STRUCTURED ASSET MORTGAGE INVESTMENTS II INC.,
DEPOSITOR,
JPMORGAN CHASE BANK, N.A.
TRUSTEE,
XXXXX FARGO BANK, NATIONAL ASSOCIATION,
MASTER SERVICER,
XXXXX FARGO BANK, NATIONAL ASSOCIATION,
SECURITIES ADMINISTRATOR,
and
EMC MORTGAGE CORPORATION
POOLING AND SERVICING AGREEMENT
Dated as of May 1, 2005
Structured Asset Mortgage Investments II Trust 2005-AR2
Mortgage Pass-Through Certificates
Series 2005-AR2
TABLE OF CONTENTS
Page
ARTICLE I
Definitions
Section 1.01. Definitions...............................................................................1
Section 1.02. Calculation of LIBOR.....................................................................45
ARTICLE II
Conveyance of Mortgage Loans;
Original Issuance of Certificates
Section 2.01. Conveyance of Mortgage Loans to Trustee..................................................46
Section 2.02. Acceptance of Trust Fund by Trustee......................................................48
Section 2.03. Assignment of Interest in the Mortgage Loan Purchase Agreement...........................50
Section 2.04. Substitution of Mortgage Loans...........................................................51
Section 2.05. Issuance of Certificates.................................................................52
Section 2.06. Representations and Warranties Concerning the Depositor..................................53
Section 2.07 Covenants of the Master Servicer and the EMC Servicer....................................54
ARTICLE III
Administration and Servicing of Mortgage Loans
Section 3.01. Master Servicer..........................................................................55
Section 3.02. REMIC-Related Covenants..................................................................56
Section 3.03. Monitoring of Servicers..................................................................56
Section 3.04. Fidelity Bond............................................................................57
Section 3.05. Power to Act; Procedures.................................................................57
Section 3.06. Due-on-Sale Clauses; Assumption Agreements...............................................58
Section 3.07. Release of Mortgage Files................................................................58
Section 3.08. Documents, Records and Funds in Possession of Master Servicer To Be Held for
Trustee..................................................................................59
Section 3.09. Standard Hazard Insurance and Flood Insurance Policies...................................60
Section 3.10. Presentment of Claims and Collection of Proceeds.........................................61
Section 3.11. Maintenance of the Primary Mortgage Insurance Policies...................................61
Section 3.12. Trustee to Retain Possession of Certain Insurance Policies and Documents.................61
Section 3.13. Realization Upon Defaulted Mortgage Loans................................................62
Section 3.14. Compensation for the Servicers and the Master Servicer...................................62
Section 3.15. REO Property.............................................................................62
Section 3.16. Annual Officer's Certificate as to Compliance............................................63
Section 3.17. Annual Independent Accountant's Servicing Report.........................................63
Section 3.18. Reports Filed with Securities and Exchange Commission....................................64
Section 3.19. EMC......................................................................................65
Section 3.20. UCC......................................................................................65
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Section 3.21. Optional Purchase of Defaulted Mortgage Loans............................................65
ARTICLE IV
Accounts
Section 4.01. Protected Accounts.......................................................................67
Section 4.02. Distribution Account.....................................................................68
Section 4.03. Permitted Withdrawals and Transfers from the Distribution Account........................69
Section 4.04. Distribution of Group I Carryover Shortfall Amount; Group I Carryover Shortfall
Reserve Fund.............................................................................71
Section 4.05. Distribution of Group II Carryover Shortfall Amount; Group II Carryover
Shortfall Reserve Fund...................................................................72
Section 4.06. Distribution of Subordinate Carryover Shortfall Amount; Subordinate Carryover
Shortfall Reserve Fund...................................................................74
Section 4.07. Yield Maintenance Account and Yield Maintenance Agreement................................75
ARTICLE V
Certificates
Section 5.01. Certificates.............................................................................77
Section 5.02. Registration of Transfer and Exchange of Certificates....................................88
Section 5.03. Mutilated, Destroyed, Lost or Stolen Certificates........................................91
Section 5.04. Persons Deemed Owners....................................................................92
Section 5.05. Transfer Restrictions on Residual Certificates...........................................92
Section 5.06. Restrictions on Transferability of Certificates..........................................93
Section 5.07. ERISA Restrictions.......................................................................93
Section 5.08. Rule 144A Information....................................................................95
Section 5.09. Appointment of Paying Agent and Certificate Registrar....................................95
ARTICLE VI
Payments to Certificateholders
Section 6.01. Distributions on the Certificates........................................................97
Section 6.02. Allocation of Losses and Subsequent Recoveries..........................................102
Section 6.03. Payments................................................................................106
Section 6.04. Statements to Certificateholders........................................................106
Section 6.05. Monthly Advances........................................................................109
Section 6.06. Compensating Interest Payments..........................................................109
ARTICLE VII
The Master Servicer
Section 7.01. Liabilities of the Master Servicer......................................................111
Section 7.02. Merger or Consolidation of the Master Servicer..........................................111
Section 7.03. Indemnification of the Trustee, the Custodian and the Securities Administrator..........111
Section 7.04. Limitations on Liability of the Master Servicer and Others..............................112
Section 7.05. Master Servicer Not to Resign...........................................................113
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Section 7.06. Successor Master Servicer...............................................................113
Section 7.07. Sale and Assignment of Master Servicing.................................................114
ARTICLE VIII
Default
Section 8.01. "Event of Default"......................................................................115
Section 8.02. Trustee to Act; Appointment of Successor................................................117
Section 8.03. Notification to Certificateholders......................................................117
Section 8.04. Waiver of Defaults......................................................................118
Section 8.05. List of Certificateholders..............................................................118
ARTICLE IX
Concerning the Trustee and the Securities Administrator
Section 9.01. Duties of Trustee.......................................................................119
Section 9.02. Certain Matters Affecting the Trustee and the Securities Administrator..................121
Section 9.03. Trustee and Securities Administrator Not Liable for Certificates or Mortgage
Loans...................................................................................123
Section 9.04. Trustee and Securities Administrator May Own Certificates...............................123
Section 9.05. Trustee's and Securities Administrator's Fees and Expenses..............................123
Section 9.06. Eligibility Requirements for Trustee, Paying Agent and Securities Administrator.........124
Section 9.07. Insurance...............................................................................124
Section 9.08. Resignation and Removal of the Trustee and Securities Administrator.....................124
Section 9.09. Successor Trustee, Paying Agent and Successor Securities Administrator..................125
Section 9.10. Merger or Consolidation of Trustee, Paying Agent or Securities Administrator............126
Section 9.11. Appointment of Co-Trustee or Separate Trustee...........................................126
Section 9.12. Federal Information Returns and Reports to Certificateholders; REMIC
Administration..........................................................................128
Section 10.01. Termination Upon Repurchase by the Depositor or its Designee or Liquidation of
the Mortgage Loans......................................................................131
Section 10.02. Additional Termination Requirements.....................................................133
ARTICLE XI
Miscellaneous Provisions
Section 11.01. Intent of Parties.......................................................................135
Section 11.02. Amendment...............................................................................135
Section 11.03. Recordation of Agreement................................................................136
Section 11.04. Limitation on Rights of Certificateholders..............................................137
Section 11.05. Acts of Certificateholders..............................................................137
Section 11.06. GOVERNING LAW...........................................................................138
Section 11.07. Notices.................................................................................139
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Section 11.08. Severability of Provisions..............................................................139
Section 11.09. Successors and Assigns..................................................................139
Section 11.10. Article and Section Headings............................................................139
Section 11.11. Counterparts............................................................................139
Section 11.12. Notice to Rating Agencies...............................................................139
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EXHIBITS
Exhibit A-1 - Form of Class A and Class X Certificates
Exhibit A-2 - Form of Class M Certificates
Exhibit A-3 - Form of Class B Certificates
Exhibit A-4 - Form of Class R Certificates
Exhibit B - Mortgage Loan Schedule
Exhibit C - [Reserved]
Exhibit D - Request for Release of Documents
Exhibit E - Form of Affidavit pursuant to Section 860E(e)(4)
Exhibit F-1 - Form of Investment Letter
Exhibit F-2 - Form of Rule 144A and Related Matters Certificate
Exhibit G - Form of Custodial Agreement
Exhibit H-1 - EverHome Subservicing Agreement
Exhibit X-0 - Xxxxxxxxxxx Xxxxxxxxx Xxxxxxxxx
Xxxxxxx X-0 - Xxxxxxxxxx Mutual Servicing Agreement
Exhibit H-4 - EMC Servicing Agreement
Exhibit I - Assignment Agreements
Exhibit J - Mortgage Loan Purchase Agreement
Exhibit K - Form of Trustee Limited Power of Attorney
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POOLING AND SERVICING AGREEMENT
Pooling and Servicing Agreement, dated as of May 1, 2005, among Structured
Asset Mortgage Investments II Inc., a Delaware corporation, as depositor (the
"Depositor"), JPMorgan Chase Bank, N.A., a banking association organized under
the laws of the United States of America, not in its individual capacity but
solely as trustee (the "Trustee"), Xxxxx Fargo Bank, National Association, as
master servicer (in such capacity, the "Master Servicer") and as securities
administrator (in such capacity, the "Securities Administrator"), and EMC
Mortgage Corporation ("EMC").
PRELIMINARY STATEMENT
On or prior to the Closing Date, the Depositor has acquired the Mortgage
Loans from EMC. On the Closing Date, the Depositor will sell the Mortgage Loans
and certain other property to the Trust Fund and receive in consideration
therefor Certificates evidencing the entire beneficial ownership interest in the
Trust Fund.
The Trustee on behalf of the Trust shall make an election for the assets
constituting REMIC I to be treated for federal income tax purposes as a REMIC.
On the Startup Day, the REMIC I Regular Interests will be designated "regular
interests" in such REMIC and the Class R-I Certificate will be designated the
"residual interests" in such REMIC.
The Trustee on behalf of the Trust shall make an election for the assets
constituting REMIC II to be treated for federal income tax purposes as a REMIC.
On the Startup Day, the REMIC II Regular Certificates will be designated
"regular interests" in such REMIC and the Class R-II Certificate will be
designated the "residual interests" in such REMIC.
The Trustee on behalf of the Trust shall make an election for the assets
constituting REMIC III to be treated for federal income tax purposes as a REMIC.
On the Startup Day, the REMIC III Regular Certificates will be designated
"regular interests" in such REMIC and the Class R-III Certificate will be
designated the "residual interests" in such REMIC.
The Mortgage Loans will have an Outstanding Principal Balance as of the
Cut-off Date, after deducting all Scheduled Principal due on or before the
Cut-off Date, of $817,715,039.
In consideration of the mutual agreements herein contained, the Depositor,
the Master Servicer, the Securities Administrator, EMC and the Trustee agree as
follows:
ARTICLE I
Definitions
Section 1.01. Definitions. Whenever used in this Agreement, the following
words and phrases, unless otherwise expressly provided or unless the context
otherwise requires, shall have the meanings specified in this Article.
Accepted Master Servicing Practices: With respect to any Mortgage Loan, as
applicable, those customary mortgage master servicing practices of prudent
institutions that master service mortgage loans of the same type and quality as
such mortgage loan in the jurisdiction where the related Mortgaged Property is
located, to the extent applicable to the Trustee or the Master Servicer (except
in its capacity as successor to a Servicer).
Account: The Distribution Account, the Group I Carryover Shortfall Reserve
Fund, the Group II Carryover Shortfall Reserve Fund, the Yield Maintenance
Account and the related Protected Account, as the context may require.
Accrued Certificate Interest: For any Certificate (other than a Residual
Certificate) on any Distribution Date, the amount of interest accrued during the
related Interest Accrual Period at the applicable Pass-Through Rate on the
Current Principal Amount (or Notional Amount, with respect to the Class I-X
Certificates, the Class II-X Certificates and the Class M-X Certificates) of
such Certificate immediately prior to such Distribution Date, less (i) in the
case of a Senior Certificate (other than a Residual Certificate), such
Certificate's share of (a) any Net Interest Shortfall from the Mortgage Loans in
the related Loan Group, (b) any interest shortfall on the Mortgage Loans in the
related Loan Group resulting from the application of the Relief Act or similar
state law, (c) any shortfalls resulting from Net Deferred Interest and (d) after
the Cross-Over Date, the interest portion of any Realized Losses on the related
Mortgage Loans in the related Loan Group to the extent allocated thereto in
accordance with Section 6.02(g), and (ii) in the case of a Subordinate
Certificate, such Certificate's share of (a) any Net Interest Shortfall from the
Mortgage Loans, (b) any interest shortfall on the Mortgage Loans in the related
Loan Group resulting from the application of the Relief Act or similar state
law, and (c) shortfalls resulting from Net Deferred Interest and the interest
portion of any Realized Losses on the Mortgage Loans allocated to that Class of
Certificates, to the extent allocated thereto in accordance with Section
6.02(g). The Accrued Certificate Interest on the Class I-X Certificates, the
Class II-X Certificates and the Class M-X Certificates on any Distribution Date
will be reduced by any amounts necessary to fund the Group I Carryover Shortfall
Reserve Fund, the Group II Carryover Shortfall Reserve Fund and the Subordinate
Carryover Reserve Fund, respectively, on the related Distribution Date with
respect to the payment of any Group I Carryover Shortfall Amount, any Group II
Carryover Shortfall Amount and any Subordination Carryover Shortfall Amount, as
the case may be. The applicable Senior Percentage of Prepayment Interest
Shortfalls and interest shortfalls resulting from the application of the Relief
Act or similar state law will be allocated among the related Senior Certificates
(other than the Residual Certificates) in proportion to the amount of Accrued
Certificate Interest that would have been allocated thereto in the absence of
such shortfalls. The applicable Subordinate Percentage of Prepayment Interest
Shortfalls and interest shortfalls resulting from the application of the Relief
Act and similar state law will be allocated among the Subordinate Certificates
in proportion to the amount of Accrued Certificate Interest that would have been
allocated thereto in the absence of such shortfalls. The interest portion of
Realized Losses for the Mortgage Loans will be allocated sequentially, in the
following order, to the Class B-6, Class B-5, Class B-4, Class B-3, Class B-2,
Class B-1 , Class M-7, Class M-6, Class M-5, Class M-4, Class M-3, Class M-2,
Class M-1 and Class M-X Certificates and, following the Cross-Over Date, (A) the
interest portion of Realized Losses on the Group I Mortgage Loans will be
allocated on a pro rata basis to the Class I-A-1 Certificates, the Class I-A-2
Certificates and the Class I-X Certificates, (B) the interest portion of
Realized Losses on the Group II Mortgage Loans will be allocated on a pro
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rata basis to the Class II-A-1 Certificates, the Class II-A-2 Certificates,
the Class II-A-3 Certificates and the Class II-X Certificates, and (C) the
interest portion of Realized Losses on the Group III Mortgage Loans will be
allocated on a pro rata basis to the Class III-A-1 Certificates and the Class
III-A-2 Certificates. Accrued Certificate Interest on the Certificates (other
than the Group III Senior Certificates, the Interest Only Certificates and the
Residual Certificates) shall be calculated on the basis of a 360-day year and
the actual number of days elapsed in the related Interest Accrual Period.
Accrued Certificate Interest on the Interest Only Certificates and the Group III
Senior Certificates is calculated on the basis of a 360-day year consisting of
twelve 30 day months. The Residual Certificates do not have a Pass-Through Rate
and will not bear interest. No Accrued Certificate Interest will be payable with
respect to any Class or Classes of Certificates that bear interest after the
Distribution Date on which the outstanding Current Principal Amount or Notional
Amount of such Certificate or Certificates has been reduced to zero.
Adjustable Rate Certificates: The Class I-A-1 Certificates, Class I-A-2
Certificates, Class II-A-1 Certificates, Class II-A-2 Certificates, Class II-A-3
Certificates, Class M-1 Certificates, Class M-2 Certificates, Class M-3
Certificates, Class M-4 Certificates, Class M-5 Certificates, Class M-6
Certificates, Class M-7 Certificates, Class B-1 Certificates, Class B-2
Certificates, Class B-3 Certificates, Class B-4 Certificates, Class B-5
Certificates and Class B-6 Certificates.
Affiliate: As to any Person, any other Person controlling, controlled by or
under common control with such Person. "Control" means the power to direct the
management and policies of a Person, directly or indirectly, whether through
ownership of voting securities, by contract or otherwise. "Controlled" and
"Controlling" have meanings correlative to the foregoing. The Trustee may
conclusively presume that a Person is not an Affiliate of another Person unless
a Responsible Officer of the Trustee has actual knowledge to the contrary.
Agreement: This Pooling and Servicing Agreement and all amendments hereof
and supplements hereto made in accordance with the terms herein.
Allocable Share: With respect to any Class of Subordinate Certificates:
(a) as to any Distribution Date and amounts distributable pursuant to
clauses (1) and (4) of the definition of Subordinate Optimal Principal Amount,
the fraction, expressed as a percentage, the numerator of which is the Current
Principal Amount of such Class of Certificates and the denominator of which is
the aggregate Current Principal Amount of all Classes of the Subordinate
Certificates; and
(b) as to any Distribution Date and amounts distributable pursuant to
clauses (2), (3), (5) and (6) of the definition of Subordinate Optimal Principal
Amount, after giving effect to the reduction of the Current Principal Amount of
the Class M-X Certificates on such Distribution Date,
(1) for any Distribution Date on which the Loss and Delinquency
Test has been satisfied, as to each Class of Subordinate Certificates
for which (x) the related Class Prepayment Distribution Trigger has
been satisfied on such
3
Distribution Date, the fraction, expressed as a percentage, the
numerator of which is the Current Principal Amount of such Class of
Certificates and the denominator of which is the aggregate Current
Principal Amount of all such Classes of Subordinate Certificates for
which the related Class Prepayment Distribution Trigger has been
satisfied and (y) the related Class Prepayment Distribution Trigger
has not been satisfied on such Distribution Date, 0%; provided that if
on a Distribution Date, the Current Principal Amount of any Class of
Subordinate Certificates for which the related Class Prepayment
Distribution Trigger was satisfied on such Distribution Date is
reduced to zero, any amounts distributed pursuant to this clause
(b)(1), to the extent of such Class's remaining Allocable Share, shall
be distributed to the Class of Subordinate Certificates having the
lowest numerical designation and to the Subordinate Certificates which
satisfy the related Class Prepayment Distribution Trigger in reduction
of their respective Current Principal Amounts, in the order of their
numerical Class designations; and
(2) for any Distribution Date on which the Loss and Delinquency
Test has not been satisfied, as to the Subordinate Certificates, 0%;
provided that if on a Distribution Date, any remaining amounts
distributed pursuant to this clause (b)(2) shall be distributed to the
Classes of Subordinate Certificates which satisfy the related Class
Prepayment Distribution Trigger and to the Class of Subordinate
Certificates having the lowest numerical designation in reduction of
their respective Current Principal Amounts in the order of their
numerical Class designations.
Applicable Credit Rating: For any long-term deposit or security, a credit
rating of AAA in the case of S&P and Aaa in the case of Moody's (or with respect
to investments in money market funds, a credit rating of "AAAm" or "AAAm-G", in
the case of S&P, and the highest rating given by Moody's for money market funds,
in the case of Moody's). For any short-term deposit or security, a rating of
A-l+ in the case of S&P and P-1 in the case of Moody's.
Applicable State Law: For purposes of Section 9.12(d), the Applicable State
Law shall be (a) the law of the State of New York and (b) such other state law
whose applicability shall have been brought to the attention of the Securities
Administrator and the Trustee by either (i) an Opinion of Counsel reasonably
acceptable to the Securities Administrator and the Trustee delivered to it by
the Master Servicer or the Depositor, or (ii) written notice from the
appropriate taxing authority as to the applicability of such state law.
Appraised Value: With respect to any Mortgage Loan originated in connection
with a refinancing, the appraised value of the related Mortgaged Property based
upon the appraisal made at the time of such refinancing or, with respect to any
other Mortgage Loan, the amount set forth as the appraised value of the related
Mortgaged Property in an appraisal made for the mortgage originator in
connection with its origination of the related Mortgage Loan.
Assignment Agreements: The agreements attached hereto as Exhibit I, whereby
the Assigned Loans (as defined therein) and the related Servicing Agreements
were assigned to the Trustee for the benefit of the Certificateholders.
4
Assumed Final Distribution Date: May 25, 2045, or if such day is not a
Business Day, the next succeeding Business Day.
Available Funds: With respect to any Distribution Date, the sum of the
Group I Available Funds, the Group II Available Funds and the Group III
Available Funds for such Distribution Date.
Average Loss Severity Percentage: With respect to any Distribution Date and
each Loan Group, the percentage equivalent of a fraction, the numerator of which
is the sum of the Loss Severity Percentages for each Mortgage Loan in such Loan
Group which had a Realized Loss and the denominator of which is the number of
Mortgage Loans in the related Loan Group which had Realized Losses.
Bankruptcy Code: The United States Bankruptcy Code, as amended, as codified
in 11 U.S.C. ss.ss.101-1330.
Bankruptcy Loss: With respect to any Mortgage Loan, any Deficient Valuation
or Debt Service Reduction related to such Mortgage Loan as reported by the
applicable Servicer to the Master Servicer.
Book-Entry Certificates: Initially, all Classes of Certificates other than
the Private Certificates and the Residual Certificates.
Business Day: Any day other than (i) a Saturday or a Sunday, or (ii) a day
on which the New York Stock Exchange or the Federal Reserve is closed or on
which banking institutions in New York City or in any of the jurisdictions in
which the Trustee, the Master Servicer, any Servicer or the Securities
Administrator is located are authorized or obligated by law or executive order
to be closed.
Carryover Shortfall: A Group I Carryover Shortfall, Group II Carryover
Shortfall or Subordinate Carryover Shortfall, as applicable.
Carryover Shortfall Amount: A Group I Carryover Shortfall Amount, a Group
II Carryover Shortfall Amount or a Subordinate Carryover Shortfall Amount, as
applicable.
Century Lending: Century Mortgage Company doing business as Century Lending
and its successor in interest.
Certificate: Any mortgage pass-through certificate evidencing a beneficial
ownership interest in the Trust Fund signed by the Trustee and countersigned by
the Certificate Registrar in substantially the forms annexed hereto as Exhibits
X-0, X-0, X-0 and A-4 with the blanks therein appropriately completed.
Certificate Group: The Group I Senior Certificates, the Group II Senior
Certificates and the Group III Senior Certificates, as applicable.
Certificate Owner: Any Person who is the beneficial owner of a Certificate
registered in the name of the Depository or its nominee.
5
Certificate Register: The register maintained pursuant to Section 5.02.
Certificate Registrar: The Securities Administrator or any successor
certificate registrar appointed hereunder.
Certificate Registrar Office: The office of the Certificate Registrar
located at Xxxxx Xxxxxx xxx Xxxxxxxxx Xxxxxx, Xxxxxxxxxxx, Xxxxxxxxx 00000,
Attention: XXXX XX Series 2005-AR2.
Certificateholder: A Holder of a Certificate.
Class: With respect to the Certificates, I-A-1, I-A-2, I-X, XX-X-0, XX-X-0,
XX-X-0, XX-X, XXX-X-0, XXX-X-0, M-X, X-0, X-0, X-0, X-0, X-0, M-6, M-7, R-I,
R-II, R-III, X-0, X-0, X-0, X-0, B-5 and B-6.
Class Prepayment Distribution Trigger: For a Class of Subordinate
Certificates (other than the Class M-X Certificates) for any Distribution Date,
the Class Prepayment Distribution Trigger is satisfied if the fraction
(expressed as a percentage), the numerator of which is the aggregate Current
Principal Amount of such Class of Certificates and each Class of Certificates
subordinate thereto, if any, and the denominator of which is the aggregate
Scheduled Principal Balance of all of the Mortgage Loans as of the related Due
Date, equals or exceeds such percentage calculated as of the Closing Date. If on
any Distribution Date the Current Principal Amount of any Class of Subordinate
Certificates (other than the Class M-X Certificates) for which the related Class
Prepayment Distribution Trigger was satisfied on such Distribution Date is
reduced to zero, any amounts distributable to such Class of Certificates
pursuant to clauses (2), (3), (5) and (6) of the definition of "Subordinate
Optimal Principal Amount," to the extent of such Class' remaining Allocable
Share, shall be distributed to the remaining Class or Classes of Subordinate
Certificates in reduction of their respective Current Principal Amounts,
sequentially, in the order of their numerical Class designations.
Class R Certificates: The Class R-I, Class R-II and Class R-III
Certificates.
Class R-I Certificate: Any one of the Class R-I Certificates executed by
the Trustee and authenticated by the Certificate Registrar substantially in the
form annexed hereto as Exhibit A-4 and evidencing an interest designated as a
"residual interest" in REMIC I for purposes of the REMIC Provisions.
Class R-II Certificate: Any one of the Class R-II Certificates executed by
the Trustee and authenticated by the Certificate Registrar substantially in the
form annexed hereto as Exhibit A-4 and evidencing an interest designated as a
"residual interest" in REMIC II for purposes of the REMIC Provisions.
Class R-III Certificate: Any one of the Class R-III Certificates executed
by the Trustee and authenticated by the Certificate Registrar substantially in
the form annexed hereto as Exhibit A-4 and evidencing an interest designated as
a "residual interest" in REMIC III for purposes of the REMIC Provisions.
Closing Date: May 31, 2005.
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Code: The Internal Revenue Code of 1986, as amended.
Combined Loan-to-Value Ratio: The fraction, expressed as a percentage, the
numerator of which is the sum of the original principal balance of the related
Mortgage Loan at the date of origination and the principal balance of the
related secondary financing and the denominator of which is the lesser of the
selling price of the Mortgaged Property and its Appraised Value.
Commission: The United States Securities and Exchange Commission.
Compensating Interest Payment: As defined in Section 6.06.
Corporate Trust Office: The office of the Trustee at which at any
particular time its corporate trust business is administered, which office, at
the date of the execution of this Agreement, is located at 0 Xxx Xxxx Xxxxx, 0xx
Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Worldwide Securities Services-Global
Debt, SAMI Series II 2005-AR2. With respect to the Certificate Registrar and the
presentment of Certificates for registration of transfer, exchange or final
payment, Xxxxx Fargo Bank, National Association, Xxxxx Xxxxxx xxx Xxxxxxxxx
Xxxxxx, Xxxxxxxxxxx, Xxxxxxxxx 00000, Attention: Corporate Trust, XXXX XX Series
2005-AR2, and for all other purposes, X.X. Xxx 00, Xxxxxxxx, Xxxxxxxx 00000 (or
for overnight deliveries, 0000 Xxx Xxxxxxxxx Xxxx, Xxxxxxxx, Xxxxxxxx 00000),
Attention: Corporate Trust, XXXX XX Series 2005-AR2.
Corresponding Certificate: With respect to (i) REMIC II Regular Interest
I-A-1, (ii) REMIC II Regular Interest I-A-2, (iii) REMIC II Regular Interest
II-A-1, (iv) REMIC II Regular Interest II-A-2, (v) REMIC II Regular Interest
II-A-3, (vi) REMIC II Regular Interest III-A-1, (vii) REMIC II Regular Interest
III-A-2, (viii) REMIC II Regular Interest M-1, (ix) REMIC II Regular Interest
M-2, (x) REMIC II Regular Interest M-3, (xi) REMIC II Regular Interest M-4,
(xii) REMIC II Regular Interest M-5, (xiii) REMIC II Regular Interest M-6, (xiv)
REMIC II Regular Interest M-7, (xv) REMIC II Regular Interest B-1, (xvi) REMIC
II Regular Interest B-2, (xvii) REMIC II Regular Interest B-3, (xviii) REMIC II
Regular Interest B-4, (xix) REMIC II Regular Interest B-5, (xx) REMIC II Regular
Interest B-6, and (xxi) REMIC II Regular Interest MT-R, (i) the Class I-A-1
Certificates, (ii) the Class I-A-2 Certificates, (iii) the Class II-A-1
Certificates, (iv) the Class II-A-2 Certificates, (v) the Class II-A-3
Certificates, (vi) the Class III-A-1 Certificates, (vii) the Class III-A-2
Certificates, (viii) the Class M-1 Certificates, (ix) the Class M-2
Certificates, (x) the Class M-3 Certificates, (xi) the Class M-4 Certificates,
(xii) the Class M-5 Certificates, (xiii) the Class M-6 Certificates, (xiv) the
Class M-7 Certificates, (xv) the Class B-1 Certificates, (xvi) the Class B-2
Certificates, (xvii) the Class B-3 Certificates, (xviii) the Class B-4
Certificates, (xix) the Class B-5 Certificates, (xx) the Class B-6 Certificates
and (xxi) the Class R-III Certificates, respectively. With respect to (i) REMIC
I Regular Interests 1A, 1B and ZZZ, (ii) REMIC I Regular Interest 2A, 2B and
ZZZ, (iii) REMIC I Regular Interest 3A, 3B and ZZZ, and (iv) REMIC I Regular
Interest ZZZ, (i) REMIC II Regular Interest A-1, (ii) REMIC II Regular Interests
A-2, (iii) REMIC II Regular Interest A-3, and (iv) REMIC II Regular Interests
X-0, X-0, X-0, X-0, X-0 and B-6.
Countrywide: Countrywide Home Loans, Inc.
7
Countrywide AAR: That certain Assignment, Assumption and Recognition
Agreement, made and entered into as of May 31, 2005, among EMC, the Trustee and
Countrywide Servicing.
Countrywide Servicing: Countrywide Home Loans Servicing LP.
Countrywide Servicing Agreement: That certain Seller's Warranties and
Servicing Agreement, dated as of September 1, 2002, as amended on January 1,
2003 and September 1, 2004, by and between Countrywide and EMC, as attached
hereto as Exhibit H-2, as modified pursuant to the Countrywide AAR.
Cross-Over Date: The first Distribution Date on which the aggregate Current
Principal Amount of the Subordinate Certificates has been reduced to zero (after
giving effect to all related distributions on such Distribution Date).
Current Principal Amount: With respect to any Certificate as of any
Distribution Date, an amount equal to the initial principal amount of such
Certificate on the Closing Date, plus the amount of any Net Deferred Interest
allocated thereto on such Distribution Date and on previous Distribution Dates,
plus, in the case of a Subordinate Certificate, any Subsequent Recoveries on the
Mortgage Loans added to the Current Principal Amount of such Certificate
pursuant to Section 6.02(h) hereof, as reduced by (i) all amounts distributed on
previous Distribution Dates on such Certificate with respect to principal, (ii)
the principal portion of all Realized Losses on the Mortgage Loans (other than
Realized Losses on the Mortgage Loans resulting from Debt Service Reductions)
allocated (as applicable) prior to such Distribution Date to such Certificate,
taking account of its applicable Loss Allocation Limitation, and (iii) in the
case of a Subordinate Certificate, such Certificate's pro rata share, if any, of
the applicable Subordinate Certificate Writedown Amount for previous
Distribution Dates. With respect to any Class of Certificates, the Current
Principal Amount thereof will equal the sum of the Current Principal Amounts of
all Certificates in such Class. Notwithstanding the foregoing, solely for
purposes of giving consents, directions, waivers, approvals, requests and
notices, the Class R-I, Class R-II and Class R-III Certificates after the
Distribution Date on which they each receive the distribution of the last dollar
of their respective original principal amount shall be deemed to have Current
Principal Amounts equal to their respective Current Principal Amounts on the day
immediately preceding such Distribution Date.
Custodial Agreement: An agreement, dated as of the Closing Date, among the
Depositor, the Master Servicer, the Trustee and the Custodian, in substantially
the form of Exhibit G hereto.
Custodian: Xxxxx Fargo Bank, National Association, or any successor
custodian appointed pursuant to the provisions hereof and of the Custodial
Agreement.
Cut-off Date: May 1, 2005.
Cut-off Date Balance: $817,715,039.
Debt Service Reduction: Any reduction of the Scheduled Payments which a
Mortgagor is obligated to pay with respect to a Mortgage Loan as a result of any
proceeding under the Bankruptcy Code or any other similar state law or other
proceeding.
8
Deferred Interest: The amount of interest which is deferred and added to
the Outstanding Principal Balance of a Mortgage Loan due to negative
amortization on such Mortgage Loan, as described in the Prospectus Supplement.
Deficient Valuation: With respect to any Mortgage Loan, a valuation of the
Mortgaged Property by a court of competent jurisdiction in an amount less than
the then-outstanding indebtedness under such Mortgage Loan secured by such
Mortgage Property, which valuation results from a proceeding initiated under the
Bankruptcy Code or any other similar state law or other proceeding.
Deposit Amount: The amount of $150.00 deposited by the Depositor on the
Closing Date into the Distribution Account.
Depositor: Structured Asset Mortgage Investments II Inc., a Delaware
corporation, or its successors in interest.
Depository: The Depository Trust Company, the nominee of which is Cede &
Co., and any successor thereto.
Depository Agreement: The meaning specified in Subsection 5.01(a) hereof.
Depository Participant: A broker, dealer, bank or other financial
institution or other Person for whom from time to time the Depository effects
book-entry transfers and pledges of securities deposited with the Depository.
Designated Depository Institution: A depository institution (commercial
bank, federal savings bank, mutual savings bank or savings and loan association)
or trust company (which may include the Trustee), the deposits of which are
fully insured by the FDIC to the extent provided by law.
Determination Date: With respect to any Distribution Date and each Mortgage
Loan, the Determination Date as defined in the related Servicing Agreement.
Disqualified Organization: Any of the following: (i) the United States, any
State or political subdivision thereof, any possession of the United States, or
any agency or instrumentality of any of the foregoing (other than an
instrumentality which is a corporation if all of its activities are subject to
tax and, except for Xxxxxxx Mac or any successor thereto, a majority of its
board of directors is not selected by such governmental unit), (ii) any foreign
government, any international organization, or any agency or instrumentality of
any of the foregoing, (iii) any organization (other than certain farmers'
cooperatives described in Section 521 of the Code) which is exempt from the tax
imposed by Chapter 1 of the Code (including the tax imposed by Section 511 of
the Code on unrelated business taxable income), (iv) rural electric and
telephone cooperatives described in Section 1381(a)(2)(C) of the Code, (v) any
Person with respect to which income on any Residual Certificate is attributable
to a foreign permanent establishment or fixed base, within the meaning of an
applicable income tax treaty, of such Person or any other Person, (vi) any
Person that does not satisfy the requirements of United States Treasury
Department Regulation Section 1.860E-1(c) with respect to a transfer of a
noneconomic residual interest, as defined therein, or (vii) any other Person so
designated by the Trustee and the
9
Certificate Registrar based upon an Opinion of Counsel that the holding of
an ownership interest in a Residual Certificate by such Person may cause any
REMIC contained in the Trust or any Person having an ownership interest in the
Residual Certificate (other than such Person) to incur a liability for any
federal tax imposed under the Code that would not otherwise be imposed but for
the transfer of an ownership interest in a Residual Certificate to such Person.
The terms "United States," "State" and "international organization" shall have
the meanings set forth in Section 7701 of the Code or successor provisions.
Distribution Account: The trust account or accounts created and maintained
pursuant to Section 4.02, which shall be denominated "Xxxxx Fargo Bank, National
Association, as Paying Agent, for the benefit of the registered holders of
Structured Asset Mortgage Investments II Trust 2005-AR2, Mortgage Pass-Through
Certificates, Series 2005-AR2 - Distribution Account," and which shall be an
Eligible Account.
Distribution Account Deposit Date: The Business Day prior to each
Distribution Date.
Distribution Date: The 25th day of any month, beginning in the month
immediately following the month of the Closing Date, or, if such 25th day is not
a Business Day, the Business Day immediately following.
DTC Custodian: The Securities Administrator, and its successors in interest
as custodian for the Depository.
Due Date: With respect to each Mortgage Loan, the date in each month on
which its Scheduled Payment is due, if such due date is the first day of a
month, and otherwise is deemed to be the first day of the following month or
such other date specified in the related Servicing Agreement. For purposes of
calculating the Net Rates of the Mortgage Loans for the first Distribution Date,
the second preceding Due Date with respect to the first Distribution Date will
be the Cut-off Date.
Due Period: With respect to any Distribution Date and each Mortgage Loan,
the period commencing on the second day of the month immediately preceding the
month in which such Distribution Date occurs and ending at the close of business
on the first day of the month in which such Distribution Date occurs.
Eligible Account: Any of (i) a segregated account maintained with a federal
or state chartered depository institution (A) the short-term obligations of
which are rated A-1+ or better by S&P and P-1 by Xxxxx'x at the time of any
deposit therein or (B) insured by the FDIC (to the limits established by such
Corporation), the uninsured deposits in which account are otherwise secured such
that, as evidenced by an Opinion of Counsel (obtained by the Person requesting
that the account be held pursuant to this clause (i)(B)) delivered to the
Trustee prior to the establishment of such account, the Certificateholders will
have a claim with respect to the funds in such account and a perfected first
priority security interest against any collateral (which shall be limited to
Permitted Investments, each of which shall mature not later than the Business
Day immediately preceding the Distribution Date next following the date of
investment in such collateral, or the Distribution Date (if such Permitted
Investment is an obligation of the institution that maintains the Distribution
Account)) securing such funds that is superior to
10
claims of any other depositors or general creditors of the depository
institution with which such account is maintained, (ii) a segregated trust
account or accounts maintained with a federal or state chartered depository
institution or trust company with trust powers acting in its fiduciary capacity
or (iii) a segregated account or accounts of a depository institution acceptable
to the Rating Agencies (as evidenced in writing by the Rating Agencies that use
of any such account as the Distribution Account will not have an adverse effect
on the then-current ratings assigned to the Classes of the Certificates then
rated by the respective Rating Agencies). Eligible Accounts may bear interest.
EMC: EMC Mortgage Corporation and its successor in interest.
EMC AAR: That certain Assignment, Assumption and Recognition Agreement,
made and entered into as of May 31, 2005, among EMC, the Trustee and the
Depositor.
EMC Mortgage Loans: The Mortgage Loans listed on the Mortgage Loan Schedule
as being serviced by the EMC Servicer.
EMC Servicer: EMC, in its capacity as servicer hereunder, and its
successors and assigns.
EMC Servicing Agreement: That certain Servicing Agreement, dated as of May
31, 2005, by and between EMC and the Depositor, as attached hereto as Exhibit
H-4, as modified pursuant to the EMC AAR.
ERISA: The Employee Retirement Income Security Act of 1974, as amended.
Event of Default: An event of default described in Section 8.01.
EverHome: EverHome Mortgage Company (formerly known as Alliance Mortgage
Company), and its successor in interest.
EverHome AAR: That certain Assignment, Assumption and Recognition
Agreement, made and entered into as of May 31, 2005, among EMC, the Trustee and
EverHome.
EverHome Subservicing Agreement: That certain Subservicing Agreement, dated
as of August 1, 2002, and attached hereto as Exhibit H-1, between EverHome as
servicer and EMC as owner, as modified pursuant to the EverHome AAR.
Excess Liquidation Proceeds: To the extent that such amount is not required
by law to be paid to the related Mortgagor, the amount, if any, by which the sum
of any Liquidation Proceeds with respect to a Liquidated Mortgage Loan received
in the calendar month in which such Mortgage Loan became a Liquidated Mortgage
Loan exceeds the sum of (i) the Scheduled Principal Balance of such Liquidated
Mortgage Loan plus (ii) accrued interest at the Mortgage Interest Rate from the
Due Date as to which interest was last paid or advanced (and not reimbursed) to
the related Certificateholders up to the Due Date applicable to the Distribution
Date immediately following the calendar month during which such liquidation
occurred plus (iii) related Liquidation Expenses.
11
Exchange Act: As defined in Section 3.18.
Xxxxxx Xxx: Xxxxxx Xxx (also known as Federal National Mortgage
Association) or any successor thereto.
FDIC: Federal Deposit Insurance Corporation or any successor thereto.
F&M: F&M Mortgage Company, Inc. and its successor in interest.
Final Certification: The certification substantially in the form of Exhibit
Three to the Custodial Agreement.
First Horizon: First Horizon Home Loan Corporation and its successor in
interest.
Fiscal Quarter: December 1 through the last day of February, March 1
through May 31, June 1 through August 31, or September 1 through November 30, as
applicable.
Fractional Undivided Interest: With respect to any Class of Certificates,
the fractional undivided interest evidenced by any Certificate of such Class of
Certificates the numerator of which is the Current Principal Amount, or Notional
Amount in the case of the Interest Only Certificates, of such Certificate and
the denominator of which is the Current Principal Amount, or Notional Amount in
the case of the Interest Only Certificates, of such Class of Certificates. With
respect to the Certificates in the aggregate, the fractional undivided interest
evidenced by (i) each Class of Residual Certificates will be deemed to equal
0.25%, (ii) each Class of Interest Only Certificates will be deemed to equal
1.0% multiplied by a fraction, the numerator of which is the Notional Amount of
such Certificate and the denominator of which is the aggregate Notional Amount
of such respective Class of Certificates and (iii) a Certificate of any other
Class will be deemed to equal 96.25% multiplied by a fraction, the numerator of
which is the Current Principal Amount of such Certificate and the denominator of
which is the aggregate Current Principal Amount of all the Certificates;
provided, however, the percentage in clause (iii) above shall be increased by 1%
upon the retirement of each Class of Interest Only Certificates.
Xxxxxxx Mac: Xxxxxxx Mac (also known as Federal Home Loan Mortgage
Corporation), or any successor thereto.
Global Certificate: Any Private Certificate registered in the name of the
Depository or its nominee, beneficial interests in which are reflected on the
books of the Depository or on the books of a Person maintaining an account with
such Depository (directly or as an indirect participant in accordance with the
rules of such depository).
GreenPoint: GreenPoint Mortgage Funding, Inc., and its successor in
interest.
Gross Margin: As to each Mortgage Loan, the fixed percentage set forth in
the related Mortgage Note and indicated on the Mortgage Loan Schedule, which
percentage is added to the related Index on each Interest Adjustment Date to
determine (subject to rounding, the Minimum Lifetime Mortgage Rate, the Maximum
Lifetime Mortgage Rate and the Periodic Rate Cap) the Mortgage Interest Rate
from such Interest Adjustment Date until the next Interest Adjustment Date.
12
Group I Allocation Fraction: With respect to a Distribution Date, a
fraction equal to (x) the Group I Available Funds for such Distribution Date
over (ii) the aggregate amount of the Group I, Group II and Group III Available
Funds for such Distribution Date.
Group I Available Funds, Group II Available Funds and Group III Available
Funds: With respect to any Distribution Date, an amount equal to the aggregate
of the following amounts with respect to the Mortgage Loans in the related Loan
Group: (a) all previously undistributed payments on account of principal
collections on the Mortgage Loans (including the principal portion of Scheduled
Payments, Principal Prepayments and the principal amount of Net Liquidation
Proceeds and Subsequent Recoveries on the Mortgage Loans) and all previously
undistributed payments on account of interest collections on the Mortgage Loans
received after the Cut-off Date and on or prior to the related Determination
Date, in each case from the Mortgage Loans in the related Loan Group, (b) any
Monthly Advances and Compensating Interest Payments by a Servicer or the Master
Servicer (or by the Trustee, as successor master servicer) with respect to such
Distribution Date, in each case, in respect of the Mortgage Loans in the related
Loan Group, (c) any other miscellaneous amounts remitted by the Master Servicer
or a Servicer pursuant to the related Servicing Agreement, and (d) any amount
reimbursed by the Master Servicer for such Distribution Date in connection with
losses on certain eligible investments, except:
(i) all payments that were due on or before the Cut-off Date with
respect to the Mortgage Loans in the related Loan Group;
(ii) all Principal Prepayments and Liquidation Proceeds received after
the applicable Prepayment Period;
(iii) all payments, other than Principal Prepayments, that represent
early receipt of Scheduled Payments due on a date or dates subsequent to
the related Due Date;
(iv) amounts received on particular Mortgage Loans as late payments of
principal or interest and respecting which, and to the extent that, there
are any unreimbursed Monthly Advances;
(v) amounts representing Monthly Advances determined to be
Nonrecoverable Advances; and
(vi) any investment earnings on amounts on deposit in the Distribution
Account, the Group I Carryover Shortfall Reserve Fund, the Group II
Carryover Shortfall Reserve Fund and the Subordinate Carryover Shortfall
Reserve Fund, and amounts permitted to be withdrawn (other than as a
distribution of principal, interest or Carryover Shortfall Amounts on the
related Certificates) from the Distribution Account, the Group I Carryover
Shortfall Reserve Fund, the Group II Carryover Shortfall Reserve Fund and
the Subordinate Carryover Shortfall Reserve Fund, and amounts to pay the
Servicing Fees or to reimburse any Servicer, the Securities Administrator,
the Trustee, the Custodian or the Master Servicer for fees and the related
Loan Group's pro rata share of reimbursable expenses as are due under the
applicable Servicing Agreement, this
13
Agreement or the Custodial Agreement and that have not been retained
by or paid to such Servicer, the Trustee, the Custodian or the Master
Servicer.
Group I Carryover Shortfall: With respect to the Class I-A-1 and Class
I-A-2 Certificates and any Distribution Date for which the respective
Pass-Through Rate for such Certificates is equal to the weighted average of the
Net Rates on the Group I Mortgage Loans, the excess, if any, of (x) Accrued
Certificate Interest on the Class I-A-1 and Class I-A-2 Certificates for such
Distribution Date, using the lesser of (a) One-Month LIBOR plus the related
Margin, as calculated for such Distribution Date, and (b) 10.50% per annum, over
(y) Accrued Certificate Interest on the Class I-A-1 and Class I-A-2
Certificates, as applicable, for such Distribution Date at the weighted average
of the Net Rates on the Group I Mortgage Loans.
Group I Carryover Shortfall Amount: With respect to the Class I-A-1 and
Class I-A-2 Certificates and each Distribution Date, the sum of (a) the
aggregate amount of Group I Carryover Shortfall for such Classes of Certificates
on such Distribution Date which is not covered on such Distribution Date by
interest distributions otherwise payable to the Class I-X Certificates, plus (b)
any Group I Carryover Shortfall Amount for such Classes of Certificates
remaining unpaid from the preceding Distribution Date, plus (c) one month's
interest on the amount in clause (b) (based on the number of days in the
preceding Interest Accrual Period) at a rate equal to the lesser of (i)
One-Month LIBOR plus the related Margin for such Distribution Date and (ii)
10.50% per annum.
Group I Carryover Shortfall Reserve Fund: An "outside reserve fund" within
the meaning of Treasury Regulation Section 1.860G-2(h), which is not an asset of
any REMIC, ownership of which is evidenced by the Class I-X Certificates, and
which is established and maintained pursuant to Section 4.04.
Group I Mortgage Loans: The Mortgage Loans identified as such on the
Mortgage Loan Schedule.
Group I Senior Certificates: The Class I-A-1 Certificates, the Class I-A-2
Certificates, the Class I-X Certificates, the Class R-I Certificates, the Class
R-II Certificates and the Class R-III Certificates.
Group II Allocation Fraction: With respect to a Distribution Date, a
fraction equal to (x) the Group II Available Funds for such Distribution Date
over (ii) the aggregate amount of the Group I Available Funds, Group II
Available Funds and Group III Available Funds for such Distribution Date.
Group II Carryover Shortfall: With respect to the Class II-A-1, Class
II-A-2 and Class II-A-3 Certificates and any Distribution Date for which the
respective Pass-Through Rate for such Certificates is equal to the weighted
average of the Net Rates on the Group II Mortgage Loans, the excess, if any, of
(x) Accrued Certificate Interest on the Class II-A-1, Class II-A-2 and Class
II-A-3 Certificates for such Distribution Date, using the lesser of (a)
One-Month LIBOR plus the related Margin, as calculated for such Distribution
Date, and (b) 10.50% per annum, over (y) Accrued Certificate Interest on the
Class II-A-1, Class II-A-2 and Class II-A-3
14
Certificates for such Distribution Date at the weighted average of the Net
Rates on the Group II Mortgage Loans.
Group II Carryover Shortfall Amount: With respect to the Class II-A-1,
Class II-A-2, and Class II-A-3 Certificates and each Distribution Date, the sum
of (a) the aggregate amount of Group II Carryover Shortfall for such Classes of
Certificates on such Distribution Date which is not covered on such Distribution
Date by interest distributions otherwise payable to the Class II-X Certificates,
plus (b) any Group II Carryover Shortfall Amount for such Classes of
Certificates remaining unpaid from the preceding Distribution Date, plus (c) one
month's interest on the amount in clause (b) (based on the number of days in the
preceding Interest Accrual Period) at a rate equal to the lesser of (i)
One-Month LIBOR plus the related Margin for such Distribution Date and (ii)
10.50% per annum.
Group II Carryover Shortfall Reserve Fund: An "outside reserve fund" within
the meaning of Treasury Regulation Section 1.860G-2(h), which is not an asset of
any REMIC, ownership of which is evidenced by the Class II-X Certificates, and
which is established and maintained pursuant to Section 4.05.
Group II Mortgage Loans: The Mortgage Loans identified as such on the
Mortgage Loan Schedule.
Group II Senior Certificates: The Class II-A-1 Certificates, the Class
II-A-2 Certificates, the Class II-A-3 Certificates and the Class II-X
Certificates.
Group III Allocation Fraction: With respect to a Distribution Date, a
fraction equal to (x) the Group III Available Funds for such Distribution Date
over (ii) the aggregate amount of the Group I Available Funds, Group II
Available Funds and Group III Available Funds for such Distribution Date.
Group III Mortgage Loans: The Mortgage Loans identified as such on the
Mortgage Loan Schedule.
Group III Senior Certificates: The Class III-A-1 Certificates and the Class
III-A-2 Certificates.
Group I Senior Optimal Principal Amount, Group II Senior Optimal Principal
Amount and Group III Senior Optimal Principal Amount: With respect to each
Distribution Date and the Group I Senior Certificates (other than the Residual
Certificates), the Group II Senior Certificates and the Group III Senior
Certificates, respectively, an amount equal to the sum, without duplication, of
the following (after giving effect to the application of such amounts to cover
Deferred Interest on the Group I Mortgage Loans, the Group II Mortgage Loans and
the Group III Mortgage Loans, respectively, but in no event greater than the
aggregate Current Principal Amount of the Group I Senior Certificates (other
than the Residual Certificates), the Group II Senior Certificates and the Group
III Senior Certificates, as applicable, immediately prior to such Distribution
Date):
(1) the applicable Senior Percentage of all scheduled payments of
principal allocated to the Scheduled Principal Balance due on each
Outstanding
15
Mortgage Loan in the related Loan Group on the related Due Date
as specified in the amortization schedule at the time applicable
thereto (after adjustments for previous Principal Prepayments but
before any adjustment to such amortization schedule by reason of any
bankruptcy or similar proceeding or any moratorium or similar waiver
or grace period, if the Distribution Date occurs prior to the
Cross-over Date);
(2) the applicable Senior Prepayment Percentage of the Scheduled
Principal Balance of each Mortgage Loan in the related Loan Group
which was the subject of a Principal Prepayment in full received by
the Master Servicer during the related Prepayment Period;
(3) the applicable Senior Prepayment Percentage of all Principal
Prepayments in part received by the Master Servicer during the related
Prepayment Period with respect to each Mortgage Loan in the related
Loan Group;
(4) the lesser of (a) the applicable Senior Prepayment Percentage
of the sum of (i) all Net Liquidation Proceeds allocable to principal
received in respect of each Mortgage Loan in the related Loan Group
which became a Liquidated Mortgage Loan during the related Prepayment
Period (other than Mortgage Loans described in the immediately
following clause (ii)) and all Subsequent Recoveries received in
respect of each Liquidated Mortgage Loan in the related Loan Group
during the related Due Period and (ii) the Scheduled Principal Balance
of each such Mortgage Loan in the related Loan Group purchased by an
insurer from the Trustee during the related Prepayment Period pursuant
to the related Primary Mortgage Insurance Policy, if any, or
otherwise; and (b) the applicable Senior Percentage of the sum of (i)
the Scheduled Principal Balance of each Mortgage Loan in the related
Loan Group which became a Liquidated Mortgage Loan during the related
Prepayment Period (other than the Mortgage Loans described in the
immediately following clause (ii)) and all Subsequent Recoveries
received in respect of each Liquidated Mortgage Loan in the related
Loan Group during the related Due Period and (ii) the Scheduled
Principal Balance of each such Mortgage Loan in the related Loan Group
that was purchased by an insurer from the Trustee during the related
Prepayment Period pursuant to the related Primary Mortgage Insurance
Policy, if any or otherwise; and
(5) the applicable Senior Prepayment Percentage of the sum of (a)
the Scheduled Principal Balance of each Mortgage Loan in the related
Loan Group which was repurchased by the Seller in connection with such
Distribution Date and (b) the excess, if any, of the Scheduled
Principal Balance of a Mortgage Loan in the related Loan Group that
has been replaced by the Seller with a Substitute Mortgage Loan
pursuant to the Agreement or the Mortgage Loan Purchase Agreement in
connection with such Distribution Date over the Scheduled Principal
Balance of such Substitute Mortgage Loan.
16
Group I Senior Percentage: Initially, 92.20%. On any Distribution Date, the
lesser of (i) 100% and (ii) the percentage (carried to six places rounded up)
obtained by dividing the aggregate Current Principal Amount of the Group I
Senior Certificates (other than the Residual Certificates) immediately preceding
such Distribution Date by the sum of the aggregate Scheduled Principal Balance
of the Group I Mortgage Loans as of the beginning of the related Due Period.
Group II Senior Percentage: Initially, 92.20%. On any Distribution Date,
the lesser of (i) 100% and (ii) the percentage (carried to six places rounded
up) obtained by dividing the aggregate Current Principal Amount of the Group II
Senior Certificates immediately preceding such Distribution Date by the sum of
the aggregate Scheduled Principal Balance of the Group II Mortgage Loans as of
the beginning of the related Due Period.
Group III Senior Percentage: Initially, 92.20%. On any Distribution Date,
the lesser of (i) 100% and (ii) the percentage (carried to six places rounded
up) obtained by dividing the aggregate Current Principal Amount of the Group III
Senior Certificates immediately preceding such Distribution Date by the sum of
the aggregate Scheduled Principal Balance of the Group III Mortgage Loans as of
the beginning of the related Due Period.
Group I Senior Prepayment Percentage: The Senior Prepayment Percentage for
Group I Senior Certificates (other than the Residual Certificates) on any
Distribution Date occurring during the periods set forth below will be as
follows:
Period (dates inclusive) Group I Senior Prepayment Percentage
-------------------------------------------------------------------------------------------
June 25, 2005 - May 25, 2015 100%
June 25, 2015 - May 25, 2016 Group I Senior Percentage plus 70% of the Group I
Subordinate Percentage
June 25, 2016 - May 25, 2017 Group I Senior Percentage plus 60% of the Group I
Subordinate Percentage
June 25, 2017 - May 25, 2018 Group I Senior Percentage plus 40% of the Group I
Subordinate Percentage
June 25, 2018 - May 25, 2019 Group I Senior Percentage plus 20% of the Group I
Subordinate Percentage
June 25, 2019 and thereafter Group I Senior Percentage
In addition, no reduction of the Group I Senior Prepayment Percentage shall
occur on any Distribution Date unless, as of the last day of the month preceding
such Distribution Date, (A) the aggregate Scheduled Principal Balance of the
Mortgage Loans delinquent 60 days or more (including for this purpose any such
Mortgage Loans in foreclosure and Mortgage Loans with respect to which the
related Mortgaged Property has been acquired by the Trust), averaged over the
last six months, as a percentage of the sum of the aggregate Current Principal
Amount of the Subordinate Certificates, does not exceed 50%; and (B) cumulative
Realized Losses on the Mortgage Loans do not exceed (a) 30% of the Original
Subordinate Principal Balance if such Distribution Date occurs between and
including June 2015 and May 2016, (b) 35% of the Original Subordinate Principal
Balance if such Distribution Date occurs between and including
17
June 2016 and May 2017, (c) 40% of the Original Subordinate Principal
Balance if such Distribution Date occurs between and including June 2017 and May
2018, (d) 45% of the Original Subordinate Principal Balance if such Distribution
Date occurs between and including June 2018 and May 2019, and (e) 50% of the
Original Subordinate Principal Balance if such Distribution Date occurs during
or after June 2019.
In addition, if on any Distribution Date after the Distribution Date
occurring in May 2008 the current weighted average of the Subordinate
Percentages is equal to or greater than two times the initial weighted average
of the Subordinate Percentages and (a) the aggregate Scheduled Principal
Balances of the Mortgage Loans delinquent 60 days or more (including for this
purpose any such Mortgage Loans in foreclosure and such Mortgage Loans with
respect to which the related Mortgaged Property has been acquired by the Trust),
averaged over the last six months, as a percentage of the sum of the aggregate
Current Principal Amount of the Subordinate Certificates, does not exceed 50%
and (b)(i) on or prior to the Distribution Date in May 2008, cumulative Realized
Losses on the Mortgage Loans as of the end of the related Prepayment Period do
not exceed 20% of the Original Subordinate Principal Balance and (ii) after the
Distribution Date in May 2008, cumulative Realized Losses on the Mortgage Loans
as of the end of the related Prepayment Period do not exceed 30% of the Original
Subordinate Principal Balance, then, in each case, the Group I Senior Prepayment
Percentage for such Distribution Date will equal the Group I Senior Percentage;
provided, however, if on a Distribution Date prior to the Distribution Date in
May 2008 the current Subordinate Percentage is equal to or greater than two
times the initial Subordinate Percentage for the Group I Senior Certificates and
the above delinquency and loss tests are met, then the Group I Senior Prepayment
Percentage for such Distribution Date will equal the Group I Senior Percentage
plus 50% of the Group I Subordinate Percentage.
Notwithstanding the foregoing, if on any Distribution Date, the percentage,
the numerator of which is the aggregate Current Principal Amount of the Group I
Senior Certificates (other than the Residual Certificates) immediately preceding
such Distribution Date, and the denominator of which is the sum of the aggregate
Scheduled Principal Balance of the Group I Mortgage Loans as of the beginning of
the related Due Period, exceeds such percentage as of the Cut-off Date, then the
Senior Prepayment Percentage with respect to the Group I Senior Certificates
(other than the Residual Certificates) for such Distribution Date will equal
100%.
Group II Senior Prepayment Percentage: The Senior Prepayment Percentage for
the Group II Senior Certificates on any Distribution Date occurring during the
periods set forth below will be as follows:
Period (dates inclusive) Group II Senior Prepayment Percentage
-----------------------------------------------------------------------------------------------
June 25, 2005 - May 25, 2015 100%
June 25, 2015 - May 25, 2016 Group II Senior Percentage plus 70% of the Group II
Subordinate Percentage
June 25, 2016 - May 25, 2017 Group II Senior Percentage plus 60% of the Group II
Subordinate Percentage
June 25, 2017 - May 25, 2018 Group II Senior Percentage plus 40% of the
18
Group II Subordinate Percentage
June 25, 2018 - May 25, 2019 Group II Senior Percentage plus 20% of the Group II
Subordinate Percentage
June 25, 2019 and thereafter Group II Senior Percentage
In addition, no reduction of the Group II Senior Prepayment Percentage
shall occur on any Distribution Date unless, as of the last day of the month
preceding such Distribution Date, (A) the aggregate Scheduled Principal Balance
of the Mortgage Loans delinquent 60 days or more (including for this purpose any
such Mortgage Loans in foreclosure and Mortgage Loans with respect to which the
related Mortgaged Property has been acquired by the Trust), averaged over the
last six months, as a percentage of the sum of the aggregate Current Principal
Amount of the Subordinate Certificates, does not exceed 50%; and (B) cumulative
Realized Losses on the Mortgage Loans do not exceed (a) 30% of the Original
Subordinate Principal Balance if such Distribution Date occurs between and
including June 2015 and May 2016, (b) 35% of the Original Subordinate Principal
Balance if such Distribution Date occurs between and including June 2016 and May
2017, (c) 40% of the Original Subordinate Principal Balance if such Distribution
Date occurs between and including June 2017 and May 2018, (d) 45% of the
Original Subordinate Principal Balance if such Distribution Date occurs between
and including June 2018 and May 2019, and (e) 50% of the Original Subordinate
Principal Balance if such Distribution Date occurs during or after June 2019.
In addition, if on any Distribution Date after the Distribution Date
occurring in May 2008 the current weighted average of the Subordinate
Percentages is equal to or greater than two times the initial weighted average
of the Subordinate Percentages, and (a) the aggregate Scheduled Principal
Balance of the Mortgage Loans delinquent 60 days or more (including for this
purpose any such Mortgage Loans in foreclosure and such Mortgage Loans with
respect to which the related Mortgaged Property has been acquired by the Trust),
averaged over the last six months, as a percentage of the sum of the aggregate
Current Principal Amount of the Subordinate Certificates, does not exceed 50%
and (b)(i) on or prior to the Distribution Date in May 2008, cumulative Realized
Losses on the Mortgage Loans as of the end of the related Prepayment Period do
not exceed 20% of the Original Subordinate Principal Balance and (ii) after the
Distribution Date in May 2008, cumulative Realized Losses on the Mortgage Loans
as of the end of the related Prepayment Period do not exceed 30% of the Original
Subordinate Principal Balance, then, in each case, the Group II Senior
Prepayment Percentage for such Distribution Date will equal the Group II Senior
Percentage; provided, however, if on a Distribution Date prior to the
Distribution Date in May 2008 the current Subordinate Percentage is equal to or
greater than two times the initial Subordinate Percentage for the Group II
Senior Certificates and the above delinquency and loss tests are met, then the
Group II Senior Prepayment Percentage for such Distribution Date will equal the
Group II Senior Percentage plus 50% of the Group II Subordinate Percentage.
Notwithstanding the foregoing, if on any Distribution Date, the percentage,
the numerator of which is the aggregate Current Principal Amount of the Group II
Senior Certificates immediately preceding such Distribution Date, and the
denominator of which is the sum of the aggregate Scheduled Principal Balance of
the Group II Mortgage Loans as of the beginning of
19
the related Due Period, exceeds such percentage as of the Cut-off Date, then the
Senior Prepayment Percentage with respect to the Group II Senior Certificates
for such Distribution Date will equal 100%.
