EXHIBIT 4.1
EXECUTION COPY
CHASE FUNDING, INC.,
Depositor
CHASE MANHATTAN MORTGAGE CORPORATION,
Servicer
and
WACHOVIA BANK, N.A.,
Trustee
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POOLING AND SERVICING AGREEMENT
Dated as of June 1, 2004
--------------------------------------
CHASE FUNDING
MORTGAGE LOAN ASSET-BACKED CERTIFICATES, SERIES 2004-2
TABLE OF CONTENTS
PAGE
ARTICLE I DEFINITIONS..................................................................................1
ARTICLE II CONVEYANCE OF MORTGAGE LOANS; REPRESENTATIONS AND WARRANTIES................................44
SECTION 2.01. Conveyance of Mortgage Loans.....................................................44
SECTION 2.02. Acceptance by Trustee of the Mortgage Loans......................................48
SECTION 2.03. Representations, Warranties and Covenants of the Depositor.......................49
SECTION 2.04. Representations and Warranties of the Servicer...................................58
SECTION 2.05. Substitutions and Repurchases of Mortgage Loans which are not "Qualified
Mortgages".......................................................................59
SECTION 2.06. Authentication and Delivery of Certificates......................................59
SECTION 2.07. REMIC Elections..................................................................59
SECTION 2.08. Covenants of the Servicer........................................................63
SECTION 2.09. [RESERVED].......................................................................63
SECTION 2.10. [RESERVED].......................................................................63
SECTION 2.11. Permitted Activities of the Trust................................................63
SECTION 2.12. Qualifying Special Purpose Entity................................................63
ARTICLE III ADMINISTRATION AND SERVICING OF MORTGAGE LOANS.............................................63
SECTION 3.01. Servicer to Service Mortgage Loans...............................................64
SECTION 3.02. Servicing and Subservicing; Enforcement of the Obligations of Servicer...........64
SECTION 3.03. Rights of the Depositor and the Trustee in Respect of the Servicer...............65
SECTION 3.04. Trustee to Act as Servicer.......................................................65
SECTION 3.05. Collection of Mortgage Loan Payments; Collection Account; Distribution
Account..........................................................................65
SECTION 3.06. Collection of Taxes, Assessments and Similar Items; Escrow Accounts..............68
SECTION 3.07. Access to Certain Documentation and Information Regarding the Mortgage
Loans............................................................................68
SECTION 3.08. Permitted Withdrawals from the Collection Account and Distribution Account.......69
SECTION 3.09. [RESERVED].......................................................................70
SECTION 3.10. Maintenance of Hazard Insurance..................................................70
SECTION 3.11. Enforcement of Due-On-Sale Clauses; Assumption Agreements........................71
SECTION 3.12. Realization Upon Defaulted Mortgage Loans; Determination of Excess
Proceeds.........................................................................72
SECTION 3.13. Trustee to Cooperate; Release of Mortgage Files..................................74
SECTION 3.14. Documents, Records and Funds in Possession of Servicer to be Held for the
Trustee..........................................................................75
SECTION 3.15. Servicing Compensation...........................................................76
SECTION 3.16. Access to Certain Documentation..................................................76
SECTION 3.17. Annual Statement as to Compliance................................................76
SECTION 3.18. Annual Independent Public Accountants' Servicing Statement; Financial
Statements.......................................................................77
SECTION 3.19. Rights of the NIMs Insurer.......................................................77
SECTION 3.20. Periodic Filings.................................................................77
ARTICLE IV DISTRIBUTIONS; ADVANCES BY THE SERVICER....................................................78
SECTION 4.01. Advances.........................................................................78
SECTION 4.02. Reduction of Servicing Compensation in Connection with Prepayment
Interest Shortfalls..............................................................79
SECTION 4.03. Distributions on the REMIC Interests.............................................79
SECTION 4.04. Distributions....................................................................79
SECTION 4.05. Monthly Statements to Certificateholders.........................................86
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TABLE OF CONTENTS
(continued)
PAGE
ARTICLE V THE CERTIFICATES............................................................................89
SECTION 5.01. The Certificates.................................................................89
SECTION 5.02. Certificate Register; Registration of Transfer and Exchange of
Certificates.....................................................................91
SECTION 5.03. Mutilated, Destroyed, Lost or Stolen Certificates................................94
SECTION 5.04. Persons Deemed Owners............................................................94
SECTION 5.05. Access to List of Certificateholders' Names and Addresses........................95
SECTION 5.06. Book-Entry Certificates..........................................................95
SECTION 5.07. Notices to Depository............................................................96
SECTION 5.08. Definitive Certificates..........................................................96
SECTION 5.09. Maintenance of Office or Agency..................................................96
SECTION 5.10. Authenticating Agents............................................................97
SECTION 5.11. Appointment of Paying Agent......................................................97
ARTICLE VI THE DEPOSITOR AND THE SERVICER..............................................................98
SECTION 6.01. Respective Liabilities of the Depositor and the Servicer.........................98
SECTION 6.02. Merger or Consolidation of the Depositor or the Servicer.........................98
SECTION 6.03. Limitation on Liability of the Depositor, the Servicer and Others................98
SECTION 6.04. Limitation on Resignation of Servicer............................................99
SECTION 6.05. Errors and Omissions Insurance; Fidelity Bonds...................................99
ARTICLE VII DEFAULT; TERMINATION OF SERVICER............................................................99
SECTION 7.01. Events of Default................................................................99
SECTION 7.02. Trustee to Act; Appointment of Successor........................................101
SECTION 7.03. Notification to Certificateholders..............................................101
ARTICLE VIII CONCERNING THE TRUSTEE.....................................................................102
SECTION 8.01. Duties of Trustee...............................................................102
SECTION 8.02. Certain Matters Affecting the Trustee...........................................103
SECTION 8.03. Trustee Not Liable for Mortgage Loans...........................................104
SECTION 8.04. Trustee May Own Certificates....................................................104
SECTION 8.05. Servicer to Pay Certain Trustee's Fees and Expenses.............................104
SECTION 8.06. Eligibility Requirements for Trustee............................................104
SECTION 8.07. Resignation and Removal of Trustee..............................................105
SECTION 8.08. Successor Trustee...............................................................106
SECTION 8.09. Merger or Consolidation of Trustee..............................................106
SECTION 8.10. Appointment of Co-Trustee or Separate Trustee...................................106
SECTION 8.11. Tax Matters.....................................................................107
ARTICLE IX TERMINATION................................................................................109
SECTION 9.01. Termination upon Liquidation or Repurchase of all Mortgage Loans................109
SECTION 9.02. Final Distribution on the Certificates..........................................110
SECTION 9.03. Additional Termination Requirements.............................................111
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TABLE OF CONTENTS
(continued)
PAGE
ARTICLE X MISCELLANEOUS PROVISIONS...................................................................112
SECTION 10.01. Amendment.......................................................................112
SECTION 10.02. Counterparts....................................................................113
SECTION 10.03. Governing Law...................................................................113
SECTION 10.04. Intention of Parties............................................................113
SECTION 10.05. Notices.........................................................................114
SECTION 10.06. Severability of Provisions......................................................115
SECTION 10.07. Assignment......................................................................115
SECTION 10.08. Limitation on Rights of Certificateholders......................................115
SECTION 10.09. Inspection and Audit Rights.....................................................116
SECTION 10.10. Certificates Nonassessable and Fully Paid.......................................116
SECTION 10.11. Third Party Rights..............................................................116
SECTION 10.12. Additional Rights of the NIMs Insurer...........................................116
EXHIBIT A FORM OF CLASS A, CLASS M AND CLASS B CERTIFICATES
EXHIBIT B FORM OF CLASS C CERTIFICATES
EXHIBIT C FORM OF CLASS P CERTIFICATES
EXHIBIT D FORM OF CLASS R CERTIFICATE
EXHIBIT E FORM OF CLASS L CERTIFICATES
EXHIBIT F-1 MORTGAGE LOAN SCHEDULE - GROUP I
EXHIBIT F-2 MORTGAGE LOAN SCHEDULE - GROUP II
EXHIBIT G FORM OF OFFICER'S CERTIFICATE (PAYING AGENT)
EXHIBIT H FORM OF TRUSTEE CERTIFICATION
EXHIBIT I FORM OF TRANSFEREE'S LETTER
EXHIBIT J FORM OF TRANSFEROR CERTIFICATE
EXHIBIT K FORM OF INVESTMENT LETTER
EXHIBIT L FORM OF RULE 144A INVESTMENT LETTER
EXHIBIT M REQUEST FOR RELEASE OF DOCUMENTS
EXHIBIT N FORM OF YIELD MAINTENANCE AGREEMENT
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POOLING AND SERVICING AGREEMENT, dated as of June 1, 2004, among CHASE
FUNDING, INC., a New York corporation, as depositor (the "Depositor"), CHASE
MANHATTAN MORTGAGE CORPORATION, a New Jersey corporation, as servicer (the
"Servicer") and WACHOVIA BANK, N.A., a national banking association, as trustee
(the "Trustee").
The Depositor is the owner of the Trust Fund that is hereby conveyed to
the Trustee in return for the Certificates. The Trust Fund (other than (i)
proceeds of prepayment penalties and late payment charges on the Mortgage Loans,
(ii) any rights to payment under the Yield Maintenance Agreement, (iii) the
Yield Maintenance Account and (iv) the interests in the grantor trusts described
in Section 2.07) for federal income tax purposes will include three REMICs.
In consideration of the mutual agreements herein contained, the
Depositor, the Servicer and the Trustee hereby agree as follows:
ARTICLE I
DEFINITIONS
Whenever used in this Agreement, the following words and phrases,
unless the context otherwise requires, shall have the following meanings:
Accepted Servicing Practices: The Servicer's normal servicing
practices, which will conform to the mortgage servicing practices of prudent
mortgage lending institutions which service for their own account mortgage loans
of the same type as the Mortgages Loans in the jurisdictions in which the
related Mortgaged Properties (or Underlying Mortgaged Properties, in the case of
Co-op Loans) are located.
Accrual Period: With respect to the Group I Certificates (other than
the Class IA-1 Certificates) and any Distribution Date, the calendar month
immediately preceding such Distribution Date. With respect to the Class IA-1
Certificates and the Group II Certificates and any Distribution Date, the period
commencing on the immediately preceding Distribution Date (or, in the case of
the first Distribution Date, the Closing Date) and ending on the day immediately
preceding such Distribution Date. All calculations of interest on the Group I
Certificates (other than the Class IA-1 Certificates) will be made on the basis
of a 360-day year consisting of twelve 30-day months, and all calculations of
interest on the Class IA-1 Certificates and the Group II Certificates will be
made on the basis of the actual number of days elapsed in the related Accrual
Period and a 360-day year.
Adjustment Date: As to each Group II Mortgage Loan, each date on which
the related Mortgage Rate is subject to adjustment, as provided in the related
Mortgage Note.
Advance: The aggregate of the advances required to be made by the
Servicer with respect to any Servicer Remittance Date pursuant to Section 4.01,
the amount of any such advances being equal to the sum of (A) the aggregate of
payments of principal (except with respect to the final Scheduled Payment on any
Balloon Loan) and interest (net of the Servicing Fees) on the Mortgage Loans
that were due on the related Due Date and not received as of the close of
business on the related Servicer Remittance Date (including monthly interest on
the Stated Principal Balance of a Balloon Loan remaining outstanding after the
Due Date with respect to the final Scheduled Payment for such Balloon Loan) and
(B) with respect to each REO Property that has not been liquidated, an amount
equal to the excess, if any, of (x) one month's interest (adjusted to the Net
Mortgage Rate) on the Stated Principal Balance of the related Mortgage Loan over
(y) the net monthly rental income (if any) from such REO Property deposited in
the Collection Account for such Distribution Date pursuant to Section 3.12, less
the aggregate amount of any such Delinquent payments that the Servicer has
determined would constitute a Non-Recoverable Advance were an advance to be made
with respect thereto.
Affiliate: With respect to any specified Person, any other Person
controlling, controlled by or under common control with such Person. For the
purposes of this definition, "control" means the power to direct the management
and policies of a Person, directly or indirectly, whether through ownership of
voting securities, by contract or otherwise; and the terms "controlling" and
"controlled" have meanings correlative to the foregoing.
Aggregate Cut-Off Date Principal Balance: $750,000,518.97
Agreement: This Pooling and Servicing Agreement and any and all
amendments or supplements hereto made in accordance with the terms herein.
Amount Held for Future Distribution: As to any Distribution Date, the
aggregate amount held in the Collection Account at the close of business on the
immediately preceding Determination Date on account of (i) all Scheduled
Payments or portions thereof received in respect of the Mortgage Loans due after
the related Due Date and (ii) Principal Prepayments and Liquidation Proceeds
together with any prepayment penalties and late payment charges received in
respect of such Mortgage Loans after the last day of the related Prepayment
Period (or Due Period, in the case of Liquidation Proceeds).
Applied Realized Loss Amount: With respect to any Distribution Date,
the amount, if any, by which, (i) with respect to the Group I Certificates, the
Group I Certificate Principal Balance after distributions of principal on such
Distribution Date exceeds the aggregate Stated Principal Balance of the Group I
Mortgage Loans as of such Distribution Date, and (ii) with respect to the Group
II Certificates, the Group II Certificate Principal Balance after distributions
of principal on such Distribution Date exceeds the aggregate Stated Principal
Balance of the Group II Mortgage Loans as of such Distribution Date.
Appraised Value: With respect to a Mortgage Loan the proceeds of which
were used to purchase the related Mortgage Property (or the related residential
dwelling unit in the Underlying Mortgaged Property in the case of a Co-op Loan),
the "Appraised Value" of a Mortgaged Property (or the related residential
dwelling unit in the Underlying Mortgaged Property, in the case of a Co-op Loan)
is the lesser of (x) the appraised value based on an appraisal made for the
originator by an independent fee appraiser at the time of the origination of the
related Mortgage Loan, and (y) the sales price of such Mortgaged Property (or
the related residential dwelling unit in the Underlying Mortgaged Property, in
the case of a Co-op Loan) at such time of origination. With respect to a
Mortgage Loan the proceeds of which were used to refinance an existing mortgage
loan, the "Appraised Value" is the appraised value of the Mortgaged Property (or
the residential dwelling unit in the Underlying Mortgaged Property, in the case
of a Co-op Loan) based upon the appraisal obtained at the time of refinancing.
Assertion of Non-Compliance: Any potentially valid assertion by or on
behalf of a Mortgagor that a Mortgage Loan was not originated in compliance with
applicable local, state and federal laws or with the originator's policies and
procedures.
Assignment of Mortgage: An assignment of the Mortgage, notice of
transfer (or UCC-3 assignment (or equivalent instrument) with respect to each
Co-op Loan) or equivalent instrument, in recordable form (except in the case of
a Co-op Loan), sufficient under the laws of the jurisdiction where the related
Mortgaged Property (or Underlying Mortgaged Property, in the case of a Co-op
Loan) is located to reflect of record the sale and assignment of the Mortgage
Loan to the Trustee, which assignment, notice of transfer or equivalent
instrument may, if permitted by law, be in the form of one or more blanket
assignments covering Mortgages secured by Mortgaged Properties located in the
same county.
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Authenticating Agent: As defined in Section 5.10 hereof.
Balloon Loan: A Mortgage Loan having an original term to stated
maturity of approximately 15 years which provides for level monthly payments of
principal and interest based on a 30-year amortization schedule, with a balloon
payment of the remaining outstanding principal balance due on such Mortgage Loan
at its stated maturity.
Book-Entry Certificates: Any of the Certificates that shall be
registered in the name of the Depository or its nominee, the ownership of which
is reflected on the books of the Depository or on the books of a Person
maintaining an account with the Depository (directly, as a "Depository
Participant", or indirectly, as an indirect participant in accordance with the
rules of the Depository and as described in Section 5.06). As of the Closing
Date, each Class of Regular Certificates constitutes a Class of Book-Entry
Certificates.
Business Day: Any day other than (i) a Saturday or a Sunday, or (ii) a
day on which banking institutions in the State of California and in the City of
New York, New York or the city in which the Servicer is located are authorized
or obligated by law or executive order to be closed.
Certificate: Any one of the certificates of any Class executed by the
Depositor and authenticated by the Authenticating Agent in substantially the
forms attached hereto as Exhibits A through E.
Certificate Group: Either of the Group I Certificates or the Group II
Certificates, as the context requires.
Certificate Owner: With respect to a Book-Entry Certificate, the Person
that is the beneficial owner of such Book-Entry Certificate.
Certificate Principal Balance: As to any Certificate and as of any
Distribution Date, the Initial Certificate Principal Balance of such Certificate
less the sum of (i) all amounts distributed with respect to such Certificate in
reduction of the Certificate Principal Balance thereof on previous Distribution
Dates pursuant to Section 4.04, and (ii) any Applied Realized Loss Amounts
allocated to such Certificate on previous Distribution Dates pursuant to (i)
Section 4.04(i) for the Group I Certificates and (ii) Section 4.04(j) for the
Group II Certificates. Notwithstanding the foregoing, the Certificate Principal
Balance of the Class C Certificate shall be the Class C Certificate Principal
Balance. Notwithstanding the foregoing on any Distribution Date relating to a
Due Period in which a Subsequent Recovery has been received by the Servicer, the
Certificate Principal Balance (or the Class C Group I Certificate Principal
Balance or the Class C Group II Certificate Principal Balance as applicable, in
the case of the Class C Certificates) of any Class of Certificates relating to
the Loan Group associated with such Subsequent Recovery then outstanding for
which any Applied Realized Loss Amount has been allocated will be increased, in
order of seniority, by an amount equal to the lesser of (i) the Unpaid Realized
Loss Amount for such Class of Certificates (or Class C Group I Unpaid Realized
Loss Amount or Class C Group II Unpaid Realized Loss Amount, as applicable, in
the case of the Class Certificates) and (ii) the total of any Subsequent
Recovery in respect of principal distributed on such date to the Holders of
Certificates relating to the Loan Group associated with such Subsequent Recovery
(reduced by the amount of the increase in the Certificate Principal Balance of
any more senior Class of Certificates pursuant to this sentence on such
Distribution Date).
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Certificate Register: The register maintained pursuant to Section 5.02
hereof.
Certificateholder or Holder: The Person in whose name a Certificate is
registered in the Certificate Register (initially, Cede & Co., as nominee for
the Depository), in the case of any Class of Regular Certificates, except that
solely for the purpose of giving any consent pursuant to this Agreement, any
Certificate registered in the name of the Depositor or any Affiliate of the
Depositor shall be deemed not to be Outstanding and the Percentage Interest
evidenced thereby shall not be taken into account in determining whether the
requisite amount of Percentage Interests necessary to effect such consent has
been obtained; provided, however, that if any such Person (including the
Depositor) owns 100% of the Percentage Interests evidenced by a Class of
Certificates, such Certificates shall be deemed to be Outstanding for purposes
of any provision hereof that requires the consent of the Holders of Certificates
of a particular Class as a condition to the taking of any action hereunder. The
Trustee and the NIMs Insurer is entitled to rely conclusively on a certification
of the Depositor or any Affiliate of the Depositor in determining which
Certificates are registered in the name of an Affiliate of the Depositor.
Certification: As defined in Section 3.20(b) hereof.
Chase: JPMorgan Chase Bank, a New York state banking corporation, or
its successor in interest.
Class: All Certificates bearing the same Class designation as set forth
in Section 5.01 hereof.
Class A Certificates: The Class IA-1 Certificates, Class IA-2
Certificates, Class IA-3 Certificates, Class IA-4 Certificates, Class IA-5
Certificates, Class IA-6 Certificates, Class IIA-1 Certificates and Class IIA-2
Certificates.
Class B Certificates: The Class IB Certificates and Class IIB
Certificates.
Class M Certificates: The Class IM-1 Certificates, Class IM-2
Certificates, Class IIM-1 Certificates and Class IIM-2 Certificates.
Class IA-1 Certificate: Any Certificate designated as a "Class IA-1
Certificate" on the face thereof, in the form of Exhibit A hereto, representing
the right to distributions as set forth herein.
Class IA-1 Certificate Principal Balance: As of any date of
determination, the aggregate Certificate Principal Balance of the Class IA-1
Certificates.
Class IA-1 Current Interest: As of any Distribution Date, the interest
accrued during the related Accrual Period at the Class IA-1 Pass-Through Rate on
the Class IA-1 Certificate Principal Balance as of the first day of such Accrual
Period (after giving effect to all distributions of principal made or deemed to
be made as of such first day) plus the interest portion of any previous
distributions on such Class that is recovered as a voidable preference by a
trustee in bankruptcy, less any Non-Supported Interest Shortfall allocated on
such Distribution Date to the Class IA-1 Certificates. For purposes of
calculating interest, principal distributions on a Distribution Date will be
deemed to have been made on the first day of the Accrual Period in which such
Distribution Date occurs.
Class IA-1 Interest Carryforward Amount: As of any Distribution Date,
the sum of (i) the excess of (a) the Class IA-1 Current Interest with respect to
prior Distribution Dates over (b) the amount actually distributed to the Class
IA-1 Certificates with respect to interest on such prior Distribution Dates and
(ii) interest on such excess (to the extent permitted by applicable law) at the
Class IA-1 Pass-Through Rate for the related Accrual Period.
Class IA-1 Margin: 0.150% per annum.
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Class IA-1 Pass-Through Rate: The lesser of (i) the Group I Net Rate
multiplied by 30 and divided by the actual number of days in the relevant
Accrual Period and (ii) One-Month LIBOR plus the Class IA-1 Margin.
Class IA-2 Certificate: Any Certificate designated as a "Class IA-2
Certificate" on the face thereof, in the form of Exhibit A hereto, representing
the right to distributions as set forth herein.
Class IA-2 Certificate Principal Balance: As of any date of
determination, the aggregate Certificate Principal Balance of the Class IA-2
Certificates.
Class IA-2 Current Interest: As of any Distribution Date, the interest
accrued during the related Accrual Period at the Class IA-2 Pass-Through Rate on
the Class IA-2 Certificate Principal Balance as of the first day of such Accrual
Period (after giving effect to all distributions of principal made or deemed to
be made as of such first day) plus the interest portion of any previous
distributions on such Class that is recovered as a voidable preference by a
trustee in bankruptcy, less any Non-Supported Interest Shortfall allocated on
such Distribution Date to the Class IA-2 Certificates. For purposes of
calculating interest, principal distributions on a Distribution Date will be
deemed to have been made on the first day of the Accrual Period in which such
Distribution Date occurs.
Class IA-2 Interest Carryforward Amount: As of any Distribution Date,
the sum of (i) the excess of (a) the Class IA-2 Current Interest with respect to
prior Distribution Dates over (b) the amount actually distributed to the Class
IA-2 Certificates with respect to interest on such prior Distribution Dates and
(ii) interest on such excess (to the extent permitted by applicable law) at the
Class IA-2 Pass-Through Rate for the related Accrual Period.
Class IA-2 Pass-Through Rate: 3.777% per annum.
Class IA-3 Certificate: Any Certificate designated as a "Class IA-3
Certificate" on the face thereof, in the form of Exhibit A hereto, representing
the right to distributions as set forth herein.
Class IA-3 Certificate Principal Balance: As of any date of
determination, the aggregate Certificate Principal Balance of the Class IA-3
Certificates.
Class IA-3 Current Interest: As of any Distribution Date, the interest
accrued during the related Accrual Period at the Class IA-3 Pass-Through Rate on
the Class IA-3 Certificate Principal Balance as of the first day of such Accrual
Period (after giving effect to all distributions of principal made or deemed to
be made as of such first day) plus the interest portion of any previous
distributions on such Class that is recovered as a voidable preference by a
trustee in bankruptcy, less any Non-Supported Interest Shortfall allocated on
such Distribution Date to the Class IA-3 Certificates. For purposes of
calculating interest, principal distributions on a Distribution Date will be
deemed to have been made on the first day of the Accrual Period in which such
Distribution Date occurs.
Class IA-3 Interest Carryforward Amount: As of any Distribution Date,
the sum of (i) the excess of (a) the Class IA-3 Current Interest with respect to
prior Distribution Dates over (b) the amount actually distributed to the Class
IA-3 Certificates with respect to interest on such prior Distribution Dates and
(ii) interest on such excess (to the extent permitted by applicable law) at the
Class IA-3 Pass-Through Rate for the related Accrual Period.
Class IA-3 Pass-Through Rate: 4.209% per annum.
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Class IA-4 Certificate: Any Certificate designated as a "Class IA-4
Certificate" on the face thereof, in the form of Exhibit A hereto, representing
the right to distributions as set forth herein.
Class IA-4 Certificate Principal Balance: As of any date of
determination, the aggregate Certificate Principal Balance of the Class IA-4
Certificates.
Class IA-4 Current Interest: As of any Distribution Date, the interest
accrued during the related Accrual Period at the Class IA-4 Pass-Through Rate on
the Class IA-4 Certificate Principal Balance as of the first day of such Accrual
Period (after giving effect to all distributions of principal made or deemed to
be made as of such first day) plus the interest portion of any previous
distributions on such Class that is recovered as a voidable preference by a
trustee in bankruptcy, less any Non-Supported Interest Shortfall allocated on
such Distribution Date to the Class IA-4 Certificates. For purposes of
calculating interest, principal distributions on a Distribution Date will be
deemed to have been made on the first day of the Accrual Period in which such
Distribution Date occurs.
Class IA-4 Interest Carryforward Amount: As of any Distribution Date,
the sum of (i) the excess of (a) the Class IA-4 Current Interest with respect to
prior Distribution Dates over (b) the amount actually distributed to the Class
IA-4 Certificates with respect to interest on such prior Distribution Dates and
(ii) interest on such excess (to the extent permitted by applicable law) at the
Class IA-4 Pass-Through Rate for the related Accrual Period.
Class IA-4 Pass-Through Rate: 5.323% per annum.
Class IA-5 Certificate: Any Certificate designated as a "Class IA-5
Certificate" on the face thereof, in the form of Exhibit A hereto, representing
the right to distributions as set forth herein.
Class IA-5 Certificate Principal Balance: As of any date of
determination, the aggregate Certificate Principal Balance of the Class IA-5
Certificates.
Class IA-5 Current Interest: As of any Distribution Date, the interest
accrued during the related Accrual Period at the Class IA-5 Pass-Through Rate on
the Class IA-5 Certificate Principal Balance as of the first day of such Accrual
Period (after giving effect to all distributions of principal made or deemed to
be made as of such first day) plus the interest portion of any previous
distributions on such Class that is recovered as a voidable preference by a
trustee in bankruptcy, less any Non-Supported Interest Shortfall allocated on
such Distribution Date to the Class IA-5 Certificates. For purposes of
calculating interest, principal distributions on a Distribution Date will be
deemed to have been made on the first day of the Accrual Period in which such
Distribution Date occurs.
Class IA-5 Interest Carryforward Amount: As of any Distribution Date,
the sum of (i) the excess of (a) the Class IA-5 Current Interest with respect to
prior Distribution Dates over (b) the amount actually distributed to the Class
IA-5 Certificates with respect to interest on such prior Distribution Dates and
(ii) interest on such excess (to the extent permitted by applicable law) at the
Class IA-5 Pass-Through Rate for the related Accrual Period.
Class IA-5 Pass-Through Rate: The lesser of (i) 5.700% per annum or, on
any Distribution Date after the Optional Termination Date for the Group I
Certificates, 6.200% per annum and (ii) the Group I Net Rate.
Class IA-6 Certificate: Any Certificate designated as a "Class IA-6
Certificate" on the face thereof, in the form of Exhibit A hereto, representing
the right to distributions as set forth herein.
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Class IA-6 Certificate Principal Balance: As of any date of
determination, the aggregate Certificate Principal Balance of the Class IA-6
Certificates.
Class IA-6 Current Interest: As of any Distribution Date, the interest
accrued during the related Accrual Period at the Class IA-6 Pass-Through Rate on
the Class IA-6 Certificate Principal Balance as of the first day of such Accrual
Period (after giving effect to all distributions of principal made or deemed to
be made as of such first day) plus the interest portion of any previous
distributions on such Class that is recovered as a voidable preference by a
trustee in bankruptcy, less any Non-Supported Interest Shortfall allocated on
such Distribution Date to the Class IA-6 Certificates. For purposes of
calculating interest, principal distributions on a Distribution Date will be
deemed to have been made on the first day of the Accrual Period in which such
Distribution Date occurs.
Class IA-6 Interest Carryforward Amount: As of any Distribution Date,
the sum of (i) the excess of (a) the Class IA-6 Current Interest with respect to
prior Distribution Dates over (b) the amount actually distributed to the Class
IA-6 Certificates with respect to interest on such prior Distribution Dates and
(ii) interest on such excess (to the extent permitted by applicable law) at the
Class IA-6 Pass-Through Rate for the related Accrual Period.
Class IA-6 Pass-Through Rate: The lesser of (i) 5.351% per annum and
(ii) the Group I Net Rate.
Class IA-6 Principal Distribution Amount: As of any Distribution Date
prior to the Distribution Date in July 2013, the principal to be distributed to
the Class IA-6 Certificates equal to the product of (i) a fraction, the
numerator of which is the Certificate Principal Balance of the Class IA-6
Certificates immediately prior to such Distribution Date and the denominator of
which is the Certificate Principal Balance of the Class IA-1 through Class IA-6
Certificates immediately prior to such Distribution Date, (ii) the Group I Class
A Principal Distribution Amount for such Distribution Date and (iii) the Class
IA-6 PDA Factor for such Distribution Date. With respect to the Distribution
Date in July 2013 and each Distribution Date thereafter until the Class IA-6
Certificate Principal Balance has been reduced to zero, the Class IA-6 Principal
Distribution Amount will equal the Group I Class A Principal Distribution Amount
for such Distribution Date.
Class IA-6 PDA Factor: As of any Distribution Date set forth below, the
Percentage set forth across from such Distribution Date:
Distribution Date Occurring in Percentage
------------------------------ ----------
July 2004 through June 2007.......................................0%
July 2007 through June 2009.......................................45%
July 2009 through June 2010.......................................80%
July 2010 through June 2011.......................................100%
July 2011 through June 2013.......................................300%
Class IIA-1 Certificate: Any Certificate designated as a "Class IIA-1
Certificate" on the face thereof, in the form of Exhibit A hereto, representing
the right to distributions as set forth herein.
Class IIA-1 Certificate Principal Balance: As of any date of
determination, the aggregate Certificate Principal Balance of the Class IIA-1
Certificates.
-7-
Class IIA-1 Current Interest: As of any Distribution Date, the interest
accrued during the related Accrual Period at the Class IIA-1 Pass-Through Rate
on the Class IIA-1 Certificate Principal Balance as of the first day of such
Accrual Period (after giving effect to all distributions of principal made or
deemed to be made as of such first day) plus the interest portion of any
previous distributions on such Class that is recovered as a voidable preference
by a trustee in bankruptcy, less any Non-Supported Interest Shortfall allocated
on such Distribution Date to the Class IIA-1 Certificates. For purposes of
calculating interest, principal distributions on a Distribution Date will be
deemed to have been made on the first day of the Accrual Period in which such
Distribution Date occurs.
Class IIA-1 Interest Carryforward Amount: As of any Distribution Date,
the sum of (i) the excess of (a) the Class IIA-1 Current Interest with respect
to prior Distribution Dates (excluding any Class IIA-1 Interest Carryover
Amount) over (b) the amount actually distributed to the Class IIA-1 Certificates
with respect to interest on such prior Distribution Dates and (ii) interest on
such excess (to the extent permitted by applicable law) at the Class IIA-1
Pass-Through Rate for the related Accrual Period.
Class IIA-1 Interest Carryover Amount: As of any Distribution Date, the
sum of (A) if on such Distribution Date the Pass-Through Rate for the Class
IIA-1 Certificates is based upon the Group II Available Funds Cap, the excess of
(i) the amount of interest the Class IIA-1 Certificates would otherwise be
entitled to receive on such Distribution Date had such rate been calculated as
the sum of One-Month LIBOR and the applicable Class IIA-1 Margin, up to the
Group II Weighted Maximum Rate Cap over (ii) the amount of interest payable on
the Class IIA-1 Certificates at the Group II Available Funds Cap for such
Distribution Date, and (B) the Class IIA-1 Interest Carryover Amount for all
previous Distribution Dates not previously paid pursuant to Section 4.04(f)(vi)
or Section 4.04(l), together with interest thereon at a rate equal to the sum of
One-Month LIBOR and the applicable Class IIA-1 Margin for such Distribution
Date.
Class IIA-1 Margin: As of any Distribution Date up to and including the
Optional Termination Date for the Group II Certificates, 0.130% per annum.
Class IIA-1 Pass-Through Rate: The least of (i) One-Month LIBOR plus
the Class IIA-1 Margin, (ii) the Group II Weighted Maximum Rate Cap and (iii)
the Group II Available Funds Cap for such Distribution Date.
Class IIA-2 Certificate: Any Certificate designated as a "Class IIA-2
Certificate" on the face thereof, in the form of Exhibit A hereto, representing
the right to distributions as set forth herein.
Class IIA-2 Certificate Principal Balance: As of any date of
determination, the aggregate Certificate Principal Balance of the Class IIA-2
Certificates.
Class IIA-2 Current Interest: As of any Distribution Date, the interest
accrued during the related Accrual Period at the Class IIA-2 Pass-Through Rate
on the Class IIA-2 Certificate Principal Balance as of the first day of such
Accrual Period (after giving effect to all distributions of principal made or
deemed to be made as of such first day) plus the interest portion of any
previous distributions on such Class that is recovered as a voidable preference
by a trustee in bankruptcy, less any Non-Supported Interest Shortfall allocated
on such Distribution Date to the Class IIA-2 Certificates. For purposes of
calculating interest, principal distributions on a Distribution Date will be
deemed to have been made on the first day of the Accrual Period in which such
Distribution Date occurs.
Class IIA-2 Interest Carryforward Amount: As of any Distribution Date,
the sum of (i) the excess of (a) the Class IIA-2 Current Interest with respect
to prior Distribution Dates (excluding any Class IIA-2 Interest Carryover
Amount) over (b) the amount actually distributed to the Class IIA-2 Certificates
with respect to interest on such prior Distribution Dates and (ii) interest on
such excess (to the extent permitted by applicable law) at the Class IIA-2
Pass-Through Rate for the related Accrual Period.
-8-
Class IIA-2 Interest Carryover Amount: As of any Distribution Date, the
sum of (A) if on such Distribution Date the Pass-Through Rate for the Class
IIA-2 Certificates is based upon the Group II Available Funds Cap, the excess of
(i) the amount of interest the Class IIA-2 Certificates would otherwise be
entitled to receive on such Distribution Date had such rate been calculated as
the sum of One-Month LIBOR and the applicable Class IIA-2 Margin for such
Distribution Date, up to the Group II Weighted Maximum Rate Cap, over (ii) the
amount of interest payable on the Class IIA-2 Certificates at the Group II
Available Funds Cap for such Distribution Date, up to the Group II Weighted
Maximum Rate Cap, and (B) the Class IIA-2 Interest Carryover Amount for all
previous Distribution Dates not previously paid pursuant to Section 4.04(f)(vi)
or Section 4.04(l), together with interest thereon at a rate equal to the sum of
One-Month LIBOR and the applicable Class IIA-2 Margin for such Distribution
Date.
Class IIA-2 Margin: As of any Distribution Date up to and including the
Optional Termination Date for the Group II Certificates, 0.250% per annum and,
as of any Distribution Date after such Optional Termination Date, 0.500% per
annum.
Class IIA-2 Pass-Through Rate: The least of (i) One-Month LIBOR plus
the Class IIA-2 Margin, (ii) the Group II Weighted Maximum Rate Cap and (iii)
the Group II Available Funds Cap for such Distribution Date.
Class IB Applied Realized Loss Amount: As of any Distribution Date, the
sum of all Applied Realized Loss Amounts with respect to the Group I Mortgage
Loans which have been applied to the reduction of the Certificate Principal
Balance of the Class IB Certificates.
Class IB Certificate: Any Certificate designated as a "Class IB
Certificate" on the face thereof, in the form of Exhibit A hereto, representing
the right to distributions as set forth herein.
Class IB Certificate Principal Balance: As of any date of
determination, the aggregate Certificate Principal Balance of the Class IB
Certificates.
Class IB Current Interest: As of any Distribution Date, the interest
accrued during the related Accrual Period at the Class IB Pass-Through Rate on
the Class IB Certificate Principal Balance as of the first day of such Accrual
Period (after giving effect to all distributions of principal made or deemed to
be made as of such first day) plus the interest portion of any previous
distributions on such Class that is recovered as a voidable preference by a
trustee in bankruptcy, less any Non-Supported Interest Shortfall allocated on
such Distribution Date to the Class IB Certificates. For purposes of calculating
interest, principal distributions on a Distribution Date will be deemed to have
been made on the first day of the Accrual Period in which such Distribution Date
occurs.
Class IB Interest Carryforward Amount: As of any Distribution Date, the
sum of (i) the excess of (a) the Class IB Current Interest with respect to prior
Distribution Dates over (b) the amount actually distributed to the Class IB
Certificates with respect to interest on such prior Distribution Dates and (ii)
interest on such excess (to the extent permitted by applicable law) at the Class
IB Pass-Through Rate for the related Accrual Period.
Class IB Pass-Through Rate: The lesser of (i) 5.700% per annum and (ii)
the Group I Net Rate.
Class IB Unpaid Realized Loss Amount: As of any Distribution Date, the
excess of (i) the Class IB Applied Realized Loss Amount over (ii) the sum of (x)
all distributions in reduction of the Class IB Unpaid Realized Loss Amount on
all previous Distribution Dates and (y) all increases in the Certificate
Principal Balance of the Class IB Certificates pursuant to the last sentence of
the definition of "Certificate Principal Balance."
-9-
Class IIB Applied Realized Loss Amount: As of any Distribution Date,
the sum of all Applied Realized Loss Amounts with respect to the Group II
Mortgage Loans which have been applied to the reduction of the Certificate
Principal Balance of the Class IIB Certificates.
Class IIB Certificate: Any Certificate designated as a "Class IIB
Certificate" on the face thereof, in the form of Exhibit A hereto, representing
the right to distributions as set forth herein.
Class IIB Certificate Principal Balance: As of any date of
determination, the aggregate Certificate Principal Balance of the Class IIB
Certificates.
Class IIB Current Interest: As of any Distribution Date, the interest
accrued during the related Accrual Period at the Class IIB Pass-Through Rate on
the Class IIB Certificate Principal Balance as of the first day of such Accrual
Period (after giving effect to all distributions of principal made or deemed to
be made as of such first day) plus the interest portion of any previous
distributions on such Class that is recovered as a voidable preference by a
trustee in bankruptcy, less any Non-Supported Interest Shortfall allocated on
such Distribution Date to the Class IIB Certificates. For purposes of
calculating interest, principal distributions on a Distribution Date will be
deemed to have been made on the first day of the Accrual Period in which such
Distribution Date occurs.
Class IIB Interest Carryforward Amount: As of any Distribution Date,
the sum of (i) the excess of (a) the Class IIB Current Interest with respect to
prior Distribution Dates (excluding any Class IIB Interest Carryover Amount)
over (b) the amount actually distributed to the Class IIB Certificates with
respect to interest on such prior Distribution Dates and (ii) interest on such
excess (to the extent permitted by applicable law) at the Class IIB Pass-Through
Rate for the related Accrual Period.
Class IIB Interest Carryover Amount: As of any Distribution Date, the
sum of (A) if on such Distribution Date the Pass-Through Rate for the Class IIB
Certificates is based upon the Group II Available Funds Cap, the excess of (i)
the amount of interest the Class IIB Certificates would otherwise be entitled to
receive on such Distribution Date had such rate been calculated as the sum of
One-Month LIBOR and the applicable Class IIB Margin for such Distribution Date,
up to the Group II Weighted Maximum Rate Cap, over (ii) the amount of interest
payable on the Class IIB Certificates at the Group II Available Funds Cap for
such Distribution Date, up to the Group II Weighted Maximum Rate Cap, and (B)
the Class IIB Interest Carryover Amount for all previous Distribution Dates not
previously paid pursuant to Section 4.04(f)(vi) or Section 4.04(l), together
with interest thereon at a rate equal to the sum of One-Month LIBOR and the
applicable Class IIB Margin for such Distribution Date.
Class IIB Margin: For any Distribution Date up to and including the
Optional Termination Date for the Group II Certificates, 1.900% per annum and,
as of any Distribution Date after such Optional Termination Date, 2.850% per
annum.
Class IIB Pass-Through Rate: The least of (i) One-Month LIBOR plus the
Class IIB Margin, (ii) the Group II Weighted Maximum Rate Cap and (iii) the
Group II Available Funds Cap for such Distribution Date.
Class IIB Unpaid Realized Loss Amount: As of any Distribution Date, the
excess of (i) the Class IIB Applied Realized Loss Amount over (ii) the sum of
(x) all distributions in reduction of the Class IIB Unpaid Realized Loss Amounts
on all previous Distribution Dates and (y) all increases in the Certificate
Principal Balance of the Class IIB Certificates pursuant to the last sentence of
the definition of "Certificate Principal Balance."
-10-
Class C Applied Realized Loss Amount: As of any Distribution Date, the
sum of all Applied Realized Loss Amounts with respect to the Mortgage Loans
which have been applied to the reduction of the Class C Group I Certificate
Principal Balance or the Class C Group II Certificate Principal Balance.
Class C Certificate: Any Certificate designated as a "Class C
Certificate" on the face thereof, in the form of Exhibit B hereto, representing
the right to distributions as set forth herein.
Class C Certificate Principal Balance: As of any date of determination,
the aggregate of the Class C Group I Certificate Principal Balance and the Class
C Group II Certificate Principal Balance.
Class C Current Interest: As of any Distribution Date, the interest
accrued during the related Accrual Period in an amount equal to the Class C
Distributable Interest Amount plus the interest portion of any previous
distributions on such Class that is recovered as a voidable preference by a
trustee in bankruptcy, less any Non-Supported Interest Shortfall allocated on
such Distribution Date to the Class C Certificates.
Class C Distributable Interest Amount: The sum of (i) the interest that
would accrue during the related Accrual Period on an amount equal to the
aggregate principal amount of the Middle-Tier REMIC Group I Accrual Interest as
of the first day of such period at a rate equal to the excess, if any, of (x)
the Group I Net Rate over (y) the weighted average of the pass through rates of
the Group I Marker Interests computed by converting the interest rate on the
Middle-Tier REMIC Class IA-1 Interest to an equivalent interest rate for a
30-day accrual period (treating, for this purpose, 0.001% of the portion of the
principal amount of the Middle-Tier REMIC Group I Accrual Interest in excess of
99,999 times the principal amount of the Group I Marker Interests (as determined
without regard to this parenthetical) as a Group I Marker Interest subject to an
interest rate cap of 0%) and (ii) the interest that would accrue during the
related Accrual Period on an amount equal to the aggregate principal amount of
the Middle-Tier REMIC Group II Accrual Interest as of the first day of such
period at a rate equal to the excess, if any, of (x) the Group II Net Rate (y)
over the weighted average of the pass through rates of the Group II Marker
Interests (treating, for this purpose, 0.001% of the portion of the principal
amount of the Middle-Tier REMIC Group II Accrual Interest in excess of 99,999
times the principal amount of the Group II Marker Interests (as determined
without regard to this parenthetical) as a Group II Marker Interest subject to
an interest rate cap of 0%). For purposes of this calculation, amounts will be
rounded to eight decimal places.
Class C Group I Applied Realized Loss Amount: As of any Distribution
Date, the sum of all Applied Realized Loss Amounts with respect to the Mortgage
Loans which have been applied to the reduction of the Class C Group I
Certificate Principal Balance.
Class C Group I Certificate Principal Balance: The Class C Group I
Certificate Principal Balance will equal the excess of the aggregate principal
amount of the Group I Mortgage Loans over the aggregate principal amount of the
Group I Certificates.
Class C Group I Current Interest: For any Accrual Period, the amount
described in clause (i) of the definition of Class C Distributable Interest
Amount.
Class C Group I Unpaid Realized Loss Amount: As of any Distribution
Date, the excess of (i) the Class C Group I Applied Realized Loss Amount over
(ii) the sum of (x) all distributions in reduction of the Class C Group I Unpaid
Realized Loss Amount on all previous Distribution Dates and (y) all increases in
the Class C Group I Certificate Principal Balance pursuant to the last sentence
of the definition of "Certificate Principal Balance."
-11-
Class C Group II Applied Realized Loss Amount: As of any Distribution
Date, the sum of all Applied Realized Loss Amounts with respect to the Mortgage
Loans which have been applied to the reduction of the Class C Group II
Certificate Principal Balance.
Class C Group II Certificate Principal Balance: The Class C Group II
Certificate Principal Balance will equal the excess of the aggregate principal
amount of the Group II Mortgage Loans over the aggregate principal amount of the
Group II Certificates.
Class C Group II Current Interest: For any Accrual Period, the amount
described in clause (ii) of the definition of Class C Distributable Interest
Amount.
Class C Group II Unpaid Realized Loss Amount: As of any Distribution
Date, the excess of (i) the Class C Group II Applied Realized Loss Amount over
(ii) the sum of (x) all distributions in reduction of the Class C Group II
Unpaid Realized Loss Amount on all previous Distribution Dates and (y) all
increases in the Class C Group II Certificate Principal Balance pursuant to the
last sentence of the definition of "Certificate Principal Balance."
Class C Interest Carryforward Amount: As of any Distribution Date, the
excess of (a) the Class C Current Interest with respect to prior Distribution
Dates (other than amounts added to the Class C Certificate Principal Balance)
over (b) the amount actually distributed to the Class C Certificates with
respect to interest on such prior Distribution Dates.
Class C Group I Interest Carryforward Amount: As of any Distribution
Date, the excess of (a) the Class C Group I Current Interest with respect to
prior Distribution Dates (other than amounts added to the Class C Group I
Certificate Principal Balance) over (b) the amount actually distributed to the
Class C Certificates with respect to Class C Group I Current Interest and Class
C Group I Interest Carryforward Amounts on such prior Distribution Dates.
Class C Group II Interest Carryforward Amount: As of any Distribution
Date, the excess of (a) the Class C Group II Current Interest with respect to
prior Distribution Dates (other than amounts added to the Class C Group II
Certificate Principal Balance) over (b) the amount actually distributed to the
Class C Certificates with respect to Class C Group II Current Interest and Class
C Group II Interest Carryforward Amounts on such prior Distribution Dates.
Class C Unpaid Realized Loss Amount: As of any Distribution Date, the
excess of (i) the Class C Applied Realized Loss Amount over (ii) the sum of all
distributions in reduction of the Class C Unpaid Realized Loss Amount on all
previous Distribution Dates.
Class L Certificate: Any one of the Class IL Certificates or Class IIL
Certificates executed by the Depositor and authenticated by the Authenticating
Agent in substantially the form set forth in Exhibit E.
Class IL Certificate: Any Certificate designated as a "Class IL
Certificate" on the face thereof, in the form of Exhibit E hereto, representing
the right to distributions as set forth herein.
Class IIL Certificate: Any Certificate designated as a "Class IIL
Certificate" on the face thereof, in the form of Exhibit E hereto, representing
the right to distributions as set forth herein.
Class IM-1 Applied Realized Loss Amount: As of any Distribution Date,
the sum of all Applied Realized Loss Amounts with respect to the Group I
Mortgage Loans which have been applied to the reduction of the Certificate
Principal Balance of the Class IM-1 Certificates.
-12-
Class IM-1 Certificate: Any Certificate designated as a "Class IM-1
Certificate" on the face thereof, in the form of Exhibit A hereto, representing
the right to distributions as set forth herein.
Class IM-1 Certificate Principal Balance: As of any date of
determination, the aggregate Certificate Principal Balance of the Class IM-1
Certificates.
Class IM-1 Current Interest: As of any Distribution Date, the interest
accrued during the related Accrual Period at the Class IM-1 Pass-Through Rate on
the Class IM-1 Certificate Principal Balance as of the first day of such Accrual
Period (after giving effect to all distributions of principal made or deemed to
be made as of such first day) plus the interest portion of any previous
distributions on such Class that is recovered as a voidable preference by a
trustee in bankruptcy, less any Non-Supported Interest Shortfall allocated on
such Distribution Date to the Class IM-1 Certificates. For purposes of
calculating interest, principal distributions on a Distribution Date will be
deemed to have been made on the first day of the Accrual Period in which such
Distribution Date occurs.
Class IM-1 Interest Carryforward Amount: As of any Distribution Date,
the sum of (i) the excess of (a) the Class IM-1 Current Interest with respect to
prior Distribution Dates over (b) the amount actually distributed to the Class
IM-1 Certificates with respect to interest on such prior Distribution Dates and
(ii) interest on such excess (to the extent permitted by applicable law) at the
Class IM-1 Pass-Through Rate for the related Accrual Period.
Class IM-1 Pass-Through Rate: The lesser of (i) 5.700% per annum and
(ii) the Group I Net Rate.
Class IM-1 Unpaid Realized Loss Amount: As of any Distribution Date,
the excess of (i) the Class IM Applied Realized Loss Amount over (ii) the sum of
(x) all distributions in reduction of the Class IM-1 Unpaid Realized Loss Amount
on all previous Distribution Dates and (y) all increases in the Certificate
Principal Balance of the Class IM-1 Certificates pursuant to the last sentence
of the definition of "Certificate Principal Balance."
Class IM-2 Applied Realized Loss Amount: As of any Distribution Date,
the sum of all Applied Realized Loss Amounts with respect to the Group I
Mortgage Loans which have been applied to the reduction of the Certificate
Principal Balance of the Class IM-2 Certificates.
Class IM-2 Certificate: Any Certificate designated as a "Class IM-2
Certificate" on the face thereof, in the form of Exhibit A hereto, representing
the right to distributions as set forth herein.
Class IM-2 Certificate Principal Balance: As of any date of
determination, the aggregate Certificate Principal Balance of the Class IM-2
Certificates.
Class IM-2 Current Interest: As of any Distribution Date, the interest
accrued during the related Accrual Period at the Class IM-2 Pass-Through Rate on
the Class IM-2 Certificate Principal Balance as of the first day of such Accrual
Period (after giving effect to all distributions of principal made or deemed to
be made as of such first day) plus the interest portion of any previous
distributions on such Class that is recovered as a voidable preference by a
trustee in bankruptcy, less any Non-Supported Interest Shortfall allocated on
such Distribution Date to the Class IM-2 Certificates. For purposes of
calculating interest, principal distributions on a Distribution Date will be
deemed to have been made on the first day of the Accrual Period in which such
Distribution Date occurs.
Class IM-2 Interest Carryforward Amount: As of any Distribution Date,
the sum of (i) the excess of (a) the Class IM-2 Current Interest with respect to
prior Distribution Dates over (b) the amount actually distributed to the Class
IM-2 Certificates with respect to interest on such prior Distribution Dates and
(ii) interest on such excess (to the extent permitted by applicable law) at the
Class IM-2 Pass- Through Rate for the related Accrual Period.
-13-
Class IM-2 Pass-Through Rate: The lesser of (i) 5.700% per annum and
(ii) the Group I Net Rate.
Class IM-2 Unpaid Realized Loss Amount: As of any Distribution Date,
the excess of (i) the Class IM-2 Applied Realized Loss Amount over (ii) the sum
of (x) all distributions in reduction of the Class IM-2 Unpaid Realized Loss
Amount on all previous Distribution Dates and (y) all increases in the
Certificate Principal Balance of the Class IM-2 Certificates pursuant to the
last sentence of the definition of "Certificate Principal Balance."
Class IIM-1 Applied Realized Loss Amount: As of any Distribution Date,
the sum of all Applied Realized Loss Amounts with respect to the Group II
Mortgage Loans which have been applied to the reduction of the Certificate
Principal Balance of the Class IIM-1 Certificates.
Class IIM-1 Certificate: Any Certificate designated as a "Class IIM-1
Certificate" on the face thereof, in the form of Exhibit A hereto, representing
the right to distributions as set forth herein.
Class IIM-1 Certificate Principal Balance: As of any date of
determination, the aggregate Certificate Principal Balance of the Class IIM-1
Certificates.
Class IIM-1 Current Interest: As of any Distribution Date, the interest
accrued during the related Accrual Period at the Class IIM-1 Pass-Through Rate
on the Class IIM-1 Certificate Principal Balance as of the first day of such
Accrual Period (after giving effect to all distributions of principal made or
deemed to be made as of such first day) plus the interest portion of any
previous distributions on such Class that is recovered as a voidable preference
by a trustee in bankruptcy, less any Non-Supported Interest Shortfall allocated
on such Distribution Date to the Class IIM-1 Certificates. For purposes of
calculating interest, principal distributions on a Distribution Date will be
deemed to have been made on the first day of the Accrual Period in which such
Distribution Date occurs.
Class IIM-1 Interest Carryforward Amount: As of any Distribution Date,
the sum of (i) the excess of (a) the Class IIM-1 Current Interest with respect
to prior Distribution Dates (excluding any Class IIM-1 Interest Carryover
Amount) over (b) the amount actually distributed to the Class IIM-1 Certificates
with respect to interest on such prior Distribution Dates and (ii) interest on
such excess (to the extent permitted by applicable law) at the Class IIM-1
Pass-Through Rate for the related Accrual Period.
Class IIM-1 Interest Carryover Amount: As of any Distribution Date, the
sum of (A) if on such Distribution Date the Pass-Through Rate for the Class
IIM-1 Certificates is based upon the Group II Available Funds Cap, the excess of
(i) the amount of interest the Class IIM-1 Certificates would otherwise be
entitled to receive on such Distribution Date had such rate been calculated as
the sum of One-Month LIBOR and the applicable Class IIM-1 Margin for such
Distribution Date, up to the Group II Weighted Maximum Rate Cap, over (ii) the
amount of interest payable on the Class IIM-1 Certificates at the Group II
Available Funds Cap for such Distribution Date, up to the Group II Weighted
Maximum Rate Cap, and (B) the Class IIM-1 Interest Carryover Amount for all
previous Distribution Dates not previously paid pursuant to Section 4.04(f)(vi)
or Section 4.04(l), together with interest thereon at a rate equal to the sum of
One-Month LIBOR and the applicable Class IIM-1 Margin for such Distribution
Date.
-14-
Class IIM-1 Margin: As of any Distribution Date up to and including the
Optional Termination Date for the Group II Certificates, 0.550% per annum and,
as of any Distribution Date after such Optional Termination Date, 0.825% per
annum.
Class IIM-1 Pass-Through Rate: The least of (i) One-Month LIBOR plus
the Class IIM-1 Margin, (ii) the Group II Weighted Maximum Rate Cap and (iii)
the Group II Available Funds Cap for such Distribution Date.
Class IIM-1 Unpaid Realized Loss Amount: As of any Distribution Date,
the excess of (i) the Class IIM-1 Applied Realized Loss Amount over (ii) the sum
of (x) all distributions in reduction of the Class IIM-1 Unpaid Realized Loss
Amounts on all previous Distribution Dates and (y) all increases in the
Certificate Principal Balance of the Class IIM-1 Certificates pursuant to the
last sentence of the definition of "Certificate Principal Balance."
Class IIM-2 Applied Realized Loss Amount: As of any Distribution Date,
the sum of all Applied Realized Loss Amounts with respect to the Group II
Mortgage Loans which have been applied to the reduction of the Certificate
Principal Balance of the Class IIM-2 Certificates.
Class IIM-2 Certificate: Any Certificate designated as a "Class IIM-2
Certificate" on the face thereof, in the form of Exhibit A hereto, representing
the right to distributions as set forth herein.
Class IIM-2 Certificate Principal Balance: As of any date of
determination, the aggregate Certificate Principal Balance of the Class IIM-2
Certificates.
Class IIM-2 Current Interest: As of any Distribution Date, the interest
accrued during the related Accrual Period at the Class IIM-2 Pass-Through Rate
on the Class IIM-2 Certificate Principal Balance as of the first day of such
Accrual Period (after giving effect to all distributions of principal made or
deemed to be made as of such first day) plus the interest portion of any
previous distributions on such Class that is recovered as a voidable preference
by a trustee in bankruptcy, less any Non-Supported Interest Shortfall allocated
on such Distribution Date to the Class IIM-2 Certificates. For purposes of
calculating interest, principal distributions on a Distribution Date will be
deemed to have been made on the first day of the Accrual Period in which such
Distribution Date occurs.
Class IIM-2 Interest Carryforward Amount: As of any Distribution Date,
the sum of (i) the excess of (a) the Class IIM-2 Current Interest with respect
to prior Distribution Dates (excluding any Class IIM-2 Interest Carryover
Amount) over (b) the amount actually distributed to the Class IIM-2 Certificates
with respect to interest on such prior Distribution Dates and (ii) interest on
such excess (to the extent permitted by applicable law) at the Class IIM-2
Pass-Through Rate for the related Accrual Period.
Class IIM-2 Interest Carryover Amount: As of any Distribution Date, the
sum of (A) if on such Distribution Date the Pass-Through Rate for the Class
IIM-2 Certificates is based upon the Group II Available Funds Cap, the excess of
(i) the amount of interest the Class IIM-2 Certificates would otherwise be
entitled to receive on such Distribution Date had such rate been calculated as
the sum of One-Month LIBOR and the applicable Class IIM-2 Margin for such
Distribution Date, up to the Group II Weighted Maximum Rate Cap, over (ii) the
amount of interest payable on the Class IIM-2 Certificates at the Group II
Available Funds Cap for such Distribution Date, up to the Group II Weighted
Maximum Rate Cap and (B) the Class IIM-2 Interest Carryover Amount for all
previous Distribution Dates not previously paid pursuant to Section 4.04(f)(vi)
or Section 4.04(l), together with interest thereon at a rate equal to the sum of
One-Month LIBOR and the applicable Class IIM-2 Margin for such Distribution
Date.
-15-
Class IIM-2 Margin: As of any Distribution Date up to and including the
Optional Termination Date for the Group II Certificates, 1.000% per annum and,
as of any Distribution Date after such Optional Termination Date, 1.500% per
annum.
Class IIM-2 Pass-Through Rate: The least of (i) One-Month LIBOR plus
the Class IIM-2 Margin, (ii) the Group II Weighted Maximum Rate Cap and (iii)
the Group II Available Funds Cap for such Distribution Date.
Class IIM-2 Unpaid Realized Loss Amount: As of any Distribution Date,
the excess of (i) the Class IIM-2 Applied Realized Loss Amount over (ii) the sum
of (x) all distributions in reduction of the Class IIM-2 Unpaid Realized Loss
Amounts on all previous Distribution Dates and (y) all increases in the
Certificate Principal Balance of the Class IIM-2 Certificates pursuant to the
last sentence of the definition of "Certificate Principal Balance."
Class IP Certificate: Any Certificate designated as a "Class IP
Certificate" on the face thereof, in the form of Exhibit C hereto, representing
the right to distributions as set forth herein.
Class IIP Certificate: Any Certificate designated as a "Class IIP
Certificate" on the face thereof, in the form of Exhibit C hereto, representing
the right to distributions as set forth herein.
Class P Certificate: Any one of the Class P Certificates executed by
the Depositor and authenticated by the Authenticating Agent in substantially the
form set forth in Exhibit C.
Class R Certificate: The Class R Certificate executed by the Depositor
and authenticated by the Authenticating Agent in substantially the form set
forth in Exhibit D.
Closing Date: June 29, 2004.
Code: The Internal Revenue Code of 1986, including any successor or
amendatory provisions.
Collection Account: The separate Eligible Account created and initially
maintained by the Servicer pursuant to Section 3.05(b) in the name of the
Trustee for the benefit of the Certificateholders and designated "Wachovia Bank,
N.A., as trustee, in trust for registered holders of Chase Funding Mortgage Loan
Asset-Backed Certificates, Series 2004-2, Chase Manhattan Mortgage Corporation
as Servicer". Funds in the Collection Account shall be held in trust for the
Certificateholders for the uses and purposes set forth in this Agreement.
Compensating Interest: With respect to any Mortgage Loan, an amount
equal to the amount set forth in Section 4.02 hereof, to be applied to the
interest portion of a Prepayment Interest Shortfall on such Mortgage Loan
pursuant to Section 4.02 hereof.
Co-op Lease: With respect to a Co-op Loan, the lease with respect to a
dwelling unit occupied by the Mortgagor and relating to the stock allocated to
the related dwelling unit.
Co-op Loan: A Mortgage Loan secured by the pledge of stock allocated to
a dwelling unit in a residential cooperative housing corporation and a
collateral assignment of the related Co-op Lease.
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 Wachovia Bank, N.A., 000 Xxxxx Xxxxx Xxxxxx, 00xx Xxxxx,
Xxxxxxxxx, Xxxxx Xxxxxxxx, 00000-0000.
-16-
Corresponding Certificates: For each of the Upper-Tier REMIC Group II
Regular Interests, the Corresponding Certificate is as set forth below:
Upper-Tier REMIC IIA-1 Interest Class IIA-1 Certificate
Upper-Tier REMIC IIA-2 Interest Class IIA-2 Certificate
Upper-Tier REMIC IIM-1 Interest Class IIM-1 Certificate
Upper-Tier REMIC IIM-2 Interest Class IIM-2 Certificate
Upper-Tier REMIC IIB Interest Class IIB Certificate
Current Interest: Any of the Class IA-1 Current Interest, the Class
IA-2 Current Interest, the Class IA-3 Current Interest, the Class IA-4 Current
Interest, the Class IA-5 Current Interest, the Class IA-6 Current Interest, the
Class IIA-1 Current Interest, the Class IIA-2 Current Interest, the Class IB
Current Interest, the Class IIB Current Interest, the Class IM-1 Current
Interest, the Class IIM-1 Current Interest, the Class IM-2 Current Interest, the
Class IIM-2 Current Interest or the Class C Current Interest.
Custodian: The custodian for the Mortgage Files appointed by the
Trustee. The initial Custodian shall be JPMorgan Document Custody Services Inc.
Cut-off Date: With respect to each Mortgage Loan, June 1, 2004.
Cut-off Date Principal Balance: As to any Mortgage Loan, the unpaid
principal balance thereof as of the close of business on the calendar day
immediately preceding the Cut-off Date after application of all payments of
principal due on or prior to the Cut-off Date, whether or not received, and all
Principal Prepayments received prior to the Cut-off Date, but without giving
effect to any installments of principal received in respect of Due Dates after
the Cut-off Date.
Definitive Certificates: As defined in Section 5.06.
Deleted Mortgage Loan: A Mortgage Loan replaced or to be replaced by a
Replacement Mortgage Loan.
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 corresponding day of the month immediately succeeding the month in which
such payment was due, or, if there is no such corresponding day (e.g., as when a
30-day month follows a 31-day month in which a payment was due on the 31st day
of such month), then on the last day of such immediately succeeding month.
Similarly for "60 days delinquent," "90 days delinquent" and so on.
Denomination: With respect to each Certificate, the amount set forth on
the face thereof as the "Initial Principal Balance of this Certificate."
Depositor: Chase Funding, Inc., a New York corporation, or its
successor in interest.
Depository: The initial Depository shall be The Depository Trust
Company ("DTC"), the nominee of which is Cede & Co., or any other organization
registered as a "clearing agency" pursuant to Section 17A of the Exchange Act.
The Depository shall initially be the registered Holder of the Book-Entry
Certificates. The Depository shall at all times be a "clearing corporation" as
defined in Section 8-102(3) of the Uniform Commercial Code of the State of New
York.
-00-
Xxxxxxxxxx Xxxxxxxxx: With respect to Classes of Book-Entry
Certificates, the agreement among the Depository, the Trustee and the initial
Paying Agent.
Depository Participant: A broker, dealer, bank or other financial
institution or other Person for whom from time to time a Depository effects
book-entry transfers and pledges of securities deposited with the Depository.
Designated Transaction: A transaction in which the assets underlying
the Certificates consist of single-family residential, multi-family residential,
home equity, manufactured housing and/or commercial mortgage obligations that
are secured by single-family residential, multi-family residential, commercial
real property or leasehold interests therein.
Determination Date: With respect to any Distribution Date, the 15th day
of the month of such Distribution Date or, if such 15th day is not a Business
Day, the immediately preceding Business Day.
Distribution Account: The separate Eligible Account created and
maintained by the Servicer or any Paying Agent pursuant to Section 3.05(d) in
the name of the Trustee for the benefit of the Certificateholders and designated
"Wachovia Bank, N.A., as trustee, in trust for registered holders of Chase
Funding Mortgage Loan Asset-Backed Certificates, Series 2004-2". Funds in the
Distribution Account shall be held in trust for the Certificateholders for the
uses and purposes set forth in this Agreement.
Distribution Date: The 25th day of each calendar month after the
initial issuance of the Certificates, or if such 25th day is not a Business Day,
the next succeeding Business Day, commencing in July 2004.
Due Date: With respect to any Distribution Date and any Mortgage Loan,
the day during the related Due Period on which a Scheduled Payment is due.
Due Period: With respect to any Distribution Date, the period beginning
on the second day of the calendar month preceding the calendar month in which
such Distribution Date occurs (or, in the case of the first Distribution Date,
beginning on the Cut-off Date) and ending on the first day of the month in which
such Distribution Date occurs.
Eligible Account: An account that is (i) maintained with a depository
institution the long-term unsecured debt obligations of which are rated by each
Rating Agency in one of its two highest rating categories, or (ii) maintained
with the corporate trust department of a bank which (a) has a rating of at least
Baa3 or P-3 by Xxxxx'x and (b) is either Chase or the corporate trust department
of a national bank or banking corporation which has a rating of at least A-1 by
S&P or F1 by Fitch, or (iii) an account or accounts the deposits in which are
fully insured by the FDIC, or (iv) an account or accounts, acceptable to each
Rating Agency without reduction or withdrawal of the rating of any Class of
Certificates, as evidenced in writing in a depository institution in which such
accounts are insured by the FDIC (to the limit established by the FDIC), the
uninsured deposits in which accounts are otherwise secured such that, as
evidenced by an Opinion of Counsel delivered to and acceptable to the Trustee
and each Rating Agency, the Certificateholders have a claim with respect to the
funds in such account and a perfected first security interest against any
collateral (which shall be limited to Permitted Investments) securing such funds
that is superior to claims of any other depositors or creditors of the
depository institution with which such account is maintained, or (v) maintained
at an eligible institution whose commercial paper, short-term debt or other
short-term deposits are rated at least A-1+ by S&P and F-1+ by Fitch, or (vi)
maintained with a federal or state chartered depository institution the deposits
in which are insured by the FDIC to the applicable limits and the short-term
unsecured debt obligations of which (or, in the case of a depository institution
that is a subsidiary of a holding company, the short-term unsecured debt
obligations of such holding company) are rated A-1 by S&P or Prime-1 by Xxxxx'x
at the time any deposits are held on deposit therein, or (vii) otherwise
acceptable to each Rating Agency, as evidenced by a letter from each Rating
Agency.
-18-
ERISA: The Employee Retirement Income Security Act of 1974, including
any successor or amendatory provisions.
ERISA Restricted Certificate: The Class C, Class L, Class P and Class R
Certificates and any other Certificate, unless such other Certificate shall have
received a rating from a Rating Agency at the time of a transfer of such other
Certificate that is in one of the three (or in the case of Designated
Transactions, four) highest generic rating categories.
Escrow Account: As defined in Section 3.06 hereof.
Event of Default: As defined in Section 7.01 hereof.
Excess Interest: On any Distribution Date, for the Class IIA-1
Certificates, the Class IIA-2 Certificates, the Class IIM-1 Certificates, the
Class IIM-2 Certificates and the Class IIB Certificates, the excess of (i) the
amount of interest each such Class of Certificates is entitled to receive on
such Distribution Date at its Pass-Through Rate over (ii) the amount of interest
each such Class of Certificates would have been entitled to receive on such
Distribution Date had the Pass-Through Rate for such Class been the Group II Net
Rate, up to but not exceeding (with respect to each such Class other than the
Class IIA-1 Certificates) the Group II Weighted Maximum Rate Cap.
Excess Proceeds: With respect to any Liquidated Loan, any Liquidation
Proceeds that are in excess of the sum of (i) the unpaid principal balance of
such Liquidated Loan as of the date of such liquidation plus (ii) interest at
the Mortgage Rate from the Due Date as to which interest was last paid or
advanced to Certificateholders (and not reimbursed to the Servicer) up to the
Due Date in the month in which such Liquidation Proceeds are required to be
distributed on the unpaid principal balance of such Liquidated Loan outstanding
during each Due Period as to which such interest was not paid or advanced.
Exchange Act: The Securities Exchange Act of 1934, including any
successor or amendatory provisions.
External Life Event: Any event outside the control of a Mortgagor which
has caused the Mortgagor financial hardship or otherwise makes it necessary or
advisable that the Mortgagor sell the related Mortgaged Property, including
death of the Mortgagor or a family member living in the Mortgaged Property,
medical condition, job status, acts of God, terrorism, or deterioration of
physical or mental health.
FDIC: The Federal Deposit Insurance Corporation, or any successor
thereto.
FHLMC: Xxxxxxx Mac, a corporate instrumentality of the United States
created and existing under Title III of the Emergency Home Finance Act of 1970,
as amended, or any successor thereto.
Fitch: Fitch Ratings, or its successor in interest.
FNMA: Xxxxxx Xxx, a federally chartered and privately owned corporation
organized and existing under the Federal National Mortgage Association Charter
Act, or any successor thereto.
-19-
Gross Margin: The percentage set forth in the related Mortgage Note for
each of the adjustable rate Mortgage Loans in Loan Group II which is to be added
to the applicable index for use in determining the Mortgage Rate on each
Adjustment Date, and which is set forth in the Mortgage Loan Schedule for each
of the Group II Mortgage Loans.
Group Net Rate: With respect to Group I, the Group I Net Rate and, with
respect to Group II, the Group II Net Rate.
Group I Certificate Principal Balance: For any date of determination,
the sum of the Class IA-1 Certificate Principal Balance, the Class IA-2
Certificate Principal Balance, the Class IA-3 Certificate Principal Balance, the
Class IA-4 Certificate Principal Balance, the Class IA-5 Certificate Principal
Balance, the Class IA-6 Certificate Principal Balance, the Class IM-1
Certificate Principal Balance, the Class IM-2 Certificate Principal Balance, the
Class IB Certificate Principal Balance and the Class C Group I Certificate
Principal Balance, in each case for such date of determination.
Group I Certificates: Any of the Class IA-1, Class IA-2, Class IA-3,
Class IA-4, Class IA-5, Class IA-6, Class IM-1, Class IM-2, Class IB, Class IL
or Class IP Certificates.
Group I Class A Certificate Principal Balance: For any date of
determination, the sum of the Class IA-1 Certificate Principal Balance, the
Class IA-2 Certificate Principal Balance, the Class IA-3 Certificate Principal
Balance, the Class IA-4 Certificate Principal Balance, the Class IA-5
Certificate Principal Balance and the Class IA-6 Certificate Principal Balance,
in each case for such date of determination.
Group I Class A Certificates: Any of the Class IA-1, Class IA-2, Class
IA-3, Class IA-4, Class IA-5 or Class IA-6 Certificates.
Group I Class A Principal Distribution Amount: With respect to any
Distribution Date (i) prior to the Group I Stepdown Date or any Distribution
Date on which a Group I Trigger Event exists, 100% of the Group I Principal
Distribution Amount for such Distribution Date and (ii) on or after the Group I
Stepdown Date where a Group I Trigger Event does not exist, the excess of (A)
the Group I Class A Certificate Principal Balance immediately prior to such
Distribution Date over (B) the lesser of (i) 78.80% of the Stated Principal
Balance of the Group I Mortgage Loans as of the end of the immediately preceding
Due Period and (II) the excess of the Stated Principal Balance of the Group I
Mortgage Loans as of the end of the immediately preceding Due Period over
$2,250,000; provided, however, that in no event will the Group I Class A
Principal Distribution Amount with respect to any Distribution Date exceed the
Group I Class A Certificate Principal Balance.
Group I Class B Principal Distribution Amount: With respect to any
Distribution Date on or after the Group I Stepdown Date and as long as a Group I
Trigger Event does not exist, the excess of (i) the sum of (A) the Group I Class
A Certificate Principal Balance (after taking into account distribution of the
Group I Class A Principal Distribution Amount on such Distribution Date), (B)
the Class IM-1 Certificate Principal Balance (after taking into account
distribution of the Group I Class IM-1 Distribution Amount on such Distribution
Date), (C) the Class IM-2 Certificate Principal Balance (after taking into
account distribution of the Group I Class IM-2 Principal Distribution Amount for
such Distribution Date), and (D) the Class IB Certificate Principal Balance
immediately prior to such Distribution Date over (ii) the lesser of (A) 94.30%
of the Stated Principal Balance of the Group I Mortgage Loans as of the end of
the immediately preceding Due Period and (B) the excess of the Stated Principal
Balances of the Group I Mortgage Loans as of the end of the immediately
preceding Due Period over $2,250,000, provided, however, that after the Group I
Class A Certificate Principal Balance, the Class IM-1 Certificate Principal
Balance and the Class IM-2 Certificate Principal Balance has been reduced to
zero, the Group I Class B Principal Distribution Amount for such Distribution
Date will equal 100% of the Group I Principal Distribution Amount for such
Distribution Date remaining after any distributions on the Group I Class A
Certificates, Class IM-1 Certificates and Class IM-2 Certificates and provided,
further, however, that in no event will the Group I Class B Principal
Distribution Amount with respect to any Distribution Date exceed the Class IB
Certificate Principal Balance.
-20-
Group I Class IM-1 Principal Distribution Amount: With respect to any
Distribution Date on or after the Group I Stepdown Date, 100% of the Group I
Principal Distribution Amount for such Distribution Date if the Group I Class A
Certificate Principal Balance has been reduced to zero and a Group I Trigger
Event exists, or as long as a Group I Trigger Event does not exist, the excess
of (i) the sum of (A) the Group I Class A Certificate Principal Balance (after
taking into account distributions of the Group I Class A Principal Distribution
Amount on such Distribution Date) and (B) the Class IM-1 Certificate Principal
Balance immediately prior to such Distribution Date over (ii) the lesser of (A)
83.80% of the Stated Principal Balances of the Group I Mortgage Loans as of the
end of the immediately preceding Due Period and (B) the excess of the Stated
Principal Balance for the Group I Mortgage Loans as of the end of the
immediately preceding Due Period over $2,250,000. Notwithstanding the foregoing,
(i) on any Distribution Date prior to the Stepdown Date on which the Certificate
Principal Balance of each Class of Group I Class A Certificates has been reduced
to zero, the Group I Class IM-1 Principal Distribution Amount will equal the
lesser of (A) the outstanding Certificate Principal Balance of the Class IM-1
Certificates and (B) 100% of the Group I Principal Distribution Amount remaining
after any distributions on such Class A Certificates and (ii) in no event will
the Group I Class IM-1 Principal Distribution Amount with respect to any
Distribution Date exceed the Class IM-1 Certificate Principal Balance.
Group I Class IM-2 Principal Distribution Amount: With respect to any
Distribution Date on or after the Group I Stepdown Date, 100% of the Group I
Principal Distribution Amount for such Distribution Date if the Group I Class A
Certificate Principal Balance and the Class IM-1 Certificate Principal Balance
have been reduced to zero and a Group I Trigger Event exists, or as long as a
Group I Trigger Event does not exist, the excess of (i) the sum of (A) the Group
I Class A Certificate Principal Balance (after taking into account distributions
of the Group I Class A Principal Distribution Amount on such Distribution Date),
(B) the Class IM-1 Certificate Principal Balance (after taking into account
distributions of the Group I Class IM-1 Principal Distribution Amount on such
Distribution Date) and (C) the Class IM-2 Certificate Principal Balance
immediately prior to such Distribution Date over (ii) the lesser of (A) 88.80%
of the Stated Principal Balances of the Group I Mortgage Loans as of the end of
the immediately preceding Due Period and (B) the excess of the Stated Principal
Balances for the Group I Mortgage Loans as of the end of the immediately
preceding Due Period over $2,250,000. Notwithstanding the foregoing, (i) on any
Distribution Date prior to the Stepdown Date on which the Certificate Principal
Balance of each Class of Group I Class A Certificates and the Class IM-1
Certificates has been reduced to zero, the Group I Class IM-2 Principal
Distribution Amount will equal the lesser of (A) the outstanding Certificate
Principal Balance of the Class IM-2 Certificates and (B) 100% of the Group I
Principal Distribution Amount remaining after any distributions on such Class A
and Class M-1 Certificates and (ii) in no event will the Group I Class IM-2
Principal Distribution Amount with respect to any Distribution Date exceed the
Class IM-2 Certificate Principal Balance.
-21-
Group I Extra Principal Distribution Amount: With respect to any
Distribution Date, an amount equal to (i) prior to the Group I Stepdown Date,
the excess of (A) the sum of (I) the Group I Certificate Principal Balance
(reduced by the Group I Principal Funds with respect to such Distribution Date)
exclusive of Class C Group I Certificate Principal Balance and (II) $12,825,000
over (B) the Stated Principal Balance of the Group I Mortgage Loans as of such
Distribution Date and (ii) on and after the Group I Stepdown Date, (A) the sum
of (I) the Group I Certificate Principal Balance (reduced by the Group I
Principal Funds with respect to such Distribution Date) exclusive of Class C
Group I Certificate Principal Balance and (II) the greater of (x) 5.70% of the
Stated Principal Balance of the Group I Mortgage Loans as of the end of the
immediately preceding Due Period and (y) $2,250,000 less (B) the Stated
Principal Balance of the Group I Mortgage Loans as of the end of the immediately
preceding Due Period, provided, however, that if on any Distribution Date, a
Group I Trigger Event is in effect, the Group I Extra Principal Distribution
Amount will not be reduced to the percentage of the then current Stated
Principal Balance of the Group I Mortgage Loans (and will remain fixed at such
percentage of the then current Stated Principal Balance of the Group I Mortgage
Loans as of the Due Date immediately prior to the occurrence of the Group I
Trigger Event) until the next Distribution Date on which a Group I Trigger Event
is not in effect. Notwithstanding the foregoing, the Group I Extra Principal
Distribution Amount will be zero for each Distribution Date up to and including
the Distribution Date in August 2004.
Group I Interest Funds: With respect to Group I Mortgage Loans and any
Distribution Date, the sum, without duplication, of (i) all scheduled interest
due during the related Due Period and received before the related Servicer
Remittance Date or advanced on or before the related Servicer Remittance Date
less the Servicing Fee with respect to the Group I Mortgage Loans, (ii) all
Advances relating to interest with respect to the Group I Mortgage Loans, (iii)
all Compensating Interest with respect to the Group I Mortgage Loans, (iv)
Liquidation Proceeds with respect to the Group I Mortgage Loans (to the extent
such Liquidation Proceeds relate to interest), (v) proceeds of any purchase
pursuant to Sections 2.02, 2.03, 3.12 or 9.01 (to the extent such proceeds
relate to interest), and (vi) prepayment penalties and late payment fees
received with respect to the Group I Mortgage Loans during the related
Prepayment Period, less all Non-Recoverable Advances with respect to the Group I
Mortgage Loans relating to interest reimbursed during the related Due Period.
Group I Marker Interests: The Middle-Tier REMIC Group I Regular
Interests, other than the Middle-Tier REMIC Group I Accrual Interest.
Group I Mortgage Loans: The pool of Mortgage Loans identified in the
Group I Mortgage Loan Schedule attached hereto as Exhibit F-1, including any
Mortgage Loans delivered in replacement thereof. Such Mortgage Loans each have a
Mortgage Rate which is fixed for the life of the related Mortgage.
Group I Net Rate: With respect to any Distribution Date, the weighted
average Net Mortgage Rate for Mortgage Loans in Loan Group I (calculated based
upon the Stated Principal Balance of such Mortgage Loans as of the preceding
Distribution Date) as of the related Due Date.
Group I Principal Distribution Amount: With respect to each
Distribution Date, the sum of (i) the Group I Principal Funds for such
Distribution Date and (ii) any Group I Extra Principal Distribution Amount for
such Distribution Date.
Group I Principal Funds: With respect to the Group I Mortgage Loans and
any Distribution Date, the sum, without duplication, of (i) the scheduled
principal due during the related Due Period and received before the related
Servicer Remittance Date or advanced on or before the related Servicer
Remittance Date, (ii) prepayments collected in the related Prepayment Period,
(iii) the Stated Principal Balance of each Mortgage Loan that was purchased by
the Depositor or the Servicer during the related Prepayment Period or in the
case of a purchase pursuant to Section 9.01, on the Business Day prior to such
Distribution Date, (iv) the amount, if any, by which the aggregate unpaid
principal balance of any Replacement Mortgage Loan is less than the aggregate
unpaid principal balance of the related Deleted Mortgage Loans delivered by the
Depositor in connection with a substitution of a Mortgage Loan pursuant to
Section 2.03(c) and (v) all Liquidation Proceeds collected during the related
Due Period (to the extent such Liquidation Proceeds related to principal), less
all Non-Recoverable Advances relating to principal with respect to the Group I
Mortgage Loans and all Non-Recoverable Advances reimbursed during the related
Due Period.
-22-
Group I Required Loss Percentage: As of any Distribution Date, the
applicable percentage for such Distribution Date set forth in the following
table:
Distribution Date Occurring In Group I Required Loss Percentage
------------------------------ --------------------------------
July 2007 - June 2008............ 1.50% with respect to July 2007, plus an
additional 1/12 of 1.00% for each month
thereafter
July 2008 - June 2009............ 2.50% with respect to July 2008, plus an
additional 1/12 of 0.50% for each month
thereafter
July 2009 - June 2010............ 3.00% with respect to July 2009, plus an
additional 1/12 of 0.25% for each month
thereafter
July 2010 - June 2011............ 3.25% with respect to July 2010, plus an
additional 1/12 of 0.25% for each month
thereafter
July 2011 and thereafter......... 3.50%
Group I Required Percentage: As of any Distribution Date following a
Group I Stepdown Date, the quotient of (i) the excess of (A) the Stated
Principal Balances of the Group I Mortgage Loans as of such Distribution Date
over (B) the Certificate Principal Balance of the most senior Class of Group I
Certificates outstanding, prior to giving effect to distributions to be made on
such Distribution Date and (ii) the Stated Principal Balance of the Group I
Mortgage Loans as of such Distribution Date.
Group I Stepdown Date: The later to occur of (i) the Distribution Date
in July 2007 or (ii) the first Distribution Date on which the Group I Class A
Certificate Principal Balance (reduced by the Group I Principal Funds with
respect to such Distribution Date) is less than or equal to 78.80% of the Stated
Principal Balances of the Group I Mortgage Loans as of the Distribution Date.
Group I Subordinated Certificates: The Class IM-1, Class IM-2 and Class
IB Certificates.
Group I Trigger Event: With respect to the Group I Certificates after
the Group I Stepdown Date, a Distribution Date on which either (a) the product
of (A) two (2.0) and (B) the quotient of (i) the aggregate Stated Principal
Balance of all Group I Mortgage Loans which are 60 or more days Delinquent
(including, for the purposes of this calculation, Group I Mortgage Loans in
foreclosure and REO Properties) and (ii) the Stated Principal Balance of the
Group I Mortgage Loans as of the preceding Servicer Advance Date, exceeds the
Group I Required Percentage or (b) the quotient (expressed as a percentage) of
(A) the aggregate Realized Losses incurred with respect to the applicable loan
group from the Cut-off Date through the last day of the calendar month preceding
such Distribution Date and (B) the aggregate stated Principal Balance of the
Group I Mortgage Loans as of the Cut-off Date, exceeds the Group I Required Loss
Percentage.
Group II Available Funds Cap: As of any Distribution Date with respect
to the Group II Certificates, a per annum rate equal to 12 times the quotient of
(i) the total scheduled interest on the Mortgage Loans in Loan Group II based on
the Net Mortgage Rates on the related Due Date divided by (ii) the aggregate
principal balance of the Group II Certificates (other than the Class IIL
Certificates and the Class IIP Certificates) as of the first day of the
applicable Accrual Period multiplied by 30 and divided by the actual number of
days in the related Accrual Period.
-23-
Group II Certificates: Any of the Class IIA-1, Class IIA-2, Class
IIM-1, Class IIM-2, Class IIB, Class IIL and Class IIP Certificates.
Group II Certificate Principal Balance: For any date of determination,
the sum of the Class IIA-1 Certificate Principal Balance, the Class IIA-2
Certificate Principal Balance, the Class IIM-1 Certificate Principal Balance,
the Class IIM-2 Certificate Principal Balance, the Class IIB Certificate
Principal Balance and the Class C Group II Certificate Principal Balance, in
each case as of such date of determination.
Group II Class A Certificate Principal Balance: For any date of
determination, the sum of the Class IIA-1 Certificate Principal Balance and the
Class IIA-2 Certificate Principal Balance, in each case for such date of
determination.
Group II Class A Certificates: Any of the Class IIA-1 or Class IIA-2
Certificates.
Group II Class A Principal Distribution Amount: With respect to any
Distribution Date (i) prior to the Group II Stepdown Date or any Distribution
Date on which a Group II Trigger Event exists, 100% of the Group II Principal
Distribution Amount for such Distribution Date and (ii) on or after the Group II
Stepdown Date where a Group II Trigger Event does not exist, the excess of (A)
the Group II Class A Certificate Principal Balance immediately prior to such
Distribution Date over (B) the lesser of (i) 76.00% of the Stated Principal
Balance of the Group II Mortgage Loans as of the end of the immediately
preceding Due Period and (II) the excess of the Stated Principal Balance of the
Group II Mortgage Loans as of the end of the immediately preceding Due Period
over $1,500,000 provided, however, that in no event will the Group II Class A
Principal Distribution Amount with respect to any Distribution Date exceed the
Group II Class A Certificate Principal Balance.
Group II Class B Principal Distribution Amount: With respect to any
Distribution Date on or after the Group II Stepdown Date and as long as a Group
II Trigger Event does not exist, the excess of (i) the sum of (A) the Group II
Class A Certificate Principal Balance (after taking into account distribution of
the Group II Class A Principal Distribution Amount on such Distribution Date),
(B) the Class IIM-1 Certificate Principal Balance (after taking into account
distribution of the Group II Class IIM-1 Principal Distribution Amount on such
Distribution Date), (C) the Class IIM-2 Certificate Principal Balance (after
taking into account distribution of the Group II Class IIM-2 Principal
Distribution Amount for such Distribution Date), and (D) the Class IIB
Certificate Principal Balance immediately prior to such Distribution Date over
(ii) the lesser of (A) 97.50% of the Stated Principal Balance of the Group II
Mortgage Loans as of the end of the immediately preceding Due Period and (B) the
excess of the Stated Principal Balances of the Group II Mortgage Loans as of the
end of the immediately preceding Due Period over $1,500,000; provided, however,
that after the Group II Class A Certificate Principal Balance, the Class IIM-1
Certificate Principal Balance and the Class IIM-2 Certificate Principal Balance
has been reduced to zero, the Group II Class B Principal Distribution Amount for
such Distribution Date will equal 100% of the Group II Principal Distribution
Amount for such Distribution Date remaining after any distributions on the Class
IIA-1 Certificates, Class IIA-2 Certificates, Class IIM-1 Certificates and Class
IIM-2 Certificates and provided, further, however, that in no event will the
Group II Class B Principal Distribution Amount with respect to any Distribution
Date exceed the Class IIB Certificate Principal Balance.
-24-
Group II Class IIM-1 Principal Distribution Amount: With respect to any
Distribution Date on or after the Group II Stepdown Date, 100% of the Group II
Principal Distribution Amount for such Distribution Date if the Group II Class A
Certificate Principal Balance has been reduced to zero and a Group II Trigger
Event exists, or as long as a Group II Trigger Event does not exist, the excess
of (i) the sum of (A) the Group II Class A Certificate Principal Balance (after
taking into account distributions of the Group II Class A Principal Distribution
Amount on such Distribution Date) and (B) the Class IIM-1 Certificate Principal
Balance immediately prior to such Distribution Date over (ii) the lesser of (A)
85.00% of the Stated Principal Balances of the Group II Mortgage Loans as of the
end of the immediately preceding Due Period and (B) the excess of the Stated
Principal Balances for the Group II Mortgage Loans as of the end of the
immediately preceding Due Period over $1,500,000. Notwithstanding the foregoing,
(i) on any Distribution Date prior to the Stepdown Date on which the Certificate
Principal Balance of each Class of Group II Class A Certificates has been
reduced to zero, the Group II Class IIM-1 Principal Distribution Amount will
equal the lesser of (A) the outstanding Certificate Principal Balance of the
Class IIM-1 Certificates and (B) 100% of the Group II Principal Distribution
Amount remaining after any distributions on such Class A Certificates and (ii)
in no event will the Group II Class IIM-1 Principal Distribution Amount with
respect to any Distribution Date exceed the Class IIM-1 Certificate Principal
Balance.
Group II Class IIM-2 Principal Distribution Amount: With respect to any
Distribution Date on or after the Group II Stepdown Date, 100% of the Group II
Principal Distribution Amount for such Distribution Date if the Group II Class A
Certificate Principal Balance and the Class IIM-1 Certificate Principal Balance
have been reduced to zero and a Group II Trigger Event exists, or as long as a
Group II Trigger Event does not exist, the excess of (i) the sum of (A) the
Group II Class A Certificate Principal Balance (after taking into account
distributions of the Group II Class A Principal Distribution Amount on such
Distribution Date), (B) the Class IIM-1 Certificate Principal Balance (after
taking into account distributions of the Group II Class IIM-1 Principal
Distribution Amount on such Distribution Date) and (C) the Class IIM-2
Certificate Principal Balance immediately prior to such Distribution Date over
(ii) the lesser of (A) 92.50% of the Stated Principal Balances of the Group II
Mortgage Loans as of the end of the immediately preceding Due Period and (B) the
excess of the Stated Principal Balances of the Group II Mortgage Loans as of the
end of the immediately preceding Due Period over $1,500,000. Notwithstanding the
foregoing, (i) on any Distribution Date prior to the Stepdown Date on which the
Certificate Principal Balance of each Class of Group II Class A Certificates and
the Class IIM-1 Certificates has been reduced to zero, the Group II Class IIM-2
Principal Distribution Amount will equal the lesser of (A) the outstanding
Certificate Principal Balance of the Class IIM-2 Certificates and (B) 100% of
the Group II Principal Distribution Amount remaining after any distributions on
the Class IIA-1, Class IIA-2 and Class IIM-1 Certificates and (ii) in no event
will the Group II Class IIM-2 Principal Distribution Amount with respect to any
Distribution Date exceed the Class IIM-2 Certificate Principal Balance.
Group II Extra Principal Distribution Amount: With respect to any
Distribution Date, an amount equal to (i) prior to the Group II Stepdown Date,
the excess of (A) the sum of (I) the Group II Certificate Principal Balance
(reduced by the Group II Principal Funds with respect to such Distribution Date)
exclusive of the Class C Group II Certificate Principal Balance and (II)
$3,750,000 over (B) the Stated Principal Balance of the Group II Mortgage Loans
as of such Distribution Date and (ii) on and after the Group II Stepdown Date,
(A) the sum of (I) the Group II Certificate Principal Balance (reduced by the
Group II Principal Funds with respect to such Distribution Date) exclusive of
the Class C Group II Certificate Principal Balance and (II) the greater of (x)
2.50% of the Stated Principal Balance of the Group II Mortgage Loans as of the
end of the immediately preceding Due Period and (y) $1,500,000 less (B) the
Stated Principal Balance of the Group II Mortgage Loans as of the end of the
immediately preceding Due Period; provided, however, that if on any Distribution
Date, a Group II Trigger Event is in effect, the Group II Extra Principal
Distribution Amount will not be reduced to the percentage of the then current
Stated Principal Balance of the Group II Mortgage Loans (and will remain fixed
at such percentage of the then current Stated Principal Balance of the Group II
Mortgage Loans as of the Due Date immediately prior to the occurrence of the
Group II Trigger Event) until the next Distribution Date on which a Group II
Trigger Event is not in effect. Notwithstanding the foregoing, the Group II
Extra Principal Distribution Amount will be zero for each Distribution Date up
to and including the Distribution Date in December 2004.
-25-
Group II Interest Funds: With respect to Group II Mortgage Loans and
any Distribution Date, the sum, without duplication, of (i) all scheduled
interest due during the related Due Period and received before the related
Servicer Remittance Date or advanced on or before the related Servicer
Remittance Date less the Servicing Fee with respect to the Group II Mortgage
Loans, (ii) all Advances relating to interest with respect to the Group II
Mortgage Loans, (iii) all Compensating Interest with respect to the Group II
Mortgage Loans, (iv) Liquidation Proceeds with respect to the Group II Mortgage
Loans (to the extent such Liquidation Proceeds relate to interest), (v) proceeds
of any purchase pursuant to Sections 2.02, 2.03, 3.12 or 9.01 (to the extent
such proceeds relate to interest) and (vi) prepayment penalties and late payment
fees received with respect to the Group II Mortgage Loans during the related
Prepayment Period, less all Non-Recoverable Advances with respect to the Group
II Mortgage Loans relating to interest reimbursed during the related Due Period.
Group II Marker Interests: The Middle-Tier REMIC Group II Regular
Interests, other than the Middle-Tier REMIC Group II Accrual Interest.
Group II Mortgage Loans: The pool of Mortgage Loans identified in the
Group II Mortgage Loan Schedule attached hereto as Exhibit F-2, including any
Mortgage Loans delivered in replacement thereof. The Group II Mortgage Loans
consist primarily of Mortgage Loans which have a Mortgage Rate which is
adjustable.
Group II Net Rate: With respect to any Distribution Date, the weighted
average Net Mortgage Rate for Mortgage Loans in Group II (calculated based upon
the Stated Principal Balance of such Mortgage Loans as of the preceding
Distribution Date) as of the related Due Date multiplied by 30 and divided by
the actual number of days in the relevant Accrual Period.
Group II Principal Distribution Amount: With respect to each
Distribution Date, the sum of (i) the Group II Principal Funds for such
Distribution Date and (ii) any Group II Extra Principal Distribution Amount for
such Distribution Date.
Group II Principal Funds: With respect to the Group II Mortgage Loans
and any Distribution Date, the sum, without duplication, of (i) the scheduled
principal due during the related Due Period and received before the related
Servicer Remittance Date or advanced on or before the related Servicer
Remittance Date, (ii) prepayments collected in the related Prepayment Period,
(iii) the Stated Principal Balance of each Mortgage Loan that was purchased by
the Depositor or the Servicer during the related Prepayment Period or, in the
case of a purchase pursuant to Section 9.01, on the Business Day prior to such
Distribution Date, (iv) the amount, if any, by which the aggregate unpaid
principal balance of any Replacement Mortgage Loan is less than the aggregate
unpaid principal of the related Deleted Mortgage Loans delivered by the
Depositor in connection with a substitution of a Mortgage Loan pursuant to
Section 2.03(c) and (v) all Liquidation Proceeds collected during the related
Due Period (to the extent such Liquidation Proceeds related to principal), less
all Non-Recoverable Advances relating to principal with respect to the Group II
Mortgage Loans and all Non-Recoverable Advances reimbursed during the related
Due Period.
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Group II Required Loss Percentage: As of any Distribution Date, the
applicable percentage for such Distribution Date set forth in the following
table:
Distribution Date Occurring In Group II Required Loss Percentage
------------------------------ ---------------------------------
July 2007 - June 2008............ 3.50% with respect to July 2007, plus an
additional 1/12 of 1.25% for each month
thereafter
July 2008 - June 2009............ 4.75% with respect to July 2008, plus an
additional 1/12 of 0.50% for each month
thereafter
July 2009 - June 2010............ 5.25% with respect to July 2009, plus an
additional 1/12 of 0.25% for each month
thereafter
July 2010 and thereafter......... 5.50%
Group II Required Percentage: As of any Distribution Date following a
Group II Stepdown Date, the quotient of (i) the excess of (A) the Stated
Principal Balances of the Group II Mortgage Loans as of such Distribution Date,
over (B) the Certificate Principal Balance of the most senior Class of Group II
Certificates outstanding as of such Distribution Date, prior to giving effect to
distributions to be made on such Distribution Date and (ii) the Stated Principal
Balance of the Group II Mortgage Loans as of such Distribution Date.
Group II Stepdown Date: The later to occur of (i) the Distribution Date
in July 2007 or (ii) the first Distribution Date on which (A) the Group II Class
A Certificate Principal Balance (reduced by the Group II Principal Funds with
respect to such Distribution Date) is less than or equal to (B) 76.00% of the
Stated Principal Balances of the Group II Mortgage Loans as of such Distribution
Date.
Group II Subordinated Certificates: The Class IIM-1, Class IIM-2 and
Class IIB Certificates.
Group II Trigger Event: With respect to the Group II Certificates after
the Group II Stepdown Date, a Distribution Date on which either (a) the product
of (A) two and one-half (2.50) and (B) the quotient of (i) the aggregate Stated
Principal Balance of all Group II Mortgage Loans which are 60 or more days
Delinquent (including, for the purposes of this calculation, Group II Mortgage
Loans in foreclosure and REO Properties) and (ii) the Stated Principal Balance
of the Group II Mortgage Loans as of the preceding Servicer Advance Date,
exceeds the Group II Required Percentage or (b) the quotient (expressed as a
percentage) of (A) the aggregate Realized Losses incurred with respect to the
applicable loan group from the Cut-off Date through the last day of the calendar
month preceding such Distribution Date and (B) the aggregate stated Principal
Balance of the Group II Mortgage Loans as of the Cut-off Date, exceeds the Group
II Required Loss Percentage.
Group II Weighted Maximum Rate Cap: As of any Distribution Date, a rate
equal to the product of (x) (i) the weighted average of the Maximum Mortgage
Rates on the Group II Mortgage Loans (calculated based upon the Stated Principal
Balance of such Mortgage Loans as of the preceding Distribution Date) on such
Distribution Date minus (ii) the Servicing Fee Rate and (y) a fraction, the
numerator of which is 30 and the denominator of which is the actual number of
days in the relevant Accrual Period.
-27-
Indenture: An indenture relating to the issuance of notes guaranteed by
the NIMs Insurer.
Initial Adjustment Date: As to any adjustable rate Mortgage Loan in
Loan Group II, the first Adjustment Date following the origination of such
Mortgage Loan.
Initial Certificate Principal Balance: With respect to any Certificate,
the Certificate Principal Balance of such Certificate or any predecessor
Certificate on the Closing Date as set forth in Section 5.01 hereof.
Initial Mortgage Rate: As to each adjustable rate Mortgage Loan, the
Mortgage Rate in effect prior to the Initial Adjustment Date.
Insurance Policy: With respect to any Mortgage Loan included in the
Trust Fund, any insurance policy, including all riders and endorsements thereto
in effect with respect to such Mortgage Loan, including any replacement policy
or policies for any insurance policies.
Insurance Proceeds: Proceeds paid in respect of the Mortgage Loans
pursuant to any Insurance Policy or any other insurance policy covering a
Mortgage Loan, to the extent such proceeds are payable to the mortgagee under
the Mortgage, the Servicer or the trustee under the deed of trust and are not
applied to the restoration of the related Mortgaged Property (or the Underlying
Mortgaged Property, in the case of a Co-op Loan) or released to the Mortgagor in
accordance with the procedures that the Servicer would follow in servicing
mortgage loans held for its own account, in each case other than any amount
included in such Insurance Proceeds in respect of Insured Expenses.
Insured Expenses: Expenses covered by an Insurance Policy or any other
insurance policy with respect to the Mortgage Loans.
Interest Carryforward Amount: Any of the Class IA-1 Interest
Carryforward Amount, the Class IA-2 Interest Carryforward Amount, the Class IA-3
Interest Carryforward Amount, the Class IA-4 Interest Carryforward Amount, the
Class IA-5 Interest Carryforward Amount, the Class IA-6 Interest Carryforward
Amount, the Class IM-1 Interest Carryforward Amount, the Class IM-2 Interest
Carryforward Amount, the Class IB Interest Carryforward Amount, the Class C
Group I Interest Carryforward Amount, the Class IIA-1 Interest Carryforward
Amount, the Class IIA-2 Interest Carryforward Amount, the Class IIM-1 Interest
Carryforward Amount, the Class IIM-2 Interest Carryforward Amount, the Class IIB
Interest Carryforward Amount or the Class C Group II Interest Carryforward
Amount, as the case may be.
Interest Carryover Amount: Any of the Class IIA-1 Interest Carryover
Amount, the Class IIA-2 Interest Carryforward Amount, the Class IIM-1 Interest
Carryover Amount, the Class IIM-2 Interest Carryover Amount or the Class IIB
Interest Carryover Amount, as the case may be.
Interest Determination Date: With respect to the Group II Certificates
and the Class IA-1 Certificates, (i) for any Accrual Period other than the first
Accrual Period, the second LIBOR Business Day preceding the commencement of such
Accrual Period and (ii) for the first Accrual Period, June 25, 2004.
Latest Possible Maturity Date: The first Distribution Date following
the anniversary of the scheduled maturity date of the Mortgage Loan in the Trust
Fund having the latest scheduled maturity date as of the Cut-off Date which
shall be the Distribution Date in February 2035.
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LIBOR Business Day: Any day on which banks in the City of London,
England and New York City, U.S.A. are open and conducting transactions in
foreign currency and exchange.
Liquidated Loan: With respect to any Distribution Date, a defaulted
Mortgage Loan that has been liquidated through deed-in-lieu of foreclosure,
foreclosure sale, trustee's sale or other realization as provided by applicable
law governing the real property subject to the related Mortgage and any security
agreements and as to which the Servicer has certified (in accordance with
Section 3.12) in the related Prepayment Period that it has received all amounts
it expects to receive in connection with such liquidation.
Liquidation Proceeds: Amounts, including Insurance Proceeds and any
Subsequent Recovery, received in connection with the partial or complete
liquidation of Mortgage Loans, whether through trustee's sale, foreclosure sale,
sale by the Servicer pursuant to this Agreement or otherwise or amounts received
in connection with any condemnation or partial release of a Mortgaged Property
and any other proceeds received in connection with an REO Property, less the sum
of related unreimbursed Advances, Servicing Fees, Servicing Advances and any
other expenses related to such Mortgage Loan.
Loan Group: Either of the Group I Mortgage Loans or the Group II
Mortgage Loans.
Loan Group I: The Group I Mortgage Loans.
Loan Group II: The Group II Mortgage Loans.
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 lesser
of (x) the Appraised Value of the related Mortgaged Property (or applicable
dwelling unit, in the case of a Co-op Loan) and (y) the sales price of the
related Mortgaged Property (or applicable dwelling unit, in the case of a Co-op
Loan) at the time of origination.
Loss Mitigation: A circumstance where a default by the Mortgagor has
occurred or is imminent and the Servicer is likely to collect more funds with
respect to a Mortgage Loan by waiving a prepayment penalty than by not waiving a
prepayment penalty.
Lower-Tier REMIC: The REMIC described in Section 2.07 hereof which is
the issuer of the Lower-Tier REMIC Regular Interests and the LR Interest.
Lower-Tier REMIC Regular Interest I: An uncertificated regular interest
in the Lower-Tier REMIC having the characteristics described in Section 2.07.
Lower-Tier REMIC Regular Interest II: An uncertificated regular
interest in the Lower-Tier REMIC having the characteristics described in Section
2.07.
Lower-Tier REMIC Regular Interests: Lower-Tier REMIC Regular Interest I
and Lower-Tier REMIC Regular Interest II.
LR Interest: The sole class of "residual interest" in the Lower-Tier
REMIC.
MERS: Mortgage Electronic Registration Systems, Inc., a Delaware
corporation, or any successor in interest thereto.
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MERS Mortgage Loan: Any Mortgage Loan as to which the related Mortgage,
or an Assignment of Mortgage, has been or will be recorded in the name of MERS
or otherwise assigned to MERS, as agent for the holder from time to time of the
Mortgage Note.
Maximum Mortgage Rate: With respect to each adjustable rate Group II
Mortgage Loan, the maximum rate of interest set forth as such in the related
Mortgage Note.
Middle-Tier REMIC: The REMIC described in Section 2.07 which is the
issuer of the Middle-Tier REMIC Regular Interests and the MR Interest.
Middle-Tier REMIC Accrual Interests: The Middle-Tier REMIC Group I
Accrual Interest and the Middle-Tier REMIC Group II Accrual Interest.
Middle-Tier REMIC Class IA-1 Interest: A regular interest in the
Middle-Tier REMIC having the characteristics described in Section 2.07.
Middle-Tier REMIC Class IA-2 Interest: A regular interest in the
Middle-Tier REMIC having the characteristics described in Section 2.07.
Middle-Tier REMIC Class IA-3 Interest: A regular interest in the
Middle-Tier REMIC having the characteristics described in Section 2.07.
Middle-Tier REMIC Class IA-4 Interest: A regular interest in the
Middle-Tier REMIC having the characteristics described in Section 2.07.
Middle-Tier REMIC Class IA-5 Interest: A regular interest in the
Middle-Tier REMIC having the characteristics described in Section 2.07.
Middle-Tier REMIC Class IA-6 Interest: A regular interest in the
Middle-Tier REMIC having the characteristics described in Section 2.07.
Middle-Tier REMIC Class IB Interest: A regular interest in the
Middle-Tier REMIC having the characteristics described in Section 2.07.
Middle-Tier REMIC Class IM-1 Interest: A regular interest in the
Middle-Tier REMIC having the characteristics described in Section 2.07.
Middle-Tier REMIC Class IM-2 Interest: A regular interest in the
Middle-Tier REMIC having the characteristics described in Section 2.07.
Middle-Tier REMIC Class IIA-1 Interest: A regular interest in the
Middle-Tier REMIC having the characteristics described in Section 2.07.
Middle-Tier REMIC Class IIA-2 Interest: A regular interest in the
Middle-Tier REMIC having the characteristics described in Section 2.07.
Middle-Tier REMIC Class IIM-1 Interest: A regular interest in the
Middle-Tier REMIC having the characteristics described in Section 2.07.
Middle-Tier REMIC Class IIM-2 Interest: A regular interest in the
Middle-Tier REMIC having the characteristics described in Section 2.07.
-30-
Middle-Tier REMIC Class IIB Interest: A regular interest in the
Middle-Tier REMIC having the characteristics described in Section 2.07.
Middle-Tier REMIC Group I Accrual Interest: A regular interest in the
Middle-Tier REMIC having the characteristics described in Section 2.07.
Middle-Tier REMIC Group I Regular Interests: The Middle-Tier REMIC
Class IA-1 Interest, the Middle-Tier REMIC Class IA-2 Interest, the Middle-Tier
REMIC Class IA-3 Interest, the Middle-Tier REMIC Class IA-4 Interest, the
Middle-Tier REMIC Class IA-5 Interest, the Middle-Tier REMIC Class IA-6
Interest, the Middle-Tier REMIC Class IM-1 Interest, the Middle-Tier REMIC Class
IM-2 Interest, the Middle-Tier REMIC IB Interest and the Middle-Tier REMIC Group
I Accrual Interest.
Middle-Tier REMIC Group II Accrual Interest: A regular interest in the
Middle-Tier REMIC having the characteristics described in Section 2.07.
Middle-Tier REMIC Group II Regular Interests: The Middle-Tier REMIC
Class IIA-1 Interest, the Middle-Tier REMIC Class IIA-2 Interest, the
Middle-Tier REMIC Class IIM-1 Interest, the Middle-Tier REMIC Class IIM-2
Interest, the Middle-Tier REMIC Class IIB Interest and the Middle-Tier REMIC
Group II Accrual Interest.
Middle-Tier REMIC Regular Interests: Each of the Middle-Tier REMIC
Group I Regular Interests and the Middle-Tier REMIC Group II Regular Interests.
Minimum Mortgage Rate: With respect to each adjustable rate Group II
Mortgage Loan, the minimum rate of interest set forth as such in the related
Mortgage Note.
Monthly Statement: The statement delivered to the Certificateholders
pursuant to Section 4.05.
Moody's: Xxxxx'x Investors Service, Inc., or its successor in interest.
Mortgage: With respect to a Mortgage Loan that is not a Co-op Loan, the
mortgage, deed of trust or other instrument creating a first lien or a first
priority ownership interest in an estate in fee simple in real property securing
a Mortgage Note. With respect to a Co-op Loan, the security agreement creating a
security interest in the stock allocated to a dwelling unit in a residential
cooperative housing corporation and pledged to secure such Co-op Loan and the
related Co-op Lease.
Mortgage File: The mortgage documents listed in Section 2.01 hereof
pertaining to a particular Mortgage Loan and any additional documents delivered
to the Trustee to be added to the Mortgage File pursuant to this Agreement.
Mortgage Loans: Such of the Group I Mortgage Loans and Group II
Mortgage Loans transferred and assigned to the Trustee pursuant to the
provisions hereof as from time to time are held as a part of the Trust Fund
(including any REO Property), the mortgage loans so held being identified in the
Mortgage Loan Schedule, notwithstanding foreclosure or other acquisition of
title of the related Mortgaged Property. Any mortgage loan that was intended by
the parties hereto to be transferred to the Trust Fund as indicated by such
Mortgage Loan Schedule which is in fact not so transferred for any reason shall
continue to be a Mortgage Loan hereunder until the Purchase Price with respect
thereto has been paid to the Trust Fund.
-31-
Mortgage Loan Schedule: The lists of Mortgage Loans (as from time to
time amended by the Trustee to reflect the deletion of Deleted Mortgage Loans
and the addition of Replacement Mortgage Loans pursuant to the provisions of
this Agreement) transferred to the Trustee as part of the Trust Fund and from
time to time subject to this Agreement, attached hereto as Exhibits F-1 and F-2,
setting forth the following information with respect to each Mortgage Loan:
(i) the loan number;
(ii) the Appraised Value;
(iii) the Initial Mortgage Rate;
(iv) the maturity date and the months remaining before maturity date;
(v) the original principal balance;
(vi) the Cut-off Date Principal Balance;
(vii) the first payment date of the Mortgage Loan;
(viii) the Scheduled Payment in effect as of the Cut-off Date;
(ix) the Loan-to-Value Ratio at origination;
(x) a code indicating whether the residential dwelling at the time
of origination was represented to be owner-occupied;
(xi) a code indicating the property type;
(xii) with respect to each adjustable rate Group II Mortgage Loan;
(a) the frequency of each Adjustment Date;
(b) the next Adjustment Date;
(c) the Maximum Mortgage Rate;
(d) the Minimum Mortgage Rate;
(e) the Mortgage Rate as of the Cut-off Date;
(f) the related Periodic Rate Cap;
(g) the Gross Margin; and
(xiii) location of the related Mortgaged Property (or Underlying
Mortgaged Property, in the case of a Co-op Loan).
Mortgage Note: The original executed note or other evidence of
indebtedness evidencing the indebtedness of a Mortgagor under a Mortgage Loan
and all amendments, modifications and attachments thereto.
Mortgage Pool: The aggregate of the Mortgage Loans identified in the
Mortgage Loan Schedule.
-32-
Mortgage Rate: The annual rate of interest borne by a Mortgage Note
from time to time.
Mortgaged Property: The underlying property securing a Mortgage Loan.
Mortgagor: The obligor on a Mortgage Note.
MR Interest: The sole class of "residual interest" in the Middle-Tier
REMIC.
Net Mortgage Rate: As to each Mortgage Loan, and at any time, the per
annum rate equal to the then current Mortgage Rate less the Servicing Fee Rate.
NIM Notes: The notes to be insured pursuant to the Indenture.
NIMs Insurer: Any insurer that is guaranteeing certain payments under
notes issued by a trust, the principal assets of which include the Class C
Certificates, the Class L Certificates and/or the Class P Certificates.
Non-Book-Entry Certificate: Any Certificate other than a Book-Entry
Certificate.
Non-MERS Mortgage Loan: Any Mortgage Loan other than a MERS Mortgage
Loan.
Non-Recoverable Advance: Any portion of an Advance previously made or
proposed to be made by the Servicer that, in the good faith judgment of the
Servicer, will not or, in the case of a current delinquency, would not, be
ultimately recoverable by the Servicer from the related Mortgagor, related
Liquidation Proceeds or otherwise.
Non-Recoverable Servicing Advance: Any portion of a Servicing Advance
previously made or proposed to be made by the Servicer that, in the good faith
judgment of the Servicer, will not be ultimately recoverable by the Servicer
from the related Mortgagor, related Liquidation Proceeds or otherwise.
Non-Supported Interest Shortfall: As defined in Section 4.02.
Officer's Certificate: A certificate (i) signed by the Chairman of the
Board, the Vice Chairman of the Board, the President, a vice president (however
denominated), an Assistant Vice President, the Treasurer, the Secretary, or one
of the assistant treasurers or assistant secretaries of the Depositor, the
Servicer (or any other officer customarily performing functions similar to those
performed by any of the above designated officers and also to whom, with respect
to a particular matter, such matter is referred because of such officer's
knowledge of and familiarity with a particular subject) or (ii), if provided for
in this Agreement, signed by a Servicing Officer, as the case may be, and
delivered to the Depositor, the Servicer and the Trustee, as the case may be, as
required by this Agreement.
One-Month LIBOR: With respect to any Accrual Period, the rate
determined by the Servicer either directly or by or through any Paying Agent on
the related Interest Determination Date on the basis of (a) the offered rates
for one-month United States dollar deposits, as such rates appear on Telerate
page 3750, as of 11:00 a.m. (London time) on such Interest Determination Date or
(b) if such rate does not appear on Telerate Page 3750 as of 11:00 a.m. (London
time), the offered rates of the Reference Banks for one-month United States
dollar deposits, as such rates appear on the Reuters Screen LIBO Page, as of
11:00 a.m. (London time) on such Interest Determination Date. If One-Month LIBOR
is determined pursuant to clause (b) above, on each Interest Determination Date,
One-Month LIBOR for the related Accrual Period will be established by the
Servicer, either directly or through any Paying Agent, as follows:
-33-
(i) If on such Interest Determination Date two or more
Reference Banks provide such offered quotations,
One-Month LIBOR for the related Accrual Period shall be
the arithmetic mean of such offered quotations (rounded
upwards if necessary to the nearest whole multiple of
0.03125%).
(ii) If on such Interest Determination Date fewer than two
Reference Banks provide such offered quotations,
One-Month LIBOR for the related Accrual Period shall be
the higher of (i) One-Month LIBOR as determined on the
previous Interest Determination Date and (ii) the
Reserve Interest Rate.
Opinion of Counsel: A written opinion of counsel, who may be counsel
for the Depositor or the Servicer, reasonably acceptable to each addressee of
such opinion; provided, however, that with respect to Section 6.04 or 10.01, or
the interpretation or application of the REMIC Provisions, such counsel must (i)
in fact be independent of the Depositor and the Servicer, (ii) not have any
direct financial interest in the Depositor or the Servicer or in any affiliate
of either, and (iii) not be connected with the Depositor or the Servicer as an
officer, employee, promoter, underwriter, trustee, partner, director or person
performing similar functions.
Optional Termination: The termination of either Loan Group hereunder
pursuant to the purchase of the Mortgage Loans pursuant to the last sentence of
Section 9.01 hereof.
Optional Termination Amounts: With respect to a Loan Group, the
Repurchase Price paid by the Servicer in connection with any repurchase of all
of the Mortgage Loans in such Loan Group pursuant to Section 9.01.
Optional Termination Date: With respect to a Loan Group, the
Distribution Date on which the aggregate Stated Principal Balance of the
Mortgage Loans in such Loan Group is less than or equal to 10% of the aggregate
Stated Principal Balance of the Mortgage Loans in such Loan Group as of the
Cut-off Date.
Original Mortgage Loan: The mortgage loan refinanced in connection with
the origination of a Refinancing Mortgage Loan.
OTS: The Office of Thrift Supervision.
Outstanding: With respect to the Certificates as of any date of
determination, all Certificates theretofore executed and authenticated under
this Agreement except: (i) Certificates theretofore canceled by the Servicer or
delivered to the Servicer for cancellation; and (ii) Certificates in exchange
for which or in lieu of which other Certificates have been executed by the
Depositor and delivered by the Servicer pursuant to this Agreement.
Outstanding Mortgage Loan: As of any Distribution Date, a Mortgage Loan
with a Stated Principal Balance greater than zero that was not the subject of a
Principal Prepayment in full, and that did not become a Liquidated Loan, prior
to the end of the related Due Period.
-34-
Ownership Interest: As to any Certificate, any ownership interest in
such Certificate including any interest in such Certificate as the Holder
thereof and any other interest therein, whether direct or indirect, legal or
beneficial.
Pass-Through Rate: With respect to any Certificate, the interest rate
borne by such Certificate.
Paying Agent: As defined in Section 5.11 hereof.
Percentage Interest: With respect to:
(i) any Class, the percentage interest in the undivided
beneficial ownership interest in the related
Certificate Group evidenced by such Class which shall
be equal to the Class Certificate Principal Balance of
such Class divided by the Class Principal Balance of
all Classes in such Certificate Group; and
(ii) any Certificate, the Percentage Interest evidenced
thereby of the related Class shall equal the
percentage obtained by dividing the Denomination of
such Certificate by the aggregate of the Denominations
of all Certificates of such Class; except that in the
case of any Class L, Class P or Class R Certificate,
the Percentage Interest with respect to such
Certificate shown on the face of such Certificate.
Periodic Rate Cap: As to each adjustable rate Group II Mortgage Loan
and the related Mortgage Note, the provision therein that limits permissible
increases and decreases in the Mortgage Rate on any Adjustment Date.
Permitted Activities: The primary activities of the trust created
pursuant to this Agreement which shall be:
(i) holding Mortgage Loans transferred from the Depositor
and other assets of the Trust Fund, including any
credit enhancement and passive derivative financial
instruments including the Yield Maintenance Agreement
that pertain to beneficial interests issued or sold to
parties other than the Depositor, its Affiliates, or
its agents;
(ii) issuing Certificates and other interests in the assets
of the Trust Fund;
(iii) receiving collections on the Mortgage Loans and the
Yield Maintenance Agreement and making payments on
such Certificates and interests in accordance with the
terms of this Agreement; and
(iv) engaging in other activities that are necessary or
incidental to accomplish these limited purposes, which
activities cannot be contrary to the status of the
Trust Fund as a qualified special purpose entity under
existing accounting literature.
Permitted Investments: At any time, any one or more of the following
obligations and securities:
(i) obligations of the United States or any agency
thereof, provided such obligations are backed by the
full faith and credit of the United States;
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(ii) general obligations of or obligations guaranteed by
any state of the United States or the District of
Columbia receiving the highest long-term debt rating
of each Rating Agency rating the Certificates;
(iii) commercial or finance company paper, other than
commercial or finance company paper issued by Chase or
any of its Affiliates, which is then receiving the
highest commercial or finance company paper rating of
each such Rating Agency;
(iv) certificates of deposit, demand or time deposits, or
bankers' acceptances (other than banker's acceptances
issued by Chase or any of its Affiliates) issued by
any depository institution or trust company
incorporated under the laws of the United States or of
any state thereof and subject to supervision and
examination by federal and/or state banking
authorities, provided that the commercial paper and/or
long term unsecured debt obligations of such
depository institution or trust company are then rated
one of the two highest long-term and the highest
short-term ratings of each such Rating Agency for such
securities;
(v) demand or time deposits or certificates of deposit
issued by any bank or trust company or savings
institution to the extent that such deposits are fully
insured by the FDIC;
(vi) guaranteed reinvestment agreements issued by any bank,
insurance company or other corporation rated in the
two highest long-term or the highest short-term
ratings of each Rating Agency containing, at the time
of the issuance of such agreements, such terms and
conditions as will not result in the downgrading or
withdrawal of the rating then assigned to the
Certificates by any such Rating Agency as evidenced by
a letter from each Rating Agency;
(vii) repurchase obligations with respect to any security
described in clauses (i) and (ii) above, in either
case entered into with a depository institution or
trust company (acting as principal) described in
clause (v) above;
(viii) securities (other than stripped bonds, stripped
coupons or instruments sold at a purchase price in
excess of 115% of the face amount thereof) bearing
interest or sold at a discount issued by any
corporation, other than Chase or any of its
Affiliates, incorporated under the laws of the United
States or any state thereof which, at the time of such
investment, have one of the two highest long term
ratings of each Rating Agency;
(ix) interests in any money market fund which at the date
of acquisition of the interests in such fund and
throughout the time such interests are held in such
fund has the highest applicable long term rating by
each such Rating Agency; and
(x) short term investment funds sponsored by any trust
company or national banking association incorporated
under the laws of the United States or any state
thereof, other than Chase or any of its Affiliates,
which on the date of acquisition has been rated by
each such Rating Agency in their respective highest
applicable rating category;
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provided, that no such instrument shall be a Permitted Investment if such
instrument (i) evidences the right to receive interest only payments with
respect to the obligations underlying such instrument, (ii) is purchased at a
premium or above par or (iii) is purchased at a deep discount; provided,
further, that no such instrument shall be a Permitted Investment (A) if such
instrument evidences principal and interest payments derived from obligations
underlying such instrument and the interest payments with respect to such
instrument provide a yield to maturity of greater than 120% of the yield to
maturity at par of such underlying obligations, or (B) if it may be redeemed at
a price below the purchase price (the foregoing clause (B) not to apply to
investments in units of money market funds pursuant to clause (ix) above); and
provided, further, that (x) no amount beneficially owned by any REMIC
(including, without limitation, any amounts collected by the Servicer but not
yet deposited in the Collection Account) may be invested in investments (other
than money market funds) treated as equity interests for Federal income tax
purposes, unless the Servicer shall receive an Opinion of Counsel, at the
expense of the party requesting that such investment be made, to the effect that
such investment will not adversely affect the status of any of the Lower-Tier
REMIC, the Middle-Tier REMIC or the Upper-Tier REMIC as a REMIC under the Code
or result in imposition of a tax on the Trust Fund and (y) each Permitted
Investment must be a "permitted investment" under Section 860G(a)(5) of the
Code. Permitted Investments that are subject to prepayment or call may not be
purchased at a price in excess of par.
Permitted Transferee: Any Person other than (i) the United States, any
State or political subdivision thereof, or any agency or instrumentality of any
of the foregoing, (ii) a foreign government, International Organization or any
agency or instrumentality of either of the foregoing, (iii) an organization
(except certain farmers' cooperatives described in section 521 of the Code) that
is exempt from tax imposed by Chapter 1 of the Code (including the tax imposed
by section 511 of the Code on unrelated business taxable income) on any excess
inclusions (as defined in section 860E(c)(1) of the Code) with respect to any
Class R Certificate, (iv) rural electric and telephone cooperatives described in
section 1381(a)(2)(C) of the Code, and (v) a Person that is not a citizen or
resident of the United States, a corporation or partnership (or other entity
treated as a corporation or partnership for United States 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 or an estate whose income from sources
without the United States is includible in gross income for United States
federal income tax purposes regardless of its connection with the conduct of a
trade or business within the United States, 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 United States persons have authority to control all
substantial decisions of the trust, unless such Person has furnished the
transferor, the Servicer and the Trustee with a duly completed Internal Revenue
Service Form W-8ECI or applicable successor form. The terms "United States,"
"State" and "International Organization" shall have the meanings set forth in
section 7701 of the Code. A corporation will not be treated as an
instrumentality of the United States or of any State thereof for these purposes
if all of its activities are subject to tax and, with the exception of the
Federal Home Loan Mortgage Corporation, a majority of its board of directors is
not selected by such government unit.
Person: Any individual, corporation, partnership, joint venture,
association, joint-stock company, trust, unincorporated organization or
government, or any agency or political subdivision thereof.
Pool Stated Principal Balance: As to any Distribution Date the
aggregate of the Stated Principal Balances, as of such Distribution Date, of the
Mortgage Loans that were Outstanding Mortgage Loans as of such date.
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Prepayment Assumption: A rate of prepayment, as described in the
Prospectus Supplement in the definition of "Modeling Assumptions," relating to
the Certificates in a Certificate Group.
Prepayment Interest Shortfall: With respect to any Distribution Date,
for each Mortgage Loan that was the subject of a partial Principal Prepayment or
a Principal Prepayment in full (other than a Principal Prepayment in full
resulting from the purchase of a Mortgage Loan pursuant to Section 2.02, 2.03,
3.12 or 9.01 hereof), the amount, if any, by which (i) one month's interest at
the applicable Net Mortgage Rate on the Stated Principal Balance of such
Mortgage Loan as of the preceding Distribution Date or in the case of a partial
Principal Prepayment on the amount of such prepayment exceeds (ii) the amount of
interest paid or collected in connection with such Principal Prepayment.
Prepayment Period: As to any Distribution Date, with respect to any
partial Principal Prepayment the period beginning with the opening of business
on the first day of the calendar month preceding the month in which such
Distribution Date occurs and ending on the close of business on the last day of
such month and with respect to any Principal Prepayment in full the period from
the 16th calendar day of the prior calendar month through the 15th calendar day
of the month of such Distribution Date.
Principal Prepayment: Any Mortgagor payment or other recovery of (or
proceeds with respect to) principal on a Mortgage Loan (including Mortgage Loans
purchased or repurchased under Sections 2.02, 2.03, 3.12 and 9.01 hereof) that
is received in advance of its scheduled Due Date and 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. Partial Principal
Prepayments shall be applied by the Servicer in accordance with the terms of the
related Mortgage Note.
Prospectus Supplement: The Prospectus Supplement dated June 24, 2004,
relating to the public offering of certain of the Group I Certificates and the
Group II Certificates.
PUD: A Planned Unit Development.
Purchase Price: With respect to any Mortgage Loan (x) required to be
repurchased by the Seller, pursuant to Section 2.02 or, 2.03 hereof or (y) that
the Servicer has a right to purchase pursuant to Section 3.12 hereof, an amount
equal to the sum of (i) 100% of the unpaid principal balance of the Mortgage
Loan as of the date of such purchase together with any unreimbursed Servicing
Advances, (ii) accrued interest thereon at the applicable Net Mortgage Rate from
(a) the date through which interest was last paid by the Mortgagor to (b) the
Due Date in the month in which the Purchase Price is to be distributed to
Certificateholders and (iii) any unreimbursed costs, penalties and/or damages
incurred by the Trust Fund and/or the Trustee in connection with any violation
relating to such Mortgage Loan of any predatory or abusive lending law.
Rating Agency: Xxxxx'x, S&P and Fitch. If any such organization or its
successor is no longer in existence, "Rating Agency" shall be a nationally
recognized statistical rating organization, or other comparable Person,
designated by the Depositor, notice of which designation shall be given to the
Trustee. References herein to a given rating category of a Rating Agency shall
mean such rating category without giving effect to any modifiers.
Realized Loss: With respect to (i) a Liquidated Loan, the amount, if
any, by which the Stated Principal Balance and accrued interest thereon at the
Net Mortgage Rate exceeds the amount actually recovered by the Servicer with
respect thereto (net of reimbursement of Advances and Servicing Advances) at the
time such Mortgage Loan became a Liquidated Loan or (ii) with respect to a
Mortgage Loan which is not a Liquidated Loan, any amount of principal that the
Mortgagor is no longer legally required to pay (except for the extinguishment of
debt that results from the exercise of remedies due to default by the
Mortgagor).
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Record Date: With respect to any Distribution Date, the close of
business on the last Business Day of the month preceding the month in which the
applicable Distribution Date occurs.
Reference Banks: Barclays Bank PLC, Chase, Citibank, N.A. and NatWest,
N.A.; provided that if any of the foregoing banks are not suitable to serve as a
Reference Bank, then any leading banks selected by the Servicer which are
engaged in transactions in Eurodollar deposits in the international Eurocurrency
market (i) with an established place of business in London, England, (ii) whose
quotations appear on the Reuters Screen LIBO Page on the relevant Interest
Determination Date, (iii) which have been designated as such by the Servicer and
(iv) not controlling, controlled by, or under common control with the Depositor,
the Servicer, the Seller or any successor Servicer.