Group III Senior Prepayment Percentage: The Senior Prepayment Percentage
for the Group III Senior Certificates on any Distribution Date occurring during
the periods set forth below will be as follows:
Period (dates inclusive) Group II Senior Prepayment Percentage
----------------------------------------------------------------------------------------------
June 25, 2005 - May 25, 2015 100%
June 25, 2015 - May 25, 2016 Group III Senior Percentage plus 70% of the Group III
Subordinate Percentage
June 25, 2016 - May 25, 2017 Group III Senior Percentage plus 60% of the Group III
Subordinate Percentage
June 25, 2017 - May 25, 2018 Group III Senior Percentage plus 40% of the Group III
Subordinate Percentage
June 25, 2018 - May 25, 2019 Group III Senior Percentage plus 20% of the Group III
Subordinate Percentage
June 25, 2019 and thereafter Group III Senior Percentage
In addition, no reduction of the Group III Senior Prepayment Percentage
shall occur on any Distribution Date unless, as of the last day of the month
preceding such Distribution Date, (A) the aggregate Scheduled Principal Balance
of the Mortgage Loans delinquent 60 days or more (including for this purpose any
such Mortgage Loans in foreclosure and Mortgage Loans with respect to which the
related Mortgaged Property has been acquired by the Trust), averaged over the
last six months, as a percentage of the sum of the aggregate Current Principal
Amount of the Subordinate Certificates, does not exceed 50%; and (B) cumulative
Realized Losses on the Mortgage Loans do not exceed (a) 30% of the Original
Subordinate Principal Balance if such Distribution Date occurs between and
including June 2015 and May 2016, (b) 35% of the Original Subordinate Principal
Balance if such Distribution Date occurs between and including June 2016 and May
2017, (c) 40% of the Original Subordinate Principal Balance if such Distribution
Date occurs between and including June 2017 and May 2018, (d) 45% of the
Original Subordinate Principal Balance if such Distribution Date occurs between
and including June 2018 and May 2019, and (e) 50% of the Original Subordinate
Principal Balance if such Distribution Date occurs during or after June 2019.
In addition, if on any Distribution Date after the Distribution Date
occurring in May 2008 the current weighted average of the Subordinate
Percentages is equal to or greater than two times the initial weighted average
of the Subordinate Percentages, and (a) the aggregate Scheduled Principal
Balance of the Mortgage Loans delinquent 60 days or more (including for this
purpose any such Mortgage Loans in foreclosure and such Mortgage Loans with
respect to which the related Mortgaged Property has been acquired by the Trust),
averaged over the last six months, as a percentage of the sum of the aggregate
Current Principal Amount of the Subordinate Certificates, does not exceed 50%
and (b)(i) on or prior to the Distribution Date in May 2008, cumulative Realized
Losses on the Mortgage Loans as of the end of the related Prepayment Period do
not exceed 20% of the Original Subordinate Principal Balance and (ii) after the
Distribution Date in May 2008,
20
cumulative Realized Losses on the Mortgage Loans as of the end of the
related Prepayment Period do not exceed 30% of the Original Subordinate
Principal Balance, then, in each case, the Group III Senior Prepayment
Percentage for such Distribution Date will equal the Group III Senior
Percentage; provided, however, if on a Distribution Date prior to the
Distribution Date in May 2008 the current Subordinate Percentage is equal to or
greater than two times the initial Subordinate Percentage for the Group III
Senior Certificates and the above delinquency and loss tests are met, then the
Group III Senior Prepayment Percentage for such Distribution Date will equal the
Group III Senior Percentage plus 50% of the Group III Subordinate Percentage.
Notwithstanding the foregoing, if on any Distribution Date, the percentage,
the numerator of which is the aggregate Current Principal Amount of the Group
III Senior Certificates immediately preceding such Distribution Date, and the
denominator of which is the aggregate Scheduled Principal Balance of the Group
III Mortgage Loans as of the beginning of the related Due Period, exceeds such
percentage as of the Cut-off Date, then the Senior Prepayment Percentage with
respect to the Group III Senior Certificates for such Distribution Date will
equal 100%.
Group I Subordinate Optimal Principal Amount: With respect to the Group I
Subordinate Certificates and each Distribution Date will be an amount equal to
the sum of the following from Loan Group I (after giving effect to the
application of such amounts to cover Deferred Interest on the Mortgage Loans,
but in no event greater than the aggregate Current Principal Amount of the Group
I Subordinate Certificates immediately prior to such Distribution Date):
(1) the Group I Subordinate Percentage of the principal portion of all
Monthly Payments due on each Mortgage Loan in Loan Group I on the related
Due Date, as specified in the amortization schedule at the time applicable
thereto (after adjustment for previous Principal Prepayments but before any
adjustment to such amortization schedule by reason of any bankruptcy or
similar proceeding or any moratorium or similar waiver or grace period);
(2) the Group I Subordinate Prepayment Percentage of the Scheduled
Principal Balance of each Mortgage Loan in Loan Group I which was the
subject of a prepayment in full received by the Master Servicer during the
applicable Prepayment Period;
(3) the Group I Subordinate Prepayment Percentage of all partial
prepayments of principal received by the Master Servicer during the
applicable Prepayment Period for each Mortgage Loan in Loan Group I;
(4) the excess, if any, of (a) the Net Liquidation Proceeds allocable
to principal received in respect of each Mortgage Loan in Loan Group I that
became a Liquidated Mortgage Loan in Loan Group I during the related
Prepayment Period and all Subsequent Recoveries received in respect of each
Liquidated Mortgage Loan in Loan Group I during the related Due Period over
(b) the sum of the amounts distributable to the
21
holders of the Group I Senior Certificates on such Distribution Date
pursuant to clause (4) of the definition of "Senior Optimal Principal
Amount";
(5) the Group I Subordinate Prepayment Percentage of the sum of (a)
the Scheduled Principal Balance of each Mortgage Loan or related REO
Property in Loan Group I which was repurchased by the Seller in connection
with such Distribution Date and (b) the amount, if any, by which the
Scheduled Principal Balance of a Mortgage Loan in Loan Group I that has
been replaced by the Seller with a substitute Mortgage Loan pursuant to the
Agreement or the Mortgage Loan Purchase Agreement in connection with such
Distribution Date exceeds the Scheduled Principal Balance of such
substitute Mortgage Loan; and
(6) on the Distribution Date on which the Current Principal Amounts of
the Group I Senior Certificates (other than the Residual Certificates) have
all been reduced to zero, 100% of any applicable Senior Optimal Principal
Amount.
After the aggregate Current Principal Amount of the Group I Subordinate
Certificates has been reduced to zero, the Group I Subordinate Optimal Principal
Amount will be zero.
Group II Subordinate Optimal Principal Amount: With respect to the Group II
Subordinate Certificates and each Distribution Date will be an amount equal to
the sum of the following from Loan Group II (after giving effect to the
application of such amounts to cover Deferred Interest on the Mortgage Loans,
but in no event greater than the aggregate Current Principal Amount of the Group
II Subordinate Certificates immediately prior to such Distribution Date):
(1) the Group II Subordinate Percentage of the principal portion of
all Monthly Payments due on each Mortgage Loan in Loan Group II on the
related Due Date, as specified in the amortization schedule at the time
applicable thereto (after adjustment for previous Principal Prepayments but
before any adjustment to such amortization schedule by reason of any
bankruptcy or similar proceeding or any moratorium or similar waiver or
grace period);
(2) the Group II Subordinate Prepayment Percentage of the Scheduled
Principal Balance of each Mortgage Loan in Loan Group II which was the
subject of a prepayment in full received by the Master Servicer during the
applicable Prepayment Period;
(3) the Group II Subordinate Prepayment Percentage of all partial
prepayments of principal received by the Master Servicer during the
applicable Prepayment Period for each Mortgage Loan in Loan Group II;
(4) the excess, if any, of (a) the Net Liquidation Proceeds allocable
to principal received in respect of each Mortgage Loan in Loan Group II
that became a Liquidated Mortgage Loan in Loan Group II during the related
Prepayment Period and all Subsequent Recoveries received in respect of each
Liquidated Mortgage Loan in Loan Group II during the related Due Period
over (b) the sum of the amounts distributable to
22
the holders of the Group II Senior Certificates on such Distribution Date
pursuant to clause (4) of the definition of "Senior Optimal Principal
Amount";
(5) the Group II Subordinate Prepayment Percentage of the sum of (a)
the Scheduled Principal Balance of each Mortgage Loan or related REO
Property in Loan Group II which was repurchased by the Seller in connection
with such Distribution Date and (b) the amount, if any, by which the
Scheduled Principal Balance of a Mortgage Loan in Loan Group II that has
been replaced by the Seller with a substitute Mortgage Loan pursuant to the
Agreement or the Mortgage Loan Purchase Agreement in connection with such
Distribution Date exceeds the Scheduled Principal Balance of such
substitute Mortgage Loan; and
(6) on the Distribution Date on which the Current Principal Amounts of
the Group II Senior Certificates (other than the Residual Certificates)
have all been reduced to zero, 100% of any applicable Senior Optimal
Principal Amount.
After the aggregate Current Principal Amount of the Group II Subordinate
Certificates has been reduced to zero, the Group II Subordinate Optimal
Principal Amount will be zero.
Group III Subordinate Optimal Principal Amount: With respect to the Group
III Subordinate Certificates and each Distribution Date will be an amount equal
to the sum of the following from Loan Group III (after giving effect to the
application of such amounts to cover Deferred Interest on the Mortgage Loans,
but in no event greater than the aggregate Current Principal Amount of the Group
III Subordinate Certificates immediately prior to such Distribution Date):
(1) the Group III Subordinate Percentage of the principal portion of
all Monthly Payments due on each Mortgage Loan in Loan Group III on the
related Due Date, as specified in the amortization schedule at the time
applicable thereto (after adjustment for previous Principal Prepayments but
before any adjustment to such amortization schedule by reason of any
bankruptcy or similar proceeding or any moratorium or similar waiver or
grace period);
(2) the Group III Subordinate Prepayment Percentage of the Scheduled
Principal Balance of each Mortgage Loan in Loan Group III which was the
subject of a prepayment in full received by the Master Servicer during the
applicable Prepayment Period;
(3) the Group III Subordinate Prepayment Percentage of all partial
prepayments of principal received by the Master Servicer during the
applicable Prepayment Period for each Mortgage Loan in Loan Group III;
(4) the excess, if any, of (a) the Net Liquidation Proceeds allocable
to principal received in respect of each Mortgage Loan in Loan Group III
that became a Liquidated Mortgage Loan in Loan Group III during the related
Prepayment Period and all Subsequent Recoveries received in respect of each
Liquidated Mortgage Loan in Loan Group III during the related Due Period
over (b) the sum of the amounts distributable to
23
the holders of the Group III Senior Certificates on such Distribution
Date pursuant to clause (4) of the definition of "Senior Optimal Principal
Amount";
(5) the Group III Subordinate Prepayment Percentage of the sum of (a)
the Scheduled Principal Balance of each Mortgage Loan or related REO
Property in Loan Group III which was repurchased by the Seller in
connection with such Distribution Date and (b) the amount, if any, by which
the Scheduled Principal Balance of a Mortgage Loan in Loan Group III that
has been replaced by the Seller with a substitute Mortgage Loan pursuant to
the Agreement or the Mortgage Loan Purchase Agreement in connection with
such Distribution Date exceeds the Scheduled Principal Balance of such
substitute Mortgage Loan; and
(6) on the Distribution Date on which the Current Principal Amounts of
the Group III Senior Certificates (other than the Residual Certificates)
have all been reduced to zero, 100% of any applicable Senior Optimal
Principal Amount.
After the aggregate Current Principal Amount of the Group III Subordinate
Certificates has been reduced to zero, the Group III Subordinate Optimal
Principal Amount will be zero.
Group I Subordinate Percentage: With respect to the Group I Mortgage Loans,
on any Distribution Date, 100% minus the Group I Senior Percentage.
Group II Subordinate Percentage: With respect to the Group II Mortgage
Loans, on any Distribution Date, 100% minus the Group II Senior Percentage.
Group III Subordinate Percentage: With respect to the Group III Mortgage
Loans, on any Distribution Date, 100% minus the Group III Senior Percentage.
Group I Subordinate Prepayment Percentage: For the Subordinate Certificates
and with respect to Loan Group I, on any Distribution Date, 100% minus the Group
I Senior Prepayment Percentage, except that on any Distribution Date after the
aggregate Current Principal Amount of the Group I Senior Certificates (other
than the Residual Certificates) has been reduced to zero, the Group I
Subordinate Prepayment Percentage for the Subordinate Certificates with respect
to Loan Group I will equal 100%.
Group II Subordinate Prepayment Percentage: For the Subordinate
Certificates and with respect to Loan Group II, on any Distribution Date, 100%
minus the Group II Senior Prepayment Percentage, except that on any Distribution
Date after the aggregate Current Principal Amount of the Group II Senior
Certificates has been reduced to zero, the Group II Subordinate Prepayment
Percentage for the Subordinate Certificates with respect to Loan Group II will
equal 100%.
Group III Subordinate Prepayment Percentage: For the Subordinate
Certificates and with respect to Loan Group III, on any Distribution Date, 100%
minus the Group III Senior Prepayment Percentage, except that on any
Distribution Date after the aggregate Current Principal Amount of the Group III
Senior Certificates has been reduced to zero, the Group III Subordinate
Prepayment Percentage for the Subordinate Certificates with respect to Loan
Group III will equal 100%.
24
Holder: The Person in whose name a Certificate is registered in the
Certificate Register, except that, subject to Subsections 11.02(b) and 11.05(e),
solely for the purpose of giving any consent pursuant to this Agreement, any
Certificate registered in the name of the Depositor, the Master Servicer or the
Trustee or any Affiliate thereof shall be deemed not to be outstanding and the
Fractional Undivided Interest evidenced thereby shall not be taken into account
in determining whether the requisite percentage of Fractional Undivided
Interests necessary to effect any such consent has been obtained.
Indemnified Persons: The Trustee, the Master Servicer, the Custodian and
the Securities Administrator and their respective officers, directors, agents
and employees and, with respect to the Trustee, any separate co-trustee and its
officers, directors, agents and employees.
Independent: When used with respect to any specified Person, this term
means that such Person (a) is in fact independent of the Depositor or the Master
Servicer and of any Affiliate of the Depositor or the Master Servicer, (b) does
not have any direct financial interest or any material indirect financial
interest in the Depositor or the Master Servicer or any Affiliate of the
Depositor or the Master Servicer and (c) is not connected with the Depositor or
the Master Servicer or any Affiliate of the Depositor or the Master Servicer as
an officer, employee, promoter, underwriter, trustee, partner, director or
person performing similar functions.
Index: The index, if any, specified in a Mortgage Note by reference to
which the related Mortgage Interest Rate will be adjusted from time to time.
Individual Certificate: Any Private Certificate registered in the name of
the Holder other than the Depository or its nominee.
Initial Certification: The certification substantially in the form of
Exhibit One to the Custodial Agreement.
Institutional Accredited Investor: Any Person meeting the requirements of
Rule 501(a)(l), (2), (3) or (7) of Regulation D under the Securities Act or any
entity all of the equity holders in which come within such paragraphs.
Insurance Policy: With respect to any Mortgage Loan, any standard hazard
insurance policy, flood insurance policy or title insurance policy.
Insurance Proceeds: Amounts paid by the insurer under any Insurance Policy
covering any Mortgage Loan or Mortgaged Property, other than amounts required to
be paid over to the Mortgagor pursuant to law or the related Mortgage Note or
Security Instrument, and other than amounts used to repair or restore the
Mortgaged Property or to reimburse insured expenses, including the related
Servicer's costs and expenses incurred in connection with presenting claims
under the related Insurance Policies.
Interest Accrual Period: With respect to each Distribution Date, for each
Class of Certificates (other than the Residual Certificates and the Adjustable
Rate Certificates), the calendar month preceding the month in which such
Distribution Date occurs. With respect to each Distribution Date and the
Adjustable Rate Certificates, the period commencing on the 25th day of the
preceding calendar month (or in the case of the first Distribution Date, the
Closing
25
Date), to the 24th day of the month of that Distribution Date. The Residual
Certificates shall not bear interest.
Interest Adjustment Date: With respect to a Mortgage Loan, the date, if
any, specified in the related Mortgage Note on which the Mortgage Interest Rate
is subject to adjustment.
Interest Determination Date: With respect to each Distribution Date and the
Adjustable Rate Certificates, the second LIBOR Business Day immediately
preceding the commencement of the related Interest Accrual Period.
Interest Only Certificates: The Class I-X Certificates, the Class II-X
Certificates and the Class M-X Certificates.
Interest Shortfall: With respect to any Distribution Date and each Mortgage
Loan that during the related Prepayment Period was the subject of a Principal
Prepayment or constitutes a Relief Act Mortgage Loan, an amount determined as
follows:
(a) Partial Principal Prepayments received during the relevant Prepayment
Period: The difference between (i) one month's interest at the applicable Net
Rate on the amount of such prepayment and (ii) the amount of interest for the
calendar month of such prepayment (adjusted to the applicable Net Rate) received
at the time of such prepayment;
(b) Principal Prepayments in full received during the relevant Prepayment
Period: The difference between (i) one month's interest at the applicable Net
Rate on the Scheduled Principal Balance of such Mortgage Loan immediately prior
to such prepayment and (ii) the amount of interest for the calendar month of
such prepayment (adjusted to the applicable Net Rate) received at the time of
such prepayment; and
(c) Relief Act Mortgage Loans: As to any Relief Act Mortgage Loan, the
excess of (i) 30 days' interest (or, in the case of a Principal Prepayment in
full, interest to the date of prepayment) on the Scheduled Principal Balance
thereof (or, in the case of a Principal Prepayment in part, on the amount so
prepaid) at the related Net Rate over (ii) 30 days' interest (or, in the case of
a Principal Prepayment in full, interest to the date of prepayment) on such
Scheduled Principal Balance (or, in the case of a Principal Prepayment in part,
on the amount so prepaid) at the Net Rate required to be paid by the Mortgagor
as limited by application of the Relief Act or similar state laws.
Interim Certification: The certification substantially in the form of
Exhibit Two to the Custodial Agreement.
Investment Letter: The letter to be furnished by each Institutional
Accredited Investor which purchases any of the Private Certificates in
connection with such purchase, substantially in the form set forth as Exhibit
F-1 hereto.
Lender-Paid PMI Rate: With respect to any Mortgage Loan covered by a
lender-paid Primary Mortgage Insurance Policy, the premium to be paid by the
applicable Servicer out of interest collections on the related Mortgage Loan, as
stated in the Mortgage Loan Schedule.
26
LIBOR: With respect to any Distribution Date, the arithmetic mean of the
London interbank offered rate quotations for one-month U.S. dollar deposits,
expressed on a per annum basis, determined in accordance with Section 1.02.
LIBOR Business Day: A day on which banks are open for dealing in foreign
currency and exchange in London, England and New York City.
Liquidated Mortgage Loan: With respect to any Distribution Date, a
defaulted Mortgage Loan that has been liquidated through deed-in-lieu of
foreclosure, foreclosure sale, trustee's sale or other realization as provided
by applicable law governing the real property subject to the related Mortgage
and any security agreements and as to which the related Servicer has certified
(in accordance with Section 3.07) in the related Prepayment Period that it has
received all amounts it expects to receive in connection with such liquidation.
Liquidation Date: With respect to any Liquidated Mortgage Loan, the date on
which the related Servicer has certified that such Mortgage Loan has become a
Liquidated Mortgage Loan.
Liquidation Expenses: With respect to a Mortgage Loan in liquidation,
unreimbursed expenses paid or incurred by or for the account of the related
Servicer or the Master Servicer in connection with the liquidation of such
Mortgage Loan and the related Mortgaged Property, such expenses including (a)
property protection expenses, (b) property sales expenses, (c) foreclosure and
sale costs, including court costs and reasonable attorneys' fees, and (d)
similar expenses reasonably paid or incurred in connection with the liquidation
of a Mortgage Loan.
Liquidation Proceeds: Amounts received by the related Servicer in
connection with the liquidation of a defaulted Mortgage Loan, whether through
trustee's sale, foreclosure sale, Insurance Proceeds, condemnation proceeds or
otherwise.
Loan Group: Loan Group I, Loan Group II or Loan Group III, as applicable.
Loan Group I: The group of Mortgage Loans designated as belonging to Loan
Group I on the Mortgage Loan Schedule.
Loan Group II: The group of Mortgage Loans designated as belonging to Loan
Group II on the Mortgage Loan Schedule.
Loan Group III: The group of Mortgage Loans designated as belonging to Loan
Group III on the Mortgage Loan Schedule.
Loan-to-Value Ratio: With respect to any Mortgage Loan, the fraction,
expressed as a percentage, the numerator of which is the principal balance of
the related Mortgage Loan at origination and the denominator of which is the
Original Value of the related Mortgaged Property.
Loss Allocation Limitation: The meaning specified in Section 6.02(c)
hereof.
Loss and Delinquency Test: On any Distribution Date, the Loss and
Delinquency Test is satisfied if, as of the last day of the month preceding such
Distribution Date, (A) the aggregate
27
Scheduled Principal Balance of the Mortgage Loans delinquent 60 days or
more (including for this purpose any such Mortgage Loans in foreclosure and
Mortgage Loans with respect to which the related Mortgaged Property has been
acquired by the Trust), averaged over the last six months, as a percentage of
the aggregate Current Principal Amount of the Subordinate Certificates, does not
exceed 50%; and (B) cumulative Realized Losses on the Mortgage Loans do not
exceed (a) 30% of the Original Subordinate Principal Balance if such
Distribution Date occurs between and including June 2015 and May 2016, (b) 35%
of the Original Subordinate Principal Balance if such Distribution Date occurs
between and including June 2016 and May 2017, (c) 40% of the Original
Subordinate Principal Balance if such Distribution Date occurs between and
including June 2017 and May 2018, (d) 45% of the Original Subordinate Principal
Balance if such Distribution Date occurs between and including June 2018 and May
2019, and (e) 50% of the Original Subordinate Principal Balance if such
Distribution Date occurs on or after June 25, 2019.
Loss Severity Percentage: With respect to any Distribution Date, the
percentage equivalent of a fraction, the numerator of which is the amount of
Realized Losses incurred on a Mortgage Loan and the denominator of which is the
Scheduled Principal Balance of such Mortgage Loan immediately prior to the
liquidation of such Mortgage Loan.
Lost Notes: The original Mortgage Notes that have been lost, as indicated
on the Mortgage Loan Schedule.
Margin: With respect to the Class I-A-1, Class I-A-2, Class II-A-1, Class
II-A-2, Class II-A-3, Class M-1, Class M-2, Class M-3, Class M-4, Class M-5,
Class M-6, Class M-7, Class B-1, Class B-2, Class B-3, Class B-4, Class B-5 and
Class B-6 Certificates, initially 0.230%, 0.300%, 0.230%, 0.280%, 0.320%,
0.450%, 0.480%, 0.500%, 0.680%, 0.740%, 0.760%, 1.250%, 1.350%, 1.700%, 1.750%,
1.800%, 1.800% and 1.800%, respectively, per annum, and starting on the first
Distribution Date after the first possible Optional Termination Date and on each
Distribution Date thereafter, 0.460%, 0.600%, 0.460%, 0.560%, 0.640%, 0.675%,
0.720%, 0.750%, 1.020%, 1.110%, 1.140%, 1.875%, 2.025%, 2.550%, 2.625%, 2.700%,
2.700% and 2.700%, respectively, per annum.
Master Servicer: As of the Closing Date, Xxxxx Fargo Bank, National
Association and, thereafter, its respective successors in interest who meet the
qualifications of a successor Master Servicer as set forth in this Agreement.
Master Servicer Certification: A written certification covering servicing
of the Mortgage Loans by all Servicers and signed by an officer of the Master
Servicer that complies with (i) the Xxxxxxxx-Xxxxx Act of 2002, as amended from
time to time, and (ii) the February 21, 2003 Statement by the Staff of the
Division of Corporation Finance of the Securities and Exchange Commission
Regarding Compliance by Asset-Backed Issuers with Exchange Act Rules 13a-14 and
15d-14, as in effect from time to time, provided that if after the Closing Date
(a) the Xxxxxxxx-Xxxxx Act of 2002 is amended, (b) the Statement referred to in
clause (ii) is modified or superceded by any subsequent statement, rule or
regulation of the Commission or any statement of a division thereof, or (c) any
future releases, rules and regulations are published by the Commission from time
to time pursuant to the Xxxxxxxx-Xxxxx Act of 2002, which in any such case
affects the form or substance of the required certification and results in the
required
28
certification being, in the reasonable judgment of the Master Servicer,
materially more onerous than the form of the required certification as of the
Closing Date, the Master Servicer Certification shall be as agreed to by the
Master Servicer and the Depositor following a negotiation in good faith to
determine how to comply with any such new requirements.
Master Servicing Compensation: The meaning specified in Section 3.14.
Maximum Lifetime Mortgage Rate: As to each Mortgage Loan, the rate, if any,
set forth in the related Mortgage Note and indicated on the Mortgage Loan
Schedule, that is the maximum level to which a Mortgage Interest Rate can adjust
in accordance with its terms, regardless of changes in the applicable Index.
Metrocities: Metrocities Mortgage LLC and its successor in interest.
MERS: Mortgage Electronic Registration Systems, Inc., a corporation
organized and existing under the laws of the State of Delaware, and any
successor thereto.
MERS(R) System: The system of recording transfers of Mortgages
electronically maintained by MERS.
MIN: The Mortgage Identification Number for Mortgage Loans registered with
MERS on the MERS(R) System.
Minimum Lifetime Mortgage Rate: As to each Mortgage Loan, the rate, if any,
set forth in the related Mortgage Note and indicated on the Mortgage Loan
Schedule, that is the minimum level to which a Mortgage Interest Rate can adjust
in accordance with its terms, regardless of changes in the applicable Index.
MOM Loan: With respect to any Mortgage Loan, MERS acting as the mortgagee
of such Mortgage Loan, solely as nominee for the originator of such Mortgage
Loan and its successors and assigns, at the origination thereof, or as nominee
for any subsequent assignee of the originator pursuant to an assignment of
mortgage to MERS.
Monthly Advance: An advance of principal or interest required to be made by
a Servicer pursuant to the related Servicing Agreement or the Master Servicer
pursuant to Section 6.05.
Monthly Payment: With respect to any Mortgage Loan and any month, the
scheduled payment or payments of principal and interest due during such month on
such Mortgage Loan which either is payable by a Mortgagor in such month under
the related Mortgage Note, or in the case of an REO Property, would otherwise
have been payable under the related Mortgage Note.
Moody's: Xxxxx'x Investors Service, Inc. and its successor in interest.
Mortgage File: The mortgage documents listed in Section 2.01(b) pertaining
to a particular Mortgage Loan and any additional documents required to be added
to the Mortgage File pursuant to this Agreement or the Mortgage Loan Purchase
Agreement.
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Mortgage Interest Rate: The annual rate at which interest accrues from time
to time on any Mortgage Loan pursuant to the related Mortgage Note, which rate
is equal to the "Mortgage Interest Rate" set forth with respect thereto on the
Mortgage Loan Schedule.
Mortgage Loan: A mortgage loan transferred and assigned to the Trustee
pursuant to Section 2.01 or Section 2.04 and held as a part of the Trust Fund,
as identified in the Mortgage Loan Schedule, including a mortgage loan the
property securing which has become an REO Property. Any Mortgage Loan that was
intended by the parties hereto to be transferred to the Trust Fund as indicated
by the Mortgage Loan Schedule which is in fact not so transferred for any reason
including, without limitation, a breach of a representation or warranty with
respect thereto, shall continue to be a Mortgage Loan hereunder until the
Repurchase Price with respect thereto has been paid to the Trust Fund.
Mortgage Loan Purchase Agreement: The Mortgage Loan Purchase Agreement,
dated as of May 31, 2005, between EMC, as seller, and Structured Asset Mortgage
Investments II Inc., as purchaser, and all amendments thereof and supplements
thereto, attached hereto as Exhibit J.
Mortgage Loan Schedule: The schedule attached hereto as Exhibit B with
respect to the Mortgage Loans, as amended from time to time to reflect the
repurchase or substitution of Mortgage Loans pursuant to this Agreement or the
Mortgage Loan Purchase Agreement.
Mortgage Note: The originally executed note or other evidence of the
indebtedness of a Mortgagor under the related Mortgage Loan.
Mortgage Store: The Mortgage Store Financial, Inc. and its successor in
interest.
Mortgaged Property: Land and improvements securing the indebtedness of a
Mortgagor under the related Mortgage Loan or, in the case of REO Property, such
REO Property.
Mortgagor: The obligor on a Mortgage Note.
Net Deferred Interest: On any Distribution Date, Deferred Interest on the
Mortgage Loans during the related Due Period net of Principal Prepayments in
full, partial Principal Prepayments, Net Liquidation Proceeds, Repurchase
Proceeds and Scheduled Principal, in that order, included in the related
Available Funds for such Distribution Date and available to be distributed on
the related Certificates on that Distribution Date.
Net Interest Shortfall: With respect to any Distribution Date, Prepayment
Interest Shortfalls, if any, for such Distribution Date net of Compensating
Interest Payments made with respect to such Distribution Date.
Net Liquidation Proceeds: As to any Liquidated Mortgage Loan, Liquidation
Proceeds net of (i) Liquidation Expenses which are payable therefrom to the
related Servicer in accordance with the related Servicing Agreement or this
Agreement, (ii) unreimbursed advances by the related Servicer and Monthly
Advances made with respect to such Mortgage Loan and the related Mortgaged
Property, and (iii) any other amounts payable to the related Servicer under the
related Servicing Agreement.
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Net Rate: With respect to each Mortgage Loan, the Mortgage Interest Rate
less the related Servicing Fee Rate and less the Lender-Paid PMI Rate, if any,
attributable thereto, in each case expressed as per annum rate.
Net Rate Cap: The weighted average of the Net Rates of the related Mortgage
Loans, as adjusted to an effective rate reflecting the accrual of interest on an
actual/360 basis.
Nonrecoverable Advance: Any advance or Monthly Advance (i) which was
previously made or is proposed to be made by the Master Servicer, the Trustee
(as successor Master Servicer) or the related Servicer and (ii) which, in the
good faith judgment of the Master Servicer, the Trustee or the related Servicer,
as the case may be, will not or, in the case of a proposed advance or Monthly
Advance, would not, be ultimately recoverable by the Master Servicer, the
Trustee (as successor Master Servicer) or the related Servicer from Liquidation
Proceeds, Insurance Proceeds or future payments on the Mortgage Loan for which
such advance or Monthly Advance was made or is proposed to be made.
Notional Amount: On any Distribution Date, the Notional Amount of the Class
I-X Certificates is equal to the aggregate Current Principal Amount of the Class
I-A-1 Certificates, the Class I-A-2 Certificates and the Class I-X Certificates
(before taking into account the payment of principal on such Classes of
Certificates on such Distribution Date). On any Distribution Date, the Notional
Amount of the Class II-X Certificates is equal to the aggregate Current
Principal Amount of the Class II-A-1 Certificates, the Class II-A-2
Certificates, the Class II-A-3 Certificates and the Class II-X Certificates (in
each case before taking into account the payment of principal on such Classes of
Certificates on such Distribution Date). On any Distribution Date, the Notional
Amount of the Class M-X Certificates is equal to the aggregate Current Principal
Amount of the Subordinate Certificates (before taking into account the payment
of principal on such Certificates on such Distribution Date).
Offered Certificate: Any Senior Certificate or any Offered Subordinate
Certificate.
Offered Subordinate Certificates: The Class M-X, Class M-1, Class M-2,
Class M-3, Class M-4, Class M-5, Class M-6, Class M-7, Class B-1, Class B-2 and
Class B-3 Certificates.
Officer's Certificate: A certificate signed by the Chairman of the Board,
the Vice Chairman of the Board, the President or a Vice President or Assistant
Vice President or other authorized officer of the Master Servicer or the
Depositor, as applicable, and delivered to the Trustee, as required by this
Agreement.
One-Month LIBOR: A per annum rate equal to the average of interbank offered
rates for one-month U.S. dollar-denominated deposits in the London market based
on quotations of major banks as published in The Wall Street Journal and most
recently available as of the time specified in the related Mortgage Note.
Opinion of Counsel: A written opinion of counsel who is or are acceptable
to each addressee of such opinion and who, unless required to be Independent (an
"Opinion of Independent Counsel"), may be internal counsel for EMC, the Master
Servicer or the Depositor.
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Optional Termination Date: Any Distribution Date on or after which the
Scheduled Principal Balance (before giving effect to distributions to be made on
such Distribution Date) of the Mortgage Loans is less than or equal to 10% of
the Cut-off Date Balance.
Original Subordinate Principal Balance: The aggregate Current Principal
Amount of the Subordinate Certificates as of the Closing Date.
Original Value: The lesser of (i) the Appraised Value or (ii) the sales
price of a Mortgaged Property at the time of origination of a Mortgage Loan,
except if either clause (i) or clause (ii) is unavailable, then the other may be
used to determine the Original Value, or if both clauses (i) and (ii) are
unavailable, then Original Value may be determined from other sources reasonably
acceptable to the Depositor.
Outstanding Mortgage Loan: With respect to any Due Date, a Mortgage Loan
with a Scheduled Principal Balance greater than zero which, prior to such Due
Date, was not the subject of a Principal Prepayment in full, did not become a
Liquidated Mortgage Loan and was not purchased or replaced.
Outstanding Principal Balance: As of the time of any determination, the
principal balance of a Mortgage Loan remaining to be paid by the Mortgagor, or,
in the case of an REO Property, the principal balance of the related Mortgage
Loan remaining to be paid by the Mortgagor at the time such property was
acquired by the Trust Fund less any Net Liquidation Proceeds with respect
thereto to the extent applied to principal.
PMC: PMC Bancorp and its successor in interest.
Pass-Through Rate: As to each Class of Certificates (other than the
Residual Certificates) and the REMIC I Regular Interests and the REMIC II
Regular Interests, the rate of interest determined as provided with respect
thereto, in Section 5.01(c). The Residual Certificates do not have a
Pass-Through Rate and shall not bear interest.
Paying Agent: The Securities Administrator or any successor paying agent
appointed hereunder.
Periodic Rate Cap: As to each Mortgage Loan, the rate, if any, set forth in
the related Mortgage Note and indicated on the Mortgage Loan Schedule, that is
the maximum adjustment that can be made to the Mortgage Interest Rate on each
Interest Adjustment Date in accordance with its terms, regardless of changes in
the applicable Index.
Permitted Investments: Any one or more of the following obligations or
securities held in the name of the Trustee for the benefit of the
Certificateholders:
(i) direct obligations of, and obligations the timely payment of which
are fully guaranteed by the United States of America or any agency or
instrumentality of the United States of America the obligations of which are
backed by the full faith and credit of the United States of America;
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(ii) (a) demand or time deposits, federal funds or bankers'
acceptances (which shall each have a maturity of not more than 90 days and, in
the case of bankers' acceptances, shall in no event have an original maturity of
more than 365 days or a remaining maturity of more than 30 days) issued by any
depository institution or trust company incorporated under the laws of the
United States of America or any state thereof (including the Trustee or the
Master Servicer or its Affiliates acting in its commercial banking capacity) and
subject to supervision and examination by federal and/or state banking
authorities, provided that the commercial paper and/or the short-term debt
rating and/or the long-term unsecured debt obligations of such depository
institution or trust company at the time of such investment or contractual
commitment providing for such investment have the Applicable Credit Rating or
better from each Rating Agency and (b) any other demand or time deposit or
certificate of deposit that is fully insured by the Federal Deposit Insurance
Corporation;
(iii) repurchase obligations with respect to (a) any security
described in clause (i) above or (b) any other security issued or guaranteed by
an agency or instrumentality of the United States of America, the obligations of
which are backed by the full faith and credit of the United States of America,
in either case entered into with a depository institution or trust company
(acting as principal) described in clause (ii)(a) above where the Trustee holds
the security therefor; provided that such repurchase obligations shall have a
remaining maturity of not more than 365 days;
(iv) securities bearing interest or sold at a discount issued by any
corporation (including the Trustee or the Master Servicer or its Affiliates)
incorporated under the laws of the United States of America or any state thereof
that have the Applicable Credit Rating or better from each Rating Agency at the
time of such investment or contractual commitment providing for such investment;
provided, however, that securities issued by any particular corporation will not
be Permitted Investments to the extent that investments therein will cause the
then outstanding principal amount of securities issued by such corporation and
held as part of the Trust to exceed 10% of the aggregate Outstanding Principal
Balances of all the Mortgage Loans and Permitted Investments held as part of the
Trust;
(v) commercial paper (including both non-interest-bearing discount
obligations and interest-bearing obligations payable on demand or on a specified
date not more than one year after the date of issuance thereof) having the
Applicable Credit Rating or better from each Rating Agency at the time of such
investment; provided, that such commercial paper shall have a remaining maturity
of not more than 365 days;
(vi) a Reinvestment Agreement issued by any bank, insurance company or
other corporation or entity;
(vii) any other demand, money market or time deposit, obligation,
security or investment as may be acceptable to each Rating Agency as evidenced
in writing by each Rating Agency to the Trustee; and
(viii) any money market or common trust fund having the Applicable
Credit Rating or better from each Rating Agency, including any such fund for
which the Trustee or Master Servicer or any affiliate of the Trustee or Master
Servicer acts as a manager or an
33
advisor; provided, however, that no instrument or security shall be a
Permitted Investment if such instrument or security evidences a right to receive
only interest payments with respect to the obligations underlying such
instrument or if such security provides for payment of both principal and
interest with a yield to maturity in excess of 120% of the yield to maturity at
par or if such instrument or security is purchased at a price greater than par;
provided, further, that, if rated, any such obligation or security shall not
have an "r" highlighter affixed to its rating.
Permitted Transferee: Any Person other than a Disqualified Organization or
an "electing large partnership" (as defined by Section 775 of the Code).
Person: Any individual, corporation, partnership, joint venture,
association, limited liability company, joint-stock company, trust,
unincorporated organization or government or any agency or political subdivision
thereof.
Physical Certificates: The Residual Certificates and the Private
Certificates.
Platinum: Platinum Capital Group and its successor in interest.
Plaza: Plaza Home Mortgage, Inc. and its successor in interest.
PMC Bancorp: PMC Bancorp and its successor in interest.
Prepayment Charge: With respect to any Mortgage Loan, the charges or
premiums, if any, due in connection with a full or partial prepayment of such
Mortgage Loan in accordance with the terms of the related Mortgage Note.
Prepayment Interest Shortfalls: 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 during the related Prepayment Period, the amount,
if any, by which (i) one month's interest at the applicable Net Rate on the
Scheduled Principal Balance of such Mortgage Loan immediately prior to such
prepayment, 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 less the sum of (a) any Prepayment
Charges relating to such Mortgage Loan and (b) the related Servicing Fee.
Prepayment Period: As to any Distribution Date and (i) the Mortgage Loans
serviced by each Servicer, other than the EMC Servicer, the prepayment period
specified in the related Servicing Agreement and (ii) the Mortgage Loans
serviced by the EMC Servicer, the period from the sixteenth day of the calendar
month preceding the calendar month in which such Distribution Date occurs
through the close of business on the fifteenth day of the calendar month in
which such Distribution Date occurs.
Primary Mortgage Insurance Policy: Any primary mortgage guaranty insurance
policy issued in connection with a Mortgage Loan which provides compensation to
a Mortgage Note holder in the event of default by the obligor under such
Mortgage Note or the related Security Instrument, if any, or any replacement
policy therefor through the related Interest Accrual Period for such Class
relating to a Distribution Date.
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Principal Prepayment: Any payment (whether partial or full) or other
recovery of (or proceeds with respect to) principal on a Mortgage Loan which is
received in advance of its scheduled Due Date to the extent that it is not
accompanied by an amount as to interest representing scheduled interest due on
any date or dates in any month or months subsequent to the month of prepayment,
including Insurance Proceeds and Repurchase Proceeds, but excluding the
principal portion of Net Liquidation Proceeds received at the time a Mortgage
Loan becomes a Liquidated Mortgage Loan.
Private Certificates: Any Class B-4, Class B-5 or Class B-6 Certificate.
Projected Principal Balance: For each specified Distribution Date, as set
forth on Schedule B to the Prospectus Supplement.
Prospectus: The Prospectus, dated December 20, 2004, relating to the
offering of the Offered Certificates.
Prospectus Supplement: The Prospectus Supplement, dated May 27, 2005,
relating to the offering of the Offered Certificates.
Protected Account: An account or accounts established and maintained for
the benefit of Certificateholders by each Servicer with respect to the related
Mortgage Loans and with respect to REO Property serviced by such Servicer
pursuant to the related Servicing Agreement, and which is an Eligible Account.
QIB: A Qualified Institutional Buyer as defined in Rule 144A promulgated
under the Securities Act.
Qualified Insurer: Any insurance company duly qualified as such under the
laws of the state or states in which the related Mortgaged Property or Mortgaged
Properties is or are located, duly authorized and licensed in such state or
states to transact the type of insurance business in which it is engaged and
approved as an insurer by the Master Servicer, so long as its claims-paying
ability is acceptable to the Rating Agencies for pass-through certificates
having the same rating as the Certificates rated by the Rating Agencies as of
the Closing Date.
Rating Agencies: Each of S&P and Moody's. If any such organization or its
successor is no longer in existence, "Rating Agency" shall be a nationally
recognized statistical rating organization, or other comparable Person,
designated by the Depositor, notice of which designation shall be given to the
Trustee. References herein to a given rating category of a Rating Agency shall
mean such rating category without giving effect to any modifiers.
Realized Loss: With respect to (i) a Mortgage Loan, a Bankruptcy Loss, and
(ii) a Liquidated Mortgage Loan, an amount (not less than zero nor greater than
the Scheduled Principal Balance of such Mortgage Loan) equal to (x) the
Outstanding Principal Balance of such Liquidated Mortgage Loan plus accrued and
unpaid interest thereon at the related Mortgage Interest Rate through the last
day of the month of such liquidation, less (y) the Net Liquidation Proceeds with
respect to such Liquidated Mortgage Loan and the related Mortgaged Property that
are allocated to principal. In addition, to the extent the Paying Agent receives
from the related Servicer Subsequent Recoveries with respect to any Mortgage
Loan, the amount of the
35
Realized Loss with respect to that Mortgage Loan will be reduced to the
extent such recoveries are applied to reduce the Current Principal Amount of any
Class or Classes of Certificates (other than the Residual Certificates) on any
Distribution Date. As to any Mortgage Loan which has become the subject of a
Deficient Valuation, if the principal amount due under the related Mortgage Note
has been reduced, then "Realized Loss" is the difference between the principal
balance of such Mortgage Loan outstanding immediately prior to such Deficient
Valuation and the principal balance of such Mortgage Loan as reduced by the
Deficient Valuation.
Record Date: With respect to each Distribution Date and each Class of
Certificates (other than the Residual Certificates and the Adjustable Rate
Certificates), the close of business on the last Business Day of the month next
preceding the month in which the related Distribution Date occurs. With respect
to each Distribution Date and the Adjustable Rate Certificates, the 24th day of
the month of such Distribution Date. With respect to the Residual Certificates,
the Closing Date.
Reinvestment Agreements: One or more reinvestment agreements, acceptable to
the Rating Agencies, from a bank, insurance company or other corporation or
entity (including the Trustee).
Relief Act: The Servicemembers' Civil Relief Act or similar state law.
Relief Act Mortgage Loan: Any Mortgage Loan as to which the Scheduled
Payment thereof has been reduced due to the application of the Relief Act or
similar state laws.
REMIC: A real estate mortgage investment conduit, as defined in the Code.
REMIC I: That group of assets contained in the Trust Fund designated as a
REMIC consisting of (i) the Mortgage Loans, and the Mortgage Notes, mortgages
and other documents related thereto, (ii) the Protected Accounts, (iii) any REO
Property relating to the Mortgage Loans, and any revenues received thereon, (iv)
the rights of the Depositor under the Mortgage Loan Purchase Agreement, (v) the
rights with respect to the Servicing Agreements, to the extent assigned to the
Trustee, (vi) the rights with respect to the Yield Maintenance Agreement and the
Assignment Agreements, (vii) such funds or assets as from time to time are
credited in the Distribution Account (or are required by the terms of this
Agreement to be credited to the Distribution Account) and belonging to the Trust
Fund (exclusive of the Group I Carryover Shortfall Reserve Fund, the Group II
Carryover Shortfall Reserve Fund, the Subordinate Carryover Shortfall Fund, and
the Yield Maintenance Account), (viii) the rights of the Trustee under all the
Insurance Policies required to be maintained pursuant to this Agreement, and any
amounts paid or payable by the related insurer under any such Insurance Policy
(to the extent the related mortgagee has a claim thereto), and (ix) any proceeds
of the foregoing.
REMIC I Interests: The REMIC I Regular Interests and the Class R-I
Certificates.
REMIC I Regular Interests: The REMIC I Regular Interests, with such terms
as described in Section 5.01(c).
REMIC I Subordinated Balance Ratio: The ratio among the Uncertificated
Principal Balances of each of the REMIC I Regular Interests ending with the
designation "A", equal to the
36
ratio between, with respect to each such REMIC I Regular Interest, the
excess of (x) the aggregate Scheduled Principal Balance of the Mortgage Loans in
the related Loan Group over (y) the aggregate Current Principal Amount of the
Senior Certificates (other than the Residual Certificates) in the related Loan
Group.
REMIC II: That group of assets contained in the Trust Fund designated as a
REMIC consisting of the REMIC I Regular Interests.
REMIC II Interests: The REMIC II Regular Interests and the Class R-II
Certificates.
REMIC II Regular Interests: The REMIC II Regular Interests, with such terms
as described in Section 5.01(c).
REMIC III: That group of assets contained in the Trust Fund designated as a
REMIC consisting of the REMIC II Regular Interests.
REMIC III Interests: The REMIC III Regular Certificates and the Class R-III
Certificates.
REMIC III Regular Certificates: The REMIC III Regular Interests, with such
terms as described in Section 5.01(c).
REMIC Opinion: An Opinion of Independent Counsel, to the effect that the
proposed action described therein would not, under the REMIC Provisions, (i)
cause REMIC I, REMIC II or REMIC III to fail to qualify as a REMIC while any
regular interest in such REMIC is outstanding, (ii) result in a tax on
prohibited transactions with respect to any REMIC or (iii) constitute a taxable
contribution to any REMIC after the Startup Day.
REMIC Provisions: The provisions of the federal income tax law relating to
REMICs, which appear at Sections 860A through 860G of the Code, and related
provisions and regulations promulgated thereunder, as the foregoing may be in
effect from time to time.
REO Property: A Mortgaged Property acquired in the name of the Trustee, for
the benefit of Certificateholders, by foreclosure or deed-in-lieu of foreclosure
in connection with a defaulted Mortgage Loan.
Repurchase Price: With respect to any Mortgage Loan (or any property
acquired with respect thereto) required or permitted to be repurchased by the
Seller pursuant to the Mortgage Loan Purchase Agreement or Article II or Section
3.21 of this Agreement, an amount equal to the sum of (i) (A) 100% of the
Outstanding Principal Balance of such Mortgage Loan as of the date of repurchase
(or if the related Mortgaged Property was acquired with respect thereto, 100% of
the Outstanding Principal Balance of such Mortgage Loan as of the date of the
acquisition), plus (B) accrued but unpaid interest on the Outstanding Principal
Balance of such Mortgage Loan at the related Mortgage Interest Rate from the
date through which interest was last paid on such Mortgage Loan by the related
Mortgagor or advanced with respect to such Mortgage Loan to the first day of the
month in which such amount is to be distributed, through and including the last
day of the month of repurchase, and reduced by (C) any portion of the Master
Servicing Compensation, Servicing Fee and Monthly Advances relating to such
Mortgage Loan and
37
advances payable to the purchaser of such Mortgage Loan, and (ii) any costs
and damages incurred by the Trust and the Trustee in connection with any
violation of such Mortgage Loan of any predatory or abusive lending laws.
Repurchase Proceeds: The Repurchase Price in connection with any repurchase
of a Mortgage Loan by the Seller or any cash deposit in connection with the
substitution of a Mortgage Loan.
Request for Release: A request for release in the form attached hereto as
Exhibit D.
Required Insurance Policy: With respect to any Mortgage Loan, any insurance
policy which is required to be maintained from time to time under this Agreement
or the related Servicing Agreement with respect to such Mortgage Loan.
Rescap: Residential Mortgage Capital and its successor in interest.
Residual Certificates: Any of the Class R Certificates.
Responsible Officer: Any officer assigned to the Corporate Trust Office (or
any successor thereto), including any Vice President, Assistant Vice President,
Trust Officer, any Assistant Secretary, any trust officer or any other officer
of the Trustee customarily performing functions similar to those performed by
any of the above designated officers and having direct responsibility for the
administration of this Agreement, and any other officer of the Trustee to whom a
matter arising hereunder may be referred.
Rule 144A: Rule 144A promulgated under the Securities Act.
Rule 144A Certificate: The certificate to be furnished by each purchaser of
a Private Certificate (which is also a Physical Certificate) which is a
Qualified Institutional Buyer as defined under Rule 144A promulgated under the
Securities Act, substantially in the form set forth as Exhibit F-2 hereto.
S&P: Standard & Poor's, a division of The XxXxxx-Xxxx Companies, Inc., and
its successors in interest.
Scheduled Payment: With respect to any Mortgage Loan and any Due Period,
the scheduled payment or payments of principal and interest due during such Due
Period on such Mortgage Loan which either is payable by a Mortgagor in such
month under the related Mortgage Note or, in the case of REO Property, would
otherwise have been payable under the related Mortgage Note.
Scheduled Principal: The principal portion of any Scheduled Payment.
Scheduled Principal Balance: With respect to any Mortgage Loan or related
REO Property on any Distribution Date, the principal balance thereof as of the
Cut-off Date, plus any Deferred Interest that is added to the Outstanding
Principal Balance of such Mortgage Loan, and minus the sum of (1) the principal
portion of the scheduled Monthly Payments due from Mortgagors with respect to
such Mortgage Loan during each Due Period ending prior to such
38
Distribution Date, irrespective of any delinquency in its payment, as
specified in the amortization schedule at the time relating thereto (before any
adjustment to such amortization schedule by reason of any bankruptcy or similar
proceeding occurring after the Cut-off Date (other than a Deficient Valuation)
or any moratorium or similar waiver or grace period), (2) all Principal
Prepayments with respect to such Mortgage Loan received prior to or during the
related Prepayment Period, and all Net Liquidation Proceeds relating to such
Mortgage Loan, to the extent applied by the related Servicer as recoveries of
principal in accordance with this Agreement or the related Servicing Agreement,
that were received by the related Servicer as of the close of business on the
last day of the Prepayment Period related to such Distribution Date and (3) any
Realized Loss thereon incurred prior to or during the related Prepayment Period;
provided that the Scheduled Principal Balance of any Liquidated Mortgage Loan is
zero. Securities Act: The Securities Act of 1933, as amended.
Securities Administrator: Xxxxx Fargo Bank, National Association, and its
successor in interest, and any successor securities administrator appointed as
herein provided.
Securities Legend: "THIS CERTIFICATE HAS NOT BEEN AND WILL NOT BE
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"),
OR UNDER ANY STATE SECURITIES LAWS. THE HOLDER HEREOF, BY PURCHASING THIS
CERTIFICATE, AGREES THAT THIS CERTIFICATE MAY BE REOFFERED, RESOLD, PLEDGED OR
OTHERWISE TRANSFERRED ONLY IN COMPLIANCE WITH THE SECURITIES ACT AND OTHER
APPLICABLE LAWS AND ONLY (1) PURSUANT TO RULE 144A UNDER THE SECURITIES ACT
("RULE 144A") TO A PERSON THAT THE HOLDER REASONABLY BELIEVES IS A QUALIFIED
INSTITUTIONAL BUYER WITHIN THE MEANING OF RULE 144A (A "QIB"), PURCHASING FOR
ITS OWN ACCOUNT OR A QIB PURCHASING FOR THE ACCOUNT OF A QIB, WHOM THE HOLDER
HAS INFORMED, IN EACH CASE, THAT THE REOFFER, RESALE, PLEDGE OR OTHER TRANSFER
IS BEING MADE IN RELIANCE ON RULE 144A, (2) PURSUANT TO AN EXEMPTION FROM
REGISTRATION PROVIDED BY RULE 144 UNDER THE SECURITIES ACT (IF AVAILABLE) OR (3)
IN CERTIFICATED FORM TO AN "INSTITUTIONAL ACCREDITED INVESTOR" WITHIN THE
MEANING THEREOF IN RULE 501(a)(1), (2), (3) or (7) OF REGULATION D UNDER THE
SECURITIES ACT OR ANY ENTITY IN WHICH ALL OF THE EQUITY OWNERS COME WITHIN SUCH
PARAGRAPHS PURCHASING NOT FOR DISTRIBUTION IN VIOLATION OF THE SECURITIES ACT,
SUBJECT TO (A) THE RECEIPT BY THE TRUSTEE AND THE CERTIFICATE REGISTRAR OF A
LETTER SUBSTANTIALLY IN THE FORM PROVIDED IN THE AGREEMENT AND (B) THE RECEIPT
BY THE TRUSTEE AND THE CERTIFICATE REGISTRAR OF SUCH OTHER EVIDENCE ACCEPTABLE
TO THE TRUSTEE AND THE CERTIFICATE REGISTRAR THAT SUCH REOFFER, RESALE, PLEDGE
OR TRANSFER IS IN COMPLIANCE WITH THE SECURITIES ACT AND OTHER APPLICABLE LAWS
OR IN EACH CASE IN ACCORDANCE WITH ALL APPLICABLE SECURITIES LAWS OF THE UNITED
STATES AND ANY OTHER APPLICABLE JURISDICTION. THIS CERTIFICATE MAY NOT BE
ACQUIRED DIRECTLY OR INDIRECTLY BY, OR ON BEHALF OF, AN EMPLOYEE BENEFIT PLAN OR
OTHER RETIREMENT ARRANGEMENT WHICH IS SUBJECT TO TITLE I OF THE EMPLOYEE
RETIREMENT INCOME SECURITY ACT OF 1974, AS
39
AMENDED, OR SECTION 4975 OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED
[in the case of a Residual Certificate or a Private Certificate] UNLESS THE
OPINION OF COUNSEL REQUIRED BY SECTION 5.07 OF THE POOLING AND SERVICING
AGREEMENT IS PROVIDED [in the case of the Class B-4, Class B-5 and Class B-6
Certificates]:, UNLESS THE TRANSFEREE CERTIFIES OR REPRESENTS THAT THE PROPOSED
TRANSFER AND HOLDING OF A CERTIFICATE AND THE SERVICING, MANAGEMENT AND
OPERATION OF THE TRUST AND ITS ASSETS: (I) WILL NOT RESULT IN ANY PROHIBITED
TRANSACTION WHICH IS NOT COVERED UNDER AN INDIVIDUAL OR CLASS PROHIBITED
TRANSACTION EXEMPTION, INCLUDING, BUT NOT LIMITED TO, PROHIBITED TRANSACTION
EXEMPTION ("PTE") 84-14, XXX 00-00, XXX 00-0, XXX 95-60 OR PTE 96-23 AND (II)
WILL NOT GIVE RISE TO ANY ADDITIONAL FIDUCIARY DUTIES ON THE PART OF THE
DEPOSITOR, THE SECURITIES ADMINISTRATOR, THE MASTER SERVICER, ANY SERVICER OR
THE TRUSTEE, WHICH WILL BE DEEMED REPRESENTED BY AN OWNER OF A BOOK-ENTRY
CERTIFICATE OR A GLOBAL CERTIFICATE AND WILL BE EVIDENCED BY A REPRESENTATION OR
AN OPINION OF COUNSEL TO SUCH EFFECT BY OR ON BEHALF OF AN INSTITUTIONAL
ACCREDITED INVESTOR."
Security Instrument: A written instrument creating a valid first lien on a
Mortgaged Property securing a Mortgage Note, which may be any applicable form of
mortgage, deed of trust, deed to secure debt or security deed, including any
riders or addenda thereto.
Seller: EMC Mortgage Corporation, as seller under the Mortgage Loan
Purchase Agreement.
Senior Certificates: The Class I-A-1 Certificates, the Class I-A-2
Certificates, the Class II-A-1 Certificates, the Class II-A-2 Certificates, the
Class II-A-3 Certificates, the Class III-A-1 Certificates, the Class III-A-2
Certificates, the Class I-X Certificates, the Class II-X Certificates and the
Residual Certificates.
Senior Percentage: The Group I Senior Percentage, the Group II Senior
Percentage or the Group III Senior Percentage.
Senior Prepayment Percentage: The Group I Senior Prepayment Percentage, the
Group II Senior Prepayment Percentage or the Group III Prepayment Percentage.
Senior Optimal Principal Amount: The Group I Senior Optimal Principal
Amount, the Group II Senior Optimal Principal Amount or the Group III Senior
Optimal Principal Amount.
Servicer: With respect to each Mortgage Loan, any of EverHome, Washington
Mutual, EMC Mortgage and Countrywide, as set forth in the Mortgage Loan
Schedule.
Servicer Remittance Date: With respect to each Mortgage Loan, the 24th day
of each month, or if such day is not a Business Day, the preceding Business Day.
Servicing Agreement(s): The EverHome Subservicing Agreement, the
Countrywide Servicing Agreement, the EMC Servicing Agreement and the Washington
Mutual Servicing Agreement, as applicable.
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Servicing Fee: As to any Mortgage Loan and a Distribution Date, an amount
equal to the product of (i) the Scheduled Principal Balance of such Mortgage
Loan as of the Due Date in the month preceding the month in which such
Distribution Date occurs and (ii) the applicable Servicing Fee Rate, or, in the
event of any payment of interest that accompanies a Principal Prepayment in full
during the related Due Period made by the Mortgagor immediately prior to such
prepayment, interest at the Servicing Fee Rate on the Scheduled Principal
Balance of such Mortgage Loan for the period covered by such payment of
interest.
Servicing Fee Rate: As to any Mortgage Loan, a per annum rate (including,
as applicable, any additional servicing fees) as set forth in the Mortgage Loan
Schedule.
Servicing Officer: As defined in the related Servicing Agreement.
Startup Day: May 31, 2005.
Strike Price: With respect to the Yield Maintenance Agreement is, for the
Distribution Date occurring in:
(i) June 2005, 9.17%;
(ii) July 2005, 9.26%;
(iii) April, June (other than June 2005), September and November of each
year during the term of the Yield Maintenance Agreement, 9.61%;
(iv) January, March, May, July (other than July 2005), August, October and
December of each year during the term of the Yield Maintenance Agreement, 9.30%;
and
(v) February of each year during the term of the Yield Maintenance
Agreement, 10.30%.
Subordinate Carryover Shortfall: With respect to the Subordinate
Certificates (other than the Class M-X Certificates) and any Distribution Date
for which the respective Pass-Through Rate for such Certificates is equal to the
weighted average of the Net Rates on the Mortgage Loans, the excess, if any, of
(x) Accrued Certificate Interest on the Subordinate Certificates (other than the
Class M-X Certificates) for such Distribution Date, using the lesser of (a)
One-Month LIBOR plus the related Margin, as calculated for such Distribution
Date, and (b) 10.50% per annum, over (y) Accrued Certificate Interest on the
Subordinate Certificates (other than the Class M-X Certificates) for such
Distribution Date at the weighted average of the Net Rates on the Mortgage
Loans.
Subordinate Carryover Shortfall Amount: With respect to the Subordinate
Certificates (other than the Class M-X Certificates) and each Distribution Date,
the sum of (a) the aggregate amount of Subordinate Carryover Shortfall for such
Classes of Certificates on such Distribution Date which is not covered on such
Distribution Date by interest distributions otherwise payable to the Class M-X
Certificates, plus (b) any Subordinate Carryover Shortfall Amount for such
Classes of Certificates remaining unpaid from the preceding Distribution Date,
plus (c) one month's interest on the amount in clause (b) (based on the number
of days in the preceding
41
Interest Accrual Period) at a rate equal to the lesser
of (i) One-Month LIBOR plus the related Margin for such Distribution Date and
(ii) 10.50% per annum.
Subordinate Carryover Shortfall Reserve Fund: An "outside reserve fund"
within the meaning of Treasury Regulation Section 1.860G-2(h), which is not an
asset of any REMIC, ownership of which is evidenced by the Class M-X
Certificates, and which is established and maintained pursuant to Section 4.06.
Subordinate Certificates: The Class M-X, Class M-1, Class M-2, Class M-3,
Class M-4, Class M-5, Class M-6, Class M-7, Class B-1, Class B-2, Class B-3,
Class B-4, Class B-5 and Class B-6 Certificates.
Subordinate Certificate Writedown Amount: With respect to the Subordinate
Certificates, the amount by which (a) the sum of the aggregate Current Principal
Amount of all of the Certificates other than the Residual Certificates (after
giving effect to the distribution of principal collections on the Mortgage Loans
and the allocation of applicable Realized Losses on the Mortgage Loans on a pro
rata basis in reduction of the respective Current Principal Amount of such
Certificates on such Distribution Date) exceeds (b) the aggregate Scheduled
Principal Balance of the Mortgage Loans on the Due Date related to such
Distribution Date.
Subordinate Optimal Principal Amount: The Group I Subordinate Optimal
Principal Amount, the Group II Subordinate Optimal Principal Amount or the Group
III Subordinate Optimal Principal Amount, as applicable.
Subordinate Percentage: As of any Distribution Date and with respect to any
Loan Group, 100% minus the related Senior Percentage for the Senior Certificates
(other than the Residual Certificates) related to such Loan Group. The initial
Subordinate Percentage for each Loan Group is equal to 7.80%.