Refinancing Mortgage Loan: Any Mortgage Loan originated in connection
with the refinancing of an existing mortgage loan.
Regular Certificate: Any one of the Group I Certificates or the Group
II Certificates.
Related Certificate: For each Middle-Tier REMIC Regular Interest, the
Certificate set forth below:
Middle-Tier REMIC Class IA-1 Interest Class IA-1 Certificates
Middle-Tier REMIC Class IA-2 Interest Class IA-2 Certificates
Middle-Tier REMIC Class IA-3 Interest Class IA-3 Certificates
Middle-Tier REMIC Class IA-4 Interest Class IA-4 Certificates
Middle-Tier REMIC Class IA-5 Interest Class IA-5 Certificates
Middle-Tier REMIC Class IA-6 Interest Class IA-6 Certificates
Middle-Tier REMIC Class IB Interest Class IB Certificates
Middle-Tier REMIC Class IM-1 Interest Class IM-1 Certificates
Middle-Tier REMIC Class IM-2 Interest Class IM-2 Certificates
Middle-Tier REMIC Class IIA-1 Interest Class IIA-1 Certificates
Middle-Tier REMIC Class IIA-2 Interest Class IIA-2 Certificates
Middle-Tier REMIC Class IIB Interest Class IIB Certificates
Middle-Tier REMIC Class IIM-1 Interest Class IIM-1 Certificates
Middle-Tier REMIC Class IIM-2 Interest Class IIM-2 Certificates
REMIC: A "real estate mortgage investment conduit" within the meaning
of section 860D of the Code. References herein to "the REMIC" shall mean any of
(or, as the context requires, all of) the Lower-Tier REMIC, the Middle-Tier
REMIC or the Upper-Tier REMIC.
REMIC Provisions: Provisions of the federal income tax law relating to
real estate mortgage investment conduits, which appear at sections 860A through
860G of Subchapter M of Chapter 1 of the Code, and related provisions, and
proposed, temporary and final regulations and published rulings, notices and
announcements promulgated thereunder, as the foregoing may be in effect from
time to time as well as provisions of applicable state laws.
REMIC Regular Interests: The Class IA-1 Certificates, the Class IA-2
Certificates, the Class IA-3 Certificates, the Class IA-4 Certificates, the
Class IA-5 Certificates, the Class IA-6 Certificates, the Class IM-1
Certificates, the Class IM-2 Certificates, the Class IB Certificates, the
Upper-Tier REMIC IIA-1 Interest, the Upper-Tier REMIC IIA-2 Interest, the
Upper-Tier REMIC IIM-1 Interest, the Upper-Tier REMIC IIM-2 Interest, the
Upper-Tier REMIC IIB Interest and the Upper-Tier REMIC Class C Interest.
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REO Property: A Mortgaged Property acquired by the Servicer through
foreclosure or deed-in-lieu of foreclosure in connection with a defaulted
Mortgage Loan.
Replacement Mortgage Loan: A Mortgage Loan substituted by the Depositor
for a Deleted Mortgage Loan, which must, on the date of such substitution, as
confirmed in a Request for Release, substantially in the form of Exhibit M, (i)
have a Stated Principal Balance, after deduction of the principal portion of the
Scheduled Payment due in the month of substitution, not in excess of, and not
less than 90% of the Stated Principal Balance of the Deleted Mortgage Loan; (ii)
with respect to any fixed rate Mortgage Loan, have a Mortgage Rate not less than
or no more than 1% per annum higher than the Mortgage Rate of the Deleted
Mortgage Loan and, with respect to any adjustable rate Mortgage Loan: (a) have a
Maximum Mortgage Rate no more than 1% per annum higher or lower than the Maximum
Mortgage Rate of the Deleted Mortgage Loan; (b) have a Minimum Mortgage Rate no
more than 1% per annum higher or lower than the Minimum Mortgage Rate of the
Deleted Mortgage Loan; (c) have the same index and Periodic Rate Cap as that of
the Deleted Mortgage Loan and a Gross Margin not more than 1% per annum higher
or lower than that of the Deleted Mortgage Loan; (d) not permit conversion of
the related Mortgage Rate to a fixed Mortgage Rate and (e) currently be accruing
interest at a rate not more than 1% per annum higher or lower than that of the
Deleted Mortgage Loan; (iii) have the same or higher credit quality
characteristics than that of the Deleted Mortgage Loan; (iv) have a
Loan-to-Value Ratio no higher than that of the Deleted Mortgage Loan; (v) have a
remaining term to maturity no greater than (and not more than one year less
than) that of the Deleted Mortgage Loan; (vi) provide for a prepayment charge on
terms substantially similar to those of the prepayment charge, if any, of the
Deleted Mortgage Loan; (vii) have the same lien priority as the Deleted Mortgage
Loan; (viii) constitute the same occupancy type as the Deleted Mortgage Loan;
and (ix) comply with each representation and warranty set forth in Section 2.03
hereof.
Repurchase Price: As defined in Section 9.01.
Request for Release: The Request for Release of Documents submitted by
the Servicer to the Trustee or its custodian as applicable, substantially in the
form of Exhibit M hereto.
Required Insurance Policy: With respect to any Mortgage Loan, any
insurance policy that is required to be maintained from time to time under this
Agreement.
Reserve Interest Rate: With respect to any Interest Determination Date
for the Group II Certificates, the rate per annum that the Paying Agent on
behalf of the Servicer determines to be (i) the arithmetic mean (rounded upwards
if necessary to the nearest whole multiple of 0.03125%) of the one-month United
States dollar lending rates which New York City banks selected by the Servicer
are quoting on the relevant Interest Determination Date to the principal London
offices of leading banks in the London interbank market or (ii) in the event
that the Servicer can determine no such arithmetic mean, the lowest one-month
United States dollar lending rate which New York City banks selected by the
Servicer are quoting on such Interest Determination Date to leading European
banks.
Responsible Officer: When used with respect to the Trustee or Servicer,
any Vice President, any Assistant Vice President, the Secretary, any Assistant
Secretary, any Trust Officer or any other officer of the Trustee or Servicer
customarily performing functions similar to those performed by any of the above
designated officers and also to whom, with respect to a particular matter, such
matter is referred because of such officer's knowledge of and familiarity with
the particular subject.
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Reuters Screen LIBO Page: The display designated as page "LIBO" on the
Reuters Monitor Money Rates Service (or such other page as may replace such LIBO
page on that service for the purpose of displaying London interbank offered
rates of major banks).
S&P: Standard & Poor's, a division of The XxXxxx-Xxxx Companies, Inc.,
or its successor in interest.
Sale Agreement: Each of the Mortgage Loan Sale Agreements, each dated
as of June 29, 2004 between the Depositor and a Seller, as applicable.
Scheduled Payment: The scheduled monthly payment on a Mortgage Loan due
on any Due Date allocable to principal and/or interest on such Mortgage Loan.
Section 302 Requirements: Any rules or regulations promulgated pursuant
to the Xxxxxxxx-Xxxxx Act of 2002 (as such may be amended from time to time).
Securities Act: The Securities Act of 1933, including any amendatory
provisions.
Seller: Any of Chase Manhattan Mortgage Corporation, a New Jersey
corporation, or its successor in interest, Chase Manhattan Bank USA, N.A., a
national banking association, or its successor in interest, or JPMorgan Chase
Bank, a New York banking corporation, or its successor in interest.
Servicer: Chase Manhattan Mortgage Corporation, a New Jersey
corporation, or its successor in interest.
Servicer Advance Date: As to any Distribution Date, the related
Servicer Remittance Date.
Servicer Remittance Date: With respect to any Distribution Date, the
day which is two Business Days prior to such Distribution Date.
Servicing Advances: All customary, reasonable and necessary "out of
pocket" costs and expenses incurred in the performance by the Servicer of its
servicing obligations hereunder, including, but not limited to, the cost of (i)
the preservation, restoration and protection of a Mortgaged Property (or
Underlying Mortgaged Property, in the case of a Co-op Loan), including without
limitation advances in respect of real estate taxes and assessments, (ii) any
collection, enforcement or judicial proceedings, including without limitation
foreclosures, collections and liquidations, (iii) the conservation, management,
sale and liquidation of any REO Property and (iv) compliance with the
obligations under Section 3.10.
Servicing Fee: As to each Mortgage Loan and any Distribution Date, an
amount equal to one month's interest at the Servicing Fee Rate on the Stated
Principal Balance of such Mortgage Loan as of the preceding Distribution Date
or, in the event of any payment of interest that accompanies a Principal
Prepayment in full made by the Mortgagor, interest at the Servicing Fee Rate on
the Stated Principal Balance of such Mortgage Loan as of the preceding
Distribution Date for the period covered by such payment of interest.
Servicing Fee Rate: With respect to each Mortgage Loan, 0.5060% per
annum.
Servicing Officer: Any officer of the Servicer involved in, or
responsible for, the administration and servicing of the Mortgage Loans whose
name and facsimile signature appear on a list of servicing officers furnished to
the Trustee by the Servicer on the Closing Date pursuant to this Agreement, as
such lists may from time to time be amended.
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SFAS 140: Statement of Financial Accounting Standard No. 140,
Accounting for Transfers and Servicing of Financial Assets and Extinguishments
of Liabilities dated September 2000, published by the Financial Accounting
Standards Board of the Financial Accounting Foundation.
Startup Date: As defined in Section 2.07 hereof.
Stated Principal Balance: With respect to any Mortgage Loan or related
REO Property (i) as of the Cut-off Date, the Cut-off Date Principal Balance
thereof, and (ii) as of any Distribution Date, such Cut-off Date Principal
Balance, minus the sum of (a) the principal portion of the Scheduled Payments
(x) due with respect to such Mortgage Loan during each Due Period ending prior
to such Distribution Date and (y) that were received by the Servicer as of the
close of business on the Determination Date related to such Distribution Date or
with respect to which Advances were made on each Servicer Advance Date prior to
such Distribution Date and (b) all Principal Prepayments with respect to such
Mortgage Loan received on or prior to the last day of the related Prepayment
Period, and all Liquidation Proceeds to the extent applied by the Servicer as
recoveries of principal in accordance with Section 3.12 with respect to such
Mortgage Loan, that were received by the Servicer as of the close of business on
the last day of the related Due Period. Notwithstanding the foregoing, the
Stated Principal Balance of a Liquidated Loan shall be deemed to be zero.
Subsequent Recovery: Any amount received on a Mortgage Loan subsequent
to such Mortgage Loan being determined to be a Liquidated Mortgage Loan.
Subservicing Agreement: As defined in Section 3.02(a).
Substitution Adjustment Amount: The meaning ascribed to such term
pursuant to Section 2.03(c).
Substitution Amount: With respect to any Mortgage Loan substituted
pursuant to Section 2.03(c), the excess of (x) the principal balance of the
Mortgage Loan that is substituted for, over (y) the principal balance of the
related substitute Mortgage Loan, each balance being determined as of the date
of substitution.
Tax Matters Person: The Person designated as "tax matters person" in
the manner provided under Treasury regulation Section 1.860F-4(d) and temporary
Treasury regulation Section 301.6231(a)(7)-1T.
Transfer: Any direct or indirect transfer or sale of any Ownership
Interest in a Certificate.
Trust Fund: The corpus of the trust (the "Chase Funding Trust, Series
2004-2") created hereunder consisting of (i) the Mortgage Loans and all interest
and principal received on or with respect thereto on and after the Cut-off Date
to the extent not applied in computing the Cut-off Date Principal Balance
thereof, exclusive of interest not required to be deposited in the Collection
Account pursuant to Section 3.05(b)(ii); (ii) the Collection Account, the
Distribution Account and all amounts deposited therein pursuant to the
applicable provisions of this Agreement; (iii) property that secured a Mortgage
Loan and has been acquired by foreclosure, deed in lieu of foreclosure or
otherwise; (iv) the mortgagee's rights under the Insurance Policies with respect
to the Mortgage Loans; and (v) all proceeds of the conversion, voluntary or
involuntary, of any of the foregoing into cash or other liquid property.
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Trustee: Wachovia Bank, N.A., a national banking association, not in
its individual capacity, but solely in its capacity as trustee for the benefit
of the Certificateholders under this Agreement, and any successor thereto, and
any corporation or national banking association resulting from or surviving any
consolidation or merger to which it or its successors may be a party and any
successor trustee as may from time to time be serving as successor trustee
hereunder.
Trustee and Agency Fee: As to each Mortgage Loan and any Distribution
Date, an amount equal to one month's interest at the Trustee and Agency Fee Rate
on the Stated Principal Balance of such Mortgage Loan as of the preceding
Distribution Date, payable to the Trustee and its agent(s) if any.
Trustee and Agency Fee Rate: With respect to each Mortgage Loan,
0.0060% per annum.
Underlying Mortgaged Property: With respect to each Co-op Loan, the
underlying real property owned by the related residential cooperative housing
corporation.
Unpaid Realized Loss Amount: The Class IB Unpaid Realized Loss Amount,
the Class IIB Unpaid Realized Loss Amount, the Class IM-1 Unpaid Realized Loss
Amount, the Class IM-2 Unpaid Realized Loss Amount, the Class IIM-1 Unpaid
Realized Loss Amount or the Class IIM-2 Unpaid Realized Loss Amount, as
applicable.
Upper-Tier REMIC: The REMIC described in Section 2.07 that issues the
REMIC Regular Interests and the UR Interest.
Upper-Tier REMIC Class C Interest: An uncertificated regular interest
in the Upper-Tier REMIC having the same rights to payments as the Class C
Certificates, except that such interest shall (i) not be treated as having any
obligations to make the payments described in Section 2.07(e) hereof and (ii) be
treated as entitled to payments treated as distributed to the Class C
Certificates pursuant to Section 2.07(e) hereof.
Upper-Tier REMIC Group II Regular Interests: The Upper-Tier REMIC IIA-1
Interest, the Upper-Tier REMIC IIA-2 Interest, the Upper-Tier REMIC IIM-1
Interest, the Upper-Tier REMIC IIM-2 Interest and the Upper-Tier REMIC IIB
Interest.
Upper-Tier REMIC IIA-1 Interest: A regular interest in the Upper-Tier
REMIC having the characteristics described in Section 2.07 and represented by
the Class IIA-1 Certificate.
Upper-Tier REMIC IIA-2 Interest: A regular interest in the Upper-Tier
REMIC having the characteristics described in Section 2.07 and represented by
the Class IIA-2 Certificate.
Upper-Tier REMIC IIB Interest: A regular interest in the Upper-Tier
REMIC having the characteristics described in Section 2.07 and represented by
the Class IIB Certificate.
Upper-Tier REMIC IIM-1 Interest: A regular interest in the Upper-Tier
REMIC having the characteristics described in Section 2.07 and represented by
the Class IIM-1 Certificate.
Upper-Tier REMIC IIM-2 Interest: A regular interest in the Upper-Tier
REMIC having the characteristics described in Section 2.07 and represented by
the Class IIM-2 Certificate.
UR Interest: The sole class of "residual interest" in the Upper-Tier
REMIC.
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Voting Rights: The portion of the voting rights of all the Certificates
that is allocated to any of the Certificates for purposes of the voting
provisions hereunder. Voting Rights allocated to each Class of Certificates
shall be allocated 95% to the Group I Certificates and Group II Certificates,
and 2.5% to the Class C, Class L and Class P Certificates and 2.5% to the Class
R Certificate, with the allocation among the Group I Certificates and Group II
Certificates to be in proportion to the Class Certificate Principal Balance of
each Class relative to the Class Certificate Principal Balance of all other
Classes. Voting Rights will be allocated among the Certificates of each such
Class in accordance with their respective Percentage Interests.
Yield Maintenance Account: The account established and maintained
pursuant to Section 3.05(d) hereof.
Yield Maintenance Agreement: The Yield Maintenance Agreement
substantially in the form of Exhibit N hereto pursuant to which the Trustee will
be entitled to receive payments thereunder on behalf of the Trust Fund.
ARTICLE II
CONVEYANCE OF MORTGAGE LOANS;
REPRESENTATIONS AND WARRANTIES
SECTION 2.01. Conveyance of Mortgage Loans
The Depositor, concurrently with the execution and delivery hereof,
does hereby sell, transfer, assign, set over and convey to the Trustee without
recourse all the right, title and interest of the Depositor in and to the assets
of the Trust Fund. Such assignment includes all interest and principal received
on or with respect to the Mortgage Loans on or after the Cut-off Date (other
than Scheduled Payments due on the Mortgage Loans on or before the Cut-off
Date).
In connection with such assignment, the Depositor does hereby deliver
to, and deposit with, the Trustee the following documents or instruments with
respect to each Mortgage Loan so assigned:
With respect to each Mortgage Loan which is not a Co-op Loan:
(A) (i) The Original Mortgage Note (or a lost note affidavit
(including a copy of the original Mortgage Note)) or (ii) original
Consolidation, Extension and Modification Agreement (or a lost note
affidavit (including a copy of the original Consolidation, Extension
and Modification Agreement)), in either case endorsed, "Pay to the
order of Wachovia Bank, N.A., as trustee, without recourse."
(B) The original Mortgage (including all riders thereto) with
evidence of recording thereon, or a copy thereof certified by the
public recording office in which such mortgage has been recorded or, if
the original Mortgage has not been returned from the applicable public
recording office, a true certified copy, certified by the Seller, of
the original Mortgage together with a certificate of the Seller
certifying that the original Mortgage has been delivered for recording
in the appropriate public recording office of the jurisdiction in which
the Mortgaged Property is located.
With respect to each Non-MERS Mortgage Loan which is not a Co-op Loan:
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(A) The original Assignment of Mortgage to "Wachovia Bank,
N.A., as trustee," which assignment shall be in form and substance
acceptable for recording, or a copy certified by the Seller as a true
and correct copy of the original Assignment which has been sent for
recordation. Subject to the foregoing, such assignments may, if
permitted by law, be by blanket assignments for Mortgage Loans covering
Mortgaged Properties situated within the same county. If the Assignment
of Mortgage is in blanket form, a copy of the Assignment of Mortgage
shall be included in the related individual Mortgage File.
(B) The original policy of title insurance, including riders
and endorsements thereto, or if the policy has not yet been issued, a
written commitment or interim binder or preliminary report of title
issued by the title insurance or escrow company.
(C) Originals of all recorded intervening Assignments of
Mortgage, or copies thereof, certified by the public recording office
in which such Assignments or Mortgage have been recorded showing a
complete chain of title from the originator to the Depositor, with
evidence of recording thereon, or a copy thereof certified by the
public recording office in which such Assignment of Mortgage has been
recorded or, if the original Assignment of Mortgage has not been
returned from the applicable public recording office, a true certified
copy, certified by the Seller of the original Assignment of Mortgage
together with a certificate of the Seller certifying that the original
Assignment of Mortgage has been delivered for recording in the
appropriate public recording office of the jurisdiction in which the
Mortgaged Property is located.
(D) Originals, or copies thereof certified by the public
recording office in which such documents have been recorded, of each
assumption, extension, modification, written assurance or substitution
agreements, if applicable, or if the original of such document has not
been returned from the applicable public recording office, a true
certified copy, certified by the Seller, of such original document
together with a certificate of Seller certifying that the original of
such document has been delivered for recording in the appropriate
recording office of the jurisdiction in which the Mortgaged Property is
located.
(E) If the Mortgaged Note or Mortgage or any other material
document or instrument relating to the Mortgaged Loan has been signed
by a person on behalf of the Mortgagor, the original power of attorney
or other instrument that authorized and empowered such person to sign
bearing evidence that such instrument has been recorded, if so required
in the appropriate jurisdiction where the Mortgaged Property is located
(or, in lieu thereof, a duplicate or conformed copy of such instrument,
together with a certificate of receipt from the recording office,
certifying that such copy represents a true and complete copy of the
original and that such original has been or is currently submitted to
be recorded in the appropriate governmental recording office of the
jurisdiction where the Mortgaged Property is located), or if the
original power of attorney or other such instrument has been delivered
for recording in the appropriate public recording office of the
jurisdiction in which the Mortgaged Property is located.
In connection with such assignment, the Depositor does hereby
deliver to, and deposit with, the Trustee the following documents or
instruments with respect to each Mortgage Loan so assigned which is a
Co-op Loan:
(A) (i) The Original Mortgage Note (or a lost note affidavit
(including a copy of the original Mortgage Note)) or (ii) original
consolidation, extension and modification agreement (or a lost note
affidavit (including a copy of the original consolidation, extension
and modification agreement)), in either case endorsed, "Pay to the
order of Wachovia Bank, N.A., as trustee, without recourse."
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(B) The original Mortgage entered into by the Mortgagor with
respect to such Co-op Loan.
(C) The original Assignment of Mortgage to "Wachovia Bank,
N.A. as trustee".
(D) Original assignments of Mortgage showing a complete chain
of assignment from the originator of the related Co-op Loan to the
Seller.
(E) Original Form UCC-1 and any continuation statements with
evidence of filing thereon entered into by the Mortgagor with respect
to such Co-op Loan.
(F) Form UCC-3 (or copy thereof) by the Seller or its agent
assigning the security interest covered by such Form UCC-1 to "Wachovia
Bank, N.A. as trustee", together with all Forms UCC-3 (or copies
thereof) showing a complete chain of assignment from the originator of
the related Co-op Loan to the Seller, with evidence of recording
thereon.
(G) Stock certificate representing the stock allocated to the
related dwelling unit in the related residential cooperative housing
corporation and pledged by the related Mortgagor to the originator of
such Co-op Loan with a stock power in blank attached.
(H) Original proprietary lease.
(I) Original assignment of proprietary lease, to the Trustee,
and all intervening assignments thereof.
(J) Original recognition agreement of the interests of the
mortgagee with respect to the Co-op Loan by the residential cooperative
housing corporation, the stock of which was pledged by the related
Mortgagor to the originator of such Co-op Loan.
(K) Originals of any assumption, consolidation or modification
agreements relating to any of the items specified in (A) through (F)
above with respect to such Co-op Loan.
If in connection with any Mortgage Loan which is not a Co-op Loan, the
Depositor cannot deliver the Mortgage, Assignments of Mortgage or assumption,
consolidation or modification, as the case may be, with evidence of recording
thereon concurrently with the execution and delivery of this Agreement solely
because of a delay caused by the public recording office where such Mortgage,
Assignments of Mortgage or assumption, consolidation or modification, as the
case may be, has been delivered for recordation, the Depositor shall deliver or
cause to be delivered to the Trustee written notice stating that such Mortgage,
Assignments of Mortgage or assumption, consolidation or modification, as the
case may be, has been delivered to the appropriate public recording office for
recordation. Thereafter, the Depositor shall deliver or cause to be delivered to
the Trustee such Mortgage, Assignments of Mortgage or assumption, consolidation
or modification, as the case may be, with evidence of recording indicated
thereon upon receipt thereof from the public recording office.
With respect to any Non-MERS Mortgage Loans which are not Co-op Loans
as to which the related Mortgaged Property is located in the State of Florida,
the Servicer shall cause to be recorded in the appropriate public recording
office for real property records each Assignment of Mortgage referred to in this
Section 2.01 as soon as practicable. With respect to any Non-MERS Mortgage Loans
which are not Co-op Loans as to which the related Mortgaged Property is located
outside the State of Florida, the Servicer shall not be obligated to cause to be
recorded the Assignment of Mortgage referred to in this Section 2.01. With
respect to Co-op Loans as to which the related dwelling unit is located in
Florida, the Servicer shall cause to be filed in the appropriate filing office
the Form UCC-3 referred to in this Section 2.01 as soon as practicable. With
respect to any Co-op Loans as to which the related dwelling unit is located
outside Florida, the Servicer shall not be obligated to cause to be filed the
Form UCC-3 referred to in this Section 2.01. While each Assignment of Mortgage
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or Form UCC-3 to be recorded is being recorded, the Servicer shall deliver to
the Trustee a photocopy of such document. If any such Assignment of Mortgage or
Form UCC-3 is returned unrecorded to the Servicer because of any defect therein,
the Servicer shall cause such defect to be cured and such document to be
recorded in accordance with this paragraph. The Servicer shall deliver or cause
to be delivered, as required, each original recorded Assignment of Mortgage and
intermediate assignment or Form UCC-3 to the Trustee within 270 days of the
Closing Date or shall deliver to the Trustee on or before such date an Officer's
Certificate stating that such document has been delivered to the appropriate
public recording office for recordation, but has not been returned solely
because of a delay caused by such recording office. In any event, the Depositor
shall use all reasonable efforts to cause each such document with evidence of
recording thereon to be delivered to the Trustee within 300 days of the Closing
Date.
With respect to each MERS Mortgage Loan, the Trustee, or the Custodian
on its behalf, at the expense of the Depositor and at the direction and with the
cooperation of the Servicer, shall cause to be taken such actions as are
necessary to cause the Trustee to be clearly identified as the owner of each
such Mortgage Loan on the records of MERS for purposes of the system of
recording transfers of beneficial ownership of mortgages maintained by MERS.
The ownership of each Mortgage Note, the Mortgage and the contents of
the related Mortgage File is vested in the Trustee. Neither the Depositor nor
the Servicer shall take any action inconsistent with such ownership and shall
not claim any ownership interest therein. The Depositor and the Servicer shall
respond to any third party inquiries with respect to ownership of the Mortgage
Loans by stating that such ownership is held by the Trustee on behalf of the
Certificateholders. Mortgage documents relating to the Mortgage Loans not
delivered to the Trustee are and shall be held in trust by the Servicer, for the
benefit of the Trustee as the owner thereof, and the Servicer's possession of
the contents of each Mortgage File so retained is for the sole purpose of
servicing the related Mortgage Loan, and such retention and possession by the
Servicer is in a custodial capacity only. The Depositor agrees to take no action
inconsistent with the Trustee's ownership of the Mortgage Loans, to promptly
indicate to all inquiring parties that the Mortgage Loans have been sold and to
claim no ownership interest in the Mortgage Loans.
It is the intention of this Agreement that the conveyance of the
Depositor's right, title and interest in and to the Trust Fund pursuant to this
Agreement shall constitute a purchase and sale and not a loan. If a conveyance
of Mortgage Loans from the Seller to the Depositor is characterized as a pledge
and not a sale, then the Depositor shall be deemed to have transferred to the
Trustee all of the Depositor's right, title and interest in, to and under the
obligations of the Seller deemed to be secured by said pledge; and it is the
intention of this Agreement that the Depositor shall also be deemed to have
granted to the Trustee a first priority security interest in all of the
Depositor's right, title, and interest in, to and under the obligations of the
Seller to the Depositor deemed to be secured by said pledge and that the Trustee
shall be deemed to be an independent custodian for purposes of perfection of the
security interest granted to the Depositor. If the conveyance of the Mortgage
Loans from the Depositor to the Trustee is characterized as a pledge, it is the
intention of this Agreement that this Agreement shall constitute a security
agreement under applicable law, and that the Depositor shall be deemed to have
granted to the Trustee a first priority security interest in all of the
Depositor's right, title and interest in, to and under the Mortgage Loans, all
payments of principal of or interest on such Mortgage Loans, all other rights
relating to and payments made in respect of the Trust Fund, and all proceeds of
any thereof. If the trust created by this Agreement terminates prior to the
satisfaction of the claims of any Person in any Certificates, the security
interest created hereby shall continue in full force and effect and the Trustee
shall be deemed to be the collateral agent for the benefit of such Person.
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In addition to the conveyance made in the first paragraph of this
Section 2.01, the Depositor does hereby convey, assign and set over to the
Trustee for the benefit of the Certificateholders all of its right, title and
interest in those representations and warranties of the Seller contained in the
Sale Agreement and the benefit of the repurchase obligations and the obligation
of the Seller contained in the Sale Agreement to take, at the request of the
Depositor or the Trustee, all action on its part which is reasonably necessary
to ensure the enforceability of a Mortgage Loan.
The Seller further agrees to cause the Yield Maintenance Agreement to
be assigned to the Trust.
SECTION 2.02. Acceptance by Trustee of the Mortgage Loans.
Except as set forth in the Exception Report delivered contemporaneously
herewith (the "Exception Report"), the Trustee acknowledges receipt of the
Mortgage Note for each Mortgage Loan and delivery of a Mortgage File (but does
not acknowledge receipt of all documents required to be included in such
Mortgage File) with respect to each Mortgage Loan and declares that it holds and
will hold such documents and any other documents constituting a part of the
Mortgage Files delivered to it in trust for the use and benefit of all present
and future Certificateholders. The Depositor will cause the Seller to repurchase
any Mortgage Loan to which an exception was taken in the Exception Report unless
such exception is cured to the satisfaction of the Trustee within 45 Business
Days of the Closing Date.
The Trustee agrees, for the benefit of Certificateholders, to review
each Mortgage File delivered to it within 270 days after the Closing Date to
ascertain that all documents required by Section 2.01 have been executed and
received, and that such documents relate to the Mortgage Loans identified in
Exhibit F that have been conveyed to it. If the Trustee finds any document or
documents constituting a part of a Mortgage File to be missing or defective
(that is, mutilated, damaged, defaced or unexecuted) in any material respect,
the Trustee shall promptly (and in any event within no more than five Business
Days) after such finding so notify the Servicer, the Seller, the Depositor and
the NIMs Insurer. In addition, the Trustee shall also notify the Servicer, the
Seller, the Depositor and the NIMs Insurer, if (a) in examining the Mortgage
Files, the documentation shows on its face (i) any adverse claim, lien or
encumbrance, (ii) that any Mortgage Note was overdue or had been dishonored,
(iii) any evidence on the face of any Mortgage Note or Mortgage of any security
interest or other right or interest therein, or (iv) any defense against or
claim to the Mortgage Note by any party or (b) the original Mortgage with
evidence of recording thereon with respect to a Mortgage Loan is not received
within 270 days of the Closing Date; provided, however, that if the Depositor
cannot deliver the original Mortgage with evidence of recording thereon because
of a delay caused by the public recording office where such Mortgage has been
delivered for recordation, the Depositor shall deliver or cause to be delivered
to the Trustee written notice stating that such Mortgage has been delivered to
the appropriate public recording officer for recordation and thereafter the
Depositor shall deliver or cause to be delivered such Mortgage with evidence of
recording thereon upon receipt thereof from the public recording office. The
Trustee shall request that the Seller correct or cure such omission, defect or
other irregularity, or substitute a Mortgage Loan pursuant to the provisions of
Section 2.03(c), within 90 days from the date the Seller was notified of such
omission or defect and, if the Seller does not correct or cure such omission or
defect within such period, that the Seller purchase such Mortgage Loan from the
Trustee within 90 days from the date the Trustee notified the Seller of such
omission, defect or other irregularity at the Purchase Price of such Mortgage
Loan. The Purchase Price for any Mortgage Loan purchased pursuant to this
Section 2.02 shall be paid to the Servicer and deposited by the Servicer in the
Collection Account promptly upon receipt, and, upon receipt by the Trustee of
written notification of such deposit signed by a Servicing Officer, the Trustee
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shall promptly release to the Seller the related Mortgage File and the Trustee
shall execute and deliver such instruments of transfer or assignment, without
recourse, as shall be necessary to vest in the Seller or its designee, as the
case may be, any Mortgage Loan released pursuant hereto, and the Trustee shall
have no further responsibility with regard to such Mortgage Loan. It is
understood and agreed that the obligation of the Seller to purchase, cure or
substitute any Mortgage Loan as to which a material defect in or omission of a
constituent document exists shall constitute the sole remedy respecting such
defect or omission available to the Trustee on behalf of Certificateholders. The
Trustee shall be under no duty or obligation to inspect, review and examine such
documents, instruments, certificates or other papers to determine that they are
genuine, enforceable or appropriate to the represented purpose, or that they
have actually been recorded, or that they are other than what they purport to be
on their face. The Trustee shall keep confidential the name of each Mortgagor
and the Trustee shall not solicit any such Mortgagor for the purpose of
refinancing the related Mortgage Loan. It is understood and agreed that all
rights and benefits relating to the solicitation of any Mortgagors and the
attendant rights, title and interest in and to the list of Mortgagors and data
relating to their Mortgages shall be retained by the Servicer.
Within 280 days of the Closing Date, the Trustee shall deliver to the
Depositor, the Servicer and the NIMs Insurer the Trustee's certificate
substantially in the form of Exhibit H attached hereto, setting forth the status
of the Mortgage Files as of such date.
Notwithstanding anything herein to the contrary, the parties hereto
acknowledge that the functions of the Trustee with respect to the custody
acceptance, inspection and release of the Mortgage Files pursuant to Sections
2.01, 2.02, 2.03 and 2.13 and the preparation and delivery of the Certification
in the form of Exhibit H shall be performed by the Custodian. The fees and
expenses of the Custodian shall be paid by the Servicer.
SECTION 2.03. Representations, Warranties and Covenants of the
Depositor.
(a) The Depositor hereby represents and warrants to the Servicer and
the Trustee as follows, as of the date hereof:
(i) The Depositor is duly organized and is validly existing as
a corporation in good standing under the laws of the State of New York
and has full power and authority (corporate and other) necessary to own
or hold its properties and to conduct its business as now conducted by
it and to enter into and perform its obligations under this Agreement.
(ii) The Depositor has the full corporate power and authority
to execute, deliver and perform, and to enter into and consummate the
transactions contemplated by, this Agreement and has duly authorized,
by all necessary corporate action on its part, the execution, delivery
and performance of this Agreement; and this Agreement, assuming the due
authorization, execution and delivery hereof by the other parties
hereto, constitutes a legal, valid and binding obligation of the
Depositor, enforceable against the Depositor in accordance with its
terms, subject, as to enforceability, to (i) bankruptcy, insolvency,
reorganization, moratorium and other similar laws affecting creditors'
rights generally and (ii) general principles of equity, regardless of
whether enforcement is sought in a proceeding in equity or at law.
(iii) The execution and delivery of this Agreement by the
Depositor, the consummation of the transactions contemplated by this
Agreement, and the fulfillment of or compliance with the terms hereof
are in the ordinary course of business of the Depositor and will not
(A) result in a material breach of any term or provision of the charter
or by-laws of the Depositor or (B) materially conflict with, result in
a violation or acceleration of, or result in a material default under,
the terms of any other material agreement or instrument to which the
Depositor is a party or by which it may be bound or (C) constitute a
material violation of any statute, order or regulation applicable to
the Depositor of any court, regulatory body, administrative agency or
governmental body having jurisdiction over the Depositor; and the
Depositor is not in breach or violation of any material indenture or
other material agreement or instrument, or in violation of any statute,
order or regulation of any court, regulatory body, administrative
agency or governmental body having jurisdiction over it which breach or
violation may materially impair the Depositor's ability to perform or
meet any of its obligations under this Agreement.
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(iv) No litigation is pending, or, to the best of the
Depositor's knowledge, threatened, against the Depositor that would
materially and adversely affect the execution, delivery or
enforceability of this Agreement or the ability of the Depositor to
perform its obligations under this Agreement in accordance with the
terms hereof.
(v) No consent, approval, authorization or order of any court
or governmental agency or body is required for the execution, delivery
and performance by the Depositor of, or compliance by the Depositor
with, this Agreement or the consummation of the transactions
contemplated hereby, or if any such consent, approval, authorization or
order is required, the Depositor has obtained the same. The Depositor
hereby represents and warrants to the Trustee with respect to each
Mortgage Loan as of the Closing Date, and following the transfer of the
Mortgage Loans to it by the Seller, the Depositor had good title to the
Mortgage Loans and the Mortgage Notes were subject to no offsets,
claims, defenses or counterclaims.
(vi) The Depositor hereby represents and warrants to the
Trustee for the benefit of the Certificateholders that on the Closing
Date it has entered into the Sale Agreement with the Seller, that the
Seller has made the following representations and warranties with
respect to each Mortgage Loan in the Sale Agreement as of the Closing
Date, which representations and warranties run to and are for the
benefit of the Depositor and the Trustee for the benefit of the
Certificateholders, and as to which the Depositor has assigned to the
Trustee for the benefit of the Certificateholders, pursuant to Section
2.01 hereof, the right to cause the Seller to repurchase a Mortgage
Loan as to which there has occurred an uncured breach of
representations and warranties in accordance with the provisions of the
Sale Agreement.
(1) The Seller is an approved seller of conventional
mortgage loans for FNMA or FHLMC and is a mortgagee
approved by the Secretary of Housing and Urban
Development pursuant to sections 203 and 211 of the
National Housing Act, as amended.
(2) The information set forth on the Mortgage Loan Schedule
is true and correct in all material respects as of the
Closing Date.
(3) The Seller will treat the transfer of the Mortgage Loans
to the Depositor as a sale of the Mortgage Loans for all
accounting and tax purposes.
(4) No Mortgage Loan is more than 59 days Delinquent in
payment of principal and interest, and no more than 1.5%
of the Mortgage Loans are 30-59 days Delinquent in the
payment of principal and interest.
(5) No Mortgage Loan had a Loan-to-Value Ratio at
origination in excess of 95.00%.
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(6) With respect to Mortgages Loans that are not Co-op
Loans, each Mortgage is a valid and enforceable first
lien on the Mortgaged Property subject only to (a) the
lien of non-delinquent real property taxes and
assessments not yet due and payable, (b) covenants,
conditions and restrictions, rights of way, easements
and other matters of public record as of the date of
recording of such Mortgage, such exceptions appearing of
record being acceptable to mortgage lending institutions
generally, specifically referred to in the lender's
title insurance policy referred to in (14) below or
referred to or otherwise considered in the appraisal
made in connection with the origination of the related
Mortgage Loan, and (c) other matters to which like
properties are commonly subject that do not materially
interfere with the benefits of the security intended to
be provided by such Mortgage. With respect to each
Mortgage Loan that is a Co-op Loan, the related Mortgage
is a valid, enforceable and subsisting first security
interest on the related cooperative shares securing the
related Mortgage Note, subject only to (a) liens of the
related residential cooperative housing corporation for
unpaid assessments representing the Mortgagor's pro rata
share of the related residential cooperative housing
corporation's payments for its blanket mortgage, current
and future real property taxes, insurance premiums,
maintenance fees and other assessments to which like
collateral is commonly subject and (b) other matters to
which like collateral is provided by the related
security agreement. There are no liens against or
security interest in the cooperative shares relating to
each Co-op Loan (except for unpaid maintenance,
assessments and other amounts owed to the related
cooperative which individually or in the aggregate will
not have a material adverse effect on such Co-op Loan),
which have priority over the Trustee's security interest
in such cooperative shares.
(7) Immediately prior to the assignment of the Mortgage
Loans to the Depositor, the Seller had good title to,
and was the sole owner of, each Mortgage Loan free and
clear of any pledge, lien, encumbrance or security
interest and had full right and authority, subject to no
interest or participation of, or agreement with, any
other party, to sell and assign the same pursuant to
this Agreement.
(8) There is no delinquent tax or assessment lien against
any Mortgaged Property.
(9) There is no valid offset, claim, defense or counterclaim
to any Mortgage Note or Mortgage, including the
obligation of the Mortgagor to pay the unpaid principal
of or interest on such Mortgage Note.
(10) There are no mechanics' liens or claims for work, labor
or material affecting any Mortgaged Property (or the
related residential dwelling unit in the Underlying
Mortgaged Property, in the case of a Co-op Loan) that
are or may be a lien prior to, or equal with, the lien
of such Mortgage, except those that are insured against
by the title insurance policy referred to in item (14)
below.
(11) As of the Closing Date, to the best of the Seller's
knowledge, each Mortgaged Property (or the related
residential dwelling unit in the Underlying Mortgaged
Property, in the case of a Co-op Loan) is undamaged by
waste, fire, earthquake or earth movement, windstorm,
flood, tornado or other casualty so as to affect
adversely the value of the Mortgaged Property as
security for the Mortgage Loan or the use for which the
premises were intended.
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(12) Each Mortgage Loan at origination complied in all
material respects with applicable state and federal laws
and all applicable predatory and abusive lending laws,
including, without limitation, usury, equal credit
opportunity, real estate settlement procedures,
truth-in-lending and disclosure laws and laws governing
prepayment penalties, and consummation of the
transactions contemplated hereby will not involve the
violation of any such laws.
(13) As of the Closing Date, neither the Seller nor any prior
holder of any Mortgage has modified the Mortgage Loan in
any material respect including as to prepayment
penalties (except that a Mortgage Loan may have been
modified by a written instrument that has been recorded
or submitted for recordation, if necessary, to protect
the interests of the Certificateholders and the original
or a copy of which has been delivered to the Trustee and
is reflected in the Mortgage Loan Schedule); satisfied,
canceled or subordinated such Mortgage Loan in whole or
in part; released the related Mortgaged Property in
whole or in part from the lien of such Mortgage Loan; or
executed any instrument of release, cancellation,
modification (except as expressly permitted above) or
satisfaction with respect thereto.
(14) With respect to Mortgage Loans which are not Co-op
Loans, a lender's policy of title insurance together
with a condominium endorsement and extended coverage
endorsement, if applicable (subject to exceptions
acceptable in the industry, including exceptions with
respect to surveys and endorsements), in an amount at
least equal to the Cut-off Date Principal Balance of
each such Mortgage Loan or a commitment (binder) to
issue the same was effective on the date of the
origination of each Mortgage Loan, each such policy is
valid and remains in full force and effect, and each
such policy was issued by a title insurer qualified to
do business in the jurisdiction where the related
Mortgaged Property is located and acceptable to FNMA or
FHLMC and is in a form acceptable to FNMA or FHLMC,
which policy insures the Seller and successor owners of
indebtedness secured by the related insured Mortgage, as
to the first priority lien, of the related Mortgage
subject to the exceptions set forth in paragraph (6)
above; to the best of the Seller's knowledge, no claims
have been made under such mortgage title insurance
policy and no prior holder of the related Mortgage,
including the Seller, has done, by act or omission,
anything that would impair the coverage of such mortgage
title insurance policy.
(15) With respect to Mortgage Loans that are not Co-op Loans,
to the best of the Seller's knowledge, as of the date of
origination all of the improvements that were included
for the purpose of determining the Appraised Value of
the Mortgaged Property lie wholly within the boundaries
and building restriction lines of such property, and no
improvements on adjoining properties encroach upon the
Mortgaged Property.
(16) To the best of the Seller's knowledge, as of the date of
origination no improvement located on or being part of
the Mortgaged Property is in violation of any applicable
zoning law or regulation. To the best of the Seller's
knowledge, as of the date of origination all
inspections, licenses and certificates required to be
made or issued with respect to all occupied portions of
the Mortgaged Property and, with respect to the use and
occupancy of the same, including but not limited to
certificates of occupancy and fire underwriting
certificates, have been made or obtained from the
appropriate authorities, unless the lack thereof would
not have a material adverse effect on the value of such
Mortgaged Property, and the Mortgaged Property is
lawfully occupied under applicable law.
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(17) The Mortgage Note and the related Mortgage are genuine,
and each is the legal, valid and binding obligation of
the maker thereof, enforceable (including as to any
prepayment penalty) in accordance with its terms and
under applicable law, except that (a) the enforceability
thereof may be limited by bankruptcy, insolvency,
moratorium, receivership and other similar laws relating
to creditors' rights generally and (b) the remedy of
specific performance and injunctive and other forms of
equitable relief may be subject to equitable defenses
and to the discretion of the court before which any
proceeding therefor may be brought. To the best of the
Seller's knowledge, all parties to the Mortgage Note and
the Mortgage had legal capacity to execute the Mortgage
Note and the Mortgage and each Mortgage Note and
Mortgage have been duly and properly executed by such
parties.
(18) The proceeds of the Mortgage Loan have been fully
disbursed, there is no requirement for future advances
thereunder and completion of any on-site or off-site
improvements and as to disbursements of any escrow funds
therefor have been complied with. All costs, fees and
expenses incurred in making, or closing or recording the
Mortgage Loans were paid.
(19) The related Mortgage contains customary and enforceable
provisions that render the rights and remedies of the
holder thereof adequate for the realization against the
Mortgaged Property of the benefits of the security,
including, (i) in the case of a Mortgage designated as a
deed of trust, by trustee's sale, and (ii) otherwise by
judicial foreclosure.
(20) With respect to each Mortgage constituting a deed of
trust, a trustee, duly qualified under applicable law to
serve as such, has been properly designated and
currently so serves and is named in such Mortgage, and
no fees or expenses are or will become payable by the
Certificateholders to the trustee under the deed of
trust, except in connection with a trustee's sale after
default by the Mortgagor.
(21) There exist no deficiencies with respect to escrow
deposits and payments, if such are required, for which
customary arrangements for repayment thereof have not
been made, and no escrow deposits or payments of other
charges or payments due to the Seller have been
capitalized under the Mortgage or the related Mortgage
Note.
(22) The origination and underwriting practices used by the
Seller with respect to each Mortgage Loan have been in
all respects legal and customary in the mortgage lending
business.
(23) There is no pledged account or other security other than
real estate securing the Mortgagor's obligations.
(24) Each Mortgage Loan contains a customary "due on sale"
clause.
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(25) With respect to Mortgage Loans that are not Co-op Loans,
at the Cut-off Date, the improvements upon each
Mortgaged Property are covered by a valid and existing
hazard insurance policy with a generally acceptable
carrier that provides for fire and extended coverage and
coverage for such other hazards as are customary in the
area where the Mortgaged Property is located in an
amount that is at least equal to the lesser of (i) the
maximum insurable value of the improvements securing
such Mortgage Loan or (ii) the greater of (a) the
outstanding principal balance of the Mortgage Loan and
(b) an amount such that the proceeds of such policy
shall be sufficient to prevent the Mortgagor and/or the
mortgagee from becoming a co-insurer. If the Mortgaged
Property is a condominium unit, it is included under the
coverage afforded by a blanket policy for the
condominium unit. All such individual insurance policies
and all flood policies referred to in item (26) below
contain a standard mortgagee clause naming the Seller or
the original mortgagee, or its successors in interest,
as mortgagee, and the Seller has received no notice that
any premiums due and payable thereon have not been paid;
the Mortgage obligates the Mortgagor thereunder to
maintain all such insurance, including flood insurance,
at the Mortgagor's cost and expense, and upon the
Mortgagor's failure to do so, authorizes the holder of
the Mortgage to obtain and maintain such insurance at
the Mortgagor's cost and expense and to seek
reimbursement therefor from the Mortgagor.
(26) With respect to Mortgage Loans that are not Co-op Loans,
if the Mortgaged Property is in an area identified in
the Federal Register by the Federal Emergency Management
Agency as having special flood hazards, a flood
insurance policy in a form meeting the requirements of
the current guidelines of the Flood Insurance
Administration is in effect with respect to such
Mortgaged Property with a generally acceptable carrier
in an amount representing coverage not less than the
least of (A) the original outstanding principal balance
of the Mortgage Loan, (B) the minimum amount required to
compensate for damage or loss on a replacement cost
basis, or (C) the maximum amount of insurance that is
available under the Flood Disaster Protection Act of
1973, as amended.
(27) To the best of the Seller's knowledge, there is no
proceeding occurring, pending or threatened for the
total or partial condemnation of the Mortgaged Property
(or Underlying Mortgage Property, in the case of a Co-op
Loan).
(28) There is no material monetary default existing under any
Mortgage or the related Mortgage Note and, to the best
of the Seller's knowledge, there is no material event
that, with the passage of time or with notice and the
expiration of any grace or cure period, would constitute
a default, breach, violation or event of acceleration
under the Mortgage or the related Mortgage Note; and the
Seller has not waived any default, breach, violation or
event of acceleration.
(29) Each Mortgaged Property (or Underlying Mortgage
Property, in the case of a Co-op Loan) is of a type
described in the Prospectus Supplement.
(30) Each Mortgage Loan is being serviced by the Servicer.
(31) With respect to any escrow advances associated with
delinquent property taxes and force placed hazard
insurance made prior to the Cut-Off Date, an amount
necessary to amortize such amounts has been added to the
monthly payment due each month on the related Mortgage
Note.
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(32) Prior to the approval of the Mortgage Loan application,
an appraisal of the related Mortgaged Property (or the
related residential dwelling unit in the Underlying
Mortgaged Property, in the case of a Co-op Loan) was
obtained from a qualified appraiser, duly appointed by
the originator, who had no interest, direct or indirect,
in the Mortgaged Property (or Underlying Mortgage
Property, in the case of a Co-op Loan) or in any loan
made on the security thereof, and whose compensation is
not affected by the approval or disapproval of the
Mortgage Loan; such appraisal is in a form acceptable to
FNMA and FHLMC.
(33) The Mortgage Loans were selected from among the
outstanding one- to four-family mortgage loans in the
Seller's portfolio at the Closing Date as to which the
representations and warranties made as to the Mortgage
Loans set forth in this Section 2.03(a)(vi) can be made.
(34) None of the Mortgage Loans is a graduated payment
mortgage loan or a growing equity mortgage loan, and no
Mortgage Loan is subject to a buydown or similar
arrangement.
(35) The Mortgage Loans, individually and in the aggregate,
conform in all material respects to the descriptions
thereof in the Prospectus Supplement.
(36) As of the Closing Date, each Mortgage Loan represents a
"qualified mortgage" within the meaning of Section
860G(a)(3) of the Code (but without regard to the rule
in Treasury Regulation Section 1.860G-2(f)(2) that
treats a defective obligation as a qualified mortgage,
or any substantially similar successor provision) and
applicable Treasury regulations promulgated thereunder.
(37) With respect to each Co-op Loan, the stock that is
pledged as security for the Mortgage Loan is held by a
person as a tenant-stockholder (as defined in Section
216 of the Code) in a cooperative housing corporation
(as defined in Section 216 of the Code).
(38) Each prepayment penalty is permissible and enforceable
in accordance with its terms upon the Mortgagor's full
and voluntary Principal Prepayment (except to the extent
that: (1) the enforceability thereof may be limited by
bankruptcy, insolvency, moratorium, receivership and
other similar laws relating to creditors' rights
generally; (2) the collectability thereof may be limited
due to acceleration in connection with a foreclosure or
other involuntary prepayment; or (3) subsequent changes
in applicable law may limit or prohibit enforceability
thereof) under applicable law.
(39) The Seller has caused the servicer for each Mortgage
Loan to accurately and fully report its borrower credit
files (including favorable and unfavorable information)
to Equifax, Trans Union and Experian, or their
successors, in a timely manner.
(40) The Seller did not offer or arrange for proceeds from
any Mortgage Loan to be used to finance single-premium
credit insurance policies.
(41) No Mortgage Loan provides for a prepayment charge to be
paid following the fifth anniversary of the origination
date of such Mortgage Loan.
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(42) As of the Closing Date, no Mortgage Loan is the subject
of pending or final foreclosure proceedings.
(43) As of the Closing Date, no Mortgage Loan provides for
interest other than at either (i) a single fixed rate in
effect throughout the term of the Mortgage Loan or (ii)
a "variable rate" (within the meaning of Treasury
Regulation Section 1.860G-1(a)(3)) in effect throughout
the term of the Mortgage Loan.
(44) As of the Closing Date, the Seller would not institute
foreclosure proceedings with respect to any of the
Mortgage Loans prior to the next scheduled payment date
for such Mortgage Loan based on such Mortgage Loan's
delinquency status.
(45) None of the Mortgage Loans are "high cost" loans as
defined by the applicable federal, state or local
predatory and abusive lending laws nor is any Mortgage
Loan a "High Cost Loan" or "Covered Loan," as applicable
(as such terms are defined in the current Standard &
Poor's LEVELS(R) Glossary) and no Mortgage Loan
originated on or after October 1, 2002 through March 6,
2003 is governed by the Georgia Fair Lending Act of
2002, as amended.
(46) None of the Mortgage Loans are classified as (a) "high
cost" loans under the Home Ownership and Equity
Protection Act of 1994 or (b) a similarly classified
loan using different terminology under a law imposing
heightened regulatory scrutiny or additional legal
liability for residential mortgage loans having high
interest rates, points and/or fees.
(b) [RESERVED].
(c) Upon discovery by any of the parties hereto of a breach of a
representation or warranty set forth in Section 2.03(a) that materially and
adversely affects the interests of the Certificateholders in any Mortgage Loan,
the party discovering such breach shall give prompt notice thereof to the other
parties and to the Seller. Pursuant to the Sale Agreement, the Seller thereunder
shall within 90 days of the earlier of the discovery by or receipt of written
notice by the Seller from any party of a breach of any representation or
warranty set forth herein made that materially and adversely affects the
interests of the Certificateholders in any Mortgage Loan, it shall cure such
breach in all material respects and, if such breach is not so cured, shall, (i)
if such 90-day period expires prior to the second anniversary of the Closing
Date, remove such Deleted Mortgage Loan from the Trust Fund and substitute in
its place a Replacement Mortgage Loan, in the manner and subject to the
conditions set forth in this Section; or (ii) repurchase the affected Mortgage
Loan or Mortgage Loans from the Trustee at the Purchase Price in the manner set
forth below; provided, however, that any such substitution pursuant to (i) above
shall not be effected prior to the additional delivery to the Trustee of a
Request for Release substantially in the form of Exhibit M and shall not be
effected unless it is within two years of the Startup Date. The Seller shall
promptly reimburse the Trustee for any expenses reasonably incurred by the
Trustee in respect of enforcing the remedies for such breach. To enable the
Servicer to amend the Mortgage Loan Schedule, unless it cures such breach in a
timely fashion pursuant to this Section 2.03, the Seller shall promptly notify
the Servicer whether the Seller intends either to repurchase, or to substitute
for, the Mortgage Loan affected by such breach. With respect to the
representations and warranties described in this Section that are made to the
best of the Seller's knowledge, if it is discovered by any of the Seller, the
Servicer or the Trustee that the substance of such representation and warranty
is inaccurate and such inaccuracy materially and adversely affects the value of
the related Mortgage Loan, notwithstanding the Seller's lack of knowledge with
respect to the substance of such representation or warranty, such inaccuracy
shall be deemed a breach of the applicable representation or warranty.
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With respect to any Replacement Mortgage Loan or Loans, the Seller
shall deliver to the Trustee for the benefit of the Certificateholders the
related Mortgage Note, Mortgage and assignment of the Mortgage, and such other
documents and agreements as are required by Section 2.01, with the Mortgage Note
endorsed and the Mortgage assigned as required by Section 2.01. No substitution
will be made in any calendar month after the Determination Date for such month.
Scheduled Payments due with respect to Replacement Mortgage Loans in the Due
Period related to the Distribution Date on which such proceeds are to be
distributed shall not be part of the Trust Fund and will be retained by the
Seller on such Distribution Date. For the month of substitution,
Certificateholders are entitled to the Scheduled Payment due on any Deleted
Mortgage Loan for the related Due Period and thereafter the Seller shall be
entitled to retain all amounts received in respect of such Deleted Mortgage
Loan. The Trustee shall amend the Mortgage Loan Schedule for the benefit of the
Certificateholders to reflect the removal of such Deleted Mortgage Loan and the
substitution of the Replacement Mortgage Loan or Loans. Upon such substitution,
the Replacement Mortgage Loan or Loans shall be subject to the terms of this
Agreement in all respects, and the Seller shall be deemed to have made with
respect to such Replacement Mortgage Loan or Loans, as of the date of
substitution, the representations and warranties set forth in Section 2.03(a)
with respect to such Mortgage Loan. No Replacement Mortgage Loan or Loans is a
"covered loan" within the meaning of the Georgia Fair Lending Act of 2002, as
amended. Upon any such substitution and the deposit to the Collection Account of
the amount required to be deposited therein in connection with such substitution
as described in the following paragraph, the Trustee shall release to the Seller
the Mortgage File relating to such Deleted Mortgage Loan and held for the
benefit of the Certificateholders and shall execute and deliver at the Seller's
direction such instruments of transfer or assignment as have been prepared by
the Seller, in each case without recourse, as shall be necessary to vest in the
Seller, or its respective designee, title to the Trustee's interest in any
Deleted Mortgage Loan substituted for pursuant to this Section 2.03.
For any month in which the Seller substitutes one or more Replacement
Mortgage Loans for one or more Deleted Mortgage Loans, the Seller will determine
the amount (if any) by which the aggregate principal balance of all such
Replacement Mortgage Loans as of the date of substitution and the aggregate
prepayment penalties with respect to such Replacement Mortgage Loans is less
than the aggregate Stated Principal Balance (after application of the principal
portion of the Scheduled Payment due in the month of substitution) and aggregate
prepayment penalties of all such Deleted Mortgage Loans. An amount equal to the
aggregate of the deficiencies described in the preceding sentence (such amount,
the "Substitution Adjustment Amount") shall be deposited into the Collection
Account by the Seller on the Determination Date for the Distribution Date
relating to the Prepayment Period during which the related Mortgage Loan became
required to be purchased or replaced hereunder. The Seller shall also deposit
with the Trustee any unreimbursed costs, penalties and/or damages incurred by
the Trust Fund and/or the Trustee in connection with any violation relating to
such Deleted Mortgage Loan of any predatory or abusive lending law.
In the event that the Seller shall have repurchased a Mortgage Loan,
the Purchase Price therefor shall be deposited in the Collection Account
pursuant to Section 3.08 on the Determination Date for the Distribution Date in
the month following the month during which the Seller became obligated to
repurchase or replace such Mortgage Loan and upon such deposit of the Purchase
Price and the receipt of a Request for Release in the form of Exhibit M hereto,
the Trustee shall release the related Mortgage File held for the benefit of the
Certificateholders to the Seller, and the Trustee shall execute and deliver at
such Person's direction the related instruments of transfer or assignment
prepared by the Seller, in each case without recourse, as shall be necessary to
transfer title from the Trustee for the benefit of the Certificateholders and
transfer the Trustee's interest to the Seller to any Mortgage Loan purchased
pursuant to this Section 2.03. It is understood and agreed that the obligation
under this Agreement of a Seller to cure, repurchase or replace any Mortgage
Loan as to which a breach has occurred and is continuing shall constitute the
sole remedy against the Depositor respecting such breach available to
Certificateholders, the Depositor or the Trustee.
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(d) The representations and warranties set forth in this Section 2.03
shall survive delivery of the respective Mortgage Files to the Trustee for the
benefit of the Certificateholders.
(e) The parties hereto agree and understand that it is not intended
that any mortgage loan be included in the Trust that is either (i) a "High-Cost
Home Loan" as defined in the New Jersey Home Ownership Act effective November
27, 2003, or (ii) a "High-Cost Home Loan" as defined in the New Mexico Home Loan
Protection Act effective January 1, 2004.
SECTION 2.04. Representations and Warranties of the Servicer.
The Servicer hereby represents and warrants to the Depositor and the
Trustee as follows, as of the date hereof:
(i) The Servicer is a duly organized corporation and is
validly existing and in good standing under the laws of the state of
its incorporation and is duly authorized and qualified to transact any
and all business contemplated by this Agreement to be conducted by the
Servicer in any state in which a Mortgaged Property (or Underlying
Mortgaged Property, in the case of a Co-op Loan) is located or is
otherwise not required under applicable law to effect such
qualification and, in any event, is in compliance with the doing
business laws of any such state, to the extent necessary to ensure its
ability to enforce each Mortgage Loan to service the Mortgage Loans in
accordance with the terms of this Agreement and to perform any of its
other obligations under this Agreement in accordance with the terms
hereof.
(ii) The Servicer has the full corporate power and authority
to service each Mortgage Loan, and to execute, deliver and perform, and
to enter into and consummate the transactions contemplated by this
Agreement and has duly authorized by all necessary corporate action on
the part of the Servicer the execution, delivery and performance of
this Agreement; and this Agreement, assuming the due authorization,
execution and delivery hereof by the other parties hereto, constitutes
a legal, valid and binding obligation of the Servicer, enforceable
against the Servicer in accordance with its terms, except that (a) the
enforceability hereof may be limited by bankruptcy, insolvency,
moratorium, receivership and other similar laws relating to creditors'
rights generally and (b) the remedy of specific performance and
injunctive and other forms of equitable relief may be subject to
equitable defenses and to the discretion of the court before which any
proceeding therefor may be brought.
(iii) The execution and delivery of this Agreement by the
Servicer, the servicing of the Mortgage Loans under this Agreement, the
consummation of any other of the transactions contemplated by this
Agreement, and the fulfillment of or compliance with the terms hereof
are in the ordinary course of business of the Servicer and will not (A)
result in a material breach of any term or provision of the charter or
by-laws of the Servicer or (B) materially conflict with, result in a
material breach, violation or acceleration of, or result in a material
default under, the terms of any other material agreement or instrument
to which the Servicer is a party or by which it may be bound, or (C)
constitute a material violation of any statute, order or regulation
applicable to the Servicer of any court, regulatory body,
administrative agency or governmental body having jurisdiction over the
Servicer; and the Servicer is not in breach or violation of any
material indenture or other material agreement or instrument, or in
violation of any statute, order or regulation of any court, regulatory
body, administrative agency or governmental body having jurisdiction
over it which breach or violation may materially impair the Servicer's
ability to perform or meet any of its obligations under this Agreement.
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(iv) The Servicer is an approved servicer of conventional
mortgage loans for FNMA or FHLMC.
(v) No litigation is pending or, to the best of the Servicer's
knowledge, threatened, against the Servicer that would materially and
adversely affect the execution, delivery or enforceability of this
Agreement or the ability of the Servicer to service the Mortgage Loans
or to perform any of its other obligations under this Agreement in
accordance with the terms hereof.
(vi) No consent, approval, authorization or order of any court
or governmental agency or body is required for the execution, delivery
and performance by the Servicer of, or compliance by the Servicer with,
this Agreement or the consummation of the transactions contemplated
hereby, or if any such consent, approval, authorization or order is
required, the Servicer has obtained the same.
SECTION 2.05. Substitutions and Repurchases of Mortgage Loans which are
not "Qualified Mortgages".
Upon discovery by the Depositor, the Servicer or the Trustee that any
Mortgage Loan does not constitute a "qualified mortgage" within the meaning of
section 860G(a)(3) of the Code, the party discovering such fact shall promptly
(and in any event within 5 Business Days of discovery) give written notice
thereof to the other parties. In connection therewith, the Depositor shall, at
the Depositor's option, either (i) substitute, if the conditions in Section
2.03(c) with respect to substitutions are satisfied, a Replacement Mortgage Loan
for the affected Mortgage Loan, or (ii) repurchase the affected Mortgage Loan
within 90 days of such discovery in the same manner as it would a Mortgage Loan
for a breach of representation or warranty contained in Section 2.03. The
Trustee shall reconvey to the Depositor the Mortgage Loan to be released
pursuant hereto in the same manner, and on the same terms and conditions, as it
would a Mortgage Loan repurchased for breach of a representation or warranty
contained in Section 2.03.
SECTION 2.06. Authentication and Delivery of Certificates.
The Trustee acknowledges the transfer and assignment to it of the Trust
Fund and, concurrently with such transfer and assignment, has caused to be
authenticated and delivered to or upon the order of the Depositor, in exchange
for the Mortgage Loans, Certificates duly authenticated by the Authenticating
Agent in authorized denominations evidencing ownership of the entire Trust Fund.
The Trustee agrees to hold the Trust Fund and exercise the rights referred to
above for the benefit of all present and future Holders of the Certificates and
to perform the duties set forth in this Agreement to the best of its ability, to
the end that the interests of the Holders of the Certificates may be adequately
and effectively protected.
SECTION 2.07. REMIC Elections.
(a) The Depositor hereby instructs and authorizes the Trustee to make
an appropriate election to treat each of the Upper-Tier REMIC, the Middle-Tier
REMIC and the Lower-Tier REMIC as a REMIC. This Agreement shall be construed so
as to carry out the intention of the parties that each of the Upper-Tier REMIC,
the Middle-Tier REMIC and the Lower-Tier REMIC be treated as a REMIC at all
times prior to the date on which the Trust Fund is terminated.
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(b) The Lower-Tier REMIC will consist of all of the assets of the Trust
Fund (other than any proceeds of prepayment penalties or late payment charges,
the assets held by the Middle-Tier REMIC or the Upper-Tier REMIC and the grantor
trusts described in this Section 2.07) and will be evidenced by the Lower-Tier
REMIC Regular Interests (which will be uncertificated and will represent the
"regular interests" in the Lower-Tier REMIC) and the LR Interest as the single
"residual interest" in the Lower-Tier REMIC. The Trustee will hold the
Lower-Tier REMIC Regular Interests. The Middle-Tier REMIC will consist of the
Lower-Tier REMIC Regular Interests and will be evidenced by the Middle-Tier
REMIC Regular Interests (which will represent the "regular interests" in the
Middle Tier REMIC) and the MR Interest as the single "residual interest" in the
Middle-Tier REMIC. The Upper-Tier REMIC will consist of the Middle-Tier REMIC
Regular Interests and will be evidenced by the REMIC Regular Interests (which
will represent the "regular interests" in the Upper-Tier REMIC) and the UR
Interest as the single "residual interest" in the Upper-Tier REMIC. The Class R
Certificate initially will represent beneficial ownership of the LR Interest,
the MR Interest and the UR Interest.
The "latest possible maturity date" for federal income tax purposes of
all of the interests created hereby will be the Latest Possible Maturity Date.
The "Startup Date" for purposes of the REMIC provisions shall be the Closing
Date. Each REMIC's fiscal year shall be the calendar year.
(c) Lower-Tier REMIC Regular Interest I shall have an initial principal
balance equal to the principal balance of the Group I Mortgage Loans as of the
Cut-Off Date, an interest rate equal to the Group I Net Rate and pay on each
Distribution Date. All Realized Losses from the Group I Mortgage Loans shall be
allocated to Lower-Tier REMIC Regular Interest I and all payments of principal
and interest (net of fees and expenses) received from the Group I Mortgage Loans
shall be paid to Lower-Tier REMIC Regular Interest I in payment of accrued
interest and principal until the principal balance of such interest is reduced
to zero and any losses allocated to Lower-Tier REMIC Regular Interest I have
been reimbursed. Any excess funds attributable to the Group I Mortgage Loans
shall first be applied to reimburse prior losses on the Group II Mortgage Loans
and then distributed to the LR Interest. If on any Distribution Date the
Certificate Principal Balance of any Class of Group I Certificates or the Class
C Group I Certificate Principal Balance is increased pursuant to the last
sentence of the definition of "Certificate Principal Balance", then there shall
be an equivalent increase in the principal amount of Lower-Tier REMIC Regular
Interest I.
Lower-Tier REMIC Regular Interest II shall have an initial principal
balance equal to the principal balance of the Group II Mortgage Loans as of the
Cut-Off Date, an interest rate equal to the Group II Net Rate and pay on each
Distribution Date. All Realized Losses from the Group II Mortgage Loans shall be
allocated to Lower-Tier REMIC Regular Interest II and all payments of principal
and interest (net of fees and expenses) received from the Group II Mortgage
Loans shall be paid to Lower-Tier REMIC Regular Interest II in payment of
accrued interest and principal until the principal balance of such interest is
reduced to zero and any losses allocated to Lower-Tier REMIC Regular Interest II
have been reimbursed. Any excess funds attributable to the Group II Mortgage
Loans shall first be applied to reimburse prior losses on the Group I Mortgage
Loans and then distributed to the LR Interest. If on any Distribution Date the
Certificate Principal Balance of any Class of Group II Certificates or the Class
C Group II Certificate Principal Balance is increased pursuant to the last
sentence of the definition of "Certificate Principal Balance", then there shall
be an equivalent increase in the principal amount of Lower-Tier REMIC Regular
Interest II.
Each of the Middle-Tier REMIC Group I Regular Interests (other than the
Middle-Tier REMIC Group I Accrual Interest) shall have an initial principal
balance equal to .001% of the principal balance of its Related Certificate
(expressed to eight decimal places). Except as provided in the following
sentence, each of the Middle-Tier REMIC Group I Regular Interests (other than
the Middle-Tier REMIC Group I Accrual Interest) shall have an interest rate
equal to the Pass-Through Rate of its Related Certificate. The Middle-Tier REMIC
Class IA-1 Interest shall have an initial accrual period of 30 days and its
interest rate for such accrual period shall equal the product of (I) the initial
Pass-Through Rate for the Class IA-1 Certificates and (II) a fraction, the
numerator of which is the number of actual days in the initial Accrual Period
for the Class IA-1 Certificates and the denominator of which is 30.
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Xxx Xxxxxx-Xxxx REMIC Group I Accrual Interest shall have an initial
principal balance equal to the excess of the principal balance of the Group I
Mortgage Loans as of the Cut-Off Date over the aggregate initial principal
balance of the Middle-Tier REMIC Group I Regular Interests (other than the
Middle-Tier REMIC Group I Accrual Interest). The Middle-Tier REMIC Group I
Accrual Interest shall have an interest rate equal to the Group I Net Rate.
Each of the Middle-Tier REMIC Group II Regular Interests (other than
the Middle-Tier REMIC Group II Accrual Interest) shall have an initial principal
balance equal to .001% of the principal balance of its Related Certificate
(expressed to eight decimal places). Except as provided in the following
sentence, each of the Middle-Tier REMIC Group II Regular Interests (other than
the Middle-Tier REMIC Group II Accrual Interest) shall have an interest rate
equal to the Pass-Through Rate of its Related Certificate, subject to a cap
equal to the Group II Net Rate. Each of the Middle-Tier REMIC Group II Regular
Interests (other than the Middle-Tier REMIC Group II Accrual Interest) shall
have an initial accrual period of 30 days and an interest rate for such Accrual
Period equal to the product of (I) the initial Pass-Through Rate for the related
class of Certificates and (II) a fraction, the numerator of which is the actual
number of days in the initial accrual period for the related class of
Certificates and the denominator of which is 30.
The Middle-Tier REMIC Group II Accrual Interest shall have an initial
principal balance equal to the excess of the principal balance of the Group II
Mortgage Loans as of the Cut-Off Date over the aggregate initial principal
balance of the Middle-Tier REMIC Group II Regular Interests (other than the
Middle-Tier REMIC Group II Accrual Interest). The Middle-Tier REMIC Group II
Accrual Interest shall have an interest rate equal to the Group II Net Rate.
Each of the Upper-Tier REMIC Group II Regular Interests shall have a
principal balance equal to the principal balance of the Corresponding
Certificate and shall have an interest rate equal to the Pass-Through Rate on
the Corresponding Certificate, subject to a cap equal to the Group II Net Rate.
On each Distribution Date the Upper-Tier REMIC Class C Interest shall
accrue interest in an amount equal to the Class C Distributable Interest Amount.
The initial principal balance of the Upper-Tier REMIC Class C Interest will
equal the initial Class C Certificate Principal Balance.
On each Distribution Date (i) there shall be treated as having been a
payment in respect of principal of each of the Middle-Tier REMIC Regular
Interests (other than the Middle-Tier REMIC Accrual Interests) in an amount
equal to .001% of the amount distributed in respect of principal on the Related
Certificate on such Distribution Date, (ii) there shall be treated as having
been distributed in respect of each of the Middle-Tier REMIC Regular Interests
(other than the Middle-Tier REMIC Accrual Interests) an amount equal to .001% of
the amount distributed to the Related Certificate on such Distribution Date in
respect of unreimbursed amounts of Realized Losses previously allocated to such
Related Certificate, (iii) there shall be treated as having been a payment of
principal on the Middle-Tier REMIC Group I Accrual Interest equal to 99.999% of
the amount distributed in respect of principal on the Group I Certificates, (iv)
there shall be treated as having been distributed in respect of the Middle-Tier
REMIC Group I Accrual Interest an amount equal to 99.999% of the amounts
distributed on the Group I Certificates in respect of unreimbursed amounts of
Realized Losses previously allocated to the Group I Certificates, (v) there
shall be treated as having been a payment of principal on the Middle-Tier REMIC
Group II Accrual Interest equal to 99.999% of the amount distributed in respect
of principal on the Group II Certificates, (vi) there shall be treated as having
been distributed in respect of the Middle-Tier REMIC Group II Accrual Interest
an amount equal to 99.999% of the amounts distributed on the Group II
Certificates in respect of unreimbursed amounts of Realized Losses previously
allocated to the Group II Certificates, (vii) there shall be treated as having
been an increase in the principal amount of each of the Middle-Tier REMIC
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Regular Interests (other than the Middle-Tier REMIC Accrual Interests) in an
amount equal to .001% of the increase in the Certificate Principal Balance of
the Related Certificate pursuant to the last sentence of the definition of
"Certificate Principal Balance" on such Distribution Date, (viii) there shall be
treated as having been an increase in the principal amount of the Middle-Tier
REMIC Group I Accrual Interest in an amount equal to 99.999% of the increase in
the Certificate Principal Balance of the Group I Certificates pursuant to the
last sentence of the definition of "Certificate Principal Balance" on such
Distribution Date, (ix) there shall be treated as having been an increase in the
principal amount of the Middle-Tier REMIC Group II Accrual Interest in an amount
equal to 99.999% of the increase in the Certificate Principal Balance of the
Group II Certificates pursuant to the last sentence of the definition of
"Certificate Principal Balance" on such Distribution Date, (x) there shall be
treated as having been an increase in the principal amount of the Middle-Tier
REMIC Group I Accrual Interest in an amount equal to the increase in the Class C
Group I Certificate Principal Balance pursuant to the last sentence of the
definition of "Certificate Principal Balance" on such Distribution Date and (xi)
there shall be treated as having been an increase in the principal amount of the
Middle-Tier REMIC Group II Accrual Interest in an amount equal to the increase
in the Class C Group II Certificate Principal Balance pursuant to the last
sentence of the definition of "Certificate Principal Balance" on such
Distribution Date.
On each Distribution Date (i) there shall be treated as having been
distributed on the Middle-Tier REMIC Group I Accrual Interest in respect of
principal an amount equal to the portion of any distribution in respect of
principal on the Class C Certificate that reflects a decrease in the excess of
the aggregate principal balance of the Group I Mortgage Loans over the aggregate
principal balance of the Group I Certificates, (ii) there shall be treated as
having been distributed in respect of the Middle-Tier REMIC Group I Accrual
Interest an amount equal to the amounts distributed on the Class C Certificate
in respect of unreimbursed amounts of Realized Losses on Group I Mortgage Loans
previously allocated to the Class C Certificate, (iii) there shall be treated as
having been distributed on the Middle-Tier REMIC Group II Accrual Interest in
respect of principal an amount equal to the portion of any distribution in
respect of principal on the Class C Certificate that reflects a decrease in the
excess of the aggregate principal balance of the Group II Mortgage Loans over
the aggregate principal balance of the Group II Certificates, and (iv) there
shall be treated as having been distributed in respect of the Middle-Tier REMIC
Group II Accrual Interest an amount equal to the amounts distributed on the
Class C Certificate in respect of unreimbursed amounts of Realized Losses on
Group II Mortgage Loans previously allocated to the Class C Certificate.
On each Distribution Date, (i) accrued interest in respect of the
Middle-Tier REMIC Group I Accrual Interest will be added to the principal amount
of that interest to the extent necessary to ensure that immediately following
such Distribution Date, the principal amount of the Middle-Tier REMIC Group I
Accrual Interest equals the excess of aggregate principal amount of the Group I
Mortgage Loans over the aggregate principal amount of the Middle-Tier REMIC
Group I Regular Interests other than the Middle-Tier REMIC Group I Accrual
Interest and (ii) accrued interest in respect of the Middle-Tier REMIC Group II
Accrual Interest will be added to the principal amount of that interest to the
extent necessary to ensure that immediately following such Distribution Date,
the principal amount of the Middle-Tier REMIC Group II Accrual Interest equals
the excess of aggregate principal amount of the Group II Mortgage Loans over the
aggregate principal amount of the Middle-Tier REMIC Group II Regular Interests
other than the Middle-Tier REMIC Group II Accrual Interest.
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The principal amount of each Middle-Tier REMIC Regular Interest (other
than the Middle-Tier REMIC Accrual Interests) will be reduced by .001% of the
Applied Realized Loss Amount allocated to the Related Certificate. The principal
amount of the Middle-Tier REMIC Group I Accrual Interest will be reduced by
99.999% of the Applied Realized Loss Amount allocated to the Group I
Certificates and by 100% of any Realized Losses on Group I Mortgage Loans
allocated to the Class C Certificate. The principal amount of the Middle-Tier
REMIC Group II Accrual Interest will be reduced by 99.999% of the Applied
Realized Loss Amount allocated to the Group II Certificates and by 100% of any
Realized Losses on Group II Mortgage Loans allocated to the Class C Certificate.
Calculations in connection with this Section 2.07(c) shall be carried
out to eight decimal places.
The beneficial ownership of the LR Interest, the MR Interest and the UR
Interest shall be represented by the Class R Certificate. None of the LR
Interest, the MR Interest or the UR Interest shall have a principal balance or
bear interest.
(d) The "tax matters person" with respect to each REMIC for purposes of
the REMIC provisions shall be the beneficial owner of the Class R Certificate;
provided, however, that each holder of a Class R Certificate, by its acceptance
thereof, irrevocably appoints the Servicer and, to the extent that a Paying
Agent is instructed by the Servicer to perform the duties set forth in (a), (b),
(c), (d), (e), (i) or (j) of the first paragraph of Section 8.11, such Paying
Agent as its agent and attorney-in-fact to act as "tax matters person" with
respect to each REMIC for purposes of the REMIC Provisions.
(e) It is intended that the rights of the Class IIA-1 Certificates, the
Class IIA-2 Certificates, the Class IIM-1 Certificates, the Class IIM-2
Certificates and the Class IIB Certificates to receive payments in respect of
Excess Interest shall be treated as a right in interest rate cap contracts
written by the Class C Certificateholders in favor of the holders of the Class
IIA-1 Certificates, the Class IIA-2 Certificates, the Class IIM-1 Certificates,
the Class IIM-2 Certificates and the Class IIB Certificates, and shall be
accounted for as property held separate and apart from the regular interests in
the Upper-Tier REMIC held by the holders of the Class IIA-1 Certificates, the
Class IIA-2 Certificates, the Class IIM-1 Certificates, the Class IIM-2
Certificates and the Class IIB Certificates. This provision is intended to
satisfy the requirements of Treasury Regulations Section 1.860G-2(i) for the
treatment of property rights coupled with regular interests to be separately
respected and shall be interpreted consistently with such regulation. On each
Distribution Date, to the extent that any of the Class IIA-1 Certificates, the
Class IIA-2 Certificates, the Class IIM-1 Certificates, the Class IIM-2
Certificates or the Class IIB Certificates receives payments of Excess Interest,
including all payments in respect of Interest Carryover Amounts, such amount
will be treated as distributed to the Class C Certificates and then paid to the
relevant class of Group II Certificates pursuant to the related interest rate
cap agreement.
(f) The parties intend that the portion of the Trust Fund consisting of
the Upper-Tier REMIC Class C Interest, the Yield Maintenance Account and the
rights to receive payments under the Yield Maintenance Agreement, together with
the obligation of the holders of the Class C Certificates to pay amounts of
Excess Interest to the holders of the Class IIA-1 Certificates, the Class IIA-2
Certificates, the Class IIM-1 Certificates, the Class IIM-2 Certificates and the
Class IIB Certificates shall be treated as a "grantor trust" under the Code, and
the provisions hereof shall be interpreted consistently with this intention. In
furtherance of such intention, the Trustee shall (i) furnish or cause to be
furnished to the holders of the Class C Certificates information regarding their
allocable share of the income with respect to such grantor trust, (ii) file or
cause to be filed with the Internal Revenue Service Form 1041 (together with any
necessary attachments) or such other form as may be applicable and (iii) comply
with such information reporting obligations with respect to payments from such
grantor trust as may be applicable under the Code or other applicable tax laws.
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(g) The parties intend that the portion of the Trust Fund consisting of
the right to receive proceeds from prepayment penalties and late payment charges
collected on the Mortgage Loans shall be treated as a "grantor trust" under the
Code, and the provisions hereof shall be interpreted consistently with this
intention. In furtherance of such intention, the Trustee shall (i) furnish or
cause to be furnished to the holders of the Class P Certificates and the Class L
Certificates information regarding their allocable share of the income with
respect to such grantor trust and (ii) file or cause to be filed with the
Internal Revenue Service Form 1041 (together with any necessary attachments) or
such other form as may be applicable.
SECTION 2.08. Covenants of the Servicer.
The Servicer hereby covenants to each of the other parties to this
Agreement as follows:
(a) the Servicer shall comply in the performance of its obligations
under this Agreement with all reasonable rules and requirements of the insurer
under each Required Insurance Policy;
(b) no written information, certificate of an officer, statement
furnished in writing or written report delivered to the Depositor or the
Trustee, any affiliate of the Depositor or the Trustee and prepared by the
Servicer pursuant to this Agreement will be inaccurate in any material respect;
SECTION 2.09. [RESERVED].
SECTION 2.10. [RESERVED].
SECTION 2.11. Permitted Activities of the Trust. The Trust is created
for the object and purpose of engaging in the Permitted Activities.
SECTION 2.12. Qualifying Special Purpose Entity. For purposes of SFAS
140, the parties hereto intend that the Trust shall be treated as a "qualifying
special purpose entity" as such term is used in SFAS 140 and any successor rule
thereto and its power and authority as stated in Section 2.11 of this Agreement
shall be limited in accordance with paragraph 35 thereof.
ARTICLE III
ADMINISTRATION AND SERVICING
OF MORTGAGE LOANS
SECTION 3.01. Servicer to Service Mortgage Loans.
For and on behalf of the Certificateholders, the Servicer shall service
and administer the Mortgage Loans in accordance with Accepted Servicing
Practices. In connection with such servicing and administration, the Servicer
shall have full power and authority, acting alone and/or through subservicers as
provided in Section 3.02 hereof, to do or cause to be done any and all things
that it may deem necessary or desirable in connection with such servicing and
administration, including but not limited to, the power and authority, subject
to the terms hereof (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 (or the stock allocated to a dwelling unit related to a Co-op Loan) and
assumptions of the Mortgage Notes and related Mortgages (but only in the manner
provided in this Agreement), (iii) to collect any Insurance Proceeds and other
Liquidation Proceeds and (iv) subject to Section 3.12(a), to effectuate
foreclosure or other conversion of the ownership of the Mortgaged Property (or
the stock allocated to a dwelling unit related to a Co-op Loan) securing any
Mortgage Loan; provided that, subject to Section 6.03, the Servicer shall not
take any action that is inconsistent with or prejudices the interests of the
Trust Fund or the Certificateholders in any Mortgage Loan serviced by it under
this Agreement or the rights and interests of the other parties to this
Agreement. The Servicer shall represent and protect the interest of the Trust
Fund in the same manner as it currently protects its own interest in mortgage
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loans in its own portfolio in any claim, proceeding or litigation regarding a
Mortgage Loan and shall not make or permit any modification, waiver or amendment
of any term of any Mortgage Loan which would cause any of the Lower-Tier REMIC,
the Middle-Tier REMIC or the Upper-Tier REMIC to fail to qualify as a REMIC or
result in the imposition of any tax under Section 860G(a) or 860G(d) of the
Code, but in any case not in any manner that is a lesser standard than that
provided in the first sentence of this Section 3.01. Without limiting the
generality of the foregoing, the Servicer, in its own name or in the name of the
Depositor and the Trustee, is hereby authorized and empowered by the Depositor
and the Trustee, when the Servicer believes it appropriate in its reasonable
judgment, to execute and deliver, on behalf of the Trustee, the Depositor, the
Certificateholders or any of them, any and all instruments of satisfaction or
cancellation, or of partial or full release or discharge and all other
comparable instruments, with respect to the Mortgage Loans, and with respect to
the Mortgaged Properties held for the benefit of the Certificateholders. The
Servicer shall prepare and deliver to the Depositor and/or the Trustee such
documents requiring execution and delivery by any or all of them as are
necessary or appropriate to enable the Servicer to service and administer the
Mortgage Loans, including without limitation, any powers of attorney. Upon
receipt of such documents, the Depositor and/or the Trustee shall execute such
documents and deliver them to the Servicer.
In accordance with the standards of the preceding paragraph, the
Servicer shall advance or cause to be advanced funds as necessary for the
purpose of effecting the payment of taxes and assessments on the Mortgaged
Properties, which advances shall be reimbursable in the first instance from
related collections from the Mortgagors pursuant to Section 3.06, and further as
provided in Section 3.08. All costs incurred by the Servicer, if any, in
effecting the timely payments of taxes and assessments on the Mortgaged
Properties and related insurance premiums shall not, for the purpose of
calculating monthly distributions to the Certificateholders, be added to the
Stated Principal Balance under the related Mortgage Loans, notwithstanding that
the terms of such Mortgage Loans so permit.
The Servicer shall deliver a list of Servicing Officers to the Trustee
by the Closing Date.
SECTION 3.02. Servicing and Subservicing; Enforcement of the
Obligations of Servicer.
(a) The Servicer may arrange for the subservicing of any Mortgage Loan
by a subservicer, which may be an affiliate (each, a "subservicer") pursuant to
a subservicing agreement (each, a "Subservicing Agreement"); provided, however,
that such subservicing arrangement and the terms of the related subservicing
agreement must provide for the servicing of such Mortgage Loans in a manner
consistent with the servicing arrangements contemplated hereunder.
Notwithstanding the provisions of any subservicing agreement, any of the
provisions of this Agreement relating to agreements or arrangements between the
Servicer and a subservicer or reference to actions taken through a subservicer
or otherwise, the Servicer shall remain obligated and liable to the Depositor,
the Trustee and the Certificateholders for the servicing and administration of
the Mortgage Loans in accordance with the provisions of this Agreement without
diminution of such obligation or liability by virtue of such subservicing
agreements or arrangements or by virtue of indemnification from the subservicer
and to the same extent and under the same terms and conditions as if the
Servicer alone were servicing and administering the Mortgage Loans. Every
subservicing agreement entered into by the Servicer shall contain a provision
giving any successor Servicer the option to terminate such agreement in the
event a successor Servicer is appointed. All actions of the each subservicer
performed pursuant to the related subservicing agreement shall be performed as
an agent of the Servicer with the same force and effect as if performed directly
by the Servicer.
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(b) For purposes of this Agreement, the Servicer shall be deemed to
have received any collections, recoveries or payments with respect to the
Mortgage Loans that are received by a subservicer regardless of whether such
payments are remitted by the subservicer to the Servicer.
SECTION 3.03. Rights of the Depositor and the Trustee in Respect of the
Servicer.
Neither the Trustee nor the Depositor shall have any responsibility or
liability for any action or failure to act by the Servicer, and neither of them
is obligated to supervise the performance of the Servicer hereunder or
otherwise.
SECTION 3.04. Trustee to Act as Servicer.
In the event that the Servicer shall for any reason no longer be the
Servicer hereunder (including by reason of an Event of Default), the Trustee or
its designee shall thereupon assume all of the rights and obligations of the
Servicer hereunder arising thereafter (except that the Trustee shall not be (i)
liable for losses of the Servicer pursuant to Section 3.10 hereof or any acts or
omissions of such predecessor Servicer hereunder, (ii) obligated to make
Advances if it is prohibited from doing so by applicable law, (iii) obligated to
effectuate repurchases or substitutions of Mortgage Loans hereunder, including
pursuant to Section 2.02 or 2.03 hereof, (iv) responsible for expenses of the
Servicer pursuant to Section 2.03 or (v) deemed to have made any representations
and warranties hereunder, including pursuant to Section 2.03 or the first
paragraph of Section 6.02 hereof). If the Servicer shall for any reason no
longer be the Servicer (including by reason of any Event of Default), the
Trustee (or any other successor servicer) may, at its option, succeed to any
rights and obligations of the Servicer under any subservicing agreement in
accordance with the terms thereof; provided, however, that the Trustee (or any
other successor servicer) shall not incur any liability or have any obligations
in its capacity as servicer under a subservicing agreement arising prior to the
date of such succession unless it expressly elects to succeed to the rights and
obligations of the Servicer thereunder; and the Servicer shall not thereby be
relieved of any liability or obligations under the subservicing agreement
arising prior to the date of such succession.
The Servicer shall, upon request of the Trustee, but at the expense of
the Servicer, deliver to the assuming party all documents and records relating
to each subservicing agreement and the Mortgage Loans then being serviced and
otherwise use its best efforts to effect the orderly and efficient transfer of
the subservicing agreement to the assuming party.
SECTION 3.05. Collection of Mortgage Loan Payments; Collection Account;
Distribution Account.
(a) The Servicer shall make reasonable efforts in accordance with
Accepted Servicing Practices to collect all payments called for under the terms
and provisions of the Mortgage Loans to the extent such procedures shall be
consistent with this Agreement and the terms and provisions of any related
Required Insurance Policy. Consistent with the foregoing, the Servicer may in
its discretion extend the due dates for payments due on a Mortgage Note for a
period not greater than 270 days; provided, however, that the NIMs Insurer's
prior written consent shall be required for any modification, waiver or
amendment if the aggregate number of outstanding Mortgage Loans which have been
modified, waived or amended exceeds 5% of the number of Mortgage Loans as of the
Cut-Off Date. In the event of any such arrangement, subject to Section 4.01, the
Servicer shall make any Advances on the related Mortgage Loan during the
scheduled period in accordance with the amortization schedule of such Mortgage
Loan without modification thereof by reason of such arrangements. The Servicer
shall waive a prepayment penalty in connection with the prepayment of a Mortgage
Loan in response to a request for such a waiver under the following
circumstances (but only under the following circumstances): (i) Loss Mitigation;
(ii) Assertion of Non-Compliance; (iii) Mortgagor hardship due to an External
Life Event; or (iv) to avoid or resolve active, pending or threatened litigation
involving the related Mortgage Loan. The Servicer shall not be required to
institute or join in litigation with respect to collection of any payment
(whether under a Mortgage, Mortgage Note or otherwise or against any public or
governmental authority with respect to a taking or condemnation) if it
reasonably believes that enforcing the provision of the Mortgage or other
instrument pursuant to which such payment is required is prohibited by
applicable law.
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(b) The Servicer shall establish and initially maintain, on behalf of
the Certificateholders, the Collection Account. The Servicer shall deposit into
the Collection Account daily, within two Business Days of receipt thereof, in
immediately available funds, the following payments and collections received or
made by it on and after the Cut-Off Date with respect to the Mortgage Loans:
(i) all payments on account of principal, including Principal
Prepayments, on the Mortgage Loans, other than principal due on the
Mortgage Loans on or prior to the Cut-off Date;
(ii) all payments on account of interest on the Mortgage Loans
net of the related Servicing Fee permitted under Section 3.15, other
than interest due on the Mortgage Loans on or prior to the Cut-off
Date;
(iii) all Liquidation Proceeds, other than proceeds to be
applied to the restoration or repair of the Mortgaged Property (or
Underlying Mortgaged Property, in the case of a Co-op Loan) or released
to the Mortgagor in accordance with the Servicer's normal servicing
procedures;
(iv) all Compensating Interest;
(v) any amount required to be deposited by the Servicer
pursuant to Section 3.05(e) in connection with any losses on Permitted
Investments;
(vi) any amounts required to be deposited by the Servicer
pursuant to Section 3.10 hereof;
(vii) the Purchase Price and any Substitution Adjustment
Amount;
(viii) all Advances made by the Servicer pursuant to Section
4.01;
(ix) all prepayment penalties and late payment charges; and
(x) any other amounts required to be deposited hereunder.
The foregoing requirements for remittance by the Servicer into the
Collection Account shall be exclusive, it being understood and agreed that,
without limiting the generality of the foregoing, payments in the nature of
assumption fees (i.e. fees related to the assumption of a Mortgage Loan upon the
purchase of the related Mortgaged Property or stock allocated to a dwelling unit
in the case of a Co-op Loan) if collected, need not be remitted by the Servicer.
In the event that the Servicer shall remit any amount not required to be
remitted and not otherwise subject to withdrawal pursuant to Section 3.08
hereof, it may at any time withdraw or direct the Trustee, or such other
institution maintaining the Collection Account, to withdraw such amount from the
Collection Account, any provision herein to the contrary notwithstanding. Such
withdrawal or direction may be accomplished by delivering written notice thereof
to the Trustee, or such other institution maintaining the Collection Account,
that describes the amounts deposited in error in the Collection Account. The
Servicer shall maintain adequate records with respect to all withdrawals made
pursuant to this Section. All funds deposited in the Collection Account shall be
held in trust for the Certificateholders until withdrawn in accordance with
Section 3.08. In no event shall the Trustee incur liability for withdrawals from
the Collection Account at the direction of the Servicer.
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The Servicer shall give notice to the NIMs Insurer, the Paying Agent
and the Trustee of the location of the Collection Account maintained by it when
established and prior to any change thereof.
(c) [RESERVED].
(d) The Paying Agent on behalf of the Servicer shall establish and
maintain, on behalf of the Certificateholders, the Distribution Account. The
Servicer shall, promptly upon receipt, deposit in the Distribution Account and
retain therein the following:
(i) the aggregate amount withdrawn by the Servicer pursuant to
the second paragraph of Section 3.08(b);
(ii) any amount required to be deposited by the Servicer
pursuant to Section 3.05(e) in connection with any losses on Permitted
Investments; and
(iii) the Repurchase Price paid by the Servicer pursuant to
Section 9.01.
The foregoing requirements for remittance by the Servicer and deposit
by the Servicer into the Distribution Account shall be exclusive. In the event
that the Servicer shall remit any amount not required to be remitted and not
otherwise subject to withdrawal pursuant to Section 3.08 hereof, it may at any
time withdraw such amount from the Distribution Account, any provision herein to
the contrary notwithstanding. All funds deposited in the Distribution Account
shall be held by the Trustee or any Paying Agent, as applicable, in trust for
the Certificateholders until disbursed in accordance with this Agreement or
withdrawn in accordance with Section 3.08. In no event shall the Trustee incur
liability for withdrawals from the Distribution Account at the direction of the
Servicer or any Paying Agent, as applicable. The Servicer or any Paying Agent,
as applicable, shall give notice to the NIMs Insurer and the Trustee of the
location of the Distribution Account when established and prior to any change
thereof.
In addition to the foregoing, the Trustee shall establish and maintain
the Yield Maintenance Account on behalf of the holders of the Group II
Certificates (other than the Class IIP and Class IIL Certificates) and Class C
Certificates and shall make, or cause to be made, a deposit into the Yield
Maintenance Account of any payments made to the Trust under the Yield
Maintenance Agreement as described in Section 4.04(l). Funds on deposit in the
Yield Maintenance Account shall remain uninvested.
(e) The institution that maintains the Collection Account shall invest
the funds in such account, as directed by the Servicer in writing, in Permitted
Investments, which shall mature not later than the Business Day preceding the
related Servicer Remittance Date (except that if such Permitted Investment is an
obligation of the institution that maintains such Collection Account or is
otherwise immediately available, then such Permitted Investment shall mature not
later than the Servicer Remittance Date). All such Permitted Investments shall
be made in the name of the Trustee, for the benefit of the Certificateholders.
All income and gain net of any losses realized from amounts on deposit in the
Collection Account shall be for the benefit of the Servicer as servicing
compensation and shall be remitted to it monthly as provided herein. The amount
of any losses incurred in the Collection Account in respect of any such
investments shall be deposited by the Servicer in the Collection Account out of
the Servicer's own funds immediately as realized. The institution that maintains
the Distribution Account shall invest the funds in such account, as directed by
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the Servicer in writing, in Permitted Investments, which shall mature not later
than the Business Day preceding the related Distribution Date (except that if
such Permitted Investment is an obligation of the institution that maintains
such Distrubution Account or is otherwise immediately available, then such
Permitted Investment shall mature not later than the Distribution Date). All
such Permitted Investments shall be made in the name of the Trustee, for the
benefit of the Certificateholders. All income and gain net of any losses
realized from amounts on deposit in the Distribution Account shall be for the
benefit of the Servicer as servicing compensation and shall be remitted to it
monthly as provided herein. The amount of any losses incurred in the
Distribution Account in respect of any such investments shall be deposited by
the Servicer in the Distribution Account out of the Servicer's own funds
immediately as realized. The Trustee or the Paying Agent shall not be liable for
the amount of any loss incurred in respect of any investment or lack of
investment of funds held in the Collection Account or the Distribution Account
and made in accordance with this Section 3.05.
(f) The Servicer shall cause the party maintaining the Collection
Account or the Distribution Account, as the case may be, shall give at least 30
days advance notice to each of the other parties to this Agreement and each
Rating Agency of any proposed change of the location of the Collection Account
or the Distribution Account prior to any change thereof.
SECTION 3.06. Collection of Taxes, Assessments and Similar Items;
Escrow Accounts.
To the extent required by the related Mortgage Note, the Servicer shall
establish and maintain one or more accounts (each, an "Escrow Account") and
deposit and retain therein all collections from the Mortgagors (or advances by
the Servicer) for the payment of taxes, assessments, hazard insurance premiums
or comparable items for the account of the Mortgagors. Nothing herein shall
require the Servicer to compel a Mortgagor to establish an Escrow Account in
violation of applicable law.
Withdrawals of amounts so collected from the Escrow Accounts may be
made only to effect timely payment of taxes, assessments, hazard insurance
premiums, condominium or PUD association dues, or comparable items, to reimburse
the Servicer out of related collections for any payments made pursuant to
Sections 3.01 hereof (with respect to taxes and assessments and insurance
premiums) and 3.10 hereof (with respect to hazard insurance), to refund to any
Mortgagors any sums as may be determined to be overages, to pay interest, if
required by law or the terms of the related Mortgage or Mortgage Note, to
Mortgagors on balances in the Escrow Account or to clear and terminate the
Escrow Account at the termination of this Agreement in accordance with Section
9.01 hereof. The Escrow Accounts shall not be a part of the Trust Fund.
SECTION 3.07. Access to Certain Documentation and Information Regarding
the Mortgage Loans.
The Servicer shall afford the Depositor, the NIMs Insurer and the
Trustee and their counsel, agents and accountants reasonable access to all
records and documentation regarding the Mortgage Loans and all accounts,
insurance policies and other matters relating to this Agreement, such access
being afforded without charge, but only upon reasonable request and during
normal business hours at the offices of the Servicer designated by it.
Upon reasonable advance notice in writing if required by federal
regulation, the Servicer will provide to each Certificateholder that is a
savings and loan association, bank or insurance company certain reports and
reasonable access to information and documentation regarding the Mortgage Loans
sufficient to permit such Certificateholder to comply with applicable
regulations of the OTS or other regulatory authorities with respect to
investment in the Certificates; provided, that the Servicer shall be entitled to
be reimbursed by each such Certificateholder for actual expenses incurred by the
Servicer in providing such reports and access.
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SECTION 3.08. Permitted Withdrawals from the Collection Account and
Distribution Account.
(a) The Servicer (or the Depositor in the case of clauses (vi) and
(vii) below) may from time to time, make withdrawals from the related Collection
Account for the following purposes:
(i) to pay to the Servicer (to the extent not previously paid
to or withheld by the Servicer), as servicing compensation in
accordance with Section 3.15, that portion of any payment of interest
that equals the Servicing Fee for the period with respect to which such
interest payment was made, and, as additional servicing compensation,
those other amounts set forth in Section 3.15;
(ii) to reimburse the Servicer for Advances made by it with
respect to the Mortgage Loans, such right of reimbursement pursuant to
this subclause (ii) being limited to amounts received on particular
Mortgage Loan(s) (including, for this purpose, Liquidation Proceeds)
that represent late recoveries of payments of principal and/or interest
on such particular Mortgage Loan(s) in respect of which any such
Advance was made;
(iii) to reimburse the Servicer for any Non-Recoverable
Advance previously made and any Non-Recoverable Servicing Advance;
(iv) to reimburse the Servicer from Insurance Proceeds for
Insured Expenses covered by the related Insurance Policy;
(v) pay the Servicer any unpaid Servicing Fees and to
reimburse it for any unreimbursed Servicing Advances, the Servicer's
right to reimbursement of Servicing Advances pursuant to this subclause
(v) with respect to any Mortgage Loan being limited to amounts received
on particular Mortgage Loan(s) (including, for this purpose,
Liquidation Proceeds and purchase and repurchase proceeds) that
represent late recoveries of the payments for which such advances were
made pursuant to Section 3.01 or Section 3.06;
(vi) to pay to the Depositor or the Servicer, as applicable,
with respect to each Mortgage Loan or property acquired in respect
thereof that has been purchased pursuant to Section 2.02, 2.03 or 3.12,
all amounts received thereon and not taken into account in determining
the related Stated Principal Balance of such repurchased Mortgage Loan;
(vii) to reimburse the Servicer or the Depositor for expenses
incurred by any of them in connection with the Mortgage Loans or
Certificates and reimbursable pursuant to Section 6.03 hereof;
(viii) to withdraw pursuant to Section 3.05 any amount
deposited in the Collection Account and not required to be deposited
therein; and
(ix) to clear and terminate the Collection Account upon
termination of this Agreement pursuant to Section 9.01 hereof.
In addition, no later than 12:00 noon Pacific Standard Time on the
Servicer Remittance Date (or such earlier time on the Servicer Remittance Date
as the Servicer or the Paying Agent requires as specified in writing not later
than two Business Days prior to the Servicer Remittance Date, such earlier time
requirement being due to the operations of the Servicer's or Paying Agent's
designated Permitted Investment closing early on the Servicer Remittance Date),
the Servicer shall cause to be withdrawn from the Collection Account the Group I
Interest Funds (other than the amounts subtracted from such funds in such
definition) and the Group I Principal Funds (other than Non-Recoverable Advances
specified in item (v) of such definition), the Group II Interest Funds (other
than the amounts subtracted from such funds in such definition), the Group II
Principal Funds (other than Non-Recoverable Advances specified in item (v) of
such definition), to the extent on deposit, and such amount shall be deposited
in the Distribution Account.
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The Servicer shall keep and maintain separate accounting, on a Mortgage
Loan by Mortgage Loan basis, for the purpose of justifying any withdrawal from
the Collection Account.
(b) The Servicer or the Paying Agent shall withdraw funds from the
Distribution Account for distribution to the Certificateholders in the manner
specified in this Agreement (and to withhold from the amounts so withdrawn, the
amount of any taxes that it is authorized to retain pursuant to the last
paragraph of Section 8.11). In addition, the Servicer may from time to time make
withdrawals from the Distribution Account for the following purposes:
(i) to withdraw pursuant to Section 3.05 any amount deposited
in the Distribution Account and not required to be deposited therein;
and
(ii) to clear and terminate the Distribution Account upon
termination of the Agreement pursuant to Section 9.01 hereof.
SECTION 3.09. [RESERVED].
SECTION 3.10. Maintenance of Hazard Insurance.
The Servicer shall cause to be maintained, for each Mortgage Loan
(other than a Co-op Loan), hazard insurance with extended coverage in an amount
that is at least equal to the lesser of (i) the replacement value of the
improvements that are part of such Mortgaged Property and (ii) the greater of
(a) the outstanding principal balance of the Mortgage Loan and (b) an amount
such that the proceeds of such policy shall be sufficient to prevent the related
Mortgagor and/or mortgagee from becoming a co-insurer. Each such policy of
standard hazard insurance shall contain, or have an accompanying endorsement
that contains, a standard mortgagee clause. The Servicer shall also cause flood
insurance to be maintained on property acquired upon foreclosure or deed in lieu
of foreclosure of any Mortgage Loan, to the extent described below. Pursuant to
Section 3.05 hereof, any amounts collected by the Servicer under any such
policies (other than the amounts to be applied to the restoration or repair of
the related Mortgaged Property or property thus acquired or amounts released to
the Mortgagor in accordance with the Servicer's normal servicing procedures)
shall be deposited in the Collection Account. Any cost incurred by the Servicer
in maintaining any such insurance shall not, for the purpose of calculating
monthly distributions to the Certificateholders or remittances to the Trustee
for their benefit, be added to the principal balance of the Mortgage Loan,
notwithstanding that the terms of the Mortgage Loan so permit. Such costs shall
be recoverable by the Servicer out of late payments by the related Mortgagor or
out of Liquidation Proceeds to the extent permitted by Section 3.08 hereof. It
is understood and agreed that no earthquake or other additional insurance is to
be required of any Mortgagor or maintained on property acquired in respect of a
Mortgage other than pursuant to such applicable laws and regulations as shall at
any time be in force and as shall require such additional insurance. If the
Mortgaged Property is located at the time of origination of the Mortgage Loan in
a federally designated special flood hazard area and such area is participating
in the national flood insurance program, the Servicer shall cause flood
insurance to be maintained with respect to such Mortgage Loan. Such flood
insurance shall be in an amount equal to the lesser of (i) the original
principal balance of the related Mortgage Loan, (ii) the replacement value of
the improvements that are part of such Mortgaged Property, or (iii) the maximum
amount of such insurance available for the related Mortgaged Property under the
Flood Disaster Protection Act of 1973, as amended.
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In the event that the Servicer shall obtain and maintain a blanket
policy insuring against hazard losses on all of the Mortgage Loans, it shall
conclusively be deemed to have satisfied its obligations as set forth in the
first sentence of this Section 3.10, it being understood and agreed that such
policy may contain a deductible clause on terms substantially equivalent to
those commercially available and maintained by comparable servicers. If such
policy contains a deductible clause, the Servicer shall, in the event that there
shall not have been maintained on the related Mortgaged Property a policy
complying with the first sentence of this Section 3.10, and there shall have
been a loss that would have been covered by such policy, deposit in the
Collection Account the amount not otherwise payable under the blanket policy
because of such deductible clause. In connection with its activities as servicer
of the Mortgage Loans, the Servicer agrees to present, on behalf of itself, the
Depositor and the Trustee for the benefit of the Certificateholders, claims
under any such blanket policy.
SECTION 3.11. Enforcement of Due-On-Sale Clauses; Assumption
Agreements.
(a) Except as otherwise provided in this Section 3.11(a), when any
property subject to a Mortgage has been or is about to be conveyed by the
Mortgagor, the Servicer shall to the extent that it has knowledge of such
conveyance, enforce any due-on-sale clause contained in any Mortgage Note or
Mortgage, to the extent permitted under applicable law and governmental
regulations, but only to the extent that such enforcement will not adversely
affect or jeopardize coverage under any Required Insurance Policy.
Notwithstanding the foregoing, the Servicer is not required to exercise such
rights with respect to a Mortgage Loan if the Person to whom the related
Mortgaged Property (or stock allocated to a dwelling unit, in the case of a
Co-op Loan) has been conveyed or is proposed to be conveyed satisfies the terms
and conditions contained in the Mortgage Note and Mortgage related thereto and
the consent of the mortgagee under such Mortgage Note or Mortgage is not
otherwise so required under such Mortgage Note or Mortgage as a condition to
such transfer. In the event that the Servicer is prohibited by law from
enforcing any such due-on-sale clause, or if coverage under any Required
Insurance Policy would be adversely affected, or if nonenforcement is otherwise
permitted hereunder, the Servicer is authorized, subject to Section 3.11(b), to
take or enter into an assumption and modification agreement from or with the
Person to whom such property has been or is about to be conveyed, pursuant to
which such Person becomes liable under the Mortgage Note and, unless prohibited
by applicable state law, the Mortgagor remains liable thereon, provided that the
Mortgage Loan shall continue to be covered (if so covered before the Servicer
enters such agreement) by the applicable Required Insurance Policies. The
Servicer, subject to Section 3.11(b), is also authorized with the prior approval
of the insurers under any Required Insurance Policies to enter into a
substitution of liability agreement with such Person, pursuant to which the
original Mortgagor is released from liability and such Person is substituted as
Mortgagor and becomes liable under the Mortgage Note. Notwithstanding the
foregoing, the Servicer shall not be deemed to be in default under this Section
3.11(a) by reason of any transfer or assumption that the Servicer reasonably
believes it is restricted by law from preventing.
(b) Subject to the Servicer's duty to enforce any due-on-sale clause to
the extent set forth in Section 3.11(a) hereof, in any case in which a Mortgaged
Property (or stock allocated to a dwelling unit, in the case of Co-op Loan) has
been conveyed to a Person by a Mortgagor, and such Person is to enter into an
assumption agreement or modification agreement or supplement to the Mortgage
Note or Mortgage that requires the signature of the Trustee, or if an instrument
of release signed by the Trustee is required releasing the Mortgagor from
liability on the Mortgage Loan, the Servicer shall prepare and deliver or cause
to be prepared and delivered to the Trustee for signature and shall direct, in
writing, the Trustee to execute the assumption agreement with the Person to whom
the Mortgaged Property (or the stock allocated to a dwelling unit, in the case
of a Co-op Loan) is to be conveyed and such modification agreement or supplement
to the Mortgage Note or Mortgage or other instruments as are reasonable or
necessary to carry out the terms of the Mortgage Note or Mortgage or otherwise
to comply with any applicable laws regarding assumptions or the transfer of the
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Mortgaged Property (or stock allocated to a dwelling unit, in the case of a
Co-op Loan) to such Person. In connection with any such assumption, no material
term of the Mortgage Note (including, but not limited to, the Mortgage Rate, the
amount of the Scheduled Payment, the Maximum Rate, the Minimum Rate, the Gross
Margin, the Periodic Rate Cap, the Adjustment Date, any prepayment penalty and
any other term affecting the amount or timing of payment on the Mortgage Loan)
may be changed. The Servicer shall notify the Trustee that any such substitution
or assumption agreement has been completed by forwarding to the Trustee the
original of such substitution or assumption agreement, which in the case of the
original shall be added to the related Mortgage File and shall, for all
purposes, be considered a part of such Mortgage File to the same extent as all
other documents and instruments constituting a part thereof. Any fee collected
by the Servicer for entering into an assumption or substitution of liability
agreement will be retained by the Servicer as additional servicing compensation.
SECTION 3.12. Realization Upon Defaulted Mortgage Loans; Determination
of Excess Proceeds.
(a) The Servicer shall use reasonable efforts to foreclose upon or
otherwise comparably convert the ownership of 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. In
connection with such foreclosure or other conversion, the Servicer shall follow
such practices and procedures as it shall deem necessary or advisable and as
shall be normal and usual in its general mortgage servicing activities and the
requirements of the insurer under any Required Insurance Policy; provided,
however, that the Servicer shall not be required to expend its own funds in
connection with any foreclosure or towards the restoration of any property
unless it shall determine (i) that such restoration and/or foreclosure will
increase the proceeds of liquidation of the Mortgage Loan after reimbursement to
itself of such expenses and (ii) that such expenses will be recoverable to it
through Liquidation Proceeds (respecting which it shall have priority for
purposes of withdrawals from the Collection Account pursuant to Section 3.08
hereof). The Servicer shall be responsible for all other costs and expenses
incurred by it in any such proceedings; provided, however, that it shall be
entitled to reimbursement thereof from the proceeds of liquidation of the
related Mortgaged Property (or stock allocated to a dwelling unit, in the case
of a Co-op Loan), as contemplated in Section 3.08 hereof. If the Servicer has
knowledge that a Mortgaged Property (or Underlying Mortgaged Property, in the
case of a Co-op Loan) that the Servicer is contemplating acquiring in
foreclosure or by deed-in-lieu of foreclosure is located within a one-mile
radius of any site with environmental or hazardous waste risks known to the
Servicer, the Servicer will, prior to acquiring the Mortgaged Property (or stock
allocated to a dwelling unit, in the case of a Co-op Loan), consider such risks
and only take action in accordance with Accepted Servicing Practices.
With respect to any REO Property, the deed or certificate of sale shall
be taken in the name of "Wachovia Bank, N.A. as trustee." Pursuant to its
efforts to sell such REO Property, the Servicer shall either itself or through
an agent selected by the Servicer protect and conserve such REO Property in the
same manner and to such extent as is customary in the locality where such REO
Property is located and may, incident to its conservation and protection of the
interests of the Certificateholders, rent the same, or any part thereof, as the
Servicer deems to be in the best interest of the Servicer and the
Certificateholders for the period prior to the sale of such REO Property. The
Servicer shall prepare a statement with respect to each REO Property that has
been rented showing the aggregate rental income received and all expenses
incurred in connection with the management and maintenance of such REO Property
at such times as is necessary to enable the Servicer to comply with the
reporting requirements of the REMIC Provisions. The net monthly rental income,
if any, from such REO Property shall be deposited in the Collection Account no
later than the close of business on each Determination Date. The Servicer shall
perform the tax reporting and withholding related to foreclosures, abandonments
and cancellation of indebtedness income as specified by Sections 1445, 6050J and
6050P of the Code by preparing and filing such tax and information returns, as
may be required.
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In the event that the Trust Fund acquires any Mortgaged Property (or
stock allocated to a dwelling unit, in the case of a Co-op Loan) as aforesaid or
otherwise in connection with a default or imminent default on a Mortgage Loan,
the Servicer shall dispose of such Mortgaged Property (or stock allocated to a
dwelling unit, in the case of a Co-op Loan) prior to the expiration of three
years from the end of the year of its acquisition by the Trust Fund or, at the
expense of the Trust Fund, request, in accordance with applicable procedures for
obtaining an automatic extension, more than 60 days prior to the day on which
such three-year period would otherwise expire, an extension of the three-year
grace period, in which case the Servicer shall dispose of such Mortgaged
Property before such extension expires, unless the Trustee shall have been
supplied with an Opinion of Counsel (such Opinion of Counsel not to be an
expense of the Trustee) to the effect that the holding by the Trust Fund of such
Mortgaged Property (or stock allocated to a dwelling unit, in the case of a
Co-op Loan) subsequent to such three-year period will not result in the
imposition of taxes on "prohibited transactions" of the Trust Fund as defined in
section 860F of the Code or cause any of the Lower-Tier REMIC, the Middle-Tier
REMIC or the Upper-Tier REMIC to fail to qualify as a REMIC at any time that any
Certificates are outstanding, in which case the Trust Fund may continue to hold
such Mortgaged Property (or stock allocated to a dwelling unit, in the case of
Co-op Loan) (subject to any conditions contained in such Opinion of Counsel).
Notwithstanding any other provision of this Agreement, no Mortgaged Property (or
stock allocated to a dwelling unit, in the case of Co-op Loan) acquired by the
Trust Fund shall be rented (or allowed to continue to be rented) or otherwise
used for the production of income by or on behalf of the Trust Fund in such a
manner or pursuant to any terms that would (i) cause such Mortgaged Property (or
stock allocated to a dwelling unit, in the case of Co-op Loan) to fail to
qualify as "foreclosure property" within the meaning of section 860G(a)(8) of
the Code or (ii) subject the Trust Fund to the imposition of any federal, state
or local income taxes on the income earned from such Mortgaged Property (or
stock allocated to a dwelling unit, in the case of Co-op Loan) under section
860G(c) of the Code or otherwise, unless the Servicer or the Depositor has
agreed to indemnify and hold harmless the Trust Fund with respect to the
imposition of any such taxes.
The decision of the Servicer to foreclose on a defaulted Mortgage Loan
shall be subject to a determination by the Servicer that the proceeds of such
foreclosure would exceed the costs and expenses of bringing such a proceeding.
The income earned from the management of any Mortgaged Properties acquired
through foreclosure or other judicial proceeding, net of reimbursement to the
Servicer for expenses incurred (including any property or other taxes) in
connection with such management and net of unreimbursed Servicing Fees,
Advances, Servicing Advances and any management fee paid or to be paid with
respect to the management of such Mortgaged Property (or stock allocated to a
dwelling unit, in the case of Co-op Loan), shall be applied to the payment of
principal of, and interest on, the related defaulted Mortgage Loans (with
interest accruing as though such Mortgage Loans were still current) and all such
income shall be deemed, for all purposes in this Agreement, to be payments on
account of principal and interest on the related Mortgage Notes and shall be
deposited into the Collection Account. To the extent the income received during
a Prepayment Period is in excess of the amount attributable to amortizing
principal and accrued interest at the related Mortgage Rate on the related
Mortgage Loan, such excess shall be considered to be a partial Principal
Prepayment for all purposes hereof.
The Liquidation Proceeds from any liquidation of a Mortgage Loan, net
of any payment to the Servicer as provided above, shall be deposited in the
Collection Account on the next succeeding Determination Date following receipt
thereof for distribution on the related Distribution Date.
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The proceeds of any Liquidated Loan, as well as any recovery resulting
from a partial collection of Liquidation Proceeds or any income from an REO
Property, will be applied in the following order of priority: first, to
reimburse the Servicer for any related unreimbursed Servicing Advances and
Servicing Fees, pursuant to Section 3.08(a)(v) or this Section 3.12; second, to
reimburse the Servicer for any unreimbursed Advances, pursuant to Section
3.08(a)(ii) or this Section 3.12; third, to any prepayment penalties and then to
accrued and unpaid interest (to the extent no Advance has been made for such
amount) on the Mortgage Loan or related REO Property, at the Net Mortgage Rate
to the Due Date occurring in the month in which such amounts are required to be
distributed; and fourth, as a recovery of principal of the Mortgage Loan.
(b) On each Determination Date, the Servicer shall determine the
respective aggregate amounts of Excess Proceeds, if any, that occurred in the
related Prepayment Period.
SECTION 3.13. Trustee to Cooperate; Release of Mortgage Files.
Upon the payment in full of any Mortgage Loan, or the receipt by the
Servicer of a notification that payment in full will be escrowed in a manner
customary for such purposes, the Servicer will promptly notify the Trustee or
its designee by delivering a Request for Release substantially in the form of
Exhibit M. Upon receipt of such request, the Trustee or its designee shall
promptly release the related Mortgage File to the Servicer, and the Trustee or
its designee shall at the Servicer's written direction execute and deliver to
the Servicer the request for reconveyance, deed of reconveyance or release or
satisfaction of mortgage or such instrument releasing the lien of the Mortgage
in each case provided by the Servicer, together with the Mortgage Note with
written evidence of cancellation thereon. No expenses incurred in connection
with any instrument of satisfaction or deed of reconveyance shall be chargeable
to the Collection Account, the Distribution Account or the related subservicing
account. From time to time and as shall be appropriate for the servicing or
foreclosure of any Mortgage Loan, including for such purpose, collection under
any policy of flood insurance, any fidelity bond or errors or omissions policy,
or for the purposes of effecting a partial release of any Mortgaged Property (or
stock allocated to a dwelling unit, in the case of Co-op Loan) from the lien of
the Mortgage or the making of any corrections to the Mortgage Note or the
Mortgage or any of the other documents included in the Mortgage File, the
Trustee or its designee shall, upon delivery to the Trustee or its designee of a
Request for Release in the form of Exhibit M signed by a Servicing Officer,
release the Mortgage File to the Servicer. Subject to the further limitations
set forth below, the Servicer shall cause the Mortgage File or documents so
released to be returned to the Trustee or its designee when the need therefor by
the Servicer no longer exists, unless the Mortgage Loan is liquidated and the
proceeds thereof are deposited in the Collection Account, in which case the
Trustee or its designee shall deliver the Request for Release to the Servicer.
Each Request for Release may be delivered to the Trustee or its
designee (i) via mail or courier, (ii) via facsimile or (iii) by such other
means, including, without limitation, electronic or computer readable medium, as
the Servicer and the Trustee or its designee shall mutually agree. The Trustee
or its designee shall promptly release the related Mortgage File(s) within five
(5) to seven (7) Business Days of receipt of a properly completed Request for
Release pursuant to clauses (i), (ii) or (iii) above. Receipt of a properly
completed Request for Release shall be authorization to the Trustee or its
designee to release such Mortgage Files, provided the Trustee or its designee
has determined that such Request for Release has been executed, with respect to
clauses (i) or (ii) above, or approved, with respect to clause (iii) above, by
an authorized Servicing Officer of the Servicer, and so long as the Trustee or
its designee complies with its duties and obligations under the agreement. If
the Trustee or its designee is unable to release the Mortgage Files within the
period previously specified, the Trustee or its designee shall immediately
notify the Servicer indicating the reason for such delay, but in no event shall
such notification be later than five Business Days after receipt of a Request
for Release. If the Servicer is required to pay penalties or damages due to the
Trustee or its designee's negligent failure to release the related Mortgage File
or the Trustee or its designee's negligent failure to execute and release
documents in a timely manner, the Trustee or its designee, shall be liable for
such penalties or damages respectively caused by it.
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On each day that the Servicer remits to the Trustee or its designee
Requests for Releases pursuant to clauses (ii) or (iii) above, the Servicer
shall also submit to the Trustee or its designee a summary of the total amount
of such Requests for Releases requested on such day by the same method as
described in such clauses (ii) and (iii) above.
If the Servicer at any time seeks to initiate a foreclosure proceeding
in respect of any Mortgaged Property (or stock allocated to a dwelling unit, in
the case of Co-op Loan) as authorized by this Agreement, the Servicer shall
deliver or cause to be delivered to the Trustee or its designee, for signature,
as appropriate, any court pleadings, requests for trustee's sale or other
documents necessary to effectuate such foreclosure or any legal action brought
to obtain judgment against the Mortgagor on the Mortgage Note or the Mortgage or
to obtain a deficiency judgment or to enforce any other remedies or rights
provided by the Mortgage Note or the Mortgage or otherwise available at law or
in equity. Notwithstanding the foregoing, the Servicer shall cause possession of
any Mortgage File or of the documents therein that shall have been released by
the Trustee or its designee to be returned to the Custodian promptly after
possession thereof shall have been released by the Trustee or its designee
unless (i) the Mortgage Loan has been liquidated and the Liquidation Proceeds
relating to the Mortgage Loan have been deposited in the Collection Account, and
the Servicer shall have delivered to the Trustee or its designee a Request for
Release in the form of Exhibit M or (ii) the Mortgage File or document shall
have been delivered to an attorney or to a public trustee or other public
official as required by law for purposes of initiating or pursuing legal action
or other proceedings for the foreclosure of the Mortgaged Property (or stock
allocated to a dwelling unit, in the case of Co-op Loan) and the Servicer shall
have delivered to the Trustee or its designee an Officer's Certificate of a
Servicing Officer certifying as to the name and address of the Person to which
the Mortgage File or the documents therein were delivered and the purpose or
purposes of such delivery.
SECTION 3.14. Documents, Records and Funds in Possession of Servicer to
be Held for the Trustee.
All Mortgage Files and funds collected or held by, or under the control
of, the Servicer in respect of any Mortgage Loans, whether from the collection
of principal and interest payments or from Liquidation Proceeds, including but
not limited to, any funds on deposit in the Collection Account, shall be held by
the Servicer for and on behalf of the Trustee and shall be and remain the sole
and exclusive property of the Trustee, subject to the applicable provisions of
this Agreement. The Servicer also agrees that it shall not create, incur or
subject any Mortgage File or any funds that are deposited in the Collection
Account or Distribution Account or in any Escrow Account, or any funds that
otherwise are or may become due or payable to the Trustee for the benefit of the
Certificateholders, to any claim, lien, security interest, judgment, levy, writ
of attachment or other encumbrance, or assert by legal action or otherwise any
claim or right of set off against any Mortgage File or any funds collected on,
or in connection with, a Mortgage Loan, except, however, that the Servicer shall
be entitled to set off against and deduct from any such funds any amounts that
are properly due and payable to the Servicer under this Agreement.
SECTION 3.15. Servicing Compensation.
As compensation for its activities hereunder, the Servicer shall be
entitled to retain or withdraw from the Collection Account out of each payment
of interest on a Mortgage Loan included in the Trust Fund an amount equal to
interest at the applicable Servicing Fee Rate on the Stated Principal Balance of
the related Mortgage Loan as of the immediately preceding Distribution Date,
plus any sums due to the Servicer pursuant to clause (ii) of the definition of
"Servicing Fee."
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Additional servicing compensation in the form of any Excess Proceeds,
assumption fees (i.e. fees related to the assumption of a Mortgage Loan upon the
purchase of the related Mortgaged Property (or stock allocated to a dwelling
unit, in the case of Co-op Loan)), and all income and gain net of any losses
realized from Permitted Investments in the Collection Account shall be retained
by the Servicer to the extent not required to be deposited in the Collection
Account pursuant to Sections 3.05, or 3.12(a) hereof. The Servicer shall be
required to pay all expenses incurred by it in connection with its servicing
activities hereunder (including payment of any premiums for hazard insurance, as
required by Section 3.10 hereof and maintenance of the other forms of insurance
coverage required by Section 3.10 hereof) and shall not be entitled to
reimbursement therefor except as specifically provided in Sections 3.08 and 3.12
hereof.
SECTION 3.16. Access to Certain Documentation.
The Servicer shall provide to the OTS and the FDIC and to comparable
regulatory authorities supervising Holders of the Certificates and the examiners
and supervisory agents of the OTS, the FDIC and such other authorities, access
to the documentation regarding the Mortgage Loans required by applicable
regulations of the OTS and the FDIC. Such access shall be afforded without
charge, but only upon reasonable and prior written request and during normal
business hours at the offices of the Servicer designated by it. Nothing in this
Section shall limit the obligation of the Servicer to observe any applicable law
prohibiting disclosure of information regarding the Mortgagors and the failure
of the Servicer to provide access as provided in this Section as a result of
such obligation shall not constitute a breach of this Section.
SECTION 3.17. Annual Statement as to Compliance.
The Servicer shall deliver to the Depositor, the Trustee and the NIMs
Insurer on or before March 31 of each year beginning in 2005 or such other date
in order to remain in compliance with the Section 302 Requirements, an Officer's
Certificate stating, as to the signer thereof, that (i) a review of the
activities of the Servicer during the preceding calendar year and of the
performance of the Servicer under this Agreement has been made under such
officer's supervision and (ii) to the best of such officer's knowledge, based on
such review, the Servicer has fulfilled all its obligations under this Agreement
throughout such year, or, if there has been a default in the fulfillment of any
such obligation, specifying each such default known to such officer and the
nature and status thereof and (iii) to the best of such officer's knowledge,
each subservicer has fulfilled all its obligations under its Subservicing
Agreement throughout such year, or, if there has been a default in the
fulfillment of any such obligation specifying each such default known to such
officer and the nature and status thereof. The Trustee shall forward a copy of
each such statement to each Rating Agency. Copies of such statement shall be
provided by the Trustee to any Certificateholder upon written request at the
Certificateholder's expense, provided such statement is delivered by the
Servicer to the Trustee.
SECTION 3.18. Annual Independent Public Accountants' Servicing
Statement; Financial Statements.
On or before March 31 of each year beginning in 2005 or such other date
in order to remain in compliance with the Section 302 Requirements, the Servicer
at its expense shall cause a nationally recognized firm of independent public
accountants (who may also render other services to the Servicer or any affiliate
thereof) that is a member of the American Institute of Certified Public
Accountants to furnish a report to the Depositor, the Trustee and the NIMs
Insurer in compliance with the Uniform Single Attestation Program for Mortgage
Bankers. Copies of such report shall be provided by the Trustee to any
Certificateholder upon written request at the Certificateholder's expense,
provided such report is delivered by the Servicer to the Trustee.
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SECTION 3.19. Rights of the NIMs Insurer.
Each of the rights of the NIMs Insurer set forth in this agreement
shall exist so long as the notes issued pursuant to the Indenture remain
outstanding or the NIMs Insurer is owed amounts in respect of its guarantee of
payment on such notes.
SECTION 3.20. Periodic Filings.
(a) Promptly upon receipt of any report of the independent public
accountants required pursuant to Section 3.18, the Servicer shall review such
report. As part of the Form 10-K required to be filed pursuant to the terms of
this Agreement, the Servicer shall include such accountants report as well as a
report of any significant deficiencies relating to the Servicer's performance of
its obligations under this Agreement and any significant deficiencies relating
to the Servicer's compliance set forth in the report of the Servicer's certified
independent accountants described above.
(b) The Servicer shall prepare for filing, and execute, on behalf of
the Trust Fund, and file with the Securities and Exchange Commission, (i) within
15 days after each Distribution Date in each month, each Monthly Statement on
Form 8-K under the Exchange Act, (ii) on or before March 31 of each year
beginning in 2005 or such other date in order to remain in compliance with the
Section 302 Requirements, a Form 10-K under the Exchange Act, including any
certification (the "Certification") required by the Section 302 Requirements,
and (iii) any and all reports, statements and information respecting the Trust
Fund and/or the Certificates required to be filed on behalf of the Trust Fund
under the Exchange Act. The Certification shall be executed by the senior
officer in charge of servicing of the Servicer. Upon such filing with the
Securities and Exchange Commission, the Servicer shall promptly deliver to the
Trustee a copy of any such executed report, statement or information. Prior to
making any such filings and certifications, the Servicer shall comply with the
provisions set forth in this Section. If permitted by applicable law and unless
the Depositor otherwise directs, the Servicer shall file a Form 15 under the
Exchange Act as soon as it is able to do so.