Subordinate Prepayment Percentage: For the Subordinate Certificates and as
of any Distribution Date and with respect to each Loan Group related to the
Mortgage Loans, will equal 100% minus the related Senior Prepayment Percentage
for the Senior Certificates (other than the Residual Certificates) related to
such Loan Group, except that on any Distribution Date after the Current
Principal Amount of each Class of Senior Certificates (other than the Residual
Certificates) has been reduced to zero, the Subordinate Prepayment Percentage
for the Subordinate Certificates with respect to each Loan Group related to the
Mortgage Loans will equal 100%.
Subsequent Recoveries: As of any Distribution Date, amounts received during
the related Due Period by the related Servicer or surplus amounts held by the
Master Servicer to cover estimated expenses (including, but not limited to,
recoveries in respect of the representations and warranties made by the Seller)
specifically related to a Liquidated Mortgage Loan or disposition of an REO
property prior to the related Prepayment Period that result in a Realized Loss
on a Mortgage Loan, after liquidation or disposition of such Mortgage Loan.
Substitute Mortgage Loan: A mortgage loan tendered to the Trustee pursuant
to the related Servicing Agreement, the Mortgage Loan Purchase Agreement or
Section 2.04 of this Agreement, as applicable, in each case, (i) which has an
Outstanding Principal Balance not
42
greater nor materially less than the Mortgage Loan for which it is to be
substituted; (ii) which has a Mortgage Interest Rate and Net Rate not less than,
and not materially greater than, such Mortgage Loan; (iii) which has a maturity
date not materially earlier or later than such Mortgage Loan and not later than
the latest maturity date of any Mortgage Loan; (iv) which is of the same
property type and occupancy type as such Mortgage Loan; (v) which has a
Loan-to-Value Ratio not greater than the Loan-to-Value Ratio of such Mortgage
Loan; (vi) which (to the extent applicable) has a Combined Loan-to-Value Ratio
not greater than the Combined Loan-to-Value Ratio of such Mortgage Loan; (vii)
which is current in payment of principal and interest as of the date of
substitution; (viii) as to which the payment terms do not vary in any material
respect from the payment terms of the Mortgage Loan for which it is to be
substituted; (ix) which has a Gross Margin, Periodic Rate Cap and Maximum
Lifetime Mortgage Rate no less than those of such Mortgage Loan, has the same
Index and interval between Interest Adjustment Dates as such Mortgage Loan, and
has a Minimum Lifetime Mortgage Rate no lower than that of such Mortgage Loan;
and (x) which is not secured by Mortgaged Property located in (A) the State of
New Jersey, if such Mortgage Loan was originated on or after November 27, 2003
or (B) the State of New Mexico, if such Mortgage Loan was originated on or after
January 1, 2004.
Tax Administration and Tax Matters Person: The person designated as "tax
matters person" in the manner provided under Treasury regulation ss. 1.860F-4(d)
and temporary Treasury regulation ss. 301.6231(a)(7)-1T. The Securities
Administrator or any successor thereto or assignee thereof shall serve as tax
administrator hereunder and as agent for the Tax Matters Person. The Holder of
each Class of Residual Certificates shall be the Tax Matters Person for the
related REMIC, as more particularly set forth in Section 9.12 hereof.
Termination Costs: The costs and expenses related to the termination of any
Servicer, the appointment of a successor servicer or the transfer and assumption
of servicing with respect to the related Servicing Agreement, including, without
limitation, the items set forth in Section 3.03(c).
Trust Fund or Trust: The corpus of the trust created by this Agreement,
consisting of the Mortgage Loans and the other assets described in Section
2.01(a).
Trustee: JPMorgan Chase Bank, N.A., and its successor in interest, or any
successor trustee appointed as herein provided.
Uncertificated Principal Balance: With respect to any REMIC I Regular
Interest or REMIC II Regular Interest as of any Distribution Date, the initial
principal amount of such Regular Interest, reduced by (i) all amounts
distributed on previous Distribution Dates on such Regular Interest with respect
to principal, (ii) the principal portion of all Realized Losses on the Mortgage
Loans allocated prior to such Distribution Date to such Regular Interest, taking
account of the Loss Allocation Limitation and (iii) in the case of a REMIC II
Regular Interest for which the Corresponding Certificate is a Subordinate
Certificate, such Regular Interest's pro rata share, if any, of the applicable
Subordinate Certificate Writedown Amount allocated to such Corresponding
Certificate for previous Distribution Dates.
Underlying Seller: With respect to each Mortgage Loan, Century Lending,
GreenPoint, Metrocities, Washington Mutual Mortgage Loan Trust 2001-1, F&M,
First Horizon, Mortgage
43
Store, Platinum, Plaza, PMC Bancorp, Rescap, WestStar, or Countrywide, as
indicated on the Mortgage Loan Schedule.
Uninsured Cause: Any cause of damage to a Mortgaged Property or related REO
Property such that the complete restoration of such Mortgaged Property or
related REO Property is not fully reimbursable by the hazard insurance policies
or flood insurance policies required to be maintained pursuant to the related
Servicing Agreement, without regard to whether or not such policy is maintained.
United States Person: A citizen or individual resident of the United
States, a corporation or partnership (including an entity treated as a
corporation or partnership for federal income tax purposes) created or organized
in, or under the laws of, the United States or any state thereof or the District
of Columbia (except, in the case of a partnership, to the extent provided in
regulations), provided that, for purposes solely of the Class R Certificates, no
partnership or other entity treated as a partnership for United States federal
income tax purposes shall be treated as a United States Person unless all
persons that own an interest in such partnership, either directly or through any
entity that is not a corporation for United States federal income tax purposes,
are United States Persons, or an estate whose income is subject to United States
federal income tax regardless of its source, or a trust if a court within the
United States is able to exercise primary supervision over the administration of
such trust and one or more such United States Persons have the authority to
control all substantial decisions of such trust or if the Trust was in existence
on August 20, 1996 and properly elected to continue to be treated as such a
United States Person.
Washington Mutual: Washington Mutual Bank and its successor in interest.
Washington Mutual AAR: That certain Assignment, Assumption and Recognition
Agreement, made and entered into as of May 31, 2005, among Washington Mutual,
EMC, the Trustee and the Depositor.
Washington Mutual Servicing Agreement: That certain Servicing Agreement
dated as of April 1, 2005, by and between Washington Mutual and EMC, as attached
hereto as Exhibit H-3, as modified pursuant to the Washington Mutual AAR.
WestStar: WestStar Mortgage, Inc., and its successor in interest.
Yield Maintenance Account: The account to be established and maintained
pursuant to the Yield Maintenance Agreement and Section 4.07, which account will
be an asset of the Trust but not of any REMIC.
Yield Maintenance Agreement: The Interest Rate Corridor Letter Agreement
dated May 26, 2005, entered into by the Yield Maintenance Provider and the
Trustee on behalf of the Trust.
Yield Maintenance Payment: An amount equal to the result of multiplying (A)
the actual number of days in the applicable Interest Accrual Period divided by
360 by (B) the product of (i) the rate equal to the excess of (x) the lesser of
then-current One-Month LIBOR and 10.50% per annum over (y) the applicable Strike
Price and (ii) an amount equal to the lesser of the principal
44
balance of the applicable Class of Certificates and the Projected Principal
Balance for such Class of Certificates for such Distribution Date.
Yield Maintenance Provider: Xxxxx Fargo Bank, National Association.
Section 1.02. Calculation of LIBOR. LIBOR applicable to the calculation of
the Pass-Through Rate on the Adjustable Rate Certificates for any Interest
Accrual Period will be determined on each Interest Determination Date. On each
Interest Determination Date, LIBOR shall be established by the Securities
Administrator and, as to any Interest Accrual Period, will equal the rate for
one month United States dollar deposits that appears on the Telerate Screen Page
3750 as of 11:00 a.m., London time, on such Interest Determination Date.
"Telerate Screen Page 3750" means the display designated as page 3750 on the
Telerate Service (or such other page as may replace page 3750 on that service
for the purpose of displaying London interbank offered rates of major banks). If
such rate does not appear on such page (or such other page as may replace that
page on that service, or if such service is no longer offered, LIBOR shall be so
established by use of such other service for displaying LIBOR or comparable
rates as may be reasonably selected by the Securities Administrator), the rate
will be the Reference Bank Rate. The "Reference Bank Rate" will be determined on
the basis of the rates at which deposits in U.S. dollars are offered by the
reference banks (which shall be any three major banks that are engaged in
transactions in the London interbank market, selected by the Securities
Administrator) as of 11:00 a.m., London time, on the Interest Determination Date
to prime banks in the London interbank market for a period of one month in
amounts approximately equal to the aggregate Current Principal Amounts of the
Adjustable Rate Certificates, then outstanding. The Securities Administrator
will request the principal London office of each of the reference banks to
provide a quotation of its rate. If at least two such quotations are provided,
the rate will be the arithmetic mean of the quotations rounded up to the nearest
whole multiple of 0.03125%. If on such date fewer than two quotations are
provided as requested, the rate will be the arithmetic mean of the rates quoted
by one or more major banks in New York City, selected by the Securities
Administrator, as of 11:00 a.m., New York City time, on such date for loans in
U.S. dollars to leading European banks for a period of one month in amounts
approximately equal to the aggregate Current Principal Amounts of the Adjustable
Rate Certificates, then outstanding. If no such quotations can be obtained, the
rate will be LIBOR for the prior Distribution Date; provided, however, if, under
the priorities described above, LIBOR for a Distribution Date would be based on
LIBOR for the previous Distribution Date for the third consecutive Distribution
Date, the Securities Administrator shall select an alternative comparable index
(over which the Securities Administrator has no control), used for determining
one-month Eurodollar lending rates that is calculated and published (or
otherwise made available) by an independent party. The establishment of LIBOR by
the Securities Administrator on any Interest Determination Date and the
Securities Administrator's subsequent calculation of the Pass-Through Rate
applicable to the Adjustable Rate Certificates for the relevant Interest Accrual
Period, in the absence of manifest error, will be final and binding. Promptly
following each Interest Determination Date, the Securities Administrator shall
supply the Master Servicer with the results of its determination of LIBOR on
such date.
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ARTICLE II
Conveyance of Mortgage Loans;
Original Issuance of Certificates
Section 2.01. Conveyance of Mortgage Loans to Trustee. (a) The Depositor,
concurrently with the execution and delivery of this Agreement, sells, transfers
and assigns to the Trust without recourse all its right, title and interest in
and to (i) the Mortgage Loans identified in the Mortgage Loan Schedule, and the
related Mortgage Notes, mortgages and other related documents, including all
interest and principal due with respect to the Mortgage Loans after the Cut-off
Date, but excluding any payments of principal and interest due on or prior to
the Cut-off Date with respect to the Mortgage Loans, (ii) such assets as shall
from time to time be credited or are required by the terms of this Agreement to
be credited to the Distribution Account, (iii) such assets relating to the
Mortgage Loans as from time to time may be held by the related Servicer in
Protected Accounts and the Paying Agent in the Group I Carryover Shortfall
Reserve Fund, the Group II Carryover Shortfall Reserve Fund, the Subordinate
Carryover Shortfall Reserve Fund, the Yield Maintenance Account and the
Distribution Account for the benefit of the Paying Agent on behalf of the
Certificateholders, (iv) any REO Property, and any revenues received thereon,
(v) the Required Insurance Policies and any amounts paid or payable by the
related insurer under any Insurance Policy (to the extent the related mortgagee
has a claim thereto), (vi) the Mortgage Loan Purchase Agreement to the extent
provided in Subsection 2.03(a), (vii) the rights with respect to the Servicing
Agreements as assigned to the Trustee on behalf of the Certificateholders by the
Assignment Agreements, (viii) the rights with respect to the Yield Maintenance
Agreement and (ix) any proceeds of the foregoing. Although it is the intent of
the parties to this Agreement that the conveyance of the Depositor's right,
title and interest in and to the Mortgage Loans and other assets in the Trust
Fund pursuant to this Agreement shall constitute a purchase and sale and not a
loan, in the event that such conveyance is deemed to be a loan, it is the intent
of the parties to this Agreement that the Depositor shall be deemed to have
granted to the Trustee a first priority perfected security interest in all of
the Depositor's right, title and interest in, to and under the Mortgage Loans
and other assets in the Trust Fund, and that this Agreement shall constitute a
security agreement under applicable law.
(b) In connection with the above sale, transfer and assignment, the
Depositor hereby deposits with the Trustee, or the Custodian, as its agent, as
described in the Mortgage Loan Purchase Agreement, with respect to each Mortgage
Loan, (i) the original Mortgage Note, including any riders thereto, endorsed
without recourse (A) to the order of the Trustee, or (B) in the case of a
Mortgage Loan registered on the MERS(R) System, in blank, and in each case
showing an unbroken chain of endorsements from the original payee thereof to the
Person endorsing it to the Trustee, or a lost note affidavit with indemnity,
together with a copy of the related Mortgage Note, (ii) the original Security
Instrument (noting the presence of the MIN of the Mortgage Loan and language
indicating that the Mortgage Loan is a MOM Loan if the Mortgage Loan is a MOM
Loan), which shall have been recorded (or if the original is not available, a
copy), with evidence of such recording indicated thereon (or if clause (x) in
the proviso below applies, shall be in recordable form), (iii) unless the
Mortgage Loan is registered on the MERS(R) System, a certified copy of the
assignment (which may be in the form of a blanket assignment if permitted in the
jurisdiction in which the Mortgaged Property is located) to "JPMorgan Chase
Bank, N.A., as Trustee," with evidence of recording with respect to each
Mortgage Loan in the name of the Trustee thereon (or if clause (x) in the
proviso below applies
46
or for Mortgage Loans with respect to which the related Mortgaged Property
is located in a state other than Maryland or an Opinion of Counsel has been
provided as set forth in this Section 2.01(b), shall be in recordable form),
(iv) all intervening assignments of the Security Instrument, if applicable and
only to the extent available to the Depositor with evidence of recording
thereon, (v) the original or a copy of the policy or certificate of primary
mortgage guaranty insurance, to the extent available, if any, (vi) the original
policy of title insurance or mortgagee's certificate of title insurance or
commitment or binder for title insurance and (vii) originals of all assumption
and modification agreements, if applicable and available; provided, however,
that in lieu of the foregoing, the Depositor may deliver the following
documents, under the circumstances set forth below: (x) in lieu of the original
Security Instrument, assignments to the Trustee or intervening assignments
thereof which have been delivered, are being delivered or will, upon receipt of
recording information relating to the Security Instrument required to be
included thereon, be delivered to recording offices for recording and have not
been returned to the Depositor in time to permit their delivery as specified
above, the Depositor may deliver, or cause to be delivered, a true copy thereof
with a certification by the Depositor, the applicable Servicer or the title
company issuing the related commitment for title insurance, on the face of such
copy, substantially as follows: "Certified to be a true and correct copy of the
original, which has been transmitted for recording"; (y) in lieu of the Security
Instrument, assignment to the Trustee or intervening assignments thereof, if the
applicable jurisdiction retains the originals of such documents (as evidenced by
a certification from the Depositor, to such effect) the Depositor may deliver,
or cause to be delivered, photocopies of such documents containing an original
certification by the judicial or other governmental authority of the
jurisdiction where such documents were recorded; and (z) the Depositor shall not
be required to deliver intervening assignments or Mortgage Note endorsements
between the related Underlying Seller and EMC Mortgage Corporation, between EMC
Mortgage Corporation and the Depositor, and between the Depositor and the
Trustee; and provided, further, however, that, in the case of Mortgage Loans
which have been prepaid in full after the Cut-off Date and prior to the Closing
Date, the Depositor, in lieu of delivering the above documents, may deliver to
the Trustee or the Custodian, as its agent, a certification to such effect and
shall deposit all amounts paid in respect of such Mortgage Loans in the
Distribution Account on the Closing Date. The Depositor shall deliver such
original documents (including any original documents as to which certified
copies had previously been delivered) to the Trustee or the Custodian, as its
agent, promptly after they are received. The Depositor shall cause, at its
expense, the assignment of the related Security Instrument to the Trustee to be
recorded not later than 180 days after the Closing Date with respect to the
Mortgage Loans, unless (1) such recordation is not required by the Rating
Agencies, (2) an Opinion of Counsel has been provided to the Trustee (with a
copy to the Custodian) which states that recordation of such Security Instrument
is not required to protect the interests of the Certificateholders in the
related Mortgage Loans or (3) MERS is identified on the related Security
Instrument or on a properly recorded assignment of such Security Instrument as
mortgagee of record solely as nominee for Depositor and its successors and
assigns; provided, however, that each assignment shall be submitted for
recording by the Depositor in the manner described above, at no expense to the
Trust or the Trustee, or the Custodian, as its agent, upon the earliest to occur
of: (i) reasonable direction by the Holders of Certificates evidencing
Fractional Undivided Interests aggregating not less than 25% of the Trust, (ii)
the occurrence of an Event of Default, (iii) the occurrence of a bankruptcy,
insolvency or foreclosure relating to the Depositor, (iv) the rating of The Bear
Xxxxxxx Companies Inc. falls below Baa3, (v) the
47
occurrence of a servicing transfer as described in Section 8.02 hereof, or
(vi) with respect to any one assignment of Mortgage, the occurrence of a
bankruptcy, insolvency or foreclosure relating to the Mortgagor under the
related Mortgage. Notwithstanding the foregoing, if the Depositor fails to pay
the cost of recording the assignments, such expense will be paid by the Trustee
and the Trustee shall be reimbursed for such expenses by the Trust in accordance
with Section 9.05.
Section 2.02. Acceptance of Trust Fund by Trustee. (a) The Trustee
acknowledges the sale, transfer and assignment of the Trust Fund to it by the
Depositor and receipt of, subject to further review and the exceptions which may
be noted pursuant to the procedures described below, and declares that it holds,
the documents (or certified copies thereof) delivered to it pursuant to Section
2.01, and declares that it will continue to hold those documents and any
amendments, replacements or supplements thereto and all other assets of the
Trust Fund delivered to it as Trustee in trust for the use and benefit of all
present and future Holders of the Certificates. On the Closing Date, the
Custodian shall acknowledge, with respect to each Mortgage Loan by an Initial
Certification substantially in the form of Exhibit One to the Custodial
Agreement, receipt of the Mortgage File, but without review of such Mortgage
File, except to the extent necessary to confirm that such Mortgage File contains
the related Mortgage Note or a lost note affidavit in lieu thereof. No later
than 90 days after the Closing Date (or, with respect to any Substitute Mortgage
Loan, within five Business Days after the receipt by the Trustee or Custodian
thereof), the Trustee agrees, for the benefit of the Certificateholders, to
review or cause to be reviewed by the Custodian on its behalf (under the
Custodial Agreement), each Mortgage File delivered to it and to execute and
deliver, or cause to be executed and delivered, to the Depositor and the Trustee
an Interim Certification substantially in the form annexed as Exhibit Two to the
Custodial Agreement. In conducting such review, the Trustee or Custodian will
ascertain whether all required documents have been executed and received, and
based on the Mortgage Loan Schedule, whether those documents relate, determined
on the basis of the Mortgagor name, original principal balance and loan number,
to the Mortgage Loans it has received, as identified in the Mortgage Loan
Schedule. In performing any such review, the Trustee or the Custodian, as its
agent, may conclusively rely on the purported due execution and genuineness of
any such document and on the purported genuineness of any signature thereon. If
the Trustee or the Custodian, as its agent, finds any document constituting part
of the Mortgage File not to have been executed or received, or to be unrelated
to the Mortgage Loans or to appear to be defective on its face, then the Trustee
or the Custodian, as its agent, shall promptly notify the Seller. In accordance
with the Mortgage Loan Purchase Agreement, the Seller shall correct or cure any
such defect within ninety (90) days from the date of notice from the Trustee or
the Custodian, as its agent, of the defect and, if the Seller fails to correct
or cure the defect within such period, and such defect materially and adversely
affects the interests of the Certificateholders in the related Mortgage Loan,
the Trustee or the Custodian, as its agent, shall enforce the Seller's
obligation pursuant to the Mortgage Loan Purchase Agreement, to, within 90 days
from the Trustee's or the Custodian's notification, provide a Substitute
Mortgage Loan (if within two years of the Closing Date) or purchase such
Mortgage Loan at the Repurchase Price; provided that, if such defect would cause
the Mortgage Loan to be other than a "qualified mortgage" as defined in Section
860G(a)(3) of the Code, any such cure or repurchase must occur within 90 days
from the date such breach was discovered; provided, however, that if such defect
relates solely to the inability of the Seller to deliver the original Security
Instrument or intervening assignments thereof, or a certified copy thereof,
because the originals of such documents or a certified copy have not been
returned by the applicable jurisdiction, then the
48
Seller shall not be required to purchase such Mortgage Loan if the Seller
delivers such original documents or certified copy promptly upon receipt, but in
no event later than 360 days after the Closing Date. The foregoing repurchase
obligation shall not apply in the event that the Seller cannot deliver such
original or copy of any document submitted for recording to the appropriate
recording office in the jurisdiction because such document has not been returned
by such office; provided that the Seller shall instead deliver a recording
receipt of such recording office or, if such receipt is not available, a
certificate of the Seller or a Servicing Officer confirming that such documents
have been accepted for recording, and delivery to the Trustee or the Custodian,
as its agent, shall be effected by the Seller within thirty days of its receipt
of the original recorded document.
(b) No later than 180 days after the Closing Date (or, with respect to any
Substitute Mortgage Loan, within five Business Days after the receipt by the
Trustee or the Custodian thereof), the Trustee or the Custodian, as its agent,
will review, for the benefit of the Certificateholders, the Mortgage Files
delivered to it and will execute and deliver or cause to be executed and
delivered to the Depositor and the Trustee a Final Certification substantially
in the form annexed as Exhibit Three to the Custodial Agreement. In conducting
such review, the Trustee or the Custodian, as its agent, will ascertain whether
an original of each document required to be recorded has been returned from the
recording office with evidence of recording thereon or a certified copy has been
obtained from the recording office. If the Trustee or the Custodian, as its
agent, finds any document constituting part of the Mortgage File has not been
received, or to be unrelated, determined on the basis of the Mortgagor name,
original principal balance and loan number, to the Mortgage Loans, or to appear
defective on its face, the Trustee or the Custodian, as its agent, shall
promptly notify the Seller (provided, however, that with respect to those
documents described in subsection (b)(iv), (b)(v) and (b)(vii) of Section 2.01,
the Trustee's and the Custodian's obligations shall extend only to the documents
actually delivered to the Trustee or Custodian pursuant to such subsections). In
accordance with the Mortgage Loan Purchase Agreement, the Seller shall correct
or cure any such defect or EMC shall deliver to the Trustee an Opinion of
Counsel to the effect that such defect does not materially or adversely affect
the interests of Certificateholders in such Mortgage Loan within 90 days from
the date of notice from the Trustee of the defect and if the Seller is unable to
cure such defect within such period, and if such defect materially and adversely
affects the interests of the Certificateholders in the related Mortgage Loan,
then the Trustee shall enforce the Seller's obligation under the Mortgage Loan
Purchase Agreement to, within 90 days from the Trustee's or Custodian's
notification, provide a Substitute Mortgage Loan (if within two years of the
Closing Date) or purchase such Mortgage Loan at the Repurchase Price; provided
that, if such defect would cause the Mortgage Loan to be other than a "qualified
mortgage" as defined in Section 860G(a)(3) of the Code, any such cure,
repurchase or substitution must occur within 90 days from the date such breach
was discovered; provided, further, however, that if such defect relates solely
to the inability of the Seller to deliver the original Security Instrument or
intervening assignments thereof, or a certified copy thereof, because the
originals of such documents or a certified copy have not been returned by the
applicable jurisdiction, then the Seller shall not be required to purchase such
Mortgage Loan if the Seller delivers such original documents or certified copy
promptly upon receipt, but in no event later than 360 days after the Closing
Date. The foregoing repurchase obligation shall not apply in the event that the
Seller cannot deliver such original or copy of any document submitted for
recording to the appropriate recording office in the applicable jurisdiction
because such document has not been returned by
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such office; provided that the Seller shall instead deliver a recording
receipt of such recording office or, if such receipt is not available, a
certificate confirming that such documents have been accepted for recording, and
delivery to the Trustee or the Custodian, as its agent, shall be effected by the
Seller within thirty days of its receipt of the original recorded document.
(c) In the event that a Mortgage Loan is purchased by the Seller in
accordance with Subsections 2.02(a) or (b) above, the Seller shall remit to the
Paying Agent the applicable Repurchase Price for deposit in the Distribution
Account and the Seller shall provide to the Master Servicer, the Paying Agent
and the Trustee written notification detailing the components of the Repurchase
Price. Upon deposit of the Repurchase Price in the Distribution Account, the
Depositor shall notify the Trustee and the Trustee or the Custodian, as its
agent (upon receipt of a Request for Release in the form of Exhibit D attached
hereto with respect to such Mortgage Loan), shall release to the Seller the
related Mortgage File and the Trustee shall execute and deliver all instruments
of transfer or assignment, without recourse, furnished to it by the Seller as
are necessary to vest in the Seller title to and rights under the related
Mortgage Loan. Such purchase shall be deemed to have occurred on the date on
which the Repurchase Price in available funds is received by the Paying Agent.
The Trustee shall amend the Mortgage Loan Schedule, which was previously
delivered to it by the Depositor in a form agreed to between the Depositor and
the Trustee, to reflect such repurchase and shall promptly notify the Rating
Agencies and the Master Servicer of such amendment. The obligation of the Seller
to repurchase any Mortgage Loan as to which such a defect in a constituent
document exists shall be the sole remedy respecting such defect available to the
Certificateholders or to the Trustee on their behalf.
Section 2.03. Assignment of Interest in the Mortgage Loan Purchase
Agreement. (a) The Depositor hereby assigns to the Trustee, on behalf of the
Certificateholders, all of its right, title and interest in the Mortgage Loan
Purchase Agreement, including but not limited to the Depositor's rights and
obligations pursuant to the Servicing Agreements (noting that the Seller has
retained the right in the event of breach of the representations, warranties and
covenants, if any, with respect to the related Mortgage Loans of the related
Servicer under the related Servicing Agreement to enforce the provisions thereof
and to seek all or any available remedies). The obligations of the Seller to
substitute or repurchase, as applicable, a Mortgage Loan shall be the Trustee's
and the Certificateholders' sole remedy for any breach thereof. At the request
of the Trustee, the Depositor shall take such actions as may be necessary to
enforce the above right, title and interest on behalf of the Trustee and the
Certificateholders or shall execute such further documents as the Trustee may
reasonably require in order to enable the Trustee to carry out such enforcement.
(b) If the Depositor, the Securities Administrator or the Trustee discovers
a breach of any of the representations and warranties set forth in the Mortgage
Loan Purchase Agreement, which breach materially and adversely affects the value
of the interests of Certificateholders or the Trustee in the related Mortgage
Loan, the party discovering the breach shall give prompt written notice of the
breach to the other parties. The Seller, within 90 days of its discovery or
receipt of notice that such breach has occurred (whichever occurs earlier),
shall cure the breach in all material respects or, subject to the Mortgage Loan
Purchase Agreement or Section 2.04 of this Agreement, as applicable, shall
purchase the Mortgage Loan or any property acquired with respect thereto from
the Trustee; provided, however, that if there is a breach of any
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representation set forth in the Mortgage Loan Purchase Agreement or Section
2.04 of this Agreement, as applicable, and the Mortgage Loan or the related
property acquired with respect thereto has been sold, then the Seller shall pay,
in lieu of the Repurchase Price, any excess of the Repurchase Price over the Net
Liquidation Proceeds received upon such sale. (If the Net Liquidation Proceeds
exceed the Repurchase Price, any excess shall be paid to the Seller, to the
extent not required by law to be paid to the related borrower.) Any such
purchase by the Seller shall be made by providing an amount equal to the
Repurchase Price to the Paying Agent for deposit in the Distribution Account and
written notification detailing the components of such Repurchase Price to the
Trustee, the Paying Agent and the Master Servicer. The Depositor shall notify
the Trustee and submit to the Trustee or the Custodian, as its agent, a Request
for Release in the form of Exhibit D attached hereto, and the Trustee shall
release, or the Trustee shall cause the Custodian to release, to the Seller, the
related Mortgage File and the Trustee shall execute and deliver all instruments
of transfer or assignment furnished to it by the Seller, without recourse, as
are necessary to vest in the Seller title to and rights under the Mortgage Loan
or any property acquired with respect thereto. Such purchase shall be deemed to
have occurred on the date on which the Repurchase Price in available funds is
received by the Securities Administrator. The Trustee shall amend the Mortgage
Loan Schedule to reflect such repurchase and shall promptly notify the Master
Servicer and the Rating Agencies of such amendment. Enforcement of the
obligation of the Seller to purchase (or substitute a Substitute Mortgage Loan
for) any Mortgage Loan or any property acquired with respect thereto (or pay the
Repurchase Price as set forth in the above proviso) as to which a breach has
occurred and is continuing shall constitute the sole remedy respecting such
breach available to the Certificateholders or the Trustee on their behalf.
Section 2.04. Substitution of Mortgage Loans. Notwithstanding anything to
the contrary in this Agreement, in lieu of purchasing a Mortgage Loan pursuant
to the Mortgage Loan Purchase Agreement or Sections 2.02 or 2.03 of this
Agreement, the Seller may, no later than the date by which such purchase by the
Seller would otherwise be required, tender to the Trustee a Substitute Mortgage
Loan accompanied by a certificate of an authorized officer of the Seller that
such Substitute Mortgage Loan conforms to the requirements set forth in the
definition of "Substitute Mortgage Loan" in the Mortgage Loan Purchase Agreement
or this Agreement, as applicable; provided, however, that substitution pursuant
to the Mortgage Loan Purchase Agreement or Section 2.04 of this Agreement, as
applicable, in lieu of purchase shall not be permitted after the termination of
the two-year period beginning on the Startup Day; provided, further, that if the
breach of a Mortgage Loan representation or warranty would cause such Mortgage
Loan to be other than a "qualified mortgage" as defined in Section 860G(a)(3) of
the Code, then any such substitution must occur within 90 days from the date the
breach was discovered. The Trustee or the Custodian, as its agent, shall examine
the Mortgage File for any Substitute Mortgage Loan in the manner set forth in
Section 2.02(a) and the Trustee or the Custodian, as its agent, shall notify the
Seller in writing, within five Business Days after receipt, whether or not the
documents relating to the Substitute Mortgage Loan satisfy the requirements of
the fourth sentence of Subsection 2.02(a). Within two Business Days after such
notification, the Seller shall provide to the Paying Agent for deposit in the
Distribution Account the amount, if any, by which the Outstanding Principal
Balance as of the next preceding Due Date of the Mortgage Loan for which
substitution is being made, after giving effect to Scheduled Principal due on
such date, exceeds the Outstanding Principal Balance as of such date of the
Substitute Mortgage Loan, after giving effect to Scheduled Principal due on such
date, which amount shall
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be treated for the purposes of this Agreement as if it were the payment by
the Seller of the Repurchase Price for the purchase of a Mortgage Loan by the
Seller. After such notification to the Seller and, if any such excess exists,
upon receipt of such deposit, the Trustee shall accept such Substitute Mortgage
Loan which shall thereafter be deemed to be a Mortgage Loan hereunder. In the
event of such a substitution, accrued interest on the Substitute Mortgage Loan
for the month in which the substitution occurs and any Principal Prepayments
made thereon during such month shall be the property of the Trust Fund and
accrued interest for such month on the Mortgage Loan for which the substitution
is made and any Principal Prepayments made thereon during such month shall be
the property of the Seller. The Scheduled Principal on a Substitute Mortgage
Loan due on the Due Date in the month of substitution shall be the property of
the Seller and the Scheduled Principal on the Mortgage Loan for which the
substitution is made due on such Due Date shall be the property of the Trust
Fund. Upon acceptance of the Substitute Mortgage Loan (and delivery to the
Trustee or Custodian of a Request for Release for such Mortgage Loan), the
Trustee (or the Custodian, as its agent) shall release to the Seller the
Mortgage File related to any Mortgage Loan released pursuant to the Mortgage
Loan Purchase Agreement or Section 2.04 of this Agreement, as applicable, and
the Trustee shall execute and deliver all instruments of transfer or assignment,
without recourse, in form as provided to it as are necessary to vest in the
Seller title to and rights under any Mortgage Loan released pursuant to the
Mortgage Loan Purchase Agreement or Section 2.04 of this Agreement, as
applicable. The Seller shall deliver the documents related to the Substitute
Mortgage Loan in accordance with the provisions of the Mortgage Loan Purchase
Agreement or Subsections 2.01(b) and 2.02(b) of this Agreement, as applicable,
with the date of acceptance of the Substitute Mortgage Loan deemed to be the
Closing Date for purposes of the time periods set forth in those Subsections.
The representations and warranties set forth in the Mortgage Loan Purchase
Agreement shall be deemed to have been made by the Seller with respect to each
Substitute Mortgage Loan as of the date of acceptance of such Mortgage Loan by
the Trustee. The Securities Administrator shall amend the Mortgage Loan Schedule
to reflect such substitution and shall provide a copy of such amended Mortgage
Loan Schedule to the Master Servicer, the Trustee and the Rating Agencies.
Section 2.05. Issuance of Certificates. The Trustee acknowledges the
assignment to it of the Mortgage Loans and the other assets comprising the Trust
Fund and, concurrently therewith, has signed, and the Certificate Registrar has
countersigned and delivered to the Depositor, in exchange therefor, Certificates
in such authorized denominations representing such Fractional Undivided
Interests as the Depositor has requested. The Trustee agrees that it will hold
the Mortgage Loans and such other assets as may from time to time be delivered
to it segregated on the books of the Trustee in trust for the benefit of the
Certificateholders.
The Depositor, concurrently with the execution and delivery hereof, does
hereby transfer, assign, set over and otherwise convey in trust to the Trustee
without recourse all the right, title and interest of the Depositor in and to
the REMIC I Regular Interests and the other assets of REMIC II for the benefit
of the holders of the REMIC II Interests. The Trustee acknowledges receipt of
the REMIC I Regular Interests (which are uncertificated) and the other assets of
REMIC II and declares that it holds and will hold the same in trust for the
exclusive use and benefit of the holders of the REMIC II Certificates.
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The Depositor, concurrently with the execution and delivery hereof, does
hereby transfer, assign, set over and otherwise convey in trust to the Trustee
without recourse all the right, title and interest of the Depositor in and to
the REMIC II Regular Interests, and the other assets of REMIC III for the
benefit of the holders of the REMIC III Certificates. The Trustee acknowledges
receipt of the REMIC II Regular Interests (which are uncertificated) and the
other assets of REMIC III and declares that it holds and will hold the same in
trust for the exclusive use and benefit of the holders of the REMIC III
Certificates.
Section 2.06. Representations and Warranties Concerning the Depositor. The
Depositor hereby represents and warrants to the Trustee, the Master Servicer and
the Securities Administrator as follows:
(i) the Depositor (a) is a corporation duly organized, validly
existing and in good standing under the laws of the State of Delaware and
(b) is qualified and in good standing as a foreign corporation to do
business in each jurisdiction where such qualification is necessary, except
where the failure so to qualify would not reasonably be expected to have a
material adverse effect on the Depositor's business as presently conducted
or on the Depositor's ability to enter into this Agreement and to
consummate the transactions contemplated hereby;
(ii) the Depositor has full corporate power to own its property, to
carry on its business as presently conducted and to enter into and perform
its obligations under this Agreement;
(iii) the execution and delivery by the Depositor of this Agreement
have been duly authorized by all necessary corporate action on the part of
the Depositor; and neither the execution and delivery of this Agreement,
nor the consummation of the transactions herein contemplated, nor
compliance with the provisions hereof, will conflict with or result in a
breach of, or constitute a default under, any of the provisions of any law,
governmental rule, regulation, judgment, decree or order binding on the
Depositor or its properties or the articles of incorporation or by-laws of
the Depositor, except those conflicts, breaches or defaults which would not
reasonably be expected to have a material adverse effect on the Depositor's
ability to enter into this Agreement and to consummate the transactions
contemplated hereby;
(iv) the execution, delivery and performance by the Depositor of this
Agreement and the consummation of the transactions contemplated hereby do
not require the consent or approval of, the giving of notice to, the
registration with, or the taking of any other action in respect of, any
state, federal or other governmental authority or agency, except those
consents, approvals, notices, registrations or other actions as have
already been obtained, given or made;
(v) this Agreement has been duly executed and delivered by the
Depositor and, assuming due authorization, execution and delivery by the
other parties hereto, constitutes a valid and binding obligation of the
Depositor enforceable against it in accordance with its terms (subject to
applicable bankruptcy and insolvency laws and other similar laws affecting
the enforcement of the rights of creditors generally);
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(vi) there are no actions, suits or proceedings pending or, to the
knowledge of the Depositor, threatened against the Depositor, before or by
any court, administrative agency, arbitrator or governmental body (i) with
respect to any of the transactions contemplated by this Agreement or (ii)
with respect to any other matter which in the judgment of the Depositor
will be determined adversely to the Depositor and will, if determined
adversely to the Depositor, materially and adversely affect the Depositor's
ability to enter into this Agreement or perform its obligations under this
Agreement; and the Depositor is not in default with respect to any order of
any court, administrative agency, arbitrator or governmental body so as to
materially and adversely affect the transactions contemplated by this
Agreement; and
(vii) immediately prior to the transfer and assignment thereof to the
Trustee, each Mortgage Note and each Mortgage was not subject to an
assignment or pledge, and the Depositor had good and marketable title to
and was the sole owner thereof and had full right to transfer and sell the
Mortgage Loans to the Trustee free and clear of any encumbrance, equity,
lien, pledge, charge, claim or security interest.
Section 2.07 Covenants of the Master Servicer and the EMC Servicer.The
Master Servicer covenants to the Depositor, the Securities Administrator and the
Trustee, and the EMC Servicer covenants to the Master Servicer, as follows:
(i) it shall comply in the performance of its obligations under this
Agreement;
(ii) no written information, certificate of an officer, statement
furnished in writing or written report prepared by the Master Servicer or
the EMC Servicer, as applicable, pursuant to this Agreement and delivered,
in the case of the Master Servicer, to the Securities Administrator, the
Depositor, any affiliate of the Depositor or the Trustee, or, in the case
of the EMC Servicer, to the Master Servicer, will contain any untrue
statement of a material fact or omit to state a material fact necessary to
make the information, certificate, statement or report not misleading; and
(iii) it shall (in the case of the Master Servicer, only in its
capacity as successor servicer pursuant to a Servicing Agreement)
accurately and fully provide information regarding payment performance of
the Mortgagors to the nationally recognized credit repositories, to the
extent such reporting remains customary and prudent in the servicing of
mortgage loans similar to the Mortgage Loans.
Nothing in this Section shall derogate from the obligation of the Master
Servicer or the EMC Servicer to observe any applicable law prohibiting
disclosure of information regarding the Mortgagors, and the failure of the
Master Servicer or the EMC Servicer to provide access as provided in this
Section as a result of such obligation shall not constitute a breach of this
Section.
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ARTICLE III
Administration and Servicing of Mortgage Loans
Section 3.01. Master Servicer. The Master Servicer shall, from and after
the Closing Date, supervise, monitor and oversee the obligation of the Servicers
to service and administer their respective Mortgage Loans in accordance with the
terms of the related Servicing Agreement and shall have full power and authority
to do any and all things which it may deem necessary or desirable in connection
with such master servicing and administration. In performing its obligations
hereunder, the Master Servicer shall act in a manner consistent with Accepted
Master Servicing Practices. Furthermore, the Master Servicer shall oversee and
consult with each Servicer as necessary from time-to-time to carry out the
Master Servicer's obligations hereunder, shall receive, review and evaluate all
reports, information and other data provided to the Master Servicer by each
Servicer and shall cause each Servicer to perform and observe the covenants,
obligations and conditions to be performed or observed by such Servicer under
the related Servicing Agreement. The Master Servicer shall independently and
separately monitor each Servicer's servicing activities with respect to each
related Mortgage Loan, reconcile the results of such monitoring with such
information provided in the previous sentence on a monthly basis and coordinate
corrective adjustments to the related Servicer's and Master Servicer's records,
and based on such reconciled and corrected information, the Master Servicer
shall provide such information to the Securities Administrator as shall be
necessary in order for it to prepare the statements specified in Section 6.04,
and prepare any other information and statements required to be forwarded by the
Master Servicer hereunder. The Master Servicer shall reconcile the results of
its Mortgage Loan monitoring with the actual remittances of the related Servicer
to the Distribution Account pursuant to the related Servicing Agreement.
The Trustee shall furnish each Servicer and the Master Servicer with any
powers of attorney, in substantially the form attached hereto as Exhibit K, and
other documents in form as provided to it necessary or appropriate to enable
such Servicer and the Master Servicer to service and administer the related
Mortgage Loans and REO Property.
The Trustee shall provide access to the records and documentation in
possession of the Trustee regarding the related Mortgage Loans and REO Property
and the servicing thereof to the Certificateholders, the FDIC, and the
supervisory agents and examiners of the FDIC, such access being afforded only
upon reasonable prior written request and during normal business hours at the
office of the Trustee; provided, however, that, unless otherwise required by
law, the Trustee shall not be required to provide access to such records and
documentation if the provision thereof would violate the legal right to privacy
of any Mortgagor. The Trustee shall allow representatives of the above entities
to photocopy any of the records and documentation and shall provide equipment
for that purpose at a charge that covers the Trustee's actual costs.
The Trustee shall execute and deliver to the related Servicer and the
Master Servicer any court pleadings, requests for trustee's sale or other
documents necessary or desirable to (i) the foreclosure or trustee's sale with
respect to a Mortgaged Property; (ii) any legal action brought to obtain
judgment against any Mortgagor on the Mortgage Note or Security Instrument;
(iii) obtain a deficiency judgment against the Mortgagor; or (iv) enforce any
other rights or remedies provided by the Mortgage Note or Security Instrument or
otherwise available at law or equity.
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Section 3.02. REMIC-Related Covenants. For as long as each REMIC shall
exist, the Trustee and the Securities Administrator shall act in accordance
herewith to assure continuing treatment of such REMIC as a REMIC, and the
Trustee and the Securities Administrator shall comply with any directions of the
Depositor, the Servicers or the Master Servicer to assure such continuing
treatment. In particular, the Trustee shall not (a) sell or permit the sale of
all or any portion of the Mortgage Loans or of any investment of deposits in an
Account unless such sale is as a result of a repurchase of the Mortgage Loans
pursuant to this Agreement or the Trustee has received a REMIC Opinion, prepared
at the expense of the Trust Fund; and (b) other than with respect to a
substitution pursuant to the Mortgage Loan Purchase Agreement or Section 2.04 of
this Agreement, as applicable, accept any contribution to any REMIC after the
Startup Day without receipt of a REMIC Opinion. In addition, the Trustee shall
comply with all of the requirements of Treasury Regulation ss. 1.860F-2(a)(2),
including, without limitation, the requirement that each REMIC account for items
of income and ownership of assets in a manner that respects the separate
existence of each REMIC.
Section 3.03. Monitoring of Servicers. (a) The Master Servicer shall be
responsible for reporting to the Trustee and the Depositor the compliance by the
Servicers with their respective duties under the related Servicing Agreement. In
the review of each Servicer's activities, the Master Servicer may rely upon an
officer's certificate of such Servicer (or similar document signed by an officer
of the Servicer) with regard to such Servicer's compliance with the terms of the
related Servicing Agreement. In the event that the Master Servicer, in its
judgment, determines that such Servicer should be terminated in accordance with
the related Servicing Agreement, or that a notice should be sent pursuant to the
related Servicing Agreement with respect to the occurrence of an event that,
unless cured, would constitute grounds for such termination, the Master Servicer
shall notify the Depositor and the Trustee thereof and the Master Servicer shall
issue such notice or take such other action as it deems appropriate.
(b) The Master Servicer, for the benefit of the Trustee and the
Certificateholders, shall enforce the obligations of each Servicer under the
related Servicing Agreement, and shall, in the event that a Servicer fails to
perform its obligations in accordance with the related Servicing Agreement,
subject to the preceding paragraph, terminate the rights and obligations of such
Servicer thereunder and act as servicer of the related Mortgage Loans or cause
the Trustee to enter into a new Servicing Agreement with a successor Servicer
selected by the Master Servicer; provided, however, it is understood and
acknowledged by the parties hereto that there will be a period of transition
(not to exceed 90 days) before the actual servicing functions can be fully
transferred to such successor Servicer. Such enforcement, including, without
limitation, the legal prosecution of claims, termination of the related
Servicing Agreement and the pursuit of other appropriate remedies, shall be in
such form and carried out to such an extent and at such time as the Master
Servicer, in its good faith business judgment, would require were it the owner
of the related Mortgage Loans. The Master Servicer shall pay the costs of such
enforcement at its own expense, provided that the Master Servicer shall not be
required to prosecute or defend any legal action except to the extent that the
Master Servicer shall have received reasonable indemnity for its costs and
expenses in pursuing such action.
(c) To the extent that the costs and expenses of the Master Servicer
related to any termination of a Servicer, appointment of a successor Servicer or
the transfer and assumption of servicing by the Master Servicer with respect to
the related Servicing Agreement (including,
56
without limitation, (i) all legal costs and expenses and all due diligence
costs and expenses associated with an evaluation of the potential termination of
a Servicer as a result of an event of default by such Servicer and (ii) all
costs and expenses associated with the complete transfer of servicing, including
all servicing files and all servicing data and the completion, correction or
manipulation of such servicing data as may be required by the successor servicer
to correct any errors or insufficiencies in the servicing data or otherwise to
enable the successor servicer to service the Mortgage Loans in accordance with
the related Servicing Agreement) are not fully and timely reimbursed by the
terminated Servicer, the Master Servicer shall be entitled to reimbursement of
such costs and expenses from the Distribution Account.
(d) The Master Servicer shall require each Servicer to comply with the
remittance requirements and other obligations set forth in the related Servicing
Agreement, including any related Assignment Agreement. The Master Servicer shall
enforce the obligation of each Servicer pursuant to the related Servicing
Agreement to provide it with the annual officer's certificate of compliance and
annual independent accountants' servicing reports, as well as back-up
certifications to each Master Servicer Certification pursuant to Section 3.18.
(e) If the Master Servicer acts as Servicer, it will not assume liability
for the representations and warranties of the Servicers, if any, that it
replaces.
Section 3.04. Fidelity Bond. The Master Servicer, at its expense, shall
maintain in effect a blanket fidelity bond and an errors and omissions insurance
policy, affording coverage with respect to all directors, officers, employees
and other Persons acting on such Master Servicer's behalf, and covering errors
and omissions in the performance of the Master Servicer's obligations hereunder.
The amount of coverage to be maintained by the Master Servicer with respect to
the blanket fidelity bond policy shall be $50,000,000 per occurrence, and, with
respect to the errors and omissions insurance policy, shall be $20,000,000 per
occurrence.
Section 3.05. Power to Act; Procedures. The Master Servicer shall master
service the Mortgage Loans and shall have full power and authority, subject to
the REMIC Provisions and the provisions of Article X hereof, to do any and all
things that it may deem necessary or desirable in connection with the master
servicing and administration of the Mortgage Loans, including but not limited to
the power and authority (i) to execute and deliver, on behalf of the
Certificateholders and the Trustee, customary consents or waivers and other
instruments and documents, (ii) to consent to transfers of any Mortgaged
Property and assumptions of the Mortgage Notes and related Mortgages, (iii) to
collect any Insurance Proceeds and Liquidation Proceeds, and (iv) to effectuate
foreclosure or other conversion of the ownership of the Mortgaged Property
securing any Mortgage Loan, in each case, in accordance with the provisions of
this Agreement and the related Servicing Agreement, as applicable; provided,
however, that the Master Servicer shall not (and, consistent with its
responsibilities under Section 3.03, shall not permit a Servicer to) knowingly
or intentionally take any action, or fail to take (or fail to cause to be taken)
any action reasonably within its control and the scope of duties more
specifically set forth herein, that, under the REMIC Provisions, if taken or not
taken, as the case may be, would cause any REMIC hereunder to fail to qualify as
a REMIC or result in the imposition of a tax upon the Trust Fund (including but
not limited to the tax on prohibited transactions as defined in Section
860F(a)(2) of the Code and the tax on contributions to a REMIC set forth in
Section 860G(d) of the Code) unless the Master Servicer has received an
57
Opinion of Counsel (but not at the expense of the Master Servicer) to the
effect that the contemplated action will not cause any REMIC hereunder to fail
to qualify as a REMIC or result in the imposition of a tax upon any REMIC
hereunder. The Trustee shall furnish the Master Servicer, upon written request
from a Servicing Officer, with any powers of attorney empowering the Master
Servicer or the related Servicer to execute and deliver instruments of
satisfaction or cancellation, or of partial or full release or discharge, and to
foreclose upon or otherwise liquidate Mortgaged Property, and to appear in,
prosecute or defend any court action relating to the Mortgage Loans or the
Mortgaged Property, in accordance with the related Servicing Agreement and this
Agreement, and the Trustee shall execute and deliver such other documents as the
Master Servicer may request, to enable the Master Servicer to master service and
administer the Mortgage Loans and carry out its duties hereunder, in each case
in accordance with Accepted Master Servicing Practices (and the Trustee shall
have no liability for misuse of any such powers of attorney by the Master
Servicer or a Servicer). If the Master Servicer or the Trustee has been advised
that it is likely that the laws of the state in which action is to be taken
prohibit such action if taken in the name of the Trustee or that the Trustee
would be adversely affected under the "doing business" or tax laws of such state
if such action is taken in its name, then the Master Servicer shall join with
the Trustee in the appointment of a co-trustee pursuant to Section 9.11 hereof.
In the performance of its duties hereunder, the Master Servicer shall be an
independent contractor and shall not, except in those instances where it is
taking action in the name of the Trustee, be deemed to be the agent of the
Trustee.
The Trustee shall execute and deliver to the related Servicer any court
pleadings, requests for trustee's sale or other documents necessary or desirable
or relating to (i) the foreclosure or trustee's sale with respect to a Mortgaged
Property; (ii) any legal action brought to obtain judgment against any Mortgagor
on the related Mortgage Note or related Mortgage; (iii) obtaining a deficiency
judgment against the related Mortgagor; or (iv) enforcing any other rights or
remedies provided by a Mortgage Note or related Mortgage or otherwise available
at law or equity.
Section 3.06. Due-on-Sale Clauses; Assumption Agreements. To the extent
provided in the related Servicing Agreement, to the extent Mortgage Loans
contain enforceable due-on-sale clauses, the Master Servicer shall cause the
related Servicer to enforce such clauses in accordance with the related
Servicing Agreement. If applicable law prohibits the enforcement of a
due-on-sale clause or such clause is otherwise not enforced in accordance with
the related Servicing Agreement, and, as a consequence, a Mortgage Loan is
assumed, the original Mortgagor may be released from liability in accordance
with the related Servicing Agreement.
Section 3.07. Release of Mortgage Files. (a) Upon becoming aware of the
payment in full of any Mortgage Loan, or the receipt by the related Servicer of
a notification that payment in full has been escrowed in a manner customary for
such purposes for payment to Certificateholders on the next Distribution Date,
such Servicer will (and if such Servicer does not, then the Master Servicer
may), if required under the related Servicing Agreement, promptly furnish to the
Custodian, on behalf of the Trustee, two copies of a certification substantially
in the form of Exhibit D hereto signed by a Servicing Officer or in a mutually
agreeable electronic format which will, in lieu of a signature on its face,
originate from a Servicing Officer (which certification shall include a
statement to the effect that all amounts received in connection with such
payment that are required to be deposited in the related Protected Account
maintained by
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such Servicer pursuant to Section 4.01 or by such Servicer pursuant to the
related Servicing Agreement have been or will be so deposited) and shall request
that the Custodian, on behalf of the Trustee, deliver to such Servicer the
related Mortgage File. Upon receipt of such certification and request, the
Custodian, on behalf of the Trustee, shall promptly release the related Mortgage
File to the related Servicer, and the Trustee and Custodian shall have no
further responsibility with regard to such Mortgage File. Upon any such payment
in full, the related Servicer is authorized to give, as agent for the Trustee,
as the mortgagee under the Mortgage that secured the Mortgage Loan, an
instrument of satisfaction (or assignment of mortgage without recourse)
regarding the Mortgaged Property subject to the Mortgage, which instrument of
satisfaction or assignment, as the case may be, shall be delivered to the Person
or Persons entitled thereto against receipt therefor of such payment, it being
understood and agreed that no expenses incurred in connection with such
instrument of satisfaction or assignment, as the case may be, shall be
chargeable to the related Protected Account.
(b) From time to time and as appropriate for the servicing or foreclosure
of any Mortgage Loan and in accordance with the related Servicing Agreement, the
Trustee shall execute such documents as shall be prepared and furnished to the
Trustee by the related Servicer or the Master Servicer (in form reasonably
acceptable to the Trustee) and as are necessary to the prosecution of any such
proceedings. The Custodian, on behalf of the Trustee, shall, upon the request of
the related Servicer or the Master Servicer, and delivery to the Custodian, on
behalf of the Trustee, of two copies of a Request for Release signed by a
Servicing Officer substantially in the form of Exhibit D (or in a mutually
agreeable electronic format which will, in lieu of a signature on its face,
originate from a Servicing Officer), release the related Mortgage File held in
its possession or control to such Servicer or the Master Servicer, as
applicable. Such trust receipt shall obligate the related Servicer or the Master
Servicer to return the Mortgage File to the Custodian on behalf of the Trustee
when the need therefor by such Servicer or the Master Servicer no longer exists,
unless the Mortgage Loan shall be liquidated, in which case, upon receipt of a
certificate of a Servicing Officer similar to that hereinabove specified, the
Mortgage File shall be released by the Custodian, on behalf of the Trustee, to
the related Servicer or the Master Servicer.
(c) The Master Servicer hereby covenants that it shall not alter the codes
referenced in Section 4(c) of the Mortgage Loan Purchase Agreement, with respect
to any Mortgage Loan during the term of this Agreement, unless and until such
Mortgage Loan is repurchased in accordance with the terms of this Agreement.
Section 3.08. Documents, Records and Funds in Possession of Master Servicer
To Be Held for Trustee.
(a) The Master Servicer shall transmit and the Servicers (to the extent
required by the related Servicing Agreement) shall transmit to the Trustee or
Custodian such documents and instruments coming into the possession of the
Master Servicer or the Servicers from time to time as are required by the terms
hereof, or in the case of the Servicers, the related Servicing Agreement, to be
delivered to the Trustee or Custodian. Any funds received by the Master Servicer
or by the related Servicer in respect of any Mortgage Loan or which otherwise
are collected by the Master Servicer or by such Servicer as Liquidation Proceeds
or Insurance Proceeds in respect of any Mortgage Loan shall be held for the
benefit of the Trustee and the
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Certificateholders subject to the Master Servicer's right to retain the
Master Servicing Compensation and other amounts provided in this Agreement, and
to the right of such Servicer to retain its Servicing Fee and other amounts as
provided in the related Servicing Agreement. The Master Servicer shall, and (to
the extent provided in the related Servicing Agreement) shall cause the
Servicers to, provide access to information and documentation regarding the
Mortgage Loans to the Trustee, the Securities Administrator and their respective
agents and accountants at any time upon reasonable request and during normal
business hours, and to Certificateholders that are savings and loan
associations, banks or insurance companies, the Office of Thrift Supervision,
the FDIC and the supervisory agents and examiners of such Office and Corporation
or examiners of any other federal or state banking or insurance regulatory
authority if so required by applicable regulations of the Office of Thrift
Supervision or other regulatory authority, such access to be afforded without
charge but only upon reasonable request in writing and during normal business
hours at the offices of the Master Servicer designated by it. In fulfilling such
a request the Master Servicer shall not be responsible for determining the
sufficiency of such information.
(b) All Mortgage Files and funds collected or held by, or under the control
of, the Master Servicer in respect of any Mortgage Loans, whether from the
collection of principal and interest payments or from Liquidation Proceeds or
Insurance Proceeds, shall be held by the Master Servicer for and on behalf of
the Trustee and the Certificateholders and shall be and remain the sole and
exclusive property of the Trustee; provided, however, that the Master Servicer
and the Servicers shall be entitled to setoff against, and deduct from, any such
funds any amounts that are properly due and payable to the Master Servicer or
such Servicer under this Agreement or the related Servicing Agreement.
Section 3.09. Standard Hazard Insurance and Flood Insurance Policies.
(a) For each Mortgage Loan, the Master Servicer shall enforce any
obligation of the Servicer under the related Servicing Agreement to maintain or
cause to be maintained standard fire and casualty insurance and, where
applicable, flood insurance, all in accordance with the provisions of the
related Servicing Agreement. It is understood and agreed that such insurance
shall be with insurers meeting the eligibility requirements set forth in the
related Servicing Agreement and that no earthquake or other additional insurance
is to be required of any Mortgagor or to be maintained on property acquired in
respect of a defaulted Mortgage Loan, other than pursuant to such applicable
laws and regulations as shall at any time be in force and as shall require such
additional insurance.
(b) Pursuant to Section 4.01, any amounts collected by a Servicer or the
Master Servicer under any insurance policies (other than amounts to be applied
to the restoration or repair of the property subject to the related Mortgage or
released to the Mortgagor in accordance with the related Servicing Agreement)
shall be deposited into the Distribution Account, subject to withdrawal pursuant
to Section 4.03. Any cost incurred by the Master Servicer or the related
Servicer in maintaining any such insurance (if the Mortgagor defaults in its
obligation to do so) shall be added to the amount owing under the Mortgage Loan
where the terms of the Mortgage Loan so permit; provided, however, that the
addition of any such cost shall not be taken into account for purposes of
calculating the distributions to be made to Certificateholders and shall be
recoverable by the Master Servicer or such Servicer pursuant to Sections 4.01
and 4.03.
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Section 3.10. Presentment of Claims and Collection of Proceeds. The Master
Servicer shall (to the extent provided in the Servicing Agreements) cause each
Servicer to prepare and present on behalf of the Trustee and the
Certificateholders all claims under the Insurance Policies and take such actions
(including the negotiation, settlement, compromise or enforcement of the
insured's claim) as shall be necessary to realize recovery under such policies.
Any proceeds disbursed to the Master Servicer (or disbursed to a Servicer and
remitted to the Master Servicer) in respect of such policies, bonds or contracts
shall be promptly deposited in the Distribution Account upon receipt, except
that any amounts realized that are to be applied to the repair or restoration of
the related Mortgaged Property as a condition precedent to the presentation of
claims on the related Mortgage Loan to the insurer under any applicable
Insurance Policy need not be so deposited (or remitted).
Section 3.11. Maintenance of the Primary Mortgage Insurance Policies.
(a) The Master Servicer shall not take, or permit a Servicer (to the extent
such action is prohibited under the related Servicing Agreement) to take, any
action that would result in noncoverage under any applicable Primary Mortgage
Insurance Policy of any loss which, but for the actions of such Master Servicer
or Servicer, would have been covered thereunder. The Master Servicer shall use
its best reasonable efforts to cause each Servicer (to the extent required under
the related Servicing Agreement) to keep in force and effect (to the extent that
the Mortgage Loan requires the Mortgagor to maintain such insurance) primary
mortgage insurance applicable to each Mortgage Loan in accordance with the
provisions of this Agreement and the related Servicing Agreement, as applicable.
The Master Servicer shall not, and shall not permit a Servicer (to the extent
required under the related Servicing Agreement) to, cancel or refuse to renew
any such Primary Mortgage Insurance Policy that is in effect at the date of the
initial issuance of the Mortgage Note and is required to be kept in force
hereunder except in accordance with the provisions of this Agreement and the
related Servicing Agreement, as applicable.
(b) The Master Servicer agrees to present, or to cause each Servicer (to
the extent required under the related Servicing Agreement) to present, on behalf
of the Trustee and the Certificateholders, claims to the insurer under any
Primary Mortgage Insurance Policies and, in this regard, to take such reasonable
action as shall be necessary to permit recovery under any Primary Mortgage
Insurance Policies respecting defaulted Mortgage Loans. Any amounts collected by
the Master Servicer or the related Servicer under any Primary Mortgage Insurance
Policies shall be deposited in the Distribution Account, subject to withdrawal
pursuant to Section 4.03.
Section 3.12. Trustee to Retain Possession of Certain Insurance Policies
and Documents.
The Trustee (or the Custodian, as directed by the Trustee), shall retain
possession and custody of the originals (to the extent available) of any Primary
Mortgage Insurance Policies, or certificate of insurance, if applicable, and any
certificates of renewal as to the foregoing as may be issued from time to time
as contemplated by this Agreement. Until all amounts distributable in respect of
the Certificates have been distributed in full and the Master Servicer otherwise
has fulfilled its obligations under this Agreement, the Trustee (or its
Custodian, if any, as directed by the Trustee) shall also retain possession and
custody of each Mortgage File in accordance with
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and subject to the terms and conditions of this Agreement. The Master
Servicer shall promptly deliver or cause to be delivered to the Trustee (or the
Custodian, as directed by the Trustee), upon the execution or receipt thereof
the originals of any Primary Mortgage Insurance Policies, any certificates of
renewal, and such other documents or instruments that constitute portions of the
Mortgage File that come into the possession of the Master Servicer from time to
time.
Section 3.13. Realization Upon Defaulted Mortgage Loans. The Master
Servicer shall cause each Servicer (to the extent required under the related
Servicing Agreement) to foreclose upon, repossess or otherwise comparably
convert the ownership of Mortgaged Properties securing such of the Mortgage
Loans as come into and continue in default and as to which no satisfactory
arrangements can be made for collection of delinquent payments, all in
accordance with the related Servicing Agreement.
Section 3.14. Compensation for the Servicers and the Master Servicer.
The Master Servicer will be entitled to all income and gain realized from
any investment of funds in the Distribution Account from the Servicer Remittance
Date in each calendar month to the related Distribution Date (the "Master
Servicing Compensation"). Servicing compensation in the form of assumption fees,
if any, late payment charges, as collected, if any, or otherwise (but not
including any prepayment premium or penalty) shall be retained by the related
Servicer and shall not be deposited in the related Protected Account. The Master
Servicer will be entitled to retain, as additional compensation, any interest
remitted by the related Servicer in connection with a Principal Prepayment in
full or otherwise in excess of amounts required to be remitted to the
Distribution Account. The Master Servicer shall be required to pay all expenses
incurred by it in connection with its activities hereunder and shall not be
entitled to reimbursement therefor except as provided in this Agreement.