(c) It is the parties intent that compliance by the Servicer with
provisions of this Section will constitute compliance with the review required
by the Section 302 Requirements. In no event shall the provisions set forth in
this Section limit the ability of the Servicer (or the Trustee) to conduct
additional procedures or investigations determined by it to be necessary or
appropriate to comply with the Section 302 Requirements.
(d) The obligations set forth in paragraphs (a) through (c) of this
Section shall only apply with respect to periods for which the Servicer is
obligated to file Form 8-Ks and 10-Ks pursuant to paragraph (b) of this Section.
In the event a Form 15 is properly filed pursuant to paragraph (b) of this
Section, there shall be no further obligations under paragraphs (a) through (c)
of this Section commencing with the fiscal year in which the Form 15 is filed
(other than the obligations in paragraphs (a) and (b) of this Section to be
performed in such fiscal year that relate back to the prior fiscal year).
(e) The Servicer shall prepare, file and deliver Form 8-Ks required to
be filed under the Exchange Act and the Paying Agent shall execute on behalf of
the Depositor so long as no certification in respect of such Form 8-K is
required by the SEC. In no event shall the Trustee or any of its agents be
obligated or responsible for preparing, executing, filing or delivering in
respect of the Trust Fund or another party, either (A) any report or filing
required by the SEC to be prepared, executed, filed or delivered in respect of
the Trust Fund or another party (other than in the circumstances described in
the previous sentence) or (B) any certification in respect of a report or filing
required by the SEC.
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(f) Not later than 15 calendar days before the date on which the Trust
Fund's annual report on Form 10-K is required to be filed in accordance with the
Exchange Act and the rules and regulations of the Commission (or, if such day is
not a Business Day, the immediately preceding Business Day), the Paying Agent
will deliver to the Depositor an officer's certificate for the prior calendar
year substantially in the form of Exhibit G hereto.
ARTICLE IV
DISTRIBUTIONS;
ADVANCES BY THE SERVICER
SECTION 4.01. Advances.
Subject to the conditions of this Article IV, the Servicer, as required
below, shall make an Advance and deposit such Advance in the Collection Account.
Each such Advance shall be remitted to the Collection Account no later than 1:00
p.m. Pacific Standard time on the Servicer Advance Date in immediately available
funds. The Servicer shall be obligated to make any such Advance only to the
extent that such advance would not be a Non-Recoverable Advance. If the Servicer
shall have determined that it has made a Non-Recoverable Advance or that a
proposed Advance or a lesser portion of such Advance would constitute a
Non-Recoverable Advance, the Servicer shall deliver (i) to the Trustee or the
Paying Agent for the benefit of the Certificateholders funds constituting the
remaining portion of such Advance, if applicable, and (ii) to the Depositor,
each Rating Agency and the Trustee or the Paying Agent an Officer's Certificate
setting forth the basis for such determination. The Servicer may, in its sole
discretion, make an Advance with respect to the principal portion of the final
Scheduled Payment on a Balloon Loan, but the Servicer is under no obligation to
do so; provided, however, that nothing in this sentence shall affect the
Servicer's obligation under this Section 4.01 to Advance the interest portion of
the final Scheduled Payment with respect to a Balloon Loan as if such Balloon
Loan were a fully amortizing Mortgage Loan. If a Mortgagor does not pay its
final Scheduled Payment on a Balloon Loan when due, the Servicer shall Advance
(unless it determines in its good faith judgment that such amounts would
constitute a Non-Recoverable Advance) a full month of interest (net of the
Servicing Fee) on the Stated Principal Balance thereof each month until its
Stated Principal Balance is reduced to zero.
In lieu of making all or a portion of such Advance from its own funds,
the Servicer may (i) cause to be made an appropriate entry in its records
relating to the Collection Account that any Amount Held for Future Distribution
has been used by the Servicer in discharge of its obligation to make any such
Advance and (ii) transfer such funds from the Collection Account to the
Distribution Account. Any funds so applied and transferred shall be replaced by
the Servicer by deposit in the Collection Account no later than the close of
business on the Servicer Advance Date on which such funds are required to be
distributed pursuant to this Agreement. The Servicer shall be entitled to be
reimbursed from the Collection Account for all Advances of its own funds made
pursuant to this Section as provided in Section 3.08. The obligation to make
Advances with respect to any Mortgage Loan shall continue until such Mortgage
Loan is paid in full or the related Mortgaged Property (or stock allocated to a
dwelling unit, in the case of Co-op Loan) or related REO Property has been
liquidated or until the purchase or repurchase thereof (or substitution
therefor) from the Trust Fund pursuant to any applicable provision of this
Agreement, except as otherwise provided in this Section 4.01.
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SECTION 4.02. Reduction of Servicing Compensation in Connection with
Prepayment Interest Shortfalls.
In the event that any Mortgage Loan is the subject of a Prepayment
Interest Shortfall, the Servicer shall, from amounts in respect of the Servicing
Fee for such Distribution Date, deposit into the Collection Account, as a
reduction of the Servicing Fee for such Distribution Date, no later than the
Servicer Advance Date immediately preceding such Distribution Date, an amount up
to the Prepayment Interest Shortfall; provided, however, that with respect to
any Distribution Date, the Servicer's obligation to deposit any such amount is
limited to an amount equal to the product of (i) one-twelfth of 0.35% and (ii)
the aggregate Stated Principal Balance of the Mortgage Loans with respect to
such Distribution Date; and in case of such deposit, the Servicer shall not be
entitled to any recovery or reimbursement from the Depositor, the Trustee, the
Trust Fund or the Certificateholders. With respect to any Distribution Date, to
the extent that the Prepayment Interest Shortfall exceeds Compensating Interest
(such excess, a "Non-Supported Interest Shortfall"), such Non-Supported Interest
Shortfall shall reduce the Current Interest with respect to each Class of Group
I Certificates and Group II Certificates, pro rata based upon the amount of
interest each such Class would otherwise be entitled to receive on such
Distribution Date.
SECTION 4.03. Distributions on the REMIC Interests.
On each Distribution Date, amounts on deposit in the Distribution
Account shall be treated for federal income tax purposes as applied to
distributions on the interests in the Lower-Tier REMIC and the Middle-Tier
REMIC, in each case in an amount sufficient to make the distributions on the
respective Certificates on such Distribution Date in accordance with the
provisions of Section 4.04.
SECTION 4.04. Distributions.
(a) On each Distribution Date, the Paying Agent shall make the
following distributions from the Distribution Account of an amount equal to the
Group I Interest Funds in the following order of priority:
(i) (A) to the Class IP Certificates, an amount equal to any
prepayment penalties collected on the Group I Mortgage Loans
during the related Prepayment Period;
(B) to the Class IL Certificates, an amount equal to any
late payment charges collected on the Group I Mortgage Loans
during the related Prepayment Period;
(C) to the Class R Certificate, in respect of the MR
Interest, an amount equal to the accrual on a principal amount
equal to 0.001% of the aggregate principal amount of the Group
I Certificates at a rate equal to the excess, if any, of the
Group I Net Rate over the weighted average rate of the Group I
Marker Interests computed by converting the interest rate on
the Middle-Tier REMIC Class IA-1 Interest to an equivalent
interest rate for a 30-day accrual period; and
(D) to the Class R Certificate, in respect of the UR
Interest, an amount equal to the excess of (1) the accrual on
a principal amount equal to 0.001% of the aggregate principal
amount of the Group I Certificates at a rate equal to the
excess, if any, of (x) the Group I Net Rate over (y) the
weighted average rate of the Group I Marker Interests computed
by converting the interest rate on the Middle-Tier REMIC Class
IA-1 Interest to an equivalent interest rate for a 30-day
accrual period (treating, solely for purposes of this clause
4.04(a)(i)(D)(y), 0.001% of the portion of the principal
amount of the Middle-Tier REMIC Group I Accrual Interest in
excess of 99,999 times the principal amount of the Group I
Marker Interests (as determined without regard to this
parenthetical) as a Group I Marker Interest subject to an
interest rate cap of 0%) over (2) the amount described in
Section 4.04(a)(i)(C);
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(ii) to each Class of Group I Class A Certificates, the
Current Interest and any Interest Carryforward Amount with respect to
such Class; provided, however, if such amount is not sufficient to make
a full distribution of the Current Interest and any Interest
Carryforward Amount with respect to all the Group I Class A
Certificates, such amount will be distributed pro rata among each Class
of the Group I Class A Certificates based on the ratio of (x) the
Current Interest and Interest Carryforward Amount for each Class of the
Group I Class A Certificates to (y) the total amount of Current
Interest and any Interest Carryforward Amount for the Group I Class A
Certificates;
(iii) to the Class IM-1 Certificates, the Class IM-1 Current
Interest and any Class IM-1 Interest Carryforward Amount;
(iv) to the Class IM-2 Certificates, the Class IM-2 Current
Interest and any Class IM-2 Interest Carryforward Amount;
(v) to the Class IB Certificates, the Class IB Current
Interest and any Class IB Interest Carryforward Amount; and
(vi) any remainder pursuant to Section 4.04(e) hereof.
(b) On each Distribution Date, the Paying Agent shall make the
following distributions from the Distribution Account of an amount equal to the
Group II Interest Funds in the following order of priority:
(i) (A) to the Class IIP Certificates, an amount equal to any
prepayment penalties collected on the Group II Mortgage Loans
during the related Prepayment Period;
(B) to the Class IIL Certificates, an amount equal to any
late payment charges collected on the Group II Mortgage Loans
during the related Prepayment Period;
(C) to the Class R Certificate, in respect of the MR
Interest, an amount equal to the accrual on a principal amount
equal to 0.001% of the aggregate principal amount of the Group
II Certificates at a rate equal to the excess, if any, of the
Group II Net Rate over the weighted average rate of the Group
II Marker Interests; and
(D) to the Class R Certificate, in respect of the UR
Interest, an amount equal to the excess of (1) the accrual on
a principal amount equal to 0.001% of the aggregate principal
amount of the Group II Certificates at a rate equal to the
excess, if any, of (x) the Group II Net Rate over (y) the
weighted average rate of the Group II Marker Interests
(treating, solely for purposes of this clause
4.04(b)(i)(D)(y), 0.001% of the portion of the principal
amount of the Middle-Tier REMIC Group II Accrual Interest in
excess of 99,999 times the principal amount of the Group II
Marker Interests (as determined without regard to this
parenthetical) as a Group II Marker Interest subject to an
interest rate cap of 0%) over (2) the amount described in
Section 4.04(b)(i)(C);
(ii) to each Class of Group II Class A Certificates, the
Current Interest and any Interest Carryforward Amount with respect to
such Class; provided, however, if such amount is not sufficient to make
a full distribution of the Current Interest and any Interest
Carryforward Amount with respect to all the Group II Class A
Certificates, such amount will be distributed pro rata among each Class
of the Group II Class A Certificates based on the ratio of (x) the
Current Interest and Interest Carryforward Amount for each Class of the
Group II Class A Certificates to (y) the total amount of Current
Interest and any Interest Carryforward Amount for the Group II Class A
Certificates;
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(iii) to the Class IIM-1 Certificates, the Class IIM-1 Current
Interest and any Class IIM-1 Interest Carryforward Amount;
(iv) to the Class IIM-2 Certificates, the Class IIM-2 Current
Interest and any Class IIM-2 Interest Carryforward Amount;
(v) to the Class IIB Certificates, the Class IIB Current
Interest and any Class IIB Interest Carryforward Amount; and
(vi) any remainder pursuant to Section 4.04(f) hereof.
(c) On each Distribution Date, the Paying Agent shall make the
following distributions from the Distribution Account of an amount equal to the
Group I Principal Distribution Amount in the following order of priority, and
each such distribution shall be made only after all distributions pursuant to
Section 4.04(a) above shall have been made until such amount shall have been
fully distributed for such Distribution Date:
(i) to the Group I Class A Certificates, the Group I Class A
Principal Distribution Amount to be distributed as follows:
sequentially, first, to the Class IA-6 Certificates, the Class IA-6
Principal Distribution Amount, and second, the remaining portion of
such amount sequentially to the Class IA-1, Class IA-2, Class IA-3,
Class IA-4, Class IA-5 and Class IA-6 Certificates, until the
Certificate Principal Balances thereof have been reduced to zero;
provided, however, that, on any Distribution Date on which the Group I
Class A Certificate Principal Balance is equal to or greater than the
Stated Principal Balances of Group I Mortgage Loans, the Group I Class
A Principal Distribution Amount will be distributed pro rata based upon
the Certificate Principal Balance of each such Class and not
sequentially;
(ii) to the Class IM-1 Certificates, the Class IM-1 Principal
Distribution Amount;
(iii) to the Class IM-2 Certificates, the Class IM-2 Principal
Distribution Amount;
(iv) to the Class IB Certificates, the Class IB Principal
Distribution Amount; and
(v) any remainder pursuant to Section 4.04(e) hereof.
(d) On each Distribution Date, the Paying Agent shall make the
following distributions from the Distribution Account of an amount equal to the
Group II Principal Distribution Amount in the following order of priority, and
each such distribution shall be made only after all distributions pursuant to
Section 4.04(b) above shall have been made until such amount shall have been
fully distributed for such Distribution Date:
(i) to the Group II Class A Certificates, the Group II Class A
Principal Distribution Amount to be distributed sequentially, to the
Class IIA-1 and Class IIA-2 Certificates, until the Certificate
Principal Balances thereof have been reduced to zero; provided,
however, that, on any Distribution Date on which the Group II Class A
Certificate Principal Balance is equal to or greater than the Stated
Principal Balances of Group II Mortgage Loans, the Group II Class A
Principal Distribution Amount will be distributed pro rata based upon
the Certificate Principal Balance of each such Class and not
sequentially;
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(ii) to the Class IIM-1 Certificates, the Class IIM-1
Principal Distribution Amount;
(iii) to the Class IIM-2 Certificates, the Class IIM-2
Principal Distribution Amount;
(iv) to the Class IIB Certificates, the Class IIB Principal
Distribution Amount; and
(v) any remainder pursuant to Section 4.04(f) hereof.
(e) On each Distribution Date, the Paying Agent shall make the
following distributions up to the following amounts from the Distribution
Account of the remainders pursuant to Section 4.04(a)(vi) and (c)(v) and, to the
extent required to make the distributions set forth below in clauses (i) through
(iv) of this Section 4.04(e), Section 4.04(f)(v) hereof in the following order
of priority, and each such distribution shall be made only after all
distributions pursuant to Sections 4.04(a) and (c) above shall have been made
until such remainders shall have been fully distributed for such Distribution
Date; provided, however, that no Optional Termination Amounts for Loan Group I
shall be used to make the distributions described in clause (v) of this Section
4.04(e):
(i) for distribution as part of the Group I Principal
Distribution Amount, the Group I Extra Principal Distribution Amount;
(ii) to the Class IM-1 Certificates, the Class IM-1 Unpaid
Realized Loss Amount;
(iii) to the Class IM-2 Certificates, the Class IM-2 Unpaid
Realized Loss Amount;
(iv) to the Class IB Certificates, the Class IB Unpaid
Realized Loss Amount;
(v) to the extent required to make the allocations set forth
below, in the following order of priority (provided, however, that to
the extent the amounts to be allocated pursuant to clauses (A) through
(B) are insufficient to make all payments of Current Interest and
Interest Carryforward Amounts for such Class IIA Certificates, the
distributions made pursuant to clauses (A) through (B) shall be made on
a pro rata basis and not sequentially):
(A) to the Class IIA-1 Certificates, the Class IIA-1
Current Interest and the Class IIA-1 Interest Carryforward
Amount;
(B) to the Class IIA-2 Certificates, the Class IIA-2
Current Interest and the Class IIA-2 Interest Carryforward
Amount;
(C) for distribution as part of the Group II Principal
Distribution Amount, the Group II Extra Principal Distribution
Amount, to the extent not distributed pursuant to (f)(i)
below; provided, however, that amounts distributed pursuant to
this clause (C) for any period cannot exceed the amount that
would have accrued on a certificate having a principal balance
equal to 99.999% of the aggregate principal balance of the
Group II Mortgage Loans at a rate equal to the Group II Net
Rate;
(D) to the Class IIM-1 Certificates, the Class IIM-1
Current Interest, the Class IIM-1 Interest Carryforward Amount
and the Class IIM-1 Unpaid Realized Loss Amount;
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(E) to the Class IIM-2 Certificates, the Class IIM-2
Current Interest, the Class IIM-2 Interest Carryforward Amount
and the Class IIM-2 Unpaid Realized Loss Amount;
(F) to the Class IIB Certificates, the Class IIB Current
Interest, the Class IIB Interest Carryforward Amount and the
Class IIB Unpaid Realized Loss Amount;
(vi) the remainder pursuant to Section 4.04(g) hereof.
(f) On each Distribution Date, the Paying Agent shall make the
following distributions up to the following amounts from the Distribution
Account of the remainders pursuant to Section 4.04(b)(vi) and (d)(v) hereof and,
to the extent required to make the distributions set forth below in clauses (i)
through (iv) of this Section 4.04(f), Section 4.04(e)(v) hereof in the following
order of priority, and each such distribution shall be made only after all
distributions pursuant to Sections 4.04(b) and (d) above shall have been made
until such remainders shall have been fully distributed for such Distribution
Date; provided, however, that no Optional Termination Amounts for Loan Group II
shall be used to make the distributions described in clause (v) of this Section
4.04(f):
(i) for distribution as part of the Group II Principal
Distribution Amount, the Group II Extra Principal Distribution Amount;
(ii) to the Class IIM-1 Certificates, the Class IIM-1 Unpaid
Realized Loss Amount;
(iii) to the Class IIM-2 Certificates, the Class IIM-2 Unpaid
Realized Loss Amount;
(iv) to the Class IIB Certificates, the Class IIB Unpaid
Realized Loss Amount;
(v) to the extent required to make the allocations set forth
below, in the following order of priority (provided, however, that to
the extent the amounts to be allocated pursuant to clauses (A) through
(G) are insufficient to make all payments of Current Interest and
Interest Carryforward Amounts for such Class IA Certificates, the
distributions made pursuant to clauses (A) through (G) shall be made on
a pro rata basis and not sequentially):
(A) to the Class IA-1 Certificates, the Class IA-1 Current
Interest and the Class IA-1 Interest Carryforward Amount;
(B) to the Class IA-2 Certificates, the Class IA-2 Current
Interest and the Class IA-2 Interest Carryforward Amount;
(C) to the Class IA-3 Certificates, the Class IA-3 Current
Interest and the Class IA-3 Interest Carryforward Amount;
(D) to the Class IA-4 Certificates, the Class IA-4 Current
Interest and the Class IA-4 Interest Carryforward Amount;
(E) to the Class IA-5 Certificates, the Class IA-5 Current
Interest and the Class IA-5 Interest Carryforward Amount;
(F) to the Class IA-6 Certificates, the Class IA-6 Current
Interest and the Class IA-6 Interest Carryforward Amount;
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(G) for distribution as part of the Group I Principal
Distribution Amount, the Group I Extra Principal Distribution
Amount, to the extent not distributed pursuant to clause
(e)(i) above; provided, however, that amounts distributed
pursuant to this clause (G) cannot exceed the amount that
would have accrued on a certificate having a principal balance
equal to 99.999% of the aggregate principal balance of the
Group I Mortgage Loans at the Group I Net Rate;
(H) to the Class IM-1 Certificates, the Class IM-1 Current
Interest, the Class IM-1 Interest Carryforward Amount and the
Class IM-1 Unpaid Realized Loss Amount;
(I) to the Class IM-2 Certificates, the Class IM-2 Current
Interest, the Class IM-2 Interest Carryforward Amount and the
Class IM-2 Unpaid Realized Loss Amount; and
(J) to the Class IB Certificates, the Class IB Current
Interest, the Class IB Interest Carryforward Amount and the
Class IB Unpaid Realized Loss Amount;
(vi) to the (i) Class IIA-1 Certificates, the Class IIA-1
Interest Carryover Amount, (ii) Class IIA-2 Certificates, the Class
IIA-2 Interest Carryover Amount, (iii) Class IIM-1 Certificates, the
Class IIM-1 Interest Carryover Amount, (iv) Class IIM-2 Certificates,
the Class IIM-2 Interest Carryover Amount, and (v) Class IIB
Certificates, the Class IIB Interest Carryover Amount, on a pro rata
basis based upon the amount of unreimbursed Interest Carryover Amount
for each Class; and
(vii) the remainder pursuant to Section 4.04(g) hereof.
(g) (i) On each Distribution Date, the Paying Agent shall allocate the
remainders pursuant to Section 4.04(e)(vi) as follows:
(A) to the Class C Certificates in the following order of
priority, (I) the Class C Group I Current Interest, (II) the
Class C Group I Interest Carryforward Amount, (III) as
principal on the Class C Certificate in respect of the Class C
Group I Certificate Principal Balance until the Class C Group
I Certificate Principal Balance has been reduced to zero and
(IV) the Class C Group I Unpaid Realized Loss Amount; and
(B) the remainder pursuant to Section 4.04(h) hereof.
(ii) On each Distribution Date, the Paying Agent shall
allocate the remainders pursuant to Section 4.04(f)(vii) as follows:
(A) to the Class C Certificates in the following order of
priority, (I) the Class C Group II Current Interest, (II) the
Class C Group II Interest Carryforward Amount, (III) as
principal on the Class C Certificate in respect of the Class C
Group II Certificate Principal Balance until the Class C Group
II Certificate Principal Balance has been reduced to zero and
(IV) the Class C Group II Unpaid Realized Loss Amount; and
(B) the remainder pursuant to Section 4.04(h) hereof.
(h) On each Distribution Date, the Paying Agent shall allocate the
remainders pursuant to Section 4.04(g)(i)(B) and 4.04(g)(ii)(B) hereof, to the
Class R Certificate, in respect of the UR Interest, any remaining funds, and
such distribution shall be made only after all preceding distributions shall
have been made until such remainders shall have been fully distributed.
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(i) On each Distribution Date, after giving effect to distributions on
such Distribution Date, the Paying Agent shall allocate the Applied Realized
Loss Amount for the Group I Certificates to reduce the Certificate Principal
Balances of the Group I Subordinated Certificates and the Class C Certificates
in the following order of priority:
(i) to the Class C Certificates until the Class C Group I
Certificate Principal Balance is reduced to zero;
(ii) to the Class IB Certificates until the Class IB
Certificate Principal Balance is reduced to zero;
(iii) to the Class IM-2 Certificates until the Class IM-2
Certificate Principal Balance is reduced to zero; and
(iv) to the Class IM-1 Certificates until the Class IM-1
Certificate Principal Balance is reduced to zero.
(j) On each Distribution Date, after giving effect to distributions on
such Distribution Date, the Paying Agent shall allocate the Applied Realized
Loss Amount for the Group II Certificates to reduce the Certificate Principal
Balances of the Group II Subordinated Certificates and the Class C Certificates
in the following order of priority:
(i) to the Class C Certificates until the Class C Group II
Certificate Principal Balance is reduced to zero;
(ii) to the Class IIB Certificates until the Class IIB
Certificate Principal Balance is reduced to zero;
(iii) to the Class IIM-2 Certificates until the Class IIM-2
Certificate Principal Balance is reduced to zero; and
(iv) to the Class IIM-1 Certificates until the Class IIM-1
Certificate Principal Balance is reduced to zero.
(k) Subject to Section 9.02 hereof respecting the final distribution,
on each Distribution Date the Paying Agent shall make distributions to each
Certificateholder of record on the preceding Record Date either by wire transfer
in immediately available funds to the account of such holder at a bank or other
entity having appropriate facilities therefor, if (i) such Holder has so
notified the Paying Agent at least 5 Business Days prior to the related Record
Date and (ii) such Holder shall hold 100% of a Class of Regular Certificates or
Certificates with an aggregate Initial Certificate Balance of $1,000,000 or
more, or, if not, by check mailed by first Class mail to such Certificateholder
at the address of such holder appearing in the Certificate Register.
Notwithstanding the foregoing, but subject to Section 9.02 hereof respecting the
final distribution, distributions with respect to Certificates registered in the
name of a Depository shall be made to such Depository in immediately available
funds.
Not later than the earlier of (i) three Business Days after the
Determination Date and (ii) the second Business Day prior to each Distribution
Date, the Servicer shall prepare and deliver a report to the Paying Agent and
the NIMs Insurer in the form of a computer readable magnetic tape (or by such
other means as the Servicer, Paying Agent and NIMs Insurer may agree from time
to time) containing such data and information such as to permit the Servicer or
the Paying Agent to prepare the Monthly Statement to Certificateholders and make
the required distributions for the related Distribution Date (the "Remittance
Report").
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If amounts available to pay the Group I Class A Principal Distribution
Amount or the Group II Class A Principal Distribution Amount are insufficient to
make the payments required pursuant to the preceding paragraphs (c) and (d) of
this Section, such shortfall shall be allocated between the Group I and Group II
Certificates based on whether such shortfall is attributable to the Group I
Mortgage Loans or the Group II Mortgage Loans, as applicable.
(l) All amounts, if any, received by the Trustee for the benefit of the
Trust Fund with respect to a Distribution Date in respect of the Yield
Maintenance Agreement shall be deposited by the Trustee into the Yield
Maintenance Account and shall be used to pay on such Distribution Date up to the
amount of any Interest Carryover Amounts on the Group II Certificates (other
than the Class IIP and Class IIL Certificates) remaining unpaid after the
application of Section 4.04(f)(vi) hereof on such Distribution Date (other than
any Interest Carryover Amounts arising from the failure to allocate Applied
Realized Loss Amounts to the Group II Class A Certificates) in the order of
priority described in Section 4.04(f)(vi) hereof. Any amounts remaining in the
Yield Maintenance Account on any Distribution Date after the application of the
preceding sentence shall be distributed on such Distribution Date to the holders
of the Class C Certificates.
SECTION 4.05. Monthly Statements to Certificateholders.
(a) Not later than the earlier of (i) three Business Days after the
Determination Date and (ii) the second Business Day prior to each Distribution
Date, the Servicer shall send to the Paying Agent (in such format as may be
mutually agreed) the relevant information for purposes of this Section 4.05. Not
later than the Distribution Date, the Paying Agent shall prepare and cause to be
made available on its website located at xxx.xxxxxxxx.xxx/xxx or upon request
shall send to each Holder of a Class of Certificates of the Trust Fund, the
Servicer, the NIMs Insurer and the Depositor a statement setting forth for the
Certificates:
(i) the amount of the related distribution to Holders of each
Class allocable to principal, separately identifying (A) the aggregate
amount of any Principal Prepayments included therein and (B) the
aggregate of all scheduled payments of principal included therein, (C)
the Group I Extra Principal Distribution Amount or the Group II Extra
Principal Distribution Amount, as applicable, if any, (D) the aggregate
amount of prepayment penalties, if any and (E) the aggregate amount of
late payment charges;
(ii) the amount of such distribution to Holders of each Class
allocable to interest, together with any Non-Supported Interest
Shortfalls allocated to each Class;
(iii) any Interest Carryforward Amount;
(iv) the Class Certificate Principal Balance of each Class
after giving effect (i) to all distributions allocable to principal on
such Distribution Date and (ii) the allocation of any Applied Realized
Loss Amounts for such Distribution Date;
(v) the Pool Stated Principal Balance for such Distribution
Date;
(vi) the related amount of the Servicing Fee paid to or
retained by the Servicer;
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(vii) the Pass-Through Rate for each Class of Certificates for
such Distribution Date;
(viii) the Net Mortgage Rates for each of the Group I Mortgage
Loans and the Group II Mortgage Loans;
(ix) the amount of Advances (calculated as of the related
Determination Date) for each Certificate Group included in the
distribution on such Distribution Date;
(x) the cumulative amount of (A) Realized Losses and (B)
Applied Realized Loss Amounts for each Certificate Group to date;
(xi) the amount of (A) Realized Losses and (B) Applied
Realized Loss Amounts for each Certificate Group with respect to such
Distribution Date;
(xii) the number and aggregate principal amounts of Mortgage
Loans in each Loan Group (A) Delinquent (exclusive of Mortgage Loans in
foreclosure) (1) 31 to 60 days, (2) 61 to 90 days and (3) 91 or more
days, and (B) in foreclosure and Delinquent (1) 31 to 60 days, (2) 61
to 90 days and (3) 91 or more days, in each case as of the close of
business on the last day of the calendar month preceding such
Distribution Date;
(xiii) with respect to any Mortgage Loan that became an REO
Property during the preceding calendar month in each Loan Group, the
loan number and Stated Principal Balance of such Mortgage Loan as of
the close of business on the last day of the calendar month preceding
such Distribution Date and the date of acquisition thereof;
(xiv) the total number and principal balance of any REO
Properties in each Loan Group as of the close of business on the last
day of the calendar month preceding such Distribution Date;
(xv) the aggregate Stated Principal Balance of all Liquidated
Loans in each Loan Group as of the preceding Distribution Date;
(xvi) with respect to any Liquidated Loan in each Loan Group,
the loan number and Stated Principal Balance relating thereto as of the
preceding Distribution Date;
(xvii) with respect to each Loan Group, whether a Group I
Trigger Event or a Group II Trigger Event has occurred;
(xviii) with respect to each Class of Certificates, any
Interest Carryforward Amount with respect to such Distribution Date for
each such Class, any Interest Carryforward Amount paid for each such
Class and any remaining Interest Carryforward Amount for each such
Class;
(xix) with respect to each Class of Group II Certificates any
Interest Carryover Amount with respect to such Distribution Date for
each such Class, any Interest Carryover Amount paid for each such Class
and any remaining Interest Carryover Amount for each such Class;
(xx) the number and Stated Principal Balance (as of the
preceding Distribution Date) of any Mortgage Loans with respect to each
Loan Group which were purchased or repurchased during the preceding Due
Period and since the Cut-off Date;
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(xxi) the aggregate number of Mortgage Loans (a) which have
been modified, (b) which are subject to a deed-in-lieu of foreclosure
and (c) for which a short-payoff has occurred;
(xxii) the year-to-date numbers for 4.05(a)(xxi)(a), (b) and
(c) above, by number of loans;
(xxiii) the number of Mortgage Loans in each Loan Group for
which prepayment penalties or late payment fees were received during
the related Prepayment Period and, for each such Mortgage Loan in each
Loan Group, the amount of prepayment penalties and late payment fees
received during the related Prepayment Period and in the aggregate of
such amounts for all such Mortgage Loans since the Cut-off Date;
(xxiv) the amount and purpose of any withdrawal from the
Collection Account pursuant to Section 3.08(a)(vii);
(xxv) as of each Distribution Date, the interest rate cap
agreement payments that have accrued in favor of or been paid to each
class of Certificates for federal income tax purposes under Section
2.07 hereof and the interest rate cap agreement payments that each
class of Certificates has accrued an obligation to make or has made for
federal income tax purposes;
(xxvi) the portion of any distributions to Holders of Class
IIA-1, Class IIA-2, Class IIM-1, Class IIM-2 or Class IIB Certificates
that are treated as paid by the Holders of the Class C Certificates
pursuant to Section 2.07(e);
(xxvii) the number of Mortgage Loans with respect to which (A)
a reduction in the Mortgage Rate has occurred or (B) the related
Mortgagor's obligation to repay principal and interest on a monthly
basis has been suspended or reduced pursuant to the Soldiers' and
Sailors' Civil Relief Act of 1940, as amended, or the California
Military and Veterans Code, as amended; and the amount of interest and
principal not required to be paid with respect to any such Mortgage
Loans during the related Due Period as a result of such reductions,
both in the aggregate and for each Class of Certificates; and
(xxviii) as of each Distribution Date, the amount, if any, to
be deposited in the Yield Maintenance Account pursuant to the Yield
Maintenance Agreement and the amount thereof to be paid to the Group II
Certificates (other than the Class IIL and Class IIP Certificates) as
described in Section 4.04(l) hereof.
(b) The Servicer, either directly or through any Paying Agent, will
make available a copy of each statement provided pursuant to this Section 4.05
to each Rating Agency.
(c) Within a reasonable period of time after the end of each calendar
year and upon written request, the Servicer, either directly or through any
Paying Agent, shall cause to be furnished to each Person who at any time during
the calendar year was a Certificateholder, a statement containing the
information set forth in clauses (a)(i), (a)(ii) and (a)(xxvi) of this Section
4.05 aggregated for such calendar year or applicable portion thereof during
which such Person was a Certificateholder. Such obligation of the Servicer,
either directly or through any Paying Agent, shall be deemed to have been
satisfied to the extent that substantially comparable information shall be
provided by the Servicer, either directly or through any Paying Agent, pursuant
to any requirements of the Code as from time to time in effect.
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(d) Upon filing with the Internal Revenue Service, the Servicer, either
directly or through any Paying Agent, shall furnish to the Holders of the Class
R Certificate the Forms 1066 and each Form 1066Q and shall respond promptly to
written requests made not more frequently than quarterly by any Holder of Class
R Certificate with respect to the following matters:
(i) The original projected principal and interest cash flows
on the Closing Date on each Class of regular and residual interests
created hereunder and on the Mortgage Loans, based on the Prepayment
Assumption;
(ii) The projected remaining principal and interest cash flows
as of the end of any calendar quarter with respect to each Class of
regular and residual interests created hereunder and the Mortgage
Loans, based on the Prepayment Assumption;
(iii) The Prepayment Assumption and any interest rate
assumptions used in determining the projected principal and interest
cash flows described above;
(iv) The original issue discount (or, in the case of the
Mortgage Loans, market discount) or premium accrued or amortized
through the end of such calendar quarter with respect to each Class of
regular or residual interests created hereunder and to the Mortgage
Loans, together with each constant yield to maturity used in computing
the same;
(v) The treatment of losses realized with respect to the
Mortgage Loans or the regular interests created hereunder, including
the timing and amount of any cancellation of indebtedness income of the
REMICs with respect to such regular interests or bad debt deductions
claimed with respect to the Mortgage Loans;
(vi) The amount and timing of any non-interest expenses of the
REMICs; and
(vii) Any taxes (including penalties and interest) imposed on
the REMICs, including, without limitation, taxes on "prohibited
transactions," "contributions" or "net income from foreclosure
property" or state or local income or franchise taxes.
The information pursuant to clauses (i), (ii), (iii) and (iv) above
shall be provided by the Depositor pursuant to Section 8.11.
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ARTICLE V
THE CERTIFICATES
SECTION 5.01. The Certificates.
The Certificates shall be substantially in the forms attached hereto as
exhibits. The Certificates shall be issuable in registered form, in the minimum
dollar denominations, integral dollar multiples in excess thereof (except that
one Certificate of each Class may be issued in a different amount which must be
in excess of the applicable minimum dollar denomination) and aggregate dollar
denominations as set forth in the following table:
Minimum Integral Multiples in Original Certificate
Class Denomination Excess of Minimum Principal Balance CUSIP
----- ------------ --------------------- -------------------- -----
IA-1 $ 25,000.00 $1.00 $170,600,000.00 161546 JD 9
IA-2 $ 25,000.00 $1.00 $ 28,600,000.00 161546 JE 7
IA-3 $ 25,000.00 $1.00 $ 63,400,000.00 161546 JF 4
IA-4 $ 25,000.00 $1.00 $ 62,100,000.00 161546 JG 2
IA-5 $ 25,000.00 $1.00 $ 48,925,000.00 161546 JH 0
IA-6 $ 25,000.00 $1.00 $ 41,500,000.00 161546 JJ 6
IP (1) (1) (1)
IL (1) (1) (1)
IM-1 $ 25,000.00 $1.00 $ 11,250,000.00 161546 JK 3
IM-2 $ 25,000.00 $1.00 $ 11,250,000.00 161546 JL 1
IB $ 25,000.00 $1.00 $ 12,375,000.00 161546 JM 9
IIA-1 $ 25,000.00 $1.00 $141,100,000.00 161546 JR 8
IIA-2 $ 25,000.00 $1.00 $126,650,000.00 161546 JS 6
IIM-1 $ 25,000.00 $1.00 $ 13,500,000.00 000000 XX 2
IIM-2 $ 25,000.00 $1.00 $ 11,250,000.00 161546 JQ 0
IIB $ 25,000.00 $1.00 $ 7,500,000.00 161546 JN 7
IIP (1) (1) (1)
IIL (1) (1) (1)
C $250,000.00 $1,000.00 $ 518.97
R (1) (1) (1)
-------------------
(1) The Class R, Class IP, Class IIP, Class IL and Class IIL shall not have
minimum dollar denominations or Certificate Principal Balances and shall be
issued in a minimum percentage interest of 100%.
The Certificates shall be executed by manual or facsimile signature on
behalf of the Depositor by an authorized officer. Certificates bearing the
manual or facsimile signatures of individuals who were, at the time when such
signatures were affixed, authorized to sign on behalf of the Depositor shall
bind the Depositor, notwithstanding that such individuals or any of them have
ceased to be so authorized prior to the authentication and delivery of such
Certificates or did not hold such offices at the date of such authentication and
delivery. No Certificate shall be entitled to any benefit under this Agreement,
or be valid for any purpose, unless there appears on such Certificate a
certificate of authentication, substantially in the form set forth in the forms
of Certificates attached hereto as exhibits, executed by the Authenticating
Agent by manual signature, and such certificate of authentication upon any
Certificate shall be conclusive evidence, and the only evidence, that such
Certificate has been duly authenticated and delivered hereunder. All
Certificates shall be dated the date of their authentication. On the Closing
Date, the Authenticating Agent shall authenticate the Certificates to be issued
at the written direction of the Depositor, or any affiliate thereof.
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SECTION 5.02. Certificate Register; Registration of Transfer and
Exchange of Certificates.
(a) The Servicer shall maintain, or cause to be maintained with the
Paying Agent in accordance with the provisions of Section 5.09 hereof, a
Certificate Register for the Trust Fund in which, subject to the provisions of
subsections (b) and (c) below and to such reasonable regulations as it may
prescribe, the Servicer shall provide for the registration of Certificates and
of Transfers and exchanges of Certificates as herein provided. Upon surrender
for registration of Transfer of any Certificate, the Authenticating Agent shall
authenticate and deliver, in the name of the designated transferee or
transferees, one or more new Certificates of the same Class and of like
aggregate Percentage Interest.
At the option of a Certificateholder, Certificates may be exchanged for
other Certificates of the same Class in authorized denominations and evidencing
the same aggregate Percentage Interest upon surrender of the Certificates to be
exchanged at the office or agency of the Paying Agent. Whenever any Certificates
are so surrendered for exchange, the Depositor shall execute and the
Authenticating Agent shall authenticate and deliver the Certificates that the
Certificateholder making the exchange is entitled to receive. Every Certificate
presented or surrendered for registration of Transfer or exchange shall be
accompanied by a written instrument of Transfer in form satisfactory to the
Servicer duly executed by the holder thereof or his attorney duly authorized in
writing.
No service charge to the Certificateholders shall be made for any
registration of Transfer or exchange of Certificates, but 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 may be required. All
Certificates surrendered for registration of Transfer or exchange shall be
canceled and subsequently destroyed by the Servicer in accordance with the
Servicer's customary procedures.
(b) No Transfer of a Class C, Class L, Class P or Class R Certificate
shall be made unless such Transfer is made pursuant to an effective registration
statement under the Securities Act and any applicable state securities laws or
is exempt from the registration requirements under the Securities Act and such
state securities laws. In the event that a Transfer is to be made in reliance
upon an exemption from the Securities Act and such laws, in order to assure
compliance with the Securities Act and such laws, the Certificateholder desiring
to effect such Transfer and such Certificateholder's prospective transferee
shall (except with respect to the initial transfer of a Class C, Class L or
Class P Certificate by the initial Certificateholder thereof or, in connection
with a transfer of a Class C or Class P Certificate to the indenture trustee
under an indenture pursuant to which NIM Notes are issued, whether or not such
notes are guaranteed by the NIMs Insurer) each certify to the Servicer in
writing the facts surrounding the Transfer in substantially the forms set forth
in Exhibit J (the "Transferor Certificate") and (i) deliver a letter in
substantially the form of either Exhibit K (the "Investment Letter") or Exhibit
L (the "Rule 144A Letter") or (ii) there shall be delivered to the Servicer an
Opinion of Counsel that such Transfer may be made pursuant to an exemption from
the Securities Act, which Opinion of Counsel shall not be an expense of the
Depositor, the Servicer or the Trustee. The Depositor shall provide to any
Holder of a Class C, Class L, Class P or Class R Certificate and any prospective
transferee designated by any such Holder, information regarding the related
Certificates and the Mortgage Loans and such other information as shall be
necessary to satisfy the condition to eligibility set forth in Rule 144A(d)(4)
for Transfer of any such Certificate without registration thereof under the
Securities Act pursuant to the registration exemption provided by Rule 144A. The
Servicer shall cooperate with the Depositor in providing the Rule 144A
information referenced in the preceding sentence, including providing to the
Depositor such information regarding the Certificates, the Mortgage Loans and
other matters regarding the Trust Fund as the Depositor shall reasonably request
to meet its obligation under the preceding sentence. Each Holder of a Class R
Certificate desiring to effect such Transfer shall, and does hereby agree to,
indemnify the Trustee, the Depositor and the Servicer against any liability that
may result if the Transfer is not so exempt or is not made in accordance with
such federal and state laws.
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No Transfer of an ERISA Restricted Certificate shall be made unless the
Servicer shall have received either (i) a representation from the transferee of
such Certificate acceptable to and in form and substance satisfactory to the
Servicer, to the effect that such transferee is not an employee benefit plan
subject to Title I of ERISA or a plan subject to Section 4975 of the Code or any
applicable Federal, state or local law materially similar to the foregoing
provisions of ERISA and the Code ("Similar Law"), or a Person acting on behalf
of any such plan or using the assets of any such plan or (ii) in the case of any
such ERISA Restricted Certificate, other than a Class R Certificate, presented
for registration in the name of an employee benefit plan subject to Title I of
ERISA, a plan subject to Section 4975 of the Code, or a plan subject to Similar
Law (or comparable provisions of any subsequent enactments), or a trustee of any
such plan or any other Person acting on behalf of any such plan, an Opinion of
Counsel satisfactory to the Servicer to the effect that the purchase and holding
of such ERISA Restricted Certificate will not result in the assets of the Trust
Fund being deemed to be "plan assets" pursuant to the Department of Labor
regulations set forth in 29 C.F.R. ss.2510.3-101 or to be subject to the
fiduciary responsibility provisions of ERISA or the prohibited transaction
provisions of the Code or to cause a violation under Similar Law, will not
constitute or result in a prohibited transaction under ERISA or the Code or
Similar Law and will not subject the Servicer to any obligation in addition to
those expressly undertaken in this Agreement, which Opinion of Counsel shall not
be an expense of the Servicer. For purposes of clause (i) of the preceding
sentence, such representation shall be deemed to have been made to the Servicer
by the transferee's acceptance of an ERISA Restricted Certificate (or the
acceptance by a Certificate Owner of the beneficial interest in any Class of
ERISA Restricted Certificates) unless the Servicer shall have received from the
transferee an alternative representation acceptable in form and substance to the
Servicer. Notwithstanding anything else to the contrary herein, any purported
transfer of an ERISA Restricted Certificate to or on behalf of an employee
benefit plan subject to Title I of ERISA, a plan subject to Section 4975 of the
Code, or a plan subject to Similar Law without the delivery to the Servicer of
an Opinion of Counsel satisfactory to the Servicer as described above shall be
void and of no effect. The Servicer shall be under no liability to any Person
for any registration of transfer of any ERISA Restricted Certificate that is in
fact not permitted by this Section 5.02(b) or for making any payments due on
such Certificate to the Holder thereof or taking any other action with respect
to such Holder under the provisions of this Agreement so long as the transfer
was registered by the Servicer in accordance with the foregoing requirements.
The Servicer shall be entitled, but not obligated, to recover from any Holder of
any ERISA Restricted Certificate that was in fact an employee benefit plan
subject to Title I of ERISA, a plan subject to Section 4975 of the Code, or a
plan subject to Similar Law or a Person acting on behalf of any such plan at the
time it became a Holder or, at such subsequent time as it became such a plan or
Person acting on behalf of such a plan, all payments made on such ERISA
Restricted Certificate at and after either such time. Any such payments so
recovered by the Servicer shall be paid and delivered by the Servicer to the
last preceding Holder of such Certificate that is not such a plan or Person
acting on behalf of a plan.
(c) Each Person who has or who acquires any Ownership Interest in a
Class R Certificate shall be deemed by the acceptance or acquisition of such
Ownership Interest to have agreed to be bound by the following provisions, and
the rights of each Person acquiring any Ownership Interest in a Class R
Certificate are expressly subject to the following provisions:
(i) Each Person holding or acquiring any Ownership Interest in
a Class R Certificate shall be a Permitted Transferee and shall
promptly notify the Servicer of any change or impending change in its
status as a Permitted Transferee.
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(ii) No Ownership Interest in a Class R Certificate may be
registered on the Closing Date or thereafter transferred, and the
Servicer shall not register the Transfer of any Class R Certificate
unless, in addition to the certificates required to be delivered to the
Servicer under subparagraph (b) above, the Servicer shall have been
furnished with an affidavit (a "Transfer Affidavit") of the initial
owner or the proposed transferee in the form attached hereto as Exhibit
I. In the absence of a contrary instruction from the transferor of a
Class R Certificate, declaration (11) in Appendix A of the Transfer
Affidavit may be left blank. If the transferor requests by written
notice to the Servicer prior to the date of the proposed transfer that
one of the two other forms of declaration (11) in Appendix A of the
Transfer Affidavit be used, then the requirements of this Section
5.02(c)(ii) shall not have been satisfied unless the Transfer Affidavit
includes such other form of declaration.
(iii) Each Person holding or acquiring any Ownership Interest
in a Class R Certificate shall agree (A) to obtain a Transfer Affidavit
from any other Person to whom such Person attempts to Transfer its
Ownership Interest in a Class R Certificate, (B) to obtain a Transfer
Affidavit from any Person for whom such Person is acting as nominee,
trustee or agent in connection with any Transfer of a Class R
Certificate and (C) not to Transfer its Ownership Interest in a Class R
Certificate or to cause the Transfer of an Ownership Interest in a
Class R Certificate to any other Person if it has actual knowledge that
such Person is not a Permitted Transferee. Further, no transfer, sale
or other disposition of any Ownership Interest in a Class R Certificate
may be made to a person who is not a U.S. Person (within the meaning of
section 7701 of the Code) unless such person furnishes the transferor
and the Trustee with a duly completed and effective Form W-8ECI (or any
successor thereto) or an Opinion of Counsel to the effect that the
transfer is in accordance with the requirements of the Code and the
regulations promulgated thereunder and will not be disregarded for
federal income tax purposes.
(iv) Any attempted or purported Transfer of any Ownership
Interest in a Class R Certificate in violation of the provisions of
this Section 5.02(c) shall be absolutely null and void and shall vest
no rights in the purported Transferee. If any purported transferee
shall become a Holder of a Class R Certificate in violation of the
provisions of this Section 5.02(c), then the last preceding Permitted
Transferee shall be restored to all rights as Holder thereof
retroactive to the date of registration of Transfer of such Class R
Certificate. The Servicer shall be under no liability to any Person for
any registration of Transfer of a Class R Certificate that is in fact
not permitted by Section 5.02(b) and this Section 5.02(c) or for making
any payments due on such Certificate to the Holder thereof or taking
any other action with respect to such Holder under the provisions of
this Agreement so long as the Transfer was registered after receipt of
the related Transfer Affidavit, Transferor Certificate and either the
Rule 144A Letter or the Investment Letter. The Servicer shall be
entitled but not obligated to recover from any Holder of a Class R
Certificate that was in fact not a Permitted Transferee at the time it
became a Holder or, at such subsequent time as it became other than a
Permitted Transferee, all payments made on such Class R Certificate at
and after either such time. Any such payments so recovered by the
Servicer shall be paid and delivered by the Servicer to the last
preceding Permitted Transferee of such Certificate.
(v) At the option of the Holder of the Class R Certificate,
the LR Interest, the MR Interest and the UR Interest may be severed and
represented by separate certificates; provided, however, that such
separate certification may not occur until the Trustee receives an
Opinion of Counsel to the effect that separate certification in the
form and manner proposed would not result in the imposition of federal
tax upon any of the Lower-Tier REMIC, the Middle-Tier REMIC or the
Upper-Tier REMIC or cause any of the Lower-Tier REMIC, the Middle-Tier
REMIC or the Upper-Tier REMIC to fail to qualify as a REMIC; and
provided further, that the provisions of Sections 5.02(b) and (c) will
apply to each such separate certificate as if the separate certificate
were a Class R Certificate. If, as evidenced by an Opinion of Counsel,
it is necessary to preserve the REMIC status of any of the Lower-Tier
REMIC, the Middle-Tier REMIC or the Upper-Tier REMIC, the LR Interest,
the MR Interest and the UR Interest shall be severed and represented by
separate Certificates.
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The restrictions on Transfers of a Class R Certificate set forth in
this Section 5.02(c) shall cease to apply (and the applicable portions of the
legend on a Class R Certificate may be deleted) with respect to Transfers
occurring after delivery to the Servicer of an Opinion of Counsel, which Opinion
of Counsel shall not be an expense of the Servicer or the Depositor to the
effect that the elimination of such restrictions will not cause any of the
Lower-Tier REMIC, the Middle-Tier REMIC or the Upper-Tier REMIC to fail to
qualify as a REMIC at any time that the Certificates are outstanding or result
in the imposition of any tax on the Trust Fund, a Certificateholder or another
Person. Each Person holding or acquiring any Ownership Interest in a Class R
Certificate hereby consents to any amendment of this Agreement that, based on an
Opinion of Counsel furnished to the Servicer, is reasonably necessary (a) to
ensure that the record ownership of, or any beneficial interest in, a Class R
Certificate is not transferred, directly or indirectly, to a Person that is not
a Permitted Transferee and (b) to provide for a means to compel the Transfer of
a Class R Certificate that is held by a Person that is not a Permitted
Transferee to a Holder that is a Permitted Transferee.
(d) The transferor of the Class R Certificate shall notify the Servicer
in writing upon the transfer of the Class R Certificate.
(e) The preparation and delivery of all certificates, opinions and
other writings referred to above in this Section 5.02 shall not be an expense of
the Trust Fund, the Depositor, the Trustee or the Servicer. Notwithstanding
anything herein to the contrary, the parties hereto acknowledge that the
functions of the Servicer with respect to Transfers, including, without
limitation, maintaining the Certificate Register, receiving certificates and/or
opinions of counsel, and the transfer and exchange of the Certificates pursuant
to Sections 5.02, 5.03, 5.05 and 5.08 shall be performed by the Paying Agent.
SECTION 5.03. Mutilated, Destroyed, Lost or Stolen Certificates.
If (a) any mutilated Certificate is surrendered to the Servicer, or the
Servicer receives evidence to its satisfaction of the destruction, loss or theft
of any Certificate and of the ownership thereof and (b) there is delivered to
the Servicer, the Authenticating Agent and the NIM's Insurer such security or
indemnity as may be required by them to save each of them harmless, then, in the
absence of notice to the Servicer that such Certificate has been acquired by a
bona fide purchaser, the Depositor shall execute and the Trustee or any
Authenticating Agent shall authenticate and deliver in exchange for or in lieu
of any such mutilated, destroyed, lost or stolen Certificate, a new Certificate
of like Class, tenor and Percentage Interest. In connection with the issuance of
any new Certificate under this Section 5.03, the Servicer and the Authenticating
Agent may require the payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in relation thereto and any other
expenses (including the fees and expenses of the Servicer and the Authenticating
Agent) connected therewith. Any replacement 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. All Certificates surrendered
to the Servicer under the terms of this Section 5.03 shall be canceled and
destroyed by the Servicer in accordance with its standard procedures without
liability on its part.
SECTION 5.04. Persons Deemed Owners.
The Servicer, the NIMs Insurer, the Paying Agent, and any agent of the
Servicer, the NIMs Insurer or the Paying Agent may treat the Person in whose
name any Certificate is registered as the owner of such Certificate for the
purpose of receiving distributions as provided in this Agreement and for all
other purposes whatsoever, and neither the Servicer, the NIMs Insurer, the
Paying Agent, nor any agent of the Servicer, the NIMs Insurer shall be affected
by any notice to the contrary.
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SECTION 5.05. Access to List of Certificateholders' Names and
Addresses.
If three or more Certificateholders (a) request such information in
writing from the Servicer, (b) state that such Certificateholders desire to
communicate with other Certificateholders with respect to their rights under
this Agreement or under the Certificates, and (c) provide a copy of the
communication that such Certificateholders propose to transmit or if the
Depositor or the NIMs Insurer shall request such information in writing from the
Servicer, then the Servicer shall, within ten Business Days after the receipt of
such request, provide the Depositor, the NIMs Insurer, or such
Certificateholders at such recipients' expense the most recent list of the
Certificateholders of the Trust Fund held by the Servicer, if any. The Depositor
and every Certificateholder, by receiving and holding a Certificate, agree that
the Servicer shall not be held accountable by reason of the disclosure of any
such information as to the list of the Certificateholders hereunder, regardless
of the source from which such information was derived.
SECTION 5.06. Book-Entry Certificates.
The Regular Certificates, upon original issuance, shall be issued in
the form of one or more typewritten Certificates representing the Book-Entry
Certificates, to be delivered to the Depository by or on behalf of the
Depositor. The Book-Entry Certificates shall initially be registered on the
Certificate Register in the name of the Depository or its nominee, and no
Certificate Owner of a Book-Entry Certificate will receive a definitive
certificate representing such Certificate Owner's interest in such Certificates,
except as provided in Section 5.08. Unless and until definitive, fully
registered Certificates ("Definitive Certificates") have been issued to the
Certificate Owners of the Book-Entry Certificates pursuant to Section 5.08:
(a) the provisions of this Section shall be in full force and effect;
(b) the Depositor, the Servicer, the Paying Agent, the Trustee and the
NIMs Insurer may deal with the Depository and the Depository Participants for
all purposes (including the making of distributions) as the authorized
representative of the respective Certificate Owners of the Book-Entry
Certificates;
(c) registration of the Book-Entry Certificates may not be transferred
by the Servicer except to another Depository;
(d) the rights of the respective Certificate Owners of the Book-Entry
Certificates shall be exercised only through the Depository and the Depository
Participants and shall be limited to those established by law and agreements
between the Owners of the Book-Entry Certificates and the Depository and/or the
Depository Participants. Pursuant to the Depository Agreement, unless and until
Definitive Certificates are issued pursuant to Section 5.08, the Depository will
make book-entry transfers among the Depository Participants and receive and
transmit distributions of principal and interest on the related Certificates to
such Depository Participants;
(e) the Depository may collect its usual and customary fees, charges
and expenses from its Depository Participants;
(f) the Servicer, the Trustee and the Paying Agent may rely and shall
be fully protected in relying upon information furnished by the Depository with
respect to its Depository Participants; and
(g) to the extent that the provisions of this Section conflict with any
other provisions of this Agreement, the provisions of this Section shall
control.
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For purposes of any provision of this Agreement requiring or permitting
actions with the consent of, or at the direction of, Certificateholders
evidencing a specified percentage of the aggregate unpaid principal amount of
any Class of Certificates, such direction or consent may be given by Certificate
Owners (acting through the Depository and the Depository Participants) owning
Book-Entry Certificates evidencing the requisite percentage of principal amount
of such Class of Certificates.
SECTION 5.07. Notices to Depository.
Whenever any notice or other communication is required to be given to
Certificateholders of the Class with respect to which Book-Entry Certificates
have been issued, unless and until Definitive Certificates shall have been
issued to the related Certificate Owners, the Servicer, the Paying Agent and the
Trustee shall give all such notices and communications to the Depository.
SECTION 5.08. Definitive Certificates.
If, after Book-Entry Certificates have been issued with respect to any
Certificates, (a) the Depository or the Depositor advises the Servicer that the
Depository is no longer willing, qualified or able to discharge properly its
responsibilities under the Depository Agreement with respect to such
Certificates and the Servicer or the Depositor is unable to locate a qualified
successor, (b) the Depositor, at its sole option, advises the Servicer that it
elects to terminate the book-entry system with respect to such Certificates
through the Depository or (c) after the occurrence and continuation of an Event
of Default, Certificate Owners of such Book-Entry Certificates having not less
than 51% of the Voting Rights evidenced by any Class of Book-Entry Certificates
advise the Servicer and the Depository in writing through the Depository
Participants that the continuation of a book-entry system with respect to
Certificates of such Class through the Depository (or its successor) is no
longer in the best interests of the Certificate Owners of such Class, then the
Servicer shall notify all Certificate Owners of such Book-Entry Certificates,
through the Depository, of the occurrence of any such event and of the
availability of Definitive Certificates to Certificate Owners of such Class
requesting the same. The Depositor shall provide the Servicer with an adequate
inventory of certificates to facilitate the issuance and transfer of Definitive
Certificates. Upon surrender to the Servicer of any such Certificates by the
Depository, accompanied by registration instructions from the Depository for
registration, the Authenticating Agent shall authenticate at the written
direction of the Depositor and the Servicer shall deliver such Definitive
Certificates. Neither the Depositor nor the Servicer shall be liable for any
delay in delivery of such instructions and each may conclusively rely on, and
shall be protected in relying on, such instructions. Upon the issuance of such
Definitive Certificates, all references herein to obligations imposed upon or to
be performed by the Depository shall be deemed to be imposed upon and performed
by the Servicer, to the extent applicable with respect to such Definitive
Certificates and the Servicer shall recognize the Holders of such Definitive
Certificates as Certificateholders hereunder.
SECTION 5.09. Maintenance of Office or Agency.
The Servicer will maintain or cause to be maintained at its expense an
office or offices or agency or agencies in New York City where Certificates may
be surrendered for registration of transfer or exchange. The Servicer initially
designates its offices at c/o JPMorgan Chase Bank, 000 Xxxx 00xx Xxxxxx, Xxx
Xxxx, Xxx Xxxx 00000, as offices for such purposes. The Servicer will give
prompt written notice to the Certificateholders of any change in such location
of any such office or agency.
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SECTION 5.10. Authenticating Agents.
(a) The Trustee may appoint one or more Authenticating Agents (each, an
"Authenticating Agent") which shall be authorized to act on behalf of the
Trustee in authenticating the Certificates. Wherever reference is made in this
Agreement to the authentication of Certificates by the Trustee or the Trustee's
certificate of authentication, such reference shall be deemed to include
authentication on behalf of the Trustee by an Authenticating Agent and a
certificate of authentication executed on behalf of the Trustee by an
Authenticating Agent. Each Authenticating Agent must be an entity organized and
doing business under the laws of the United States of America or of any state,
having a combined capital and surplus of at least $15,000,000, authorized under
such laws to do a trust business and subject to supervision or examination by
federal or state authorities. If the Authenticating Agent is a party other than
the Trustee, the Trustee shall have no liability in connection with the
performance or failure of performance of the Authenticating Agent. The Trustee
hereby appoints Chase as the initial Authenticating Agent. The Trustee shall be
the Authenticating Agent during any such time as no other Authenticating Agent
has been appointed.
(b) Any Person into which any Authenticating Agent may be merged or
converted or with which it may be consolidated, or any Person resulting from any
merger, conversion or consolidation to which any Authenticating Agent shall be a
party, or any Person succeeding to the corporate agency business of any
Authenticating Agent, shall continue to be the Authenticating Agent without the
execution or filing of any paper or any further act on the part of the Trustee
or the Authenticating Agent.
(c) Any Authenticating Agent may at any time resign by giving at least
30 days' advance written notice of resignation to the Trustee and the Depositor.
The Trustee may at any time terminate the agency of any Authenticating Agent by
giving written notice of termination to such Authenticating Agent and the
Depositor. Upon receiving a notice of resignation or upon such a termination, or
in case at any time any Authenticating Agent shall cease to be eligible in
accordance within the provisions of this Section 5.10, the Trustee may appoint a
successor Authenticating Agent, shall give written notice of such appointment to
the Depositor and shall mail notice of such appointment to all Holders of
Certificates. Any successor Authenticating Agent upon acceptance of its
appointment hereunder shall become vested with all the rights, powers, duties
and responsibilities of its predecessor hereunder, with like effect as if
originally named as Authenticating Agent. No successor Authenticating Agent
shall be appointed unless eligible under the provisions of this Section 5.10. No
Authenticating Agent shall have responsibility or liability for any action taken
by it as such at the direction of the Trustee or the Depositor. Any
Authenticating Agent shall be entitled to reasonable compensation for its
services and any such compensation shall be payable solely by the Trustee,
without any right of reimbursement from the Depositor, the Servicer or the Trust
Fund.
SECTION 5.11. Appointment of Paying Agent.
The Servicer may appoint a Paying Agent hereunder (the "Paying Agent").
In the event of any such appointment, the Servicer shall cause the Paying Agent
to perform each of the obligations of the Paying Agent set forth herein and
shall be liable to the Trustee and the Certificateholders for failure of the
Paying Agent to perform such obligations. If the Paying Agent is a party other
than the Trustee, the Trustee shall have no liability in connection with the
performance or failure of performance of the Paying Agent. The Servicer
designates the Institutional Trust Services Department of Chase as the initial
Paying Agent.
The Servicer shall cause each Paying Agent other than the Trustee and
the Paying Agent appointed hereunder to execute and deliver to the Servicer and
the Trustee on the Closing Date or, if subsequently appointed, on the date of
appointment, a written instrument executed by an officer of the Paying Agent in
which such Paying Agent shall agree with the Servicer and the Trustee that such
Paying Agent will hold all sums held by it for the payment to Certificateholders
in trust for the benefit of the Certificateholders entitled thereto until such
sums shall be paid to such Certificateholders.
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ARTICLE VI
THE DEPOSITOR AND THE SERVICER
SECTION 6.01. Respective Liabilities of the Depositor and the Servicer.
The Depositor and the Servicer shall each be liable in accordance
herewith only to the extent of the obligations specifically and respectively
imposed upon and undertaken by them herein.
SECTION 6.02. Merger or Consolidation of the Depositor or the Servicer.
The Depositor and the Servicer will each keep in full effect its
existence, rights and franchises as a corporation under the laws of the United
States or under the laws of one of the States thereof and will each 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, or any of the Mortgage Loans and
to perform its respective duties under this Agreement.
Any Person into which the Depositor or Servicer may be merged or
consolidated, or any Person resulting from any merger or consolidation to which
the Depositor or Servicer shall be a party, or any Person succeeding to the
business of the Depositor or Servicer, shall be the successor of the Depositor
or Servicer, as the case may be, hereunder, without the execution or filing of
any paper or any further act on the part of any of the parties hereto, anything
herein to the contrary notwithstanding (except for the execution of an
assumption agreement where such succession is not effected by operation of law);
provided, however, that the successor or surviving Person to a Servicer shall be
qualified to sell mortgage loans to, and to service mortgage loans on behalf of,
FNMA or FHLMC.
SECTION 6.03. Limitation on Liability of the Depositor, the Servicer
and Others.
None of the Depositor, the Servicer nor any of the directors, officers,
employees or agents of the Depositor or the Servicer shall be under any
liability to the Trust Fund or the Certificateholders for any action taken or
for refraining from the taking of any action in good faith pursuant to this
Agreement, or for errors in judgment; provided, however, that this provision
shall not protect the Depositor, the Servicer or any such Person against any
breach of representations or warranties made by it herein or protect the
Depositor, the Servicer or any such Person from any liability that would
otherwise be imposed by reasons of willful misfeasance, bad faith or negligence
in the performance of duties or by reason of reckless disregard of obligations
and duties hereunder. The Depositor, the Servicer and any director, officer,
employee or agent of the Depositor or the Servicer may rely in good faith on any
document of any kind prima facie properly executed and submitted by any Person
respecting any matters arising hereunder. The Depositor, the Servicer and any
director, officer, employee or agent of the Depositor or the Servicer shall be
indemnified by the Trust Fund and held harmless against any loss, liability or
expense incurred in connection with any audit, controversy or judicial
proceeding relating to a governmental taxing authority or any legal action
relating to this Agreement or the Certificates, other than any loss, liability
or expense related to any specific Mortgage Loan or Mortgage Loans (except as
any such loss, liability or expense shall be otherwise reimbursable pursuant to
this Agreement) and any loss, liability or expense incurred by reason of willful
misfeasance, bad faith or negligence in the performance of duties hereunder or
by reason of reckless disregard of obligations and duties hereunder. None of the
Depositor nor the Servicer shall be under any obligation to appear in, prosecute
or defend any legal action that is not incidental to its respective duties
hereunder and that in its opinion may involve it in any expense or liability;
provided, however, that any of the Depositor or the Servicer may, in its
discretion undertake any such action that it may deem necessary or desirable in
respect of this Agreement and the rights and duties of the parties hereto and
interests of the Trustee and 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
Depositor and the Servicer shall be entitled to be reimbursed therefor out of
the Collection Account as provided by Section 3.08 hereof.
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SECTION 6.04. Limitation on Resignation of Servicer.
The Servicer shall not resign from the obligations and duties hereby
imposed on it except upon determination that its duties hereunder are no longer
permissible under applicable law. Any such determination permitting the
resignation of a Servicer shall be evidenced by an Opinion of Counsel to such
effect delivered to the Trustee. No such resignation shall become effective
until the Trustee or a successor servicer appointed in accordance with section
7.02 shall have assumed the Servicer's responsibilities, duties, liabilities and
obligations hereunder.
SECTION 6.05. Errors and Omissions Insurance; Fidelity Bonds.
The Servicer shall, for so long as it acts as servicer under this
Agreement, obtain and maintain in force (a) a policy or policies of insurance
covering errors and omissions in the performance of its obligations as servicer
hereunder, and (b) a fidelity bond in respect of its officers, employees and
agents. Each such policy or policies and bond shall, together, comply with the
requirements from time to time of FNMA or FHLMC for Persons performing servicing
for mortgage loans purchased by FNMA or FHLMC. In the event that any such policy
or bond ceases to be in effect, the Servicer shall use its reasonable best
efforts to obtain a comparable replacement policy or bond from an insurer or
issuer meeting the requirements set forth above as of the date of such
replacement.
ARTICLE VII
DEFAULT; TERMINATION OF SERVICER
SECTION 7.01. Events of Default.
"Event of Default," wherever used herein, means any one of the
following events:
(i) any failure by the Servicer to deposit in the Collection
Account or the Distribution Account or remit to the Trustee or any
Paying Agent any payment (excluding a payment required to be made under
Section 4.01 hereof) required to be made under the terms of this
Agreement, which failure shall continue unremedied for five calendar
days and, with respect to a payment required to be made under Section
4.01 hereof, for one calendar day, after the date on which written
notice of such failure shall have been given to the Servicer by the
Trustee or the Depositor, or to the Trustee and the Servicer by the
NIMs Insurer or the Holders of Certificates evidencing not less than
25% of the Voting Rights evidenced by the Certificates; or
(ii) any failure by the Servicer to observe or perform in any
material respect any other of the covenants or agreements on the part
of the Servicer contained in this Agreement or any representation or
warranty shall prove to be untrue, which failure or breach shall
continue unremedied for a period of 60 days after the date on which
written notice of such failure shall have been given to the Servicer by
the Trustee or the Depositor, or to the Trustee by the NIMs Insurer or
the Holders of Certificates evidencing not less than 25% of the Voting
Rights evidenced by the Certificates; or
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(iii) a decree or order of a court or agency or supervisory
authority having jurisdiction for the appointment of a 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, shall have been entered against the
Servicer and such decree or order shall have remained in force
undischarged or unstayed for a period of 60 consecutive days; or
(iv) consent by the Servicer to the appointment of a receiver
or liquidator in any insolvency, readjustment of debt, marshaling of
assets and liabilities or similar proceedings of or relating to the
Servicer or all or substantially all of the property of the Servicer;
or
(v) admission by a Servicer in writing of its inability to pay
its debts generally as they become due, file a petition to take
advantage of, or commence a voluntary case under, any applicable
insolvency or reorganization statute, make an assignment for the
benefit of its creditors, or voluntarily suspend payment of its
obligations.
If an Event of Default shall occur with respect to the Servicer, then,
and in each and every such case, so long as such Event of Default shall not have
been remedied, the Trustee may, or at the direction of the NIMs Insurer or the
Holders of Certificates evidencing not less than 25% of the Voting Rights
evidenced by the Certificates, shall, by notice in writing to the Servicer (with
a copy to each Rating Agency), terminate all of the rights and obligations of
the Servicer under this Agreement and in and to the Mortgage Loans and the
proceeds thereof, other than its rights as a Certificateholder hereunder. On or
after the receipt by the Servicer of such written notice, all authority and
power of the Servicer hereunder, whether with respect to the Mortgage Loans or
otherwise, shall pass to and be vested in the Trustee. The Trustee shall
thereupon make any Advance described in Section 4.01 hereof subject to Section
3.04 hereof. The Trustee is hereby authorized and empowered to execute and
deliver, on behalf of the 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. Unless expressly
provided in such written notice, no such termination shall affect any obligation
of the Servicer to pay amounts owed pursuant to Article VIII. The Servicer
agrees to cooperate with the Trustee in effecting the termination of the
Servicer's responsibilities and rights hereunder, including, without limitation,
the transfer to the Trustee of all cash amounts which shall at the time be
credited to the Collection Account, or thereafter be received with respect to
the Mortgage Loans. The Servicer and the Trustee shall promptly notify the
Rating Agencies of the occurrence of an Event of Default or an event that, with
notice, passage of time, other action or any combination of the foregoing would
be an Event of Default, such notice to be provided in any event within two
Business Days of such occurrence.
Notwithstanding any termination of the activities of the Servicer
hereunder, the Servicer shall be entitled to receive, out of any late collection
of a Scheduled Payment on a Mortgage Loan that was due prior to the notice
terminating the Servicer's rights and obligations as Servicer hereunder and
received after such notice, that portion thereof to which the Servicer would
have been entitled pursuant to Sections 3.08(a)(i) through (viii), and any other
amounts payable to the Servicer hereunder the entitlement to which arose prior
to the termination of its activities hereunder.
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SECTION 7.02. Trustee to Act; Appointment of Successor.
On and after the time the Servicer receives a notice of termination
pursuant to Section 7.01 hereof, the Trustee shall, to the extent provided in
Section 3.04, be the successor to the Servicer in its capacity as servicer under
this Agreement and the transactions set forth or provided for herein and shall
be subject to all the responsibilities, duties and liabilities relating thereto
placed on the Servicer by the terms and provisions hereof and applicable law
including the obligation to make advances pursuant to Section 4.01. As
compensation therefor, subject to the last paragraph of Section 7.01, the
Trustee shall be entitled to all fees, costs and expenses relating to the
Mortgage Loans that the Servicer would have been entitled to if the Servicer had
continued to act hereunder. Notwithstanding the foregoing, if the Trustee has
become the successor to the Servicer in accordance with Section 7.01 hereof, the
Trustee may, if it shall be unwilling to so act, or shall, if it is prohibited
by applicable law from making Advances pursuant to Section 4.01 hereof or if it
is otherwise unable to so act, appoint, or petition a court of competent
jurisdiction to appoint, any established mortgage loan servicing institution the
appointment of which does not adversely affect the then current rating of the
Certificates by each Rating Agency as the successor to the Servicer hereunder in
the assumption of all or any part of the responsibilities, duties or liabilities
of the Servicer hereunder. Any successor Servicer shall be an institution that
is a FNMA and FHLMC approved seller/servicer in good standing, that has a net
worth of at least $15,000,000, and that is willing to service the Mortgage Loans
and executes and delivers to the Depositor and the Trustee an agreement
accepting such delegation and assignment, that contains an assumption by such
Person of the rights, powers, duties, responsibilities, obligations and
liabilities of the Servicer (other than liabilities of the Servicer under
Section 6.03 hereof incurred prior to termination of the Servicer under Section
7.01), with like effect as if originally named as a party to this Agreement; and
provided further that each Rating Agency acknowledges that its rating of the
Certificates in effect immediately prior to such assignment and delegation will
not be qualified or reduced as a result of such assignment and delegation. No
appointment of a successor to the Servicer hereunder shall be effective until
the Trustee shall have consented thereto, and written notice of such proposed
appointment shall have been provided by the Trustee to each Certificateholder.
The Trustee shall not resign as servicer until a successor servicer has been
appointed and has accepted such appointment. Pending appointment of a successor
to the Servicer hereunder, the Trustee, unless the Trustee is prohibited by law
from so acting, shall, subject to Section 3.04 hereof, 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 Mortgage Loans as it and such successor shall agree; provided,
however, that no such compensation shall be in excess of that permitted the
Servicer hereunder. The Trustee and such successor shall take such action,
consistent with this Agreement, as shall be necessary to effectuate any such
succession. Neither the Trustee nor any other successor servicer shall be deemed
to be in default hereunder by reason of any failure to make, or any delay in
making, any distribution hereunder or any portion thereof or any failure to
perform, or any delay in performing, any duties or responsibilities hereunder,
in either case caused by the failure of the Servicer to deliver or provide, or
any delay in delivering or providing, any cash, information, documents or
records to it.
Any successor to the Servicer as servicer shall give notice to the
Mortgagors of such change of servicer and shall, during the term of its service
as servicer maintain in force the policy or policies that the Servicer is
required to maintain pursuant to Section 6.05.
SECTION 7.03. Notification to Certificateholders.
(a) Upon any termination of or appointment of a successor to the
Servicer, the Trustee shall give prompt written notice thereof to
Certificateholders, the Paying Agent and to each Rating Agency.
(b) Within 60 days after the occurrence of any Event of Default, the
Trustee shall transmit by mail to all Certificateholders notice of each such
Event of Default hereunder known to the Trustee, unless such Event of Default
shall have been cured or waived.
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ARTICLE VIII
CONCERNING THE TRUSTEE
SECTION 8.01. Duties of Trustee.
The Trustee, prior to the occurrence of an Event of Default and after
the curing of all Events of Default that may have occurred, shall undertake to
perform such duties and only such duties as are specifically set forth in this
Agreement. In case an Event of Default has occurred and remains uncured, the
Trustee shall exercise such of the rights and powers vested in it by this
Agreement, and use the same degree of care and skill in their exercise as a
prudent person would exercise or use under the circumstances in the conduct of
such person's own affairs.
The Trustee, upon receipt of all resolutions, certificates, statements,
opinions, reports, documents, orders or other instruments furnished to the
Trustee that are specifically required to be furnished pursuant to any provision
of this Agreement shall examine them to determine whether they conform to the
requirements of this Agreement. If any such instrument is found not to conform
to the requirements of this Agreement in a material manner, the Trustee shall
take action as it deems appropriate to have the instrument corrected.
The Trustee is hereby authorized and empowered to execute and deliver,
and shall execute and deliver, on the date hereof, the Yield Maintenance
Agreement on behalf of the Trust Fund.
No provision of this Agreement shall be construed to relieve the
Trustee from liability for its own negligent action, its own negligent failure
to act or its own misconduct, its negligent failure to perform its obligations
in compliance with this Agreement, or any liability that would be imposed by
reason of its willful misfeasance or bad faith; provided, however, that:
(i) prior to the occurrence of an Event of Default, and after
the curing of all such Events of Default that may have occurred, the
duties and obligations of the Trustee shall be determined solely by the
express provisions of this Agreement, the Trustee shall not be liable,
individually or as Trustee, except for the performance of such duties
and obligations as are specifically set forth in this Agreement, no
implied covenants or obligations shall be read into this Agreement
against the Trustee and the Trustee may conclusively rely, as to the
truth of the statements and the correctness of the opinions expressed
therein, upon any certificates or opinions furnished to the Trustee and
conforming to the requirements of this Agreement that it reasonably
believed in good faith to be genuine and to have been duly executed by
the proper authorities respecting any matters arising hereunder;
(ii) the Trustee shall not be liable, individually or as
Trustee, for an error of judgment made in good faith by a Responsible
Officer or Responsible Officers of the Trustee, unless the Trustee was
negligent or acted in bad faith or with willful misfeasance; and
(iii) the Trustee shall not be liable, individually or as
Trustee, with respect to any action taken, suffered or omitted to be
taken by it in good faith in accordance with the direction of Holders
of each Class of Certificates evidencing not less than 25% of the
Voting Rights of such Class relating to the time, method and place of
conducting any proceeding for any remedy available to the Trustee, or
exercising any trust or power conferred upon the Trustee under this
Agreement.
SECTION 8.02. Certain Matters Affecting the Trustee.
(a) Except as otherwise provided in Section 8.01:
(i) the Trustee may request and rely upon and shall be
protected in acting or refraining from acting upon any resolution,
Officer's Certificate, certificate of auditors or any other
certificate, statement, instrument, opinion, report, notice, request,
consent, order, appraisal, bond or other paper or document believed by
it to be genuine and to have been signed or presented by the proper
party or parties;
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(ii) the Trustee may consult with counsel of its choice and
any Opinion of Counsel shall be full and complete authorization and
protection in respect of any action taken or suffered or omitted by it
hereunder in good faith and in accordance with such Opinion of Counsel;
(iii) the Trustee shall not be liable, individually or as
Trustee, 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;
(iv) prior to the occurrence of an Event of Default hereunder
and after the curing of all Events of Default that may have occurred,
the Trustee shall not be bound to make any investigation into the facts
or matters stated in any resolution, certificate, statement,
instrument, opinion, report, notice, request, consent, order, approval,
bond or other paper or document, unless requested in writing so to do
by Holders of each Class of Certificates evidencing not less than 25%
of the Voting Rights of such Class;
(v) the Trustee may execute any of the trusts or powers
hereunder or perform any duties hereunder either directly or by or
through agents, accountants or attorneys;
(vi) the Trustee shall not be required to expend its own funds
or otherwise incur any financial liability in the performance of any of
its duties hereunder if it shall have reasonable grounds for believing
that repayment of such funds or adequate indemnity against such
liability is not assured to it;
(vii) the Trustee shall not be liable, individually or as
Trustee, for any loss on any investment of funds pursuant to this
Agreement (other than as issuer of the investment security);
(viii) the Trustee shall not be deemed to have knowledge of an
Event of Default until a Responsible Officer of the Trustee shall have
received written notice thereof;
(ix) the Trustee shall be under no obligation to exercise any
of the trusts or powers vested in it by this Agreement or to make any
investigation of matters arising hereunder 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 that may be incurred therein or
thereby; and
(x) if requested by the Servicer, the Trustee may appoint the
Servicer as the trustee's attorney-in-fact in order to carry out and
perform certain activities that are necessary or appropriate for the
servicing and administration of the Mortgage Loans pursuant to this
Agreement. Such appointment shall be evidenced by a power of attorney
in such form as may be agreed to by the Trustee and the Servicer.
(xi) the Paying Agent and the Authenticating Agent and any
agent of the Trustee shall be afforded the same rights, protections,
immunities and indemnities of the Trustee as set forth herein.
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(b) All rights of action under this Agreement or under any of the
Certificates, enforceable by the Trustee, may be enforced by the Trustee without
the possession of any of the Certificates, or the production thereof at the
trial or other proceeding relating thereto, and any such suit, action or
proceeding instituted by the Trustee shall be brought in its name for the
benefit of all the Holders of the Certificates, subject to the provisions of
this Agreement.
SECTION 8.03. Trustee Not Liable for Mortgage Loans.
The recitals contained herein shall be taken as the statements of the
Depositor or the Servicer, as the case may be, and the Trustee assumes no
responsibility for their correctness. The Trustee makes no representations as to
the validity or sufficiency of this Agreement or of any Mortgage Loan or related
document other than with respect to the Trustee's execution and authentication
of the Certificates. The Trustee shall not be accountable for the use or
application by the Depositor or the Servicer of any funds paid to the Depositor
or the Servicer in respect of the Mortgage Loans or deposited in or withdrawn
from the Collection Account or Distribution Account by the Depositor or the
Servicer.
SECTION 8.04. Trustee May Own Certificates.
The Trustee in its individual or any other capacity may become the
owner or pledgee of Certificates with the same rights as it would have if it
were not the Trustee.
SECTION 8.05. Servicer to Pay Certain Trustee's Fees and Expenses.
The Servicer covenants and agrees (i) to pay to the Trustee from time
to time, and the Trustee shall be entitled to, such compensation as shall be
agreed in writing by the Servicer and the Trustee (which shall not be limited by
any provision of law in regard to the compensation of a trustee of an express
trust) for all services rendered by it in the execution of the trusts hereby
created and in the exercise and performance of any of the powers and duties
hereunder of the Trustee and (ii) to pay or reimburse the Trustee, upon its
request, for all reasonable expenses, disbursements and advances incurred or
made by the Trustee on behalf of the Trust Fund in accordance with any of the
provisions of this Agreement (including, without limitation: (A) the reasonable
compensation and the expenses and disbursements of its counsel, but only for
representation of the Trustee acting in its capacity as Trustee hereunder and
(B) to the extent that the Trustee must engage persons not regularly in its
employ to perform acts or services on behalf of the Trust Fund, which acts or
services are not in the ordinary course of the duties of a trustee, paying agent
or certificate registrar, in the absence of a breach or default by any party
hereto, the reasonable compensation, expenses and disbursements of such persons,
except any such expense, disbursement or advance as may arise from its
negligence, bad faith or willful misconduct. The Trustee and any director,
officer, employee or agent of the Trustee shall be indemnified by the Servicer
and held harmless against any loss, liability or expense (i) incurred in
connection with any legal action relating to this Agreement or the Certificates,
or in connection with the performance of any of the Trustee's duties hereunder,
other than any loss, liability or expense incurred by reason of willful
misfeasance, bad faith or negligence in the performance of any of the Trustee's
duties hereunder or by reason of reckless disregard of the Trustee's obligations
and duties hereunder and (ii) resulting from any error in any tax or information
return prepared by the Servicer. Such indemnity shall survive the termination of
this Agreement or the resignation or removal of the Trustee hereunder.
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SECTION 8.06. Eligibility Requirements for Trustee.
The Trustee hereunder shall, at all times, be a corporation or
association organized and doing business under the laws of a state or the United
States of America, authorized under such laws to exercise corporate trust powers
reasonably acceptable to the NIMs Insurer, having a combined capital and surplus
of at least $50,000,000, subject to supervision or examination by federal or
state authority and with a credit rating that would not cause any of the Rating
Agencies to reduce their respective ratings of any Class of Certificates below
the ratings issued on the Closing Date (or having provided such security from
time to time as is sufficient to avoid such reduction). If such corporation or
association publishes reports of condition at least annually, pursuant to law or
to the requirements of the aforesaid supervising or examining authority, then
for the purposes of this Section 8.06 the combined capital and surplus of such
corporation or association shall be deemed to be its combined capital and
surplus as set forth in its most recent report of condition so published. In
case at any time the Trustee shall cease to be eligible in accordance with the
provisions of this Section 8.06, the Trustee shall resign immediately in the
manner and with the effect specified in Section 8.07 hereof. The corporation or
national banking association serving as Trustee may have normal banking and
trust relationships with the Depositor, the NIMs Insurer and the Servicer and
their respective Affiliates; provided, however, that such corporation cannot be
an affiliate of the Servicer other than the Trustee in its role as successor to
a Servicer.
SECTION 8.07. Resignation and Removal of Trustee.
The Trustee may at any time resign and be discharged from the trusts
hereby created by (1) giving written notice of resignation to the Depositor, the
Servicer, the NIMs Insurer and by mailing notice of resignation by first Class
mail, postage prepaid, to the Certificateholders at their addresses appearing on
the Certificate Register and each Rating Agency, not less than 60 days before
the date specified in such notice when, subject to Section 8.08, such
resignation is to take effect, and (2) acceptance of appointment by a successor
trustee in accordance with Section 8.08 and meeting the qualifications set forth
in Section 8.06. If no successor trustee shall have been so appointed and have
accepted appointment within 30 days after the giving of such notice or
resignation, the resigning Trustee may petition any court of competent
jurisdiction for the appointment of a successor trustee.
If at any time (i) the Trustee shall cease to be eligible in accordance
with the provisions of Section 8.06 hereof and shall fail to resign after
written request thereto by the Depositor or the NIMs Insurer, (ii) the Trustee
shall become incapable of acting, or shall be adjudged as bankrupt or insolvent,
or a receiver of the Trustee or of its property shall be appointed, or any
public officer shall take charge or control of the Trustee or of its property or
affairs for the purpose of rehabilitation, conservation or liquidation, or
(iii)(A) a tax is imposed with respect to the Trust Fund by any state in which
the Trustee or the Trust Fund is located, (B) the imposition of such tax would
be avoided by the appointment of a different trustee and (C) the Trustee fails
to indemnify the Trust Fund against such tax, then the Depositor may remove the
Trustee and appoint a successor trustee by written instrument, in triplicate,
one copy of which instrument shall be delivered to the Trustee, one copy of
which shall be delivered to the Servicer and one copy of which shall be
delivered to the successor trustee.
The Holders evidencing at least 51% of the Voting Rights of all Classes
of Certificates may at any time remove the Trustee and appoint a successor
trustee by written instrument or instruments, in triplicate, signed by such
Holders or their attorneys-in-fact duly authorized, one complete set of which
instruments shall be delivered by the successor Trustee to the Servicer, one
complete set to the Trustee so removed and one complete set to the successor so
appointed. Notice of any removal of the Trustee shall be given to each Rating
Agency by the Successor Trustee.
Any resignation or removal of the Trustee and appointment of a
successor trustee pursuant to any of the provisions of this Section 8.07 shall
become effective upon acceptance of appointment by the successor trustee as
provided in Section 8.08 hereof.
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SECTION 8.08. Successor Trustee.
Any successor trustee appointed as provided in Section 8.07 hereof
shall execute, acknowledge and deliver to the Depositor and to its predecessor
trustee and the Servicer an instrument accepting such appointment hereunder and
thereupon the resignation or removal of the predecessor trustee shall become
effective and such successor trustee, without any further act, deed or
conveyance, shall become fully vested with all the rights, powers, duties and
obligations of its predecessor hereunder, with the like effect as if originally
named as trustee herein.
No successor trustee shall accept appointment as provided in this
Section 8.08 unless at the time of such acceptance such successor trustee shall
be eligible under the provisions of Section 8.06 hereof and its appointment
shall not adversely affect the then current rating of the Certificates.
Upon acceptance of appointment by a successor trustee as provided in
this Section 8.08, the Depositor shall mail notice of the succession of such
trustee hereunder to all Holders of Certificates. If the Depositor fails to mail
such notice within ten days after acceptance of appointment by the successor
trustee, the successor trustee shall cause such notice to be mailed at the
expense of the Depositor.
SECTION 8.09. Merger or Consolidation of Trustee.
Any corporation into which the Trustee may be merged or converted or
with which it may be consolidated or any corporation resulting from any merger,
conversion or consolidation to which the Trustee shall be a party, or any
corporation succeeding to substantially all of the corporate trust business of
the Trustee, shall be the successor of the Trustee hereunder, provided that such
corporation shall be eligible under the provisions of Section 8.06 hereof
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 (except
for the execution of an assumption agreement where such succession is not
effected by operation of law).
SECTION 8.10. Appointment of Co-Trustee or Separate Trustee.
Notwithstanding any other provisions of this Agreement, at any time,
for the purpose of meeting any legal requirements of any jurisdiction in which
any part of the Trust Fund or property securing any Mortgage Note may at the
time be located, the Servicer and the Trustee acting jointly shall have the
power and shall execute and deliver all instruments to appoint one or more
Persons approved by the Trustee to act as co-trustee or co-trustees jointly with
the Trustee, or separate trustee or separate trustees, of all or any part of the
Trust Fund, and to vest in such Person or Persons, in such capacity and for the
benefit of the Certificateholders, such title to the Trust Fund or any part
thereof, whichever is applicable, and, subject to the other provisions of this
Section 8.10, such powers, duties, obligations, rights and trusts as the
Servicer and the Trustee may consider necessary or desirable. The Trustee shall
be ultimately liable for the actions of any co-trustee. If the Servicer shall
not have joined in such appointment within 15 days after the receipt by it of a
request to do so, or in the case an Event of Default shall have occurred and be
continuing, the Trustee alone shall have the power to make such appointment. No
co-trustee or separate trustee hereunder shall be required to meet the terms of
eligibility as a successor trustee under Section 8.06 and no notice to
Certificateholders of the appointment of any co-trustee or separate trustee
shall be required under Section 8.08.
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Every separate trustee and co-trustee shall, to the extent permitted by
law, be appointed and act subject to the following provisions and conditions:
(i) All rights, powers, duties and obligations conferred or
imposed upon the Trustee, except for the obligation of the Trustee
under this Agreement to advance funds on behalf of the Servicer, shall
be conferred or imposed upon and exercised or performed by the Trustee
and such separate trustee or co-trustee jointly (it being understood
that such separate trustee or co-trustee is not authorized to act
separately without the Trustee joining in such act), except to the
extent that under any law of any jurisdiction in which any particular
act or acts are to be performed (whether as Trustee hereunder or as
successor to the Servicer hereunder), the Trustee shall be incompetent
or unqualified to perform such act or acts, in which event such rights,
powers, duties and obligations (including the holding of title to the
Trust Fund or any portion thereof in any such jurisdiction) shall be
exercised and performed singly by such separate trustee or co-trustee,
but solely at the direction of the Trustee;
(ii) No trustee hereunder shall be held personally liable by
reason of any act or omission of any other trustee hereunder; and
(iii) The Trustee may at any time accept the resignation of or
remove any separate trustee or co-trustee.
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 VIII. 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 and a copy thereof given to the
Servicers and the Depositor.
Any separate trustee or co-trustee may, at any time, constitute the
Trustee its agent or attorney-in-fact, with full power and authority, to the
extent not prohibited by law, to do any lawful act under or in respect of this
Agreement on its behalf and in its name. 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.
SECTION 8.11. Tax Matters.
It is intended that each of the Lower-Tier REMIC, the Middle-Tier REMIC
and the Upper-Tier REMIC shall constitute, and that the affairs of the Trust
Fund shall be conducted so as to allow each of the Lower-Tier REMIC, the
Middle-Tier REMIC and the Upper-Tier REMIC to qualify as, a "real estate
mortgage investment conduit" as defined in and in accordance with the REMIC
Provisions. In furtherance of such intention, the Servicer covenants and agrees
that it shall act as agent (and the Servicer is hereby appointed to act as
agent) on behalf of each of the Lower-Tier REMIC, the Middle-Tier REMIC and the
Upper-Tier REMIC and that in such capacity it shall: (a) prepare and file, or
cause to be prepared and filed, in a timely manner, a U.S. Real Estate Mortgage
Investment Conduit Income Tax Return (Form 1066 or any successor form adopted by
the Internal Revenue Service) and prepare and file or cause to be prepared and
filed with the Internal Revenue Service and applicable state or local tax
authorities income tax or information returns for each taxable year with respect
to each of the Lower-Tier REMIC, the Middle-Tier REMIC and the Upper-Tier REMIC,
containing such information and at the times and in the manner as may be
required by the Code or state or local tax laws, regulations, or rules, and
furnish or cause to be furnished to Certificateholders the schedules, statements
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or information at such times and in such manner as may be required thereby; (b)
within thirty days of the Closing Date, furnish or cause to be furnished to the
Internal Revenue Service, on Forms 8811 or as otherwise may be required by the
Code, the name, title, address, and telephone number of the person that the
holders of the Certificates may contact for tax information relating thereto,
together with such additional information as may be required by such Form, and
update such information at the time or times in the manner required by the Code
for each of the Lower-Tier REMIC, the Middle-Tier REMIC and the Upper-Tier
REMIC; (c) make or cause to be made elections, on behalf of each of the
Lower-Tier REMIC, the Middle-Tier REMIC and the Upper-Tier REMIC to be treated
as a REMIC on the federal tax return of each of the Lower-Tier REMIC, the
Middle-Tier REMIC and the Upper-Tier REMIC for its first taxable year (and, if
necessary, under applicable state law); (d) prepare and forward, or cause to be
prepared and forwarded, to the Certificateholders and to the Internal Revenue
Service and, if necessary, state tax authorities, all information returns and
reports as and when required to be provided to them in accordance with the REMIC
Provisions, including without limitation, the calculation of any original issue
discount using the Prepayment Assumption; (e) provide information necessary for
the computation of tax imposed on the transfer of a Class R Certificate to a
Person that is not a Permitted Transferee, or an agent (including a broker,
nominee or other middleman) of a Non-Permitted Transferee, or a pass-through
entity in which a Non-Permitted Transferee is the record holder of an interest
(the reasonable cost of computing and furnishing such information may be charged
to the Person liable for such tax); (f) to the extent that they are under its
control conduct the affairs of each of the Lower-Tier REMIC, the Middle-Tier
REMIC and the Upper-Tier REMIC at all times that any Certificates are
outstanding so as to maintain the status of each of the Lower-Tier REMIC, the
Middle-Tier REMIC and the Upper-Tier REMIC as a REMIC under the REMIC
Provisions; (g) not knowingly or intentionally take any action or omit to take
any action that would cause the termination of the REMIC status of the
Lower-Tier REMIC, the Middle-Tier REMIC or the Upper-Tier REMIC; (h) pay, from
the sources specified in the last paragraph of this Section 8.11, the amount of
any federal, state and local taxes, including prohibited transaction taxes as
described below, imposed on each of the Lower-Tier REMIC, the Middle-Tier REMIC
and the Upper-Tier REMIC prior to the termination of the Trust Fund when and as
the same shall be due and payable (but such obligation shall not prevent the
Trustee or any other appropriate Person from contesting any such tax in
appropriate proceedings and shall not prevent the Trustee from withholding
payment of such tax, if permitted by law, pending the outcome of such
proceedings); (i) sign or cause to be signed federal, state or local income tax
or information returns; (j) maintain records relating to each of the Lower-Tier
REMIC, the Middle-Tier REMIC and the Upper-Tier REMIC, including but not limited
to the income, expenses, assets and liabilities of each of the Lower-Tier REMIC,
the Middle-Tier REMIC and the Upper-Tier REMIC, and the fair market value and
adjusted basis of the Trust Fund property determined at such intervals as may be
required by the Code, as may be necessary to prepare the foregoing returns,
schedules, statements or information; and (k) as and when necessary and
appropriate, represent each of the Lower-Tier REMIC, the Middle-Tier REMIC and
the Upper-Tier REMIC in any administrative or judicial proceedings relating to
an examination or audit by any governmental taxing authority, request an
administrative adjustment as to any taxable year of each of the Lower-Tier
REMIC, the Middle-Tier REMIC and the Upper-Tier REMIC, enter into settlement
agreements with any governmental taxing agency, extend any statute of
limitations relating to any tax item of any of the Lower-Tier REMIC, the
Middle-Tier REMIC or the Upper-Tier REMIC, and otherwise act on behalf of any of
the Lower-Tier REMIC, the Middle-Tier REMIC or the Upper-Tier REMIC in relation
to any tax matter involving any of the Lower-Tier REMIC, the Middle-Tier REMIC
or the Upper-Tier REMIC or controversy involving the Trust Fund. The Trustee
shall sign any tax returns of the Trust, the Lower-Tier REMIC, the Middle-Tier
REMIC, the Upper-Tier REMIC and the grantor trusts described in Section 2.07
that the Servicer or the Paying Agent is not permitted to sign under applicable
law. The Servicer shall prepare and file all tax and information returns
required under federal, state or local tax law with regard to the grantor trusts
provided for in Section 2.07.
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In order to enable the Servicer to perform its duties as set forth
herein, the Depositor shall provide, or cause to be provided, to the Servicer
within 10 days after the Closing Date all information or data that the Servicer
requests in writing and determines to be relevant for tax purposes to the
valuations and offering prices of the Certificates, including, without
limitation, the price, yield, prepayment assumption and projected cash flows of
the Certificates and the Mortgage Loans. Thereafter, the Depositor shall provide
to the Servicer promptly upon written request therefor, any such additional
information or data that the Servicer may, from time to time, request in order
to enable the Servicer to perform its duties as set forth herein. The Depositor
hereby agrees to indemnify the Servicer and any Paying Agent acting on the
Servicer's behalf for any losses, liabilities, damages, claims or expenses of
the Servicer and any Paying Agent acting on the Servicer's behalf arising from
any errors or miscalculations of the Servicer that result from any failure of
the Depositor to provide, or to cause to be provided, accurate information or
data to the Servicer and any Paying Agent acting on the Servicer's behalf on a
timely basis.
In the event that any tax is imposed on "prohibited transactions" of
any of the Lower-Tier REMIC, the Middle-Tier REMIC or the Upper-Tier REMIC as
defined in Section 860F(a)(2) of the Code, on the "net income from foreclosure
property" of the Trust Fund as defined in Section 860G(c) of the Code, on any
contribution to the Trust Fund after the Startup Day pursuant to Section 860G(d)
of the Code, or any other tax is imposed, if not paid as otherwise provided for
herein, such tax shall be paid by (i) the Servicer, if any such tax arises out
of or results from a breach by the Servicer of any of its obligations under this
Agreement, (ii) any party hereto (other than the Servicer) to the extent any
such tax arises out of or results from a breach by such other party of any of
its obligations under this Agreement or (iii) in all other cases, or in the
event that any liable party here fails to honor its obligations under the
preceding clauses (i) or (ii), any such tax will be paid first with amounts
otherwise to be distributed to the Class R Certificateholders (pro rata), and
second with amounts otherwise to be distributed to all other Certificateholders
in the following order of priority: first, to the Class C Certificates (pro
rata), second, to the Class IB and Class IIB Certificates (pro rata), third, to
the Class IM-2 and IIM-2 Certificates (pro rata), fourth, to the Class IM-1 and
IIM-1 Certificates (pro rata), and fifth, to the Group I Class A Certificates
and the Group II Class A Certificates (pro rata). Notwithstanding anything to
the contrary contained herein, to the extent that such tax is payable by the
Class R Certificate, the Servicer is hereby authorized to instruct the Trustee
or Paying Agent, as applicable and the Trustee or Paying Agent, as applicable is
hereby authorized pursuant to such instruction to retain on any Distribution
Date, from the Holders of the Class R Certificate (and, if necessary, second,
from the Holders of all other Certificates in the priority specified in the
preceding sentence), funds otherwise distributable to such Holders in an amount
sufficient to pay such tax. The Servicer agrees to promptly notify in writing
the party liable for any such tax of the amount thereof and the due date for the
payment thereof. The Paying Agent is hereby appointed to act as the agent of the
Servicer with respect to any duties of the Servicer set forth in (a), (b), (c),
(d), (e), (i) and (j) of the first paragraph of this Section 8.11.
ARTICLE IX
TERMINATION
SECTION 9.01. Termination upon Liquidation or Repurchase of all
Mortgage Loans.
Subject to Section 9.03, the obligations and responsibilities of the
Depositor, the Servicer and the Trustee created hereby with respect to the Trust
Fund shall terminate upon the earlier of (a) the repurchase by the Servicer of
all of the Mortgage Loans (and REO Properties) remaining in either Loan Group at
the price (the "Repurchase Price") equal to the sum of (i) 100% of the Stated
Principal Balance of each Mortgage Loan in such Loan Group (other than in
respect of REO Property), (ii) accrued interest thereon at the applicable
Mortgage Rate, (iii) the appraised value of any REO Property in such Loan Group
(up to the Stated Principal Balance of the related Mortgage Loan), such
appraisal to be conducted by an appraiser mutually agreed upon by the Depositor
and the Trustee and (iv) any unreimbursed Servicing Fees, Advances and Servicing
Advances with respect to the Mortgage Loans in such Loan Group prior to the
exercise of such repurchase, together with any unreimbursed Servicing Fees; and
(b) the later of (i) the maturity or other liquidation (or any Advance with
respect thereto) of the last Mortgage Loan remaining in the Trust Fund and the
disposition of all REO Property and (ii) the distribution to Certificateholders
of all amounts required to be distributed to them pursuant to this Agreement, as
applicable. In no event shall the trusts created hereby continue beyond the
earlier of (i) the expiration of 21 years from the death of the last survivor of
the descendants of Xxxxxx X. Xxxxxxx, the late Ambassador of the United States
to the Court of St. James's, living on the date hereof and (ii) the Latest
Possible Maturity Date.
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The right to repurchase all Mortgage Loans and REO Properties in a Loan
Group pursuant to clause (a) above shall be conditioned upon the aggregate
Stated Principal Balance of the Mortgage Loans in such Loan Group, at the time
of any such repurchase, aggregating ten percent or less of the aggregate
Principal Balance of the Mortgage Loans in such Loan Group as of the Cut-off
Date.
SECTION 9.02. Final Distribution on the Certificates.
If on any Determination Date, (i) the Servicer determines that there
are no Outstanding Mortgage Loans and no other funds or assets in the Trust Fund
other than the funds in the Collection Account, the Trustee, the Servicer or
Paying Agent shall send a final distribution notice promptly to each
Certificateholder or (ii) the Servicer determines that a Class of Certificates
shall be retired after a final distribution on such Class, the Servicer shall
notify the Trustee and any Paying Agent and the Trustee shall notify the
Certificateholders within seven (7) Business Days after such Determination Date
that the final distribution in retirement of such Class of Certificates is
scheduled to be made on the immediately following Distribution Date. Any final
distribution made pursuant to the immediately preceding sentence will be made
only upon presentation and surrender of the Certificates at the office of the
Paying Agent. If the Servicer elects to terminate the Trust Fund pursuant to
clause (a) of Section 9.01, at least 10 days prior to the date notice is to be
mailed to the affected Certificateholders, the Servicer shall notify the
Depositor, any Paying Agent and the Trustee of the date such electing party
intends to terminate the Trust Fund and of the applicable repurchase price of
the Mortgage Loans and REO Properties.
Notice of any termination of the Trust Fund, specifying the
Distribution Date on which Certificateholders may surrender their Certificates
for payment of the final distribution and cancellation, shall be given promptly
by the Trustee or the Servicer or Paying Agent by letter to Certificateholders
mailed not earlier than the 10th day and no later than the 15th day of the month
immediately preceding the month of such final distribution. Any such notice
shall specify (a) the Distribution Date upon which final distribution on the
Certificates will be made upon presentation and surrender of Certificates at the
office therein designated, (b) the location of the office or agency at which
such presentation and surrender must be made, and (c) that the Record Date
otherwise applicable to such Distribution Date is not applicable, distributions
being made only upon presentation and surrender of the Certificates at the
office therein specified. The Servicer will give such notice to each Rating
Agency at the time such notice is given to Certificateholders.
In the event such notice is given, the Servicer shall cause all funds
in the Collection Account to be deposited in the Distribution Account on the
Business Day prior to the applicable Distribution Date in an amount equal to the
final distribution in respect of the Certificates. Upon such final deposit with
respect to the Trust Fund and the receipt by the Trustee of a Request for
Release therefor, the Trustee shall promptly release to the Servicer the
Mortgage Files for the Mortgage Loans.
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Upon presentation and surrender of the Certificates, the Trustee or any
Paying Agent shall cause to be distributed to Certificateholders of each Class
the amounts allocable to such Certificates held in the Distribution Account in
the order and priority set forth in Section 4.04 hereof on the final
Distribution Date and in proportion to their respective Percentage Interests.
In the event that any affected Certificateholders shall not surrender
Certificates for cancellation within six months after the date specified in the
above mentioned written notice, the Trustee or any Paying Agent shall give a
second written notice to the remaining Certificateholders to surrender their
Certificates for cancellation and receive the final distribution with respect
thereto. If within six months after the second notice all the applicable
Certificates shall not have been surrendered for cancellation, the Trustee or
any Paying Agent may take appropriate steps, or may appoint an 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 that remain a part of the Trust Fund. If within one year
after the second notice all Certificates shall not have been surrendered for
cancellation, the Class R Certificateholders shall be entitled to and, upon
written direction to the Trustee or any Paying Agent, shall receive all
unclaimed funds and other assets of the Trust Fund that remain subject hereto.
Upon payment to the Class R Certificateholders of such funds and assets, the
Trustee or any Paying Agent shall have no further duties or obligations with
respect thereto.
SECTION 9.03. Additional Termination Requirements.
(a) In the event the Servicer exercises its purchase option on both of
the Group I Mortgage Loans and the Group II Mortgage Loans as provided in
Section 9.01, the Trust Fund shall be terminated in accordance with the
following additional requirements, unless the Trustee has been supplied with an
Opinion of Counsel, at the expense of the Servicer, to the effect that the
failure of the Trust Fund to comply with the requirements of this Section 9.03
will not (i) result in the imposition of taxes on "prohibited transactions" of
any of the Lower-Tier REMIC, the Middle-Tier REMIC or the Upper-Tier REMIC as
defined in section 860F of the Code, or (ii) cause any of the Lower-Tier REMIC,
the Middle-Tier REMIC or the Upper-Tier REMIC to fail to qualify as a REMIC at
any time that any Certificates are outstanding:
(i) The Depositor shall establish a 90-day liquidation period
and notify the Trustee and any Paying Agent and the Servicer thereof,
which shall in turn specify the first day of such period in a statement
attached to the Trust Fund's final Tax Return pursuant to Treasury
Regulation Section 1.860F-1. The Depositor shall satisfy all the
requirements of a qualified liquidation under Section 860F of the Code
and any regulations thereunder, as evidenced by an Opinion of Counsel
obtained at the expense of the Servicer;
(ii) During such 90-day liquidation period, and at or prior to
the time of making the final payment on the Certificates, the Depositor
as agent of the Trustee shall sell all of the assets of the Trust Fund
for cash; and
(iii) At the time of the making of the final payment on the
Certificates, the Trustee, any Paying Agent or the Servicer shall
distribute or credit, or cause to be distributed or credited, to the
Class R Certificateholders all cash on hand (other than cash retained
to meet outstanding claims known to the Trustee), and the Trust Fund
shall terminate at that time, whereupon the Trustee and any Paying
Agent shall have no further duties or obligations with respect to sums
distributed or credited to the Class R Certificateholders.
(b) By their acceptance of the Certificates, the Holders thereof hereby
authorize the Depositor to specify the 90-day liquidation period for the Trust
Fund, which authorization shall be binding upon all successor
Certificateholders.
(c) The Servicer as agent for each REMIC hereby agrees to adopt and
sign such a plan of complete liquidation upon the written request of the
Depositor, and the receipt of the Opinion of Counsel referred to in Section 9.03
and to take such other action in connection therewith as may be reasonably
requested by the Depositor.
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ARTICLE X
MISCELLANEOUS PROVISIONS
SECTION 10.01. Amendment.
This Agreement may be amended from time to time by the Depositor, the
Servicer and the Trustee, without the consent of any of the Certificateholders
to cure any ambiguity, to correct or supplement any provisions herein, or to
make such other provisions with respect to matters or questions arising under
this Agreement, as shall not be inconsistent with any other provisions herein if
such action shall not, as evidenced by an Opinion of Counsel, adversely affect
in any material respect the interests of any Certificateholder; provided,
however, that any such amendment shall be deemed not to adversely affect in any
material respect the interests of the Certificateholders and no such Opinion of
Counsel shall be required if the Person requesting such amendment obtains a
letter from each Rating Agency stating that such amendment would not result in
the downgrading or withdrawal of the respective ratings then assigned to the
Certificates, it being understood and agreed that any such letter in and of
itself will not represent a determination as to the materiality of any such
amendment and will represent a determination only as to the credit issues
affecting any such rating.
Notwithstanding the foregoing, without the consent of the
Certificateholders, the Trustee, the Depositor and the Servicer may at any time
and from time to time amend this Agreement to modify, eliminate or add to any of
its provisions to such extent as shall be necessary or appropriate to maintain
the qualification of each of the Lower-Tier REMIC, the Middle-Tier REMIC and the
Upper-Tier REMIC as a REMIC under the Code or to avoid or minimize the risk of
the imposition of any tax on the Trust Fund pursuant to the Code that would be a
claim against the Trust Fund at any time prior to the final redemption of the
Certificates, provided that the Trustee has been provided an Opinion of Counsel,
which opinion shall be an expense of the party requesting such opinion but in
any case shall not be an expense of the Trustee or the Servicer, to the effect
that such action is necessary or appropriate to maintain such qualification or
to avoid or minimize the risk of the imposition of such a tax.
This Agreement may also be amended from time to time by the Depositor,
the Servicer and the Trustee and the Holders of each Class of Certificates
affected thereby evidencing not less than 66 2/3% of the Voting Rights of such
Class for the purpose of adding any provisions to or changing in any manner or
eliminating any of the provisions of this Agreement or of modifying in any
manner the rights of the Holders of Certificates; provided, however, that no
such amendment shall (i) reduce in any manner the amount of, or delay the timing
of, payments required to be distributed on any Certificate without the consent
of the Holder of such Certificate, (ii) adversely affect in any material respect
the interests of the Holders of any Class of Certificates in a manner other than
as described in (i), without the consent of the Holders of Certificates of such
Class evidencing 66 2/3% or more of the Voting Rights of such Class or (iii)
reduce the aforesaid percentages of Certificates the Holders of which are
required to consent to any such amendment without the consent of the Holders of
all such Certificates then outstanding.
Notwithstanding anything to the contrary in this Agreement, this
Agreement may be amended from time to time by the Depositor, the Servicer and
the Trustee with the consent of Certificateholders evidencing not less than
66 2/3% of the Voting Rights of each Class of Certificates (excluding the Voting
Rights of the Depositor, its Affiliates or its agents) for the purpose of
significantly changing the Permitted Activities of the Trust.
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Notwithstanding any contrary provision of this Agreement, the Trustee
shall not consent to any amendment to this Agreement unless it shall have first
received an Opinion of Counsel, which opinion shall be an expense of the party
requesting such amendment but in any case shall not be an expense of the
Trustee, to the effect that such amendment will not cause the imposition of any
tax on the Trust Fund or the Certificateholders or cause any of the Lower-Tier
REMIC, the Middle-Tier REMIC or the Upper-Tier REMIC to fail to qualify as a
REMIC at any time that any Certificates are outstanding.
Promptly after the execution of any amendment to this Agreement
requiring the consent of Certificateholders, the Trustee or upon the written
request of the Trustee to the Servicer, the Servicer shall furnish written
notification of the substance of such amendment to each Certificateholder and
each Rating Agency.
It shall not be necessary for the consent of Certificateholders under
this Section to approve the particular form of any proposed amendment, but it
shall be sufficient if such consent shall approve the substance thereof. The
manner of obtaining such consents and of evidencing the authorization of the
execution thereof by Certificateholders shall be subject to such reasonable
regulations as the Trustee may prescribe.
Nothing in this Agreement shall require the Trustee or the Servicer to
enter into an amendment without receiving an Opinion of Counsel, satisfactory to
the Trustee or the Servicer that (i) such amendment is permitted and is not
prohibited by this Agreement and that all requirements for amending this
Agreement have been complied with; and (ii) either (A) the amendment does not
adversely affect in any material respect the interests of any Certificateholder
or (B) the conclusion set forth in the immediately preceding clause (A) is not
required to be reached pursuant to this Section 10.01.
The Trustee may, but shall not be obligated to, enter into any
supplement, modification or waiver which affects its rights, duties or
obligations hereunder.
SECTION 10.02. Counterparts.
This Agreement may be executed simultaneously in any number of
counterparts, each of which counterparts shall be deemed to be an original, and
such counterparts shall constitute but one and the same instrument.
SECTION 10.03. Governing Law.
THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY
THE SUBSTANTIVE LAWS OF THE STATE OF NEW YORK APPLICABLE TO AGREEMENTS MADE AND
TO BE PERFORMED IN THE STATE OF NEW YORK AND THE OBLIGATIONS, RIGHTS AND
REMEDIES OF THE PARTIES HERETO AND THE CERTIFICATEHOLDERS SHALL BE DETERMINED IN
ACCORDANCE WITH SUCH LAWS WITHOUT REGARD TO THE CONFLICTS OF LAWS PRINCIPLES
THEREOF.
SECTION 10.04. Intention of Parties.
It is the express intent of the parties hereto that the conveyance of
the Mortgage Notes, Mortgages, assignments of Mortgages, title insurance
policies and any modifications, extensions and/or assumption agreements and
private mortgage insurance policies relating to the Mortgage Loans by the
Depositor to the Trustee be, and be construed as, an absolute sale thereof to
the Trustee. It is, further, not the intention of the parties that such
conveyance be deemed a pledge thereof by the Depositor to the Trustee. However,
in the event that, notwithstanding the intent of the parties, such assets are
held to be the property of the Depositor, or if for any other reason this
Agreement is held or deemed to create a security interest in such assets, then
(i) this Agreement shall be deemed to be a security agreement within the meaning
of the Uniform Commercial Code of the State of New York and (ii) the conveyance
provided for in this Agreement shall be deemed to be an assignment and a grant
by the Depositor to the Trustee, for the benefit of the Certificateholders, of a
security interest in all of the assets that constitute the Trust Fund, whether
now owned or hereafter acquired.
-114-
The Depositor for the benefit of the Certificateholders shall, to the
extent consistent with this Agreement, take such actions as may be necessary to
ensure that, if this Agreement were deemed to create a security interest in the
assets of the Trust Fund, such security interest would be deemed to be a
perfected security interest of first priority under applicable law and will be
maintained as such throughout the term of the Agreement. The Depositor shall
arrange for filing any Uniform Commercial Code continuation statements in
connection with any security interest granted or assigned to the Trustee for the
benefit of the Certificateholders.
SECTION 10.05. Notices.
(a) The Servicer shall use its best efforts to promptly provide notice
to each Rating Agency and the NIMs Insurer with respect to each of the following
of which it has actual knowledge:
(i) Any material change or amendment to this Agreement;
(ii) The occurrence of any Event of Default that has not been
cured;
(iii) The resignation or termination of the Servicer, the
Servicer or the Trustee and the appointment of any successor;
(iv) The repurchase or substitution of Mortgage Loans pursuant
to Sections 2.02, 2.03 and 3.12; and
(v) The final payment to Certificateholders.
The Servicer shall promptly furnish to each Rating Agency copies of the
following:
(i) Each report to Certificateholders described in Section
4.05;
(ii) Each annual statement as to compliance described in
Section 3.17; and
(iii) Each annual independent public accountants' servicing
report described in Section 3.18.
(b) All directions, demands and notices hereunder shall be in writing
and shall be deemed to have been duly given when delivered to (a) in the case of
the Depositor, Chase Funding, Inc., 000 Xxxx Xxxxxxxxx, 0xx Xxxxx Xxxxx,
Xxxxxxxxx Lake, New Jersey 07675, Attention: Structured Finance; (b) in the case
of the Trustee, Wachovia Bank, N.A., 000 Xxxxx Xxxxx Xxxxxx, 00xx Xxxxx,
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000-0000 (with a copy to JPMorgan Chase Bank, 4 New
Xxxx Xxxxx, 0xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000-0000, Attention: Chase Funding
Trust, Series 2004-2); (c) in the case of the Servicer, Chase Manhattan Mortgage
Corporation, 000 Xxxxxxxx Xxxxxx, Xxxxxx, Xxx Xxxxxx 00000, Attention:
Structured Finance (with a copy to JPMorgan Chase Bank, 4 New York Plaza, 6th
Floor, New York, New York 10004-2413, Attention: Chase Funding Trust, Series
2004-2); (d) in the case of the Rating Agencies, (i) Xxxxx'x Investors Service,
Inc., 00 Xxxxxx Xxxxxx, 0xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000; (ii) Standard &
Poor's, a division of The XxXxxx-Xxxx Companies, Inc., 00 Xxxxx Xxxxxx, Xxx
Xxxx, Xxx Xxxx 00000; and (iii) Fitch Ratings, Xxx Xxxxx Xxxxxx Xxxxx, Xxx Xxxx,
Xxx Xxxx 00000, and (e) in the case of the NIMs Insurer to such address provided
to the other parties hereto by the NIMs Insurer and in the case of any of the
foregoing Persons, such other addresses as may hereafter be furnished by any
such Persons to the other parties to this Agreement. Notices to
Certificateholders shall be deemed given when mailed, first class postage
prepaid, to their respective addresses appearing in the Certificate Register.
-115-
SECTION 10.06. Severability of Provisions.
If any one or more of the covenants, agreements, provisions or terms of
this Agreement shall be for any reason whatsoever held invalid, then such
covenants, agreements, provisions or terms shall be deemed severable from the
remaining covenants, agreements, provisions or terms of this Agreement and shall
in no way affect the validity or enforceability of the other provisions of this
Agreement or of the Certificates or the rights of the Holders thereof.
SECTION 10.07. Assignment.
Notwithstanding anything to the contrary contained herein, except as
provided pursuant to Section 6.02, this Agreement may not be assigned by the
Servicer without the prior written consent of the Trustee and Depositor.
SECTION 10.08. Limitation on Rights of Certificateholders.
The death or incapacity of any Certificateholder shall not operate to
terminate this Agreement or the Trust Fund, nor entitle such Certificateholder's
legal representative or heirs to claim an accounting or to take any action or
commence any proceeding in any court for a petition or winding up of the Trust
Fund, or otherwise affect the rights, obligations and liabilities of the parties
hereto or any of them.
No Certificateholder shall have any right to vote (except as provided
herein) or in any manner otherwise control the operation and management of the
Trust Fund, or the obligations of the parties hereto, nor shall anything herein
set forth or contained in the terms of the Certificates be construed so as to
constitute the Certificateholders from time to time as partners or members of an
association; nor shall any Certificateholder be under any liability to any third
party by reason of any action taken by the parties to this Agreement pursuant to
any provision hereof.
No Certificateholder shall have any right by virtue or by availing
itself of any provisions of this Agreement to institute any suit, action or
proceeding in equity or at law upon or under or with respect to this Agreement,
unless such Holder previously shall have given to the Trustee a written notice
of an Event of Default and of the continuance thereof, as hereinbefore provided,
the Holders of Certificates evidencing not less than 25% of the Voting Rights
evidenced by the Certificates shall also have made written request to 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, expenses, and liabilities to be incurred therein
or thereby, and 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; it being understood and intended, and being
expressly covenanted by each Certificateholder with every other
Certificateholder and the Trustee, that no one or more Holders of Certificates
shall have any right in any manner whatever by virtue or by availing itself or
themselves of any provisions of this Agreement to affect, disturb or prejudice
the rights of the Holders of any other of the Certificates and/or the NIMs
Insurer, or to obtain or seek to obtain priority over or preference to any other
such Holder and/or the NIMs Insurer or to enforce any right under this
Agreement, except in the manner herein provided and for the common benefit of
all Certificateholders. For the protection and enforcement of the provisions of
this Section 10.08, each and every Certificateholder and the Trustee shall be
entitled to such relief as can be given either at law or in equity.
-116-
SECTION 10.09. Inspection and Audit Rights.
The Servicer agrees that, on reasonable prior notice, it will permit
any representative of the Depositor or the Trustee during the Servicer's normal
business hours, to examine all the books of account, records, reports and other
papers of the Servicer relating to the Mortgage Loans, to make copies and
extracts therefrom, to cause such books to be audited by independent certified
public accountants selected by the Depositor or the Trustee and to discuss its
affairs, finances and accounts relating to the Mortgage Loans with its officers,
employees, agents, counsel and independent public accountants (and by this
provision the Servicer hereby authorizes such accountants to discuss with such
representative such affairs, finances and accounts), all at such reasonable
times and as often as may be reasonably requested. Any out-of-pocket expense
incident to the exercise by the Depositor or the Trustee of any right under this
Section 10.09 shall be borne by the party requesting such inspection; all other
such expenses shall be borne by the Servicer.
SECTION 10.10. Certificates Nonassessable and Fully Paid.
It is the intention of the Depositor that Certificateholders shall not
be personally liable for obligations of the Trust Fund, that the interests in
the Trust Fund represented by the Certificates shall be nonassessable for any
reason whatsoever, and that the Certificates, upon due authentication thereof by
the Authenticating Agent pursuant to this Agreement, are and shall be deemed
fully paid.
SECTION 10.11. Third Party Rights.
The NIMs Insurer shall be deemed a third-party beneficiary of this
Agreement to the same extent as if it were a party hereto, and shall have the
right to enforce the provisions of this Agreement.
SECTION 10.12. Additional Rights of the NIMs Insurer.
(a) Each party to this Agreement, any agent thereof and any successor
thereto shall furnish to the NIMs Insurer a copy of any notice, direction,
demand, opinion, schedule, list, certificate, report, statement, filing,
information, data or other communication provided by it or on its behalf to any
other Person pursuant to this Agreement at the same time, in the same form and
in the same manner as such communication is so provided and shall address or
cause such communication to be addressed to the NIMs Insurer in addition to any
other addressee thereof. Each Servicer shall cause the NIMs Insurer to be an
addressee of any report furnished in respect of the Servicer pursuant to
Section 3.18.
(b) Wherever in this Agreement there shall be a requirement that there
be no downgrade, reduction, withdrawal or qualification of or other effect on
the rating of any Class of Certificates by any Rating Agency as of any date,
there also shall be deemed to be a requirement that there be no such effect on
any class of notes issued pursuant to the Indenture and guaranteed by the NIMs
Insurer as of such date. In addition, unless there exists a continuance of any
failure by the NIMs Insurer to make a required payment under the policy insuring
the NIM Notes or there exists a proceeding in bankruptcy by or against the NIMs
Insurer (either such event, a "NIMs Insurer Default"), wherever in this
Agreement there shall be a requirement that any Person or any communication,
object or other matter be acceptable or satisfactory to or otherwise receive the
consent or other approval of any other Person (whether as a condition to the
eligibility of such Person to act in any capacity, as a condition to any
circumstance or state of affairs related to such matter, or otherwise), there
also shall be deemed to be a requirement that such Person or matter be approved
in writing by the NIMs Insurer, which approval shall not be unreasonably
withheld or delayed.
* * *
-117-
IN WITNESS WHEREOF, the Depositor, the Servicer and the Trustee have
caused their names to be signed hereto by their respective officers thereunto
duly authorized as of the day and year first above written.
CHASE FUNDING, INC.,
as Depositor
By:
----------------------------------------
Name: Xxxxxxx X. Xxxxxxx
Title: Vice President
CHASE MANHATTAN MORTGAGE CORPORATION,
as Servicer
By:
----------------------------------------
Name: Xxxxxxx X. Xxxxxxx
Title: Vice President
WACHOVIA BANK, N.A.,
not in its individual capacity,
but solely as Trustee
By:
----------------------------------------
Name: Xxxxxxxxx X. Xxxxxxxxxx
Title: Assistant Vice President
-118-
EXHIBIT A
FORM OF CLASS A, CLASS M AND CLASS B CERTIFICATES
[FOR USE WITH GROUP I CERTIFICATES:
SOLELY FOR FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE REPRESENTS A "REGULAR
INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT," AS THOSE TERMS ARE
DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL REVENUE CODE OF
1986, AS AMENDED.]
[FOR USE WITH GROUP II CERTIFICATES:
SOLELY FOR FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE REPRESENTS (I) A
"REGULAR INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT", AS THOSE
TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL
REVENUE CODE OF 1986, AS AMENDED, AND (II) RIGHTS TO PAYMENTS UNDER AN INTEREST
RATE CAP AGREEMENT.]
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN CHASE
FUNDING, INC. ("CHASE FUNDING"), THE SERVICER, OR THE TRUSTEE REFERRED TO BELOW
OR ANY OF THEIR AFFILIATES. NEITHER THIS CERTIFICATE, THE REMIC REGULAR INTEREST
REPRESENTED HEREBY NOR THE UNDERLYING MORTGAGE LOANS ARE GUARANTEED OR INSURED
BY CHASE FUNDING, CHASE MANHATTAN MORTGAGE CORPORATION, THE TRUSTEE OR BY ANY OF
THEIR AFFILIATES OR BY ANY GOVERNMENTAL AGENCY OR INSTRUMENTALITY.
FOLLOWING THE INITIAL ISSUANCE OF THE CERTIFICATES, THE PRINCIPAL BALANCE OF
THIS CERTIFICATE MAY BE DIFFERENT FROM THE ORIGINAL DENOMINATION SHOWN BELOW.
ANYONE ACQUIRING THIS CERTIFICATE MAY ASCERTAIN ITS CURRENT PRINCIPAL BALANCE BY
INQUIRY OF THE SERVICER.
CLASS IA-1 CERTIFICATE
Number: 04-2-IA-1-1 Original Denomination:
$
Cut-off Date: June 1, 2004 Latest Possible
Maturity Date: February 26, 2035
First Distribution Date: Aggregate Initial Certificate
July 26, 2004 Balance of all Class IA-1
Certificates: $
Pass-Through Rate: CUSIP:
A-1
CHASE FUNDING MORTGAGE LOAN ASSET-BACKED CERTIFICATE
Series 2004-2
evidencing an ownership interest in distributions allocable to the Class IA-1
Certificates with respect to a pool of conventional, sub-prime mortgage loans
formed and sold by
CHASE FUNDING, INC.
Unless this Certificate is presented by an authorized representative of
the Depository Trust Company, a New York corporation ("DTC"), to the Servicer
for registration of transfer, exchange or payment, and any certificate issued is
registered in the name of Cede & Co. or in such other name as is requested by an
authorized representative of DTC (and any payment is made to Cede & Co. or to
such other entity as is requested by an authorized representative of DTC), ANY
TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON
IS WRONGFUL inasmuch as the registered owner hereof, Cede & Co. has an interest
herein.
This certifies that CEDE & CO. is the registered owner of the ownership
interest (the "Ownership Interest") evidenced by this Certificate (obtained by
dividing the Original Denomination of this Certificate by the aggregate Initial
Certificate Balance of all Class IA-1 Certificates) in certain distributions
with respect to a pool of conventional, sub-prime mortgage loans (the "Mortgage
Loans") formed and sold by Chase Funding, Inc. (hereinafter called the
"Depositor"), and certain other property held in trust for the benefit of
Certificateholders (collectively, the "Trust Fund"). The Mortgage Loans are
serviced by Chase Manhattan Mortgage Corporation (the "Servicer") and are
secured by first mortgages on Mortgaged Properties. The Trust Fund was created
pursuant to a pooling and servicing agreement (the "Agreement"), dated as of
June 1, 2004, among the Depositor, the Servicer and Wachovia Bank, N.A., as
trustee (the "Trustee"), a summary of certain of the pertinent provisions of
which is set forth hereafter. To the extent not defined herein, the capitalized
terms used herein have the meanings assigned in the Agreement.
This Certificate is one of a duly authorized issue of Certificates,
designated as Chase Funding Mortgage Loan Asset-Backed Certificates, Series
2004-2, Class IA-1 (the "Class IA-1 Certificates") and is issued under and is
subject to the terms, provisions and conditions of the Agreement, to which
Agreement the Holder of this Certificate by virtue of the acceptance hereof
assents and by which Agreement such Holder is bound.
The Class A Certificates, the Class M Certificates, the Class B
Certificates, the Class L Certificates, the Class P Certificates, the Class C
Certificates and the Class R Certificate are collectively referred to herein as
the "Certificates."
Pursuant to the terms of the Agreement, the Paying Agent will
distribute from funds in the Distribution Account the amounts described in the
Agreement on the 25th day of each month or, if such 25th day is not a Business
Day, the Business Day immediately following (the "Distribution Date"),
commencing on July 26, 2004. Such distributions will be made to the Person in
whose name this Certificate is registered at the close of business on the last
Business Day of the month preceding the month in which such payment is made, or
if such last day is not a Business Day, the Business Day immediately preceding
such last day.
A-2
Distributions on this Certificate will be made either by check mailed
to the address of the Person entitled thereto, as such name and address shall
appear on the Certificate Register, or by wire transfer in immediately available
funds to the account of such Holder at a bank or other financial or depository
institution having appropriate facilities therefor, if such Holder has so
notified the Servicer in writing at least 5 Business Days prior to the first
Distribution Date for which distribution by wire transfer is to be made, and
such Holder's Certificates evidence an aggregate original principal balance of
not less than $1,000,000 or such Holder holds a 100% Percentage Interest of such
Class. Notwithstanding the above, the final distribution on this Certificate
will be made after due notice by the Servicer, of the pendency of such
distribution and only upon presentation and surrender of this Certificate at the
office of the Servicer or at such other office as may be designated by such
notice of final distribution.