Section 3.15. REO Property.
(a) In the event the Trust Fund acquires ownership of any REO Property in
respect of any related Mortgage Loan, the deed or certificate of sale shall be
issued to the Trustee, or to its nominee, on behalf of the related
Certificateholders. The Master Servicer shall, to the extent provided in the
Servicing Agreements, cause the related Servicer to sell any REO Property as
expeditiously as possible and in accordance with the provisions of this
Agreement and the related Servicing Agreement, as applicable. Pursuant to its
efforts to sell such REO Property, the Master Servicer shall cause the related
Servicer to protect and conserve such REO Property in the manner and to the
extent required by the related Servicing Agreement, in accordance with the REMIC
Provisions and in a manner that does not result in a tax on "net income from
foreclosure property" or cause such REO Property to fail to qualify as
"foreclosure property" within the meaning of Section 860G(a)(8) of the Code.
(b) The Master Servicer shall, to the extent required by the Servicing
Agreements, cause the related Servicer to deposit all funds collected and
received in connection with the operation of any REO Property in the related
Protected Account.
(c) The Master Servicer and the related Servicer, upon the final
disposition of any REO Property, shall be entitled to reimbursement for any
related unreimbursed Monthly
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Advances and other unreimbursed advances as well as any unpaid Servicing
Fees from Liquidation Proceeds received in connection with the final disposition
of such REO Property; provided, that any such unreimbursed Monthly Advances as
well as any unpaid Servicing Fees may be reimbursed or paid, as the case may be,
prior to final disposition, out of any net rental income or other net amounts
derived from such REO Property.
(d) To the extent provided in the Servicing Agreements, the Liquidation
Proceeds from the final disposition of the REO Property, net of any payment to
the Master Servicer and the related Servicer as provided above, shall be
deposited in the related Protected Account on or prior to the Determination Date
in the month following receipt thereof and be remitted by wire transfer in
immediately available funds to the Master Servicer for deposit into the
Distribution Account on the next succeeding Servicer Remittance Date.
Section 3.16. Annual Officer's Certificate as to Compliance.
(a) The Master Servicer shall deliver to the Trustee and the Rating
Agencies on or before March 1 of each year, commencing on March 1, 2006, an
Officer's Certificate, certifying that with respect to the year ending December
31 of the prior year: (i) such Servicing Officer has reviewed the activities of
such Master Servicer during the preceding calendar year or portion thereof and
its performance under this Agreement, (ii) to the best of such Servicing
Officer's knowledge, based on such review, such Master Servicer has performed
and fulfilled its duties, responsibilities and obligations under this Agreement
in all material respects throughout such year, or, if there has been a default
in the fulfillment of any such duties, responsibilities or obligations,
specifying each such default known to such Servicing Officer and the nature and
status thereof, and (iii) nothing has come to the attention of such Servicing
Officer to lead such Servicing Officer to believe that a Servicer has failed to
perform any of its duties, responsibilities and obligations under the related
Servicing Agreement in all material respects throughout such year, or, if there
has been a material default in the performance or fulfillment of any such
duties, responsibilities or obligations, specifying each such default known to
such Servicing Officer and the nature and status thereof.
(b) Copies of such statements shall be provided to any Certificateholder
upon request, by the Master Servicer or by the Trustee at the Master Servicer's
expense if the Master Servicer failed to provide such copies (unless (i) the
Master Servicer shall have failed to provide the Trustee with such statement or
(ii) the Trustee shall be unaware of the Master Servicer's failure to provide
such statement).
Section 3.17. Annual Independent Accountant's Servicing Report. If the
Master Servicer has, during the course of any fiscal year, directly serviced any
of the Mortgage Loans, then the Master Servicer at its expense shall cause a
nationally recognized firm of independent certified public accountants to
furnish a statement to the Trustee, the Rating Agencies and the Depositor on or
before March 1 of each year, commencing on March 1, 2006, to the effect that,
with respect to the most recently ended fiscal year, such firm has examined
certain records and documents relating to the Master Servicer's performance of
its servicing obligations under this Agreement and pooling and servicing and
trust agreements in material respects similar to this Agreement and to each
other and that, on the basis of such examination conducted substantially in
compliance with the Audit Program for Mortgages Serviced for Xxxxxxx Mac or the
Uniform
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Single Attestation Program for Mortgage Bankers, such firm is of the
opinion that the Master Servicer's activities have been conducted in compliance
with this Agreement, or that such examination has disclosed no material items of
noncompliance except for (i) such exceptions as such firm believes to be
immaterial, (ii) such other exceptions as are set forth in such statement and
(iii) such exceptions that the Uniform Single Attestation Program for Mortgage
Bankers or the Audit Program for Mortgages Serviced by Xxxxxxx Mac requires it
to report. Copies of such statements shall be provided by the Master Servicer to
any Certificateholder upon request, or by the Trustee at the expense of the
Master Servicer if the Master Servicer shall fail to provide such copies. If
such report discloses exceptions that are material, the Master Servicer shall
advise the Trustee whether such exceptions have been or are susceptible of cure,
and will take prompt action to do so.
Section 3.18. Reports Filed with Securities and Exchange Commission. (a)
Within 15 days after each Distribution Date, the Securities Administrator shall,
in accordance with industry standards, file with the Commission via the
Electronic Data Gathering and Retrieval System ("XXXXX"), a Form 8-K (or other
comparable form containing the same or comparable information, or other
information mutually agreed upon) with a copy of the statement to the
Certificateholders for such Distribution Date as an exhibit thereto. Prior to
January 30 in any year, the Securities Administrator shall, in accordance with
industry standards and only if instructed by the Depositor, file a Form 15
Suspension Notice with respect to the Trust Fund, if applicable. Prior to (i)
March 15, 2006 and (ii) unless and until a Form 15 Suspension Notice shall have
been filed, prior to March 15 of each year thereafter, the Master Servicer shall
provide the Securities Administrator with a Master Servicer Certification,
together with a copy of the annual independent accountant's servicing report and
annual statement of compliance of each Servicer, in each case, required to be
delivered pursuant to the related Servicing Agreement, and, if applicable, the
annual statement of compliance and the annual independent accountant's servicing
report to be delivered by the Master Servicer pursuant to Sections 3.16 and
3.17. Prior to (i) March 31, 2006, or such earlier filing date as may be
required by the Commission, and (ii) unless and until a Form 15 Suspension
Notice shall have been filed, March 31 of each year thereafter, or such earlier
filing date as may be required by the Commission, the Securities Administrator
shall prepare and file a Form 10-K, in substance conforming to industry
standards, with respect to the Trust. Such Form 10-K shall include the Master
Servicer Certification and other documentation provided by the Master Servicer
pursuant to the second preceding sentence. The Depositor hereby grants to the
Securities Administrator a limited power of attorney to execute and file each
such document on behalf of the Depositor. Such power of attorney shall continue
until either the earlier of (i) receipt by the Securities Administrator from the
Depositor of written termination of such power of attorney and (ii) the
termination of the Trust Fund. The Depositor agrees to promptly furnish to the
Securities Administrator, from time to time upon request, such further
information, reports and financial statements within its control related to this
Agreement and the Mortgage Loans as the Securities Administrator reasonably
deems appropriate to prepare and file all necessary reports with the Commission.
The Securities Administrator shall have no responsibility to file any items
other than those specified in this Section 3.18; provided, however, the
Securities Administrator will cooperate with the Depositor in connection with
any additional filings with respect to the Trust Fund as the Depositor deems
necessary under the Securities Exchange Act of 1934, as amended (the "Exchange
Act").
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(b) The Master Servicer shall indemnify and hold harmless the Depositor,
the Trustee and their respective officers, directors and Affiliates from and
against any losses, damages, penalties, fines, forfeitures, reasonable and
necessary legal fees and related costs, judgments and other costs and expenses
arising out of or based upon a breach of the Master Servicer's obligations under
this Section 3.18 or the Master Servicer's negligence, bad faith or willful
misconduct in connection therewith. Fees and expenses incurred by the Master
Servicer in connection with this Section 3.18 shall not be reimbursable from the
Trust Fund.
Section 3.19. EMC. On the Closing Date, EMC will receive from the Depositor
a payment of $5,000.
Section 3.20. UCC. The Depositor shall inform the Trustee in writing of any
Uniform Commercial Code financing statements that were filed on the Closing Date
in connection with the Trust with stamped recorded copies of such financing
statements to be delivered to the Trustee promptly upon receipt by the
Depositor. The Trustee agrees to monitor and notify the Depositor if any
continuation statements for such Uniform Commercial Code financing statements
need to be filed. If directed by the Depositor in writing, the Trustee will file
any such continuation statements solely at the expense of the Depositor. The
Depositor shall file any financing statements or amendments thereto required by
any change in the Uniform Commercial Code.
Section 3.21. Optional Purchase of Defaulted Mortgage Loans. With respect
to any Mortgage Loan which as of the first day of a Fiscal Quarter is delinquent
in payment by 90 days or more or is an REO Property, EMC shall have the right to
purchase such Mortgage Loan from the Trust at a price equal to the Repurchase
Price; provided, however, (i) that such Mortgage Loan is still 90 days or more
delinquent or is an REO Property as of the date of such purchase and (ii) this
purchase option, if not theretofore exercised, shall terminate on the date prior
to the last day of the related Fiscal Quarter. This purchase option, if not
exercised, shall not be thereafter reinstated unless the delinquency is cured
and the Mortgage Loan thereafter again becomes 90 days or more delinquent or
becomes an REO Property, in which case the option shall again become exercisable
as of the first day of the related Fiscal Quarter.
In addition, EMC shall, at its option, purchase any Mortgage Loan from the
Trust if the first Due Date for such Mortgage Loan is subsequent to the Cut-off
Date, and the initial Monthly Payment with respect to such Mortgage Loan is not
made within thirty (30) days of such Due Date. Such purchase shall be made at a
price equal to the Repurchase Price.
If at any time EMC remits to the Paying Agent a payment for deposit in the
Distribution Account covering the amount of the Repurchase Price for such a
Mortgage Loan, and EMC provides to the Trustee and the Master Servicer a
certification signed by a Servicing Officer stating that the amount of such
payment has been deposited in the Distribution Account, then the Trustee shall
execute the assignment of such Mortgage Loan at the request of EMC, without
recourse, to EMC which shall succeed to all the Trustee's right, title and
interest in and to such Mortgage Loan, and all security and documents relative
thereto. Such assignment shall be an assignment outright and not for security.
EMC will thereupon own such Mortgage Loan, and all such security and documents,
free of any further obligation to the Trustee or the Certificateholders with
respect thereto.
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ARTICLE IV
Accounts
Section 4.01. Protected Accounts. (a) The Master Servicer shall enforce the
obligation of each respective Servicer to establish and maintain a Protected
Account in accordance with the related Servicing Agreement, with records to be
kept with respect thereto on a Mortgage Loan by Mortgage Loan basis, into which
Protected Account shall be deposited, within 48 hours (or as of such other time
specified in the related Servicing Agreement) of receipt thereof, all
collections of principal and interest on any Mortgage Loan and with respect to
any REO Property received by the related Servicer, including Principal
Prepayments, Insurance Proceeds, Liquidation Proceeds, and advances made from
such Servicer's own funds (less servicing compensation as permitted by the
related Servicing Agreement) and all other amounts to be deposited in the
related Protected Account. Each Servicer is hereby authorized to make
withdrawals from and deposits to the related Protected Account for purposes
required or permitted by this Agreement. To the extent provided in the related
Servicing Agreement, the related Protected Account shall be held in a Designated
Depository Institution and segregated as a trust account on the books of such
institution in the name of the Trustee for the benefit of Certificateholders.
(b) To the extent provided in a Servicing Agreement, amounts on deposit in
the related Protected Account may be invested in Permitted Investments in the
name of the Trustee for the benefit of Certificateholders and, except as
provided in the preceding paragraph, not commingled with any other funds, such
Permitted Investments to mature, or to be subject to redemption or withdrawal,
no later than the date on which such funds are required to be withdrawn for
deposit in the Distribution Account, and shall be held until required for such
deposit. The income earned from Permitted Investments made pursuant to this
Section 4.01 shall be paid to the related Servicers under the related Servicing
Agreement, and the risk of loss of moneys required to be distributed to the
Certificateholders resulting from such investments shall be borne by and be the
risk of the related Servicer. Each Servicer (to the extent provided in the
related Servicing Agreement) shall deposit the amount of any such loss in the
related Protected Account within two Business Days of receipt of notification of
such loss but not later than the second Business Day prior to the Distribution
Date on which the moneys so invested are required to be distributed to the
Certificateholders.
(c) To the extent provided in a Servicing Agreement and subject to this
Article IV, on or before each Servicer Remittance Date, the Master Servicer
shall (if acting as a successor servicer to a Servicer), or shall cause the
related Servicer to, withdraw or shall cause to be withdrawn from the related
Protected Account, and shall immediately deposit or cause to be deposited in the
Distribution Account, amounts representing the following collections and
payments (other than with respect to principal of or interest on the Mortgage
Loans due on or before the Cut-off Date) with respect to each Mortgage Loan
serviced by it:
(i) Scheduled Payments on the Mortgage Loans received or any related
portion thereof advanced by the related Servicer pursuant to the related
Servicing Agreement which were due on or before the related Due Date, net
of the amount thereof comprising the related Servicing Fee or any fees with
respect to any lender-paid primary mortgage insurance policy;
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(ii) Full Principal Prepayments and any Liquidation Proceeds received
by the related Servicer with respect to such Mortgage Loans in the related
Prepayment Period (or, in the case of Subsequent Recoveries, during the
related Due Period), with interest to the date of prepayment or
liquidation, net of the amount thereof comprising the related Servicing
Fee;
(iii) Partial Principal Prepayments received by the related Servicer
for such Mortgage Loans in the related Prepayment Period;
(iv) All funds collected and received in connection with the operation
of any REO Property, and Liquidation Proceeds received upon the final
disposition of any REO Property (net of any unreimbursed Monthly Advances,
other advances of the related Servicer or Master Servicer with respect
thereto, and unpaid related Servicing Fees with respect thereto); and
(v) Any amount to be used as a Monthly Advance.
(d) Withdrawals may be made from a Protected Account only to make
remittances as provided in Section 4.01(c); to reimburse the Master Servicer or
the related Servicer for Monthly Advances which have been recovered by
subsequent collection from the related Mortgagor; to remove amounts deposited in
error; to remove fees, charges or other such amounts deposited on a temporary
basis; or to clear and terminate the account at the termination of this
Agreement in accordance with Section 10.01. As provided in Section 4.01(c),
certain amounts otherwise due to the related Servicers may be retained by them
and need not be deposited in the Distribution Account.
Section 4.02. Distribution Account. (a) The Paying Agent shall establish
and maintain in the name of the Paying Agent, for the benefit of the
Certificateholders, the Distribution Account as a segregated trust account or
accounts. On the Closing Date, the Depositor shall deposit the Deposit Amount
into the Distribution Account.
(b) All amounts deposited to the Distribution Account shall be held by the
Paying Agent in the name of the Paying Agent in trust for the benefit of the
Certificateholders in accordance with the terms and provisions of this
Agreement.
(c) The Distribution Account shall constitute a trust account of the Trust
Fund segregated on the books of the Paying Agent. The Distribution Account shall
be an Eligible Account. The Distribution Account and the funds deposited therein
shall not be subject to, and shall be protected from, all claims, liens, and
encumbrances of any creditors or depositors of the Trustee, the Paying Agent,
the Securities Administrator or the Master Servicer (whether made directly, or
indirectly through a liquidator or receiver of the Trustee, the Paying Agent,
the Securities Administrator or the Master Servicer). The amount at any time
credited to the Distribution Account shall, if invested, be invested in the name
of the Trustee, in such Permitted Investments selected by the Master Servicer.
All Permitted Investments shall mature or be subject to redemption or withdrawal
on or before, and shall be held until, the next succeeding Distribution Date if
the obligor for such Permitted Investment is the Paying Agent or, if such
obligor is any other Person, the Business Day preceding such Distribution Date.
All investment
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earnings from Permitted Investments in the Distribution Account from time to
time shall be for the account of the Master Servicer. The Master Servicer shall
be permitted to withdraw or receive distribution of any and all investment
earnings from the Distribution Account on each Distribution Date. If there is
any loss on a Permitted Investment or demand deposit, the Master Servicer shall
promptly remit the amount of the loss to the Paying Agent, who shall deposit
such amount in the Distribution Account. With respect to the Distribution
Account and the funds deposited therein, the Paying Agent shall take such action
as may be necessary to ensure that the Certificateholders shall be entitled to
the priorities afforded to such a trust account (in addition to a claim against
the estate of the Paying Agent) as provided by 12 U.S.C. ss. 92a(e), and
applicable regulations pursuant thereto, if applicable, or any applicable
comparable state statute applicable to state chartered banking corporations.
Section 4.03. Permitted Withdrawals and Transfers from the Distribution
Account. (a) The Paying Agent will, from time to time on demand of the Master
Servicer or the Securities Administrator, make or cause to be made such
withdrawals or transfers from the Distribution Account as the Master Servicer
has designated for such transfer or withdrawal pursuant to the related Servicing
Agreement or this Agreement or as the Securities Administrator has instructed
hereunder for the following purposes:
(i) to reimburse the Master Servicer or the related Servicer for any
Monthly Advance of its own funds or any advance of such Master Servicer's
or Servicer's own funds, the right of the Master Servicer or a Servicer to
reimbursement pursuant to this subclause (i) being limited to amounts
received on a particular Mortgage Loan (including, for this purpose, the
Repurchase Price therefor, Insurance Proceeds and Liquidation Proceeds)
which represent late payments or recoveries of the principal of or interest
on such Mortgage Loan respecting which such Monthly Advance or advance was
made;
(ii) to reimburse the Master Servicer or the related Servicer from
Insurance Proceeds or Liquidation Proceeds relating to a particular
Mortgage Loan for amounts expended by the Master Servicer or the related
Servicer in good faith in connection with the restoration of the related
Mortgaged Property which was damaged by an Uninsured Cause or in connection
with the liquidation of such Mortgage Loan;
(iii) to reimburse the Master Servicer or the related Servicer from
Insurance Proceeds relating to a particular Mortgage Loan for insured
expenses incurred with respect to such Mortgage Loan and to reimburse the
Master Servicer or the related Servicer from Liquidation Proceeds from a
particular Mortgage Loan for Liquidation Expenses incurred with respect to
such Mortgage Loan; provided that the Master Servicer shall not be entitled
to reimbursement for Liquidation Expenses with respect to a Mortgage Loan
to the extent that (i) any amounts with respect to such Mortgage Loan were
paid as Excess Liquidation Proceeds pursuant to clause (x) of this
Subsection 4.03(a) to the Master Servicer, and (ii) such Liquidation
Expenses were not included in the computation of such Excess Liquidation
Proceeds;
(iv) to pay the Master Servicer or the related Servicer, as
appropriate, from Liquidation Proceeds or Insurance Proceeds received in
connection with the liquidation
69
of any Mortgage Loan, the amount which the Master Servicer or the
related Servicer would have been entitled to receive under subclause (xi)
of this Subsection 4.03(a) as servicing compensation on account of each
defaulted Scheduled Payment on such Mortgage Loan if paid in a timely
manner by the related Mortgagor;
(v) to pay the related Servicer from the Repurchase Price for any
Mortgage Loan, the amount which the related Servicer would have been
entitled to receive under subclause (xi) of this Subsection 4.03(a) as
servicing compensation;
(vi) to reimburse the Master Servicer or the related Servicer for
advances of funds, and the right to reimbursement pursuant to this
subclause being limited to amounts received on the related Mortgage Loan
(including, for this purpose, the Repurchase Price therefor, Insurance
Proceeds and Liquidation Proceeds) which represent late recoveries of the
payments for which such advances were made;
(vii) to reimburse the Master Servicer or the related Servicer for any
Monthly Advance or advance, after a Realized Loss has been allocated with
respect to the related Mortgage Loan, if the Monthly Advance or advance has
not been reimbursed pursuant to clauses (i) and (vi);
(viii) to pay the Master Servicer as set forth in Section 3.14;
(ix) to reimburse the Master Servicer for expenses, costs and
liabilities incurred by and reimbursable to it pursuant to Sections 3.03,
7.04(c) and 7.04 (d);
(x) to pay to the Master Servicer, as additional servicing
compensation, any Excess Liquidation Proceeds to the extent not retained by
the related Servicer;
(xi) to reimburse or pay a Servicer any such amounts as are due
thereto under the related Servicing Agreement and have not been retained by
or paid to such Servicer, to the extent provided in the related Servicing
Agreement;
(xii) to reimburse or pay the Trustee, the Securities Administrator or
the Custodian for fees, expenses, costs and liabilities incurred by and
reimbursable or payable to it pursuant to this Agreement and not otherwise
reimbursable or payable to it;
(xiii) to remove amounts deposited in error;
(xiv) to clear and terminate the Distribution Account pursuant to
Section 10.01; and
(xv) on the first Distribution Date, to withdraw an amount equal to
the Deposit Amount from the Distribution Account and distribute such amount
to the holders of the Class R-I, Class R-II and Class R-III Certificates,
pro rata, until their respective Current Principal Amounts have been
reduced to zero.
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(b) The Master Servicer shall keep and maintain separate accounting, on a
Mortgage Loan by Mortgage Loan basis, for the purpose of accounting for any
reimbursement from the Distribution Account pursuant to subclauses (i) through
(vii), inclusive, and (x).
(c) On each Distribution Date, the Paying Agent shall distribute the
Available Funds to the extent on deposit in the Distribution Account for each
Loan Group to the Holders of the Certificates (other than the Residual
Certificates) in accordance with distribution instructions provided to it by the
Securities Administrator no later than two Business Days prior to such
Distribution Date and determined by the Securities Administrator in accordance
with Section 6.01.
Section 4.04. Distribution of Group I Carryover Shortfall Amount; Group I
Carryover Shortfall Reserve Fund.
(a) On the Closing Date, the Paying Agent shall establish and maintain, in
trust for the benefit of the holders of the Class I-A-1 Certificates and the
Class I-A-2 Certificates, a segregated trust account or sub-account of a trust
account, which shall be titled "Group I Carryover Shortfall Reserve Fund,
JPMorgan Chase Bank, N.A., as trustee for the benefit of holders of Structured
Asset Mortgage Investments II Trust 2005-AR2, Mortgage Pass-Through
Certificates, Series 2005-AR2, Class I-A-1 and Class I-A-2" (the "Group I
Carryover Shortfall Reserve Fund"). The Paying Agent shall, promptly upon
receipt, deposit in the Group I Carryover Shortfall Reserve Fund an amount equal
to $5,000 to be remitted on the Closing Date to the Paying Agent by the
Depositor. On each Distribution Date, the Paying Agent shall transfer from the
Distribution Account to the Group I Carryover Shortfall Reserve Fund the amounts
specified pursuant to Section 6.01(a)(A). On each Distribution Date, to the
extent required, the Paying Agent shall make withdrawals from the Group I
Carryover Shortfall Reserve Fund and use the amounts in the Group I Carryover
Shortfall Reserve Fund to make distributions pro rata to the Class I-A-1 and
Class I-A-2 Certificates, in an amount equal to the amount of any Group I
Carryover Shortfall Amount on such Certificates, pursuant to Section 6.01(a)(G).
Any such amounts transferred shall be treated for federal tax purposes as
amounts distributed by REMIC III to the Class I-X Certificateholders as
transferee thereof. For federal tax return and information reporting purposes,
the rights of the Holders of the Class I-A-1 and Class I-A-2 Certificates to
receive such distributions shall be assigned a value determined by the Depositor
and reported by it to the Securities Administrator.
(b) The Group I Carryover Shortfall Reserve Fund shall be an Eligible
Account. Amounts held in the Group I Carryover Shortfall Reserve Fund from time
to time shall continue to constitute assets of the Trust Fund, but not of the
REMICs, until released from the Group I Carryover Shortfall Reserve Fund
pursuant to this Section 4.04 and Section 6.01(a)(G). The Group I Carryover
Shortfall Reserve Fund constitutes an "outside reserve fund" within the meaning
of Treasury Regulation ss. 1.860G-2(h) and is not an asset of the REMICs. The
Class I-X Certificateholders shall be the owners of the Group I Carryover
Shortfall Reserve Fund, and for all federal tax purposes, amounts transferred by
the REMICs to the Group I Carryover Shortfall Reserve Fund shall be treated as
amounts distributed by the REMICs to the Class I-X Certificateholders. The
Paying Agent shall keep records that accurately reflect the funds on deposit in
the Group I Carryover Shortfall Reserve Fund.
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(c) The Paying Agent will invest funds deposited in the Group I Carryover
Shortfall Reserve Fund as directed by the Class I-X Certificateholders in
writing in Permitted Investments with a maturity date (i) no later than the
Business Day immediately preceding the date on which such funds are required to
be withdrawn from the Group I Carryover Shortfall Reserve Fund pursuant to this
Agreement, if a Person other than the Paying Agent or an Affiliate of the Paying
Agent manages or advises such Permitted Investment, or (ii) no later than the
date on which such funds are required to be withdrawn from the Group I Carryover
Shortfall Reserve Fund pursuant to this Agreement, if the Paying Agent or an
Affiliate of the Paying Agent manages or advises such Permitted Investment. If
no written direction with respect to such Permitted Investment shall be received
by the Paying Agent from the Class I-X Certificateholders, then funds in the
Group I Carryover Shortfall Reserve Fund shall remain uninvested. All income and
gain realized from investment of funds deposited in the Group I Carryover
Shortfall Reserve Fund shall be for the sole and exclusive benefit of the Class
I-X Certificateholders and shall be remitted by the Paying Agent to the Class
I-X Certificateholders no later than the first Business Day following receipt of
such income and gain by the Paying Agent. The Class I-X Certificateholders shall
deposit in the Group I Carryover Shortfall Reserve Fund the amount of any net
loss incurred in respect of any such Permitted Investment immediately upon
realization of such loss, without any right of reimbursement therefor.
Section 4.05. Distribution of Group II Carryover Shortfall Amount; Group II
Carryover Shortfall Reserve Fund.(a) On the Closing Date, the Paying Agent shall
establish and maintain, in trust for the benefit of Class II-A-1 Certificates,
the Class II-A-2 Certificates, and the Class II-A-3 Certificates, a segregated
trust account or sub-account of a trust account, which shall be titled "Group II
Carryover Shortfall Reserve Fund, JPMorgan Chase Bank, N.A., as trustee for the
benefit of holders of Structured Asset Mortgage Investments II Trust 2005-AR2,
Mortgage Pass-Through Certificates, Series 2005-AR2, Class II-A-1, Class II-A-2
and Class II-A-3" (the "Group II Carryover Shortfall Reserve Fund"). The Paying
Agent shall, promptly upon receipt, deposit in the Group II Carryover Shortfall
Reserve Fund an amount equal to $5,000 to be remitted on the Closing Date to the
Paying Agent by the Depositor. On each Distribution Date, the Paying Agent shall
transfer from the Distribution Account to the Group II Carryover Shortfall
Reserve Fund the amounts specified pursuant to Section 6.01(a)(B). On each
Distribution Date, to the extent required, the Paying Agent shall make
withdrawals from the Group II Carryover Shortfall Reserve Fund and use the
amounts in the Group II Carryover Shortfall Reserve Fund to make distributions
pro rata to the Class II-A-1 Certificates, the Class II-A-2 Certificates and the
Class II-A-3 Certificates, in an amount equal to the amount of any Group II
Carryover Shortfall Amount on such Certificates, pursuant to Section 6.01(a)(H).
Any such amounts transferred shall be treated for federal tax purposes as
amounts distributed by REMIC III to the Class II-X Certificateholders as
transferee thereof. For federal tax return and information reporting purposes,
the rights of the Holders of the Class II-A-1 Certificates, the Class II-A-2
Certificates and the Class II-A-3 Certificates to receive such distributions
shall be assigned a value determined by the Depositor and reported by it to the
Securities Administrator.
(b) The Group II Carryover Shortfall Reserve Fund shall be an Eligible
Account. Amounts held in the Group II Carryover Shortfall Reserve Fund from time
to time shall continue to constitute assets of the Trust Fund, but not of the
REMICs, until released from the Group II Carryover Shortfall Reserve Fund
pursuant to this Section 4.05 and Section 6.01(a)(H). The Group II Carryover
Shortfall Reserve Fund constitutes an "outside reserve fund" within the
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meaning of Treasury Regulation ss. 1.860G-2(h) and is not an asset of the
REMICs. The Class II-X Certificateholders shall be the owners of the Group II
Carryover Shortfall Reserve Fund, and for all federal tax purposes, amounts
transferred by the REMICs to the Group II Carryover Shortfall Reserve Fund shall
be treated as amounts distributed by the REMICs to the Class II-X
Certificateholders. The Paying Agent shall keep records that accurately reflect
the funds on deposit in the Group II Carryover Shortfall Reserve Fund.
(c) The Paying Agent will invest funds deposited in the Group II Carryover
Shortfall Reserve Fund as directed by the Class II-X Certificateholders in
writing in Permitted Investments with a maturity date (i) no later than the
Business Day immediately preceding the date on which such funds are required to
be withdrawn from the Group II Carryover Shortfall Reserve Fund pursuant to this
Agreement, if a Person other than the Paying Agent or an Affiliate of the Paying
Agent manages or advises such Permitted Investment, or (ii) no later than the
date on which such funds are required to be withdrawn from the Group II
Carryover Shortfall Reserve Fund pursuant to this Agreement, if the Paying Agent
or an Affiliate of the Paying Agent manages or advises such Permitted
Investment. If no written direction with respect to such Permitted Investment
shall be received by the Paying Agent from the Class II-X Certificateholders,
then funds in the Group II Carryover Shortfall Reserve Fund shall remain
uninvested. All income and gain realized from investment of funds deposited in
the Group II Carryover Shortfall Reserve Fund shall be for the sole and
exclusive benefit of the Class II-X Certificateholders and shall be remitted by
the Paying Agent to the Class II-X Certificateholders no later than the first
Business Day following receipt of such income and gain by the Paying Agent. The
Class II-X Certificateholders shall deposit in the Group II Carryover Shortfall
Reserve Fund the amount of any net loss incurred in respect of any such
Permitted Investment immediately upon realization of such loss, without any
right of reimbursement therefor.
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Section 4.06. Distribution of Subordinate Carryover Shortfall Amount;
Subordinate Carryover Shortfall Reserve On the Closing Date, the Paying Agent
shall establish and maintain in its name, in trust for the benefit of Class X-0,
Xxxxx X-0, Class M-3, Class M-4, Class M-5, Class M-6, Class M-7, Class B-1,
Class B-2, Class B-3, Class B-4, Class B-5 and Class B-6 Certificates, a
segregated trust account or sub-account of a trust account, which shall be
titled "Subordinate Carryover Shortfall Reserve Fund, JPMorgan Chase Bank, N.A.,
as trustee for the benefit of holders of Structured Asset Mortgage Investments
II Trust 2005-AR2, Mortgage Pass-Through Certificates, Series 2005-AR2, Class
M-1, Class M-2, Class M-3, Class M-4, Class M-5, Class M-6, Class M-7, Class
B-1, Class B-2, Class B-3, Class B-4, Class B-5 and Class B-6" (the "Subordinate
Carryover Shortfall Reserve Fund"). The Paying Agent shall, promptly upon
receipt, deposit in the Subordinate Carryover Shortfall Reserve Fund an amount
equal to $5,000 to be remitted on the Closing Date to the Paying Agent by the
Depositor. On each Distribution Date, the Paying Agent shall transfer from the
Distribution Account to the Subordinate Carryover Shortfall Reserve Fund the
amounts specified pursuant to Section 6.01(a)(A), (B) and (C). On each
Distribution Date, to the extent required, the Paying Agent shall make
withdrawals from the Subordinate Carryover Shortfall Reserve Fund and use the
amounts in the Subordinate Carryover Shortfall Reserve Fund to make
distributions sequentially to the Class X-0, Xxxxx X-0, Class M-3, Class M-4,
Class M-5, Class M-6, Class M-7, Class B-1, Class B-2, Class B-3, Class B-4,
Class B-5 and Class B-6 Certificates, in an amount equal to the amount of any
Subordinate Carryover Shortfall Amount on such Certificates, pursuant to Section
6.01(a)(I). Any such amounts transferred shall be treated for federal tax
purposes as amounts distributed by REMIC III to the Class M-X Certificateholders
as transferee thereof. For federal tax return and information reporting
purposes, the rights of the Holders of the Class M-1, Class M-2, Class M-3,
Class M-4, Class M-5, Class M-6, Class M-7, Class B-1, Class B-2, Class B-3,
Class B-4, Class B-5 and Class B-6 Certificates to receive such distributions
shall be assigned a value determined by the Depositor and reported by it to the
Securities Administrator.
(b) The Subordinate Carryover Shortfall Reserve Fund shall be an Eligible
Account. Amounts held in the Subordinate Carryover Shortfall Reserve Fund from
time to time shall continue to constitute assets of the Trust Fund, but not of
the REMICs, until released from the Subordinate Carryover Shortfall Reserve Fund
pursuant to this Section 4.06 and Section 6.01(a)(I). The Subordinate Carryover
Shortfall Reserve Fund constitutes an "outside reserve fund" within the meaning
of Treasury Regulation ss. 1.860G-2(h) and is not an asset of the REMICs. The
Class M-X Certificateholders shall be the owners of the Subordinate Carryover
Shortfall Reserve Fund, and for all federal tax purposes, amounts transferred by
the REMICs to the Subordinate Carryover Shortfall Reserve Fund shall be treated
as amounts distributed by the REMICs to the Class M-X Certificateholders. The
Paying Agent shall keep records that accurately reflect the funds on deposit in
the Subordinate Carryover Shortfall Reserve Fund.
(c) The Paying Agent will invest funds deposited in the Subordinate
Carryover Shortfall Reserve Fund as directed by the Class M-X Certificateholders
in writing in Permitted Investments with a maturity date (i) no later than the
Business Day immediately preceding the date on which such funds are required to
be withdrawn from the Subordinate Carryover Shortfall Reserve Fund pursuant to
this Agreement, if a Person other than the Paying Agent or an Affiliate of the
Paying Agent manages or advises such Permitted Investment, or (ii) no later than
the date on which such funds are required to be withdrawn from the Subordinate
Carryover Shortfall Reserve Fund pursuant to this Agreement, if the Paying Agent
or an Affiliate of the Paying
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Agent manages or advises such Permitted Investment. If no written direction
with respect to such Permitted Investment shall be received by the Paying Agent
from the Class M-X Certificateholders, then funds in the Subordinate Carryover
Shortfall Reserve Fund shall remain uninvested. All income and gain realized
from investment of funds deposited in the Subordinate Carryover Shortfall
Reserve Fund shall be for the sole and exclusive benefit of the Class M-X
Certificateholders and shall be remitted by the Paying Agent to the Class M-X
Certificateholders no later than the first Business Day following receipt of
such income and gain by the Paying Agent. The Class M-X Certificateholders shall
deposit in the Subordinate Carryover Shortfall Reserve Fund the amount of any
net loss incurred in respect of any such Permitted Investment immediately upon
realization of such loss, without any right of reimbursement therefor.
Section 4.07. Yield Maintenance Account and Yield Maintenance Agreement.
The Trustee is hereby directed to execute the Yield Maintenance Agreement
on behalf of the Trust Fund. Amounts payable by the Trust Fund on the Closing
Date pursuant to the Yield Maintenance Agreement shall be paid by the Seller.
The Trustee in its individual capacity shall have no responsibility for any of
the undertakings, agreements or representations with respect to the Yield
Maintenance Agreement, including, without limitation, for making any payments
thereunder.
The Paying Agent shall establish and maintain in the name of the Paying
Agent, for the benefit of the Class I-A-1, Class I-A-2, Class II-A-1, Class
II-A-2 and Class II-A-3 Certificateholders, the Yield Maintenance Account as a
segregated trust account. The Yield Maintenance Account constitutes an "outside
reserve fund" within the meaning of Treasury Regulation ss. 1.860G-2(h) and is
not an asset of the REMICs. The Class I-X and Class II-X Certificateholders
shall be the owners of the Yield Maintenance Account, and for all federal tax
purposes, amounts transferred by the REMICs to the Yield Maintenance Account
shall be treated as amounts distributed by the REMICs to the Class I-X and Class
II-X Certificateholders. The Paying Agent shall keep records that accurately
reflect the funds on deposit in the Yield Maintenance Account.
The Paying Agent will invest funds deposited in the Yield Maintenance
Account as directed by the Class I-X and Class II-X Certificateholders in
writing in Permitted Investments with a maturity date (i) no later than the
Business Day immediately preceding the date on which such funds are required to
be withdrawn from the Yield Maintenance Account pursuant to this Agreement, if a
Person other than the Paying Agent or an Affiliate of the Paying Agent manages
or advises such Permitted Investment, or (ii) no later than the date on which
such funds are required to be withdrawn from the Yield Maintenance Account
pursuant to this Agreement, if the Paying Agent or an Affiliate of the Paying
Agent manages or advises such Permitted Investment. If no written direction with
respect to such Permitted Investment shall be received by the Paying Agent from
the Class I-X and Class II-X Certificateholders, then funds in the Yield
Maintenance Account shall remain uninvested. All income and gain realized from
investment of funds deposited in the Yield Maintenance Account shall be for the
sole and exclusive benefit of the Class I-X and Class II-X Certificateholders
and shall be remitted by the Paying Agent pro rata to the Class I-X and Class
II-X Certificateholders no later than the first Business Day following receipt
of such income and gain by the Paying Agent. The Class I-X and Class II-X
Certificateholders shall deposit in the Yield Maintenance Account their pro rata
share of the
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amount of any net loss incurred in respect of any such Permitted Investment
immediately upon realization of such loss, without any right of reimbursement
therefor.
Any Yield Maintenance Payments made by the Yield Maintenance Provider
pursuant to the Yield Maintenance Agreement with respect to a Distribution Date
shall be deposited by the Paying Agent into the Yield Maintenance Account and
distributed by the Paying Agent on the related Distribution Date to the Class
I-A-1, Class I-A-2, Class II-A-1, Class II-A-2 and Class II-A-3
Certificateholders, on a pro rata basis, in an amount equal to the lesser of the
respective Class of Certificates' pro rata share of (1) the amount of such Yield
Maintenance Payment made with respect to such Distribution Date, and (2) the
Accrued Certificate Interest that the related Class of Certificates would have
been entitled to receive on such Distribution Date had the applicable
Pass-Through Rate on such Class of Certificates been calculated at One-Month
LIBOR for the related Distribution Date plus the related Margin for the related
Interest Accrual Period, to the extent that such Accrued Certificate Interest
was not otherwise paid from Group I or Group II Available Funds, as the case may
be, on such Distribution Date to the related Class of Certificates.
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ARTICLE V
Certificates
Section 5.01. Certificates (a) The Depository and the Depositor have
entered into a Depository Agreement dated as of the Closing Date (the
"Depository Agreement"). Except for the Residual Certificates, the Private
Certificates and the Individual Certificates and as provided in Subsection
5.01(b), the Certificates shall at all times remain registered in the name of
the Depository or its nominee and at all times: (i) registration of such
Certificates may not be transferred by the Certificate Registrar except to a
successor to the Depository; (ii) ownership and transfers of registration of
such Certificates on the books of the Depository shall be governed by applicable
rules established by the Depository; (iii) the Depository may collect its usual
and customary fees, charges and expenses from its Depository Participants; (iv)
the Certificate Registrar, as agent of the Depositor, shall deal with the
Depository as representative of such Certificate Owners of the respective Class
of Certificates for purposes of exercising the rights of Certificateholders
under this Agreement, and requests and directions for and votes of such
representative shall not be deemed to be inconsistent if they are made with
respect to different Certificate Owners; and (v) the Certificate Registrar, as
agent of the Depositor, may rely and shall be fully protected in relying upon
information furnished by the Depository with respect to its Depository
Participants.
The Residual Certificates and the Private Certificates are initially
Physical Certificates. If at any time the Holders of all of the Certificates of
one or more such Classes request that the Certificate Registrar cause such Class
to become Global Certificates, the Certificate Registrar and the Depositor will
take such action as may be reasonably required to cause the Depository to accept
such Class or Classes of Certificates for trading if it may legally be so
traded.
All transfers by Certificate Owners of such respective Classes of
Book-Entry Certificates and any Global Certificates shall be made in accordance
with the procedures established by the Depository Participant or brokerage firm
representing such Certificate Owners. Each Depository Participant shall only
transfer Book-Entry Certificates of Certificate Owners it represents or of
brokerage firms for which it acts as agent in accordance with the Depository's
normal procedures.
(b) If (i)(A) the Depositor advises the Certificate Registrar in writing
that the Depository is no longer willing or able to properly discharge its
responsibilities as Depository and (B) the Certificate Registrar or the
Depositor is unable to locate a qualified successor within 30 days or (ii) the
Depositor at its option advises the Certificate Registrar, as agent of the
Depositor, in writing that it elects to terminate the book-entry system through
the Depository, the Certificate Registrar, as agent of the Depositor, shall
request that the Depository notify all Certificate Owners of the occurrence of
any such event and of the availability of definitive, fully registered
Certificates to Certificate Owners requesting the same. Upon surrender to the
Certificate Registrar, as agent of the Depositor, of the Certificates by the
Depository, accompanied by registration instructions from the Depository for
registration, the Certificate Registrar shall issue the definitive Certificates.
In addition, if an Event of Default has occurred and is continuing, each
Certificate Owner materially adversely affected thereby may at its option
request a definitive Certificate evidencing
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such Certificate Owner's interest in the related Class of Certificates. In
order to make such request, such Certificate Owner shall, subject to the rules
and procedures of the Depository, provide the Depository or the related
Depository Participant with directions for the Certificate Registrar to exchange
or cause the exchange of the Certificate Owner's interest in such Class of
Certificates for an equivalent interest in fully registered definitive form.
Upon receipt by the Certificate Registrar, as agent of the Depositor, of
instructions from the Depository directing the Certificate Registrar to effect
such exchange (such instructions to contain information regarding the Class of
Certificates and the Current Principal Balance or Notional Amount, as
applicable, being exchanged, the registered holder of and delivery instructions
for the definitive Certificate, and any other information reasonably required by
the Certificate Registrar), (i) the Certificate Registrar shall execute and
deliver, in accordance with the registration and delivery instructions provided
by the Depository, a Definitive Certificate evidencing such Certificate Owner's
interest in such Class of Certificates and (ii) the Certificate Registrar shall
execute a new Book-Entry Certificate reflecting the reduction in the aggregate
Current Principal Balance or Notional Amount, as applicable, of such Class of
Certificates by the amount of the definitive Certificates.
Neither the Depositor nor the Certificate Registrar shall be liable for any
delay in the delivery of any instructions required pursuant to this Section
5.01(b) and may conclusively rely on, and shall be protected in relying on, such
instructions.
(c) (i) REMIC I will be evidenced by (x) the REMIC I Regular Interests
(designated below), which will be uncertificated and non-transferable and are
hereby designated as the "regular interests" in REMIC I and have the principal
balances and accrue interest at the Pass-Through Rates equal to those set forth
in this Section 5.01(c)(i) and (y) the Class R-I Certificates, which are hereby
designated as the single "residual interest" in REMIC I.
The REMIC I Regular Interests and the Class R-I Certificate will have the
following designations, initial balances and pass-through rates:
REMIC I Interest Initial Balance Pass-Through Related Group
Rate
1A $2,213.92 (1) Group I
1B $28,383.27 (2) Group I
2A $3,229.99 (1) Group II
2B $41,409.69 (3) Group II
3A $934.32 (1) Group III
3B $11,978.55 (4) Group III
ZZZ $817,626,889.26 (1) N/A
Class R-I $50.00 N/A Group I
(1) The weighted average of the Net Rates of the Mortgage Loans (as of the
second preceding Due Date)as adjusted to an effective rate reflecting the
accrual of interest on an actual/360 basis, weighted on the basis of the
respective Scheduled Principal Balance of each such Mortgage Loan as of the
beginning of the Due Period immediately preceding the related Distribution Date.
(2) The weighted average of the Net Rates of the Group I Mortgage Loans (as
of the second preceding Due Date) as adjusted to an effective rate reflecting
the accrual of interest on an actual/360 basis, weighted on the basis of the
respective Scheduled Principal Balance of each such Mortgage Loan as of the
beginning of the Due Period immediately preceding the related Distribution Date.
(3) The weighted average of the Net Rates of the Group II Mortgage Loans
(as of the second preceding Due Date) as adjusted to an effective rate
reflecting the accrual of interest on an actual/360 basis, weighted on the basis
of the
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respective Scheduled Principal Balance of each such Mortgage Loan as of
the beginning of the Due Period immediately preceding the related Distribution
Date.
(4) The weighted average of the Net Rates of the Group III Mortgage Loans
(as of the second preceding Due Date) as adjusted to an effective rate
reflecting the accrual of interest on an actual/360 basis, weighted on the basis
of the respective Scheduled Principal Balance of each such Mortgage Loan as of
the beginning of the Due Period immediately preceding the related Distribution
Date.
Distributions of principal shall be deemed to be made from amounts received
on the Mortgage Loans to the REMIC I Regular Interests, first, so as to keep the
Uncertificated Principal Balance of each REMIC I Regular Interest ending with
the designation "B" equal to 0.01% of the aggregate Scheduled Principal Balance
of the Mortgage Loans in the related Loan Group; second, to each REMIC I Regular
Interest ending with the designation "A," so that the Uncertificated Principal
Balance of each such REMIC I Regular Interest is equal to 0.01% of the excess of
(x) the aggregate Scheduled Principal Balance of the Mortgage Loans in the
related Loan Group over (y) the Current Principal Amount of the Senior
Certificates (other than the Residual Certificates) in the related Loan Group
(except that if any such excess is a larger number than in the preceding
distribution period, the least amount of principal shall be distributed to such
REMIC I Regular Interests such that the REMIC I Subordinated Balance Ratio is
maintained); and third, any remaining principal to REMIC I Regular Interest ZZZ.
Realized Losses on the Mortgage Loans shall be applied after all distributions
have been made on each Distribution Date first, so as to keep the Uncertificated
Principal Balance of each REMIC I Regular Interest ending with the designation
"B" equal to 0.01% of the aggregate Scheduled Principal Balance of the Mortgage
Loans in the related Loan Group; second, to each REMIC I Regular Interest ending
with the designation "A," so that the Uncertificated Principal Balance of each
such REMIC I Regular Interest is equal to 0.01% of the excess of (x) the
aggregate Scheduled Principal Balance of the Mortgage Loans in the related Loan
Group over (y) the Current Principal Amount of the Senior Certificates (other
than the Residual Certificates) in the related Loan Group (except that if any
such excess is a larger number than in the preceding distribution period, the
least amount of Realized Losses on the Mortgage Loans shall be applied to such
REMIC I Regular Interests such that the REMIC I Subordinated Balance Ratio is
maintained); and third, any remaining Realized Losses on the Mortgage Loans
shall be allocated to REMIC I Regular Interest ZZZ.
(ii) REMIC II will be evidenced by (x) the REMIC II Regular Interests
(designated below), which will be uncertificated and non-transferable and are
hereby designated as the "regular interests" in REMIC II and have the principal
balances and accrue interest at the Pass-Through Rates equal to those set forth
in this Section 5.01(c)(ii) and (y) the Class R-II Certificate, which is hereby
designated as the single "residual interest" in REMIC II.
The REMIC II Regular Interests and the Class R-II Certificate will have the
following designations, initial balances and pass-through rates:
REMIC II Interest Initial Balance Pass-Through Rate Related Group
I-A-1 $222,439,500 (1) Group I
I-A-2 $39,254,000 (1) Group I
II-A-1 $229,078,300 (2) Group II
II-A-2 $95,449,200 (2) Group II
II-A-3 $57,269,500 (2) Group II
III-A-1 $105,411,300 (3) Group III
III-A-2 $5,031,000 (3) Group III
79
MT-R $50 N/A Group I
M-1 $10,630,200 (4) N/A
M-2 $9,403,800 (4) N/A
M-3 $5,724,100 (4) N/A
M-4 $6,950,600 (4) N/A
M-5 $3,270,900 (4) N/A
M-6 $3,270,900 (4) N/A
M-7 $3,270,900 (4) N/A
B-1 $4,088,600 (4) N/A
B-2 $1,635,500 (4) N/A
B-3 $2,453,100 (4) N/A
B-4 $4,497,500 (4) N/A
B-5 $4,906,300 (4) N/A
B-6 $3,679,839 (4) N/A
R-II $50 N/A Group I
(1) The weighted average of the Net Rates of the Group I Mortgage Loans (as
of the second preceding Due Date) as adjusted to an effective rate reflecting
the accrual of interest on an actual/360 basis, weighted on the basis of the
respective Scheduled Principal Balance of each such Mortgage Loan as of the
beginning of the Due Period immediately preceding the related Distribution Date.
(2) The weighted average of the Net Rates of the Group II Mortgage Loans
(as of the second preceding Due Date) as adjusted to an effective rate
reflecting the accrual of interest on an actual/360 basis, weighted on the basis
of the respective Scheduled Principal Balance of each such Mortgage Loan as of
the beginning of the Due Period immediately preceding the related Distribution
Date.
(3) The weighted average of the Net Rates of the Group III Mortgage Loans
(as of the second preceding Due Date) as adjusted to an effective rate
reflecting the accrual of interest on an actual/360 basis, weighted on the basis
of the respective Scheduled Principal Balance of each such Mortgage Loan as of
the beginning of the Due Period immediately preceding the related Distribution
Date.
(4) A variable Pass-Through Rate equal to the weighted average of the
Pass-Through Rates on REMIC I Regular Interests 1A, 2A and 3A, weighted on the
basis of the Uncertificated Principal Balance of each such REMIC I Regular
Interest immediately preceding the related Distribution Date, provided that for
purposes of that weighted average, the Pass-Through Rate of each such REMIC I
Regular Interest shall be subject to a cap and a floor equal to the Pass-Through
Rate of the REMIC I Regular Interest from the related Group ending with the
designation "B".
Principal shall be payable to, and shortfalls, losses and prepayments are
allocable to, the REMIC II Regular Interests as such amounts are payable and
allocable to the Corresponding Certificates.
(iii) The Classes of the Certificates shall have the following
designations, initial principal amounts and Pass-Through Rates:
Designation Initial Principal/ Pass-Through Rate
Notional Amount
I-A-1 $222,439,500 (1)
I-A-2 $39,254,000 (2)
II-A-1 $229,078,300 (3)
II-A-2 $95,449,200 (4)
II-A-3 $57,269,500 (5)
III-A-1 $105,411,300 (6)
III-A-2 $5,031,000 (7)
I-X $261,693,500 (8)
II-X $381,797,000 (9)
M-X $63,782,239 (10)
R-I $50 (11)
R-II $50 (11)
80
R-III $50 (11)
M-1 $10,630,200 (11)
M-2 $9,403,800 (12)
M-3 $5,724,100 (13)
M-4 $6,950,600 (14)
M-5 $3,270,900 (15)
M-6 $3,270,900 (16)
M-7 $3,270,900 (17)
B-1 $4,088,600 (18)
B-2 $1,635,500 (19)
B-3 $2,453,100 (20)
B-4 $4,497,500 (21)
B-5 $4,906,300 (21)
B-6 $3,679,839 (21)
(1) The Class I-A-1 Certificates will bear interest at a variable
Pass-Through Rate equal to the least of (i) One-Month LIBOR plus a margin
initially equal to 0.230%, (ii) 10.50% per annum and (iii) the weighted average
of the Net Rates of the Group I Mortgage Loans (as of the second preceding Due
Date) as adjusted to an effective rate reflecting the accrual of interest on an
actual/360 basis, weighted on the basis of the respective Scheduled Principal
Balances of each such Mortgage Loan as of the beginning of the Due Period
immediately preceding the related Distribution Date; provided that, on such
Distribution Dates, for federal income tax purposes such Certificates will bear
interest at a rate equivalent to the foregoing, with the weighted average of the
Net Rates of the Group I Mortgage Loans expressed as the weighted average of the
Pass-Through Rate on REMIC II Regular Interest I-A-1, weighted on the basis of
the Uncertificated Principal Balance of such REMIC II Regular Interest
immediately preceding the related Distribution Date. The Pass-Through Rate for
the Class I-A-1 Certificates with respect to the first Interest Accrual Period
is 3.331% per annum.
(2) The Class I-A-2 Certificates will bear interest at a variable
Pass-Through Rate equal to the least of (i) One-Month LIBOR plus a margin
initially equal to 0.300%, (ii) 10.50% per annum and (iii) the weighted average
of the Net Rates of the Group I Mortgage Loans (as of the second preceding Due
Date) as adjusted to an effective rate reflecting the accrual of interest on an
actual/360 basis, weighted on the basis of the respective Scheduled Principal
Balances of each such Mortgage Loan as of the beginning of the Due Period
immediately preceding the related Distribution Date; provided that, on such
Distribution Dates, for federal income tax purposes such Certificates will bear
interest at a rate equivalent to the foregoing, with the weighted average of the
Net Rates of the Group I Mortgage Loans expressed as the weighted average of the
Pass-Through Rate on REMIC II Regular Interest I-A-2, weighted on the basis of
the Uncertificated Principal Balance of such REMIC II Regular Interest
immediately preceding the related Distribution Date. The Pass-Through Rate for
the Class I-A-2 Certificates with respect to the first Interest Accrual Period
is 3.401% per annum.
(3) The Class II-A-1 Certificates will bear interest at a variable
Pass-Through Rate equal to the least of (i) One-Month LIBOR plus a margin
initially equal to 0.230% per annum (ii) 10.50% per annum and (iii) the weighted
average of the Net Rates of the Group II Mortgage Loans (as of the second
preceding Due Date) as adjusted to an effective rate reflecting the accrual of
interest on an actual/360 basis, weighted on the basis of the respective
Scheduled Principal Balances of each such Mortgage Loan as of the beginning of
the Due Period immediately preceding the related Distribution Date; provided
that, on such Distribution Dates, for federal income tax purposes such
Certificates will bear interest at a rate equivalent to the foregoing, with the
weighted average of the Net Rates of the Group II Mortgage Loans expressed as
the weighted average of the Pass-Through Rate on REMIC II Regular Interest
II-A-1, weighted on the basis of the Uncertificated Principal Balance of such
REMIC II Regular Interest immediately preceding the related Distribution Date.
The Pass-Through Rate for the Class II-A-1 Certificates with respect to the
first Interest Accrual Period is 3.331% per annum.
(4) The Class II-A-2 Certificates will bear interest at a variable
Pass-Through Rate equal to the least of (i) One-Month LIBOR plus a margin
initially equal to 2.280% per annum (ii) 10.50% per annum and (iii) the weighted
average of the Net Rates of the Group II Mortgage Loans (as of the second
preceding Due Date) as adjusted to an effective rate reflecting the accrual of
interest on an actual/360 basis, weighted on the basis of the respective
Scheduled Principal Balances of each such Mortgage Loan as of the beginning of
the Due Period immediately preceding the related Distribution Date; provided
that, on such Distribution Dates, for federal income tax purposes such
Certificates will bear interest at a rate equivalent to the foregoing, with the
weighted average of the Net Rates of the Group II Mortgage Loans expressed as
the weighted average of the Pass-Through Rate on REMIC II Regular Interest
II-A-2, weighted on the basis of the Uncertificated Principal Balance of such
REMIC II Regular Interest immediately preceding the related Distribution Date.
The Pass-Through Rate for the Class II-A-2 Certificates with respect to the
first Interest Accrual Period is 3.381% per annum.
(5) The Class II-A-3 Certificates will bear interest at a variable
Pass-Through Rate equal to the least of (i) One-Month LIBOR plus a margin
initially equal to 0.320% per annum (ii) 10.50% per annum and (iii) the weighted
average of the Net
81
Rates of the Group II Mortgage Loans (as of the second preceding Due Date)
as adjusted to an effective rate reflecting the accrual of interest on an
actual/360 basis, weighted on the basis of the respective Scheduled Principal
Balances of each such Mortgage Loan as of the beginning of the Due Period
immediately preceding the related Distribution Date; provided that, on such
Distribution Dates, for federal income tax purposes such Certificates will bear
interest at a rate equivalent to the foregoing, with the weighted average of the
Net Rates of the Group II Mortgage Loans expressed as the weighted average of
the Pass-Through Rate on REMIC II Regular Interest II-A-3, weighted on the basis
of the Uncertificated Principal Balance of such REMIC II Regular Interest
immediately preceding the related Distribution Date. The Pass-Through Rate for
the Class II-A-3 Certificates with respect to the first Interest Accrual Period
is 3.421% per annum.
(6) The Class III-A-1 Certificates will bear interest at a variable
Pass-Through Rate equal to the weighted average of the Net Rates of the Group
III Mortgage Loans (as of the second preceding Due Date), weighted on the basis
of the respective Scheduled Principal Balances of each such Mortgage Loan as of
the beginning of the Due Period immediately preceding the related Distribution
Date; provided that, on such Distribution Dates, for federal income tax purposes
such Certificates will bear interest at a rate equivalent to the foregoing, with
the weighted average of the Net Rates of the Group III Mortgage Loans expressed
as the weighted average of the Pass-Through Rate on REMIC II Regular Interest
III-A-1, weighted on the basis of the Uncertificated Principal Balance of such
REMIC II Regular Interest immediately preceding the related Distribution Date.
The Pass-Through Rate for the Class III-A-1 Certificates with respect to the
first Interest Accrual Period is 4.551% per annum.
(7) The Class III-A-2 Certificates will bear interest at a variable
Pass-Through Rate equal to the weighted average of the Net Rates of the Group
III Mortgage Loans (as of the second preceding Due Date), weighted on the basis
of the respective Scheduled Principal Balances of each such Mortgage Loan as of
the beginning of the Due Period immediately preceding the related Distribution
Date; provided that, on such Distribution Dates, for federal income tax purposes
such Certificates will bear interest at a rate equivalent to the foregoing, with
the weighted average of the Net Rates of the Group III Mortgage Loans expressed
as the weighted average of the Pass-Through Rate on REMIC II Regular Interest
III-A-2, weighted on the basis of the Uncertificated Principal Balance of such
REMIC II Regular Interest immediately preceding the related Distribution Date.
The Pass-Through Rate for the Class III-A-2 Certificates with respect to the
first Interest Accrual Period is 4.551% per annum.
(8) The Class I-X Certificates will bear interest at a variable
Pass-Through Rate equal to the greater of (i) zero and (ii) the excess of (x)
the weighted average of the Net Rates of the Group I Mortgage Loans (as of the
second preceding Due Date), over (y) the weighted average of the Pass-Through
Rates on the Class I-A-1 Certificates and the Class I-A-2 Certificates, based on
a Notional Amount equal to the aggregate Current Principal Amount of the Class
I-A-1 Certificates, the Class I-A-2 Certificates and the Class I-X Certificates
and calculated on the basis of a year of 360 days with twelve 30-day months. The
amount of interest payable to the Class I-X Certificates on a Distribution Date
will be reduced by any amounts necessary to fund the Group I Carryover Shortfall
Reserve Fund on such Distribution Date to pay any Group I Carryover Shortfall
Amounts to the relating to such Distribution Date and the Class I-A-1
Certificates and the Class I-A-2 Certificates.
(9) The Class II-X Certificates will bear interest at a variable
Pass-Through Rate equal to the greater of (i) zero and (ii) the excess of (x)
the weighted average of the Net Rates of the Group II Mortgage Loans (as of the
second preceding Due Date), over (y) the weighted average of the Pass-Through
Rates on the Class II-A-1 Certificates, the Class I-A-2 Certificates and the
Class II-A-3 Certificates, based on a Notional Amount equal to the aggregate
Current Principal Amount of the Class II-A-1 Certificates, the Class II-A-2
Certificates, the Class II-A-3 Certificates and the Class II-X Certificates and
calculated on the basis of a year of 360 days with twelve 30-day months. The
amount of interest payable to the Class II-X Certificates on a Distribution Date
will be reduced by any amounts necessary to fund the Group II Carryover
Shortfall Reserve Fund on such Distribution Date to pay any Group II Carryover
Shortfall Amounts relating to such Distribution Date and the Class II-A-1
Certificates, the Class II-A-2 Certificates and the Class II-A-3 Certificates.
(10) The Class M-X Certificates will bear interest at a variable
Pass-Through Rate equal to the greater of (i) zero and (ii) the excess of (x)
the weighted average of the Net Rates of each Loan Group (as of the second
preceding Due Date), weighted in proportion to the results of subtracting from
the aggregate Principal Balance of each Loan Group the aggregate Current
Principal Amount of the related Classes of Senior Certificates (other than the
Residual Certificates) immediately prior to the related Distribution Date, over
(y) the weighted average of the Pass-Through Rates on the Subordinate
Certificates, based on a Notional Amount equal to the aggregate Current
Principal Amount of the Subordinate Certificates. The amount of interest payable
to the Class M-X Certificates on a Distribution Date will be reduced by any
amounts necessary to fund the Subordinate Carryover Shortfall Reserve Fund on
such Distribution Date to pay any Subordinate Carryover Shortfall Amounts
relating to such Distribution Date and the Subordinate Certificates.
(11) The Class R-I, Class R-II and Class R-III Certificates do not have a
Pass-Through Rate and will not bear interest.