The Servicer will maintain or cause to be maintained a Certificate
Register in which, subject to such reasonable regulations as it may prescribe,
the Servicer will provide for the registration of Certificates and of transfers
and exchanges of Certificates. Upon surrender for registration of transfer of
any Certificate at any office or agency of the Servicer, or, if an
Authenticating Agent has been appointed under the Agreement, the Authenticating
Agent, maintained for such purpose, the Servicer, or, if an Authenticating Agent
has been appointed under the Agreement, the Authenticating Agent, will, subject
to the limitations set forth in the Agreement, authenticate and deliver, in the
name of the designated transferee or transferees, a Certificate of a like class
and dated the date of authentication by the Authenticating Agent.
Notwithstanding the above, the final distribution on this Certificate will be
made after due notice by the Servicer, of the pendency of such distribution and
only upon presentation and surrender of this Certificate at the office or agency
appointed by the Servicer, for that purpose and specified in such notice of
final distribution.
Reference is hereby made to the further provisions of this Certificate
set forth on the reverse hereof which further provisions shall for all purposes
have the same effect as if set forth at this place.
Unless the certificate of authentication has been executed by the
Authenticating Agent, by manual signature, this Certificate shall not be
entitled to any benefit under the Agreement or be valid for any purpose.
A-3
IN WITNESS WHEREOF, the Depositor has caused this Class ____
Certificate to be duly executed.
Dated: CHASE FUNDING, INC.
By:________________________________
Authorized Officer
A-4
Dated: CERTIFICATE OF AUTHENTICATION
This is one of the Class___
Certificates referred to
in the within-mentioned
Agreement.
JPMORGAN CHASE BANK
as Authenticating Agent
By:_________________________________
Authorized Signatory
A-5
REVERSE OF CERTIFICATE
CHASE FUNDING MORTGAGE LOAN ASSET-BACKED CERTIFICATE
SERIES 2004-2
This Certificate is one of a duly authorized issue of Certificates,
designated as Chase Funding Mortgage Loan Asset-Backed Certificates, Series
2004-2, issued in one or more Classes of Class A Certificates, Class M
Certificates, Class B Certificates, Class L Certificates, Class P Certificates,
Class C Certificates and Class R Certificate, each evidencing an interest in
certain distributions with respect to a pool of conventional, sub-prime Mortgage
Loans formed and sold by the Depositor and certain other property conveyed by
the Depositor to the Trustee.
Following the initial issuance of the Certificates, the principal
balance of this Certificate will be different from the Original Denomination
shown above. Anyone acquiring this Certificate may ascertain its current
principal balance by inquiry of the Servicer.
The Holder, by its acceptance of this Certificate, agrees that it will
look solely to the Trust Fund and certain amounts resulting from credit
enhancements for payment hereunder and that the Trustee is not liable to the
Holders for any amount payable under this Certificate or the Agreement or,
except as expressly provided in the Agreement, subject to any liability under
the Agreement.
This Certificate does not purport to summarize the Agreement and
reference is made to the Agreement for the interests, rights and limitations of
rights, benefits, obligations and duties evidenced hereby, and the rights,
duties and immunities of the Trustee.
No service charge will be made to the Holder for any transfer or
exchange of the Certificate, but the Servicer may require payment of a sum
sufficient to cover any tax or governmental charge that may be imposed in
connection with any transfer or exchange of the Certificate. Prior to due
presentation of a Certificate for registration of transfer, the Depositor, the
Servicer and the Trustee may treat the person in whose name any Certificate is
registered as the owner of such Certificate and the Percentage Interest in the
Trust Fund evidenced thereby for the purpose of receiving distributions pursuant
to the Agreement and for all other purposes whatsoever, and neither the
Depositor, the Servicer nor the Trustee will be affected by notice to the
contrary.
The Agreement may be amended from time to time by the Depositor, the
Servicer and the Trustee, without the consent of any of the Certificateholders,
to cure any ambiguity, to correct or supplement any provisions therein which may
be inconsistent with the other provisions therein, to ensure continuing
treatment of each REMIC included in the Trust Fund as a REMIC, or to make any
other provisions with respect to matters or questions arising under the
Agreement which are not materially inconsistent with the provisions of the
Agreement, provided that such action does not, as evidenced by an Opinion of
Counsel, adversely affect in any material respect the interests of any
Certificateholder.
The Agreement may also be amended from time to time by the Depositor,
the Servicer and the Trustee with the consent of the Holders of Certificates
evidencing in the aggregate not less than 66 2/3% of the Percentage Interests of
each Class of Certificates affected thereby for the purpose of adding any
provisions to or changing in any manner or eliminating any of the provisions of
the Agreement or of modifying in any manner the rights of the Holders of
Certificates of such Class; provided, however, that no such amendment may (i)
reduce in any manner the amount of, or delay the timing of, payments received on
Mortgage Loans which are required to be distributed on any Certificate without
the consent of the Holder of such Certificate, (ii) adversely affect in any
material respect the interests of the Holders of any Class of Certificates in a
manner other than as described in clause (i), without the consent of the Holders
of Certificates of such Class evidencing 66 2/3% or more of the Voting Rights of
such Class or (iii) change the percentage specified in clause (ii) of the third
paragraph of Section 10.01 of the Agreement, without the consent of the Holders
of all Certificates of such Class then outstanding.
A-6
For federal income tax purposes, the Trust Fund includes three
segregated asset pools. The Depositor intends to make elections to treat each as
a "real estate mortgage investment conduit" (a "REMIC"). The Certificates (other
than the Class L Certificates, Class P Certificates and Class R Certificate)
will represent "regular interests" in the Upper-Tier REMIC. The Class R
Certificate will represent the sole class of "residual interest" in each of
three REMICs.
The respective obligations and responsibilities of the Depositor, the
Servicer and the Trustee under the Agreement will terminate upon (i) the later
of the final payment or other liquidation (or any Advance with respect thereto)
of the last Mortgage Loan or the disposition of all property acquired upon the
foreclosure or deed in lieu of foreclosure of any Mortgage Loan and the
remittance of all funds due thereunder; or (ii) at the option of the Servicer,
on any Distribution Date on which the aggregate Stated Principal Balances of the
Mortgage Loans in a Loan Group is less than or equal to 10% of the aggregate
Stated Principal Balance of the Mortgage Loans in such Loan Group as of the
Cut-Off Date, so long as the Servicer deposits or causes to be deposited in the
Distribution Account during the Principal Prepayment Period related to such
Distribution Date an amount equal to the sum of (i) 100% of the Stated Principal
Balance of each Mortgage Loan in such Loan Group (other than in respect of REO
Property), (ii) accrued interest thereon at the applicable Mortgage Rate, (iii)
the appraised value of any REO Property in such Loan Group (up to the Stated
Principal Balance of the related Mortgage Loan), such appraisal to be conducted
by an appraiser mutually agreed upon by the Depositor and the Trustee and (iv)
any unreimbursed Servicing Fees, Advances and Servicing Advances, and the
principal portion of any unreimbursed Advances, made on the Mortgage Loans in
such Loan Group prior to such termination; provided, however, that in no event
shall the trust created hereby continue beyond the earlier of (i) the expiration
of 21 years from the death of the last survivor of the descendants of Xxxxxx X.
Xxxxxxx, the late ambassador of the United States to the Court of St. James's,
living on the date hereof and (ii) the Latest Possible Maturity Date.
A-7
[FORM OF ASSIGNMENT]
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers
unto
(PLEASE INSERT SOCIAL SECURITY* OR TAXPAYER IDENTIFICATION NUMBER OF ASSIGNEE)
(Please Print or Type Name and Address of Assignee)
the within Certificate, and all rights thereunder, and hereby does irrevocably
constitute and appoint
______________________________Attorney to transfer the within Certificate on the
books kept for the registration thereof, with full power of substitution in the
premises.
Dated:
(Signature guaranty) NOTICE: The signature to this assignment
must correspond with the name as it
appears upon the face of the within
Certificate in every particular, without
alteration or enlargement or any change
whatever.
(*This information, which is voluntary, is being requested to ensure that the
assignee will not be subject to backup withholding under Section 3406 of the
Code.)
A-8
EXHIBIT B
FORM OF CLASS C CERTIFICATES
SOLELY FOR FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE REPRESENTS AN INTEREST
IN A GRANTOR TRUST THAT HOLDS A "REGULAR INTEREST" IN A "REAL ESTATE MORTGAGE
INVESTMENT CONDUIT," AS THOSE TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G
AND 860D OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED AND IS TREATED AS
HAVING ENTERED INTO CERTAIN INTEREST RATE CAP AGREEMENTS.
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN CHASE
FUNDING, INC. ("CHASE FUNDING"), THE SERVICER OR THE TRUSTEE REFERRED TO BELOW
OR ANY OF THEIR AFFILIATES. NEITHER THIS CERTIFICATE, THE REMIC REGULAR INTEREST
REPRESENTED HEREBY NOR THE UNDERLYING MORTGAGE LOANS ARE GUARANTEED OR INSURED
BY CHASE FUNDING, CHASE MANHATTAN MORTGAGE CORPORATION, THE TRUSTEE OR BY ANY OF
THEIR AFFILIATES OR BY ANY GOVERNMENTAL AGENCY OR INSTRUMENTALITY.
THIS CLASS C CERTIFICATE HAS NOT BEEN AND WILL NOT BE REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS OF ANY STATE AND MAY
NOT BE RESOLD OR TRANSFERRED UNLESS IT IS SOLD OR TRANSFERRED IN TRANSACTIONS
WHICH ARE EXEMPT FROM REGISTRATION UNDER SUCH ACT OR UNDER APPLICABLE STATE LAW
AND IS TRANSFERRED IN ACCORDANCE WITH THE PROVISIONS OF SECTION 5.02 OF THE
POOLING AND SERVICING AGREEMENT REFERRED TO HEREIN.
NO TRANSFER OF THIS CERTIFICATE SHALL BE MADE UNLESS THE TRUSTEE SHALL HAVE
RECEIVED EITHER (I) A REPRESENTATION LETTER FROM THE TRANSFEREE OF THIS
CERTIFICATE TO THE EFFECT THAT SUCH TRANSFEREE IS NOT AN EMPLOYEE BENEFIT PLAN
SUBJECT TO TITLE I OF THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS
AMENDED ("ERISA") OR SECTION 4975 OF THE INTERNAL REVENUE CODE OF 1986, AS
AMENDED (THE "CODE") OR ANY APPLICABLE FEDERAL, STATE OR LOCAL LAW MATERIALLY
SIMILAR TO THE FOREGOING PROVISIONS OF ERISA AND THE CODE ("SIMILAR LAW") (A
"PLAN"), AND IS NOT DIRECTLY OR INDIRECTLY PURCHASING ANY CERTIFICATE ON BEHALF
OF, AS INVESTMENT MANAGER OF, AS NAMED FIDUCIARY OF, AS TRUSTEE OF OR WITH
ASSETS OF A PLAN OR, IN THE CASE OF AN INSURANCE COMPANY, THE ASSETS OF ANY
SEPARATE ACCOUNTS TO EFFECT SUCH ACQUISITION OR (II) IF THIS CERTIFICATE IS
PRESENTED FOR REGISTRATION IN THE NAME OF A PLAN SUBJECT TO TITLE I OF ERISA, OR
SECTION 4975 OF THE CODE OR SIMILAR LAW (OR COMPARABLE PROVISIONS OF ANY
SUBSEQUENT ENACTMENTS), OR A TRUSTEE OF ANY SUCH PLAN, OR ANY OTHER PERSON WHO
IS USING THE ASSETS OF ANY SUCH PLAN TO EFFECT SUCH ACQUISITION, AN OPINION OF
COUNSEL TO THE EFFECT THAT THE PURCHASE AND HOLDING OF THIS CERTIFICATE WILL NOT
RESULT IN THE ASSETS OF THE TRUST FUND BEING DEEMED TO BE "PLAN ASSETS" PURSUANT
TO THE DEPARTMENT OF LABOR REGULATIONS SET FORTH IN 29 C.F.R. ss.2510.3-101 OR
TO BE SUBJECT TO THE FIDUCIARY RESPONSIBILITY PROVISIONS OF ERISA OR THE
PROHIBITED TRANSACTION PROVISIONS OF ERISA OR THE CODE OR CAUSE A VIOLATION
UNDER SIMILAR LAW, WILL NOT CONSTITUTE OR RESULT IN A PROHIBITED TRANSACTION
WITHIN THE MEANING OF title i OF ERISA OR SECTION 4975 OF THE CODE OR SIMILAR
LAW, AND WILL NOT SUBJECT THE TRUSTEE, THE SERVICER, THE COMPANY OR ANY OF THEIR
AFFILIATES TO ANY OBLIGATION OR LIABILITY (INCLUDING OBLIGATIONS OR LIABILITIES
UNDER ERISA OR SECTION 4975 OF THE CODE OR SIMILAR LAW) RELATING TO THE
CERTIFICATES, WHICH OPINION OF COUNSEL SHALL NOT BE AN EXPENSE OF THE TRUSTEE,
THE SERVICER OR THE COMPANY. FOR PURPOSES OF CLAUSE (I) ABOVE, SUCH
REPRESENTATION SHALL BE DEEMED TO HAVE BEEN MADE TO THE SERVICER BY THE
TRANSFEREE'S ACCEPTANCE OF THIS CERTIFICATE OR A BENEFICIAL INTEREST HEREIN
UNLESS THE SERVICER SHALL HAVE RECEIVED FROM THE TRANSFEREE AN ALTERNATIVE
REPRESENTATION ACCEPTABLE IN FORM AND SUBSTANCE TO THE SERVICER.
B-1
FOLLOWING THE INITIAL ISSUANCE OF THE CERTIFICATES, THE PRINCIPAL BALANCE OF
THIS CERTIFICATE MAY BE DIFFERENT FROM THE ORIGINAL DENOMINATION SHOWN BELOW.
ANYONE ACQUIRING THIS CERTIFICATE MAY ASCERTAIN ITS CURRENT PRINCIPAL BALANCE BY
INQUIRY OF THE SERVICER.
CLASS C CERTIFICATE
Number: 04-2-C-1 Original Denomination:
$
Cut-off Date: June 1, 2004 Latest Possible
Maturity Date: February 26, 2035
First Distribution Date: July 26, 2004 Aggregate Initial Certificate
Balance of all Class C
Certificates: $
Pass-Through Rate: Variable
B-2
CHASE FUNDING
MORTGAGE LOAN ASSET-BACKED CERTIFICATE
Series 2004-2
evidencing an ownership interest in distributions allocable to the Class C
Certificates with respect to a pool of conventional, sub-prime mortgage loans
formed and sold by
CHASE FUNDING, INC.
This certifies that ________________________________________ is the
registered owner of the ownership interest (the "Ownership Interest") evidenced
by this Certificate in certain distributions with respect to a pool of
conventional, sub-prime mortgage loans (the "Mortgage Loans") formed and sold by
Chase Funding, Inc. (hereinafter called the "Depositor"), and certain other
property held in trust for the benefit of Certificateholders (collectively, the
"Trust Fund"). The Mortgage Loans are serviced by Chase Manhattan Mortgage
Corporation (the "Servicer") and are secured by first mortgages on Mortgaged
Properties. The Trust Fund was created pursuant to a pooling and servicing
agreement (the "Agreement"), dated as of June 1, 2004, among the Depositor, the
Servicer and Wachovia Bank, N.A., as trustee (the "Trustee"), a summary of
certain of the pertinent provisions of which is set forth hereafter. To the
extent not defined herein, the capitalized terms used herein have the meanings
assigned in the Agreement.
This Certificate is one of a duly authorized issue of Certificates,
designated as Chase Funding Mortgage Loan Asset-Backed Certificates, Series
2004-2, Class C (the "Class C Certificates") and is issued under and is subject
to the terms, provisions and conditions of the Agreement, to which Agreement the
Holder of this Certificate by virtue of the acceptance hereof assents and by
which Agreement such Holder is bound.
The Class A Certificates, the Class M Certificates, the Class B
Certificates, the Class L Certificates, the Class P Certificates, the Class C
Certificates and the Class R Certificate are collectively referred to herein as
the "Certificates."
Pursuant to the terms of the Agreement, the Paying Agent will
distribute from funds in the Distribution Account the amounts described in the
Agreement on the 25th day of each month or, if such 25th day is not a Business
Day, the Business Day immediately following (the "Distribution Date"),
commencing on July 26, 2004. Such distributions will be made to the Person in
whose name this Certificate is registered at the close of business on the last
Business Day of the month preceding the month in which such payment is made, or
if such last day is not a Business Day, the Business Day immediately preceding
such last day.
Distributions on this Certificate will be made either by check mailed
to the address of the Person entitled thereto, as such name and address shall
appear on the Certificate Register, or by wire transfer in immediately available
funds to the account of such Holder at a bank or other financial or depository
institution having appropriate facilities therefor, if such Holder has so
notified the Servicer in writing at least 5 Business Days prior to the first
Distribution Date for which distribution by wire transfer is to be made, and
such Holder's Certificates evidence an aggregate original principal balance of
not less than $1,000,000 or such Holder holds a 100% Percentage Interest of such
Class. Notwithstanding the above, the final distribution on this Certificate
will be made after due notice by the Servicer, of the pendency of such
distribution and only upon presentation and surrender of this Certificate at the
office of the Servicer or at such other office as may be designated by such
notice of final distribution.
B-3
The Servicer will maintain or cause to be maintained a Certificate
Register in which, subject to such reasonable regulations as it may prescribe,
the Servicer will provide for the registration of Certificates and of transfers
and exchanges of Certificates. Upon surrender for registration of transfer of
any Certificate at any office or agency of the Servicer, or, if an
Authenticating Agent has been appointed under the Agreement, the Authenticating
Agent, maintained for such purpose, the Servicer, or, if an Authenticating Agent
has been appointed under the Agreement, the Authenticating Agent, will, subject
to the limitations set forth in the Agreement, authenticate and deliver, in the
name of the designated transferee or transferees, a Certificate of a like class
and dated the date of authentication by the Authenticating Agent.
Notwithstanding the above, the final distribution on this Certificate will be
made after due notice by the Servicer, of the pendency of such distribution and
only upon presentation and surrender of this Certificate at the office or agency
appointed by the Servicer, for that purpose and specified in such notice of
final distribution.
Reference is hereby made to the further provisions of this Certificate
set forth on the reverse hereof which further provisions shall for all purposes
have the same effect as if set forth at this place.
Unless the certificate of authentication has been executed by the
Authenticating Agent, by manual signature, this Certificate shall not be
entitled to any benefit under the Agreement or be valid for any purpose.
B-4
IN WITNESS WHEREOF, the Depositor has caused this Class C Certificate
to be duly executed.
Dated: CHASE FUNDING, INC.
By:______________________________
Authorized Officer
B-5
Dated: CERTIFICATE OF AUTHENTICATION
This is one of the Class C
Certificates referred to
in the within-mentioned
Agreement.
JPMORGAN CHASE BANK
as Authenticating Agent
By:______________________________
Authorized Signatory
B-6
REVERSE OF CERTIFICATE
CHASE FUNDING
MORTGAGE LOAN ASSET-BACKED CERTIFICATE
SERIES 2004-2
This Certificate is one of a duly authorized issue of Certificates,
designated as Chase Funding Mortgage Loan Asset-Backed Certificates, Series
2004-2, issued in one or more Classes of Class A Certificates, Class M
Certificates, Class B Certificates, Class L Certificates, Class P Certificates,
Class C Certificates and Class R Certificate, each evidencing an interest in
certain distributions with respect to a pool of conventional, sub-prime Mortgage
Loans formed and sold by the Depositor and certain other property conveyed by
the Depositor to the Trustee.
Following the initial issuance of the Certificates, the principal
balance of this Certificate will be different from the Original Denomination
shown above. Anyone acquiring this Certificate may ascertain its current
principal balance by inquiry of the Servicer.
The Holder, by its acceptance of this Certificate, agrees that it will
look solely to the Trust Fund and certain amounts resulting from credit
enhancements for payment hereunder and that the Trustee is not liable to the
Holders for any amount payable under this Certificate or the Agreement or,
except as expressly provided in the Agreement, subject to any liability under
the Agreement.
This Certificate does not purport to summarize the Agreement and
reference is made to the Agreement for the interests, rights and limitations of
rights, benefits, obligations and duties evidenced hereby, and the rights,
duties and immunities of the Trustee.
No service charge will be made to the Holder for any transfer or
exchange of the Certificate, but the Servicer may require payment of a sum
sufficient to cover any tax or governmental charge that may be imposed in
connection with any transfer or exchange of the Certificate. Prior to due
presentation of a Certificate for registration of transfer, the Depositor, the
Servicer and the Trustee may treat the person in whose name any Certificate is
registered as the owner of such Certificate and the Percentage Interest in the
Trust Fund evidenced thereby for the purpose of receiving distributions pursuant
to the Agreement and for all other purposes whatsoever, and neither the
Depositor, the Servicer nor the Trustee will be affected by notice to the
contrary.
The Agreement may be amended from time to time by the Depositor, the
Servicer and the Trustee, without the consent of any of the Certificateholders,
to cure any ambiguity, to correct or supplement any provisions therein which may
be inconsistent with the other provisions therein, to ensure continuing
treatment of each REMIC included in the Trust Fund as a REMIC, or to make any
other provisions with respect to matters or questions arising under the
Agreement which are not materially inconsistent with the provisions of the
Agreement, provided that such action does not, as evidenced by an Opinion of
Counsel, adversely affect in any material respect the interests of any
Certificateholder.
The Agreement may also be amended from time to time by the Depositor,
the Servicer and the Trustee with the consent of the Holders of Certificates
evidencing in the aggregate not less than 66 2/3% of the Percentage Interests of
each Class of Certificates affected thereby for the purpose of adding any
provisions to or changing in any manner or eliminating any of the provisions of
the Agreement or of modifying in any manner the rights of the Holders of
Certificates of such Class; provided, however, that no such amendment may (i)
reduce in any manner the amount of, or delay the timing of, payments received on
Mortgage Loans which are required to be distributed on any Certificate without
the consent of the Holder of such Certificate, (ii) adversely affect in any
material respect the interests of the Holders of any Class of Certificates in a
manner other than as described in clause (i), without the consent of the Holders
of Certificates of such Class evidencing 66 2/3% or more of the Voting Rights of
such Class or (iii) change the percentage specified in clause (ii) of the third
paragraph of Section 10.01 of the Agreement, without the consent of the Holders
of all Certificates of such Class then outstanding.
B-7
For federal income tax purposes, the Trust Fund includes three
segregated asset pools. The Depositor intends to make elections to treat each as
a "real estate mortgage investment conduit" (a "REMIC"). The Certificates (other
than the Class L Certificates, Class P Certificates and Class R Certificate)
will represent "regular interests" in the Upper-Tier REMIC. The Class R
Certificate will represent the sole class of "residual interest" in each of
three REMICs.
The respective obligations and responsibilities of the Depositor, the
Servicer and the Trustee under the Agreement will terminate upon (i) the later
of the final payment or other liquidation (or any Advance with respect thereto)
of the last Mortgage Loan or the disposition of all property acquired upon the
foreclosure or deed in lieu of foreclosure of any Mortgage Loan and the
remittance of all funds due thereunder; or (ii) at the option of the Servicer,
on any Distribution Date on which the aggregate Stated Principal Balances of the
Mortgage Loans in a Loan Group is less than or equal to 10% of the aggregate
Stated Principal Balance of the Mortgage Loans in such Loan Group as of the
Cut-Off Date, so long as the Servicer deposits or causes to be deposited in the
Distribution Account during the Principal Prepayment Period related to such
Distribution Date an amount equal to the sum of (i) 100% of the Stated Principal
Balance of each Mortgage Loan in the applicable Loan Group (other than in
respect of REO Property), (ii) accrued interest thereon at the applicable
Mortgage Rate, (iii) the appraised value of any REO Property in such Loan Group
(up to the Stated Principal Balance of the related Mortgage Loan), such
appraisal to be conducted by an appraiser mutually agreed upon by the Depositor
and the Trustee and (iv) any unreimbursed Servicing Fees, Advances and Servicing
Advances, and the principal portion of any unreimbursed Advances, made on the
Mortgage Loans in such Loan Group prior to such termination; provided, however,
that in no event shall the trust created hereby continue beyond the earlier of
(i) the expiration of 21 years from the death of the last survivor of the
descendants of Xxxxxx X. Xxxxxxx, the late ambassador of the United States to
the Court of St. James's, living on the date hereof and (ii) the Latest Possible
Maturity Date.
B-8
[FORM OF ASSIGNMENT]
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers
unto
(PLEASE INSERT SOCIAL SECURITY* OR TAXPAYER IDENTIFICATION NUMBER OF ASSIGNEE)
_______________________________________________________________________________
(Please Print or Type Name and Address of Assignee)
_______________________________________________________________________________
the within Certificate, and all rights thereunder, and hereby does irrevocably
constitute and appoint
______________________________Attorney to transfer the within Certificate on the
books kept for the registration thereof, with full power of substitution in the
premises.
Dated: ________________________________________
(Signature guaranty) NOTICE: The signature to this assignment
must correspond with the name as it
appears upon the face of the within
Certificate in every particular, without
alteration or enlargement or any change
whatever.
(*This information, which is voluntary, is being requested to ensure that the
assignee will not be subject to backup withholding under Section 3406 of the
Code.)
B-9
EXHIBIT C
FORM OF CLASS P CERTIFICATES
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN CHASE
FUNDING, INC. ("CHASE FUNDING"), THE SERVICER OR THE TRUSTEE REFERRED TO BELOW
OR ANY OF THEIR AFFILIATES. NEITHER THIS CERTIFICATE NOR THE UNDERLYING MORTGAGE
LOANS ARE GUARANTEED OR INSURED BY CHASE FUNDING, CHASE MANHATTAN MORTGAGE
CORPORATION, THE TRUSTEE OR BY ANY OF THEIR AFFILIATES OR BY ANY GOVERNMENTAL
AGENCY OR INSTRUMENTALITY.
THIS CLASS IP CERTIFICATE HAS NOT BEEN AND WILL NOT BE REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS OF ANY STATE AND MAY
NOT BE RESOLD OR TRANSFERRED UNLESS IT IS SOLD OR TRANSFERRED IN TRANSACTIONS
WHICH ARE EXEMPT FROM REGISTRATION UNDER SUCH ACT OR UNDER APPLICABLE STATE LAW
AND IS TRANSFERRED IN ACCORDANCE WITH THE PROVISIONS OF SECTION 5.02 OF THE
POOLING AND SERVICING AGREEMENT REFERRED TO HEREIN.
NO TRANSFER OF THIS CERTIFICATE SHALL BE MADE UNLESS THE TRUSTEE SHALL HAVE
RECEIVED EITHER (I) A REPRESENTATION LETTER FROM THE TRANSFEREE OF THIS
CERTIFICATE TO THE EFFECT THAT SUCH TRANSFEREE IS NOT AN EMPLOYEE BENEFIT PLAN
SUBJECT TO TITLE I OF THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS
AMENDED ("ERISA") OR SECTION 4975 OF THE INTERNAL REVENUE CODE OF 1986, AS
AMENDED (THE "CODE") OR ANY APPLICABLE FEDERAL, STATE OR LOCAL LAW MATERIALLY
SIMILAR TO THE FOREGOING PROVISIONS OF ERISA AND THE CODE ("SIMILAR LAW") (A
"PLAN"), AND IS NOT DIRECTLY OR INDIRECTLY PURCHASING ANY CERTIFICATE ON BEHALF
OF, AS INVESTMENT MANAGER OF, AS NAMED FIDUCIARY OF, AS TRUSTEE OF OR WITH
ASSETS OF A PLAN OR, IN THE CASE OF AN INSURANCE COMPANY, THE ASSETS OF ANY
SEPARATE ACCOUNTS TO EFFECT SUCH ACQUISITION OR (II) IF THIS CERTIFICATE IS
PRESENTED FOR REGISTRATION IN THE NAME OF A PLAN SUBJECT TO TITLE I OF ERISA, OR
SECTION 4975 OF THE CODE OR SIMILAR LAW (OR COMPARABLE PROVISIONS OF ANY
SUBSEQUENT ENACTMENTS), OR A TRUSTEE OF ANY SUCH PLAN, OR ANY OTHER PERSON WHO
IS USING THE ASSETS OF ANY SUCH PLAN TO EFFECT SUCH ACQUISITION, AN OPINION OF
COUNSEL TO THE EFFECT THAT THE PURCHASE AND HOLDING OF THIS CERTIFICATE WILL NOT
RESULT IN THE ASSETS OF THE TRUST FUND BEING DEEMED TO BE "PLAN ASSETS" PURSUANT
TO THE DEPARTMENT OF LABOR REGULATIONS SET FORTH IN 29 C.F.R. ss.2510.3-101 OR
TO BE SUBJECT TO THE FIDUCIARY RESPONSIBILITY PROVISIONS OF ERISA OR THE
PROHIBITED TRANSACTION PROVISIONS OF ERISA OR THE CODE OR CAUSE A VIOLATION
UNDER SIMILAR LAW, WILL NOT CONSTITUTE OR RESULT IN A PROHIBITED TRANSACTION
WITHIN THE MEANING OF TITLE i OF ERISA OR SECTION 4975 OF THE CODE OR SIMILAR
LAW, AND WILL NOT SUBJECT THE TRUSTEE, THE SERVICER, THE COMPANY OR ANY OF THEIR
AFFILIATES TO ANY OBLIGATION OR LIABILITY (INCLUDING OBLIGATIONS OR LIABILITIES
UNDER ERISA OR SECTION 4975 OF THE CODE OR SIMILAR LAW) RELATING TO THE
CERTIFICATES, WHICH OPINION OF COUNSEL SHALL NOT BE AN EXPENSE OF THE TRUSTEE,
THE SERVICER OR THE COMPANY. FOR PURPOSES OF CLAUSE (I) ABOVE, SUCH
REPRESENTATION SHALL BE DEEMED TO HAVE BEEN MADE TO THE Servicer BY THE
TRANSFEREE'S ACCEPTANCE OF THIS CERTIFICATE OR A BENEFICIAL INTEREST HEREIN
UNLESS THE servicer SHALL HAVE RECEIVED FROM THE TRANSFEREE AN ALTERNATIVE
REPRESENTATION ACCEPTABLE IN FORM AND SUBSTANCE TO THE SERVICER.
C-1
CLASS IP CERTIFICATE
Number: 04-2-IP-1 Percentage Interest: 100%
Cut-off Date: June 1, 2004 Latest Possible
Maturity Date: February 26, 2035
First Distribution Date: July 26, 2004
C-2
CHASE FUNDING MORTGAGE LOAN ASSET-BACKED CERTIFICATE
Series 2004-2
evidencing an ownership interest in distributions allocable to the Class IP
Certificates with respect to a pool of conventional, sub-prime mortgage loans
formed and sold by
CHASE FUNDING, INC.
This certifies that ___________________________________ is the
registered owner of the ownership interest (the "Ownership Interest") evidenced
by this Certificate in certain distributions with respect to a pool of
conventional, sub-prime mortgage loans (the "Mortgage Loans") formed and sold by
Chase Funding, Inc. (hereinafter called the "Depositor"), and certain other
property held in trust for the benefit of Certificateholders (collectively, the
"Trust Fund"). The Mortgage Loans are serviced by Chase Manhattan Mortgage
Corporation, (the "Servicer") and are secured by first mortgages on Mortgaged
Properties. The Trust Fund was created pursuant to a pooling and servicing
agreement (the "Agreement"), dated as of June 1, 2004, among the Depositor, the
Servicer and Wachovia Bank, N.A., as trustee (the "Trustee"), a summary of
certain of the pertinent provisions of which is set forth hereafter. To the
extent not defined herein, the capitalized terms used herein have the meanings
assigned in the Agreement.
This Certificate is one of a duly authorized issue of Certificates,
designated as Chase Funding Loan Mortgage Loan Asset-Backed Certificates, Series
2004-2, Class IP (the "Class IP Certificates") and is issued under and is
subject to the terms, provisions and conditions of the Agreement, to which
Agreement the Holder of this Certificate by virtue of the acceptance hereof
assents and by which Agreement such Holder is bound.
The Class A Certificates, the Class M Certificates, the Class B
Certificates, the Class L Certificates, the Class P Certificates, the Class C
Certificates and the Class R Certificate are collectively referred to herein as
the "Certificates."
Pursuant to the terms of the Agreement, the Paying Agent will
distribute from funds in the Distribution Account the amounts described in the
Agreement on the 25th day of each month or, if such 25th day is not a Business
Day, the Business Day immediately following (the "Distribution Date"),
commencing on July 26, 2004. Such distributions will be made to the Person in
whose name this Certificate is registered at the close of business on the last
Business Day of the month preceding the month in which such payment is made, or
if such last day is not a Business Day, the Business Day immediately preceding
such last day.
Distributions on this Certificate will be made either by check mailed
to the address of the Person entitled thereto, as such name and address shall
appear on the Certificate Register, or by wire transfer in immediately available
funds to the account of such Holder at a bank or other financial or depository
institution having appropriate facilities therefor, if such Holder has so
notified the Servicer in writing at least 5 Business Days prior to the first
Distribution Date for which distribution by wire transfer is to be made, and
such Holder's Certificates evidence an aggregate original principal balance of
not less than $1,000,000 or such Holder holds a 100% Percentage Interest of such
Class. Notwithstanding the above, the final distribution on this Certificate
will be made after due notice by the Servicer, of the pendency of such
distribution and only upon presentation and surrender of this Certificate at the
office of the Servicer or at such other office as may be designated by such
notice of final distribution.
C-3
The Servicer will maintain or cause to be maintained a Certificate
Register in which, subject to such reasonable regulations as it may prescribe,
the Servicer will provide for the registration of Certificates and of transfers
and exchanges of Certificates. Upon surrender for registration of transfer of
any Certificate at any office or agency of the Servicer, or, if an
Authenticating Agent has been appointed under the Agreement, the Authenticating
Agent, maintained for such purpose, the Servicer, or, if an Authenticating Agent
has been appointed under the Agreement, the Authenticating Agent, will, subject
to the limitations set forth in the Agreement, authenticate and deliver, in the
name of the designated transferee or transferees, a Certificate of a like class
and dated the date of authentication by the Authenticating Agent.
Notwithstanding the above, the final distribution on this Certificate will be
made after due notice by the Servicer, of the pendency of such distribution and
only upon presentation and surrender of this Certificate at the office or agency
appointed by the Servicer, for that purpose and specified in such notice of
final distribution.
Reference is hereby made to the further provisions of this Certificate
set forth on the reverse hereof which further provisions shall for all purposes
have the same effect as if set forth at this place.
Unless the certificate of authentication has been executed by the
Authenticating Agent, by manual signature, this Certificate shall not be
entitled to any benefit under the Agreement or be valid for any purpose.
C-4
IN WITNESS WHEREOF, the Depositor has caused this Class ___ Certificate
to be duly executed.
Dated: CHASE FUNDING, INC.
By:_____________________________
Authorized Officer
C-5
Dated: CERTIFICATE OF AUTHENTICATION
This is one of the Class ___
Certificates referred to
in the within-mentioned
Agreement.
JPMORGAN CHASE BANK
as Authenticating Agent
By:_______________________________
Authorized Signatory
C-6
REVERSE OF CERTIFICATE
CHASE FUNDING LOAN
MORTGAGE LOAN ASSET-BACKED CERTIFICATE
SERIES 2004-2
This Certificate is one of a duly authorized issue of Certificates,
designated as Chase Funding Loan Mortgage Loan Asset-Backed Certificates, Series
2004-2, issued in one or more Classes of Class A Certificates, Class M
Certificates, Class B Certificates, Class L Certificates, Class P Certificates,
Class C Certificates and Class R Certificate, each evidencing an interest in
certain distributions with respect to a pool of conventional, sub-prime Mortgage
Loans formed and sold by the Depositor and certain other property conveyed by
the Depositor to the Trustee.
The Holder, by its acceptance of this Certificate, agrees that it will
look solely to the Trust Fund and certain amounts resulting from credit
enhancements for payment hereunder and that the Trustee is not liable to the
Holders for any amount payable under this Certificate or the Agreement or,
except as expressly provided in the Agreement, subject to any liability under
the Agreement.
This Certificate does not purport to summarize the Agreement and
reference is made to the Agreement for the interests, rights and limitations of
rights, benefits, obligations and duties evidenced hereby, and the rights,
duties and immunities of the Trustee.
No service charge will be made to the Holder for any transfer or
exchange of the Certificate, but the Servicer may require payment of a sum
sufficient to cover any tax or governmental charge that may be imposed in
connection with any transfer or exchange of the Certificate. Prior to due
presentation of a Certificate for registration of transfer, the Depositor, the
Servicer and the Trustee may treat the person in whose name any Certificate is
registered as the owner of such Certificate and the Percentage Interest in the
Trust Fund evidenced thereby for the purpose of receiving distributions pursuant
to the Agreement and for all other purposes whatsoever, and neither the
Depositor, the Servicer nor the Trustee will be affected by notice to the
contrary.
The Agreement may be amended from time to time by the Depositor, the
Servicer and the Trustee, without the consent of any of the Certificateholders,
to cure any ambiguity, to correct or supplement any provisions therein which may
be inconsistent with the other provisions therein, to ensure continuing
treatment of each REMIC included in the Trust Fund as a REMIC, or to make any
other provisions with respect to matters or questions arising under the
Agreement which are not materially inconsistent with the provisions of the
Agreement, provided that such action does not, as evidenced by an Opinion of
Counsel, adversely affect in any material respect the interests of any
Certificateholder.
The Agreement may also be amended from time to time by the Depositor,
the Servicer and the Trustee with the consent of the Holders of Certificates
evidencing in the aggregate not less than 66 2/3% of the Percentage Interests of
each Class of Certificates affected thereby for the purpose of adding any
provisions to or changing in any manner or eliminating any of the provisions of
the Agreement or of modifying in any manner the rights of the Holders of
Certificates of such Class; provided, however, that no such amendment may (i)
reduce in any manner the amount of, or delay the timing of, payments received on
Mortgage Loans which are required to be distributed on any Certificate without
the consent of the Holder of such Certificate, (ii) adversely affect in any
material respect the interests of the Holders of any Class of Certificates in a
manner other than as described in clause (i), without the consent of the Holders
of Certificates of such Class evidencing 66 2/3% or more of the Voting Rights of
such Class or (iii) change the percentage specified in clause (ii) of the third
paragraph of Section 10.01 of the Agreement, without the consent of the Holders
of all Certificates of such Class then outstanding.
C-7
For federal income tax purposes, the Trust Fund includes three
segregated asset pools. The Depositor intends to make elections to treat each as
a "real estate mortgage investment conduit" (a "REMIC"). The Certificates (other
than the Class L Certificates, Class P Certificates and Class R Certificate)
will represent "regular interests" in the Upper-Tier REMIC. The Class R
Certificate will represent the sole class of "residual interest" in each of
three REMICs.
The respective obligations and responsibilities of the Depositor, the
Servicer and the Trustee under the Agreement will terminate upon (i) the later
of the final payment or other liquidation (or any Advance with respect thereto)
of the last Mortgage Loan or the disposition of all property acquired upon the
foreclosure or deed in lieu of foreclosure of any Mortgage Loan and the
remittance of all funds due thereunder; or (ii) at the option of the Servicer,
on any Distribution Date on which the aggregate Stated Principal Balances of the
Mortgage Loans in a Loan Group is less than or equal to 10% of the aggregate
Stated Principal Balance of the Mortgage Loans in such Loan Group as of the
Cut-Off Date, so long as the Servicer deposits or causes to be deposited in the
Distribution Account during the Principal Prepayment Period related to such
Distribution Date an amount equal to the sum of (i) 100% of the Stated Principal
Balance of each Mortgage Loan in the applicable Loan Group (other than in
respect of REO Property), (ii) accrued interest thereon at the applicable
Mortgage Rate, (iii) the appraised value of any REO Property in such Loan Group
(up to the Stated Principal Balance of the related Mortgage Loan), such
appraisal to be conducted by an appraiser mutually agreed upon by the Depositor
and the Trustee and (iv) any unreimbursed Servicing Fees, Advances and Servicing
Advances, and the principal portion of any unreimbursed Advances, made on the
Mortgage Loans in such Loan Group prior to such termination; provided, however,
that in no event shall the trust created hereby continue beyond the earlier of
(i) the expiration of 21 years from the death of the last survivor of the
descendants of Xxxxxx X. Xxxxxxx, the late ambassador of the United States to
the Court of St. James's, living on the date hereof and (ii) the Latest Possible
Maturity Date.
C-8
[FORM OF ASSIGNMENT]
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers
unto
(PLEASE INSERT SOCIAL SECURITY* OR TAXPAYER IDENTIFICATION NUMBER OF ASSIGNEE)
_______________________________________________________________________________
(Please Print or Type Name and Address of Assignee)
_______________________________________________________________________________
the within Certificate, and all rights thereunder, and hereby does irrevocably
constitute and appoint
______________________________Attorney to transfer the within Certificate on the
books kept for the registration thereof, with full power of substitution in the
premises.
Dated: ________________________________________
(Signature guaranty) NOTICE: The signature to this assignment
must correspond with the name as it
appears upon the face of the within
Certificate in every particular, without
alteration or enlargement or any change
whatever.
(*This information, which is voluntary, is being requested to ensure that the
assignee will not be subject to backup withholding under Section 3406 of the
Code.)
C-9
EXHIBIT D
FORM OF CLASS R CERTIFICATE
SOLELY FOR FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A "RESIDUAL
INTEREST" IN EACH OF THREE "REAL ESTATE MORTGAGE INVESTMENT CONDUITS," AS THOSE
TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL
REVENUE CODE OF 1986, AS AMENDED (THE "CODE").
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN CHASE
FUNDING, INC. ("CHASE FUNDING"), THE SERVICER OR THE TRUSTEE REFERRED TO BELOW
OR ANY OF THEIR AFFILIATES. NEITHER THIS CERTIFICATE, THE REMIC RESIDUAL
INTERESTS REPRESENTED HEREBY NOR THE UNDERLYING MORTGAGE LOANS ARE GUARANTEED OR
INSURED BY CHASE FUNDING, CHASE MANHATTAN MORTGAGE CORPORATION, THE TRUSTEE OR
BY ANY OF THEIR AFFILIATES OR BY ANY GOVERNMENTAL AGENCY OR INSTRUMENTALITY.
THIS CLASS R CERTIFICATE HAS NOT BEEN AND WILL NOT BE REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS OF ANY STATE AND MAY
NOT BE RESOLD OR TRANSFERRED UNLESS IT IS SOLD OR TRANSFERRED IN TRANSACTIONS
WHICH ARE EXEMPT FROM REGISTRATION UNDER SUCH ACT OR UNDER APPLICABLE STATE LAW
AND IS TRANSFERRED IN ACCORDANCE WITH THE PROVISIONS OF SECTION 5.02 OF THE
POOLING AND SERVICING AGREEMENT REFERRED TO HEREIN.
NO TRANSFER OF THIS CERTIFICATE SHALL BE MADE UNLESS THE TRUSTEE SHALL HAVE
RECEIVED A REPRESENTATION LETTER IN AcCORDANCE WITH SECTION 5.02 of the POOLING
AND SERVICING AGREEMENT REFERRED TO HEREIN FROM THE TRANSFEREE OF THIS
CERTIFICATE TO THE EFFECT THAT SUCH TRANSFEREE IS NOT AN EMPLOYEE BENEFIT PLAN
SUBJECT TO TITLE I OF THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS
AMENDED ("ERISA") OR SECTION 4975 OF THE CODE OR ANY APPLICABLE FEDERAL, STATE
OR LOCAL LAW MATERIALLY SIMILAR TO THE FOREGOING PROVISIONS OF ERISA AND THE
CODE (a "plan"), AND IS NOT DIRECTLY OR INDIRECTLY PURCHASING ANY CERTIFICATE ON
BEHALF OF, AS INVESTMENT MANAGER OF, AS NAMED FIDUCIARY OF, AS TRUSTEE OF OR
WITH ASSETS OF A PLAN.
CLASS R CERTIFICATE
Number: 04-2-R-1 Percentage Interest: 100%
Cut-off Date: June 1, 2004 Pass-Through Rate: Variable
First Distribution Date: July 26, 2004
D-1
CHASE FUNDING
MORTGAGE LOAN ASSET-BACKED CERTIFICATE
Series 2004-2
evidencing an ownership interest in distributions allocable to the Class R
Certificate with respect to a pool of conventional one- to four-family mortgage
loans formed and sold by
CHASE FUNDING, INC.
This certifies that ________________________________ is the registered
owner of the ownership interest (the "Ownership Interest") evidenced by this
Certificate (indicated by the Percentage Interest set forth on the face of this
Certificate) in certain distributions with respect to a pool of conventional,
sub-prime mortgage loans (the "Mortgage Loans") formed and sold by Chase
Funding, Inc. (hereinafter called the "Depositor"), and certain other property
held in trust for the benefit of Certificateholders (collectively, the "Trust
Fund"). The Mortgage Loans are serviced by Chase Manhattan Mortgage Corporation
(the "Servicer") and are secured by first mortgages on Mortgaged Properties. The
Trust Fund was created pursuant to a pooling and servicing agreement (the
"Agreement"), dated as of June 1, 2004 among the Depositor, the Servicer and
Wachovia Bank, N.A., as trustee (the "Trustee"), a summary of certain of the
pertinent provisions of which is set forth hereafter. To the extent not defined
herein, the capitalized terms used herein have the meanings assigned in the
Agreement.
This Certificate is one of a duly authorized issue of Certificates,
designated as Chase Funding Mortgage Loan Asset-Backed Certificates, Series
2004-2, Class R (the "Class R Certificate") and is issued under and is subject
to the terms, provisions and conditions of the Agreement, to which Agreement the
Holder of this Certificate by virtue of the acceptance hereof assents and by
which Agreement such Holder is bound.
The Class A Certificates, the Class M Certificates, the Class B
Certificates, the Class L Certificates, the Class P Certificates, the Class C
Certificates and the Class R Certificate are collectively referred to herein as
the "Certificates."
Pursuant to the terms of the Agreement, the Paying Agent will
distribute from funds in the Distribution Account the amounts described in the
Agreement on the 25th day of each month or, if such 25th day is not a Business
Day, the Business Day immediately following (the "Distribution Date"),
commencing on July 26, 2004. Such distributions will be made to the Person in
whose name this Certificate is registered at the close of business on the last
Business Day of the month preceding the month in which such payment is made, or
if such last day is not a Business Day, the Business Day immediately preceding
such last day.
Distributions on this Certificate will be made either by check mailed
to the address of the Person entitled thereto, as such name and address shall
appear on the Certificate Register, or by wire transfer in immediately available
funds to the account of such Holder at a bank or other financial or depository
institution having appropriate facilities therefor, if such Holder has so
notified the Paying Agent in writing at least 5 Business Days prior to the first
Distribution Date for which distribution by wire transfer is to be made, and
such Holder's Certificates evidence an aggregate original principal balance of
not less than $1,000,000 or such Holder holds a 100% Percentage Interest of such
Class. Notwithstanding the above, the final distribution on this Certificate
will be made after due notice by the Servicer of the pendency of such
distribution and only upon presentation and surrender of this Certificate at the
office of the Servicer or at such other office as may be designated by such
notice of final distribution.
D-2
The Servicer will maintain or cause to be maintained a Certificate
Register in which, subject to such reasonable regulations as it may prescribe,
the Servicer will provide for the registration of Certificates and of transfers
and exchanges of Certificates. Upon surrender for registration of transfer of
any Certificate at any office or agency of the Servicer, or, if an
Authenticating has been appointed under the Agreement, the Authenticating Agent,
maintained for such purpose, the Servicer, or, if an Authenticating Agent has
been appointed under the Agreement, the Authenticating Agent, will, subject to
the limitations set forth in the Agreement, authenticate and deliver, in the
name of the designated transferee or transferees, a Certificate of a like class
and dated the date of authentication by the Authenticating Agent.
Notwithstanding the above, the final distribution on this Certificate will be
made after due notice by the Servicer of the pendency of such distribution and
only upon presentation and surrender of this Certificate at the office or agency
appointed by the Servicer, for that purpose and specified in such notice of
final distribution.
Reference is hereby made to the further provisions of this Certificate
set forth on the reverse hereof which further provisions shall for all purposes
have the same effect as if set forth at this place.
Unless the certificate of authentication has been executed by the
Authenticating Agent, by manual signature, this Certificate shall not be
entitled to any benefit under the Agreement or be valid for any purpose.
D-3
IN WITNESS WHEREOF, the Depositor has caused this Class R Certificate
to be duly executed.
Dated: CHASE FUNDING, INC.
By:_____________________________
Authorized Officer
D-4
Dated: CERTIFICATE OF AUTHENTICATION
This is one of the Class R
Certificates referred to
in the within-mentioned
Agreement.
JPMORGAN CHASE BANK
as Authenticating Agent
By:______________________________
Authorized Signatory
D-5
REVERSE OF CERTIFICATE
CHASE FUNDING
MORTGAGE LOAN ASSET-BACKED CERTIFICATE
SERIES 2004-2
This Certificate is one of a duly authorized issue of Certificates,
designated as Chase Funding Mortgage Loan Asset-Backed Certificates, Series
2004-2, issued in one or more Classes of Class A Certificates, Class M
Certificates, Class B Certificates, Class L Certificates, Class P Certificates,
Class C Certificates and Class R Certificate, each evidencing an interest in
certain distributions with respect to a pool of conventional, sub-prime Mortgage
Loans formed and sold by the Depositor and certain other property conveyed by
the Depositor to the Trustee.
The Holder, by its acceptance of this Certificate, agrees that it will
look solely to the Trust Fund and certain amounts resulting from credit
enhancements for payment hereunder and that the Trustee is not liable to the
Holders for any amount payable under this Certificate or the Agreement or,
except as expressly provided in the Agreement, subject to any liability under
the Agreement.
This Certificate does not purport to summarize the Agreement and
reference is made to the Agreement for the interests, rights and limitations of
rights, benefits, obligations and duties evidenced hereby, and the rights,
duties and immunities of the Trustee.
No service charge will be made to the Holder for any transfer or
exchange of the Certificate, but the Trustee, or, or, if an Authenticating Agent
has been appointed under the Agreement, the Authenticating Agent, may require
payment of a sum sufficient to cover any tax or governmental charge that may be
imposed in connection with any transfer or exchange of the Certificate. Prior to
due presentation of a Certificate for registration of transfer, the Depositor,
the Servicer and the Trustee may treat the person in whose name any Certificate
is registered as the owner of such Certificate and the Percentage Interest in
the Trust Fund evidenced thereby for the purpose of receiving distributions
pursuant to the Agreement and for all other purposes whatsoever, and neither the
Depositor, the Servicer nor the Trustee will be affected by notice to the
contrary.
The Agreement may be amended from time to time by the Depositor, the
Servicer, and the Trustee, without the consent of any of the Certificateholders,
to cure any ambiguity, to correct or supplement any provisions therein which may
be inconsistent with the other provisions therein, to ensure continuing
treatment of each REMIC included in the Trust Fund as a REMIC, or to make any
other provisions with respect to matters or questions arising under the
Agreement which are not materially inconsistent with the provisions of the
Agreement, provided that such action does not, as evidenced by an Opinion of
Counsel, adversely affect in any material respect the interests of any
Certificateholder.
The Agreement may also be amended from time to time by the Depositor,
the Servicer, and the Trustee with the consent of the Holders of Certificates
evidencing in the aggregate not less than 66 2/3% of the Percentage Interests of
each Class of Certificates affected thereby for the purpose of adding any
provisions to or changing in any manner or eliminating any of the provisions of
the Agreement or of modifying in any manner the rights of the Holders of
Certificates of such Class; provided, however, that no such amendment may (i)
reduce in any manner the amount of, or delay the timing of, payments received on
Mortgage Loans which are required to be distributed on any Certificate without
the consent of the Holder of such Certificate, (ii) adversely affect in any
material respect the interests of the Holders of any Class of Certificates in a
manner other than as described in clause (i), without the consent of the Holders
of Certificates of such Class evidencing 66 2/3% or more of the Voting Rights of
such Class or (iii) change the percentage specified in clause (ii) of the first
paragraph of Section 10.01 of the Agreement, without the consent of the Holders
of all Certificates of such Class then outstanding.
D-6
For federal income tax purposes, the Trust Fund includes three
segregated asset pools. The Depositor intends to make elections to treat each as
a "real estate mortgage investment conduit" (a "REMIC"). The Certificates (other
than the Class L Certificates, Class P Certificates and Class R Certificate)
will represent "regular interests" in the Upper-Tier REMIC. The Class R
Certificate will represent the sole class of "residual interest" in each of
three REMICs.
The respective obligations and responsibilities of the Depositor, the
Servicer and the Trustee under the Agreement will terminate upon (i) the later
of the final payment or other liquidation (or any Advance with respect thereto)
of the last Mortgage Loan or the disposition of all property acquired upon the
foreclosure or deed in lieu of foreclosure of any Mortgage Loan and the
remittance of all funds due thereunder; or (ii) at the option of the Servicer,
on any Distribution Date on which the aggregate Stated Principal Balances of the
Mortgage Loans in a Loan Group is less than or equal to 10% of the aggregate
Stated Principal Balance of the Mortgage Loans in such Loan Group as of the
Cut-Off Date, so long as the Servicer deposits or causes to be deposited in the
Distribution Account during the Principal Prepayment Period related to such
Distribution Date an amount equal to the sum of (i) 100% of the Stated Principal
Balance of each Mortgage Loan in such Loan Group (other than in respect of REO
Property), (ii) accrued interest thereon at the applicable Mortgage Rate, (iii)
the appraised value of any REO Property in such Loan Group (up to the Stated
Principal Balance of the related Mortgage Loan), such appraisal to be conducted
by an appraiser mutually agreed upon by the Depositor and the Trustee and (iv)
any unreimbursed Servicing Fees, Advances and Servicing Advances, and the
principal portion of any unreimbursed Advances, made on the Mortgage Loans in
such Loan Group prior to such termination; provided, however, that in no event
shall the trust created hereby continue beyond the earlier of (i) the expiration
of 21 years from the death of the last survivor of the descendants of Xxxxxx X.
Xxxxxxx, the late ambassador of the United States to the Court of St. James's,
living on the date hereof and (ii) the Latest Possible Maturity Date.
D-7
[FORM OF ASSIGNMENT]
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers
unto
(PLEASE INSERT SOCIAL SECURITY* OR TAXPAYER IDENTIFICATION NUMBER OF ASSIGNEE)
_______________________________________________________________________________
(Please Print or Type Name and Address of Assignee)
_______________________________________________________________________________
the within Certificate, and all rights thereunder, and hereby does irrevocably
constitute and appoint
______________________________Attorney to transfer the within Certificate on the
books kept for the registration thereof, with full power of substitution in the
premises.
Dated: ________________________________________
(Signature guaranty) NOTICE: The signature to this assignment
must correspond with the name as it
appears upon the face of the within
Certificate in every particular, without
alteration or enlargement or any change
whatever.
(*This information, which is voluntary, is being requested to ensure that the
assignee will not be subject to backup withholding under Section 3406 of the
Code.)
D-8
EXHIBIT E
FORM OF CLASS L CERTIFICATES
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN CHASE
FUNDING, INC. ("CHASE FUNDING"), THE SERVICER OR THE TRUSTEE REFERRED TO BELOW
OR ANY OF THEIR AFFILIATES. NEITHER THIS CERTIFICATE NOR THE UNDERLYING MORTGAGE
LOANS ARE GUARANTEED OR INSURED BY CHASE FUNDING, CHASE MANHATTAN MORTGAGE
CORPORATION, THE TRUSTEE OR BY ANY OF THEIR AFFILIATES OR BY ANY GOVERNMENTAL
AGENCY OR INSTRUMENTALITY.
THIS CLASS IL CERTIFICATE HAS NOT BEEN AND WILL NOT BE REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS OF ANY STATE AND MAY
NOT BE RESOLD OR TRANSFERRED UNLESS IT IS SOLD OR TRANSFERRED IN TRANSACTIONS
WHICH ARE EXEMPT FROM REGISTRATION UNDER SUCH ACT OR UNDER APPLICABLE STATE LAW
AND IS TRANSFERRED IN ACCORDANCE WITH THE PROVISIONS OF SECTION 5.02 OF THE
POOLING AND SERVICING AGREEMENT REFERRED TO HEREIN.
NO TRANSFER OF THIS CERTIFICATE SHALL BE MADE UNLESS THE TRUSTEE SHALL HAVE
RECEIVED EITHER (I) A REPRESENTATION LETTER FROM THE TRANSFEREE OF THIS
CERTIFICATE TO THE EFFECT THAT SUCH TRANSFEREE IS NOT AN EMPLOYEE BENEFIT PLAN
SUBJECT TO TITLE I OF THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS
AMENDED ("ERISA") OR SECTION 4975 OF THE INTERNAL REVENUE CODE OF 1986, AS
AMENDED (THE "CODE") OR ANY APPLICABLE FEDERAL, STATE OR LOCAL LAW MATERIALLY
SIMILAR TO THE FOREGOING PROVISIONS OF ERISA AND THE CODE ("SIMILAR LAW") (A
"PLAN"), AND IS NOT DIRECTLY OR INDIRECTLY PURCHASING ANY CERTIFICATE ON BEHALF
OF, AS INVESTMENT MANAGER OF, AS NAMED FIDUCIARY OF, AS TRUSTEE OF OR WITH
ASSETS OF A PLAN OR, IN THE CASE OF AN INSURANCE COMPANY, THE ASSETS OF ANY
SEPARATE ACCOUNTS TO EFFECT SUCH ACQUISITION OR (II) IF THIS CERTIFICATE IS
PRESENTED FOR REGISTRATION IN THE NAME OF A PLAN SUBJECT TO TITLE I OF ERISA, OR
SECTION 4975 OF THE CODE OR SIMILAR LAW (OR COMPARABLE PROVISIONS OF ANY
SUBSEQUENT ENACTMENTS), OR A TRUSTEE OF ANY SUCH PLAN, OR ANY OTHER PERSON WHO
IS USING THE ASSETS OF ANY SUCH PLAN TO EFFECT SUCH ACQUISITION, AN OPINION OF
COUNSEL TO THE EFFECT THAT THE PURCHASE AND HOLDING OF THIS CERTIFICATE WILL NOT
RESULT IN THE ASSETS OF THE TRUST FUND BEING DEEMED TO BE "PLAN ASSETS" PURSUANT
TO THE DEPARTMENT OF LABOR REGULATIONS SET FORTH IN 29 C.F.R. ss.2510.3-101 OR
TO BE SUBJECT TO THE FIDUCIARY RESPONSIBILITY PROVISIONS OF ERISA OR THE
PROHIBITED TRANSACTION PROVISIONS OF ERISA OR THE CODE OR CAUSE A VIOLATION
UNDER SIMILAR LAW, WILL NOT CONSTITUTE OR RESULT IN A PROHIBITED TRANSACTION
WITHIN THE MEANING OF title i OF ERISA OR SECTION 4975 OF THE CODE OR SIMILAR
LAW, AND WILL NOT SUBJECT THE TRUSTEE, THE SERVICER, THE COMPANY OR ANY OF THEIR
AFFILIATES TO ANY OBLIGATION OR LIABILITY (INCLUDING OBLIGATIONS OR LIABILITIES
UNDER ERISA OR SECTION 4975 OF THE CODE OR SIMILAR LAW) RELATING TO THE
CERTIFICATES, WHICH OPINION OF COUNSEL SHALL NOT BE AN EXPENSE OF THE TRUSTEE,
THE SERVICER OR THE COMPANY. FOR PURPOSES OF CLAUSE (I) ABOVE, SUCH
REPRESENTATION SHALL BE DEEMED TO HAVE BEEN MADE TO THE SERVICER BY THE
TRANSFEREE'S ACCEPTANCE OF THIS CERTIFICATE OR A BENEFICIAL INTEREST HEREIN
UNLESS THE SERVICER SHALL HAVE RECEIVED FROM THE TRANSFEREE AN ALTERNATIVE
REPRESENTATION ACCEPTABLE IN FORM AND SUBSTANCE TO THE SERVICER.
E-1
CLASS IL CERTIFICATE
Number: 04-2-IL-1 Percentage Interest:
100%
Cut-off Date: June 1, 2004 Latest Possible
Maturity Date: February 26, 2035
First Distribution Date: July 26, 2004
E-2
CHASE FUNDING
MORTGAGE LOAN ASSET-BACKED CERTIFICATE
Series 2004-2
evidencing an ownership interest in distributions allocable to the Class IL
Certificates with respect to a pool of conventional, sub-prime mortgage loans
formed and sold by
CHASE FUNDING, INC.
This certifies that ______________________________ is the registered
owner of the ownership interest (the "Ownership Interest") evidenced by this
Certificate in certain distributions with respect to a pool of conventional,
sub-prime mortgage loans (the "Mortgage Loans") formed and sold by Chase
Funding, Inc. (hereinafter called the "Depositor"), and certain other property
held in trust for the benefit of Certificateholders (collectively, the "Trust
Fund"). The Mortgage Loans are serviced by Chase Manhattan Mortgage Corporation
(the "Servicer"), and are secured by first mortgages on Mortgaged Properties.
The Trust Fund was created pursuant to a pooling and servicing agreement (the
"Agreement"), dated as of June 1, 2004, among the Depositor, the Servicer and
Wachovia Bank, N.A., as trustee (the "Trustee"), a summary of certain of the
pertinent provisions of which is set forth hereafter. To the extent not defined
herein, the capitalized terms used herein have the meanings assigned in the
Agreement.
This Certificate is one of a duly authorized issue of Certificates,
designated as Chase Funding Mortgage Loan Asset-Backed Certificates, Series
2004-2, Class IL (the "Class IL Certificates") and is issued under and is
subject to the terms, provisions and conditions of the Agreement, to which
Agreement the Holder of this Certificate by virtue of the acceptance hereof
assents and by which Agreement such Holder is bound.
The Class A Certificates, the Class M Certificates, the Class B
Certificates, the Class L Certificates, the Class P Certificates, the Class C
Certificates and the Class R Certificate are collectively referred to herein as
the "Certificates."
Pursuant to the terms of the Agreement, the Paying Agent will
distribute from funds in the Distribution Account the amounts described in the
Agreement on the 25th day of each month or, if such 25th day is not a Business
Day, the Business Day immediately following (the "Distribution Date"),
commencing on July 26, 2004. Such distributions will be made to the Person in
whose name this Certificate is registered at the close of business on the last
Business Day of the month preceding the month in which such payment is made, or
if such last day is not a Business Day, the Business Day immediately preceding
such last day.
Distributions on this Certificate will be made either by check mailed
to the address of the Person entitled thereto, as such name and address shall
appear on the Certificate Register, or by wire transfer in immediately available
funds to the account of such Holder at a bank or other financial or depository
institution having appropriate facilities therefor, if such Holder has so
notified the Servicer in writing at least 5 Business Days prior to the first
Distribution Date for which distribution by wire transfer is to be made, and
such Holder's Certificates evidence an aggregate original principal balance of
not less than $1,000,000 or such Holder holds a 100% Percentage Interest of such
Class. Notwithstanding the above, the final distribution on this Certificate
will be made after due notice by the Servicer, of the pendency of such
distribution and only upon presentation and surrender of this Certificate at the
office of the Servicer or at such other office as may be designated by such
notice of final distribution.
E-3
The Servicer will maintain or cause to be maintained a Certificate
Register in which, subject to such reasonable regulations as it may prescribe,
the Servicer will provide for the registration of Certificates and of transfers
and exchanges of Certificates. Upon surrender for registration of transfer of
any Certificate at any office or agency of the Servicer, or, if an
Authenticating Agent has been appointed under the Agreement, the Authenticating
Agent, maintained for such purpose, the Servicer, or, if an Authenticating Agent
has been appointed under the Agreement, the Authenticating Agent, will, subject
to the limitations set forth in the Agreement, authenticate and deliver, in the
name of the designated transferee or transferees, a Certificate of a like class
and dated the date of authentication by the Authenticating Agent.