82
(12) The Class M-1 Certificates will bear interest at a variable
Pass-Through Rate equal to the least of (i) One-Month LIBOR plus a margin
initially equal to 0.450%, (ii) 10.50% per annum and (iii) the weighted average
of the Net Rates of each Loan Group (as of the second preceding Due Date) as
adjusted to an effective rate reflecting the accrual of interest on an
actual/360 basis, weighted in proportion to the results of subtracting from the
aggregate principal balance of each Loan Group the aggregate Current Principal
Amount of the related Classes of Senior Certificates (other than the Residual
Certificates) immediately prior to the related Distribution Date; provided that
for federal income tax purposes such Certificates will bear interest at a rate
equivalent to the foregoing, with the weighted average of the Net Rates of each
Loan Group expressed as the weighted average of the Pass-Through Rates on REMIC
II Regular Interests X-0, X-0, X-0, X-0, X-0, X-0, X-0, X-0, X-0, X-0, X-0, X-0
and B-6, weighted on the basis of the Uncertificated Principal Balance of each
such REMIC II Regular Interest immediately preceding the related Distribution
Date. The Pass-Through Rate for the Class M-1 Certificates with respect to the
first Interest Accrual Period is 3.551% per annum.
(13) The Class M-2 Certificates will bear interest at a variable
Pass-Through Rate equal to the least of (i) One-Month LIBOR plus a margin
initially equal to 0.480%, (ii) 10.50% per annum and (iii) the weighted average
of the Net Rates of each Loan Group (as of the second preceding Due Date) as
adjusted to an effective rate reflecting the accrual of interest on an
actual/360 basis, weighted in proportion to the results of subtracting from the
aggregate principal balance of each Loan Group the aggregate Current Principal
Amount of the related Classes of Senior Certificates (other than the Residual
Certificates) immediately prior to the related Distribution Date; provided that
for federal income tax purposes such Certificates will bear interest at a rate
equivalent to the foregoing, with the weighted average of the Net Rates of each
Loan Group expressed as the weighted average of the Pass-Through Rates on REMIC
II Regular Interests X-0, X-0, X-0, X-0, X-0, X-0, X-0, X-0, X-0, X-0, X-0, X-0
and B-6, weighted on the basis of the Uncertificated Principal Balance of each
such REMIC II Regular Interest immediately preceding the related Distribution
Date. The Pass-Through Rate for the Class M-1 Certificates with respect to the
first Interest Accrual Period is 3.581% per annum.
(14) The Class M-3 Certificates will bear interest at a variable
Pass-Through Rate equal to the least of (i) One-Month LIBOR plus a margin
initially equal to 0.500%, (ii) 10.50% per annum and (iii) the weighted average
of the Net Rates of each Loan Group (as of the second preceding Due Date) as
adjusted to an effective rate reflecting the accrual of interest on an
actual/360 basis, weighted in proportion to the results of subtracting from the
aggregate principal balance of each Loan Group the aggregate Current Principal
Amount of the related Classes of Senior Certificates (other than the Residual
Certificates) immediately prior to the related Distribution Date; provided that
for federal income tax purposes such Certificates will bear interest at a rate
equivalent to the foregoing, with the weighted average of the Net Rates of each
Loan Group expressed as the weighted average of the Pass-Through Rates on REMIC
II Regular Interests X-0, X-0, X-0, X-0, X-0, X-0, X-0, X-0, X-0, X-0, X-0, X-0
and B-6, weighted on the basis of the Uncertificated Principal Balance of each
such REMIC II Regular Interest immediately preceding the related Distribution
Date. The Pass-Through Rate for the Class M-3 Certificates with respect to the
first Interest Accrual Period is 3.601% per annum.
(15) The Class M-4 Certificates will bear interest at a variable
Pass-Through Rate equal to the least of (i) One-Month LIBOR plus a margin
initially equal to 0.680%, (ii) 10.50% per annum and (iii) the weighted average
of the Net Rates of each Loan Group (as of the second preceding Due Date) as
adjusted to an effective rate reflecting the accrual of interest on an
actual/360 basis, weighted in proportion to the results of subtracting from the
aggregate principal balance of each Loan Group the aggregate Current Principal
Amount of the related Classes of Senior Certificates (other than the Residual
Certificates) immediately prior to the related Distribution Date; provided that
for federal income tax purposes such Certificates will bear interest at a rate
equivalent to the foregoing, with the weighted average of the Net Rates of each
Loan Group expressed as the weighted average of the Pass-Through Rates on REMIC
II Regular Interests X-0, X-0, X-0, X-0, X-0, X-0, X-0, X-0, X-0, X-0, X-0, X-0
and B-6, weighted on the basis of the Uncertificated Principal Balance of each
such REMIC II Regular Interest immediately preceding the related Distribution
Date. The Pass-Through Rate for the Class M-4 Certificates with respect to the
first Interest Accrual Period is 3.781% per annum.
(16) The Class M-5 Certificates will bear interest at a variable
Pass-Through Rate equal to the least of (i) One-Month LIBOR plus a margin
initially equal to 0.740%, (ii) 10.50% per annum and (iii) the weighted average
of the Net Rates of each Loan Group (as of the second preceding Due Date) as
adjusted to an effective rate reflecting the accrual of interest on an
actual/360 basis, weighted in proportion to the results of subtracting from the
aggregate principal balance of each Loan Group the aggregate Current Principal
Amount of the related Classes of Senior Certificates (other than the Residual
Certificates) immediately prior to the related Distribution Date; provided that
for federal income tax purposes such Certificates will bear interest at a rate
equivalent to the foregoing, with the weighted average of the Net Rates of each
Loan Group expressed as the weighted average of the Pass-Through Rates on REMIC
II Regular Interests X-0, X-0, X-0, X-0, X-0, X-0, X-0, X-0, X-0, X-0, X-0, X-0
and B-6, weighted on the basis of the Uncertificated Principal Balance of each
such REMIC II Regular Interest immediately preceding the related Distribution
Date. The Pass-Through Rate for the Class M-5 Certificates with respect to the
first Interest Accrual Period is 3.841% per annum.
83
(17) The Class M-6 Certificates will bear interest at a variable
Pass-Through Rate equal to the least of (i) One-Month LIBOR plus a margin
initially equal to 0.760%, (ii) 10.50% per annum and (iii) the weighted average
of the Net Rates of each Loan Group (as of the second preceding Due Date) as
adjusted to an effective rate reflecting the accrual of interest on an
actual/360 basis, weighted in proportion to the results of subtracting from the
aggregate principal balance of each Loan Group the aggregate Current Principal
Amount of the related Classes of Senior Certificates (other than the Residual
Certificates) immediately prior to the related Distribution Date; provided that
for federal income tax purposes such Certificates will bear interest at a rate
equivalent to the foregoing, with the weighted average of the Net Rates of each
Loan Group expressed as the weighted average of the Pass-Through Rates on REMIC
II Regular Interests X-0, X-0, X-0, X-0, X-0, X-0, X-0, X-0, X-0, X-0, X-0, X-0
and B-6, weighted on the basis of the Uncertificated Principal Balance of each
such REMIC II Regular Interest immediately preceding the related Distribution
Date. The Pass-Through Rate for the Class M-6 Certificates with respect to the
first Interest Accrual Period is 3.861% per annum.
(18) The Class M-7 Certificates will bear interest at a variable
Pass-Through Rate equal to the least of (i) One-Month LIBOR plus a margin
initially equal to 1.250%, (ii) 10.50% per annum and (iii) the weighted average
of the Net Rates of each Loan Group (as of the second preceding Due Date) as
adjusted to an effective rate reflecting the accrual of interest on an
actual/360 basis, weighted in proportion to the results of subtracting from the
aggregate principal balance of each Loan Group the aggregate Current Principal
Amount of the related Classes of Senior Certificates (other than the Residual
Certificates) immediately prior to the related Distribution Date; provided that
for federal income tax purposes such Certificates will bear interest at a rate
equivalent to the foregoing, with the weighted average of the Net Rates of each
Loan Group expressed as the weighted average of the Pass-Through Rates on REMIC
II Regular Interests X-0, X-0, X-0, X-0, X-0, X-0, X-0, X-0, X-0, X-0, X-0, X-0
and B-6, weighted on the basis of the Uncertificated Principal Balance of each
such REMIC II Regular Interest immediately preceding the related Distribution
Date. The Pass-Through Rate for the Class M-7 Certificates with respect to the
first Interest Accrual Period is 4.351% per annum.
(19) The Class B-1 Certificates will bear interest at a variable
Pass-Through Rate equal to the least of (i) One-Month LIBOR plus a margin
initially equal to 1.350%, (ii) 10.50% per annum and (iii) the weighted average
of the Net Rates of each Loan Group (as of the second preceding Due Date) as
adjusted to an effective rate reflecting the accrual of interest on an
actual/360 basis, weighted in proportion to the results of subtracting from the
aggregate Scheduled Principal Balance of each Loan Group, the aggregate Current
Principal Amount of the related Classes of Senior Certificates (other than the
Residual Certificates) immediately prior to the related Distribution Date;
provided that for federal income tax purposes such Certificates will bear
interest at a rate equivalent to the foregoing, with the weighted average of the
Net Rates of each Loan Group expressed as the weighted average of the
Pass-Through Rates on REMIC II Regular Interests X-0, X-0, X-0, X-0, X-0, X-0,
X-0, X-0, X-0, X-0, X-0, X-0 and B-6, weighted on the basis of the
Uncertificated Principal Balance of each such REMIC II Regular Interest
immediately preceding the related Distribution Date. The Pass-Through Rate for
the Class B-1 Certificates with respect to the first Interest Accrual Period is
4.451% per annum.
(20) The Class B-2 Certificates will bear interest at a variable
Pass-Through Rate equal to the least of (i) One-Month LIBOR plus a margin
initially equal to 1.700%, (ii) 10.50% per annum and (iii) the weighted average
of the Net Rates of each Loan Group (as of the second preceding Due Date) as
adjusted to an effective rate reflecting the accrual of interest on an
actual/360 basis, weighted in proportion to the results of subtracting from the
aggregate Scheduled Principal Balance of each Loan Group, the aggregate Current
Principal Amount of the related Classes of Senior Certificates (other than the
Residual Certificates) immediately prior to the related Distribution Date;
provided that for federal income tax purposes such Certificates will bear
interest at a rate equivalent to the foregoing, with the weighted average of the
Net Rates of each Loan Group expressed as the weighted average of the
Pass-Through Rates on REMIC II Regular Interests X-0, X-0, X-0, X-0, X-0, X-0,
X-0, X-0, X-0, X-0, X-0, X-0 and B-6, weighted on the basis of the
Uncertificated Principal Balance of each such REMIC II Regular Interest
immediately preceding the related Distribution Date. The Pass-Through Rate with
respect to the first Interest Accrual Period is 4.801% per annum.
(21) The Class B-3 Certificates will bear interest at a variable
Pass-Through Rate equal to the least of (i) One-Month LIBOR plus a margin
initially equal to 1.800%, (ii) 10.50% per annum and (iii) the weighted average
of the Net Rates of each Loan Group (as of the second preceding Due Date) as
adjusted to an effective rate reflecting the accrual of interest on an
actual/360 basis, weighted in proportion to the results of subtracting from the
aggregate Scheduled Principal Balance of each Loan Group, the aggregate Current
Principal Amount of the related Classes of Senior Certificates (other than the
Residual Certificates) immediately prior to the related Distribution Date;
provided that for federal income tax purposes such Certificates will bear
interest at a rate equivalent to the foregoing, with the weighted average of the
Net Rates of each Loan Group expressed as the weighted average of the
Pass-Through Rate on REMIC II Regular Interests X-0, X-0, X-0, X-0, X-0, X-0,
X-0, X-0, X-0, X-0, X-0, X-0 and B-6, weighted on the basis of the
Uncertificated Principal Balance of each such REMIC II Regular Interest
immediately preceding the related Distribution Date. The Pass-Through Rate with
respect to the first Interest Accrual Period is 4.851% per annum.
84
(22) The Class B-4, Class B-5 and Class B-6 Certificates will bear interest
at a variable Pass-Through Rate equal to the least of (i) One-Month LIBOR plus a
margin initially equal to 1.800%, (ii) 10.50% per annum and (iii) the weighted
average of the Net Rates of each Loan Group (as of the second preceding Due
Date) as adjusted to an effective rate reflecting the accrual of interest on an
actual/360 basis, weighted in proportion to the results of subtracting from the
aggregate Scheduled Principal Balance of each Loan Group, the aggregate Current
Principal Amount of the related Classes of Senior Certificates (other than the
Residual Certificates) immediately prior to the related Distribution Date;
provided that for federal income tax purposes such Certificates will bear
interest at a rate equivalent to the foregoing, expressed as the weighted
average of the Pass-Through Rates on REMIC II Regular Interests X-0, X-0, X-0,
X-0, X-0, X-0, X-0, X-0, X-0, X-0, X-0, X-0 and B-6, weighted on the basis of
the Uncertificated Principal Balance of each such REMIC II Regular Interest
immediately preceding the related Distribution Date. The Pass-Through Rate for
the Class B-4, Class B-5 and Class B-6 Certificates with respect to the first
Interest Accrual Period is 4.901% per annum.
Principal shall be payable to, and shortfalls, losses and prepayments are
allocable to, the REMIC I Regular Interests as such amounts are payable and
allocable to the Corresponding Certificates.
(d) Solely for purposes of Section 1.860G-1(a)(4)(iii) of the Treasury
regulations, the Distribution Date immediately following the maturity date for
the Mortgage Loan with the latest maturity date in the Trust Fund has been
designated as the "latest possible maturity date" for the REMIC I Regular
Interests, REMIC II Regular Interests and the Certificates.
(e) With respect to each Distribution Date, each Class of Certificates
(other than the Residual Certificates) shall accrue interest during the related
Interest Accrual Period. With respect to each Distribution Date and each such
Class of Certificates (other than the Residual Certificates, the Interest Only
Certificates and the Group III Senior Certificates), interest shall be
calculated on the basis of a 360-day year and the actual number of days elapsed
in the related Interest Accrual Period, and with respect to each Distribution
Date and the Interest Only Certificates and the Group III Senior Certificates,
interest is calculated on the basis of a 360-day year consisting of twelve 30
day months, based upon the respective Pass-Through Rate set forth, or determined
as provided, above and the Current Principal Amount (or Notional Amount, in the
case of the Interest Only Certificates) of such Class of Certificates applicable
to such Distribution Date. The Residual Certificates do not have a Pass-Through
Rate and shall not bear interest.
(f) The Certificates shall be substantially in the forms set forth in
Exhibits X-0, X-0, X-0 and A-4. On original issuance, the Trustee shall sign,
and the Certificate Registrar shall countersign and deliver the Certificates at
the direction of the Depositor. Pending the preparation of definitive
Certificates of any Class, the Trustee may sign and the Certificate Registrar
may countersign temporary Certificates that are printed, lithographed or
typewritten, in authorized denominations for Certificates of such Class,
substantially of the tenor of the definitive Certificates in lieu of which they
are issued and with such appropriate insertions, omissions, substitutions and
other variations as the officers or authorized signatories executing such
Certificates may determine, as evidenced by their execution of such
Certificates. If temporary Certificates are issued, the Depositor will cause
definitive Certificates to be prepared without unreasonable delay. After the
preparation of definitive Certificates, the temporary Certificates shall be
exchangeable for definitive Certificates upon surrender of the temporary
Certificates at the Certificate Registrar Office, without charge to the Holder.
Upon surrender for cancellation of any one or more temporary Certificates, the
Trustee shall sign and the Certificate Registrar shall countersign and deliver
in exchange therefor a like aggregate principal amount, in authorized
denominations for such Class, of definitive Certificates of the same Class.
Until so
85
exchanged, such temporary Certificates shall in all respects be entitled to the
same benefits as definitive Certificates.
(g) Each Class of Book-Entry Certificates will be registered as a single
Certificate of such Class held by a nominee of the Depository or the DTC
Custodian, and beneficial interests will be held by investors through the
book-entry facilities of the Depository in minimum denominations of (i) in the
case of the Senior Certificates (other than the Residual Certificates), $1,000
and in each case increments of $1.00 in excess thereof, and (ii) in the case of
the Offered Subordinate Certificates, $25,000 and increments of $1.00 in excess
thereof, except that one Certificate of each such Class may be issued in a
different amount so that the sum of the denominations of all outstanding
Certificates of such Class shall equal the Current Principal Amount or Notional
Amount, as the case may be, of such Class of Certificates on the Closing Date.
On the Closing Date, the Trustee shall execute, and the Certificate
Registrar shall countersign, Physical Certificates all in an aggregate principal
amount that shall equal the Current Principal Amount or Notional Amount, as the
case may be, of such Class of Certificates on the Closing Date. The Private
Certificates shall be issued in certificated fully-registered form in minimum
dollar denominations of $25,000 and integral multiples of $1.00 in excess
thereof, except that one Private Certificate of each such Class may be issued in
a different amount so that the sum of the denominations of all outstanding
Private Certificates of such Class shall equal the Current Principal Amount or
Notional Amount, as the case may be, of such Class of Certificates on the
Closing Date. The Residual Certificates shall each be issued in certificated
fully-registered form in the denomination of $50, $50 and $50, respectively.
Each Class of Global Certificates, if any, shall be issued in fully registered
form in minimum dollar denominations of $50,000 and integral multiples of $1.00
in excess thereof, except that one Certificate of each Class may be in a
different denomination so that the sum of the denominations of all outstanding
Certificates of such Class shall equal the Current Principal Amount or Notional
Amount, as the case may be, of such Class of Certificates on the Closing Date.
On the Closing Date, the Trustee shall execute and the Certificate
Registrar shall countersign (i) in the case of each Class of Offered
Certificates, the Certificate in the entire Current Principal Amount or Notional
Amount, as the case may be, of the respective Class of Certificates and (ii) in
the case of each Class of Private Certificates, Individual Certificates all in
an aggregate principal amount or notional amount, as the case may be, that shall
equal the Current Principal Amount or Notional Amount, as the case may be, of
each such respective Class of Certificates on the Closing Date. The Certificates
referred to in clause (i) and, if at any time there are to be Global
Certificates, the Global Certificates, shall be delivered by the Depositor to
the Depository or, pursuant to the Depository's instructions, shall be delivered
by the Depositor on behalf of the Depository to and deposited with the DTC
Custodian. The Trustee shall sign the Certificates by facsimile or manual
signature and the Certificate Registrar shall countersign them by manual
signature on behalf of the Trustee by one or more authorized signatories, each
of whom shall be Responsible Officers of the Trustee or its agent and the
Certificate Registrar or its agent, as applicable. A Certificate bearing the
manual and facsimile signatures of individuals who were the authorized
signatories of the Trustee or its agent or the Certificate Registrar or its
agent, as applicable, at the time of issuance shall bind the Trustee and the
Certificate Xxxxxxxxx,
00
notwithstanding that such individuals or any of them have ceased to hold such
positions prior to the delivery of such Certificate.
(h) No Certificate shall be entitled to any benefit under this Agreement,
or be valid for any purpose, unless there appears on such Certificate the
manually executed countersignature of the Certificate Registrar or its agent,
and such countersignature upon any Certificate shall be conclusive evidence, and
the only evidence, that such Certificate has been duly executed and delivered
hereunder. All Certificates issued on the Closing Date shall be dated the
Closing Date. All Certificates issued thereafter shall be dated the date of
their countersignature.
(i) The Closing Date is hereby designated as the "startup" day of each
REMIC within the meaning of Section 860G(a)(9) of the Code.
(j) For federal income tax purposes, each REMIC shall have a tax year that
is a calendar year and shall report income on an accrual basis.
(k) The Trustee on behalf of the Trust shall cause each REMIC to timely
elect to be treated as a REMIC under Section 860D of the Code. Any
inconsistencies or ambiguities in this Agreement or in the administration of any
Trust established hereby shall be resolved in a manner that preserves the
validity of such elections.
(l) The following legend shall be placed on the Residual Certificates,
whether upon original issuance or upon issuance of any other Certificate of any
such Class In exchange therefor or upon transfer thereof:
THIS CERTIFICATE MAY NOT BE ACQUIRED DIRECTLY OR INDIRECTLY BY, OR ON
BEHALF OF, AN EMPLOYEE BENEFIT PLAN OR OTHER RETIREMENT ARRANGEMENT WHICH IS
SUBJECT TO TITLE I OF THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS
AMENDED, OR SECTION 4975 OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED,
UNLESS THE PROPOSED TRANSFEREE PROVIDES THE TRUSTEE WITH AN OPINION OF COUNSEL
ADDRESSED TO THE TRUSTEE, THE CERTIFICATE REGISTRAR, THE MASTER SERVICER AND THE
SECURITIES ADMINISTRATOR AND ON WHICH THEY MAY RELY THAT IS SATISFACTORY TO THE
TRUSTEE THAT THE PURCHASE OF CERTIFICATES ON BEHALF OF SUCH PERSON WILL NOT
RESULT IN OR CONSTITUTE A NONEXEMPT PROHIBITED TRANSACTION, IS PERMISSIBLE UNDER
APPLICABLE LAW AND WILL NOT GIVE RISE TO ANY ADDITIONAL OBLIGATIONS ON THE PART
OF THE DEPOSITOR, THE CERTIFICATE REGISTRAR, THE MASTER SERVICER, THE SECURITIES
ADMINISTRATOR OR THE TRUSTEE.
The following legend shall be placed upon the Private Certificates, whether
upon original issuance or upon issuance of any other Certificate of any such
Class In exchange therefor or upon transfer thereof:
THIS CERTIFICATE MAY NOT BE ACQUIRED DIRECTLY OR INDIRECTLY BY, OR ON
BEHALF OF, AN EMPLOYEE BENEFIT PLAN OR OTHER RETIREMENT ARRANGEMENT WHICH IS
SUBJECT TO TITLE I OF THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS
AMENDED, OR SECTION 4975 OF
87
THE INTERNAL REVENUE CODE OF 1986, AS AMENDED, UNLESS THE PROPOSED
TRANSFEREE CERTIFIES OR REPRESENTS THAT THE PROPOSED TRANSFER AND HOLDING OF A
CERTIFICATE AND THE SERVICING, MANAGEMENT AND OPERATION OF THE TRUST AND ITS
ASSETS: (I) WILL NOT RESULT IN ANY PROHIBITED TRANSACTION WHICH IS NOT COVERED
UNDER AN INDIVIDUAL OR CLASS PROHIBITED TRANSACTION EXEMPTION, INCLUDING, BUT
NOT LIMITED TO, PROHIBITED TRANSACTION EXEMPTION ("PTCE") 84-14, XXX 00-00, XXX
00-0, XXX 95-60 OR PTE 96-23 AND (II) WILL NOT GIVE RISE TO ANY ADDITIONAL
OBLIGATIONS ON THE PART OF THE DEPOSITOR, THE SECURITIES ADMINISTRATOR, THE
MASTER SERVICER OR THE TRUSTEE, WHICH WILL BE DEEMED REPRESENTED BY AN OWNER OF
A BOOK-ENTRY CERTIFICATE OR A GLOBAL CERTIFICATE OR UNLESS THE OPINION SPECIFIED
IN SECTION 5.07 OF THE AGREEMENT IS PROVIDED.
Section 5.02. Registration of Transfer and Exchange of Certificates(a) The
Certificate Registrar shall maintain at its Certificate Registrar Office a
Certificate Register in which, subject to such reasonable regulations as it may
prescribe, the Certificate Registrar shall provide for the registration of
Certificates and of transfers and exchanges of Certificates as herein provided.
(b) Subject to Subsection 5.01(a) and, in the case of any Global
Certificate or Physical Certificate upon the satisfaction of the conditions set
forth below, upon surrender for registration of transfer of any Certificate at
any office or agency of the Certificate Registrar maintained for such purpose,
the Trustee shall sign, and the Certificate Registrar shall countersign and
deliver, in the name of the designated transferee or transferees, a new
Certificate of a like Class and aggregate Fractional Undivided Interest, but
bearing a different number.
(c) By acceptance of an Individual Certificate, whether upon original
issuance or subsequent transfer, each holder of such a Certificate acknowledges
the restrictions on the transfer of such Certificate set forth in the Securities
Legend and agrees that it will transfer such a Certificate only as provided
herein. In addition to the provisions of Subsection 5.02(h), the following
restrictions shall apply with respect to the transfer and registration of
transfer of an Individual Certificate to a transferee that takes delivery in the
form of an Individual Certificate:
(i) The Certificate Registrar shall register the transfer of an
Individual Certificate if the requested transfer is being made to a
transferee who has provided the Certificate Registrar with a Rule 144A
Certificate or comparable evidence as to its QIB status.
(ii) The Certificate Registrar shall register the transfer of any
Individual Certificate if (x) the transferor has advised the Certificate
Registrar in writing that the Certificate is being transferred to an
Institutional Accredited Investor, and (y) prior to the transfer the
transferee furnishes to the Certificate Registrar an Investment Letter (and
the Certificate Registrar shall be fully protected in so doing), provided
that, if based upon an Opinion of Counsel to the effect that the delivery
of (x) and (y) above are not sufficient to confirm that the proposed
transfer is being made pursuant to an exemption from, or in a transaction
not subject to, the registration requirements of the Securities Act and
other applicable laws, the Certificate Registrar shall as a condition of
the registration of any
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such transfer require the transferor to furnish such other
certifications, legal opinions or other information prior to registering
the transfer of an Individual Certificate as shall be set forth in such
Opinion of Counsel.
(d) Subject to Subsection 5.02(h), so long as a Global Certificate of such
Class Is outstanding and is held by or on behalf of the Depository, transfers of
beneficial interests in such Global Certificate, or transfers by holders of
Individual Certificates of such Class to transferees that take delivery in the
form of beneficial interests in the Global Certificate, may be made only in
accordance with this Subsection 5.02(d) and in accordance with the rules of the
Depository:
(i) In the case of a beneficial interest in the Global Certificate
being transferred to an Institutional Accredited Investor, such transferee
shall be required to take delivery in the form of an Individual Certificate
or Certificates and the Certificate Registrar shall register such transfer
only upon compliance with the provisions of Subsection 5.02(c)(ii).
(ii) In the case of a beneficial interest in a Class of Global
Certificates being transferred to a transferee that takes delivery in the
form of an Individual Certificate or Certificates of such Class, except as
set forth in clause (i) above, the Certificate Registrar shall register
such transfer only upon compliance with the provisions of Subsection
5.02(c)(i).
(iii) In the case of an Individual Certificate of a Class being
transferred to a transferee that takes delivery in the form of a beneficial
interest in a Global Certificate of such Class, the Certificate Registrar
shall register such transfer if the transferee has provided the Trustee
with a Rule 144A Certificate or comparable evidence as to its QIB status.
(iv) No restrictions shall apply with respect to the transfer or
registration of transfer of a beneficial interest in the Global Certificate
of a Class to a transferee that takes delivery in the form of a beneficial
interest in the Global Certificate of such Class; provided that each such
transferee shall be deemed to have made such representations and warranties
contained in the Rule 144A Certificate as are sufficient to establish that
it is a QIB.
(e) Subject to Subsection 5.02(h), an exchange of a beneficial interest in
a Global Certificate of a Class for an Individual Certificate or Certificates of
such Class, an exchange of an Individual Certificate or Certificates of a Class
for a beneficial interest in the Global Certificate of such Class and an
exchange of an Individual Certificate or Certificates of a Class for another
Individual Certificate or Certificates of such Class (in each case, whether or
not such exchange is made in anticipation of subsequent transfer, and, in the
case of the Global Certificate of such Class, so long as such Certificate is
outstanding and is held by or on behalf of the Depository) may be made only in
accordance with this Subsection 5.02(e) and in accordance with the rules of the
Depository:
89
(i) A holder of a beneficial interest in a Global Certificate of a
Class may at any time exchange such beneficial interest for an Individual
Certificate or Certificates of such Class.
(ii) A holder of an Individual Certificate or Certificates of a Class
may exchange such Certificate or Certificates for a beneficial interest in
the Global Certificate of such Class If such holder furnishes to the
Certificate Registrar a Rule 144A Certificate or comparable evidence as to
its QIB status.
(iii) A holder of an Individual Certificate of a Class may exchange
such Certificate for an equal aggregate principal amount of Individual
Certificates of such Class In different authorized denominations without
any certification.
(f) (i) Upon acceptance for exchange or transfer of an Individual
Certificate of a Class for a beneficial interest in a Global Certificate of such
Class as provided herein, the Certificate Registrar shall cancel such Individual
Certificate and shall (or shall request the Depository to) endorse on the
schedule affixed to the applicable Global Certificate (or on a continuation of
such schedule affixed to the Global Certificate and made a part thereof) or
otherwise make in its books and records an appropriate notation evidencing the
date of such exchange or transfer and an increase in the certificate balance of
the Global Certificate equal to the certificate balance of such Individual
Certificate exchanged or transferred therefor.
(ii) Upon acceptance for exchange or transfer of a beneficial interest
in a Global Certificate of a Class for an Individual Certificate of such
Class as provided herein, the Certificate Registrar shall (or shall request
the Depository to) endorse on the schedule affixed to such Global
Certificate (or on a continuation of such schedule affixed to such Global
Certificate and made a part thereof) or otherwise make in its books and
records an appropriate notation evidencing the date of such exchange or
transfer and a decrease in the certificate balance of such Global
Certificate equal to the certificate balance of such Individual Certificate
issued in exchange therefor or upon transfer thereof.
(g) The Securities Legend shall be placed on any Individual Certificate
issued in exchange for or upon transfer of another Individual Certificate or of
a beneficial interest in a Global Certificate.
(h) Subject to the restrictions on transfer and exchange set forth in this
Section 5.02, the holder of any Individual Certificate may transfer or exchange
the same in whole or in part (in an initial certificate balance equal to the
minimum authorized denomination set forth in Section 5.01(g) above or any
integral multiple of $1.00 in excess thereof) by surrendering such Certificate
at the Certificate Registrar Office, or at the office of any transfer agent,
together with an executed instrument of assignment and transfer satisfactory in
form and substance to the Certificate Registrar in the case of transfer and a
written request for exchange in the case of exchange. The holder of a beneficial
interest in a Global Certificate may, subject to the rules and procedures of the
Depository, cause the Depository (or its nominee) to notify the Certificate
Registrar (as agent of the Depositor) in writing of a request for transfer or
exchange of such beneficial interest for an Individual Certificate or
Certificates. Following a proper request for
90
transfer or exchange, the Certificate Registrar shall, within five Business
Days of such request made at such the Certificate Registrar Office, sign,
countersign and deliver at the Certificate Registrar Office, to the transferee
(in the case of transfer) or holder (in the case of exchange) or send by first
class mail at the risk of the transferee (in the case of transfer) or holder (in
the case of exchange) to such address as the transferee or holder, as
applicable, may request, an Individual Certificate or Certificates, as the case
may require, for a like aggregate Fractional Undivided Interest and in such
authorized denomination or denominations as may be requested. The presentation
for transfer or exchange of any Individual Certificate shall not be valid unless
made at the Certificate Registrar Office by the registered holder in person, or
by a duly authorized attorney-in-fact.
(i) At the option of the Certificateholders, Certificates may be exchanged
for other Certificates of authorized denominations of a like Class and aggregate
Fractional Undivided Interest, upon surrender of the Certificates to be
exchanged at any such office or agency; provided, however, that no Certificate
may be exchanged for new Certificates unless the original Fractional Undivided
Interest represented by each such new Certificate (i) is at least equal to the
minimum authorized denomination or (ii) is acceptable to the Depositor as
indicated to the Trustee in writing. Whenever any Certificates are so
surrendered for exchange, the Trustee shall sign and the Certificate Registrar
shall countersign and deliver the Certificates which the Certificateholder
making the exchange is entitled to receive.
(j) If the Certificate Registrar so requires, every Certificate presented
or surrendered for transfer or exchange shall be duly endorsed by, or be
accompanied by a written instrument of transfer, with a signature guarantee, in
form satisfactory to the Certificate Registrar, duly executed by the holder
thereof or his or her attorney duly authorized in writing.
(k) No service charge shall be made for any transfer or exchange of
Certificates, but the Certificate Registrar may require payment of a sum
sufficient to cover any tax or governmental charge that may be imposed in
connection with any transfer or exchange of Certificates.
(l) The Certificate Registrar shall cancel all Certificates surrendered for
transfer or exchange but shall retain such Certificates in accordance with its
standard retention policy or for such further time as is required by the record
retention requirements of the Exchange Act, and thereafter may destroy such
Certificates.
Section 5.03. Mutilated, Destroyed, Lost or Stolen Certificates. (a) If (i)
any mutilated Certificate is surrendered to the Certificate Registrar, or the
Certificate Registrar receives evidence to its satisfaction of the destruction,
loss or theft of any Certificate, and (ii) there is delivered to the Certificate
Registrar, the Master Servicer, the Securities Administrator and the Trustee
such security or indemnity as it may require to save it harmless, and (iii) the
Certificate Registrar has not received notice that such Certificate has been
acquired by a third Person, the Trustee shall sign and the Certificate Registrar
shall countersign and deliver, in exchange for or in lieu of any such mutilated,
destroyed, lost or stolen Certificate, a new Certificate of like tenor and
Fractional Undivided Interest but in each case bearing a different number. The
mutilated, destroyed, lost or stolen Certificate shall thereupon be canceled of
record by the Certificate Registrar and shall be of no further effect and
evidence no rights.
91
(b) Upon the issuance of any new Certificate under this Section 5.03, the
Certificate Registrar may require the payment of a sum sufficient to cover any
tax or other governmental charge that may be imposed in relation thereto and any
other expenses (including the fees and expenses of the Certificate Registrar)
connected therewith. Any duplicate Certificate issued pursuant to this Section
5.03 shall constitute complete and indefeasible evidence of ownership in the
Trust Fund, as if originally issued, whether or not the lost, stolen or
destroyed Certificate shall be found at any time.
Section 5.04. Persons Deemed Owners. Prior to due presentation of a
Certificate for registration of transfer, the Depositor, the Paying Agent, the
Certificate Registrar, the Trustee and any agent of the Depositor, the Paying
Agent, the Certificate Registrar, or the Trustee may treat the Person in whose
name any Certificate is registered as the owner of such Certificate for the
purpose of receiving distributions pursuant to Section 6.01 and for all other
purposes whatsoever. Neither the Depositor, the Paying Agent, the Certificate
Registrar the Trustee nor any agent of the Depositor, the Paying Agent, the
Certificate Registrar or the Trustee shall be affected by notice to the
contrary. No Certificate shall be deemed duly presented for a transfer effective
on any Record Date unless the Certificate to be transferred is presented no
later than the close of business on the third Business Day preceding such Record
Date.
Section 5.05. Transfer Restrictions on Residual Certificates. (a) Residual
Certificates, or interests therein, may not be transferred without the prior
express written consent of the Tax Matters Person and the Depositor. As a
prerequisite to such consent, the proposed transferee must provide the Tax
Matters Person, the Depositor, the Certificate Registrar and the Trustee with an
affidavit that the proposed transferee is a Permitted Transferee (and, unless
the Tax Matters Person and the Depositor consent to the transfer to a person who
is not a U.S. Person, an affidavit that it is a U.S. Person) as provided in
Subsection 5.05(b).
(b) No transfer, sale or other disposition of a Residual Certificate
(including a beneficial interest therein) may be made unless, prior to the
transfer, sale or other disposition of a Residual Certificate, the proposed
transferee (including the initial purchasers thereof) delivers to the Tax
Matters Person, the Certificate Registrar, the Trustee and the Depositor an
affidavit in the form attached hereto as Exhibit E stating, among other things,
that as of the date of such transfer (i) such transferee is a Permitted
Transferee and that (ii) such transferee is not acquiring such Residual
Certificate for the account of any person who is not a Permitted Transferee. The
Tax Matters Person shall not consent to a transfer of a Residual Certificate if
it has actual knowledge that any statement made in the affidavit issued pursuant
to the preceding sentence is not true. Notwithstanding any transfer, sale or
other disposition of a Residual Certificate to any Person who is not a Permitted
Transferee, such transfer, sale or other disposition shall be deemed to be of no
legal force or effect whatsoever and such Person shall not be deemed to be a
Holder of a Residual Certificate for any purpose hereunder, including, but not
limited to, the receipt of distributions thereon. If any purported transfer
shall be in violation of the provisions of this Subsection 5.05(b), then the
prior Holder thereof shall, upon discovery that the transfer of such Residual
Certificate was not in fact permitted by this Subsection 5.05(b), be restored to
all rights as a Holder thereof retroactive to the date of the purported
transfer. None of the Trustee, the Certificate Registrar, the Tax Matters Person
or the Depositor shall be under any liability to any Person for any registration
or transfer of a Residual Certificate that is not permitted by this Subsection
5.05(b) or for making payments due on such Residual Certificate to the purported
92
Holder thereof or taking any other action with respect to such purported Holder
under the provisions of this Agreement so long as the written affidavit referred
to above was received with respect to such transfer, and the Tax Matters Person,
the Trustee and the Depositor, as applicable, had no knowledge that it was
untrue. The prior Holder shall be entitled to recover from any purported Holder
of a Residual Certificate that was in fact not a Permitted Transferee under this
Subsection 5.05(b) at the time it became a Holder all payments made on such
Residual Certificate. Each Holder of a Residual Certificate, by acceptance
thereof, shall be deemed for all purposes to have consented to the provisions of
this Subsection 5.05(b) and to any amendment of this Agreement deemed necessary
(whether as a result of new legislation or otherwise) by counsel of the Tax
Matters Person or the Depositor to ensure that the Residual Certificates are not
transferred to any Person who is not a Permitted Transferee and that any
transfer of such Residual Certificates will not cause the imposition of a tax
upon the Trust or cause any REMIC to fail to qualify as a REMIC.
(c) Unless the Tax Matters Person and the Depositor shall have consented in
writing (which consent may be withheld in the Tax Matters Person's or the
Depositor's sole discretion), the Residual Certificates (including a beneficial
interest therein) may not be purchased by or transferred to any person who is
not a United States Person.
(d) By accepting a Residual Certificate, the purchaser thereof agrees to be
a Tax Matters Person, and appoints the Securities Administrator to act as its
agent with respect to all matters concerning the tax obligations of the Trust.
Section 5.06. Restrictions on Transferability of Certificates. (a) No
offer, sale, transfer or other disposition (including pledge) of any Certificate
shall be made by any Holder thereof unless registered under the Securities Act,
or an exemption from the registration requirements of the Securities Act and any
applicable state securities or "Blue Sky" laws is available and the prospective
transferee (other than the Depositor) of such Certificate signs and delivers to
the Certificate Registrar an Investment Letter, if the transferee is an
Institutional Accredited Investor, in the form set forth as Exhibit F-1 hereto,
or a Rule 144A Certificate, if the transferee is a QIB, in the form set forth as
Exhibit F-2 hereto. Notwithstanding the provisions of the immediately preceding
sentence, no restrictions shall apply with respect to the transfer or
registration of transfer of a beneficial interest in any Certificate that is a
Global Certificate of a Class to a transferee that takes delivery in the form of
a beneficial interest in the Global Certificate of such Class, provided that
each such transferee shall be deemed to have made such representations and
warranties contained in the Rule 144A Certificate as are sufficient to establish
that it is a QIB. In the case of a proposed transfer of any Certificate to a
transferee other than a QIB, the Certificate Registrar may require an Opinion of
Counsel that such transaction is exempt from the registration requirements of
the Securities Act. The cost of such opinion shall not be an expense of the
Trustee or the Trust Fund.
(b) The Private Certificates shall each bear a Securities Legend. The
Trustee and the Securities Administrator shall comply with the requirements of
Treasury Regulations xx.xx. 1.860D-1(b)(5) and 1.860E-2(a)(5) with respect to
the furnishing of information.
Section 5.07. ERISA Restrictions. (a) Subject to the provisions of
Subsection 5.07(b), no Residual Certificates or Private Certificates may be
acquired directly or indirectly by, or on
93
behalf of, an employee benefit plan or other retirement arrangement which
is subject to Title I of ERISA and/or Section 4975 of the Code, unless the
proposed transferee provides either (i) the Trustee, the Certificate Registrar,
the Master Servicer and the Securities Administrator with an Opinion of Counsel
satisfactory to the Trustee, the Certificate Registrar, the Master Servicer and
the Securities Administrator, which opinion will not be at the expense of the
Trustee, the Master Servicer or the Securities Administrator, that the purchase
of such Certificates by or on behalf of such Plan is permissible under
applicable law, will not constitute or result in the assets of the Trust being
deemed to be "plan assets" subject to the prohibited transaction provisions of
ERISA or Section 4975 of the Code, will not result in a non-exempt prohibited
transaction under Section 406 of ERISA or Section 4975 of the Code and will not
subject the Trustee, the Certificate Registrar, the Master Servicer, the
Depositor, any Servicer or the Securities Administrator to any obligation in
addition to those undertaken in the Agreement or (ii) in the case of the Class
B-4, Class B-5 and Class B-6 Certificates, a representation or certification to
the Trustee and the Certificate Registrar (upon which each of the Trustee and
the Certificate Registrar is authorized to rely) to the effect that the proposed
transfer and/or holding of such a Certificate and the servicing, management and
operation of the Trust: (I) will not result in a prohibited transaction under
Section 406 of ERISA or Section 4975 of the Code unless it is covered under an
individual or class prohibited transaction exemption, including but not limited
to Department of Labor Prohibited Transaction Class Exemption ("PTCE") 84-14
(Class Exemption for Plan Asset Transactions Determined by Independent Qualified
Professional Asset Managers); PTCE 91-38 (Class Exemption for Certain
Transactions Involving Bank Collective Investment Funds); PTCE 90-1 (Class
Exemption for Certain Transactions Involving Insurance Company Pooled Separate
Accounts), PTCE 95-60 (Class Exemption for Certain Transactions Involving
Insurance Company General Accounts), and PTCE 96-23 (Class Exemption for Plan
Asset Transactions Determined by In-House Asset Managers), or Section 401(c) of
ERISA and the regulations promulgated thereunder; (II) will not constitute or
result in the assets of the Trust being deemed to be "plan assets" subject to
the prohibited transaction provisions of ERISA or Section 4975 of the Code; and
(III) will not subject the Depositor, the Certificate Registrar, the Securities
Administrator, any Servicer, the Master Servicer or the Trustee to any
obligation in addition to those undertaken in the Agreement.
(b) Each beneficial owner of a Class M, Class B-1, Class B-2 or Class B-3
Certificate or any interest therein shall be deemed to have represented, by
virtue of its acquisition or holding of that certificate or interest therein,
that either (i) it is not a Plan or investing with "Plan Assets", (ii) it has
acquired and is holding such Certificate in reliance on Prohibited Transaction
Exemption 97-34, as amended (the "Exemption"), and that it understands that
there are certain conditions to the availability of the Exemption, including
that the certificate must be rated, at the time of purchase, not lower than
"BBB-" (or its equivalent) by S&P, Fitch or Xxxxx'x Investors Service, Inc., and
the certificate is so rated or (iii) (1) it is an insurance company, (2) the
source of funds used to acquire or hold the certificate or interest therein is
an "insurance company general account," as such term is defined in Prohibited
Transaction Class Exemption ("PTCE") 95-60, and (3) the applicable conditions of
PTCE 95-60 have been satisfied.
(c) Any Person acquiring an interest in a Global Certificate which is a
Private Certificate, by acquisition of such Certificate, shall be deemed to have
represented to the Trustee that, in the case of the Class B-4, Class B-5 and
Class B-6 Certificates, either: (i) it is not acquiring an interest in such
Certificate directly or indirectly by, or on behalf of, an employee
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benefit plan or other retirement arrangement which is subject to Title I of
ERISA and/or Section 4975 of the Code, or (ii) the transfer and/or holding of an
interest in such Certificate to that Person and the subsequent servicing,
management and/or operation of the Trust and its assets: (I) will not result in
any prohibited transaction unless it is covered under an individual or class
prohibited transaction exemption, including, but not limited to, XXXX 00-00,
XXXX 00-00, XXXX 00-0, XXXX 95-60 or PTCE 96-23, or Section 401(c) of ERISA and
the regulations promulgated thereunder; (II) will not constitute or result in
the assets of the Trust being deemed to be "plan assets" subject to the
prohibited transaction provisions of ERISA or Section 4975 of the Code; and
(III) will not subject the Depositor, the Certificate Registrar, the Securities
Administrator, any Servicer, the Master Servicer or the Trustee to any
obligation in addition to those undertaken in the Agreement.
(d) Neither the Trustee, the Certificate Registrar, the Master Servicer nor
the Securities Administrator will be required to monitor, determine or inquire
as to compliance with the transfer restrictions with respect to the Global
Certificates or any Book-Entry Certificate. Any attempted or purported transfer
of any Certificate in violation of the provisions of Subsections (a) or (b)
above shall be void ab initio and such Certificate shall be considered to have
been held continuously by the prior permitted Certificateholder. Any transferor
of any Certificate in violation of such provisions, shall indemnify and hold
harmless the Trustee, the Certificate Registrar, the Securities Administrator
and the Master Servicer from and against any and all liabilities, claims, costs
or expenses incurred by the Trustee, the Certificate Registrar, the Securities
Administrator or the Master Servicer as a result of such attempted or purported
transfer. Neither the Trustee nor the Certificate Registrar shall have any
liability for transfer of any such Global Certificates or any Book-Entry
Certificates in or through book-entry facilities of any Depository or between or
among Depository Participants or Certificate Owners made in violation of the
transfer restrictions set forth herein.
Section 5.08. Rule 144A Information. For so long as any Certificates are
outstanding and are "restricted securities" within the meaning of Rule 144(a)(3)
of the Securities Act: (1) the Depositor will provide or cause to be provided to
any holder of such Certificates and any prospective purchaser thereof designated
by such a holder, upon the request of such holder or prospective purchaser, the
information required to be provided to such holder or prospective purchaser by
Rule 144A(d)(4) under the Securities Act; and (2) the Depositor shall update
such information from time to time in order to prevent such information from
becoming false and misleading and will take such other actions as are necessary
to ensure that the safe harbor exemption from the registration requirements of
the Securities Act under Rule 144A is and will be available for resales of such
Certificates conducted in accordance with Rule 144A.
Section 5.09. Appointment of Paying Agent and Certificate Registrar. Xxxxx
Fargo Bank, National Association, as Securities Administrator, shall act as the
initial Paying Agent and Certificate Registrar for so long as it is also the
Master Servicer. Each of the Paying Agent and the Certificate Registrar may
resign upon thirty (30) days' prior written notice to the Trustee; provided
hereto that no such resignation shall be effective until the appointment of a
successor paying agent or certificate registrar. In the event the Paying Agent
and/or the Certificate Registrar resigns or is removed by the Trustee for cause,
the Trustee may appoint a successor paying agent or certificate registrar, as
applicable. The Trustee shall cause such successor paying agent, if other than
the Trustee or the Master Servicer or the Securities Administrator, to
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execute and deliver to the Trustee an instrument in which such paying agent
shall agree with the Trustee that such paying agent will hold all sums held by
it for the payment to Certificateholders in trust for the benefit of the
Certificateholders entitled thereto until such sums have been paid to the
Certificateholders.
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ARTICLE VI
Payments to Certificateholders
Section 6.01. Distributions on the Certificates. (a) Interest and (as
applicable) principal on the Certificates (other than the Residual Certificates)
will be distributed monthly on each Distribution Date, commencing in June 2005,
in an aggregate amount equal to the Available Funds for such Distribution Date.
On the first Distribution Date, an amount equal to the Deposit Amount shall
be distributed to the Residual Certificates, pro rata, in reduction of their
Current Principal Amounts, until their respective Current Principal Amounts are
reduced to zero.
(A) On each Distribution Date, the Group I Available Funds will be
distributed to the Group I Senior Certificates (other than the Residual
Certificates) and the Class M-X Certificates as follows:
first, to the Class I-A-1 Certificates, the Class I-A-2 Certificates and
the Class I-X Certificates, the Accrued Certificate Interest on each such Class
of Certificates for such Distribution Date, pro rata, and then to the Class M-X
Certificates, the Group I Allocation Fraction of Accrued Certificate Interest on
such Class of Certificates for such Distribution Date, in each case based on the
Accrued Certificate Interest owed to each such Class of Certificates; provided,
however, that the amount of Accrued Certificate Interest paid to the Class I-X
Certificates pursuant to this clause will be reduced by the aggregate amount of
any Group I Carryover Shortfall Amounts on the Class I-A-1 Certificates and the
Class I-A-2 Certificates, which amount will be deposited on such Distribution
Date in the Group I Carryover Shortfall Reserve Fund for distribution to the
Class I-A-1 Certificates and the Class I-A-2 Certificates, as set forth in
subparagraph second below and in clause (G) below, and that the amount of
Accrued Certificate Interest paid to the Class M-X Certificates pursuant to this
clause on each Distribution Date will be reduced by the Group I Allocation
Fraction of any Subordinate Carryover Shortfall Amounts on the Subordinate
Certificates (other than the Class M-X Certificates), which amount will be
deposited on such Distribution Date into the Subordinate Carryover Reserve Fund
for distribution as set forth in Section 6.01(a)(I) below. In addition, Accrued
Certificate Interest on the Class I-A-1 Certificates, the Class I-A-2
Certificates, the Class I-X Certificates and the Class M-X Certificates is
subject to reduction in the event of certain Net Interest Shortfalls and Net
Deferred Interest allocable thereto. Any Net Interest Shortfalls and Net
Deferred Interest shall be allocated among such Class I-A-1 Certificates, the
Class I-A-2 Certificates, the Class I-X Certificates and the Class M-X
Certificates in accordance with the provisions of Section 6.02(g);
second, to the Class I-A-1 Certificates and the Class I-A-2 Certificates,
any Group I Carryover Shortfall Amounts due to such Certificates (in accordance
with Section 6.01(a)(G) below) to the extent such amount was deducted from the
Accrued Certificate Interest on the Class I-X Certificates for such Distribution
Date;
third, to the extent of remaining Group I Available Funds, to the Class
I-A-1 Certificates, the Class I-A-2 Certificates and the Class I-X Certificates,
any Accrued Certificate Interest thereon pursuant to clause first remaining
undistributed from previous Distribution Dates (other than, with respect to the
Class I-X Certificates, any amounts pursuant to clause first deposited
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into the Group I Carryover Shortfall Reserve), pro rata, and then to the
Class M-X Certificates, the Accrued Certificate Interest thereon pursuant to
clause first remaining undistributed from previous Distribution Dates (other
than any amounts pursuant to clause first deposited into the Subordinate
Carryover Shortfall Reserve Fund), in each case based on the undistributed
Accrued Certificate Interest owed to each such Class of Certificates; and
fourth, to the extent of remaining Group I Available Funds, to the Class
I-A-1 Certificates, the Class I-A-2 Certificates and the Class I-X Certificates,
in reduction of the respective Current Principal Amount thereof, the remaining
Group I Senior Optimal Principal Amount for such Distribution Date, until the
respective Current Principal Amount of each such Class of Certificates has been
reduced to zero.
(B) On each Distribution Date, the Group II Available Funds will be
distributed to the Class II-A-1 Certificates, the Class II-A-2 Certificates, the
Class II-A-3 Certificates, the Class II-X Certificates and the Class M-X
Certificates as follows:
first, to the Class II-A-1 Certificates, the Class II-A-2 Certificates, the
Class II-A-3 Certificates and the Class II-X Certificates, the Accrued
Certificate Interest on each such Class of Certificates for such Distribution
Date, pro rata, and then to the Class M-X Certificates, the Group II Allocation
Fraction of Accrued Certificate Interest on such Class of Certificates for such
Distribution Date, in each case based on the Accrued Certificate Interest owed
to each such Class of Certificates, provided, however, that the amount of
Accrued Certificate Interest paid to the Class II-X Certificates pursuant to
this clause will be reduced by the aggregate amount of any Group II Carryover
Shortfall Amounts for that Distribution Date on the Class II-A-1 Certificates,
the Class II-A-2 Certificates and the Class II-A-3 Certificates, which amount
will be deposited on such Distribution Date into the Group II Carryover
Shortfall Reserve Fund for distribution to the Class II-A-1 Certificates, the
Class II-A-2 Certificates and the Class II-A-3 Certificates as set forth in
subparagraph second below and in clause (H) below; and provided further, that
the amount of Accrued Certificate Interest paid to the Class M-X certificates
pursuant to this clause on each Distribution Date will be reduced by the Group
II Allocation Fraction of any Subordinate Carryover Shortfall Amounts on the
Subordinate Certificates (other than the Class M-X Certificates), which amount
will be deposited on such Distribution Date in the Subordinate Carryover
Shortfall Reserve Fund for distribution to the Subordinate Certificates (other
than the Class M-X Certificates) as set forth in clause (I) below. In addition,
as described below, Accrued Certificate Interest on the Class II-A-1
Certificates, the Class II-A-2 Certificates, the Class II-A-3 Certificates, the
Class II-X Certificates and the Class M-X Certificates is subject to reduction
in the event of certain Net Interest Shortfalls and Net Deferred Interest
allocable thereto. Any Net Interest Shortfalls and Net Deferred Interest shall
be allocated among the Class II-A-1 Certificates, the Class II-A-2 Certificates,
the Class II-A-3 Certificates, the Class II-X Certificates and the Class M-X
Certificates in accordance with the provisions of Section 6.02(g);
third, to the extent of remaining Group II Available Funds, to the Class
II-A-1 Certificates, the Class II-A-2 Certificates, the Class II-A-3
Certificates and the Class II-X Certificates, any Accrued Certificate Interest
thereon pursuant to clause first remaining undistributed from previous
Distribution Dates (other than, with respect to the Class II-X Certificates, any
amounts pursuant to clause first deposited into the Group II Carryover Shortfall
Reserve Fund), pro rata, and then to the Class M-X Certificates, the Group II
Allocation Fraction
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of Accrued Certificate Interest on such Class of Certificates for such
Distribution Date, in each case based on the undistributed Accrued Certificate
Interest owed to each such Class of Certificates; and
fourth, to the extent of remaining Group II Available Funds, to the Class
II-A-1 Certificates, the Class II-A-2 Certificates, the Class II-A-3
Certificates and the Class II-X Certificates, pro rata, in reduction of the
respective Current Principal Amount thereof, the Group II Senior Optimal
Principal Amount for such Distribution Date, until the respective Current
Principal Amount of each such Class of Certificates has been reduced to zero.
(C) On each Distribution Date, the Group III Available Funds will be
distributed to the Group III Senior Certificates and the Class M-X Certificates
in the following order:
first, to the Group III Senior Certificates, the Accrued Certificate
Interest on each such Class of Certificates for such Distribution Date, pro
rata, and then to the Class M-X Certificates, the Group III Allocation Fraction
of Accrued Certificate Interest on such Class of Certificates for such
Distribution Date, in each case based on the Accrued Certificate Interest owed
to each such Class of Certificates ; provided, however, that the amount of
Accrued Certificate Interest paid to the Class M-X Certificates pursuant to this
clause will be reduced by the Group III Allocation Fraction of any Subordinate
Carryover Shortfall Amounts on the Subordinate Certificates (other than the
Class M-X Certificates), which amount will be deposited on such Distribution
Date in the Subordinate Carryover Shortfall Reserve Fund for distribution to the
Subordinate Certificates (other than the Class M-X Certificates) as set forth in
clause (I) below. As described below, Accrued Certificate Interest on the Group
III Senior Certificates and the Class M-X Certificates is subject to reduction
in the event of certain Net Interest Shortfalls and Net Deferred Interest
allocable thereto. Any Net Interest Shortfalls and Net Deferred Interest shall
be allocated among the Group III Senior Certificates and the Class M-X
Certificates as described below;
second, to the extent of remaining Group III Available Funds, to the Group
III Senior Certificates, any Accrued Certificate Interest thereon pursuant to
clause first remaining undistributed from previous Distribution Dates, pro rata,
and then to the Class M-X Certificates, the Group III Allocation Fraction of
Accrued Certificate Interest on such Class of Certificates for such Distribution
Date, in each case based on the undistributed Accrued Certificate Interest owed
to each such Class of Certificates; and
third, to the extent of remaining Group III Available Funds, to the Group
III Senior Certificates, pro rata, in reduction of the respective Current
Principal Amount thereof, the Group III Senior Optimal Principal Amount for such
Distribution Date, until the respective Current Principal Amount of each such
Class of Certificates has been reduced to zero.
(D) Except as provided in paragraphs (E) and (F) below, on each
Distribution Date on or prior to the Cross-Over Date, an amount equal to the sum
of the remaining Group I Available Funds, Group II Available Funds and Group III
Available Funds after the distributions in (A), (B) and (C) above will be
distributed sequentially, in the following order, to the Class X-0, Xxxxx X-0,
Class M-3, Class M-4, Class M-5, Class M-6, Class M-7, Class B-1, Class B-2,
Class B-3, Class B-4, Class B-5 and Class B-6 Certificates, in each case up to
an amount equal to and in the following order: (a) the Accrued Certificate
Interest thereon for such Distribution Date, (b) any
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Accrued Certificate Interest thereon remaining undistributed from previous
Distribution Dates , (c) in reduction of the Current Principal Amount of the
Class M-X Certificates, in an amount not to exceed the Subordinate Optimal
Principal Amount for such Distribution Date, until the Current Principal Amount
of such Class of Certificates has been reduced to zero and (d) such Class's
Allocable Share for such Distribution Date, in each case, to the extent of the
remaining Group I Available Funds, Group II Available Funds and Group III
Available Funds.
(E) On each Distribution Date prior to the Cross-Over Date but after the
reduction of the respective Current Principal Amount of any of the Group I
Senior Certificates (other than the Residual Certificates), the Group II Senior
Certificates or the Group III Senior Certificates to zero, the remaining Class
or Classes of Senior Certificates (other than the Residual Certificates), as the
case may be, will be entitled to receive on a pro rata basis in reduction of
their Current Principal Amounts, in addition to any Principal Prepayments
related to such remaining Class of Senior Certificates' respective Loan Group
allocated to such Senior Certificates, 100% of the Principal Prepayments on any
Mortgage Loan in the Loan Group relating to such fully repaid Class or Classes
of Group I Senior Certificates, Group II Senior Certificates or Group III Senior
Certificates; provided, however, that if (A) the weighted average of the
Subordinate Percentages on such Distribution Date equals or exceeds two times
the initial weighted average of the Subordinate Percentages and (B) the
aggregate Scheduled Principal Balance of the Mortgage Loans delinquent 60 days
or more (including for this purpose any such Mortgage Loans in foreclosure and
Mortgage Loans with respect to which the related Mortgaged Property has been
acquired by the Trust), averaged over the last six months, as a percentage of
the sum of the aggregate Current Principal Amount of the Subordinate
Certificates, does not exceed 100%, then the additional allocation of Principal
Prepayments to such Group I Senior Certificates, Group II Senior Certificates or
Group III Senior Certificates in accordance with this clause (E) will not be
made and 100% of the Principal Prepayments on any Mortgage Loan in the Loan
Group relating to such fully prepaid Class or Classes of Group I Senior
Certificates, Group II Senior Certificates or Group III Senior Certificates will
be allocated on a pro rata basis to the Subordinate Certificates.
(F) If on any Distribution Date the aggregate Current Principal Amount of
the Group I Senior Certificates (other than the Residual Certificates), the
Group II Senior Certificates or the Group III Senior Certificates would be
greater than the aggregate Scheduled Principal Balance of the Mortgage Loans in
the related Loan Group and any Subordinate Certificates are still outstanding,
in each case after giving effect to distributions to be made on such
Distribution Date, then (i) 100% of amounts otherwise allocable to the
Subordinate Certificates in respect of principal collections on the Mortgage
Loans will be distributed to the Group I Senior Certificates, the Group II
Senior Certificates or to the Group III Senior Certificates (other than the
Residual Certificates), on a pro rata basis, in reduction of the respective
Current Principal Amount thereof, until the aggregate Current Principal Amount
of such Class or Classes of Senior Certificates, as applicable, is an amount
equal to the aggregate Scheduled Principal Balance of the Mortgage Loans in the
related Loan Group, and (ii) the Accrued Certificate Interest otherwise
allocable to the Subordinate Certificates on such Distribution Date will be
reduced, if necessary, and distributed on a pro rata basis to such Class or
Classes of Senior Certificates in an amount equal to the Accrued Certificate
Interest for such Distribution Date on the excess of (x) the aggregate Current
Principal Amount of such Class or Classes of Senior Certificates over (y) the
aggregate Scheduled Principal Balance of the
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Mortgage Loans in the related Loan Group. Any such reduction in the Accrued
Certificate Interest on the Subordinate Certificates will be allocated on a pro
rata basis in reverse order of the payment priority of the Subordinate
Certificates, commencing with the Class B-6 Certificates.
(G) On each Distribution Date, any amounts in the Group I Carryover
Shortfall Reserve Fund will be distributed to the Class I-A-1 Certificates and
the Class I-A-2 Certificates, pro rata based on unpaid Group I Carryover
Shortfall Amounts on each such Class of Certificates, up to an amount equal to
any unpaid Group I Carryover Shortfall Amounts with respect to the respective
Classes of Certificates.
(H) On each Distribution Date, any amounts in the Group II Carryover
Shortfall Reserve Fund will be distributed to the Class II-A-1 Certificates, the
Class II-A-2 Certificates and the Class II-A-3 Certificates, pro rata based on
unpaid Group II Carryover Shortfall Amounts on each such Class of Certificates,
up to an amount equal to any unpaid Group II Carryover Shortfall Amounts with
respect to the respective Classes of Certificates.
(I) (i) On each Distribution Date on which all distributions set forth in
paragraphs (A), (B), (C) and (D) above to be made on such Distribution Date have
been made, any amounts in the Subordinate Carryover Shortfall Reserve Fund will
be distributed sequentially to the Class X-0, Xxxxx X-0, Class M-3, Class M-4,
Class M-5, Class M-6, Class M-7, Class B-1, Class B-2, Class B-3, Class B-4,
Class B-5 and Class B-6 certificates, in each case up to an amount equal to any
unpaid Subordinate Carryover Shortfall Amounts with respect to such Class or
Classes of Certificates.
(b) If, after distributions have been made pursuant to priorities first,
second and third of clause (A) above, priorities first, second and third of
clause (B) above or priorities first and second of clause (C) above, as the case
may be, on any Distribution Date, the remaining Group I Available Funds, Group
II Available Funds or Group III Available Funds, respectively, are less than the
Group I Senior Optimal Principal Amount, Group II Senior Optimal Principal
Amount and Group III Senior Optimal Principal Amount, respectively, then such
respective amounts shall be reduced, and such remaining funds will be
distributed to the related Senior Certificates (other than the Residual
Certificates) on the basis of such reduced amounts.
(c) "Pro rata" principal distributions among Classes of Certificates will
be made in proportion to the then Current Principal Amounts of such Classes of
Certificates. "Pro rata" interest distributions among Classes of Certificates
that bear interest on any Distribution Date will be made in proportion to the
Accrued Certificate Interest payable on such Distribution Date.
(d) On each Distribution Date, any Available Funds remaining after payment
of interest and principal to the Classes of Certificates entitled thereto, as
described above, will be distributed to the Class R-III Certificates; provided
that if on any Distribution Date there are any Group I Available Funds, Group II
Available Funds or Group III Available Funds remaining after payment of interest
and principal to a Class or Classes of Certificates entitled thereto, such
amounts will be distributed to the other Classes of Senior Certificates (other
than the Residual Certificates), pro rata, based upon their Current Principal
Amounts, until all amounts due to all
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such Classes of Senior Certificates (other than the Residual Certificates)
have been paid in full, before any amounts are distributed to the Class R-III
Certificates.
(e) [Reserved.]
(f) No Accrued Certificate Interest will be payable with respect to any
Class or Classes of Certificates that bears interest after the Distribution Date
on which the Current Principal Amount of such Certificate or Certificates or
Notional Amount of such Certificate or Certificates has been reduced to zero.
(g) (i) If on any Distribution Date the Group I Available Funds, Group II
Available Funds, or Group III Available Funds for the Group I Senior
Certificates (other than the Residual Certificates), Group II Senior
Certificates and Group III Senior Certificates, respectively, in any Certificate
Group are less than the Accrued Certificate Interest on the related Senior
Certificates for such Distribution Date prior to reduction for Net Interest
Shortfalls and the interest portion of Realized Losses on the related Mortgage
Loans, the shortfall will be allocated among the holders of each Class of
related Senior Certificates (other than the Residual Certificates) in such
Certificate Group and related Interest Only Certificates (as applicable) in
proportion to the respective amounts of Accrued Certificate Interest for such
Distribution Date that would have been allocated thereto in the absence of such
Net Interest Shortfall and/or Realized Losses on the related Mortgage Loans for
such Distribution Date. In addition, the amount of any interest shortfalls (not
including Interest Shortfalls) will constitute unpaid Accrued Certificate
Interest and will be distributable to holders of the Certificates of the related
Classes (other than the Residual Certificates) entitled to such amounts on
subsequent Distribution Dates, to the extent of the related Certificate Group's
Available Funds after current interest distributions as required herein. Any
such amounts so carried forward will not bear interest. Any interest shortfalls
will not be offset by a reduction in the servicing compensation of the Master
Servicer, the Servicers or otherwise, except to the extent of applicable
Compensating Interest Payments.
(h) The expenses and fees of the Trust shall be paid by each of the REMICs,
to the extent that such expenses relate to the assets of each of such respective
REMICs, and all other expenses and fees of the Trust shall be paid pro rata by
each of the REMICs.
Section 6.02. Allocation of Losses and Subsequent Recoveries. (a) On or
prior to each Determination Date, the Master Servicer shall determine the amount
of any Realized Loss in respect of each Mortgage Loan that occurred during the
immediately preceding calendar month.
(b) With respect to any Certificates (other than the Residual Certificates)
on any Distribution Date, the principal portion of each Realized Loss on a
Mortgage Loan shall be allocated as follows:
first, to the Class B-6 Certificates until the Current Principal Amount
thereof has been reduced to zero;
second, to the Class B-5 Certificates until the Current Principal Amount
thereof has been reduced to zero;
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third, to the Class B-4 Certificates until the Current Principal Amount
thereof has been reduced to zero;
fourth, to the Class B-3 Certificates until the Current Principal Amount
thereof has been reduced to zero;
fifth, to the Class B-2 Certificates until the Current Principal Amount
thereof has been reduced to zero;
sixth, to the Class B-1 Certificates until the Current Principal Amount
thereof has been reduced to zero;
seventh, to the Class M-7 Certificates until the Current Principal Amount
thereof has been reduced to zero;
eighth, to the Class M-6 Certificates until the Current Principal Amount
thereof has been reduced to zero;
ninth, to the Class M-5 Certificates until the Current Principal Amount
thereof has been reduced to zero;
tenth, to the Class M-4 Certificates until the Current Principal Amount
thereof has been reduced to zero;
eleventh, to the Class M-3 Certificates until the Current Principal Amount
thereof has been reduced to zero;
twelfth, to the Class M-2 Certificates until the Current Principal Amount
thereof has been reduced to zero;
thirteenth, to the Class M-1 Certificates until the Current Principal
Amount thereof has been reduced to zero; and
fourteenth, after the Cross-over Date, (i) the principal portion of
Realized Losses on the Mortgage Loans in Loan Group I will be allocated on any
Distribution Date after the Cross-over Date first to the Class I-A-2
Certificates until the Current Principal Amount thereof has been reduced to
zero, and then to the Class I-A-1 Certificates until the Current Principal
Amount thereof has been reduced to zero, (ii) the principal portion of Realized
Losses on the Mortgage Loans in Loan Group II will be allocated on any
Distribution Date after the Cross-over Date first to the Class II-A-3
Certificates until the Current Principal Amount thereof has been reduced to
zero, and then to the Class II-A-2 Certificates until the Current Principal
Amount thereof has been reduced to zero, and then to the Class II-A-1
Certificates until the Current Principal Amount thereof has been reduced to
zero, and (iii) the principal portion of Realized Losses on the Mortgage Loans
in Loan Group III will be allocated on any Distribution Date after the
Cross-over Date first to the Class III-A-2 Certificates until the Current
Principal Amount thereof has been reduced to zero, and then to the Class III-A-1
Certificates until the Current Principal Amount thereof has been reduced to
zero.
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(c) Notwithstanding the foregoing clause (b), (i) no such allocation of any
Realized Loss on the Group I Mortgage Loans, Group II Mortgage Loans or Group
III Mortgage Loans, as the case may be, shall be made on a Distribution Date to
any Class or Classes of Group I Senior Certificates (other than the Residual
Certificates), Group II Senior Certificates or Group III Senior Certificates,
respectively, to the extent that such allocation would result in the reduction
of the aggregate Current Principal Amounts of all Certificates (other than the
Residual Certificates) in the related Certificate Group as of such Distribution
Date, after giving effect to all distributions and prior allocations of Realized
Losses on the Mortgage Loans in the related Loan Group on such date, to an
amount less than the aggregate Scheduled Principal Balance of all of the
Mortgage Loans in the related Loan Group as of the first day of the month of
such Distribution Date , and (ii) no reduction of the Current Principal Amount
of any Class of Subordinate Certificates shall be made on any Distribution Date
on account of Realized Losses on the Mortgage Loans to the extent that such
reduction would have the effect of reducing the aggregate Current Principal
Amount of all Certificates as of such Distribution Date, after giving effect to
all distributions and prior allocations of Realized Losses on the Mortgage Loans
on such date, to an amount less than the aggregate Scheduled Principal Balance
of all of the Mortgage Loans as of the first day of the month during which such
Distribution Date occurs (the limitations set forth in such clauses (i) and
(ii), the "Loss Allocation Limitation").
(d) The principal portion of any Realized Losses on the Mortgage Loans
allocated to a Class of Certificates (other than the Residual Certificates)
shall be allocated among the Certificates of such Class (other than the Residual
Certificates) in proportion to their respective Current Principal Amounts. Once
the Senior Certificates (other than, as applicable, the Residual Certificates)
of a Certificate Group have been reduced to zero, the principal portion of
Realized Losses on the Mortgage Loans in the related Loan Group (if any) will be
allocated on a pro rata basis to the remaining Senior Certificates (other than,
as applicable, the Residual Certificates) of the other Certificate Groups.
Within each Certificate Group, the principal portion of Realized Losses on the
related Mortgage Loans will be allocated to each Certificate (other than, as
applicable, the Residual Certificates) pro rata based upon the respective
Current Principal Amount of such Certificate. The principal portion of any
allocation of Realized Losses on the Mortgage Loans shall be accomplished by
reducing the Current Principal Amount of the related Certificates on the related
Distribution Date.
(e) Realized Losses on the Mortgage Loans shall be allocated on the
Distribution Date in the month following the month in which such loss was
incurred and, in the case of the principal portion thereof, after giving effect
to distributions made on such Distribution Date.
(f) On each Distribution Date, the Securities Administrator shall determine
and notify the Paying Agent of the Subordinate Certificate Writedown Amount. Any
such Subordinate Certificate Writedown Amount shall effect a corresponding
reduction in the Current Principal Amount of (i) with respect to the Subordinate
Certificate Writedown Amount, if prior to the Cross-Over Date, the Subordinate
Certificates, in the reverse order of their numerical Class designations and
(ii) from and after the Cross-Over Date, the Senior Certificates (other than the
Residual Certificates), which reduction shall occur on such Distribution Date
after giving effect to distributions made on such Distribution Date.
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(g) (i) The applicable Senior Percentage of any Prepayment Interest
Shortfalls and interest shortfalls resulting from the application of the Relief
Act or similar state law will be allocated among the Senior Certificates (other
than the Residual Certificates) in proportion to the amount of Accrued
Certificate Interest that would have been allocated thereto in the absence of
such shortfalls. The applicable Subordinate Percentage of any Prepayment
Interest Shortfalls and interest shortfalls resulting from the application of
the Relief Act or similar state law will be allocated sequentially to the
Subordinate Certificates, beginning with the Subordinate Certificates with the
highest payment priority, in proportion to the respective amounts of Accrued
Certificate Interest that would have been allocated thereto in the absence of
such shortfalls. The principal portion of any Realized Losses with respect to
the Group I Mortgage Loans, Group II Mortgage Loans or Group III Mortgage Loans
occurring on or prior to the Cross-Over Date will not be allocated among any
Senior Certificates, but will reduce the amount of Group I Available Funds,
Group II Available Funds or Group III Available Funds, respectively, available
for distribution on the related Distribution Date. As a result of the
subordination of the Subordinate Certificates in right of distribution, such
Realized Losses on the Mortgage Loans will be borne by the Subordinate
Certificates in inverse order of their payment priority. Following the
Cross-Over Date, the principal portion of Realized Losses on the Mortgage Loans
will be allocated as set forth in Section 6.02(d) above.
(ii) The principal portion of Debt Service Reductions will not be
allocated in reduction of the Current Principal Amount of any Class of
Certificates. However, after the Cross-over Date, the amounts distributable to
the Senior Certificates (other than the Residual Certificates) under clause (1)
of the definition of Senior Optimal Principal Amount for the Senior Certificates
(other than the Residual Certificates) of each Certificate Group and
distributable to the Subordinate Certificates under clause (1) of the definition
of Subordinate Optimal Principal Amount will be reduced by the amount of any
Debt Service Reductions applicable to the Mortgage Loans of the related Loan
Group. Any Debt Service Reductions relating to the Mortgage Loans prior to the
Cross-over Date will be borne by the Subordinate Certificates (to the extent
then outstanding) in inverse order of priority.
(h) In addition, in the event that the Paying Agent receives any Subsequent
Recoveries on the Mortgage Loans from a Servicer, the Paying Agent shall deposit
such funds into the Distribution Account pursuant to Section 4.01(c)(ii). If,
after taking into account such Subsequent Recoveries on the Mortgage Loans, the
amount of a Realized Loss on a Mortgage Loan is reduced, the amount of such
Subsequent Recoveries will be applied to increase the Current Principal Amount
of the Class or Classes of Subordinate Certificates with the highest payment
priority, to which Realized Losses on the Mortgage Loans have been allocated,
but not by more than the amount of Realized Losses on the Mortgage Loans
previously allocated to that Class or Classes of Subordinate Certificates
pursuant to Section 6.02. The amount of any Subsequent Recoveries on the
Mortgage Loans following the application set forth in the immediately preceding
sentence will be applied to sequentially increase the Current Principal Amount
of the Subordinate Certificates, beginning with the Class of Subordinate
Certificates with the next highest payment priority, up to the amount of such
Realized Losses on the Mortgage Loans previously allocated to such Class or
Classes of Certificates pursuant to this Section 6.02. Holders of such
Certificates will not be entitled to any payments in respect of Accrued
Certificate Interest on the amount of such increases for any Interest Accrual
Period preceding the Distribution Date on which such increase occurs. Any such
increases shall be
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applied to the Current Principal Amount of each Subordinate Certificate of
such Class of Certificates, in accordance with its respective Fractional
Undivided Interest.
Section 6.03. Payments (a) On each Distribution Date, other than the final
Distribution Date, the Paying Agent shall distribute, to the extent of funds
then on deposit in the Distribution Account, to each Certificateholder of record
on the directly preceding Record Date (other than each Certificateholder of
record of the Residual Certificates) the Certificateholder's pro rata share of
its Class of Certificates (based on the aggregate Fractional Undivided Interest
represented by such Holder's Certificates) of all amounts required to be
distributed on such Distribution Date to such Class of Certificates, based on
information provided to the Securities Administrator by the Master Servicer. The
Securities Administrator shall calculate the amount to be distributed to each
Class of Certificates and, based on such amounts, the Securities Administrator
shall determine the amount to be distributed to each Certificateholder. All of
the Securities Administrator's calculations of payments shall be based solely on
information provided to the Securities Administrator by the Master Servicer. The
Securities Administrator shall not be required to confirm, verify or recompute
any such information but shall be entitled to rely conclusively on such
information.
(b) Payment of the above amounts to each Certificateholder shall be made
(i) by check mailed to each Certificateholder entitled thereto at the address
appearing in the Certificate Register or (ii) upon receipt by the Paying Agent
on or before the fifth Business Day preceding the Record Date of written
instructions from a Certificateholder by wire transfer to a United States dollar
account maintained by the payee at any United States depository institution with
appropriate facilities for receiving such a wire transfer; provided, however,
that the final payment in respect of each Class of Certificates will be made
only upon presentation and surrender of such respective Certificates at the
office or agency of the Paying Agent specified in the notice to
Certificateholders of such final payment.
Section 6.04. Statements to Certificateholders. (a) Concurrently with each
distribution to Certificateholders, the Securities Administrator shall make
available to the parties hereto and each Certificateholder via the Securities
Administrator's internet website as set forth below, the following information,
expressed with respect to clauses (i) through (vii) in the aggregate and as a
Fractional Undivided Interest representing an initial Current Principal Amount
of $1,000, in the case of the Interest Only Certificates, a Notional Amount of
$1,000, or in the case of the Residual Certificates, an initial Current
Principal Amount of $50:
(i) the Current Principal Amount or Notional Amount, as applicable, of
each Class of Certificates immediately prior to such Distribution Date;
(ii) the amount of the distribution allocable to principal on each
applicable Class of Certificates;
(iii) the aggregate amount of interest accrued at the related
Pass-Through Rate with respect to each Class during the related Interest
Accrual Period;
(iv) any Carryover Shortfall, any Carryover Shortfall Amounts, the Net
Interest Shortfall and any other adjustments to interest at the related
Pass-Through Rate
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necessary to account for any difference between interest accrued and
aggregate interest distributed with respect to each Class of Certificates
(other than the Residual Certificates);
(v) the amount of the distribution allocable to interest on each Class
of Certificates that bears interest;
(vi) the Pass-Through Rates for each Class of Certificates with
respect to such Distribution Date;
(vii) the Current Principal Amount or Notional Amount of each Class of
Certificates after such Distribution Date;
(viii) the amount of any Monthly Advances, Compensating Interest
Payments and outstanding unreimbursed advances by the Master Servicer or
the Trustee included in such distribution, separately stated for each Loan
Group;
(ix) the aggregate amount of any Realized Losses on the Mortgage Loans
(listed separately for each category of Realized Loss and for each Loan
Group) and Subsequent Recoveries on the Mortgage Loans during the related
Prepayment Period and cumulatively since the Cut-off Date with respect to
the Mortgage Loans, and the amount and source (separately identified) of
any distribution in respect thereof included in such distribution;
(x) with respect to each Mortgage Loan which incurred a Realized Loss
during the related Prepayment Period, (i) the loan number, (ii) the
Scheduled Principal Balance of such Mortgage Loan as of the Cut-off Date,
(iii) the Scheduled Principal Balance of such Mortgage Loan as of the
beginning of the related Due Period, (iv) the Net Liquidation Proceeds with
respect to such Mortgage Loan and (v) the amount of the Realized Loss with
respect to such Mortgage Loan;
(xi) with respect to each Loan Group, the amount of Scheduled
Principal and Principal Prepayments (including but separately identifying
the principal amount of principal prepayments, Insurance Proceeds, the
purchase price in connection with the purchase of Mortgage Loans, cash
deposits in connection with substitutions of Mortgage Loans and Net
Liquidation Proceeds) and the number and principal balance of Mortgage
Loans purchased or substituted for during the relevant period and
cumulatively since the Cut-off Date with respect to the Mortgage Loans;
(xii) the number of Mortgage Loans (excluding REO Property) in each
Loan Group remaining in the Trust Fund as of the end of the related
Prepayment Period;
(xiii) information for each Loan Group and in the aggregate regarding
any Mortgage Loan delinquencies as of the end of the related Prepayment
Period, including the aggregate number and aggregate Outstanding Principal
Balance of Mortgage Loans (a) delinquent 30 to 59 days on a contractual
basis, (b) delinquent 60 to 89 days on a contractual basis, and (c)
delinquent 90 or more days on a contractual basis, in each case as of the
close of business on the last day of the immediately preceding month;
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(xiv) for each Loan Group, the number of Mortgage Loans in the
foreclosure process as of the end of the related Due Period and the
aggregate Outstanding Principal Balance of such Mortgage Loans;
(xv) for each Loan Group, the number and aggregate Outstanding
Principal Balance of all Mortgage Loans as to which the Mortgaged Property
was REO Property as of the end of the related Due Period;
(xvi) the book value (the sum of (A) the Outstanding Principal Balance
of the related Mortgage Loan and (B) accrued interest through the date of
foreclosure, minus (C) foreclosure expenses) of any REO Property in each
Loan Group; provided that, in the event that such information is not
available to the Securities Administrator on the Distribution Date, such
information shall be furnished promptly after it becomes available;
(xvii) the amount of Realized Losses on the Mortgage Loans allocated
to each Class of Certificates (other than the Residual Certificates) since
the prior Distribution Date and in the aggregate for all prior Distribution
Dates;
(xviii) the Average Loss Severity Percentage for each Loan Group;
(xix) the then applicable Group I, Group II and Group III Senior
Percentage, Group I, Group II and Group III Senior Prepayment Percentage,
Group I, Group II and Group III Subordinate Percentage, and Group I, Group
II and Group III Subordinate Prepayment Percentage; and
(xx) the amount of any Subsequent Recovery on the Mortgage Loans for
such Distribution Date, and the amount by which the Current Principal
Amount of each Class of Subordinate Certificates was increased as a result
thereof.
The information set forth above shall be calculated or reported, as the
case may be, by the Securities Administrator, based solely on, and to the extent
of, information provided to the Securities Administrator by the Master Servicer.
The Securities Administrator may conclusively rely on such information and shall
not be required to confirm, verify or recalculate any such information.
The Securities Administrator may make available each month, to any
interested party, the monthly statement to Certificateholders via the Securities
Administrator's website initially located at "xxx.xxxxxxx.xxx." Assistance in
using the website can be obtained by calling the Securities Administrator's
customer service desk at (000) 000-0000. Parties that are unable to use the
above distribution option are entitled to have a paper copy mailed to them via
first class mail by calling the Securities Administrator's customer service desk
and indicating such. The Securities Administrator shall have the right to change
the way such reports are distributed in order to make such distribution more
convenient and/or more accessible to the parties, and the Securities
Administrator shall provide timely and adequate notification to all parties
regarding any such change.
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To the extent timely received from the Securities Administrator, the
Trustee will also make monthly statements available each month to
certificateholders via the Trustee's internet website. The Trustee's internet
website will initially be located at xxx.xxxxxxxx.xxx/xxx. Assistance in using
the Trustee's website service can be obtained by calling the Trustee's customer
service desk at (000) 000-0000.
(b) By March 31 of each year beginning in 2006, the Trustee will furnish
such report to each Holder of the Certificates of record at any time during the
prior calendar year as to the aggregate of amounts reported pursuant to
subclauses (a)(ii) and (a)(v) above with respect to the Certificates, plus
information with respect to the amount of servicing compensation and such other
customary information as the Securities Administrator may determine and advise
the Trustee to be necessary and/or to be required by the Internal Revenue
Service or by a federal or state law or rules or regulations to enable such
Holders to prepare their tax returns for such calendar year. Such obligations
shall be deemed to have been satisfied to the extent that substantially
comparable information shall be provided by the Securities Administrator
pursuant to the requirements of the Code.
Section 6.05. Monthly Advances. Pursuant to the related Servicing
Agreement, each Servicer will make Monthly Advances. Each such Monthly Advance
shall be remitted to the Distribution Account no later than 1:00 p.m. Eastern
time on the Distribution Account Deposit Date in immediately available funds.
Subject to the Master Servicer's recoverability determination, in the event that
the related Servicer fails to make a required Monthly Advance, the Master
Servicer shall be required to remit the amount of such Monthly Advance to the
Distribution Account. The Master Servicer shall be obligated to make any such
Monthly Advance only to the extent that such advance would not be a
Nonrecoverable Advance. If the Master Servicer shall have determined that it has
made a Nonrecoverable Advance or that a proposed Monthly Advance or a lesser
portion of such Monthly Advance would constitute a Nonrecoverable Advance, on
the related Distribution Account Deposit Date the Master Servicer shall deliver
(i) to the Paying Agent for the benefit of the Certificateholders funds
constituting the remaining portion of such Monthly Advance, if applicable, and
(ii) to the Trustee an Officer's Certificate setting forth the basis for such
determination.
The Master Servicer and each Servicer shall be entitled to be reimbursed
from the Distribution Account for all Monthly Advances of its own funds made
pursuant to this Section as provided in Section 4.03. The obligation to make
Monthly Advances with respect to any Mortgage Loan shall continue until such
Mortgage Loan is paid in full or the related Mortgaged Property or related REO
Property has been liquidated or until the purchase or repurchase thereof (or
substitution therefor) from the Trust Fund pursuant to any applicable provision
of this Agreement, except as otherwise provided in this Section 6.05.
Subject to and in accordance with the provisions of Article VIII hereof, in
the event the Master Servicer fails to make such Monthly Advance, then the
Trustee, as the successor Master Servicer, shall be obligated to make such
Monthly Advance, subject to the provisions of this Section 6.05.
Section 6.06. Compensating Interest Payments. Upon timely notice by the
Paying Agent, the Master Servicer shall deposit in the Distribution Account not
later than each
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Distribution Account Deposit Date an amount equal to the lesser of (i) the
sum of the amounts required to be paid by each Servicer under the related
Servicing Agreement with respect to subclauses (a) and (b) of the definition of
Interest Shortfall with respect to the Mortgage Loans for the related
Distribution Date, and not so paid by such Servicers and (ii) the Master
Servicing Compensation for such Distribution Date (such amount, the
"Compensating Interest Payment"). The Master Servicer shall not be entitled to
any reimbursement of any Compensating Interest Payment.
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ARTICLE VII
The Master Servicer
Section 7.01. Liabilities of the Master Servicer. The Master Servicer shall
be liable in accordance herewith only to the extent of the obligations
specifically imposed upon and undertaken by it herein.
Section 7.02. Merger or Consolidation of the Master Servicer.
(a) The Master Servicer will keep in full force and effect its existence,
rights and franchises as a corporation under the laws of the state of its
incorporation, and will obtain and preserve its qualification to do business as
a foreign corporation in each jurisdiction in which such qualification is or
shall be necessary to protect the validity and enforceability of this Agreement,
the Certificates or any of the Mortgage Loans and to perform its duties under
this Agreement.
(b) Any Person into which the Master Servicer may be merged or
consolidated, or any corporation resulting from any merger or consolidation to
which the Master Servicer shall be a party, or any Person succeeding to the
business of the Master Servicer, shall be the successor of the Master Servicer
hereunder, without the execution or filing of any paper or further act on the
part of any of the parties hereto, anything herein to the contrary
notwithstanding.
Section 7.03. Indemnification of the Trustee, the Custodian and the
Securities Administrator. (a) The Master Servicer agrees to indemnify the
Indemnified Persons for, and to hold them harmless against, any loss, liability
or expense (including reasonable legal fees and disbursements of counsel)
incurred on their part that may be sustained in connection with, arising out of,
or relating to, any claim or legal action (including any pending or threatened
claim or legal action) relating to this Agreement or the Certificates (i)
related to the Master Servicer's failure to perform its duties in compliance
with this Agreement (except as any such loss, liability or expense shall be
otherwise reimbursable pursuant to this Agreement) or (ii) incurred by reason of
the Master Servicer's willful misfeasance, bad faith or gross negligence in the
performance of duties hereunder or by reason of reckless disregard of
obligations and duties hereunder, provided, in each case, that with respect to
any such claim or legal action (or pending or threatened claim or legal action),
the Indemnified Person shall have given the Master Servicer and the Depositor
written notice thereof promptly after the Indemnified Person shall have, with
respect to such claim or legal action, knowledge thereof. The Indemnified
Person's failure to give such notice shall not affect the Indemnified Person's
right to indemnification hereunder, except to the extent that the Master
Servicer is materially prejudiced by such failure to give notice. This indemnity
shall survive the resignation or removal of the Trustee, the Master Servicer,
the Custodian or the Securities Administrator and the termination of this
Agreement.
(b) The Depositor will indemnify any Indemnified Person for any loss,
liability or expense of any Indemnified Person not otherwise covered by the
Master Servicer's indemnification pursuant to Subsection (a) above.
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(c) The Securities Administrator agrees to indemnify the Indemnified
Persons (other than the Securities Administrator) for, and to hold them harmless
against, any loss, liability or expense (including reasonable legal fees and
disbursements of counsel) incurred on their part (i) in connection with, arising
out of, or relating to the Securities Administrator's failure to prepare and
file a Form 10-K in accordance with Section 3.18, (ii) by reason of the
Securities Administrator's willful misfeasance, bad faith or gross negligence in
the performance of its obligations pursuant to Section 3.18 or (iii) by reason
of the Securities Administrator's reckless disregard of its obligations pursuant
to Section 3.18 (including, without limitation, in respect of any powers of
attorney furnished to the Securities Administrator), provided, in each case,
that with respect to any such claim or legal action (or pending or threatened
claim or legal action), an Indemnified Person shall have given the Securities
Administrator written notice thereof promptly after such Indemnified Person
shall have knowledge with respect to such claim or legal action. The Indemnified
Person's failure to give such notice shall not affect the Indemnified Person's
right to indemnification hereunder. This indemnity shall survive the resignation
or removal of the Trustee, the Master Servicer or the Securities Administrator
and the termination of this Agreement.
Section 7.04. Limitations on Liability of the Master Servicer and Others.
Subject to the obligation of the Master Servicer to indemnify the Indemnified
Persons pursuant to Section 7.03:
(a) Neither the Master Servicer nor any of the directors, officers,
employees or agents of the Master Servicer shall be under any liability to the
Indemnified Persons, the Depositor, the Trust Fund or the Certificateholders for
taking any action or for refraining from taking any action in good faith
pursuant to this Agreement, or for errors in judgment; provided, however, that
this provision shall not protect the Master Servicer or any such Person against
any breach of warranties or representations made herein or any liability which
would otherwise be imposed by reason of such Person's willful misfeasance, bad
faith or gross negligence in the performance of duties or by reason of reckless
disregard of obligations and duties hereunder.
(b) The Master Servicer and any director, officer, employee or agent of the
Master Servicer may rely in good faith on any document of any kind prima facie
properly executed and submitted by any Person respecting any matters arising
hereunder.
(c) The Master Servicer, the Custodian and any director, officer, employee
or agent of the Master Servicer or the Custodian shall be indemnified by the
Trust and held harmless thereby against any loss, liability or expense
(including reasonable legal fees and disbursements of counsel) incurred on their
part that may be sustained in connection with, arising out of, or related to,
any claim or legal action (including any pending or threatened claim or legal
action) relating to this Agreement, the Certificates or the Servicing Agreements
(except to the extent that the Master Servicer is indemnified by the related
Servicer thereunder), other than (i) any such loss, liability or expense related
to the Master Servicer's failure to perform its duties in compliance with this
Agreement (except as any such loss, liability or expense shall be otherwise
reimbursable pursuant to this Agreement), or to the Custodian's failure to
perform its duties under the Custodial Agreement, respectively, or (ii) any such
loss, liability or expense incurred by reason of the Master Servicer's or the
Custodian's willful misfeasance, bad faith or gross negligence in the
performance of duties hereunder or under the Custodial Agreement, as
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applicable, or by reason of reckless disregard of obligations and duties
hereunder or under the Custodial Agreement, as applicable.
(d) The Master Servicer shall not be under any obligation to appear in,
prosecute or defend any legal action that is not incidental to its duties under
this Agreement and that in its opinion may involve it in any expense or
liability; provided, however, the Master Servicer may in its discretion, with
the consent of the Trustee (which consent shall not be unreasonably withheld),
undertake any such action which it may deem necessary or desirable with respect
to this Agreement and the rights and duties of the parties hereto and the
interests of the Certificateholders hereunder. In such event, the legal expenses
and costs of such action and any liability resulting therefrom shall be
expenses, costs and liabilities of the Trust Fund, and the Master Servicer shall
be entitled to be reimbursed therefor out of the Distribution Account as
provided by Section 4.03. Nothing in this Subsection 7.04(d) shall affect the
Master Servicer's obligation to supervise, or to take such actions as are
necessary to ensure, the servicing and administration of the Mortgage Loans
pursuant to Section 3.01.
(e) In taking or recommending any course of action pursuant to this
Agreement, unless specifically required to do so pursuant to this Agreement, the
Master Servicer shall not be required to investigate or make recommendations
concerning potential liabilities which the Trust might incur as a result of such
course of action by reason of the condition of the Mortgaged Properties but
shall give notice to the Trustee if it has notice of such potential liabilities.
(f) The Master Servicer shall not be liable for any acts or omissions of
any Servicer, except as otherwise expressly provided herein.
Section 7.05. Master Servicer Not to Resign. Except as provided in Section
7.07, the Master Servicer shall not resign from the obligations and duties
hereby imposed on it except upon a determination that any such duties hereunder
are no longer permissible under applicable law and such impermissibility cannot
be cured. Any such determination permitting the resignation of the Master
Servicer shall be evidenced by an Opinion of Independent Counsel to such effect
delivered to the Trustee. No such resignation by the Master Servicer shall
become effective until EMC or the Trustee or a successor to the Master Servicer
reasonably satisfactory to the Trustee shall have assumed the responsibilities
and obligations of the Master Servicer in accordance with Section 8.02 hereof.
The Trustee shall notify the Rating Agencies of the resignation of the Master
Servicer.
Section 7.06. Successor Master Servicer. In connection with the appointment
of any successor Master Servicer or the assumption of the duties of the Master
Servicer, EMC or the Trustee may make such arrangements for the compensation of
such successor Master Servicer out of payments on the Mortgage Loans as EMC or
the Trustee and such successor Master Servicer shall agree. If the successor
Master Servicer does not agree that such market value is a fair price, such
successor Master Servicer shall obtain two quotations of market value from third
parties actively engaged in the servicing of single-family Mortgage Loans.
Notwithstanding the foregoing, the compensation payable to a successor master
servicer may not exceed the compensation which the Master Servicer would have
been entitled to retain if the Master Servicer had continued to act as Master
Servicer hereunder.
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Section 7.07. Sale and Assignment of Master Servicing. The Master Servicer
may sell and assign its rights and delegate its duties and obligations in its
entirety as Master Servicer under this Agreement and EMC may terminate the
Master Servicer without cause and select a new Master Servicer; provided,
however, that: (i) the purchaser or transferee accepting such assignment and
delegation (a) shall be a Person or shall be an Affiliate of a Person which
shall be qualified to service Mortgage Loans for Xxxxxx Xxx or Xxxxxxx Mac; (b)
shall have a net worth of not less than $10,000,000 (unless otherwise approved
by each Rating Agency pursuant to clause (ii) below); (c) shall be reasonably
satisfactory to the Trustee (as evidenced in a writing signed by the Trustee);
and (d) shall execute and deliver to the Trustee an agreement, in form and
substance reasonably satisfactory to the Trustee, which contains an assumption
by such Person of the due and punctual performance and observance of each
covenant and condition to be performed or observed by it as Master Servicer
under this Agreement and any custodial agreement from and after the effective
date of such agreement; (ii) each Rating Agency shall be given prior written
notice of the identity of the proposed successor to the Master Servicer and each
Rating Agency's rating of the Certificates in effect immediately prior to such
assignment, sale and delegation will not be downgraded, qualified or withdrawn
as a result of such assignment, sale and delegation, as evidenced by a letter to
such effect delivered to the Master Servicer and the Trustee; (iii) the Master
Servicer assigning and delegating its rights and obligations hereunder shall
deliver to the Trustee an Officer's Certificate and an Opinion of Independent
Counsel, each stating that all conditions precedent to such action under this
Agreement have been completed and such action is permitted by and complies with
the terms of this Agreement; and (iv) in the event the Master Servicer is
terminated without cause by EMC, EMC shall pay the terminated Master Servicer a
termination fee equal to 0.25% of the aggregate Scheduled Principal Balance of
the Mortgage Loans at the time the master servicing of the Mortgage Loans is
transferred to the successor Master Servicer. No such assignment or delegation
shall affect any liability of the Master Servicer arising prior to the effective
date thereof.
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ARTICLE VIII
Default
Section 8.01. "Event of Default" wherever used herein, means any one of the
following events (whatever the reason for such Event of Default and whether it
shall be voluntary or involuntary or be effected by operation of law or pursuant
to any judgment, decree or order of any court or any order, rule or regulation
of any administrative or governmental body) and only with respect to the
defaulting Master Servicer:
(i) The Master Servicer fails to deposit in the Distribution Account
any amount so required by it to be deposited pursuant to this Agreement
(other than any Monthly Advance), and such failure continues unremedied for
a period of three Business Days after the date upon which written notice of
such failure, requiring the same to be remedied, shall have been given to
the Master Servicer; or
(ii) The Master Servicer fails to observe or perform in any material
respect any other material covenants and agreements set forth in this
Agreement to be performed by it, which covenants and agreements materially
affect the rights of Certificateholders, and such failure continues
unremedied for a period of 60 days (or, in the case of a breach of its
obligation to provide a Master Servicer Certification pursuant to Section
3.18, for a period of five days) after the date on which written notice of
such failure, requiring the same to be remedied, shall have been given to
the Master Servicer by the Trustee or to the Master Servicer and the
Trustee by the Holders of Certificates evidencing Fractional Undivided
Interests aggregating not less than 25% of the Trust Fund; or
(iii) There is entered against the Master Servicer a decree or order
by a court or agency or supervisory authority having jurisdiction in the
premises for the appointment of a conservator, receiver or liquidator in
any insolvency, readjustment of debt, marshaling of assets and liabilities
or similar proceedings, or for the winding up or liquidation of its
affairs, and the continuance of any such decree or order is unstayed and in
effect for a period of 60 consecutive days, or an involuntary case is
commenced against the Master Servicer under any applicable insolvency or
reorganization statute and the petition is not dismissed within 60 days
after the commencement of the case; or
(iv) The Master Servicer consents to the appointment of a conservator
or receiver or liquidator in any insolvency, readjustment of debt,
marshaling of assets and liabilities or similar proceedings of or relating
to the Master Servicer or substantially all of its property; or the Master
Servicer admits in writing its inability to pay its debts generally as they
become due, files a petition to take advantage of any applicable insolvency
or reorganization statute, makes an assignment for the benefit of its
creditors, or voluntarily suspends payment of its obligations; or
(v) The Master Servicer assigns or delegates its duties or rights
under this Agreement in contravention of the provisions permitting such
assignment or delegation under Sections 7.05 or 7.07; or
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(vi) The Master Servicer fails to deposit, or cause to be deposited,
on the Distribution Date in the Distribution Account any Monthly Advance
(other than a Nonrecoverable Advance) required to be made with respect to
such Distribution Date.
In each and every such case, so long as such Event of Default with respect to
the Master Servicer shall not have been remedied, either the Trustee or the
Holders of Certificates evidencing Fractional Undivided Interests aggregating
not less than 51% of the principal of the Trust Fund, by notice in writing to
the Master Servicer (and to the Trustee, if given by such Certificateholders),
with a copy to the Rating Agencies, and with the consent of EMC, may terminate
all of the rights and obligations (but not the liabilities) of the Master
Servicer under this Agreement and in and to the Mortgage Loans and/or the REO
Property serviced by the Master Servicer and the proceeds thereof. Upon the
receipt by the Master Servicer of such written notice, all authority and power
of the Master Servicer under this Agreement, whether with respect to the
Certificates, the Mortgage Loans, REO Property or under any other related
agreements (but only to the extent that such other agreements relate to the
Mortgage Loans or related REO Property) shall, subject to Section 8.02 and to
bankruptcy, insolvency or similar laws, if applicable, automatically and without
further action pass to and be vested in the Trustee pursuant to this Section
8.01; and, without limitation, the Trustee is hereby authorized and empowered to
execute and deliver, on behalf of the Master Servicer as attorney-in-fact or
otherwise, any and all documents and other instruments and to do or accomplish
all other acts or things necessary or appropriate to effect the purposes of such
notice of termination, whether to complete the transfer and endorsement or
assignment of the Mortgage Loans and related documents, or otherwise. The Master
Servicer agrees to cooperate with the Trustee in effecting the termination of
the Master Servicer's rights and obligations hereunder, including, without
limitation, the transfer to the Trustee of (i) the property and amounts which
are then or should be part of the Trust or which thereafter become part of the
Trust, and (ii) originals or copies of all documents of the Master Servicer
reasonably requested by the Trustee to enable it to assume the Master Servicer's
duties hereunder. In addition to any other amounts which are then, or,
notwithstanding the termination of its activities under this Agreement, may
become payable to the Master Servicer under this Agreement, the Master Servicer
shall be entitled to receive, out of any amount received on account of a
Mortgage Loan or related REO Property, that portion of such payments which it
would have received as reimbursement under this Agreement if notice of
termination had not been given. The termination of the rights and obligations of
the Master Servicer shall not affect any obligations incurred by the Master
Servicer prior to such termination.
Notwithstanding the foregoing, if an Event of Default described in clause (vi)
of this Section 8.01 shall occur, the Trustee shall, by notice in writing to the
Master Servicer, which may be delivered by telecopy, immediately terminate all
of the rights and obligations of the Master Servicer thereafter arising under
this Agreement, but without prejudice to any rights it may have as a
Certificateholder or to reimbursement of Monthly Advances and other advances of
its own funds, and the Trustee shall act as provided in Section 8.02 to carry
out the duties of the Master Servicer, including the obligation to make any
Monthly Advance the nonpayment of which was an Event of Default described in
clause (vi) of this Section 8.01. Any such action taken by the Trustee must be
taken prior to the distribution on the relevant Distribution Date.
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Section 8.02. Trustee to Act; Appointment of Successor. (a) Upon the
receipt by the Master Servicer of a notice of termination pursuant to Section
8.01 or an Opinion of Independent Counsel pursuant to Section 7.05 to the effect
that the Master Servicer is legally unable to act or to delegate its duties to a
Person which is legally able to act, the Trustee shall automatically become the
successor in all respects to the Master Servicer in its capacity under this
Agreement and the transactions set forth or provided for herein and shall
thereafter be subject to all the responsibilities, duties, liabilities and
limitations on liabilities relating thereto placed on the Master Servicer by the
terms and provisions hereof; provided, however, that EMC shall have the right to
either (a) immediately assume the duties of the Master Servicer or (b) select a
successor Master Servicer; provided, further, however, that the Trustee shall
have no obligation whatsoever with respect to any liability (other than advances
deemed recoverable and not previously made) incurred by the Master Servicer at
or prior to the time of termination. As compensation therefor, but subject to
Section 7.06, the Trustee shall be entitled to all funds relating to the
Mortgage Loans which the Master Servicer would have been entitled to retain if
the Master Servicer had continued to act hereunder, except for those amounts due
the Master Servicer as reimbursement permitted under this Agreement for advances
previously made or expenses previously incurred. Notwithstanding the above, the
Trustee may, if it shall be unwilling so to act, or shall, if it is legally
unable so to act, appoint or petition a court of competent jurisdiction to
appoint any established housing and home finance institution which is a Xxxxxx
Xxx- or Xxxxxxx Mac-approved servicer, and with respect to a successor to the
Master Servicer only having a net worth of not less than $10,000,000, as the
successor to the Master Servicer hereunder in the assumption of all or any part
of the responsibilities, duties or liabilities of the Master Servicer hereunder;
provided, that the Trustee shall obtain a letter from each Rating Agency that
the ratings, if any, of such Rating Agency on each of the Certificates will not
be downgraded, qualified or withdrawn as a result of the selection of the
successor to the Master Servicer. Pending appointment of a successor to the
Master Servicer hereunder, the Trustee shall act in such capacity as hereinabove
provided. In connection with such appointment and assumption, the Trustee may
make such arrangements for the compensation of such successor out of payments on
the Mortgage Loans as it and such successor shall agree; provided, however, that
the provisions of Section 7.06 shall apply, no such compensation shall be in
excess of that permitted the Trustee under this Subsection 8.02(a), and that
such successor shall undertake and assume the obligations of the Trustee to pay
compensation to any third Person acting as an agent or independent contractor in
the performance of master servicing responsibilities hereunder. The Trustee and
such successor shall take such action, consistent with this Agreement, as shall
be necessary to effectuate any such succession.
(b) If the Trustee shall succeed to any duties of the Master Servicer
respecting the Mortgage Loans as provided herein, it shall do so in a separate
capacity and not in its capacity as Trustee and, accordingly, the provisions of
Article IX shall be inapplicable to the Trustee in its duties as the successor
to the Master Servicer in the servicing of the Mortgage Loans (although such
provisions shall continue to apply to the Trustee in its capacity as Trustee);
the provisions of all other provisions of this Agreement and the respective
Servicing Agreements relating to the Master Servicer, including the provisions
of Article VII, however, shall apply to it in its capacity as successor Master
Servicer.
Section 8.03. Notification to Certificateholders. Upon any termination or
appointment of a successor to the Master Servicer, the Trustee shall give prompt
written notice thereof to
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Certificateholders at their respective addresses appearing in the
Certificate Register, and to the Rating Agencies.
Section 8.04. Waiver of Defaults. The Trustee shall transmit by mail to all
Certificateholders, within 60 days after the occurrence of any Event of Default
known to the Trustee, unless such Event of Default shall have been cured, notice
of each such Event of Default hereunder known to the Trustee. The Holders of
Certificates evidencing Fractional Undivided Interests aggregating not less than
51% of the Trust Fund may, on behalf of all Certificateholders, waive any
default by the Master Servicer in the performance of its obligations hereunder
and the consequences thereof, except a default in the making of or the causing
to be made of any required distribution on the Certificates, which default may
only be waived by Holders of Certificates evidencing Fractional Undivided
Interests aggregating 100% of the Trust Fund. Upon any such waiver of a past
default, such default shall be deemed to cease to exist, and any Event of
Default arising therefrom shall be deemed to have been timely remedied for every
purpose of this Agreement. No such waiver shall extend to any subsequent or
other default or impair any right consequent thereon except to the extent
expressly so waived. The Trustee shall give notice of any such waiver to the
Rating Agencies.
Section 8.05. List of Certificateholders. Upon written request of three or
more Certificateholders of record, for purposes of communicating with other
Certificateholders with respect to their rights under this Agreement, the
Trustee will afford such Certificateholders access during business hours to the
most recent list of Certificateholders held by the Trustee.
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ARTICLE IX
Concerning the Trustee and the Securities Administrator
Section 9.01. Duties of Trustee. (a) The Trustee, prior to the occurrence
of an Event of Default and after the curing or waiver of all Events of Default
which may have occurred, and the Securities Administrator each undertake to
perform such duties and only such duties as are specifically set forth in this
Agreement as duties of the Trustee and the Securities Administrator,
respectively. If an Event of Default has occurred and has not been cured or
waived, the Trustee shall exercise such of the rights and powers vested in it by
this Agreement, and subject to Section 8.02(b) use the same degree of care and
skill in their exercise, as a prudent person would exercise under the
circumstances in the conduct of his own affairs.
(b) Upon receipt of all resolutions, certificates, statements, opinions,
reports, documents, orders or other instruments which are specifically required
to be furnished to the Trustee and the Securities Administrator pursuant to any
provision of this Agreement, the Trustee and the Securities Administrator,
respectively, shall examine them to determine whether they are in the form
required by this Agreement; provided, however, that neither the Trustee nor the
Securities Administrator shall be responsible for the accuracy or content of any
resolution, certificate, statement, opinion, report, document, order or other
instrument furnished by the Master Servicer; and provided, further, that neither
the Trustee nor the Securities Administrator shall be responsible for the
accuracy or verification of any calculation provided to it pursuant to this
Agreement.
(c) On each Distribution Date, the Paying Agent shall make monthly
distributions and the final distribution to the Certificateholders from funds in
the Distribution Account as provided in Sections 6.01 and 10.01 herein based on
the report of the Securities Administrator.
(d) No provision of this Agreement shall be construed to relieve the
Trustee or the Securities Administrator from liability for its own negligent
action, its own negligent failure to act or its own willful misconduct;
provided, however, that:
(i) Prior to the occurrence of an Event of Default, and after the
curing or waiver of all such Events of Default which may have occurred, the
duties and obligations of the Trustee and the Securities Administrator
shall be determined solely by the express provisions of this Agreement,
neither the Trustee nor the Securities Administrator shall be liable except
for the performance of their respective duties and obligations as are
specifically set forth in this Agreement, no implied covenants or
obligations shall be read into this Agreement against the Trustee or the
Securities Administrator and, in the absence of bad faith on the part of
the Trustee or the Securities Administrator, respectively, the Trustee or
the Securities Administrator, respectively, may conclusively rely, as to
the truth of the statements and the correctness of the opinions expressed
therein, upon any certificates or opinions furnished to the Trustee or the
Securities Administrator, respectively, and conforming to the requirements
of this Agreement;
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(ii) Neither the Trustee nor the Securities Administrator shall be
liable in its individual capacity for an error of judgment made in good
faith by a Responsible Officer or Responsible Officers of the Trustee or an
officer of the Securities Administrator, respectively, unless it shall be
proved that the Trustee or the Securities Administrator, respectively, was
negligent in ascertaining the pertinent facts;
(iii) Neither the Trustee nor the Securities Administrator shall be
liable with respect to any action taken, suffered or omitted to be taken by
it in good faith in accordance with the directions of the Holders of
Certificates evidencing Fractional Undivided Interests aggregating not less
than 25% of the Trust Fund, if such action or non-action relates to the
time, method and place of conducting any proceeding for any remedy
available to the Trustee or the Securities Administrator, respectively, or
exercising any trust or other power conferred upon the Trustee or the
Securities Administrator, respectively, under this Agreement;
(iv) The Trustee shall not be required to take notice or be deemed to
have notice or knowledge of any default or Event of Default unless a
Responsible Officer of the Trustee's Corporate Trust Office shall have
actual knowledge thereof. In the absence of such notice, the Trustee may
conclusively assume there is no such default or Event of Default;
(v) The Trustee shall not in any way be liable by reason of any
insufficiency in any Account held by or in the name of Trustee unless it is
determined by a court of competent jurisdiction that the Trustee's gross
negligence or willful misconduct was the primary cause of such
insufficiency (except to the extent that the Trustee is obligor and has
defaulted thereon);
(vi) Anything in this Agreement to the contrary notwithstanding, in no
event shall the Trustee or the Securities Administrator be liable for
special, indirect or consequential loss or damage of any kind whatsoever
(including but not limited to lost profits), even if the Trustee or the
Securities Administrator, respectively, has been advised of the likelihood
of such loss or damage and regardless of the form of action; and
(vii) None of the Securities Administrator, EMC or the Trustee shall
be responsible for the acts or omissions of the other, the Master Servicer
or any Servicer, it being understood that this Agreement shall not be
construed to render them partners, joint venturers or agents of one
another.
Neither the Trustee nor the Securities Administrator shall be required to
expend or risk its own funds or otherwise incur financial liability in the
performance of any of its duties hereunder, or in the exercise of any of its
rights or powers, if there is reasonable ground for believing that the repayment
of such funds or adequate indemnity against such risk or liability is not
reasonably assured to it, and none of the provisions contained in this Agreement
shall in any event require the Trustee or the Securities Administrator to
perform, or be responsible for the manner of performance of, any of the
obligations of the Master Servicer under the Servicing Agreements, except during
such time, if any, as the Trustee shall be the successor to, and be vested with
the
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rights, duties, powers and privileges of, the Master Servicer in accordance
with the terms of this Agreement.
(e) All funds received by the Master Servicer and the Paying Agent and
required to be deposited in the Distribution Account pursuant to this Agreement
will be promptly so deposited by the Master Servicer or the Paying Agent, as
applicable.
(f) Except for those actions that the Trustee or the Securities
Administrator is required to take hereunder, neither the Trustee nor the
Securities Administrator shall have any obligation or liability to take any
action or to refrain from taking any action hereunder in the absence of written
direction as provided hereunder.
Section 9.02. Certain Matters Affecting the Trustee and the Securities
Administrator. Except as otherwise provided in Section 9.01:
(i) The Trustee and the Securities Administrator may rely and shall be
protected in acting or refraining from acting in reliance on any
resolution, certificate of a Depositor, Master Servicer or Servicer,
certificate of auditors or any other certificate, statement, instrument,
opinion, report, notice, request, consent, order, appraisal, bond or other
paper or document believed by it to be genuine and to have been signed or
presented by the proper party or parties;
(ii) The Trustee and the Securities Administrator may consult with
counsel, and any advice of such counsel or any Opinion of Counsel shall be
full and complete authorization and protection with respect to any action
taken or suffered or omitted by it hereunder in good faith and in
accordance with such advice or Opinion of Counsel:
(iii) Neither the Trustee nor the Securities Administrator shall be
under any obligation to exercise any of the trusts or powers vested in it
by this Agreement, other than its obligation to give notices pursuant to
this Agreement, or to institute, conduct or defend any litigation hereunder
or in relation hereto at the request, order or direction of any of the
Certificateholders pursuant to the provisions of this Agreement, unless
such Certificateholders shall have offered to the Trustee reasonable
security or indemnity against the costs, expenses and liabilities which may
be incurred therein or thereby. Nothing contained herein shall, however,
relieve the Trustee of the obligation, upon the occurrence of an Event of
Default of which a Responsible Officer of the Trustee's Corporate Trust
Office has actual knowledge (which has not been cured or waived), subject
to Section 8.02(b), to exercise such of the rights and powers vested in it
by this Agreement, and to use the same degree of care and skill in their
exercise, as a prudent person would exercise under the circumstances in the
conduct of his own affairs;
(iv) Prior to the occurrence of an Event of Default hereunder and
after the curing or waiver of all Events of Default which may have
occurred, neither the Trustee nor the Securities Administrator shall be
liable in its individual capacity for any action 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;
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(v) Neither the Trustee nor the Securities Administrator shall be
bound to make any investigation into the facts or matters stated in any
resolution, certificate, statement, instrument, opinion, report, notice,
request, consent, order, approval, bond or other paper or document, unless
requested in writing to do so by Holders of Certificates evidencing
Fractional Undivided Interests aggregating not less than 25% of the Trust
Fund, and provided that the payment within a reasonable time to the Trustee
or the Securities Administrator, as applicable, of the costs, expenses or
liabilities likely to be incurred by it in the making of such investigation
is, in the opinion of the Trustee or the Securities Administrator, as
applicable, reasonably assured to the Trustee or the Securities
Administrator, as applicable, by the security afforded to it by the terms
of this Agreement. The Trustee or the Securities Administrator may require
reasonable indemnity against such expense or liability as a condition to
taking any such action. The reasonable expense of every such examination
shall be paid by the Certificateholders requesting the investigation;
(vi) The Trustee and the Securities Administrator may execute any of
the trusts or powers hereunder or perform any duties hereunder either
directly or through Affiliates, agents or attorneys; provided, however,
that the Trustee may not appoint any agent to perform its custodial
functions with respect to the Mortgage Files or paying agent functions
under this Agreement without the express written consent of the Master
Servicer, which consent will not be unreasonably withheld or delayed.
Neither the Trustee nor the Securities Administrator shall be liable or
responsible for the misconduct or negligence of any of the Trustee's or the
Securities Administrator's agents or attorneys or a custodian or paying
agent appointed hereunder by the Trustee or the Securities Administrator
with due care and, when required, with the consent of the Master Servicer;
(vii) Should the Trustee or the Securities Administrator deem the
nature of any action required on its part, other than a payment or transfer
under Subsection 4.01(b) or Section 4.02, to be unclear, the Trustee or the
Securities Administrator, respectively, may require prior to such action
that it be provided by the Depositor with reasonable further instructions;
(viii) The right of the Trustee or the Securities Administrator to
perform any discretionary act enumerated in this Agreement shall not be
construed as a duty, and neither the Trustee nor the Securities
Administrator shall be accountable for other than its negligence, negligent
failure to act or willful misconduct in the performance of any such act;
(ix) Neither the Trustee nor the Securities Administrator shall be
required to give any bond or surety with respect to the execution of the
trust created hereby or the powers granted hereunder, except as provided in
Subsection 9.07; and
(x) Neither the Trustee nor the Securities Administrator shall have
any duty to conduct any affirmative investigation as to the occurrence of
any condition requiring the repurchase of any Mortgage Loan by the Seller
pursuant to this Agreement, the Mortgage Loan Purchase Agreement or the
eligibility of any Mortgage Loan for purposes of this Agreement.
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Section 9.03. Trustee and Securities Administrator Not Liable for
Certificates or Mortgage Loans. The recitals contained herein and in the
Certificates (other than the signature of the Trustee, and the countersignature
of the Certificate Registrar, on the Certificates) shall be taken as the
statements of the Depositor, and neither the Trustee nor the Securities
Administrator shall have any responsibility for their correctness. Neither the
Trustee nor the Securities Administrator makes any representation as to the
validity or sufficiency of the Certificates (other than the signature of the
Trustee on the Certificates) or of any Mortgage Loan except as expressly
provided in Sections 2.02 and 2.05 hereof; provided, however, that the foregoing
shall not relieve the Trustee of the obligation to review the Mortgage Files
pursuant to Sections 2.02 and 2.04. The Trustee's signature on the Certificates
shall be solely in its capacity as Trustee and shall not constitute the
Certificates an obligation of the Trustee in any other capacity. Neither the
Trustee or the Securities Administrator shall be accountable for the use or
application by the Depositor of any of the Certificates or of the proceeds of
such Certificates, or for the use or application of any funds paid to the
Depositor with respect to the Mortgage Loans. Subject to the provisions of
Section 2.05, neither the Trustee nor the Securities Administrator shall be
responsible for the legality or validity of this Agreement or any document or
instrument relating to this Agreement, the validity of the execution of this
Agreement or of any supplement hereto or instrument of further assurance, or the
validity, priority, perfection or sufficiency of the security for the
Certificates issued hereunder or intended to be issued hereunder. Neither the
Trustee nor the Securities Administrator shall at any time have any
responsibility or liability for or with respect to the legality, validity and
enforceability of any Mortgage or any Mortgage Loan, or the perfection and
priority of any Mortgage or the maintenance of any such perfection and priority,
or for or with respect to the sufficiency of the Trust Fund or its ability to
generate the payments to be distributed to Certificateholders, under this
Agreement. Neither the Trustee nor the Securities Administrator shall have any
responsibility for filing any financing or continuation statement in any public
office at any time or to otherwise perfect or maintain the perfection of any
security interest or lien granted to it hereunder or to record this Agreement,
other than any continuation statements required to be filed by the Trustee
pursuant to Section 3.20.
Section 9.04. Trustee and Securities Administrator May Own Certificates.
Each of the Trustee and the Securities Administrator, in its individual capacity
or in any capacity other than as Trustee or Securities Administrator hereunder,
may become the owner or pledgee of any Certificates with the same rights it
would have if it were not the Trustee or the Securities Administrator, as
applicable, and may otherwise deal with the parties hereto.
Section 9.05. Trustee's and Securities Administrator's Fees and Expenses.
The fees and expenses of the Trustee and the Securities Administrator shall be
paid in accordance with a side letter agreement. In addition, the Trustee and
the Securities Administrator will be entitled to recover from the Distribution
Account pursuant to Section 4.03 all reasonable out-of-pocket expenses,
disbursements and advances and the expenses of the Trustee and the Securities
Administrator, respectively, or any of their respective directors, officers,
employees or agents in connection with any Event of Default, any breach of this
Agreement or any claim or legal action (including any pending or threatened
claim or legal action) incurred or made by the Trustee or the Securities
Administrator, respectively, or any of their respective directors, officers,
employees or agents in the administration of the trusts hereunder (including the
reasonable compensation, expenses and disbursements of its counsel) except any
such expense, disbursement or advance as may arise from its or their negligence,
negligent failure to act or
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intentional misconduct or which is the responsibility of the Certificateholders
or the Trust Fund hereunder. If funds in the Distribution Account are
insufficient therefor, the Trustee and the Securities Administrator shall
recover such expenses from the Depositor. Such compensation and reimbursement
obligation shall not be limited by any provision of law in regard to the
compensation of a trustee of an express trust.
Section 9.06. Eligibility Requirements for Trustee, Paying Agent and
Securities Administrator. The Trustee and any successor Trustee, the Paying
Agent and any successor Paying Agent and the Securities Administrator and any
successor Securities Administrator shall during the entire duration of this
Agreement be a state bank or trust company or a national banking association
organized and doing business under the laws of such state or the United States
of America, authorized under such laws to exercise corporate trust powers,
having a combined capital and surplus and undivided profits of at least
$40,000,000 or, in the case of a successor Trustee, $50,000,000, subject to
supervision or examination by federal or state authority and, in the case of the
Trustee, rated "BBB" or higher by S&P with respect to their long-term rating and
rated "BBB" or higher by S&P and "Baa2" or higher by Xxxxx'x with respect to any
outstanding long-term unsecured unsubordinated debt, and, in the case of a
successor Trustee, successor Paying Agent or successor Securities Administrator
other than pursuant to Section 9.10, rated in one of the two highest long-term
debt categories of, or otherwise acceptable to, each of the Rating Agencies. If
the Trustee publishes reports of condition at least annually, pursuant to law or
to the requirements of the aforesaid supervising or examining authority, then
for the purposes of this Section 9.06 the combined capital and surplus of such
corporation shall be deemed to be its total equity capital (combined capital and
surplus) as set forth in its most recent report of condition so published. In
case at any time the Trustee, the Paying Agent or the Securities Administrator
shall cease to be eligible in accordance with the provisions of this Section
9.06, the Trustee, the Paying Agent or the Securities Administrator, as
applicable, shall resign immediately in the manner and with the effect specified
in Section 9.08.
Section 9.07. Insurance. The Trustee, the Paying Agent and the Securities
Administrator, at their own expense, shall at all times maintain and keep in
full force and effect: (i) fidelity insurance, (ii) theft of documents insurance
and (iii) forgery insurance (which may be collectively satisfied by a "Financial
Institution Bond" and/or a "Bankers' Blanket Bond"). All such insurance shall be
in amounts, with standard coverage and subject to deductibles, as are customary
for insurance typically maintained by banks or their affiliates which act as
custodians for investor-owned mortgage pools. A certificate of an officer of the
Trustee, the Paying Agent or the Securities Administrator as to the Trustee's,
the Paying Agent's or the Securities Administrator's, respectively, compliance
with this Section 9.07 shall be furnished to any Certificateholder upon
reasonable written request.
Section 9.08. Resignation and Removal of the Trustee and Securities
Administrator. (a) The Trustee and the Securities Administrator may at any time
resign and be discharged from the Trust hereby created by giving written notice
thereof to the Depositor and the Master Servicer, with a copy to the Rating
Agencies. Upon receiving such notice of resignation, the Depositor shall
promptly appoint a successor Trustee or successor Securities Administrator, as
applicable, by written instrument, in triplicate, one copy of which instrument
shall be delivered to each of the resigning Trustee or Securities Administrator,
as applicable, and the successor Trustee or Securities Administrator, as
applicable. If no successor Trustee or Securities Administrator shall
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have been so appointed and have accepted appointment within 30 days after
the giving of such notice of resignation, the resigning Trustee or Securities
Administrator may petition any court of competent jurisdiction for the
appointment of a successor Trustee or Securities Administrator.
(b) If at any time (i) the Trustee, the Paying Agent or the Securities
Administrator shall cease to be eligible in accordance with the provisions of
Section 9.06 and shall fail to resign after written request therefor by the
Depositor, (ii) the Trustee, the Paying Agent or the Securities Administrator
shall become incapable of acting, or shall be adjudged bankrupt or insolvent, or
a receiver of the Trustee, the Paying Agent or the Securities Administrator, as
applicable, or of its property shall be appointed, or any public officer shall
take charge or control of the Trustee, the Paying Agent or the Securities
Administrator, as applicable, or of its property or affairs for the purpose of
rehabilitation, conservation or liquidation, or (iii)(A) a tax is imposed with
respect to the Trust Fund by any state in which the Trustee or the Securities
Administrator or the Trust Fund is located, and (B) the imposition of such tax
would be avoided by the appointment of a different trustee or securities
administrator, then the Depositor shall promptly remove the Trustee, or shall be
entitled to remove the Paying Agent or the Securities Administrator, as
applicable, and appoint a successor Trustee, Paying Agent or Securities
Administrator, as applicable, by written instrument, in triplicate, one copy of
which instrument shall be delivered to each of the Master Servicer, the Trustee,
the Paying Agent or Securities Administrator, as applicable, so removed, and the
successor Trustee, Paying Agent or Securities Administrator, as applicable.