Notwithstanding the above, the final distribution on this Certificate will be
made after due notice by the Servicer, of the pendency of such distribution and
only upon presentation and surrender of this Certificate at the office or agency
appointed by the Servicer, for that purpose and specified in such notice of
final distribution.
Reference is hereby made to the further provisions of this Certificate
set forth on the reverse hereof which further provisions shall for all purposes
have the same effect as if set forth at this place.
Unless the certificate of authentication has been executed by the
Authenticating Agent, by manual signature, this Certificate shall not be
entitled to any benefit under the Agreement or be valid for any purpose.
E-4
IN WITNESS WHEREOF, the Depositor has caused this Class ___ Certificate
to be duly executed.
Dated: CHASE FUNDING, INC.
By:_____________________________
Authorized Officer
E-5
Dated: CERTIFICATE OF AUTHENTICATION
This is one of the Class___
Certificates referred to
in the within-mentioned
Agreement.
JPMORGAN CHASE BANK
as Authenticating Agent
By:______________________________
Authorized Signatory
E-6
REVERSE OF CERTIFICATE
CHASE FUNDING
MORTGAGE LOAN ASSET-BACKED CERTIFICATE
SERIES 2004-2
This Certificate is one of a duly authorized issue of Certificates,
designated as Chase Funding Mortgage Loan Asset-Backed Certificates, Series
2004-2, issued in one or more Classes of Class A Certificates, Class M
Certificates, Class B Certificates, Class L Certificates, Class P Certificates,
Class C Certificates and Class R Certificate, each evidencing an interest in
certain distributions with respect to a pool of conventional, sub-prime Mortgage
Loans formed and sold by the Depositor and certain other property conveyed by
the Depositor to the Trustee.
The Holder, by its acceptance of this Certificate, agrees that it will
look solely to the Trust Fund and certain amounts resulting from credit
enhancements for payment hereunder and that the Trustee is not liable to the
Holders for any amount payable under this Certificate or the Agreement or,
except as expressly provided in the Agreement, subject to any liability under
the Agreement.
This Certificate does not purport to summarize the Agreement and
reference is made to the Agreement for the interests, rights and limitations of
rights, benefits, obligations and duties evidenced hereby, and the rights,
duties and immunities of the Trustee.
No service charge will be made to the Holder for any transfer or
exchange of the Certificate, but the Servicer may require payment of a sum
sufficient to cover any tax or governmental charge that may be imposed in
connection with any transfer or exchange of the Certificate. Prior to due
presentation of a Certificate for registration of transfer, the Depositor, the
Servicer and the Trustee may treat the person in whose name any Certificate is
registered as the owner of such Certificate and the Percentage Interest in the
Trust Fund evidenced thereby for the purpose of receiving distributions pursuant
to the Agreement and for all other purposes whatsoever, and neither the
Depositor, the Servicer nor the Trustee will be affected by notice to the
contrary.
The Agreement may be amended from time to time by the Depositor, the
Servicer and the Trustee, without the consent of any of the Certificateholders,
to cure any ambiguity, to correct or supplement any provisions therein which may
be inconsistent with the other provisions therein, to ensure continuing
treatment of each REMIC included in the Trust Fund as a REMIC, or to make any
other provisions with respect to matters or questions arising under the
Agreement which are not materially inconsistent with the provisions of the
Agreement, provided that such action does not, as evidenced by an Opinion of
Counsel, adversely affect in any material respect the interests of any
Certificateholder.
The Agreement may also be amended from time to time by the Depositor,
the Servicer and the Trustee with the consent of the Holders of Certificates
evidencing in the aggregate not less than 66 2/3% of the Percentage Interests of
each Class of Certificates affected thereby for the purpose of adding any
provisions to or changing in any manner or eliminating any of the provisions of
the Agreement or of modifying in any manner the rights of the Holders of
Certificates of such Class; provided, however, that no such amendment may (i)
reduce in any manner the amount of, or delay the timing of, payments received on
Mortgage Loans which are required to be distributed on any Certificate without
the consent of the Holder of such Certificate, (ii) adversely affect in any
material respect the interests of the Holders of any Class of Certificates in a
manner other than as described in clause (i), without the consent of the Holders
of Certificates of such Class evidencing 66 2/3% or more of the Voting Rights of
such Class or (iii) change the percentage specified in clause (ii) of the third
paragraph of Section 10.01 of the Agreement, without the consent of the Holders
of all Certificates of such Class then outstanding.
E-7
For federal income tax purposes, the Trust Fund includes three
segregated asset pools. The Depositor intends to make elections to treat each as
a "real estate mortgage investment conduit" (a "REMIC"). The Certificates (other
than the Class L Certificates, Class P Certificates and Class R Certificate)
will represent "regular interests" in the Upper-Tier REMIC. The Class R
Certificate will represent the sole class of "residual interest" in each of
three REMICs.
The respective obligations and responsibilities of the Depositor, the
Servicer and the Trustee under the Agreement will terminate upon (i) the later
of the final payment or other liquidation (or any Advance with respect thereto)
of the last Mortgage Loan or the disposition of all property acquired upon the
foreclosure or deed in lieu of foreclosure of any Mortgage Loan and the
remittance of all funds due thereunder; or (ii) at the option of the Servicer,
on any Distribution Date on which the aggregate Stated Principal Balances of the
Mortgage Loans in a Loan Group is less than or equal to 10% of the aggregate
Stated Principal Balance of the Mortgage Loans in such Loan Group as of the
Cut-Off Date, so long as the Servicer deposits or causes to be deposited in the
Distribution Account during the Principal Prepayment Period related to such
Distribution Date an amount equal to the sum of (i) 100% of the Stated Principal
Balance of each Mortgage Loan in such Loan Group (other than in respect of REO
Property), (ii) accrued interest thereon at the applicable Mortgage Rate, (iii)
the appraised value of any REO Property in such Loan Group (up to the Stated
Principal Balance of the related Mortgage Loan), such appraisal to be conducted
by an appraiser mutually agreed upon by the Depositor and the Trustee and (iv)
any unreimbursed Servicing Fees, Advances and Servicing Advances, and the
principal portion of any unreimbursed Advances, made on the Mortgage Loans in
such Loan Group prior to such termination; provided, however, that in no event
shall the trust created hereby continue beyond the earlier of (i) the expiration
of 21 years from the death of the last survivor of the descendants of Xxxxxx X.
Xxxxxxx, the late ambassador of the United States to the Court of St. James's,
living on the date hereof and (ii) the Latest Possible Maturity Date.
E-8
[FORM OF ASSIGNMENT]
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers
unto
(PLEASE INSERT SOCIAL SECURITY* OR TAXPAYER IDENTIFICATION NUMBER OF ASSIGNEE)
_______________________________________________________________________________
(Please Print or Type Name and Address of Assignee)
_______________________________________________________________________________
the within Certificate, and all rights thereunder, and hereby does irrevocably
constitute and appoint
______________________________Attorney to transfer the within Certificate on the
books kept for the registration thereof, with full power of substitution in the
premises.
Dated: ________________________________________
(Signature guaranty) NOTICE: The signature to this assignment
must correspond with the name as it
appears upon the face of the within
Certificate in every particular, without
alteration or enlargement or any change
whatever.
(*This information, which is voluntary, is being requested to ensure that the
assignee will not be subject to backup withholding under Section 3406 of the
Code.)
E-9
EXHIBIT F-1
MORTGAGE LOAN SCHEDULE - GROUP I
[INTENTIONALLY OMITTED]
F-1
EXHIBIT F-2
MORTGAGE LOAN SCHEDULE - GROUP II
[INTENTIONALLY OMITTED]
F-2
EXHIBIT G
FORM OF OFFICER'S CERTIFICATE (PAYING AGENT)
[DATE]
Chase Funding, Inc.
000 Xxxx Xxxxxxxxx, 0xx Xxxxx Xxxxx
Xxxxxxxxx Lake, New Jersey 07675
Reference is made to each pooling and servicing agreement listed on
Exhibit A hereto (each, an "Agreement") in which JPMorgan Chase Bank has been
appointed the paying agent (the "Paying Agent"). JPMorgan Chase Bank, hereby
certifies to you that:
1. I have reviewed all reports on Form 8-K containing distribution reports filed
in respect of periods included in the year covered by the annual report, of each
of the trusts created pursuant to each Agreement;
2. Based on my knowledge, the information in these reports, taken as a whole,
does not contain any untrue statement of a material fact or omit to state a
material fact required by the respective pooling and servicing agreement to be
included therein and necessary to make the statements made, in light of the
circumstances under which such statements were made, not misleading as of the
last day of the period covered by the annual reports; and
3. Based on my knowledge, the distribution or servicing information required to
be provided to the Paying Agent by the Servicer under each Agreement for
inclusion in the reports is included in the reports.
4. In compiling the distribution information, the Paying Agent has relied upon
information furnished to it by the Servicer under each pooling and servicing
agreement. The Paying Agent shall have no responsibility or liability for any
inaccuracy in such reports resulting from information so provided by the
Servicer.
____________________
[NAME OF OFFICER]
Vice President
JPMorgan Chase Bank
G-1
EXHIBIT H
FORM OF TRUSTEE CERTIFICATION
[DATE]
Chase Funding, Inc.
300 Xxxx Boulevard, 0xx Xxxxx Xxxxx
Xxxxxxxxx Xxxx, Xxx Xxxxxx 00000
Re: Pooling and Servicing Agreement dated as of June 1, 2004 among Chase
Funding, Inc. as depositor, Chase Manhattan Mortgage Corporation, as
servicer, and Wachovia Bank, N.A., as trustee, Chase Funding Mortgage
Loan Asset-Backed Certificates, Series 2004-2
---------------------------------------------
Ladies and Gentlemen:
In accordance with Section 2.02 of the above-captioned Pooling and
Servicing Agreement, the undersigned, as Trustee, hereby certifies that [,
except as set forth in Schedule A hereto,] as to each Mortgage Loan listed in
the Mortgage Loan Schedule attached hereto (other than any Mortgage Loan paid in
full or listed on the attachment hereto) it has reviewed the Mortgage File and
the Mortgage Loan Schedule and has determined that:
(i) All documents in the Mortgage File required to be delivered to the
Trustee pursuant to Section 2.01 of the Pooling and Servicing Agreement are in
its possession;
(ii) In connection with each Mortgage Loan or Assignment thereof as to
which documentary evidence of recording was not received on the Closing Date, it
has received evidence of such recording; and
(iii) Such documents have been reviewed by it and such documents do not
contain any material omissions or defects within the meaning of Section 2.01 or
2.02.
The Trustee further certifies that as to each Mortgage Loan, the
Trustee holds the Mortgage Note without any Responsible Officer of the Trustee
having received written notice (a) of any adverse claims, liens or encumbrances,
(b) that any Mortgage Note was overdue or has been dishonored, (c) of evidence
on the face of any Mortgage Note or Mortgage of any security interest therein,
or (d) of any defense against or claim to the Mortgage Note by any other party.
The Trustee has made no independent examination of any documents
contained in each Mortgage File beyond confirming (i) that the Mortgage Loan
number and the name of the Mortgagor in each Mortgage File conform to the
respective Mortgage Loan number and name listed on the Mortgage Loan Schedule
and (ii) the existence in each Mortgage File of each of the documents listed in
subparagraphs (i)(A) through (F), inclusive, of Section 2.01 in the Agreement.
The Trustee makes no representations or warranties as to the validity, legality,
sufficiency, enforceability or genuineness of any of the documents contained in
each Mortgage Loan or the collectibility, insurability, effectiveness or
suitability of any such Mortgage Loan.
H-1
Capitalized words and phrases used herein shall have the respective
meanings assigned to them in the above-captioned Pooling and Servicing
Agreement.
Wachovia Bank, N.A.,
as Trustee
By:
--------------------------------
Name:
------------------------------
Title:
-----------------------------
H-2
EXHIBIT I
FORM OF TRANSFEREE'S LETTER
CHASE FUNDING
MORTGAGE LOAN ASSET-BACKED CERTIFICATES, SERIES 2004-2
[DATE]
Chase Funding, Inc.
000 Xxxx Xxxxxxxxx, 0xx Xxxxx Xxxxx
Xxxxxxxxx Lake, New Jersey 07675
Ladies and Gentlemen:
We propose to purchase the Chase Funding Mortgage Loan Asset-Backed
Certificates, Series 2004-2, Class R Certificate, described in the Prospectus
Supplement, dated June 24, 2004, and Prospectus, dated June 24, 2004
1. We certify that (a) we are not a disqualified organization, (b) we
are not purchasing such Class R Certificate on behalf of a disqualified
organization; for this purpose the term "disqualified organization" means the
United States, any state or political subdivision thereof, any foreign
government, any international organization, any agency or instrumentality of any
of the foregoing (except any entity treated as other than an instrumentality of
the foregoing for purposes of Section 168(h)(2)(D) of the Internal Revenue Code
of 1986, as amended (the "Code")), any organization (other than a cooperative
described in Section 521 of the Code) that is exempt from taxation under the
Code (unless such organization is subject to tax on excess inclusions) and any
organization that is described in Section 1381(a)(2)(C) of the Code and (c) we
are not an employee benefit plan subject to Title I of the Employee Retirement
Income Security Act of 1974, as amended ("ERISA") or Section 4975 of the Code or
any applicable federal, state or local law materially similar to the foregoing
provisions of ERISA and the Code, and are not directly or indirectly purchasing
any certificate on behalf of, as investment manager of, as named fiduciary of,
as trustee of or with assets of a plan or, in the case of an insurance company,
the assets of any separate accounts or general accounts containing any "plan
assets" pursuant to the Department of Labor plan asset regulations set forth in
29 C.F.R. ss.2510.3-101. We understand that any breach by us of this
certification may cause us to be liable for an excise tax imposed upon transfers
to disqualified organizations.
2. We certify that (a) we have historically paid our debts as they
became due, (b) we intend, and believe that we will be able, to continue to pay
our debts as they become due in the future, (c) we understand that, as
beneficial owner of the Class R Certificate, we may incur tax liabilities in
excess of any cash flows generated by the Class R Certificate, (d) we intend to
pay any taxes associated with holding the Class R Certificate as they become
due, and (e) we will not cause income from the Class R Certificate to be
atttributable to a foreign permanent establishment or fixed base (within the
meaning of an applicable income tax treaty) of ours or another U.S. taxpayer.
I-1
3. We acknowledge that we will be the beneficial owner of the Class R
Certificate and:1/
______ The Class R Certificate will be registered in our name.
______ The Class R Certificate will be held in the name of
our nominee, _________________, which is not a disqualified
organization.
4. Unless Chase Funding, Inc. ("Chase Funding") has consented to the
transfer to us by executing the form of Consent affixed hereto as Appendix B, we
certify that we are a U.S. person; for this purpose the term "U.S. person" means
a citizen or resident of the United States, a corporation, or partnership
(unless, in the case of a partnership, Treasury regulations are adopted that
provide otherwise) created or organized in or under the laws of the United
States, any State thereof or the District of Columbia, including an entity
treated as a corporation or partnership for federal income tax purposes, an
estate whose income is subject to United States federal income tax regardless of
the source of its income, 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 U.S. persons have the authority to control all substantial decisions
of the trust (or, to the extent provided in applicable Treasury regulations,
certain trusts in existence on August 20, 1996 which are eligible to elect to be
treated as U.S. Persons). We agree that any breach by us of this certification
shall render the transfer of any interest in the Class R Certificate to us
absolutely null and void and shall cause no rights in the Class R Certificate to
vest in us.
5. We agree that in the event that at some future time we wish to
transfer any interest in the Class R Certificate, we will transfer such interest
in the Class R Certificate only (a) to a transferee that (i) is not a
disqualified organization and is not purchasing such interest in the Class R
Certificate on behalf of a disqualified organization, (ii) is a U.S. person and
(iii) has delivered to Chase Funding a letter in the form of this letter
(including the affidavit appended hereto) and, if requested by Chase Funding, an
opinion of counsel (in a form acceptable to Chase Funding) that the proposed
transfer will not cause the interest in the Class R Certificate to be held by a
disqualified organization or a person who is not a U.S. person or (b) with the
written consent of Chase Funding.
-----------
1/ Check appropriate box and if necessary fill in the name of the Transferee's
nominee
I-2
6. We hereby designate Chase Manhattan Mortgage Corporation as our
fiduciary to act as the tax matters person for the Chase Funding Mortgage Loan
Asset-Backed Certificates, Series 2004-2 REMICs.
Very truly yours,
[PURCHASER]
By:______________________________
Name:
Title:
Accepted as of __________ __, 200__
CHASE FUNDING, INC.
By:_____________________________
Name:
Title:
I-3
APPENDIX A
Affidavit pursuant to (i) Section
860E(e)(4) of the Internal Revenue Code
of 1986, as amended, and (ii) certain
provisions of the Pooling and Servicing
Agreement
Under penalties of perjury, the undersigned declares that the following is true:
(1) He or she is an officer of _________________________ (the "Transferee"),
(2) the Transferee's Employer Identification number is __________,
(3) the Transferee is not a "disqualified organization" (as defined below), has
no plan or intention of becoming a disqualified organization, and is not
acquiring any of its interest in the Chase Funding, Inc., Chase Funding
Trust, Mortgage Loan Asset-Backed Certificates, Series 2004-2, Class R on
behalf of a disqualified organization or any other entity,
(4) unless Chase Funding, Inc. ("Chase Funding") has consented to the transfer
to the Transferee by executing the form of Consent affixed as Appendix B to
the Transferee's Letter to which this Certificate is affixed as Appendix A,
the Transferee is a "U.S. person" (as defined below),
(5) that no purpose of the transfer is to avoid or impede the assessment or
collection of tax,
(6) the Transferee has historically paid its debts as they became due,
(7) the Transferee intends, and believes that it will be able, to continue to
pay its debts as they become due in the future,
(8) the Transferee understands that, as beneficial owner of the Class R
Certificate, it may incur tax liabilities in excess of any cash flows
generated by the Class R Certificate,
(9) the Transferee intends to pay any taxes associated with holding the Class R
Certificate as they become due,
(10) the Transferee consents to any amendment of the Pooling and Servicing
Agreement that shall be deemed necessary by Chase Funding (upon advice of
counsel) to constitute a reasonable arrangement to ensure that the Class R
Certificate will not be owned directly or indirectly by a disqualified
organization, and
(11) IF BRACKETED, THE FOLLOWING CERTIFICATIONS ARE INAPPLICABLE [the transfer
is not a direct or indirect transfer of the Class R Certificate to a
foreign permanent establishment or fixed base (within the meaning of an
applicable income tax treaty) of the Transferee, and as to each of the
residual interests represented by the Class R Certificates, the present
value of the anticipated tax liabilities associated with holding such
residual interest does not exceed the sum of:
(A) the present value of any consideration given to the Transferee to
acquire such residual interest;
I-4
(B) the present value of the expected future distributions on such
residual interest; and
(C) the present value of the anticipated tax savings associated with
holding such residual interest as the related REMIC generates losses.
For purposes of this declaration, (i) the Transferee is assumed to pay
tax at a rate equal to the highest rate of tax specified in Section
11(b)(1) of the Code, but the tax rate specified in Section
55(b)(1)(B) of the Code may be used in lieu of the highest rate
specified in Section 11(b)(1) of the Code if the Transferee has been
subject to the alternative minimum tax under Section 55 of the Code in
the preceding two years and will compute its taxable income in the
current taxable year using the alternative minimum tax rate, and (ii)
present values are computed using a discount rate equal to the Federal
short-term rate prescribed by Section 1274(d) of the Code for the
month of the transfer and the compounding period used by the
Transferee;]
[(11)(A) at the time of the transfer, and at the close of each of the
Transferee's two fiscal years preceding the Transferee's fiscal year
of transfer, the Transferee's gross assets for financial reporting
purposes exceed $100 million and its net assets for financial
reporting purposes exceed $10 million; and
(B) the Transferee is an eligible corporation as defined in Treasury
regulation section 1.860E-1(c)(6)(i) and has agreed in writing that
any subsequent transfer of the Class R Certificate will be to another
eligible corporation in a transaction that satisfies Treasury
regulation sections 1.860E-1(c)(4)(i), 1.860E-1(c)(4)(ii),
1.860E-1(c)(4)(iii) and 1.860E-1(c)(5) and such transfer will not be a
direct or indirect transfer to a foreign permanent establishment
(within the meaning of an applicable income tax treaty) of a domestic
corporation.
For purposes of this declaration, the gross assets and net assets of the
Transferee do not include any obligation of any related person (as defined in
Treasury regulation section 1.860E-1(c)(6)(ii)) or any other asset if a
principal purpose for holding or acquiring the other asset is to permit the
Transferee to make this declaration or to satisfy the requirements of Treasury
regulation section 1.860E-1(c)(5)(i);]
(12) the Transferee represents that it will not cause income from the Class R
Certificate to be attributable to a foreign permanent establishment or
fixed base (within the meaning of an applicable income tax treaty) of the
Transferee or another U.S. taxpayer;
I-5
For purpose of this affidavit, the term "disqualified organization" means the
United States, any state or political subdivision thereof, any foreign
government, any international organization, any agency or instrumentality of any
of the foregoing (except any entity treated as other than an instrumentality of
the foregoing for purposes of Section 168(h)(2)(D) of the Internal Revenue Code
of 1986, as amended (the "Code")), any organization (other than a cooperative
described in Section 521 of the Code) that is exempt from taxation under the
Code (unless such organization is subject to tax on excess inclusions) and any
organization that is described in Section 1381(a)(2)(C) of the Code and the term
"U.S. Person" means a citizen or resident of the United States, a corporation or
partnership (unless, in the case of a partnership, Treasury regulations are
adopted that provide otherwise) created or organized in or under the laws of the
United States, any state thereof or the District of Columbia, including an
entity treated as a corporation or partnership for federal income tax purposes,
an estate whose income is subject to Unites States federal income tax regardless
of its source, or a trust if a court within the United States is able to
exercise primary supervision over the administration of such trust, and one or
more such U.S. Persons have the authority to control all substantial decisions
of such trust, (or, to the extent provided in applicable Treasury regulations,
certain trusts in existence on August 20, 1996 which are eligible to elect to be
treated as U.S. Persons).
_________________________________________
By:______________________________________
_________________________________________
Address of Investor for receipt of distribution:
Address of Investor for receipt of tax information:
(Corporate Seal)
Attest:
_____________________________________________
_____________________________________________, Secretary
I-6
Personally appeared before me the above-named ______________, known or
proved to me to be the same person who executed the foregoing
instrument and to be the _______ of the Investor, and acknowledged to
me that he executed the same as his free act and deed and the free act
and deed of the Investor.
Subscribed and sworn before me this day of , 200_ .
__________________________________
Notary Public
County of_________________________
State of__________________________
My commission expires the ________ day of ______________
By:____________________________
Name:_____________________
Title:____________________
Dated: _____________
I-7
APPENDIX B
CONSENT
_________________________ (Transferee)
_________________________
_________________________
Ladies and Gentlemen:
Chase Funding, Inc. ("Chase Funding") hereby consents to the transfer
to, and registration in the name of, the Transferee (or, if applicable,
registration in the name of such Transferee's nominee of the Chase Funding,
Mortgage Loan Asset-Backed Certificates, Series 2004-2, Class R Certificate
described in the Transferee's Letter to which this Consent is appended,
notwithstanding Chase Funding's knowledge that the Transferee is not a U.S.
person (as defined in such Transferee's Letter).
CHASE FUNDING, INC.
Dated:__________________________ By:_______________________________
I-8
EXHIBIT J
FORM OF TRANSFEROR CERTIFICATE FOR
CLASS R CERTIFICATE
Chase Funding, Inc.
000 Xxxx Xxxxxxxxx
Xxxxxxxxx Xxxx, Xxx Xxxxxx 00000
Wachovia Bank, N.A., as Trustee
000 Xxxxx Xxxxx Xxxxxx, 00xx Xxxxx
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000-0000
RE: Chase Funding, Inc., Chase Funding Mortgage Loan Asset-Backed
Certificates, Series 2004-2
-------------------------------------------------------------
Ladies and Gentlemen:
In connection with our disposition of the Class R Certificate, we
certify that (a) we understand that the Certificates have not been registered
under the Securities Act of 1933, as amended (the "Act"), and are being disposed
by us in a transaction that is exempt from the registration requirements of the
Act, (b) we have not offered or sold any Certificates to, or solicited offers to
buy any Certificates from, any Person, or otherwise approached or negotiated
with any Person with respect thereto, in a manner that would be deemed, or taken
any other action that would result in, a violation of Section 5 of the Act and
(c) if we are disposing of a Class R Certificate, we have no knowledge the
Transferee is not a Permitted Transferee. All capitalized terms used herein but
not defined herein shall have the meanings assigned to them in the Pooling and
Servicing Agreement dated as of June 1, 2004, among Chase Funding, Inc., as
depositor, Chase Manhattan Mortgage Corporation, as servicer, and Wachovia Bank,
N.A., as trustee.
Very truly yours,
_______________________________
Name of Transferor
By: ___________________________
Name:
Title
J-1
EXHIBIT K
FORM OF INVESTMENT LETTER
(Accredited Investor)
[DATE]
Chase Funding, Inc.
300 Xxxx Boulevard, 0xx Xxxxx Xxxxx
Xxxxxxxxx Xxxx, Xxx Xxxxxx 00000
Re: Pooling and Servicing Agreement dated as of June 1, 2004 among Chase
Funding, Inc. as depositor, Chase Manhattan Mortgage Corporation, as
servicer, and Wachovia Bank, N.A., as trustee, Chase Funding, Inc.,
Chase Funding Mortgage Loan Asset-Backed Certificates, Series 2004-2
[Class R]
--------------------------------------------------------------------
Ladies and Gentlemen:
______________ (the "Purchaser") intends to purchase from
________________ (the "Transferor") $_______ by original principal balance (the
"Transferred Certificates") of Mortgage Loan Asset-Backed Certificates, Series
2004-2, [Class R] (the "Certificates"), issued pursuant to a pooling and
servicing agreement, dated as of June 1, 2004 (the "Pooling and Servicing
Agreement"), among Chase Funding, Inc. as depositor (the "Depositor"), Chase
Manhattan Mortgage Corporation, as servicer (the "Servicer"), and Wachovia Bank,
N.A., as trustee (the "Trustee"). [The Purchaser intends to register the
Transferred Certificate in the name of ____________________, as nominee for
_________________.] All terms used and not otherwise defined herein shall have
the meanings set forth in the Pooling and Servicing Agreement.
For good and valuable consideration, the receipt and sufficiency of
which is hereby acknowledged, the Purchaser certifies, represents and warrants
to, and covenants with, the Depositor and the Trustee that:
1. The Purchaser understands that (a) the Certificates have not been
registered or qualified under the Securities Act of 1933, as amended (the
"Securities Act"), or the securities laws of any state, (b) neither the
Depositor nor the Trustee is required, and neither of them intends, to so
register or qualify the Certificates, (c) the Certificates cannot be resold
unless (i) they are registered and qualified under the Securities Act and the
applicable state securities laws or (ii) an exemption from registration and
qualification is available and (d) the Pooling and Servicing Agreement contains
restrictions regarding the transfer of the Certificates.
2. The Certificates will bear a legend to the following effect:
THIS CERTIFICATE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED (THE "ACT"), THE INVESTMENT COMPANY ACT OF 1940, AS
AMENDED (THE "1940 ACT") OR ANY STATE SECURITIES OR "BLUE SKY" LAWS,
AND MAY NOT, DIRECTLY OR INDIRECTLY, BE SOLD OR OTHERWISE TRANSFERRED,
OR OFFERED FOR SALE, UNLESS SUCH TRANSFER IS NOT SUBJECT TO
REGISTRATION UNDER THE ACT, THE 1940 ACT AND ANY APPLICABLE STATE
SECURITIES LAWS AND SUCH TRANSFER ALSO COMPLIES WITH THE OTHER
PROVISIONS OF SECTION 5.02 OF THE POOLING AND SERVICING AGREEMENT. NO
TRANSFER OF THIS CERTIFICATE SHALL BE MADE UNLESS THE SERVICER SHALL
HAVE RECEIVED, IN FORM AND SUBSTANCE SATISFACTORY TO THE SERVICER (A)
AN INVESTMENT LETTER FROM THE PROSPECTIVE INVESTOR; AND (B)
REPRESENTATIONS FROM THE TRANSFEROR REGARDING THE OFFERING AND SALE OF
THE CERTIFICATES.
K-1
NO TRANSFER OF THIS CERTIFICATE SHALL BE MADE UNLESS THE DEPOSITOR
SHALL HAVE RECEIVED A REPRESENTATION LETTER FROM THE TRANSFEREE OF THIS
CERTIFICATE TO THE EFFECT THAT SUCH TRANSFEREE IS NOT AN EMPLOYEE
BENEFIT PLAN SUBJECT TO TITLE I OF THE EMPLOYEE RETIREMENT INCOME
SECURITY ACT OF 1974, AS AMENDED ("ERISA") OR SECTION 4975 OF THE CODE
OR ANY APPLICABLE FEDERAL, STATE OR LOCAL LAW (A "PLAN") MATERIALLY
SIMILAR TO THE FOREGOING PROVISIONS OF ERISA AND THE CODE, AND IS NOT
DIRECTLY OR INDIRECTLY PURCHASING ANY CERTIFICATE ON BEHALF OF, AS
INVESTMENT MANAGER OF, AS NAMED FIDUCIARY OF, AS TRUSTEE OF OR WITH
ASSETS OF A PLAN OR, IN THE CASE OF AN INSURANCE COMPANY, THE ASSETS OF
ANY SEPARATE ACCOUNTS OR GENERAL ACCOUNTS CONTAINING ANY "PLAN ASSETS"
PURSUANT TO THE DEPARTMENT OF LABOR REGULATIONS SET FORTH IN 29 CFR
ss.2510.3-101.
3. The Purchaser is acquiring the Transferred Certificates for its own
account [for investment only]**/ and not with a view to or for sale or other
transfer in connection with any distribution of the Transferred Certificates in
any manner that would violate the Securities Act or any applicable state
securities laws, subject, nevertheless, to the understanding that disposition of
the Purchaser's property shall at all times be and remain within its control.
4. The Purchaser (a) is a substantial, sophisticated institutional
investor having such knowledge and experience in financial and business matters,
and in particular in such matters related to securities similar to the
Certificates, such that it is capable of evaluating the merits and risks of
investment in the Certificates, (b) is able to bear the economic risks of such
an investment and (c) is an "accredited investor" within the meaning of Rule
501(a) promulgated pursuant to the Securities Act.
5. The Purchaser will not nor has it authorized nor will it authorize
any person to (a) offer, pledge, sell, dispose of or otherwise transfer any
Certificate, any interest in any Certificate or any other similar security to
any person in any manner, (b) solicit any offer to buy or to accept a pledge,
disposition or other transfer of any Certificate, any interest in any
Certificate or any other similar security from any person in any manner, (c)
otherwise approach or negotiate with respect to any Certificate, any interest in
any Certificate or any other similar security with any person in any manner, (d)
make any general solicitation by means of general advertising or in any other
manner, or (e) take any other action, that would constitute a distribution of
any Certificate under the Securities Act or the Investment Company Act of 1940,
as amended (the "1940 Act"), that would render the disposition of any
Certificate a violation of Section 5 of the Securities Act or any state
securities law, or that would require registration or qualification pursuant
thereto. Neither the Purchaser nor anyone acting on its behalf has offered the
Certificates for sale or made any general solicitation by means of general
advertising or in any other manner with respect to the Certificates. The
Purchaser will not sell or otherwise transfer any of the Certificates, except in
compliance with the provisions of the Pooling and Servicing Agreement.
------------------------
**/ Not required of a broker/dealer purchaser.
K-2
6. The Purchaser is not an employee benefit plan within the meaning of
Section 3(3) of the Employee Retirement Income Security Act of 1974, as amended
("ERISA"), or a plan within the meaning of Section 4975 of the Internal Revenue
Code of 1986, as amended (the "Code") or a plan subject to federal state or
local law materially similar to the foregoing provisions of ERISA and the Code
(each, a "Plan"), and is not directly or indirectly purchasing any Certificate
on behalf of, as investment manager of, as named fiduciary of, as trustee of or
with assets of a Plan or directly or indirectly purchasing any certificates with
the assets of any insurance company separate account or general account
containing any "plan assets" or of any Plan.
7. Prior to the sale or transfer by the Purchaser of any of the
Certificates, the Purchaser will obtain from any subsequent purchaser
substantially the same certifications, representations, warranties and covenants
contained in the foregoing paragraphs and in this letter or a letter
substantially in the form of Exhibit L to the Pooling and Servicing Agreement.
8. The Purchaser agrees to indemnify the Trustee, the Servicer and the
Depositor against any liability that may result from any misrepresentation made
herein.
Very truly yours,
[PURCHASER]
By:_______________________________
Name:
Title:
K-3
EXHIBIT L
FORM OF RULE 144A INVESTMENT LETTER
(Qualified Institutional Buyer)
[DATE]
Chase Funding, Inc.
000 Xxxx Xxxxxxxxx, 0xx Xxxxx Xxxxx
Xxxxxxxxx Lake, New Jersey 07675
Chase Manhattan Mortgage Corporation
c/o JPMorgan Chase Bank
Global Trust Services
0 Xxx Xxxx Xxxxx, 0xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Re: Pooling and Servicing Agreement dated as of June 1, 2004 among Chase
Funding, Inc. as depositor, Chase Manhattan Mortgage Corporation, as
servicer, and Wachovia Bank, N.A., as trustee, Chase Funding, Inc.,
Chase Funding Mortgage Loan Asset-Backed Certificates, Series 2004-2
[Class R]
--------------------------------------------------------------------
Ladies and Gentlemen:
______________ (the "Purchaser") intends to purchase from
________________ (the "Transferor") $_______ by original principal balance (the
"Transferred Certificates") of Mortgage Loan Asset-Backed Certificates, Series
2004-2, [Class R] (the "Certificates"), issued pursuant to a pooling and
servicing agreement, dated as of June 1, 2004 (the "Pooling and Servicing
Agreement"), among Chase Funding, Inc. as depositor (the "Depositor"), Chase
Manhattan Mortgage Corporation, as servicer (the "Servicer"), and Wachovia Bank,
N.A., as trustee (the "Trustee"). [The Purchaser intends to register the
Transferred Certificate in the name of ____________________, as nominee for
__________________.] All terms used and not otherwise defined herein shall have
the meanings set forth in the Trust Agreement.
For good and valuable consideration, the receipt and sufficiency of
which is hereby acknowledged, the Purchaser certifies, represents and warrants
to, and covenants with, the Depositor and the Trustee that:
In connection with our acquisition of the above Transferred
Certificates we certify that (a) we understand that the Certificates are not
being registered under the Securities Act of 1933, as amended (the "Act"), or
any state securities laws and are being transferred to us in a transaction that
is exempt from the registration requirements of the Act and any such laws, (b)
we have such knowledge and experience in financial and business matters that we
are capable of evaluating the merits and risks of investments in the
Certificates, (c) we have had the opportunity to ask questions of and receive
answers from the Depositor concerning the purchase of the Transferred
Certificates and all matters relating thereto or any additional information
deemed necessary to our decision to purchase the Transferred Certificates, (d)
we are not an employee benefit plan within the meaning of Section 3(3) of the
Employee Retirement Income Security Act of 1974, as amended, or a plan within
the meaning of Section 4975 of the Internal Revenue Code of 1986, as amended or
a plan subject to federal, state or local law materially similar to the
foregoing provisions of ERISA and the Code (each, a "Plan"), nor are we directly
or indirectly purchasing any Certificate on behalf of, as investment manager of,
as named fiduciary of, as trustee of or with assets of a Plan or directly or
indirectly purchasing any certificates with the assets of any insurance company
separate account or general account containing any "plan assets" or of any Plan,
(e) we have not, nor has anyone acting on our behalf offered, transferred,
pledged, sold or otherwise disposed of the Certificates, any interest in the
Certificates or any other similar security to, or solicited any offer to buy or
accept a transfer, pledge or other disposition of the Certificates, any interest
L-1
in the Certificates or any other similar security from, or otherwise approached
or negotiated with respect to the Certificates, any interest in the Certificates
or any other similar security with, any person in any manner, or made any
general solicitation by means of general advertising or in any other manner, or
taken any other action, that would constitute a distribution of the Certificates
under the Securities Act or that would render the disposition of the
Certificates a violation of Section 5 of the Securities Act or require
registration pursuant thereto, nor will act, nor has authorized or will
authorize any person to act, in such manner with respect to the Certificates,
(f) we are a "qualified institutional buyer" as that term is defined in Rule
144A under the Securities Act and have completed one of the forms of
certification to that effect attached hereto as Annex 1 or Annex 2. We are aware
that the sale of the Transferred Certificates to us is being made in reliance on
Rule 144A. We are acquiring the Transferred Certificates for our own account or
for resale pursuant to Rule 144A and further understand that such Certificates
may be resold, pledged or transferred only (i) to a person reasonably believed
by us, based upon certifications of such purchaser or information we have in our
possession, to be a qualified institutional buyer that purchases for its own
account or for the account of a qualified institutional buyer to whom notice is
given that the resale, pledge or transfer is being made in reliance on Rule
144A, or (ii) pursuant to another exemption from registration under the
Securities Act.
We agree to indemnify the Trustee, the Servicer and the Depositor
against any liability that may result from any misrepresentation made herein.
Very truly yours,
[PURCHASER]
By:______________________________
Name:
Title:
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ANNEX 1
QUALIFIED INSTITUTIONAL BUYER STATUS UNDER SEC RULE 144A
[For Transferees Other Than Registered Investment Companies]
The undersigned (the "Buyer") hereby certifies as follows to the
parties listed in the Rule 144A Transferee Certificate to which this
certification relates with respect to the Certificates described therein:
1. As indicated below, the undersigned is the President, Chief
Financial Officer, Senior Vice President or other executive officer of the
Buyer.
2. In connection with the purchases by the Buyer, the Buyer is a
"qualified institutional buyer" as that term is defined in Rule 144A under the
Securities Act of 1933, as amended ("Rule 144A") because (i) the Buyer owned
and/or invested on a discretionary basis $____________*/ in securities (except
for the excluded securities referred to below) as of the end of the Buyer's most
recent fiscal year (such amount being calculated in accordance with Rule 144A)
and (ii) the Buyer satisfies the criteria in the category marked below.
____ Corporation, etc. The Buyer is a corporation (other
than a bank, savings and loan association or similar
institution), Massachusetts or similar business
trust, partnership, or charitable organization
described in Section 501(c)(3) of the Internal
Revenue Code of 1986, as amended.
____ Bank. The Buyer (a) is a national bank or banking
institution organized under the laws of any State,
territory or the District of Columbia, the business
of which is substantially confined to banking and is
supervised by Federal, State or territorial banking
commission or similar official or is a foreign bank
or equivalent institution, and (b) has an audited net
worth of at least $25,000,000 as demonstrated in its
latest annual financial statements, a copy of which
is attached hereto.
___________________
* Buyer must own and/or invest on a discretionary basis at least
$100,000,000 in securities unless Buyer is a dealer, and, in that case,
Buyer must own and/or invest on a discretionary basis at least
$10,000,000 in securities.
____ Savings and Loan. The Buyer (a) is a savings and loan
association, building and loan association,
cooperative bank, homestead association or similar
institution, which is supervised and examined by a
State or Federal authority having supervision over
such institution or is a foreign savings and loan
association or equivalent institution and (b) has an
audited net worth of at least $25,000,000 as
demonstrated in its latest annual financial
statements, a copy of which is attached hereto.
____ Broker-dealer. The Buyer is a dealer registered
pursuant to Section 15 of the Securities Exchange Act
of 1934, as amended.
____ Insurance Company. The Buyer is an insurance company
whose primary and predominant business activity is
the writing of insurance or the reinsuring of risks
underwritten by insurance companies and which is
subject to supervision by the insurance commissioner
or a similar official or agency of the State,
territory or the District of Columbia.
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____ State or Local Plan. The Buyer is a plan established
and maintained by a State, its political
subdivisions, or any agency or instrumentality of the
State or its political subdivisions, for the benefit
of its employees.
____ ERISA Plan. The Buyer is an employee benefit plan
within the meaning of Title I of the Employee
Retirement Income Security Act of 1974, as amended.
____ Investment Advisor. The Buyer is an investment
advisor registered under the Investment Advisors Act
of 1940, as amended.
____ Small Business Investment Company. Buyer is a small
business investment company licensed by the U.S.
Small Business Administration under Section 301(c)
or (d) of the
Small Business Investment Act of 1958, as amended.
____ Business Development Company. Buyer is a business
development company as defined in Section 202(a)(22)
of the Investment Advisors Act of 1940, as amended.
3. The term "securities" as used for purposes of the calculation of the
dollar amount in paragraph 2 excludes: (i) securities of issuers that are
affiliated with the Buyer, (ii) securities that are part of an unsold allotment
to or subscription by the Buyer, if the Buyer is a dealer, (iii) securities
issued or guaranteed by the U.S. or any instrumentality thereof, (iv) bank
deposit notes and certificates of deposit, (v) loan participations, (vi)
repurchase agreements, (vii) securities owned but subject to a repurchase
agreement and (viii) currency, interest rate and commodity swaps.
4. For purposes of determining the aggregate amount of securities owned
and/or invested on a discretionary basis by the Buyer, the Buyer used the cost
of such securities to the Buyer and did not include any of the securities
referred to in the preceding paragraph, except (i) where the Buyer reports its
securities holdings in its financial statements on the basis of their market
value, and (ii) no current information with respect to the cost of those
securities has been published. If clause (ii) in the preceding sentence applies,
the securities may be valued at market. Further, in determining such aggregate
amount, the Buyer may have included securities owned by subsidiaries of the
Buyer, but only if such subsidiaries are consolidated with the Buyer in its
financial statements prepared in accordance with generally accepted accounting
principles and if the investments of such subsidiaries are managed under the
Buyer's direction. However, such securities were not included if the Buyer is a
majority-owned, consolidated subsidiary of another enterprise and the Buyer is
not itself a reporting company under the Securities Exchange Act of 1934, as
amended.
5. The Buyer acknowledges that it is familiar with Rule 144A and
understands that the seller to it and other parties related to the Certificates
are relying and will continue to rely on the statements made herein because one
or more sales to the Buyer may be in reliance on Rule 144A.
6. Until the date of purchase of the Rule 144A Securities, the Buyer
will notify each of the parties to which this certification is made of any
changes in the information and conclusions herein. Until such notice is given,
the Buyer's purchase of the Certificates will constitute a reaffirmation of this
certification as of the date of such purchase. In addition, if the Buyer is a
bank or savings and loan as provided above, the Buyer agrees that it will
furnish to such parties updated annual financial statements promptly after they
become available.
By:______________________________
Name:
Title:
Date:____________________________
L-4
ANNEX 2
QUALIFIED INSTITUTIONAL BUYER STATUS UNDER SEC RULE 144A
[For Transferees That are Registered Investment Companies]
The undersigned (the "Buyer") hereby certifies as follows to the
parties listed in the Rule 144A Transferee Certificate to which this
certification relates with respect to the Certificates described therein:
1. As indicated below, the undersigned is the President, Chief
Financial Officer or Senior Vice President of the Buyer or, if the Buyer is a
"qualified institutional buyer" as that term is defined in Rule 144A under the
Securities Act of 1933, as amended ("Rule 144A"), because Buyer is part of a
Family of Investment Companies (as defined below), is such an officer of the
Adviser.
2. In connection with purchases by Buyer, the Buyer is a "qualified
institutional buyer" as defined in Rule 144A because (i) the Buyer is an
investment company registered under the Investment Company Act of 1940, as
amended and (ii) as marked below, the Buyer alone, or the Buyer's Family of
Investment Companies, owned at least $100,000,000 in securities (other than the
excluded securities referred to below) as of the end of the Buyer's most recent
fiscal year. For purposes of determining the amount of securities owned by the
Buyer or the Buyer's Family of Investment Companies, the cost of such securities
was used, except (i) where the Buyer or the Buyer's Family of Investment
Companies reports its securities holdings in its financial statements on the
basis of their market value, and (ii) no current information with respect to the
cost of those securities has been published. If clause (ii) in the preceding
sentence applies, the securities may be valued at market.
____ The Buyer owned $___________ in securities (other
than the excluded securities referred to below) as of
the end of the Buyer's most recent fiscal year (such
amount being calculated in accordance with Rule
144A).
____ The Buyer is part of a Family of Investment Companies
which owned in the aggregate $__________ in
securities (other than the excluded securities
referred to below) as of the end of the Buyer's most
recent fiscal year (such amount being calculated in
accordance with Rule 144A).
3. The term "Family of Investment Companies" as used herein means two
or more registered investment companies (or series thereof) that have the same
investment adviser or investment advisers that are affiliated (by virtue of
being majority owned subsidiaries of the same parent or because one investment
adviser is a majority owned subsidiary of the other).
4. The term "securities" as used herein does not include (i) securities
of issuers that are affiliated with the Buyer or are part of the Buyer's Family
of Investment Companies, (ii) securities issued or guaranteed by the U.S. or any
instrumentality thereof, (iii) bank deposit notes and certificates of deposit,
(iv) loan participations, (v) repurchase agreements, (vi) securities owned but
subject to a repurchase agreement and (vii) currency, interest rate and
commodity swaps.
5. The Buyer is familiar with Rule 144A and understands that the
parties listed in the Rule 144A Transferee Certificate to which this
certification relates are relying and will continue to rely on the statements
made herein because one or more sales to the Buyer will be in reliance on Rule
144A. In addition, the Buyer will only purchase for the Buyer's own account.
L-5
6. Until the date of purchase of the Certificates, the undersigned will
notify the parties listed in the Rule 144A Transferee Certificate to which this
certification relates of any changes in the information and conclusions herein.
Until such notice is given, the Buyer's purchase of the Certificates will
constitute a reaffirmation of this certification by the undersigned as of the
date of such purchase.
By:________________________________________
Name:
Title:
IF AN ADVISER:
___________________________________________
Print Name of Buyer
Date:______________________________________
L-6
EXHIBIT M
REQUEST FOR RELEASE OF DOCUMENTS
To: Wachovia Bank, N.A.
000 Xxxxx Xxxxx Xxxxxx, 00xx Xxxxx
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000-0000
Re:
In connection with the administration of the Mortgage Loans held by
you, as Trustee, pursuant to the above-captioned Pooling and Servicing
Agreement, we request the release, and hereby acknowledge receipt, of the
Mortgage File for the Mortgage Loan described below, for the reason indicated.
Mortgage Loan Number:
Mortgagor Name, Address & Zip Code:
Reason for Requesting Documents (check one):
_______ 1. Mortgage Loan Paid in Full (Servicer hereby certifies that
all amounts received in connection therewith have been
credited to the Collection Account)
_______ 2. Mortgage Loan Liquidated (Servicer hereby certifies that
all proceeds of foreclosure, insurance or other liquidation
have been received and credited to the Collection Account
_______ 3. Mortgage Loan Repurchased pursuant to Section 2.03(c) of the
Pooling and Servicing Agreement
_______ 4. Mortgage Loan in Foreclosure
_______ 5. Other
Reason:______________________________
By:__________________________________
(authorized signer)
Address:_____________________________
Date:________________________________
If box 1 or 2 above is checked, and if all or part of the Mortgage File was
previously released to us, please release to us our previous receipt on file
with you, as well as any additional documents in your possession relating to the
above specified Mortgage Loan.
If box 3, 4, or 5 above is checked, upon our return of all of the above
documents to you as Trustee [or Trustee's designee], please acknowledge your
receipt by signing in the space indicated below, and returning this form.
M-1
Trustee
Wachovia Bank, N.A.
Please acknowledge the execution of the above request by your signature and date
below:
_________________________________ ________________________________________
Signature Date
Documents returned to Trustee:
_________________________________ ________________________________________
Trustee Date
M-2
EXHIBIT N
FORM OF YIELD MAINTENANCE AGREEMENT
Interest Rate Cap Agreement
Confirmation
Rate Cap Transaction
Dated as of June 29, 2004
Chase Funding Trust, Series 2004-2
Re: Rate Cap Transaction (Our ref. no 7559329)
--------------------
Ladies and Gentlemen:
The purpose of this Confirmation is to confirm the terms and conditions
of the Transaction entered into between us on the Trade Date specified below.
This Confirmation constitutes a "Confirmation" as referred to in the ISDA Form
Master specified below.
The definitions and provisions contained in the 2000 ISDA Definitions,
as published by the International Swaps and Derivatives Association, Inc., are
incorporated into this Confirmation. In the event of any inconsistency between
those definitions and provisions and this Confirmation, this Confirmation will
govern.
1. This Confirmation evidences a complete and binding agreement between
you and us as to the terms of the Transaction to which this
Confirmation relates. This Confirmation shall supplement, form a part
of, and be subject to an agreement in the form of the 1992 ISDA Master
Agreement (Multicurrency-Cross Border) (the "ISDA Form Master") as if
you and we had executed an agreement in such form (subject to the
provisions set forth in Schedule 1 hereto which constitutes a "Schedule
to the ISDA Form Master") on the Trade Date (collectively, the
"Agreement"). A copy of the ISDA Form Master will be provided upon
request. In the event of any inconsistency between provisions of that
agreement and this Confirmation, this Confirmation will prevail for the
purpose of the Transaction to which this Confirmation relates.
The parties to this Transaction are UBS AG, London Branch ("Cap Provider") and
Wachovia Bank, N.A. not in its individual capacity but solely as Trustee on
behalf of the Chase Funding Trust, Series 2004-2 or its assignee (the
"Counterparty").
2. This Transaction is a Rate Cap Transaction. The terms of the particular
Transaction to which this Confirmation relates are as follows:
Notional Amount: (i) USD $300,000,000 for the
initial Calculation Period, and
(ii) the lesser of (a) the amount
indicated as such for each
Calculation Period on the Schedule
of Notional Amounts and Cap Rates
attached hereto and (b) the
aggregate outstanding certificate
balance of the Chase Funding
Mortgage Loan Asset-Backed
Certificates Series 2004-2 Class II
Certificates as of such Calculation
Period after any payments made with
respect to such certificates on the
first day of such Calculation
Period.
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Trade Date: June 23, 2004
Effective Date: June 29, 2004
Termination Date: The earlier of (i) August 25, 2006
subject to the Following Business
Day Convention and (ii) the date on
which the principal balance of the
Chase Funding Mortgage Loan
Asset-Backed Certificates, Series
2004-2 has been reduced to zero.
Fixed Amounts:
Fixed Rate Payer: Chase Funding Trust, Series 2004-2
Fixed Rate Payer Payment Date: June 29, 2004
Fixed Amount: USD $
Floating Amounts:
Floating Rate Payer: Cap Provider
Cap Rate: As detailed in the Schedule of
Notional Amounts and Cap Strikes
attached hereto. The Floating Rate
Payer shall pay on each Floating
Rate Payer Payment Date, an amount
based on the product of (a) the
excess of the Floating Rate Option
(but not more than the Cap Ceiling)
over the Cap Strike and (b) the
Notional Amount; subject to the
Floating Rate Day Count Fraction.
Floating Rate Payer Payment Dates: The 25th day of each month up to
and including the Termination Date,
commencing on July 25, 2004,
subject to adjustment in accordance
with Following Business Day
Convention.
Floating Rate Option: USD-LIBOR-BBA
Designated Maturity: One (1) Month
Floating Rate Day Count Fraction: Act/360
Reset Dates: The first day of each Calculation
Period.
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Compounding: Not applicable
Business Days: New York
Calculation Agent: Cap Provider
3. Account Details
Payments to Cap Provider:
Account for payments in USD: ____________
ABA No: ___________
For: UBS AG, London Branch
Account No. 101-wa-140007-000
Payments to Counterparty:
Account for payments in USD: JPMorgan Chase Bank
ABA: 000000000
ACCT: 507947541
Ref: 2004-2
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4. Office and Address for notices in connection with this Transaction:
(a) Counterparty: Chase Funding Trust, Series 2004-2
c/o JPMorgan Chase Bank
4 New York Plaza, 6th Floor
New York, New York 10004
Attn: 2004-2
Facsimile: 000-000-0000
(b) Cap Provider: UBS AG, London Branch
000 Xxxxxxxxx Xxxxxx
Xxxxxx XX0X 0XX
Attention: Swap Operations
Facsimile: (00) 00 0000 0000/2990
Telephone:
5. Documents to be delivered:
Counterparty shall deliver to Cap Provider, at the time of its execution of this
Confirmation, evidence of the specimen signature and incumbency of each person
who is executing the Confirmation on the Counterparty's behalf, unless such
evidence has previously been supplied in connection with this Agreement and
remains true and in effect.
6. Representations:
Each party will be deemed to represent to the other party on the date on which
it enters into a Transaction that (absent a written agreement between the
parties that expressly imposes affirmative obligations to the contrary for that
Transaction):
(a) Non-Reliance. It is acting for its own account, and it has made its own
independent decisions to enter into that Transaction and as to whether that
Transaction is appropriate or proper for it based upon its own judgment and upon
advice from such advisers as it has deemed necessary. It is not relying on any
communication (written or oral) of the other party as investment advice or as a
recommendation to enter into that Transaction; it being understood that
information and explanations related to the terms and conditions of a
Transaction shall not be considered investment advice or a recommendation to
enter into that Transaction. No communication (written or oral) received from
the other party shall be deemed to be an assurance or guarantee as to the
expected results of that Transaction.
(b) Assessment and Understanding. It is capable of assessing the merits of and
understanding (on its own behalf or through independent professional advice),
and understands and accepts, the terms, conditions and risks of that
Transaction. It is capable of assuming, and assumes the risks of that
Transaction.
(c) Status of Parties. The other party is not acting as a fiduciary for or an
adviser to it in respect of that Transaction.
(d) Multibranch Party. It is not a "Multibranch Party".
(e) Tax status. Cap Provider is a US entity, subject to US laws and no
withholding tax is payable.
N-4
7. Additional Termination Events:
Additional Termination Events will apply. If a Rating Agency Downgrade has
occurred and Cap Provider has not, within 30 days, complied with Section 8
below, then an Additional Termination Event shall have occurred with respect to
Cap Provider and Cap Provider shall be the sole Affected Party with respect to
such an Additional Termination Event.
8. Rating Agency Downgrade:
If a Ratings Event (as defined below) occurs with respect to Cap Provider, then
Cap Provider shall, at is own expense, (i) assign this Transaction hereunder to
a third party within thirty (30) days of such Ratings Event that meets or
exceeds, or as to which any applicable credit support provider meets or exceeds,
the Approved Ratings Thresholds (as defined below) on terms substantially
similar to this Confirmation or (ii) deliver collateral acceptable in a form and
amount acceptable to Standard and Poor's ("S&P"), Fitch Ratings ("Fitch") and
Xxxxx'x Investors Service, Inc. ("Moody's"), an executed ISDA Credit Support
Annex (reasonably satisfactory to the Counterparty and S&P, Fitch and Xxxxx'x),
within thirty (30) days of such Ratings Event and subject to written
confirmation from S&P, Fitch and Moody's that delivery of such collateral in the
context of such downgrade will not result in a withdrawal, qualification or
downgrade of the then current ratings assigned to the Certificates. For the
avoidance of doubt, a downgrade of the rating on the certificates issued by the
Chase Funding Trust, Series 2004-2 (the "Certificates") could occur in the event
that Cap Provider does not post sufficient collateral. For purposes of this
Transaction, a "Ratings Event" shall occur with respect to the Cap Provider if
its long term unsecured debt rating ceases to be rated at least "A+" by S&P, at
least "A+" by Fitch Ratings and at least "A1" by Moody's (including in
connection with a merger, consolidation or other similar transaction by Credit
Support Provider) such ratings being referred to herein as the "Approved Ratings
Thresholds", (unless, within 30 days after such withdrawal or downgrade, each of
Xxxxx'x, Fitch and S&P has reconfirmed the rating of the Certificates which was
in effect immediately prior to such withdrawal or downgrade).
9. Termination Provisions:
(a) "Specified Entity" is not applicable to Cap Provider or Counterparty
for any purpose.
(b) "Specified Transaction" is not applicable to Cap Provider or
Counterparty for any purpose, and, accordingly, Section 5(a)(v) shall not apply
to Cap Provider or Counterparty.
(c) The "Cross Default" Provision of Section 5(a)(vi) will not apply to Cap
Provider or to Counterparty.
(d) The provisions of Section 5(a)(ii), (iii), (iv), (v), (vii) and (viii)
and 5(b)(ii), (iii) and (iv) will not apply to Counterparty upon payment of the
Fixed Amount to the Cap Provider.
(e) The "Credit Event Upon Merger" provisions of Section 5(b)(iv) will not
apply to Cap Provider or to Counterparty.
(f) The "Automatic Early Termination" provision of Section 6(a) will not
apply to Cap Provider or to Counterparty.
(g) Payments on Early Termination.
(i) Market Quotation will apply.
(ii) The Second Method will apply.
N-5
10. Transfer, Amendment and Assignment: No transfer, amendment, waiver,
supplement, assignment or other modification of this Transaction shall
be permitted by either party unless each of Xxxxx'x, Fitch and S&P has
been provided notice of the same and confirms in writing (including by
facsimile transmission) after such notice is given that it will not
downgrade, withdraw or otherwise modify its then-current rating of any
of the Certificates; provided, however, that any such action described
herein may be taken by the parties hereto prior to the issuance of the
Certificates.
11. Proceedings: Cap Provider shall not institute against or cause any
other person to institute against, or join any other person in
instituting against, Counterparty any bankruptcy, reorganization,
arrangement, insolvency or liquidation proceedings, or other
proceedings under any federal or state bankruptcy or similar law for a
period of one year and one day following payment in full of the
Certificates.
12. Setoff. There is deemed to be no "Set-Off for purposes of Section 6(e)
of the ISDA Form and all payments by Cap Provider shall be made without
setoff or counterclaim.
13. Monthly Information: No later than each Floating Rate Payer Payment
Date the Counterparty will make available on the website of its
designee located at xxx.xxxxxxxx.xxx/xxxxxx/xxx the current principal
balance of the Chase Funding Mortgage Loan Asset-Backed Certificates,
Series 2004-2 as of the first day of the Calculation Period. No later
than each Reset Date, the Cap Provider shall deliver to JPMorgan Chase
Bank, as Counterparty or administrator on behalf of the Counterparty, a
written confirmation containing the results of the calculations
performed on each Reset Date and the amount which is to be paid to the
Counterparty on the next Floating Rate Payer Payment Date.
14. Limitation on Liability of the Trustee. (a) this letter agreement is
executed and delivered by Counterparty, not individually or personally
but solely as the trustee, in the exercise of the powers and authority
conferred and vested in it,
(b) the representations, undertakings and agreements herein
made on the part of the Trust are made and intended not as personal
representations, undertakings and agreements by Counterparty but are made and
intended for the purpose of binding only the Trust,
(c) nothing herein contained shall be construed as creating
any liability on Counterparty, individually or personally, to perform any
covenant either expressed or implied contained herein, all such liability, if
any, being expressly waived by the parties who are signatories to this
Confirmation and by any person claiming by, through or under such parties and
(d) under no circumstances shall Counterparty be personally
liable for the payment of any indebtedness or expenses of the Trust or be liable
for the breach or failure of any obligation, representation, warranty or
covenant made or undertaken by the Trust under this Confirmation.
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Please confirm that the foregoing correctly sets forth the terms of our
agreement by executing a copy of this Confirmation returning it to us.
Yours sincerely,
UBS AG, LONDON BRANCH
By: _________________________
Name:
Title:
Confirmed as of the date first above written:
WACHOVIA BANK, N.A., not in its individual capacity, but
solely as Trustee on behalf of the
CHASE FUNDING TRUST, SERIES 2004-2
By: _______________________________
Name:
Title:
B-7
SCHEDULE 1
SCHEDULE TO THE MASTER AGREEMENT
With respect to the ISDA Form Master (incorporated by reference into this
Confirmation) Cap Provider and Counterparty agree that the following provisions
are deemed to be incorporated in a Schedule to the ISDA Form Master and that
such ISDA Form Master shall be deemed to have been executed by you and us on the
date we entered into this Transaction. (Capitalized terms in this Schedule 1 and
not otherwise defined shall have the meanings ascribed to them in the ISDA Form
Master. Section and paragraph references in this Schedule 1 are to the sections
and paragraphs of the ISDA Form Master):
(a) "Termination Currency" means United States Dollars
(b) Governing Law: This Agreement (including all agreements incorporated herein
by reference) will be governed by, and construed and enforced in accordance
with, the substantive laws of the State of New York (without reference to
its choice of law doctrine).
(c) Severability: If any term, provision, covenant, or condition of the
Agreement, or the application thereof to any party or circumstance, is held
to be invalid or unenforceable (in whole or in part) for any reason, the
remaining terms, provisions, covenants, and conditions thereof will
continue in full force and effect as if the Agreement had been executed
with the invalid or unenforceable portion eliminated, so long as the
Agreement as so modified continues to express, without material change, the
original intentions of the parties as to the subject matter of the
Agreement and the deletion of such portion of the Agreement will not
substantially impair the respective benefits or expectations of the
parties.
(d) For purposes of Section 6(e), Set-off and Counterclaim will not apply;
provided, however, that upon the designation of any Early Termination Date,
in addition to and not in limitation of any other right or remedy under
applicable law, the Cap Provider may, by notice to the Counterparty,
require the Counterparty to set off any sum or obligation that the Cap
Provider owed to the Counterparty against any collateral currently held by
the Counterparty that the Cap Provider has posted to the Counterparty, and
the Counterparty shall effect such setoff promptly, if and to the extent
permitted to do so by applicable law, provided that the Counterparty's
exercise of this setoff is not stayed or otherwise delayed by order of any
court, regulatory authority or other governmental agency, or any receiver
or any other person appointed in respect of the Cap Provider or any of its
property or the Counterparty has any other reasonable concern related to
the ability of the Counterparty to realize upon such posted collateral.
N-8
SCHEDULE OF NOTIONAL AMOUNTS AND CAP STRIKES
RATE CAP TRANSACTION REF. NO. 7559329
MONTH OF FLOATING RATE PAYOR PAYMENT DATE NOTIONAL PRINCIPAL AMOUNT IN USD CAP STRIKE(%) CAP CEILING (%)
----------------------------------------- -------------------------------- ------------- ---------------
July 2004 300,000,000.00 6.63% 7.71%
August 2004 296,696,643.97 5.51% 7.71%
September 2004 292,767,062.91 5.51% 7.71%
October 2004 288,219,093.92 5.71% 7.71%
November 2004 283,064,509.94 5.51% 7.71%
December 2004 277,319,066.26 5.71% 7.71%
January 2005 271,002,510.49 5.51% 7.71%
February 2005 263,155,198.31 5.53% 7.71%
March 2005 254,812,723.68 6.18% 7.71%
April 2005 246,667,756.58 5.58% 7.71%
May 2005 238,846,181.46 5.80% 7.71%
June 2005 232,060,170.77 5.61% 7.71%
July 2005 225,462,516.64 5.81% 7.71%
August 2005 219,048,021.66 5.61% 7.71%
September 2005 212,811,631.20 5.62% 7.71%
October 2005 206,748,429.45 5.82% 7.71%
November 2005 200,853,635.69 5.62% 7.71%
December 2005 195,122,600.56 5.82% 7.71%
January 2006 189,550,802.44 5.63% 7.71%
February 2006 184,133,843.98 5.63% 7.71%
March 2006 0.00 7.72% 7.71%
April 2006 157,214,755.08 6.96% 7.71%
May 2006 145,251,068.69 7.21% 7.71%
June 2006 134,175,736.47 6.99% 7.71%
July 2006 129,194,284.20 7.24% 7.71%
August 2006 124,391,948.36 7.00% 7.71%
N-9