(c) The Holders of Certificates evidencing Fractional Undivided Interests
aggregating not less than 51% of the Trust Fund may at any time remove the
Trustee, the Paying Agent or the Securities Administrator and appoint a
successor Trustee, Paying Agent or Securities Administrator by written
instrument or instruments, in sextuplicate, signed by such Holders or their
attorneys-in-fact duly authorized, one complete set of which instruments shall
be delivered to the Depositor, the Paying Agent, the Master Servicer, the
Securities Administrator (if the Trustee is removed), the Trustee (if the
Securities Administrator or the Paying Agent is removed), and the Trustee,
Paying Agent or Securities Administrator so removed and the successor so
appointed. Notice of any removal of the Trustee or the Securities Administrator
shall be given to each Rating Agency by the Master Servicer or the successor
trustee, or by the Securities Administrator or the successor securities
administrator, as applicable. In the event that the Trustee, the Paying Agent or
the Securities Administrator is removed by the Holders of Certificates in
accordance with this Section 9.08(c), the Holders of such Certificates shall be
responsible for paying any compensation payable to a successor Trustee,
successor Paying Agent or successor Securities Administrator, in excess of the
amount paid to the predecessor Trustee, predecessor Paying Agent or predecessor
Securities Administrator, as applicable.
(d) No resignation or removal of the Trustee, the Paying Agent or the
Securities Administrator and appointment of a successor Trustee, Paying Agent or
Securities Administrator pursuant to any of the provisions of this Section 9.08
shall become effective except upon appointment of and acceptance of such
appointment by the successor Trustee, Paying Agent or Securities Administrator
as provided in Section 9.09.
Section 9.09. Successor Trustee, Paying Agent and Successor Securities
Administrator. (a) Any successor Trustee, Paying Agent or Securities
Administrator appointed as provided in
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Section 9.08 shall execute, acknowledge and deliver to the Depositor and to
its predecessor Trustee, Paying Agent or Securities Administrator, as
applicable, and the Master Servicer an instrument accepting such appointment
hereunder. The resignation or removal of the predecessor Trustee, Paying Agent
or Securities Administrator shall then become effective and such successor
Trustee, Paying Agent or Securities Administrator, without any further act, deed
or conveyance, shall become fully vested with all the rights, powers, duties and
obligations of its predecessor hereunder, with like effect as if originally
named as Trustee, Paying Agent or Securities Administrator herein. The
predecessor Trustee, Paying Agent or Securities Administrator shall, after its
receipt of payment of its outstanding fees and expenses with respect hereunder,
promptly deliver to the successor Trustee, Paying Agent or Securities
Administrator, as applicable, all assets and records of the Trust held by it
hereunder, and the Depositor and the predecessor Trustee, Paying Agent or
Securities Administrator, as applicable, shall execute and deliver such
instruments and do such other things as may reasonably be required for more
fully and certainly vesting and confirming in the successor Trustee, Paying
Agent or Securities Administrator, as applicable, all such rights, powers,
duties and obligations.
(b) No successor Trustee, Paying Agent or Securities Administrator shall
accept appointment as provided in this Section 9.09 unless at the time of such
acceptance such successor Trustee, Paying Agent or Securities Administrator
shall be eligible under the provisions of Section 9.06.
(c) Upon acceptance of appointment by a successor Trustee, Paying Agent or
Securities Administrator as provided in this Section 9.09, the successor
Trustee, Paying Agent or Securities Administrator shall mail notice of the
succession of such Trustee, Paying Agent or Securities Administrator hereunder
to all Certificateholders at their addresses as shown in the Certificate
Register and to the Rating Agencies. EMC shall pay the cost of any such mailing
by the successor Trustee, Paying Agent or Securities Administrator.
Section 9.10. Merger or Consolidation of Trustee, Paying Agent or
Securities Administrator. Any state bank or trust company or national banking
association into which the Trustee, the Paying Agent or the Securities
Administrator may be merged or converted or with which it may be consolidated,
or any state bank or trust company or national banking association resulting
from any merger, conversion or consolidation to which the Trustee, the Paying
Agent or the Securities Administrator, respectively, shall be a party, or any
state bank or trust company or national banking association succeeding to all or
substantially all of the corporate trust business of the Trustee, the Paying
Agent or the Securities Administrator, respectively, shall be the successor of
the Trustee, the Paying Agent or the Securities Administrator, respectively,
hereunder, provided such state bank or trust company or national banking
association shall be eligible under the provisions of Section 9.06. Such
succession shall be valid without the execution or filing of any paper or any
further act on the part of any of the parties hereto, anything herein to the
contrary notwithstanding.
Section 9.11. Appointment of Co-Trustee or Separate Trustee. (a)
Notwithstanding any other provisions hereof, at any time, for the purpose of
meeting any legal requirements of any jurisdiction in which any part of the
Trust or property constituting the same may at the time be located, the
Depositor and the Trustee acting jointly shall have the power and shall execute
and deliver all instruments to appoint one or more Persons approved by the
Trustee and the Depositor
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to act as co-trustee or co-trustees, jointly with the Trustee, or separate
trustee or separate trustees, of all or any part of the Trust, and to vest in
such Person or Persons, in such capacity and for the benefit of the
Certificateholders such title to the Trust, or any part thereof, and, subject to
the other provisions of this Section 9.11, such powers, duties, obligations,
rights and trusts as the Depositor and the Trustee may consider necessary or
desirable.
(b) If the Depositor shall not have joined in such appointment within 15
days after the receipt by it of a written request so to do, the Trustee shall
have the power to make such appointment without the Depositor.
(c) No co-trustee or separate trustee hereunder shall be required to meet
the terms of eligibility as a successor Trustee under Section 9.06 hereunder and
no notice to Certificateholders of the appointment of co-trustee(s) or separate
trustee(s) shall be required under Section 9.08 hereof.
(d) In the case of any appointment of a co-trustee or separate trustee
pursuant to this Section 9.11, all rights, powers, duties and obligations
conferred or imposed upon the Trustee (except for the obligation of the Trustee
under this Agreement to advance funds on behalf of the Master Servicer) and
required to be conferred on such co-trustee shall be conferred or imposed upon
and exercised or performed by the Trustee and such separate trustee or
co-trustee jointly (it being understood that such separate trustee or co-trustee
is not authorized to act separately without the Trustee joining in such act),
except to the extent that under any law of any jurisdiction in which any
particular act or acts are to be performed (whether as Trustee hereunder or as
successor to the Master Servicer hereunder), the Trustee shall be incompetent or
unqualified to perform such act or acts, in which event such rights, powers,
duties and obligations (including the holding of title to the Trust or any
portion thereof in any such jurisdiction) shall be exercised and performed by
such separate trustee or co-trustee at the direction of the Trustee.
(e) Any notice, request or other writing given to the Trustee shall be
deemed to have been given to each of the then separate trustees and co-trustees,
as effectively as if given to each of them. Every instrument appointing any
separate trustee or co-trustee shall refer to this Agreement and the conditions
of this Article IX. Each separate trustee and co-trustee, upon its acceptance of
the trusts conferred, shall be vested with the estates or property specified in
its instrument of appointment, either jointly with the Trustee or separately, as
may be provided therein, subject to all the provisions of this Agreement,
specifically including every provision of this Agreement relating to the conduct
of, affecting the liability of, or affording protection to, the Trustee. Every
such instrument shall be filed with the Trustee.
(f) To the extent not prohibited by law, any separate trustee or co-trustee
may, at any time, request the Trustee, or its agent or attorney-in-fact, with
full power and authority, to do any lawful act under or with respect to this
Agreement on its behalf and in its name. If any separate 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.
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(g) No trustee under this Agreement shall be personally liable by reason of
any act or omission of another trustee under this Agreement. The Depositor and
the Trustee acting jointly may at any time accept the resignation of or remove
any separate trustee or co-trustee.
Section 9.12. Federal Information Returns and Reports to
Certificateholders; REMIC Administration. (a) For federal income tax purposes,
the taxable year of each of REMIC I, REMIC II and REMIC III shall be a calendar
year and the Securities Administrator shall maintain or cause the maintenance of
the books of each such REMIC on the accrual method of accounting.
(b) (i) The Securities Administrator shall prepare and file or cause to be
filed with the Internal Revenue Service, and the Trustee shall sign, Federal tax
information returns or elections required to be made hereunder with respect to
each REMIC, the Trust Fund, if applicable, and the Certificates, containing such
information and at the times and in the manner as may be required by the Code or
applicable Treasury regulations, and shall furnish to each Holder of
Certificates at any time during the calendar year for which such returns or
reports are made such statements or information at the times and in the manner
as may be required thereby, including, without limitation, reports relating to
interest, original issue discount and market discount or premium (using a
constant prepayment assumption of 25% CPR). The Securities Administrator shall
apply for an Employee Identification Number from the IRS under Form SS-4 or any
other acceptable method for all tax entities. In connection with the foregoing,
the Securities Administrator shall timely prepare and file, and the Trustee
shall sign, IRS Form 8811, and updated versions thereof, as required, which
shall provide the name and address of the person who can be contacted to obtain
information required to be reported to the holders of regular interests in each
REMIC. The Trustee shall make elections to treat each REMIC hereunder as a REMIC
(which elections shall apply to the taxable period ending December 31, 2005 and
each calendar year thereafter) in such manner as the Code or applicable Treasury
regulations may prescribe (and, if applicable, under applicable state and local
law), and as described by the Securities Administrator. The Trustee shall sign
all tax information returns filed pursuant to this Section 9.12 and any other
returns as may be required by the Code. The Holder of the largest percentage
interest of the Class R-I Certificate is hereby designated as the "Tax Matters
Person" (within the meaning of Treas. Reg. ss.1.860F-4(d)) for REMIC I, the
Holder of the largest percentage interest of the Class R-II Certificate is
hereby designated as the "Tax Matters Person" (within the meaning of Treas. Reg.
ss. 1.860F-4(d)) for REMIC II, and the Holder of the largest percentage interest
of the Class R-III Certificate is hereby designated as the "Tax Matters Person"
(within the meaning of Treas. Reg. ss. 1.860F-4(d)) for REMIC III. The
Securities Administrator is hereby designated and appointed as the agent of each
such Tax Matters Person. Any Holder of a Residual Certificate will by acceptance
thereof appoint the Securities Administrator as agent and attorney-in-fact for
the purpose of acting as Tax Matters Person for each REMIC during such time as
the Securities Administrator does not own any such Residual Certificate. In the
event that the Code or applicable Treasury regulations prohibit the Trustee from
signing tax or information returns or other statements, or the Securities
Administrator from acting as agent for the Tax Matters Person, each of the
Trustee and the Securities Administrator shall take whatever action that in its
sole good faith judgment is necessary for the proper filing of such information
returns or for the provision of a Tax Matters Person for each REMIC, including
designation of the Holder of a Residual Certificate to sign
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such returns or act as Tax Matters Person for each REMIC. Each Holder of a
Residual Certificate shall be bound by this Section.
(ii) The Securities Administrator shall, to the extent that they are
under its control, conduct matters relating to the assets of any REMIC
hereunder at all times that any Certificates are outstanding so as to
maintain its status as a REMIC under the REMIC Provisions. The Securities
Administrator shall not knowingly or intentionally take any action or omit
to take any action that would cause the termination of the REMIC status of
any REMIC hereunder. The Securities Administrator shall not permit the
creation of any interests in REMIC III other than the Certificates. The
Securities Administrator shall not receive any amount representing a fee or
other compensation for services (except as otherwise permitted by this
Agreement). The Securities Administrator shall not receive any income
attributable to any asset which is neither a "qualified mortgage" nor a
"permitted investment" within the meaning of the REMIC Provisions. The
Securities Administrator shall not receive any contributions to any REMIC
hereunder after the Startup Day that would be subject to tax under Section
860G(d) of the Code. The Securities Administrator shall not dispose of any
assets of any REMIC hereunder at a gain if such disposition would be a
"prohibited transaction" within the meaning of Section 860F(a)(2) of the
Code. As agent of each Tax Matters Person, the Securities Administrator
shall, as and when necessary and appropriate, represent the related REMIC
in any administrative or judicial proceedings relating to an examination or
audit by any governmental taxing authority, request an administrative
adjustment as to any taxable year of such REMIC, enter into settlement
agreements with any governmental taxing agency, extend any statute of
limitations relating to any tax item of such REMIC, and otherwise act on
behalf of such REMIC in relation to any tax matter or controversy involving
it.
(c) The Securities Administrator shall provide, upon request and receipt of
reasonable compensation, such information as required in Section 860D(a)(6)(B)
of the Code to the Internal Revenue Service, to any Person purporting to
transfer a Residual Certificate to a Person other than a transferee permitted by
Section 5.05(b), and to any regulated investment company, real estate investment
trust, common trust fund, partnership, trust, estate, organization described in
Section 1381 of the Code, or nominee holding an interest in a pass-through
entity described in Section 860E(e)(6) of the Code, or any record holder of
which is not a transferee permitted by Section 5.05(b) (or which is deemed by
statute to be an entity with a disqualified member) and otherwise shall comply
with all of the requirements of Section 860E(e) of the Code.
(d) The Securities Administrator shall prepare and file or cause to be
filed, and the Trustee shall sign, any state income tax returns required under
Applicable State Law with respect to each REMIC or the Trust Fund.
(e) Notwithstanding any other provision of this Agreement, the Trustee and
the Securities Administrator shall comply with all federal withholding
requirements respecting payments to Certificateholders of interest or original
issue discount on the Mortgage Loans, that the Trustee or the Securities
Administrator reasonably believes are applicable under the Code. The consent of
Certificateholders shall not be required for such withholding. In the event the
Trustee or the Securities Administrator withholds any amount from interest or
original issue
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discount payments or advances thereof to any Certificateholder pursuant to
federal withholding requirements, the Trustee or the Securities Administrator
shall, together with its monthly report to such Certificateholders, indicate
such amount withheld.
(f) The Trustee and the Securities Administrator agree to indemnify the
Trust Fund and the Depositor for any taxes and costs, including, without
limitation, any reasonable attorneys fees, imposed on or incurred by the Trust
Fund, the Depositor or the Master Servicer as a result of a breach of the
Trustee's covenants or the Securities Administrator's covenants, respectively,
set forth in this Section 9.12; provided, however, such liability and obligation
to indemnify in this paragraph shall not be joint and several and neither the
Trustee nor the Securities Administrator shall be liable or be obligated to
indemnify the Trust Fund for the failure by the other to perform any duty under
this Agreement or the breach by the other of any covenant in this Agreement.
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ARTICLE X
Termination
Xxxxxxx 00.00. Xxxxxxxxxxx Xxxx Xxxxxxxxxx by the Depositor or its Designee
or Liquidation of the Mortgage Loans. (a) Subject to Section 10.02, the
respective obligations and responsibilities of the Depositor, the Trustee, the
Paying Agent, the Master Servicer, EMC and the Securities Administrator created
hereby, other than the obligation of the Paying Agent to make payments to
Certificateholders as hereinafter set forth, shall terminate upon the earlier
of:
(i) in accordance with Section 10.01(c), the repurchase by or at the
direction of the Depositor or its designee of all of the Mortgage Loans and
all related REO Property remaining in the Trust at a price (the
"Termination Purchase Price") equal to the sum of (a) 100% of the
Outstanding Principal Balance of each Mortgage Loan (other than a Mortgage
Loan related to REO Property) as of the date of repurchase, net of the
principal portion of any unreimbursed Monthly Advances made by the
purchaser, together with interest at the applicable Mortgage Interest Rate
accrued but unpaid to, but not including, the first day of the month of
repurchase, (b) the appraised value of any related REO Property, less the
good faith estimate of the Depositor of liquidation expenses to be incurred
in connection with its disposal thereof (but not more than the Outstanding
Principal Balance of the related Mortgage Loan, together with interest at
the applicable Mortgage Interest Rate accrued on that balance but unpaid
to, but not including, the first day of the month of repurchase), such
appraisal to be calculated by an appraiser mutually agreed upon by the
Depositor and the Trustee at the expense of the Depositor, (c) unreimbursed
out-of pocket costs of the related Servicer and the Master Servicer,
including unreimbursed servicing advances and the principal portion of any
unreimbursed Monthly Advances, made on the Mortgage Loans prior to the
exercise of such repurchase right, (d) any costs and damages incurred by
the Trust in connection with any violation of such Mortgage Loan of any
predatory or abusive lending laws and (e) any unreimbursed costs and
expenses of the Trustee and the Securities Administrator payable pursuant
to Section 9.05; or
(ii) the later of (A) the making of the final payment or other
liquidation, or any advance with respect thereto, of the last Mortgage Loan
remaining in the Trust Fund and (B) the disposition of all property
acquired with respect to any Mortgage Loan; provided, however, that in the
event that an advance has been made, but not yet recovered, at the time of
such termination, the Person having made such advance shall be entitled to
receive, notwithstanding such termination, any payments received subsequent
thereto with respect to which such advance was made; or
(iii) the payment to Certificateholders of all amounts required to be
paid to them pursuant to this Agreement.
(b) In no event, however, shall the Trust created hereby continue beyond
the expiration of 21 years from the death of the last survivor of the
descendants of Xxxxxx X. Xxxxxxx, the late Ambassador of the United States to
the Court of St. James's, living on the date of this Agreement.
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(c) The right of the Depositor or its designee to repurchase all of the
assets of the Trust Fund pursuant to Subsection 10.01(a)(i) above shall be
exercisable only if (i) the aggregate Scheduled Principal Balance of the
Mortgage Loans at the time of any such repurchase is less than or equal to 10%
of the Cut-off Date Balance, or (ii) the Depositor, based upon an Opinion of
Counsel addressed to the Depositor, the Trustee and the Securities
Administrator, has determined that the REMIC status of a REMIC hereunder has
been lost or that a substantial risk exists that such REMIC status will be lost
for the then-current taxable year. At any time thereafter, in the case of (i) or
(ii) above, the Depositor may elect to terminate REMIC I, REMIC II or REMIC III
at any time, and upon such election, the Depositor or its designee shall
repurchase all of the assets of the Trust Fund as described in Subsection
10.01(a)(i) above.
(d) The Paying Agent shall give notice of any termination to the
Certificateholders, with a copy to the Master Servicer, the Securities
Administrator and the Rating Agencies, upon which the Certificateholders shall
surrender their Certificates to the Paying Agent for payment of the final
distribution and cancellation. Such notice shall be given by letter, mailed not
earlier than the 15th day and not later than the 25th day of the month next
preceding the month of such final distribution, and shall specify (i) the
Distribution Date upon which final payment of the Certificates will be made upon
presentation and surrender of the Certificates at the office of the Paying Agent
therein designated, (ii) the amount of any such final payment and (iii) that the
Record Date otherwise applicable to such Distribution Date is not applicable,
payments being made only upon presentation and surrender of the Certificates at
the office of the Paying Agent therein specified.
(e) If the option of the Depositor to repurchase or cause the repurchase of
all of the assets of the Trust Fund as described in Subsection 10.01 (a)(i)
above is exercised, the Depositor and/or its designee shall deliver to the
Paying Agent for deposit in the Distribution Account, by the Business Day prior
to the applicable Distribution Date, an amount equal to the Termination Purchase
Price. Upon presentation and surrender of the Certificates by the
Certificateholders, the Paying Agent shall distribute to the Certificateholders,
as directed by the Securities Administrator in writing, an amount determined as
follows: with respect to each Certificate (other than the Class R Certificates),
the outstanding Current Principal Amount, plus with respect to each Certificate
(other than the Class R Certificates), one month's interest thereon at the
applicable Pass-Through Rate; and with respect to the Class R Certificates, the
percentage interest evidenced thereby multiplied by the difference, if any,
between the above described repurchase price and the aggregate amount to be
distributed to the Holders of the Certificates (other than the Class R
Certificates). If the proceeds with respect to the Group I Mortgage Loans are
not sufficient to pay all of the Group I Senior Certificates (other than the
Residual Certificates) in full, any such deficiency will be allocated first, to
the Subordinate Certificates, in inverse order of their payment priority, and
then to the Group I Senior Certificates (other than the Residual Certificates),
in each case on a pro rata basis. If the proceeds with respect to the Group II
Mortgage Loans are not sufficient to pay all of the Group II Senior Certificates
in full, any such deficiency will be allocated first, to the Subordinate
Certificates, in inverse order of their payment priority, and then to the Group
II Senior Certificates, in each case on a pro rata basis. If the proceeds with
respect to the Group III Mortgage Loans are not sufficient to pay all of the
Group III Senior Certificates in full, any such deficiency will be allocated
first, to the Subordinate Certificates, in inverse order of their payment
priority, and then to the Group III Senior Certificates, in each case on a pro
rata basis. Upon deposit of the required repurchase
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price and following such final Distribution Date relating thereto, the
Trustee shall release promptly to the Depositor and/or its designee the Mortgage
Files for the remaining applicable Mortgage Loans, and the Accounts with respect
thereto shall terminate, subject to the Paying Agent's obligation to hold any
amounts payable to Certificateholders in trust without interest pending final
distributions pursuant to Subsection 10.01(f) and (g). After final distributions
pursuant to Section 10.01(f) and (g) to all Certificateholders, any other
amounts remaining in the Accounts will belong to the Depositor.
(f) Upon the presentation and surrender of the Certificates, the Paying
Agent shall distribute to the remaining Certificateholders, pursuant to the
written direction of the Securities Administrator and in accordance with their
respective interests, all distributable amounts remaining in the Distribution
Account.
(g) If not all of the Certificateholders shall surrender their Certificates
for cancellation within six months after the time specified in the
above-mentioned written notice, the Paying Agent shall give a second written
notice to the remaining Certificateholders to surrender their Certificates for
cancellation and receive the final distribution with respect thereto. If within
six months after the second notice not all the Certificates shall have been
surrendered for cancellation, the Paying Agent may take appropriate steps, or
appoint any agent to take appropriate steps, to contact the remaining
Certificateholders concerning surrender of their Certificates, and the cost
thereof shall be paid out of the funds and other assets which remain subject to
this Agreement.
Section 10.02. Additional Termination Requirements. (a) If the option of
the Depositor to repurchase all the Mortgage Loans under Subsection 10.01(a)(i)
above is exercised, the Trust Fund and each of REMIC I, REMIC II and REMIC III
shall be terminated in accordance with the following additional requirements,
unless the Trustee has been furnished with an Opinion of Counsel to the effect
that the failure of the Trust to comply with the requirements of this Section
10.02 will not (i) result in the imposition of taxes on "prohibited
transactions" as defined in Section 860F of the Code on REMIC I, REMIC II or
REMIC III or (ii) cause any REMIC to fail to qualify as a REMIC at any time that
any Certificates are outstanding:
(i) within 90 days prior to the final Distribution Date, at the
written direction of the Depositor, the Trustee, as agent for the
respective Tax Matters Persons, shall adopt a plan of complete liquidation
of REMIC I, REMIC II and REMIC III provided to it by the Depositor meeting
the requirements of a "qualified liquidation" under Section 860F of the
Code and any regulations thereunder;
(ii) the Depositor shall notify the Trustee at the commencement of
such 90-day liquidation period and, at or prior to the time of making of
the final payment on the Certificates, the Trustee shall sell or otherwise
dispose of all of the remaining assets of the Trust Fund in accordance with
the terms hereof; and
(iii) at or after the time of adoption of such a plan of complete
liquidation of any of REMIC I, REMIC II and REMIC III and at or prior to
the final Distribution Date relating thereto, the Trustee shall sell for
cash all of the assets of the Trust to or at the
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direction of the Depositor, and REMIC I, REMIC II and REMIC III, as
applicable, shall terminate at such time.
(b) By their acceptance of the Residual Certificates, the Holders thereof
hereby (i) agree to adopt such a plan of complete liquidation of the related
REMIC upon the written request of the Depositor and to take such action in
connection therewith as may be reasonably requested by the Depositor and (ii)
appoint the Depositor as their attorney-in-fact, with full power of
substitution, for purposes of adopting such a plan of complete liquidation. The
Trustee shall adopt such plan of liquidation by filing the appropriate statement
on the final tax return of each REMIC. Upon complete liquidation or final
distribution of all of the assets of the Trust Fund, the Trust Fund and each of
REMIC I, REMIC II and REMIC III shall terminate.
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ARTICLE XI
Miscellaneous Provisions
Section 11.01. Intent of Parties. The parties intend that each of REMIC I,
REMIC II and REMIC III shall be treated as a REMIC for federal income tax
purposes and that the provisions of this Agreement should be construed in
furtherance of this intent.
It is the express intent of the parties hereto that the conveyance of the
Mortgage Notes, Mortgages, assignments of Mortgages, title insurance policies
and any modifications, extensions and/or assumption agreements and private
mortgage insurance policies relating to the Mortgage Loans by the Seller to the
Depositor, and by the Depositor to the Trust be, and be construed as, an
absolute sale thereof to the Depositor or the Trust, as applicable. It is,
further, not the intention of the parties that such conveyance be deemed a
pledge thereof by the Seller to the Depositor, or by the Depositor to the Trust.
However, in the event that, notwithstanding the intent of the parties, such
assets are held to be the property of the Seller or the Depositor, as
applicable, or if for any other reason this Agreement is held or deemed to
create a security interest in such assets, then (i) this Agreement shall be
deemed to be a security agreement within the meaning of the Uniform Commercial
Code of the State of New York, (ii) each conveyance provided for in this
Agreement shall be deemed to be an assignment and a grant by the Seller or the
Depositor, as applicable, for the benefit of the Certificateholders, of a
security interest in all of the assets that constitute the Trust Fund, whether
now owned or hereafter acquired, (iii) the possession by the Trustee or the
Custodian of the Mortgage Notes and such other items of property as may be
perfected by possession pursuant to Section 9-313 (or comparable provision) of
the applicable Uniform Commercial Code shall be deemed to be "possession by the
secured party" for purposes of effecting the security interest pursuant to such
section of the applicable Uniform Commercial Code and other applicable law. Any
assignment of the Seller and the Depositor shall also be deemed to be an
assignment of any security interest created hereby.
Each of the Seller and the Depositor for the benefit of the
Certificateholders shall, to the extent consistent with this Agreement, take
such actions as may be necessary to ensure that, if this Agreement were deemed
to create a security interest in the assets of the Trust Fund, such security
interest would be deemed to be a perfected security interest of first priority
under applicable law and will be maintained as such throughout the term of the
Agreement.
Section 11.02. Amendment. (a) This Agreement may be amended from time to
time by EMC, the Depositor, the Master Servicer, the Securities Administrator
and the Trustee, and the Servicing Agreements may be amended from time to time
by EMC, the Master Servicer and the Trustee, without notice to or the consent of
any of the Certificateholders, to (i) cure any ambiguity, (ii) conform the terms
hereof to the disclosure in the Prospectus or the Prospectus Supplement, (iii)
correct or supplement any provisions herein that may be defective or
inconsistent with any other provisions herein, (iv) comply with any changes in
the Code or (v) make any other provisions with respect to matters or questions
arising under this Agreement or the Servicing Agreements which shall not be
inconsistent with the provisions of this Agreement; provided, however, that with
regard to clauses (iv) and (v) of this Section 11.02(a), such action shall not,
as evidenced by an Opinion of Independent Counsel, addressed to the Trustee,
adversely affect in any material respect the interests of any Certificateholder.
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(b) This Agreement may also be amended from time to time by EMC, the Master
Servicer, the Depositor, the Securities Administrator and the Trustee, and the
Servicing Agreements may also be amended from time to time by the Master
Servicer and the Trustee, with the consent of the Holders of Certificates
evidencing Fractional Undivided Interests aggregating not less than 51% of the
Trust Fund or of the applicable Class or Classes of Certificates, if such
amendment affects only such Class or Classes of Certificates, for the purpose of
adding any provisions to or changing in any manner or eliminating any of the
provisions of this Agreement or the Servicing Agreements or of modifying in any
manner the rights of the Certificateholders; provided, however, that no such
amendment shall (i) reduce in any manner the amount of, or delay the timing of,
payments received on Mortgage Loans which are required to be distributed on any
Certificate without the consent of the Holder of such Certificate, (ii) reduce
the aforesaid percentage of Certificates the Holders of which are required to
consent to any such amendment, without the consent of the Holders of all
Certificates then outstanding, or (iii) cause REMIC I, REMIC II or REMIC III to
fail to qualify as a REMIC for federal income tax purposes, as evidenced by an
Opinion of Independent Counsel which shall be provided to the Trustee other than
at the Trustee's expense. Notwithstanding any other provision of this Agreement,
for purposes of the giving or withholding of consents pursuant to Section
11.02(b), Certificates registered in the name of or held for the benefit of the
Depositor, the Securities Administrator, the Master Servicer, or the Trustee or
any Affiliate thereof shall be entitled to vote their Fractional Undivided
Interests with respect to matters affecting such Certificates.
(c) Promptly after the execution of any such amendment, the Trustee shall
furnish a copy of such amendment or written notification of the substance of
such amendment to each Certificateholder, with a copy to the Rating Agencies.
(d) In the case of an amendment under Subsection 11.02(b) above, it shall
not be necessary for the Certificateholders to approve the particular form of
such an amendment. Rather, it shall be sufficient if the Certificateholders
approve the substance of the amendment. The manner of obtaining such consents
and of evidencing the authorization of the execution thereof by
Certificateholders shall be subject to such reasonable regulations as the
Trustee may prescribe.
(e) Prior to the execution of any amendment to this Agreement, the Trustee
shall be entitled to receive and rely upon an Opinion of Counsel stating that
the execution of such amendment is authorized or permitted by this Agreement.
The Trustee and the Securities Administrator may, but shall not be obligated to,
enter into any such amendment which affects the Trustee's or the Securities
Administrator's own respective rights, duties or immunities under this
Agreement.
Section 11.03. Recordation of Agreement. To the extent permitted by
applicable law, this Agreement is subject to recordation in all appropriate
public offices for real property records in all the counties or other comparable
jurisdictions in which any or all of the Mortgaged Properties are situated, and
in any other appropriate public recording office or elsewhere. The Depositor
shall effect such recordation at the expense of the Trust upon the request in
writing of a Certificateholder, but only if such direction is accompanied by an
Opinion of Counsel (provided at the expense of the Certificateholder requesting
recordation) to the effect that such
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recordation would materially and beneficially affect the interests of the
Certificateholders or is required by law.
Section 11.04. Limitation on Rights of Certificateholders. (a) The death or
incapacity of any Certificateholder shall not terminate this Agreement or the
Trust, nor entitle such Certificateholder's legal representatives or heirs to
claim an accounting or to take any action or proceeding in any court for a
partition or winding up of the Trust, nor otherwise affect the rights,
obligations and liabilities of the parties hereto or any of them.
(b) Except as expressly provided in this Agreement, no Certificateholders
shall have any right to vote or in any manner otherwise control the operation
and management of the Trust, or the obligations of the parties hereto, nor shall
anything herein set forth, or contained in the terms of the Certificates, be
construed so as to establish the Certificateholders from time to time as
partners or members of an association; nor shall any Certificateholders be under
any liability to any third Person by reason of any action taken by the parties
to this Agreement pursuant to any provision hereof.
(c) No Certificateholder shall have any right by virtue of any provision of
this Agreement to institute any suit, action or proceeding in equity or at law
upon, under or with respect to this Agreement against the Depositor, the
Securities Administrator, the Master Servicer or any successor to any such
parties unless (i) such Certificateholder previously shall have given to the
Trustee a written notice of a continuing default, as herein provided, (ii) the
Holders of Certificates evidencing Fractional Undivided Interests aggregating
not less than 51% of the Trust Fund shall have made written request upon the
Trustee to institute such action, suit or proceeding in its own name as Trustee
hereunder and shall have offered to the Trustee such reasonable indemnity as it
may require against the costs and expenses and liabilities to be incurred
therein or thereby, and (iii) the Trustee, for 60 days after its receipt of such
notice, request and offer of indemnity, shall have neglected or refused to
institute any such action, suit or proceeding.
(d) No one or more Certificateholders shall have any right by virtue of any
provision of this Agreement to affect the rights of any other Certificateholders
or to obtain or seek to obtain priority or preference over any other such
Certificateholder, or to enforce any right under this Agreement, except in the
manner herein provided and for the equal, ratable and common benefit of all
Certificateholders. For the protection and enforcement of the provisions of this
Section 11.04, each and every Certificateholder and the Trustee shall be
entitled to such relief as can be given either at law or in equity.
Section 11.05. Acts of Certificateholders. (a) Any request, demand,
authorization, direction, notice, consent, waiver or other action provided by
this Agreement to be given or taken by Certificateholders may be embodied in and
evidenced by one or more instruments of substantially similar tenor signed by
such Certificateholders in person or by an agent duly appointed in writing.
Except as herein otherwise expressly provided, such action shall become
effective when such instrument or instruments are delivered to the Trustee and,
where it is expressly required, to the Depositor. Proof of execution of any such
instrument or of a writing appointing any such agent shall be sufficient for any
purpose of this Agreement and conclusive in favor of the Trustee and the
Depositor, if made in the manner provided in this Section 11.05.
137
(b) The fact and date of the execution by any Person of any such instrument
or writing may be proved by the affidavit of a witness of such execution or by a
certificate of a notary public or other officer authorized by law to take
acknowledgments of deeds, certifying that the individual signing such instrument
or writing acknowledged to him the execution thereof. Where such execution is by
a signer acting in a capacity other than his or her individual capacity, such
certificate or affidavit shall also constitute sufficient proof of his or her
authority. The fact and date of the execution of any such instrument or writing,
or the authority of the individual executing the same, may also be proved in any
other manner which the Trustee deems sufficient.
(c) The ownership of Certificates (notwithstanding any notation of
ownership or other writing on such Certificates, except an endorsement in
accordance with Section 5.02 made on a Certificate presented in accordance with
Section 5.04) shall be proved by the Certificate Register, and neither the
Trustee, the Depositor, the Securities Administrator, the Master Servicer nor
any successor to any such parties shall be affected by any notice to the
contrary.
(d) Any request, demand, authorization, direction, notice, consent, waiver
or other action of the holder of any Certificate shall bind every future holder
of the same Certificate and the holder of every Certificate issued upon the
registration of transfer or exchange thereof, if applicable, or in lieu thereof
with respect to anything done, omitted or suffered to be done by the Trustee,
the Securities Administrator, the Depositor, the Master Servicer or any
successor to any such party in reliance thereon, whether or not notation of such
action is made upon such Certificates.
(e) In determining whether the Holders of the requisite percentage of
Certificates evidencing Fractional Undivided Interests have given any request,
demand, authorization, direction, notice, consent or waiver hereunder,
Certificates owned by the Trustee, the Securities Administrator, the Depositor,
the Master Servicer or any Affiliate thereof shall be disregarded, except as
otherwise provided in Section 11.02(b) and except that, in determining whether
the Trustee shall be protected in relying upon any such request, demand,
authorization, direction, notice, consent or waiver, only Certificates which the
Trustee knows to be so owned shall be so disregarded. Certificates which have
been pledged in good faith to the Trustee, the Securities Administrator, the
Depositor, the Master Servicer or any Affiliate thereof may be regarded as
outstanding if the pledgor establishes to the satisfaction of the Trustee the
pledgor's right to act with respect to such Certificates and that the pledgor is
not an Affiliate of the Trustee, the Securities Administrator, the Depositor, or
the Master Servicer, as the case may be.
Section 11.06. GOVERNING LAW. THIS AGREEMENT AND THE CERTIFICATES SHALL BE
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT REFERENCE
TO ITS CONFLICT OF LAWS RULES (OTHER THAN SECTION 5-1401 OF THE GENERAL
OBLIGATIONS LAW, WHICH THE PARTIES HERETO EXPRESSLY RELY UPON IN THE CHOICE OF
SUCH LAW AS THE GOVERNING LAW HEREUNDER) AND THE OBLIGATIONS, RIGHTS AND
REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH
LAWS.
138
Section 11.07. Notices. All demands and notices hereunder shall be in
writing and shall be deemed given when delivered at (including delivery by
facsimile) or mailed by registered mail, return receipt requested, postage
prepaid, or by recognized overnight courier, to (i) in the case of the
Depositor, 000 Xxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Vice
President-Servicing, telecopier number: (000) 000-0000, or to such other address
as may hereafter be furnished to the other parties hereto in writing; (ii) in
the case of the Trustee, at its Corporate Trust Office, or such other address as
may hereafter be furnished to the other parties hereto in writing; (iii) in the
case of EMC Mortgage Xxxxxxxxxxx, XXX Mortgage Corporation, 000 Xxxxxxx Xxxxxx,
Xxx Xxxx, Xxx Xxxx 00000, Attention: Vice President - Servicing, telecopier
number (000) 000-0000, or to such other address as may hereafter be furnished to
the other parties hereto in writing; (iv) in the case of the Master Servicer,
Paying Agent or Securities Administrator, Xxxxx Fargo Bank, National
Association, X.X. Xxx 00, Xxxxxxxx, Xxxxxxxx 00000 and for overnight delivery to
0000 Xxx Xxxxxxxxx Xxxx, Xxxxxxxx, Xxxxxxxx 00000 (Attention: XXXX XX 2005-AR2),
telecopier no.: (000) 000-0000, or such other address as may hereafter be
furnished to the other parties hereto in writing; (v) in the case of the
Certificate Registrar, the Certificate Registrar Office; or (vi) in the case of
the Rating Agencies, Xxxxx'x Investors Service, Inc., 00 Xxxxxx Xxxxxx, 0xx
Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, and Standard & Poor's, a division of The
XxXxxx-Xxxx Companies, Inc., 00 Xxxxx Xxxxxx, 00xx Xxxxx, Xxx Xxxx, Xxx Xxxx,
00000, Attention: Residential Mortgage Surveillance, or such other address as
may be furnished to the parties hereto in writing. Any notice delivered to the
Depositor, the Master Servicer, the Securities Administrator, EMC or the Trustee
under this Agreement shall be effective only upon receipt. Any notice required
or permitted to be mailed to a Certificateholder, unless otherwise provided
herein, shall be given by first-class mail, postage prepaid, at the address of
such Certificateholder as shown in the Certificate Register. Any notice so
mailed within the time prescribed in this Agreement shall be conclusively
presumed to have been duly given when mailed, whether or not the
Certificateholder receives such notice.
Section 11.08. Severability of Provisions. If any one or more of the
covenants, agreements, provisions or terms of this Agreement shall be for any
reason whatsoever held invalid, then such covenants, agreements, provisions or
terms shall be deemed severed from the remaining covenants, agreements,
provisions or terms of this Agreement and shall in no way affect the validity or
enforceability of the other provisions of this Agreement or of the Certificates
or the rights of the holders thereof.
Section 11.09. Successors and Assigns. The provisions of this Agreement
shall be binding upon and inure to the benefit of the respective successors and
assigns of the parties hereto.
Section 11.10. Article and Section Headings. The article and section
headings herein are for convenience of reference only, and shall not limit or
otherwise affect the meaning hereof.
Section 11.11. Counterparts. This Agreement may be executed in two or more
counterparts, each of which when so executed and delivered shall be an original
but all of which together shall constitute one and the same instrument.
Section 11.12. Notice to Rating Agencies. The Trustee shall promptly
provide notice to each Rating Agency with respect to each of the following of
which it has actual knowledge:
139
1. Any material change or amendment to this Agreement or a Servicing
Agreement;
2. The occurrence of any Event of Default that has not been cured;
3. The resignation or termination of the Master Servicer, the Trustee or
the Securities Administrator;
4. The repurchase or substitution of Mortgage Loans;
5. The final payment to Certificateholders; and
6. Any change in the location of the Distribution Account.
[Signature page follows]
140
IN WITNESS WHEREOF, the Depositor, the Trustee, the Master Servicer, the
Securities Administrator and EMC Mortgage Corporation have caused their names to
be signed hereto by their respective officers thereunto duly authorized as of
the day and year first above written.
STRUCTURED ASSET MORTGAGE INVESTMENTS II
INC., as Depositor
By: /s/ Xxxxx Xxxxxxxxxxx
--------------------------------
Name: Xxxxx Xxxxxxxxxxx
Title: Vice President
JPMORGAN CHASE BANK, N.A., as Trustee
By: /s/ Xxxxx X. Xxxx
----------------------------------
Name: Xxxxx X. Xxxx
Title: Assistant Vice President
XXXXX FARGO BANK, NATIONAL ASSOCIATION, as
Master Servicer
By: /s/ Xxxxxx Xxxxxx
----------------------------------
Name: Xxxxxx Xxxxxx
Title: Vice President
XXXXX FARGO BANK, NATIONAL ASSOCIATION, as
Securities Administrator
By: /s/ Xxxxxx Xxxxxx
-----------------------------------
Name: Xxxxxx Xxxxxx
Title: Vice President
EMC MORTGAGE CORPORATION
By: /s/ Xxxx Xxxxxxx
-----------------------------------
Name: Xxxx Xxxxxxx
Title: Senior Vice President
Accepted and Agreed as to
Sections 2.01, 2.02, 2.03, 2.04 and 9.09(c)
in its capacity as Seller
EMC MORTGAGE CORPORATION, as Seller
By: /s/ Xxxx Xxxxxxx
----------------------------------
Name: Xxxx Xxxxxxx
Title: Senior Vice President
/s/ Xxxxxxx Xxxxxx
-------------------------
Notary Public
[Notarial Seal]
STATE OF NEW YORK )
) ss.:
COUNTY OF NEW YORK )
On the 31st day of May 2005 before me, a notary public in and for said
State, personally appeared Xxxxx Xxxxxxxxxxx, known to me to be a Vice President
of Structured Asset Mortgage Investments II Inc., the corporation that executed
the within instrument, and also known to me to be the person who executed it on
behalf of said corporation, and acknowledged to me that such corporation
executed the within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official
seal the day and year in this certificate first above written.
/s/ Xxxxxx Xxxxxxxxxx
-----------------------
Notary Public
[Notarial Seal]
STATE OF NEW YORK )
) ss.:
COUNTY OF NEW YORK )
On the 31st day of May 2005 before me, a notary public in and for said
State, personally appeared Xxxxx X. Xxxx, known to me to be an Assistant Vice
President of JPMorgan Chase Bank, N.A., the banking association that executed
the within instrument, and also known to me to be the person who executed it on
behalf of said banking association, and acknowledged to me that such banking
association executed the within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official
seal the day and year in this certificate first above written.
/s/ Xxxxx Xxxxxx
---------------------
Notary Public
[Notarial Seal]
STATE OF TEXAS )
) ss.:
COUNTY OF DALLAS )
On the 31st day of May 2005 before me, a notary public in and for said
State, personally appeared Xxxx Xxxxxxx, known to me to be a Senior Vice
President of EMC Mortgage Corporation, the corporation that executed the within
instrument, and also known to me to be the person who executed it on behalf of
said corporation, and acknowledged to me that such corporation executed the
within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official
seal the day and year in this certificate first above written.
/s/ Xxxxxxx Xxxxxx
-------------------------
Notary Public
[Notarial Seal]
STATE OF MARYLAND )
) ss.:
COUNTY OF XXXXXX )
On the 31st day of May 2005 before me, a notary public in and for said
State, personally appeared Xxxxxx Xxxxxx, known to me to be a Vice President of
Xxxxx Fargo Bank, National Association, the corporation that executed the within
instrument, and also known to me to be the person who executed it on behalf of
said corporation, and acknowledged to me that such corporation executed the
within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official
seal the day and year in this certificate first above written.
/s/ Xxxxxx X. Xxxxxx
---------------------------
Notary Public
[Notarial Seal]
STATE OF MARYLAND )
) ss.:
COUNTY OF XXXXXX )
On the 31st day of May 2005 before me, a notary public in and for said
State, personally appeared Xxxxxx Xxxxxx, known to me to be a Vice President of
Xxxxx Fargo Bank, National Association, the corporation that executed the within
instrument, and also known to me to be the person who executed it on behalf of
said corporation, and acknowledged to me that such corporation executed the
within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official
seal the day and year in this certificate first above written.
/s/ Xxxxxx X. Xxxxxx
--------------------------
Notary Public
[Notarial Seal]
STATE OF TEXAS )
) ss.:
COUNTY OF DALLAS )
On the 31st day of May 2005 before me, a notary public in and for said
State, personally appeared Xxxx Xxxxxxx, known to me to be a Senior Vice
President of EMC Mortgage Corporation, the corporation that executed the within
instrument, and also known to me to be the person who executed it on behalf of
said corporation, and acknowledged to me that such corporation executed the
within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official
seal the day and year in this certificate first above written.
/s/ Xxxxxxx Xxxxxx
-------------------
Notary Public
[Notarial Seal]
FORM OF CLASS [__-A-__] [__-X] CERTIFICATES
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A "REGULAR
INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT," AS THOSE TERMS ARE
DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL REVENUE CODE OF
1986, AS AMENDED (THE "CODE").
THE [CURRENT PRINCIPAL] [NOTIONAL] AMOUNT OF THIS CERTIFICATE WILL BE
DECREASED BY THE PRINCIPAL PAYMENTS [HEREON] AND REALIZED LOSSES [ON THE
MORTGAGE LOANS AS SET FORTH IN THE AGREEMENT (AS DEFINED BELOW)] [ALLOCABLE
HERETO]. ACCORDINGLY, FOLLOWING THE INITIAL ISSUANCE OF THE CERTIFICATES, THE
[CURRENT PRINCIPAL] [NOTIONAL] AMOUNT OF THIS CERTIFICATE WILL BE DIFFERENT FROM
THE DENOMINATION SHOWN BELOW. ANYONE ACQUIRING THIS CERTIFICATE MAY ASCERTAIN
ITS [CURRENT PRINCIPAL] [NOTIONAL] AMOUNT BY INQUIRY OF XXXXX FARGO BANK,
NATIONAL ASSOCIATION, AS CERTIFICATE REGISTRAR (THE "CERTIFICATE REGISTRAR")
WITH RESPECT HERETO.
[UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF
THE DEPOSITORY TRUST COMPANY TO THE CERTIFICATE REGISTRAR OR ITS AGENT FOR
REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS
REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY AND ANY PAYMENT IS
MADE TO CEDE & CO., ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL SINCE THE REGISTERED OWNER HEREOF,
CEDE & CO., HAS AN INTEREST HEREIN.]
Certificate No.__ Pass-Through Rate: Variable
Class [__-A-__] [__-X] [Senior]
Date of Pooling and Servicing Agreement and Cut-off Date: Aggregate Initial [Current Principal] [Notional] Amount
May 1, 2005 of this Class of Certificates as of the Cut-off Date:
$____________
First Distribution Date: Initial [Current Principal] [Notional Amount] of this
June 27, 2005 Certificate as of the Cut-off Date: $____________
Master Servicer: CUSIP: 86359L____
Xxxxx Fargo Bank, National Association
Assumed Final Distribution Date:
May 25, 2045
MORTGAGE PASS-THROUGH CERTIFICATE
SERIES 2005-AR2
evidencing a fractional undivided interest in the distributions
allocable to the Class [__-A-__] [__-X] Certificates with respect to a
Trust Fund consisting primarily of a pool of one- to four-family
adjustable rate negative amortization mortgage loans sold by
STRUCTURED ASSET MORTGAGE INVESTMENTS II INC.
This Certificate is payable solely from the assets of the Trust Fund, and
does not represent an obligation of or interest in Structured Asset Mortgage
Investments II Inc., the Master Servicer, the Certificate Registrar or the
Trustee referred to below or any of their affiliates or any other person.
Neither this Certificate nor the underlying Mortgage Loans are guaranteed or
insured by any governmental entity or by Structured Asset Mortgage Investments
II Inc., the Master Servicer, the Certificate Registrar or the Trustee or any of
their affiliates or any other person. None of Structured Asset Mortgage
Investments II Inc., the Master Servicer or any of their affiliates will have
any obligation with respect to any certificate or other obligation secured by or
payable from payments on the Certificates.
This certifies that Cede & Co. is the registered owner of the Fractional
Undivided Interest evidenced hereby in the beneficial ownership interest of
Certificates of the same Class as this Certificate in a trust (the "Trust Fund")
generally consisting of first lien, adjustable rate negative amortization
mortgage loans secured by one- to four-family residences and individual
A-1-2
condominium units (collectively, the "Mortgage Loans") sold by Structured Asset
Mortgage Investments II Inc. ("XXXX XX"). The Mortgage Loans were sold on the
Closing Date by EMC Mortgage Corporation ("EMC") to XXXX XX. Xxxxx Fargo Bank,
National Association ("Xxxxx Fargo") will act as master servicer of the Mortgage
Loans (the "Master Servicer," which term includes any successors thereto under
the Agreement referred to below). The Trust Fund was created pursuant to the
Pooling and Servicing Agreement, dated as of the Cut-off Date specified above
(the "Agreement"), among XXXX XX, as depositor (the "Depositor"), EMC Mortgage
Corporation, Xxxxx Fargo, as Master Servicer and securities administrator and
JPMorgan Chase Bank, N.A., as trustee (the "Trustee"), a summary of certain of
the pertinent provisions of which is set forth hereafter. To the extent not
defined herein, capitalized terms used herein shall have the meaning ascribed to
them in the Agreement. This Certificate is issued under and is subject to the
terms, provisions and conditions of the Agreement, to which Agreement the Holder
of this Certificate by virtue of its acceptance hereof assents and by which such
Holder is bound.
[Interest on this Certificate will accrue during the month prior to the
month in which a Distribution Date (as hereinafter defined) occurs on the
Current Principal Amount hereof at the per annum Pass-Through Rate set forth in
the Agreement.]
[Interest on this Certificate will accrue during the month prior to the
month in which a Distribution Date (as defined below) occurs on the Notional
Amount hereof at a per-annum Pass-Through Rate equal to the greater of (i) zero
and (ii) the excess of (x) the weighted average of the Net Rates of the Mortgage
Loans in the related Loan Group or Loan Groups (as of the second preceding Due
Date), [weighted in proportion to the results of subtracting from the aggregate
Principal Balance of each Loan Group the aggregate Current Principal Amount of
the related Classes of Senior Certificates (other than the Residual
Certificates) immediately prior to the related Distribution Date,] over (y) the
weighted average of the Pass-Through Rates on the related Classes of
Certificates, based on a Notional Amount equal to the aggregate Current
Principal Amount of the related Classes of Certificates and calculated on the
basis of a year of 360 days with twelve 30-day months.]
The Paying Agent will distribute on the 25th day of each month, or, if such
25th day is not a Business Day, the immediately following Business Day (each, a
"Distribution Date"), commencing on the First Distribution Date specified above,
to the Person in whose name this Certificate is registered [at the close of
business on the last Business Day of the calendar month preceding the month] [on
the 24th day of the month] of such Distribution Date, an amount equal to the
product of the Fractional Undivided Interest evidenced by this Certificate and
the amount (of interest and principal, if any) required to be distributed to the
Holders of Certificates of the same Class as this Certificate. The Assumed Final
Distribution Date is the first Distribution Date in the month immediately
following the month of the latest scheduled maturity date of any Mortgage Loan
and is not likely to be the date on which the [Current Principal] [Notional]
Amount of this Class of Certificates will be reduced to zero.
Distributions on this Certificate will be made by the Paying Agent by check
mailed to the address of the Person entitled thereto as such name and address
shall appear on the Certificate Register or, if such Person so requests, by
notifying the Paying Agent in writing as specified in
A-1-3
the Agreement. Notwithstanding the above, the final distribution on this
Certificate will be made after due notice by the Paying Agent of the pendency of
such distribution and only upon presentation and surrender of this Certificate
at the office or agency appointed by the Paying Agent for that purpose and
designated in such notice. The Initial [Current Principal] [Notional] Amount of
this Certificate is set forth above. The Current [Principal] [Notional] Amount
hereof will be reduced to the extent of distributions allocable to principal
hereon and any Realized Losses allocable hereto as set forth in the Agreement.
This Certificate is one of a duly authorized issue of Certificates
designated as set forth on the face hereof (the "Certificates"), issued in
twenty-six Classes. The Certificates, in the aggregate, evidence the entire
beneficial ownership interest in the Trust Fund formed pursuant to the
Agreement.
The Certificateholder, by its acceptance of this Certificate, agrees that
it will look solely to the Trust Fund for payment hereunder and that neither the
Trustee, the Master Servicer nor the Certificate Registrar is liable to the
Certificateholders for any amount payable under this Certificate or the
Agreement or, except as expressly provided in the Agreement, subject to any
liability under the Agreement.
This Certificate does not purport to summarize the Agreement and reference
is made to the Agreement for the interests, rights and limitations of rights,
benefits, obligations and duties evidenced hereby, and the rights, duties and
immunities of the Trustee, the Master Servicer and the Certificate Registrar.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Depositor and the rights of the Certificateholders under the Agreement from time
to time by the Depositor and the Trustee with the consent of the Holders of
Certificates evidencing Fractional Undivided Interests aggregating not less than
51% of the Trust Fund (or in certain cases, Holders of Certificates of affected
Classes evidencing such percentage of the Fractional Undivided Interests
thereof). Any such consent by the Holder of this Certificate shall be conclusive
and binding on such Holder and upon all future Holders of this Certificate and
of any Certificate issued upon the transfer hereof or in lieu hereof whether or
not notation of such action is made upon this Certificate. The Agreement also
permits the amendment thereof, in certain limited circumstances, without the
consent of the Holders of any of the Certificates.
As provided in the Agreement and subject to certain limitations therein set
forth, the transfer of this Certificate is registrable with the Certificate
Registrar upon surrender of this Certificate for registration of transfer at the
offices or agencies maintained by the Certificate Registrar for such purposes,
duly endorsed by, or accompanied by a written instrument of transfer in form
satisfactory to the Certificate Registrar duly executed by the Holder hereof or
such Holder's attorney duly authorized in writing, and thereupon one or more new
Certificates in authorized denominations representing a like aggregate
Fractional Undivided Interest will be issued to the designated transferee.
The Certificates are issuable only as registered Certificates without
coupons in the Classes and denominations specified in the Agreement. As provided
in the Agreement and
A-1-4
subject to certain limitations therein set forth, this Certificate is
exchangeable for one or more new Certificates evidencing the same Class and in
the same aggregate Fractional Undivided Interest, as requested by the Holder
surrendering the same.
No service charge will be made to the Certificateholders for any such
registration of transfer, but the Certificate Registrar may require payment of a
sum sufficient to cover any tax or other governmental charge payable in
connection therewith. The Depositor , the Master Servicer, the Trustee, the
Certificate Registrar and any agent of any of them may treat the Person in whose
name this Certificate is registered as the owner hereof for all purposes, and
none of Depositor, the Master Servicer, the Trustee, the Certificate Registrar
or any such agent shall be affected by notice to the contrary.
The obligations created by the Agreement and the Trust Fund created thereby
(other than the obligations to make payments to Certificateholders with respect
to the termination of the Agreement) shall terminate upon (i) the later of the
(A) final payment or other liquidation (or Advance with respect thereto) of the
last Mortgage Loan remaining in the Trust Fund and (B) disposition of all
property acquired with respect to any Mortgage Loan, (ii) the payment to
Certificateholders of all amounts required to be paid to them under the
Agreement, or (iii) the optional repurchase by the party named in the Agreement
of all the Mortgage Loans and other assets of the Trust Fund in accordance with
the terms of the Agreement. Such optional repurchase may be made only (A) if (i)
the aggregate Scheduled Principal Balance of the Mortgage Loans at the time of
any such repurchase is less than or equal to 10% of the Cut-off Date Balance, or
(ii) the Depositor, based upon an Opinion of Counsel, has determined that the
REMIC status of any REMIC under the Agreement has been lost or a substantial
risk exists that such REMIC status will be lost for the then-current taxable
year, and (B) following the satisfaction of certain additional termination
requirements specified in the Agreement. The exercise of such right will effect
the early retirement of the Certificates. In no event, however, will the Trust
Fund created by the Agreement continue beyond the expiration of 21 years after
the death of certain persons identified in the Agreement.
Unless this Certificate has been countersigned by an authorized signatory
of the Certificate Registrar by manual signature, this Certificate shall not be
entitled to any benefit under the Agreement, or be valid for any purpose.
[Signature page follows]
A-1-5
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed.
Dated: May 31, 2005 JPMORGAN CHASE BANK, N.A.,
not in its individual capacity but
solely as Trustee
By:
---------------------------------
Authorized Signatory
CERTIFICATE OF AUTHENTICATION
This is one of the Class [__-A-__] [__-X] Certificates referred to in the
within-mentioned Agreement.
XXXXX FARGO BANK,
NATIONAL ASSOCIATION, as Certificate
Registrar
By:
---------------------------------
Authorized Signatory
A-1-6
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto __________________________________ (Please print or typewrite
name and address including postal zip code of assignee) a Fractional Undivided
Interest evidenced by the within Mortgage Pass-Through Certificate and hereby
authorizes the transfer of registration of such interest to assignee on the
Certificate Register of the Trust Fund.
I (We) further direct the Certificate Registrar to issue a new Certificate
of a like denomination and Class, to the above named assignee and deliver such
Certificate to the following address:
Dated:
-------------------------------------
Signature by or on behalf of assignor
-------------------------------------
Signature Guaranteed
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of distribution:
Distributions shall be made, by wire transfer or otherwise, in immediately
available funds to _________________________________ for the account of
_________________________ account number _____________, or, if mailed by check,
to ______________________________. Applicable statements should be mailed to
_____________________________________________.
This information is provided by __________________, the assignee named
above, or ________________________, as its agent.
X-0-0
XXXXXXX X-0
CLASS [M-__] CERTIFICATE
THIS CERTIFICATE IS SUBORDINATED IN RIGHT OF PAYMENT TO THE SENIOR
CERTIFICATES [AND][,] THE CLASS M-X CERTIFICATES [AND THE CLASS M-___
CERTIFICATES] AS DESCRIBED IN THE AGREEMENT (AS DEFINED HEREIN).
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A "REGULAR
INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT," AS THOSE TERMS ARE
DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL REVENUE CODE OF
1986, AS AMENDED (THE "CODE").
THE CURRENT PRINCIPAL AMOUNT OF THIS CERTIFICATE WILL BE DECREASED BY THE
PRINCIPAL PAYMENTS HEREON AND ANY REALIZED LOSSES ALLOCABLE HERETO. ACCORDINGLY,
FOLLOWING THE INITIAL ISSUANCE OF THE CERTIFICATES, THE CURRENT PRINCIPAL AMOUNT
OF THIS CERTIFICATE WILL BE DIFFERENT FROM THE DENOMINATION SHOWN BELOW. ANYONE
ACQUIRING THIS CERTIFICATE MAY ASCERTAIN ITS CURRENT PRINCIPAL AMOUNT BY INQUIRY
OF XXXXX FARGO BANK, NATIONAL ASSOCIATION, AS CERTIFICATE REGISTRAR (THE
"CERTIFICATE REGISTRAR") WITH RESPECT HERETO.
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY TO THE CERTIFICATE REGISTRAR OR ITS AGENT FOR
REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS
REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY AND ANY PAYMENT IS
MADE TO CEDE & CO., ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL SINCE THE REGISTERED OWNER HEREOF,
CEDE & CO., HAS AN INTEREST HEREIN.
EACH BENEFICIAL OWNER OF THIS CERTIFICATE OR ANY INTEREST HEREIN SHALL BE
DEEMED TO HAVE REPRESENTED, BY VIRTUE OF ITS ACQUISITION OR HOLDING OF THIS
CERTIFICATE OR INTEREST HEREIN, THAT EITHER (I) IT IS NOT AN EMPLOYEE BENEFIT
PLAN SUBJECT TO THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED
OR SECTION 4975 OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED ("PLAN"), OR
INVESTING WITH ASSETS OF A PLAN OR (II) IT HAS ACQUIRED AND IS HOLDING SUCH
CERTIFICATE IN RELIANCE ON PROHIBITED TRANSACTION EXEMPTION 90-30, AS AMENDED
FROM TIME TO TIME ("EXEMPTION"), AND THAT IT UNDERSTANDS THAT THERE ARE CERTAIN
CONDITIONS TO THE AVAILABILITY OF THE EXEMPTION, INCLUDING THAT
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THE CERTIFICATE MUST BE RATED, AT THE TIME OF PURCHASE, NOT LOWER THAN
"BBB-" (OR ITS EQUIVALENT) BY STANDARD & POOR'S, FITCH, INC. OR XXXXX'X
INVESTORS SERVICE, INC., AND THE CERTIFICATE IS SO RATED OR (III) (1) IT IS AN
INSURANCE COMPANY, (2) THE SOURCE OF FUNDS USED TO ACQUIRE OR HOLD THE
CERTIFICATE OR INTEREST HEREIN IS AN "INSURANCE COMPANY GENERAL ACCOUNT", AS
SUCH TERM IS DEFINED IN PROHIBITED TRANSACTION CLASS EXEMPTION ("PTCE") 95-50,
AND (3) THE CONDITIONS IN SECTIONS I AND III OF PTCE 95-60 HAVE BEEN SATISFIED.
A-2-2
CERTIFICATE NO. ___
Pass-Through Rate: Variable
Class [M-__] Subordinate
Date of Pooling and Servicing Agreement and Cut-off Date: Aggregate Initial Current Principal Amount of this
May 1, 2005 Class of Certificates as of the Cut-off Date:
$__________
First Distribution Date: Initial Current Principal Amount of this Certificate as
June 27, 2005 of the Cut-off Date:
$__________
Master Servicer: CUSIP: 86359L ___
Xxxxx Fargo Bank, National Association
Assumed Final Distribution Date:
May 25, 2045
MORTGAGE PASS-THROUGH CERTIFICATE
SERIES 2005-AR2
evidencing a fractional undivided interest in the distributions
allocable to the Class [M-__] Certificates with respect to a Trust
Fund consisting primarily of a pool of one- to four-family adjustable
interest rate negative amortization mortgage loans sold by STRUCTURED
ASSET MORTGAGE INVESTMENTS II INC.
This Certificate is payable solely from the assets of the Trust Fund, and
does not represent an obligation of or interest in Structured Asset Mortgage
Investments II Inc., the Master Servicer or the Certificate Registrar referred
to below or any of their affiliates or any other person. Neither this
Certificate nor the underlying Mortgage Loans are guaranteed or insured by any
governmental entity or by Structured Asset Mortgage Investments II Inc., the
Master Servicer or the Certificate Registrar or any of their affiliates or any
other person. None of Structured Asset Mortgage Investments II Inc., the Master
Servicer, the Certificate Registrar or any of their affiliates will have any
obligation with respect to any certificate or other obligation secured by or
payable from payments on the Certificates.
This certifies that Cede & Co. is the registered owner of the Fractional
Undivided Interest evidenced hereby in the beneficial ownership interest of
Certificates of the same Class as this
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Certificate in a trust (the "Trust Fund") generally consisting of first
lien, adjustable rate negative amortization mortgage loans secured by one- to
four-family residences and individual condominium units (collectively, the
"Mortgage Loans") sold by Structured Asset Mortgage Investments II Inc. ("XXXX
XX"). The Mortgage Loans were sold on the Closing Date by EMC Mortgage
Corporation ("EMC") to XXXX XX. Xxxxx Fargo Bank, National Association ("Xxxxx
Fargo") will act as master servicer of the Mortgage Loans (the "Master
Servicer," which term includes any successors thereto under the Agreement
referred to below). The Trust Fund was created pursuant to the Pooling and
Servicing Agreement, dated as of the Cut-off Date specified above (the
"Agreement"), among XXXX XX, as depositor (the "Depositor"), EMC Mortgage
Corporation, Xxxxx Fargo, as Master Servicer and securities administrator and
JPMorgan Chase Bank, N.A., as trustee (the "Trustee"), a summary of certain of
the pertinent provisions of which is set forth hereafter. To the extent not
defined herein, capitalized terms used herein shall have the meaning ascribed to
them in the Agreement. This Certificate is issued under and is subject to the
terms, provisions and conditions of the Agreement, to which Agreement the Holder
of this Certificate by virtue of its acceptance hereof assents and by which such
Holder is bound.
Interest on this Certificate will accrue during the month prior to the
month in which a Distribution Date (as hereinafter defined) occurs on the
Current Principal Amount hereof at a per annum Pass-Through Rate set forth in
the Agreement.
The Paying Agent will distribute on the 25th day of each month, or, if such
25th day is not a Business Day, the immediately following Business Day (each, a
"Distribution Date"), commencing on the First Distribution Date specified above,
to the Person in whose name this Certificate is registered on the 24th day of
the month of such Distribution Date, an amount equal to the product of the
Fractional Undivided Interest evidenced by this Certificate and the amount (of
interest and principal, if any) required to be distributed to the Holders of
Certificates of the same Class as this Certificate. The Assumed Final
Distribution Date is the first Distribution Date in the month immediately
following the month of the latest scheduled maturity date of any Mortgage Loan
and is not likely to be the date on which the Current Principal Amount of this
Class of Certificates will be reduced to zero.
Distributions on this Certificate will be made by the Paying Agent by check
mailed to the address of the Person entitled thereto as such name and address
shall appear on the Certificate Register or, if such Person so requests, by
notifying the Paying Agent in writing as specified in the Agreement.
Notwithstanding the above, the final distribution on this Certificate will be
made after due notice by the Paying Agent of the pendency of such distribution
and only upon presentation and surrender of this Certificate at the office or
agency appointed by the Paying Agent for that purpose and designated in such
notice. The Initial Current Principal Amount of this Certificate is set forth
above. The Current Principal Amount hereof will be reduced to the extent of
distributions allocable to principal hereon and any Realized Losses allocable
hereto.
This Certificate is one of a duly authorized issue of Certificates
designated as set forth on the face hereof (the "Certificates"), issued in
twenty-six Classes. The Certificates, in the aggregate, evidence the entire
beneficial ownership interest in the Trust Fund formed pursuant to the
Agreement.
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The Certificateholder, by its acceptance of this Certificate, agrees that
it will look solely to the Trust Fund for payment hereunder and that neither the
Trustee nor the Certificate Registrar is liable to the Certificateholders for
any amount payable under this Certificate or the Agreement or, except as
expressly provided in the Agreement, subject to any liability under the
Agreement.
This Certificate does not purport to summarize the Agreement and reference
is made to the Agreement for the interests, rights and limitations of rights,
benefits, obligations and duties evidenced hereby, and the rights, duties and
immunities of the Trustee and the Certificate Registrar.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Depositor and the rights of the Certificateholders under the Agreement from time
to time by the Depositor and the Trustee with the consent of the Holders of
Certificates evidencing Fractional Undivided Interests aggregating not less than
51% of the Trust Fund (or in certain cases, Holders of Certificates of affected
Classes evidencing such percentage of the Fractional Undivided Interests
thereof). Any such consent by the Holder of this Certificate shall be conclusive
and binding on such Holder and upon all future Holders of this Certificate and
of any Certificate issued upon the transfer hereof or in lieu hereof, whether or
not notation of such consent is made upon this Certificate. The Agreement also
permits the amendment thereof, in certain limited circumstances, without the
consent of the Holders of any of the Certificates.
As provided in the Agreement and subject to certain limitations therein set
forth, the transfer of this Certificate is registrable with the Certificate
Registrar upon surrender of this Certificate for registration of transfer at the
offices or agencies maintained by the Certificate Registrar for such purposes,
duly endorsed by, or accompanied by a written instrument of transfer in form
satisfactory to the Certificate Registrar duly executed by the Holder hereof or
such Holder's attorney duly authorized in writing, and thereupon one or more new
Certificates in authorized denominations representing a like aggregate
Fractional Undivided Interest will be issued to the designated transferee.
The Certificates are issuable only as registered Certificates without
coupons in the Classes and denominations specified in the Agreement. As provided
in the Agreement and subject to certain limitations therein set forth, this
Certificate is exchangeable for one or more new Certificates evidencing the same
Class and in the same aggregate Fractional Undivided Interest, as requested by
the Holder surrendering the same.
No service charge will be made to the Certificateholders for any such
registration of transfer, but the Certificate Registrar may require payment of a
sum sufficient to cover any tax or other governmental charge payable in
connection therewith. The Depositor, the Master Servicer, the Trustee, the
Certificate Registrar and any agent of any of them may treat the Person in whose
name this Certificate is registered as the owner hereof for all purposes, and
none of the Depositor, the Master Servicer, the Trustee, the Certificate
Registrar or any such agent shall be affected by notice to the contrary.
The obligations created by the Agreement and the Trust Fund created thereby
(other than the obligations to make payments to Certificateholders with respect
to the termination of the
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Agreement) shall terminate upon (i) the later of the (A) final payment or
other liquidation (or Advance with respect thereto) of the last Mortgage Loan
remaining in the Trust Fund and (B) disposition of all property acquired with
respect to any Mortgage Loan, (ii) the payment to Certificateholders of all
amounts required to be paid to them under the Agreement, or (iii) the optional
repurchase by the party named in the Agreement of all the Mortgage Loans and
other assets of the Trust Fund in accordance with the terms of the Agreement.
Such optional repurchase may be made only (A) if (i) the aggregate Scheduled
Principal Balance of the Mortgage Loans at the time of any such repurchase is
less than or equal to 10% of the Cut-off Date Balance, or (ii) the Depositor,
based upon an Opinion of Counsel, has determined that the REMIC status of any
REMIC under the Agreement has been lost or a substantial risk exists that such
REMIC status will be lost for the then-current taxable year, and (B) following
the satisfaction of certain additional termination requirements specified in the
Agreement. The exercise of such right will effect the early retirement of the
Certificates. In no event, however, will the Trust Fund created by the Agreement
continue beyond the expiration of 21 years after the death of certain persons
identified in the Agreement.
Unless this Certificate has been countersigned by an authorized signatory
of the Certificate Registrar by manual signature, this Certificate shall not be
entitled to any benefit under the Agreement, or be valid for any purpose.
[Signature page follows]
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IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed.
Dated: May 31, 2005
JPMORGAN CHASE BANK, N.A.,
not in its individual capacity but
solely as Trustee
By:
---------------------------------
Authorized Signatory
CERTIFICATE OF AUTHENTICATION
This is one of the Class [M-__] Certificates referred to in the
within-mentioned Agreement.
XXXXX FARGO BANK,
NATIONAL ASSOCIATION, as Certificate
Registrar
By:
---------------------------------
Authorized Signatory
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ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto __________________________________ (Please print or typewrite
name and address including postal zip code of assignee) a Fractional Undivided
Interest evidenced by the within Mortgage Pass-Through Certificate and hereby
authorizes the transfer of registration of such interest to assignee on the
Certificate Register of the Trust Fund.
I (We) further direct the Certificate Registrar to issue a new Certificate
of a like denomination and Class, to the above named assignee and deliver such
Certificate to the following address:
Dated:
-------------------------------------
Signature by or on behalf of assignor
-------------------------------------
Signature Guaranteed
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of distribution:
Distributions shall be made, by wire transfer or otherwise, in immediately
available funds to _________________________________ for the account of
_________________________ account number _____________, or, if mailed by check,
to ______________________________. Applicable statements should be mailed to
______________________________________________.
This information is provided by __________________, the assignee named
above, or ________________________, as its agent.
X-0-0
XXXXXXX X-0
CLASS B-__ CERTIFICATE
THIS CERTIFICATE IS SUBORDINATED IN RIGHT OF PAYMENT TO THE SENIOR
CERTIFICATES, THE CLASS M-X CERTIFICATES, THE CLASS M-1 CERTIFICATES, THE CLASS
M-2 CERTIFICATES, THE CLASS M-3 CERTIFICATES, THE CLASS M-4 CERTIFICATES, THE
CLASS M-5 CERTIFICATES, THE CLASS M-6 CERTIFICATES AND THE M-7 CERTIFICATES [AND
THE CLASS B-_ CERTIFICATES] AS DESCRIBED IN THE AGREEMENT (AS DEFINED HEREIN).
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A "REGULAR
INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT," AS THOSE TERMS ARE
DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL REVENUE CODE OF
1986, AS AMENDED (THE "CODE").
THE CURRENT PRINCIPAL AMOUNT OF THIS CERTIFICATE WILL BE DECREASED BY THE
PRINCIPAL PAYMENTS HEREON AND ANY REALIZED LOSSES ALLOCABLE HERETO. ACCORDINGLY,
FOLLOWING THE INITIAL ISSUANCE OF THE CERTIFICATES, THE CURRENT PRINCIPAL AMOUNT
OF THIS CERTIFICATE WILL BE DIFFERENT FROM THE DENOMINATION SHOWN BELOW. ANYONE
ACQUIRING THIS CERTIFICATE MAY ASCERTAIN ITS CURRENT PRINCIPAL AMOUNT BY INQUIRY
OF XXXXX FARGO BANK, NATIONAL ASSOCIATION, AS CERTIFICATE REGISTRAR (THE
"CERTIFICATE REGISTRAR") WITH RESPECT HERETO.
[FOR CLASS B-1, CLASS B-2 AND CLASS B-3 CERTIFICATES] [UNLESS THIS
CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST
COMPANY TO THE CERTIFICATE REGISTRAR OR ITS AGENT FOR REGISTRATION OF TRANSFER,
EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF
CEDE & CO. OR SUCH OTHER NAME AS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF
THE DEPOSITORY TRUST COMPANY AND ANY PAYMENT IS MADE TO CEDE & CO., ANY
TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON
IS WRONGFUL SINCE THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST
HEREIN.]
[FOR CLASS B-1, CLASS B-2 AND CLASS B-3 CERTIFICATES] [EACH BENEFICIAL
OWNER OF THIS CERTIFICATE OR ANY INTEREST HEREIN SHALL BE DEEMED TO HAVE
REPRESENTED, BY VIRTUE OF ITS ACQUISITION OR HOLDING OF THIS CERTIFICATE OR
INTEREST HEREIN, THAT EITHER (I) IT IS NOT AN EMPLOYEE BENEFIT PLAN SUBJECT TO
THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED OR SECTION 4975
OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED ("PLAN"), OR INVESTING
A-3-1
WITH ASSETS OF A PLAN OR (II) IT HAS ACQUIRED AND IS HOLDING SUCH CERTIFICATE IN
RELIANCE ON PROHIBITED TRANSACTION EXEMPTION 90-30, AS AMENDED FROM TIME TO TIME
("EXEMPTION"), AND THAT IT UNDERSTANDS THAT THERE ARE CERTAIN CONDITIONS TO THE
AVAILABILITY OF THE EXEMPTION, INCLUDING THAT THE CERTIFICATE MUST BE RATED, AT
THE TIME OF PURCHASE, NOT LOWER THAN "BBB-" (OR ITS EQUIVALENT) BY STANDARD &
POOR'S, FITCH, INC. OR XXXXX'X INVESTORS SERVICE, INC., AND THE CERTIFICATE IS
SO RATED OR (III) (1) IT IS AN INSURANCE COMPANY, (2) THE SOURCE OF FUNDS USED
TO ACQUIRE OR HOLD THE CERTIFICATE OR INTEREST HEREIN IS AN "INSURANCE COMPANY
GENERAL ACCOUNT", AS SUCH TERM IS DEFINED IN PROHIBITED TRANSACTION CLASS
EXEMPTION ("PTCE") 95-60, AND (3) THE CONDITIONS IN SECTIONS I AND III OF PTCE
95-60 HAVE BEEN SATISFIED.]
[FOR CLASS B-4, CLASS B-5 AND CLASS B-6 CERTIFICATES] [THIS CERTIFICATE HAS
NOT BEEN AND WILL NOT BE REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED
(THE "SECURITIES ACT"), OR UNDER ANY STATE SECURITIES LAWS. THE HOLDER HEREOF,
BY PURCHASING THIS CERTIFICATE, AGREES THAT THIS CERTIFICATE MAY BE REOFFERED,
RESOLD, PLEDGED OR OTHERWISE TRANSFERRED ONLY IN COMPLIANCE WITH THE SECURITIES
ACT AND OTHER APPLICABLE LAWS AND ONLY (1) PURSUANT TO RULE 144A UNDER THE
SECURITIES ACT ("RULE 144A") TO A PERSON THAT THE HOLDER REASONABLY BELIEVES IS
A QUALIFIED INSTITUTIONAL BUYER WITHIN THE MEANING OF RULE 144A (A "QIB"),
PURCHASING FOR ITS OWN ACCOUNT OR A QIB PURCHASING FOR THE ACCOUNT OF A QIB,
WHOM THE HOLDER HAS INFORMED, IN EACH CASE, THAT THE REOFFER, RESALE, PLEDGE OR
OTHER TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A, (2) PURSUANT TO AN
EXEMPTION FROM REGISTRATION PROVIDED BY RULE 144 UNDER THE SECURITIES ACT (IF
AVAILABLE) OR (3) IN CERTIFICATED FORM TO AN "INSTITUTIONAL ACCREDITED INVESTOR"
WITHIN THE MEANING THEREOF IN RULE 501(A)(1), (2), (3) OR (7) OF REGULATION D
UNDER THE SECURITIES ACT OR ANY ENTITY IN WHICH ALL OF THE EQUITY OWNERS COME
WITHIN SUCH PARAGRAPHS PURCHASING NOT FOR DISTRIBUTION IN VIOLATION OF THE
SECURITIES ACT, SUBJECT TO (A) THE RECEIPT BY THE TRUSTEE AND THE CERTIFICATE
REGISTRAR OF A LETTER SUBSTANTIALLY IN THE FORM PROVIDED IN THE AGREEMENT AND
(B) THE RECEIPT BY THE TRUSTEE AND THE CERTIFICATE REGISTRAR OF SUCH OTHER
EVIDENCE ACCEPTABLE TO THE TRUSTEE AND THE CERTIFICATE REGISTRAR THAT SUCH
REOFFER, RESALE, PLEDGE OR TRANSFER IS IN COMPLIANCE WITH THE SECURITIES ACT AND
OTHER APPLICABLE LAWS OR IN EACH CASE IN ACCORDANCE WITH ALL APPLICABLE
SECURITIES LAWS OF THE UNITED STATES AND ANY OTHER APPLICABLE JURISDICTION.]
[FOR CLASS B-4, CLASS B-5 AND CLASS B-6 CERTIFICATES] [THIS CERTIFICATE MAY
NOT BE ACQUIRED DIRECTLY OR INDIRECTLY BY, OR ON BEHALF OF, AN EMPLOYEE BENEFIT
PLAN OR OTHER RETIREMENT ARRANGEMENT WHICH
A-3-2
IS SUBJECT TO TITLE I OF THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS
AMENDED, OR SECTION 4975 OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED,
UNLESS THE TRANSFEREE CERTIFIES OR REPRESENTS THAT THE PROPOSED TRANSFER AND
HOLDING OF A CERTIFICATE AND THE SERVICING, MANAGEMENT AND OPERATION OF THE
TRUST AND ITS ASSETS: (I) WILL NOT RESULT IN ANY PROHIBITED TRANSACTION WHICH
IS NOT COVERED UNDER AN INDIVIDUAL OR CLASS PROHIBITED TRANSACTION EXEMPTION,
INCLUDING, BUT NOT LIMITED TO, PROHIBITED TRANSACTION CLASS EXEMPTION ("PTCE")
84-14, XXXX 00-00, XXXX 00-0, XXXX 95-60 OR PTCE 96-23 AND (II) WILL NOT GIVE
RISE TO ANY ADDITIONAL OBLIGATIONS ON THE PART OF THE DEPOSITOR, THE SECURITIES
ADMINISTRATOR, THE MASTER SERVICER, THE CERTIFICATE REGISTRAR, ANY SERVICER OR
THE TRUSTEE, WHICH WILL BE DEEMED REPRESENTED BY AN OWNER OF A BOOK-ENTRY
CERTIFICATE OR A GLOBAL CERTIFICATE, OR UNLESS THE OPINION SPECIFIED IN SECTION
5.07 OF THE AGREEMENT IS PROVIDED.]
A-3-3
Pass-Through Rate: Variable
Class B-__ Subordinate
Date of Pooling and Servicing Agreement and Cut-off Date: Aggregate Initial Current Principal Amount of this
May 1, 2005 Class of Certificates as of the Cut-off Date:
$______________
First Distribution Date: Initial Current Principal Amount of this Certificate as
June 27, 2005 of the Cut-off Date: $______________
Master Servicer: CUSIP: 86359L_____
Xxxxx Fargo Bank, National Association
Assumed Final Distribution Date:
May 25, 2045
MORTGAGE PASS-THROUGH CERTIFICATE
SERIES 2005-AR2
evidencing a fractional undivided interest in the distributions
allocable to the Class B-__ Certificates with respect to a Trust Fund
consisting primarily of a pool of one- to four-family adjustable
interest rate negative amortization mortgage loans sold by STRUCTURED
ASSET MORTGAGE INVESTMENTS II INC.
This Certificate is payable solely from the assets of the Trust Fund, and
does not represent an obligation of or interest in Structured Asset Mortgage
Investments II Inc., the Master Servicer, the Certificate Registrar or the
Trustee referred to below or any of their affiliates or any other person.
Neither this Certificate nor the underlying Mortgage Loans are guaranteed or
insured by any governmental entity or by Structured Asset Mortgage Investments
II Inc., the Master Servicer, the Certificate Registrar or the Trustee or any of
their affiliates or any other person. None of Structured Asset Mortgage
Investments II Inc., the Master Servicer or any of their affiliates will have
any obligation with respect to any certificate or other obligation secured by or
payable from payments on the Certificates.
This certifies that [Cede & Co.] [Bear, Xxxxxxx Securities Corp.] is the
registered owner of the Fractional Undivided Interest evidenced hereby in the
beneficial ownership interest of Certificates of the same Class as this
Certificate in a trust (the "Trust Fund") generally consisting
A-3-4
of first lien, adjustable rate negative amortization mortgage loans secured
by one- to four-family residences and individual condominium units
(collectively, the "Mortgage Loans") sold by Structured Asset Mortgage
Investments II Inc. ("XXXX XX"). The Mortgage Loans were sold on the Closing
Date by EMC Mortgage Corporation ("EMC") to XXXX XX. Xxxxx Fargo Bank, National
Association ("Xxxxx Fargo") will act as master servicer of the Mortgage Loans
(the "Master Servicer," which term includes any successors thereto under the
Agreement referred to below). The Trust Fund was created pursuant to the Pooling
and Servicing Agreement, dated as of the Cut-off Date specified above (the
"Agreement"), among XXXX XX, as depositor (the "Depositor"), EMC Mortgage
Corporation, Xxxxx Fargo, as Master Servicer and securities administrator and
JPMorgan Chase Bank, N.A., as trustee (the "Trustee"), a summary of certain of
the pertinent provisions of which is set forth hereafter. To the extent not
defined herein, capitalized terms used herein shall have the meaning ascribed to
them in the Agreement. This Certificate is issued under and is subject to the
terms, provisions and conditions of the Agreement, to which Agreement the Holder
of this Certificate by virtue of its acceptance hereof assents and by which such
Holder is bound.
Interest on this Certificate will accrue during the month prior to the
month in which a Distribution Date (as hereinafter defined) occurs on the
Current Principal Amount hereof at the per annum Pass-Through Rate set forth in
the Agreement. The Paying Agent will distribute on the 25th day of each month,
or, if such 25th day is not a Business Day, the immediately following Business
Day (each, a "Distribution Date"), commencing on the First Distribution Date
specified above, to the Person in whose name this Certificate is registered [on
the last Business Day of the month next preceding] [on the 24th day of] the
month of such Distribution Date, an amount equal to the product of the
Fractional Undivided Interest evidenced by this Certificate and the amount (of
interest and principal, if any) required to be distributed to the Holders of
Certificates of the same Class as this Certificate. The Assumed Final
Distribution Date is the first Distribution Date in the month immediately
following the month of the latest scheduled maturity date of any Mortgage Loan
and is not likely to be the date on which the Current Principal Amount of this
Class of Certificates will be reduced to zero.
Distributions on this Certificate will be made by the Paying Agent by check
mailed to the address of the Person entitled thereto as such name and address
shall appear on the Certificate Register or, if such Person so requests, by
notifying the Paying Agent in writing as specified in the Agreement.
Notwithstanding the above, the final distribution on this Certificate will be
made after due notice by the Paying Agent of the pendency of such distribution
and only upon presentation and surrender of this Certificate at the office or
agency appointed by the Paying Agent for that purpose and designated in such
notice. The Initial Current Principal Amount of this Certificate is set forth
above. The Current Principal Amount hereof will be reduced to the extent of
distributions allocable to principal hereon and any Realized Losses allocable
hereto.
[For Class B-1, Class B-2 and Class B-3 Certificates] [Each beneficial
owner of this Certificate or any interest herein shall be deemed to have
represented, by virtue of its acquisition or holding of this certificate or
interest herein, that either (i) it is not an employee benefit plan subject to
the Employee Retirement Income Security Act of 1974, as amended or section 4975
of the Internal Revenue Code of 1986, as amended ("Plan"), or investing with
assets of a Plan or (ii) it has acquired and is holding such certificate in
reliance on Prohibited Transaction Exemption 90-30, as amended from time to time
("Exemption"), and that it understands that
A-3-5
there are certain conditions to the availability of the Exemption,
including that the certificate must be rated, at the time of purchase, not lower
than "BBB-" (or its equivalent) by Standard & Poor's, Fitch, Inc. or Xxxxx'x
Investors Service, Inc., and the certificate is so rated or (iii) (1) it is an
insurance company, (2) the source of funds used to acquire or hold the
certificate or interest therein is an "insurance company general account", as
such term is defined in Prohibited Transaction Class Exemption ("PTCE") 95-60,
and (3) the conditions in Sections I and III of PTCE 95-60 have been satisfied.]
[For Class B-4, Class B-5 and Class B-6 Certificates] [No transfer of this
Certificate shall be made unless the transfer is made pursuant to an effective
registration statement under the Securities Act of 1933, as amended (the
"Securities Act"), and an effective registration or qualification under
applicable state securities laws, or is made in a transaction that does not
require such registration or qualification, and is made in accordance with
Section 5.02 of the Agreement. In the event that such transfer is to be made the
Certificate Registrar shall register such transfer if: (i) made to a transferee
who has provided the Certificate Registrar and the Trustee with evidence as to
its QIB status; or (ii) (A) the transferor has advised the Trustee and the
Certificate Registrar in writing that the Certificate is being transferred to an
Institutional Accredited Investor and (B) prior to such transfer the transferee
furnishes to the Trustee and the Certificate Registrar an Investment Letter; or
(iii) based upon an Opinion of Counsel to the effect that (A) and (B) above are
met sufficient to confirm that such transfer is being made pursuant to an
exemption from, or in a transaction not subject to, the registration
requirements of the Securities Act and other applicable laws.]
Neither the Depositor nor the Certificate Registrar nor the Trustee is
obligated to register or qualify the Class of Certificates specified on the face
hereof under the Securities Act or any other securities law or to take any
action not otherwise required under the Agreement to permit the transfer of such
Certificates without registration or qualification. Any Holder desiring to
effect a transfer of this Certificate shall be required to indemnify the
Trustee, the Certificate Registrar, the Securities Administrator, the Depositor,
EMC and the Master Servicer against any liability that may result if the
transfer is not so exempt or is not made in accordance with such federal and
state laws.
[For Class B-4, Class B-5 and Class B-6 Certificates] [This Certificate may
not be acquired directly or indirectly by, or on behalf of, an employee benefit
plan or other retirement arrangement which is subject to Title I of the Employee
Retirement Income Security Act of 1974, as amended, or Section 4975 of the
Internal Revenue Code of 1986, as amended, unless the transferee certifies or
represents that the proposed transfer and holding of this Certificate and the
servicing, management and operation of the Trust and its assets: (i) will not
result in any prohibited transaction under Section 406 of ERISA or Section 4975
of the Code which is not covered under an individual or class prohibited
transaction exemption, including, but not limited to Department of Labor
Prohibited Transaction Class Exemption ("PTCE") 84-14 (Class Exemption for Plan
Asset Transactions Determined by Independent Qualified Professional Asset
Managers); PTCE 91-38 (Class Exemption for Certain Transactions Involving Bank
Collective Investment Funds); PTCE 90-1 (Class Exemption for Certain
Transactions Involving Insurance Company Pooled Separate Accounts); PTCE 95-60
(Class Exemption for Certain Transactions Involving Insurance Company General
Accounts); and PTCE 96-23 (Class Exemption for Plan Asset Transactions
Determined by In-House Asset Managers), or Section 401(c) of ERISA and
A-3-6
the regulations promulgated thereunder; (ii) will not constitute or result
in the assets of the Trust being deemed to be "plan assets" subject to the
prohibited transaction provisions of ERISA or Section 4975 of the Code; and
(iii) will not give rise to any additional obligations on the part of the
Depositor, the Securities Administrator, any Servicer, the Master Servicer, the
Certificate Registrar or the Trustee in addition to those undertaken in the
Agreement, which will be deemed represented by an owner of a Book-Entry
Certificate or a Global Certificate, or unless the opinion specified in Section
5.07 of the Agreement is provided.]
This Certificate is one of a duly authorized issue of Certificates
designated as set forth on the face hereof (the "Certificates"), issued in
twenty-six Classes. The Certificates, in the aggregate, evidence the entire
beneficial ownership interest in the Trust Fund formed pursuant to the
Agreement.
The Certificateholder, by its acceptance of this Certificate, agrees that
it will look solely to the Trust Fund for payment hereunder and that neither the
Trustee nor the Certificate Registrar is liable to the Certificateholders for
any amount payable under this Certificate or the Agreement or, except as
expressly provided in the Agreement, subject to any liability under the
Agreement.
This Certificate does not purport to summarize the Agreement and reference
is made to the Agreement for the interests, rights and limitations of rights,
benefits, obligations and duties evidenced hereby, and the rights, duties and
immunities of the Trustee and the Certificate Registrar.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Depositor and the rights of the Certificateholders under the Agreement from time
to time by the Depositor and the Trustee with the consent of the Holders of
Certificates evidencing Fractional Undivided Interests aggregating not less than
51% of the Trust Fund (or in certain cases, Holders of Certificates of affected
Classes evidencing such percentage of the Fractional Undivided Interests
thereof). Any such consent by the Holder of this Certificate shall be conclusive
and binding on such Holder and upon all future Holders of this Certificate and
of any Certificate issued upon the transfer hereof or in lieu hereof, whether or
not notation of such consent is made upon this Certificate. The Agreement also
permits the amendment thereof, in certain limited circumstances, without the
consent of the Holders of any of the Certificates.
As provided in the Agreement and subject to certain limitations therein set
forth, the transfer of this Certificate is registrable with the Certificate
Registrar upon surrender of this Certificate for registration of transfer at the
offices or agencies maintained by the Certificate Registrar for such purposes,
duly endorsed by, or accompanied by a written instrument of transfer in form
satisfactory to the Certificate Registrar duly executed by the Holder hereof or
such Holder's attorney duly authorized in writing, and thereupon one or more new
Certificates in authorized denominations representing a like aggregate
Fractional Undivided Interest will be issued to the designated transferee.
The Certificates are issuable only as registered Certificates without
coupons in the Classes and denominations specified in the Agreement. As provided
in the Agreement and subject to certain limitations therein set forth, this
Certificate is exchangeable for one or more
A-3-7
new Certificates evidencing the same Class and in the same aggregate
Fractional Undivided Interest, as requested by the Holder surrendering the same.
No service charge will be made to the Certificateholders for any such
registration of transfer, but the Certificate Registrar may require payment of a
sum sufficient to cover any tax or other governmental charge payable in
connection therewith. The Depositor, the Master Servicer, the Certificate
Registrar, the Trustee and any agent of any of them may treat the Person in
whose name this Certificate is registered as the owner hereof for all purposes,
and none of the Depositor, the Master Servicer, the Certificate Registrar, the
Trustee or any such agent shall be affected by notice to the contrary.
The obligations created by the Agreement and the Trust Fund created thereby
(other than the obligations to make payments to Certificateholders with respect
to the termination of the Agreement) shall terminate upon (i) the later of the
(A) final payment or other liquidation (or Advance with respect thereto) of the
last Mortgage Loan remaining in the Trust Fund and (B) disposition of all
property acquired with respect to any Mortgage Loan, (ii) the payment to
Certificateholders of all amounts required to be paid to them under the
Agreement, or (iii) the optional repurchase by the party named in the Agreement
of all the Mortgage Loans and other assets of the Trust Fund in accordance with
the terms of the Agreement. Such optional repurchase may be made only (A) if (i)
the aggregate Scheduled Principal Balance of the Mortgage Loans at the time of
any such repurchase is less than or equal to 10% of the Cut-off Date Balance, or
(ii) the Depositor, based upon an Opinion of Counsel, has determined that the
REMIC status of any REMIC under the Agreement has been lost or a substantial
risk exists that such REMIC status will be lost for the then-current taxable
year, and (B) following the satisfaction of certain additional termination
requirements specified in the Agreement. The exercise of such right will effect
the early retirement of the Certificates. In no event, however, will the Trust
Fund created by the Agreement continue beyond the expiration of 21 years after
the death of certain persons identified in the Agreement.
Unless this Certificate has been countersigned by an authorized signatory
of the Certificate Registrar by manual signature, this Certificate shall not be
entitled to any benefit under the Agreement, or be valid for any purpose.
[Signature page follows]
A-3-8
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed.
Dated: May 31, 2005
JPMORGAN CHASE BANK, N.A.,
not in its individual capacity but
solely as Trustee
By:
---------------------------------
Authorized Signatory
CERTIFICATE OF AUTHENTICATION
This is one of the Class B-__ Certificates referred to in the
within-mentioned Agreement.
XXXXX FARGO BANK,
NATIONAL ASSOCIATION, as Certificate
Registrar
By:
---------------------------------
Authorized Signatory
A-3-9
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto __________________________________ (Please print or typewrite
name and address including postal zip code of assignee) a Fractional Undivided
Interest evidenced by the within Mortgage Pass-Through Certificate and hereby
authorizes the transfer of registration of such interest to assignee on the
Certificate Register of the Trust Fund.
I (We) further direct the Certificate Registrar to issue a new Certificate
of a like denomination and Class, to the above named assignee and deliver such
Certificate to the following address:
Dated: ______________
-------------------------------------
Signature by or on behalf of assignor
-------------------------------------
Signature Guaranteed
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of distribution:
Distributions shall be made, by wire transfer or otherwise, in immediately
available funds to _________________________________ for the account of
_________________________ account number _____________, or, if mailed by check,
to ______________________________. Applicable statements should be mailed to
______________________________________________.
This information is provided by __________________, the assignee named
above, or ________________________, as its agent.
A-3-10
CLASS R-__ CERTIFICATE
THIS CERTIFICATE MAY NOT BE HELD BY OR TRANSFERRED TO A NON-UNITED STATES
PERSON, A PUBLICLY TRADED PARTNERSHIP OR A DISQUALIFIED ORGANIZATION (AS DEFINED
BELOW).
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A
"RESIDUAL INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT" AS THOSE
TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL
REVENUE CODE OF 1986, AS AMENDED (THE "CODE").
THIS CERTIFICATE MAY NOT BE ACQUIRED DIRECTLY OR INDIRECTLY BY, OR ON
BEHALF OF, AN EMPLOYEE BENEFIT PLAN OR OTHER RETIREMENT ARRANGEMENT WHICH IS
SUBJECT TO TITLE I OF THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS
AMENDED, AND/OR SECTION 4975 OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED,
UNLESS THE PROPOSED TRANSFEREE PROVIDES THE CERTIFICATE REGISTRAR AND THE
TRUSTEE WITH AN OPINION OF COUNSEL ADDRESSED TO THE TRUSTEE, THE DEPOSITOR, THE
MASTER SERVICER, THE CERTIFICATE REGISTRAR AND THE SECURITIES ADMINISTRATOR, AND
ON WHICH THEY MAY RELY, IN A FORM SATISFACTORY TO THE TRUSTEE AND THE
CERTIFICATE REGISTRAR, THAT THE PROPOSED TRANSFER AND HOLDING OF A CERTIFICATE
AND THE SERVICING, MANAGEMENT AND OPERATION OF THE TRUST AND ITS ASSETS: (I)
WILL NOT CONSTITUTE OR RESULT IN THE ASSETS OF THE TRUST BEING DEEMED TO BE
"PLAN ASSETS" SUBJECT TO THE PROHIBITED TRANSACTION PROVISIONS OF ERISA OR
SECTION 4975 OF THE CODE; (II) WILL NOT RESULT IN A NON-EXEMPT PROHIBITED
TRANSACTION UNDER SECTION 406 OF ERISA OR SECTION 4975 OF THE CODE; (III) IS
PERMISSIBLE UNDER APPLICABLE LAW; AND (IV) WILL NOT SUBJECT THE DEPOSITOR, THE
SECURITIES ADMINISTRATOR, THE MASTER SERVICER, THE CERTIFICATE REGISTRAR, ANY
SERVICER OR THE TRUSTEE TO ANY OBLIGATION IN ADDITION TO THOSE UNDERTAKEN IN THE
AGREEMENT (AS DEFINED HEREIN).
ANY RESALE, TRANSFER OR OTHER DISPOSITION OF THIS CERTIFICATE MAY BE MADE
ONLY IF THE PROPOSED TRANSFEREE OBTAINS THE PRIOR WRITTEN CONSENT OF STRUCTURED
ASSET MORTGAGE INVESTMENTS II INC. AND THE SECURITIES ADMINISTRATOR AND PROVIDES
A TRANSFER AFFIDAVIT TO THE TAX MATTERS PERSON, THE SELLER, THE CERTIFICATE
REGISTRAR AND THE TRUSTEE THAT (1) SUCH TRANSFEREE IS NOT (A) THE UNITED STATES
(AS DEFINED IN SECTION 7701 OF THE CODE), ANY STATE (AS DEFINED IN SECTION 7701
OF THE CODE) OR POLITICAL SUBDIVISION THEREOF, ANY POSSESSION OF THE UNITED
STATES, OR ANY AGENCY OR INSTRUMENTALITY OF ANY OF THE FOREGOING (OTHER THAN
A-4-1
AN INSTRUMENTALITY WHICH IS A CORPORATION IF ALL OF ITS ACTIVITIES ARE
SUBJECT TO TAX AND, EXCEPT FOR XXXXXXX MAC OR ANY SUCCESSOR THERETO, A MAJORITY
OF ITS BOARD OF DIRECTORS IS NOT SELECTED BY SUCH GOVERNMENTAL UNIT), (B) ANY
FOREIGN GOVERNMENT, ANY INTERNATIONAL ORGANIZATION (AS DEFINED IN SECTION 7701
OF THE CODE), OR ANY AGENCY OR INSTRUMENTALITY OF ANY OF THE FOREGOING, (C) ANY
ORGANIZATION (OTHER THAN CERTAIN FARMERS' COOPERATIVES DESCRIBED IN SECTION 521
OF THE CODE) WHICH IS EXEMPT FROM THE TAX IMPOSED BY CHAPTER 1 OF THE CODE
(INCLUDING THE TAX IMPOSED BY SECTION 511 OF THE CODE ON UNRELATED BUSINESS
TAXABLE INCOME), (D) ANY ORGANIZATION DESCRIBED IN SECTION 1381(A)(2)(C) OF THE
CODE (ANY SUCH PERSON DESCRIBED IN THE FOREGOING CLAUSES (A), (B), (C) OR (D)
BEING HEREIN REFERRED TO AS A "DISQUALIFIED ORGANIZATION") OR (E) AN AGENT OF A
DISQUALIFIED ORGANIZATION, (2) NO PURPOSE OF SUCH TRANSFER IS TO IMPEDE THE
ASSESSMENT OR COLLECTION OF TAX AND (3) SUCH TRANSFEREE SATISFIES CERTAIN
ADDITIONAL CONDITIONS RELATING TO THE FINANCIAL CONDITION OF THE PROPOSED
TRANSFEREE. NOTWITHSTANDING THE REGISTRATION IN THE CERTIFICATE REGISTER OR ANY
TRANSFER, SALE OR OTHER DISPOSITION OF THIS CERTIFICATE TO A DISQUALIFIED
ORGANIZATION OR AN AGENT OF A DISQUALIFIED ORGANIZATION, SUCH REGISTRATION SHALL
BE DEEMED TO BE OF NO LEGAL FORCE OR EFFECT WHATSOEVER AND SUCH PERSON SHALL NOT
BE DEEMED TO BE A CERTIFICATEHOLDER FOR ANY PURPOSE HEREUNDER, INCLUDING, BUT
NOT LIMITED TO, THE RECEIPT OF DISTRIBUTIONS ON THIS CERTIFICATE. EACH HOLDER OF
THIS CERTIFICATE BY ACCEPTANCE OF THIS CERTIFICATE SHALL BE DEEMED TO HAVE
CONSENTED TO THE PROVISIONS OF THIS PARAGRAPH.
A-4-2
Certificate No. 1 Pass-Through Rate: N/A
Class R-__ Senior
Date of Pooling and Servicing Agreement and Cut-off Date: Aggregate Initial Current Principal Amount of this
May1, 2005 Class of Certificates as of the Cut-off Date: $50.00
First Distribution Date: Initial Current Principal Amount of this Certificate as
June 27, 2005 of the Cut-off Date: $50.00
Master Servicer: CUSIP: 86359L_____
Xxxxx Fargo Bank, National Association
Assumed Final Distribution Date:
May 29, 2045
MORTGAGE PASS-THROUGH CERTIFICATE
SERIES 2005-AR2
evidencing a fractional undivided interest in the distributions
allocable to the Class R-__ Certificates with respect to a Trust Fund
consisting primarily of a pool of one- to four-family adjustable
interest rate negative amortization mortgage loans sold by STRUCTURED
ASSET MORTGAGE INVESTMENTS II INC.
This Certificate is payable solely from the assets of the Trust Fund, and
does not represent an obligation of or interest in Structured Asset Mortgage
Investments II Inc., the Master Servicer, the Certificate Registrar or the
Trustee referred to below or any of their affiliates or any other person.
Neither this Certificate nor the underlying Mortgage Loans are guaranteed or
insured by any governmental entity or by Structured Asset Mortgage Investments
II Inc., the Master Servicer, the Certificate Registrar or the Trustee or any of
their affiliates or any other person. None of Structured Asset Mortgage
Investments II Inc., the Master Servicer or any of their affiliates will have
any obligation with respect to any certificate or other obligation secured by or
payable from payments on the Certificates.
This certifies that Bear, Xxxxxxx Securities Corp. is the registered owner
of the Fractional Undivided Interest evidenced hereby in the beneficial
ownership interest of Certificates of the same Class as this Certificate in a
trust (the "Trust Fund") generally consisting of first lien, adjustable rate
negative amortization mortgage loans secured by one- to four-family residences
and individual condominium units (collectively, the "Mortgage Loans") sold by
Structured Asset
A-4-3
Mortgage Investments II Inc. ("XXXX XX"). The Mortgage Loans were sold on
the Closing Date by EMC Mortgage Corporation ("EMC") to XXXX XX. Xxxxx Fargo
Bank, National Association ("Xxxxx Fargo") will act as master servicer of the
Mortgage Loans (the "Master Servicer," which term includes any successors
thereto under the Agreement referred to below). The Trust Fund was created
pursuant to the Pooling and Servicing Agreement, dated as of the Cut-off Date
specified above (the "Agreement"), among XXXX XX, as depositor (the
"Depositor"), EMC Mortgage Corporation, Xxxxx Fargo, as Master Servicer and
securities administrator and JPMorgan Chase Bank, N.A., as trustee (the
"Trustee"), a summary of certain of the pertinent provisions of which is set
forth hereafter. To the extent not defined herein, capitalized terms used herein
shall have the meaning ascribed to them in the Agreement. This Certificate is
issued under and is subject to the terms, provisions and conditions of the
Agreement, to which Agreement the Holder of this Certificate by virtue of its
acceptance hereof assents and by which such Holder is bound.
No Interest will accrue or be payable on this Certificate. On the First
Distribution Date specified above, the Paying Agent will distribute to the Class
R-____ Certificates $50 from the Deposit Amount deposited by the Depositor on
the Closing Date in the Distribution Account, thereby reducing the Current
Principal Amount of this Class of Certificates to zero.
Distributions on this Certificate will be made by the Paying Agent by check
mailed to the address of the Person entitled thereto as such name and address
shall appear on the Certificate Register or, if such Person so requests, by
notifying the Paying Agent in writing as specified in the Agreement.
Notwithstanding the above, the final distribution on this Certificate will be
made after due notice by the Paying Agent of the pendency of such distribution
and only upon presentation and surrender of this Certificate at the office or
agency appointed by the Paying Agent for that purpose and designated in such
notice.
Each Holder of this Certificate will be deemed to have agreed to be bound
by the restrictions set forth in the Agreement to the effect that (i) each
person holding or acquiring any ownership interest in this Certificate must be a
United States Person and a Permitted Transferee, (ii) the transfer of any
ownership interest in this Certificate will be conditioned upon the delivery to
XXXX XX, the Securities Administrator, the Trustee and the Certificate Registrar
of, among other things, an affidavit to the effect that it is a United States
Person and Permitted Transferee, (iii) any attempted or purported transfer of
any ownership interest in this Certificate in violation of such restrictions
will be absolutely null and void and will vest no rights in the purported
transferee, and (iv) if any person other than a person that is a United States
Person and a Permitted Transferee acquires any ownership interest in this
Certificate in violation of such restrictions, then the Depositor will have the
right, in its sole discretion and without notice to the Holder of this
Certificate, to sell this Certificate to a purchaser selected by the Depositor,
or any affiliate of the Depositor, on such terms and conditions as the Depositor
may impose.
This Certificate may not be acquired directly or indirectly by, or on
behalf of, an employee benefit plan or other retirement arrangement which is
subject to title I of the Employee Retirement Income Security Act of 1974, as
amended, and/or Section 4975 of the Internal Revenue Code of 1986, as amended,
unless the proposed transferee provides the Certificate Registrar and the
Trustee with an opinion of counsel addressed to the Trustee, the Certificate
Registrar, the Master Servicer and the Securities Administrator and on which
they may rely
A-4-4
(which shall not be at the expense of the Trustee, the Certificate
Registrar, the Master Servicer or the Securities Administrator) which is
acceptable to the Certificate Registrar and the Trustee, that the purchase of
this Certificate will not result in or constitute a nonexempt prohibited
transaction, is permissible under applicable law and will not give rise to any
additional fiduciary obligations on the part of the Depositor, the Master
Servicer, the Securities Administrator, the Certificate Registrar or the
Trustee.
This Certificate is one of a duly authorized issue of Certificates
designated as set forth on the face hereof (the "Certificates"), issued in
twenty-six Classes. The Certificates, in the aggregate, evidence the entire
beneficial ownership interest in the Trust Fund formed pursuant to the
Agreement.
The Certificateholder, by its acceptance of this Certificate, agrees that
it will look solely to the Trust Fund for payment hereunder and that neither the
Trustee nor the Certificate Registrar is liable to the Certificateholders for
any amount payable under this Certificate or the Agreement or, except as
expressly provided in the Agreement, subject to any liability under the
Agreement.
This Certificate does not purport to summarize the Agreement and reference
is made to the Agreement for the interests, rights and limitations of rights,
benefits, obligations and duties evidenced hereby, and the rights, duties and
immunities of the Trustee and the Certificate Registrar.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Depositor, the Master Servicer and the Trustee and the rights of the
Certificateholders under the Agreement from time to time by the Depositor and
the Trustee with the consent of the Holders of Certificates evidencing
Fractional Undivided Interests aggregating not less than 51% of the Trust Fund
(or in certain cases, Holders of Certificates of affected Classes evidencing
such percentage of the Fractional Undivided Interests thereof). Any such consent
by the Holder of this Certificate shall be conclusive and binding on such Holder
and upon all future Holders of this Certificate and of any Certificate issued
upon the transfer hereof or in lieu hereof whether or not notation of such
consent is made upon this Certificate. The Agreement also permits the amendment
thereof, in certain limited circumstances, without the consent of the Holders of
any of the Certificates.
As provided in the Agreement and subject to certain limitations therein set
forth, the transfer of this Certificate is registrable with the Certificate
Registrar upon surrender of this Certificate for registration of transfer at the
offices or agencies maintained by the Certificate Registrar for such purposes,
duly endorsed by, or accompanied by a written instrument of transfer in form
satisfactory to the Certificate Registrar duly executed by the Holder hereof or
such Holder's attorney duly authorized in writing, and thereupon one or more new
Certificates in authorized denominations representing a like aggregate
Fractional Undivided Interest will be issued to the designated transferee.
By accepting this Certificate, the purchaser hereof agrees to be a Tax
Matters Person and appoints the Securities Administrator to act as its agent
with respect to all matters concerning the tax obligations of the Trust.
A-4-5
The Certificates are issuable only as registered Certificates without
coupons in the Classes and denominations specified in the Agreement. As provided
in the Agreement and subject to certain limitations therein set forth, this
Certificate is exchangeable for one or more new Certificates evidencing the same
Class and in the same aggregate Fractional Undivided Interest, as requested by
the Holder surrendering the same.
No service charge will be made to the Certificateholders for any such
registration of transfer, but the Certificate Registrar may require payment of a
sum sufficient to cover any tax or other governmental charge payable in
connection therewith. The Depositor, the Master Servicer, the Certificate
Registrar, the Trustee and any agent of any of them may treat the Person in
whose name this Certificate is registered as the owner hereof for all purposes,
and none of the Depositor, the Master Servicer, the Certificate Registrar, the
Trustee or any such agent shall be affected by notice to the contrary.
The obligations created by the Agreement and the Trust Fund created thereby
(other than the obligations to make payments to Certificateholders with respect
to the termination of the Agreement) shall terminate upon (i) the later of the
(A) final payment or other liquidation (or Advance with respect thereto) of the
last Mortgage Loan remaining in the Trust Fund and (B) disposition of all
property acquired with respect to any Mortgage Loan, (ii) the payment to
Certificateholders of all amounts required to be paid to them under the
Agreement, or (iii) the optional repurchase by the party named in the Agreement
of all the Mortgage Loans and other assets of the Trust Fund in accordance with
the terms of the Agreement. Such optional repurchase may be made only (A) if (i)
the aggregate Scheduled Principal Balance of the Mortgage Loans at the time of
any such repurchase is less than or equal to 10% of the Cut-off Date Balance, or
(ii) the Depositor, based upon an Opinion of Counsel, has determined that the
REMIC status of any REMIC under the Agreement has been lost or a substantial
risk exists that such REMIC status will be lost for the then-current taxable
year, and (B) following the satisfaction of certain additional termination
requirements specified in the Agreement. The exercise of such right will effect
the early retirement of the Certificates. In no event, however, will the Trust
Fund created by the Agreement continue beyond the expiration of 21 years after
the death of certain persons identified in the Agreement.
Unless this Certificate has been countersigned by an authorized signatory
of the Certificate Registrar by manual signature, this Certificate shall not be
entitled to any benefit under the Agreement, or be valid for any purpose.
[Signature page follows]
A-4-6
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed.
Dated: May 31, 2005
JPMORGAN CHASE BANK, N.A.,
not in its individual capacity but
solely as Trustee
By:
---------------------------------
Authorized Signatory
CERTIFICATE OF AUTHENTICATION
This is one of the Class R-__ Certificates referred to in the
within-mentioned Agreement.
XXXXX FARGO BANK,
NATIONAL ASSOCIATION, as Certificate
Registrar
By:
---------------------------------
Authorized Signatory
A-4-7
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto __________________________________ (Please print or typewrite
name and address including postal zip code of assignee) a Fractional Undivided
Interest evidenced by the within Mortgage Pass-Through Certificate and hereby
authorizes the transfer of registration of such interest to assignee on the
Certificate Register of the Trust Fund.
I (We) further direct the Certificate Registrar to issue a new Certificate
of a like denomination and Class, to the above named assignee and deliver such
Certificate to the following address:
Dated:
-------------------------------------
Signature by or on behalf of assignor
-------------------------------------
Signature Guaranteed
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of distribution:
Distributions shall be made, by wire transfer or otherwise, in immediately
available funds to _________________________________ for the account of
_________________________ account number _____________, or, if mailed by check,
to ______________________________. Applicable statements should be mailed to
_____________________________________________.
This information is provided by __________________, the assignee named
above, or ________________________, as its agent.
A-4-8
EXHIBIT B
MORTGAGE LOAN SCHEDULE
[PROVIDED UPON REQUEST]
EXHIBIT C
[RESERVED]
EXHIBIT D
REQUEST FOR RELEASE OF DOCUMENTS
To: JPMorgan Chase Bank, N.A.
0 Xxx Xxxx Xxxxx, 0xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Xxxxx Fargo Bank, National Association
as Custodian
0000 Xxx Xxxxxxxxx Xxxx
Xxxxxxxx, XX 00000
Attn: XXXX XX 2005-AR2
RE: Pooling and Servicing Agreement dated as of
May 1, 2005, among Structured Asset Mortgage Investments II Inc.,
EMC Mortgage Corporation, Xxxxx Fargo
Bank, National Association and
JPMorgan Chase Bank, N.A.
as Trustee
In connection with the administration of the Mortgage Loans (as defined in
the Agreement) held by you pursuant to the above-captioned Pooling and Servicing
Agreement (the "Agreement"), we request the release, and hereby acknowledge
receipt, of the Mortgage File (as defined in the Agreement) for the Mortgage
Loan described below, for the reason indicated. The release of such Mortgage
File will not invalidate any insurance coverage provided in respect of such
Mortgage Loan under any of the Insurance Policies (as defined in the Agreement).
Mortgage Loan Number:
Mortgagor Name, Address & Zip Code:
Reason for Requesting Documents (check one):
_____ 1. Mortgage paid in full and proceeds have been
deposited into the Custodial Account
_____ 2. Foreclosure
_____ 3. Substitution
_____ 4. Other Liquidation
_____ 5. Nonliquidation Reason:
_____ 6. California Mortgage Loan paid in full
By:
-------------------------
(authorized signer)
Issuer:
---------------------
Address:
---------------------
Date:
---------------------
EXHIBIT E
FORM OF AFFIDAVIT PURSUANT TO SECTION 860E(E)(4)
Affidavit pursuant to Section 860E(e)(4)
of the Internal Revenue Code of 1986, as
amended, and for other purposes
STATE OF )
: ss:
COUNTY OF )
[NAME OF OFFICER], being first duly sworn, deposes and says:
1. That he is [Title of Officer] of [Name of Investor] (the "Investor"), a
[savings institution] [corporation] duly organized and existing under the laws
of [the State of ______] [the United States], on behalf of which he makes this
affidavit.
2. That (i) the Investor is not a "disqualified organization" as defined in
Section 860E(e)(5) of the Internal Revenue Code of 1986, as amended (the
"Code"), and will not be a disqualified organization as of [Closing Date] [date
of purchase]; (ii) it is not acquiring the Structured Asset Mortgage Investments
II Trust 2005-AR2, Mortgage Pass-Through Certificates, Series 2005-AR2, Class
R-I, Class R-II and Class R-III Certificates (the "Residual Certificates") for
the account of a disqualified organization; (iii) it consents to any amendment
of the Pooling and Servicing Agreement that shall be deemed necessary by
Structured Asset Mortgage Investments II Inc. (upon advice of counsel) to
constitute a reasonable arrangement to ensure that the Residual Certificates
will not be owned directly or indirectly by a disqualified organization; and
(iv) it will not transfer such Residual Certificates unless (a) it has received
from the transferee an affidavit in substantially the same form as this
affidavit containing these same four representations and (b) as of the time of
the transfer, it does not have actual knowledge that such affidavit is false.
3. That the Investor is one of the following: (i) a citizen or resident of
the United States, (ii) a corporation or partnership (including an entity
treated as a corporation or partnership for federal income tax purposes) created
or organized in, or under the laws of, the United States or any state thereof or
the District of Columbia (except, in the case of a partnership, to the extent
provided in regulations), provided that no partnership or other entity treated
as a partnership for United States federal income tax purposes shall be treated
as a United States Person unless all persons that own an interest in such
partnership, either directly or through any entity that is not a corporation for
United States federal income tax purposes, are United States Persons, (iii) an
estate whose income is subject to United States federal income tax regardless of
its source, or (iv) a trust other than a "foreign trust," as defined in Section
7701 (a)(31) of the Code.
4. That the Investor's taxpayer identification number is
______________________.
5. That no purpose of the acquisition of the Residual Certificates is to
avoid or impede the assessment or collection of tax.
6. That the Investor understands that, as the holder of the Residual
Certificates, the Investor may incur tax liabilities in excess of any cash flows
generated by such Residual Certificates.
7. That the Investor intends to pay taxes associated with holding the
Residual Certificates as they become due.
8. The Investor is not an employee benefit plan or other plan subject to
the prohibited transaction provisions of the Employee Retirement Income Security
Act of 1974, as amended ("ERISA"), or Section 4975 of the Internal Revenue Code
of 1986, as amended (the "Code"), or an investment manager, named fiduciary or a
trustee of any such plan, or any other Person acting, directly or indirectly, on
behalf of or purchasing any Certificate with "plan assets" of any such plan.
IN WITNESS WHEREOF, the Investor has caused this instrument to be executed
on its behalf, pursuant to authority of its Board of Directors, by its [Title of
Officer] this ____ day of _________, 20__.
[NAME OF INVESTOR]
By:
-----------------------------------
[Name of Officer]
[Title of Officer]
[Address of Investor for receipt
of distributions]
Address of Investor
for receipt of tax information:
E-2
Personally appeared before me the above-named [Name of Officer], known or
proved to me to be the same person who executed the foregoing instrument and to
be the [Title of Officer] of the Investor, and acknowledged to me that he
executed the same as his free act and deed and the free act and deed of the
Investor.
Subscribed and sworn before me this ___ day of _________, 20___.
NOTARY PUBLIC
COUNTY OF
STATE OF
My commission expires the ___ day of ___________________, 20___.
E-3
EXHIBIT F-1
FORM OF INVESTMENT LETTER
___________________[Date]
[DEPOSITOR]
JPMorgan Chase Bank, N.A.
0 Xxx Xxxx Xxxxx, 0xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Xxxxx Fargo Bank, National Association
Xxxxx Xxxxxx xxx Xxxxxxxxx Xxxxxx
Xxxxxxxxxxx, Xxxxxxxxx 00000
Structured Asset Mortgage Investments II Inc.
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Re: Structured Asset Mortgage Investments II Trust 2005-AR2, Mortgage
Pass-Through Certificates Series 2005-AR2 (the "Certificates"),
including the [Class B-4, Class B-5, Class B-6]
Certificates (the "Privately Offered Certificates")
Dear Ladies and Gentlemen:
In connection with our purchase of Privately Offered Certificates, we
confirm that:
(i) we understand that the Privately Offered Certificates are not being
registered under the Securities Act of 1933, as amended (the "Act"), or any
applicable state securities or "Blue Sky" laws, and are being sold to us in a
transaction that is exempt from the registration requirements of such laws;
(ii) any information we desired concerning the Certificates, including the
Privately Offered Certificates, the trust in which the Certificates represent
the entire beneficial ownership interest (the "Trust") or any other matter we
deemed relevant to our decision to purchase Privately Offered Certificates has
been made available to us;
(iii) we are able to bear the economic risk of investment in Privately
Offered Certificates; we are an institutional "accredited investor" as defined
in Section 501(a) of Regulation D promulgated under the Act and a sophisticated
institutional investor;
(iv) we are acquiring Privately Offered Certificates for our own account,
not as nominee for any other person, and not with a present view to any
distribution or other disposition of the Privately Offered Certificates;
(v) we agree the Privately Offered Certificates must be held indefinitely
by us (and may not be sold, pledged, hypothecated or in any way disposed of)
unless subsequently registered under the Act and any applicable state securities
or "Blue Sky" laws or an exemption from the registration requirements of the Act
and any applicable state securities or "Blue Sky" laws is available;
(vi) we agree that in the event that at some future time we wish to dispose
of or exchange any of the Privately Offered Certificates (such disposition or
exchange not being currently foreseen or contemplated), we will not transfer or
exchange any of the Privately Offered Certificates unless:
(A) (1) the sale is to an Eligible Purchaser (as defined below), (2) if
required by the Pooling and Servicing Agreement (as defined below), a letter to
substantially the same effect as either this letter or, if the Eligible
Purchaser is a Qualified Institutional Buyer as defined under Rule 144A of the
Act, the Rule 144A and Related Matters Certificate in the form attached as
Exhibit F-2 to the Pooling and Servicing Agreement (as defined below) (or such
other documentation as may be acceptable to the Trustee and the Certificate
Registrar (each such term as defined below)) is executed promptly by the
purchaser and delivered to the addressees hereof and (3) all offers or
solicitations in connection with the sale, whether directly or through any agent
acting on our behalf, are limited only to Eligible Purchasers and are not made
by means of any form of general solicitation or general advertising whatsoever;
and
(B) if the Privately Offered Certificate is not registered under the Act
(as to which we acknowledge you have no obligation), the Privately Offered
Certificate is sold in a transaction that does not require registration under
the Act and any applicable state securities or "blue sky" laws and, if JPMorgan
Chase Bank, N.A. (the "Trustee") or Xxxxx Fargo Bank, National Association (the
"Certificate Registrar") so requests, a satisfactory Opinion of Counsel (as
defined in the Pooling and Servicing Agreement) is furnished to such effect,
which Opinion of Counsel shall be an expense of the transferor or the
transferee;
(vii) we agree to be bound by all of the terms (including those relating to
restrictions on transfer) of the Pooling and Servicing Agreement, pursuant to
which the Trust was formed; we have reviewed carefully and understand the terms
of the Pooling and Servicing Agreement;
(viii) we either: (i) are not acquiring the Privately Offered Certificate
directly or indirectly by, or on behalf of, an employee benefit plan or other
retirement arrangement which is subject to Title I of the Employee Retirement
Income Security Act of 1974, as amended, and/or Section 4975 of the Internal
Revenue Code of 1986, as amended, or (ii) are providing a representation or an
Opinion of Counsel to the effect that the proposed transfer and/or holding of a
Privately Offered Certificate and the servicing, management and/or operation of
the Trust and its assets: (I) will not result in any prohibited transaction
unless it is covered under an individual or prohibited transaction class
exemption, including, but not limited to, Class Prohibited Transaction Exemption
("PTCE") 84-14, XXXX 00-00, XXXX 00-0, XXXX 95-60, PTCE 96-23 or Section 401(c)
of ERISA and the regulations promulgated thereunder; (II) will not constitute or
result in the assets of the Trust being deemed to be "plan assets" subject to
the prohibited transaction provisions of ERISA or Section 4975 of the Code; and
(III) will not give rise to any
F-1-2
additional fiduciary duties on the part of the Seller, the Master Servicer,
the Certificate Registrar, the Securities Administrator, any Servicer or the
Trustee.
(ix) We understand that each of the [Class B-4, Class B-5 and Class B-6]
Certificates bears, and will continue to bear, a legend to substantially the
following effect: "THIS CERTIFICATE HAS NOT BEEN AND WILL NOT BE REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR UNDER
ANY STATE SECURITIES LAWS. THE HOLDER HEREOF, BY PURCHASING THIS CERTIFICATE,
AGREES THAT THIS CERTIFICATE MAY BE REOFFERED, RESOLD, PLEDGED OR OTHERWISE
TRANSFERRED ONLY IN COMPLIANCE WITH THE SECURITIES ACT AND OTHER APPLICABLE LAWS
AND ONLY (1) PURSUANT TO RULE 144A UNDER THE SECURITIES ACT ("RULE 144A") TO A
PERSON THAT THE HOLDER REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER
WITHIN THE MEANING OF RULE 144A (A "QIB"), PURCHASING FOR ITS OWN ACCOUNT OR A
QIB PURCHASING FOR THE ACCOUNT OF A QIB, WHOM THE HOLDER HAS INFORMED, IN EACH
CASE, THAT THE REOFFER, RESALE, PLEDGE OR OTHER TRANSFER IS BEING MADE IN
RELIANCE ON RULE 144A, (2) PURSUANT TO AN EXEMPTION FROM REGISTRATION PROVIDED
BY RULE 144 UNDER THE SECURITIES ACT (IF AVAILABLE) OR (3) IN CERTIFICATED FORM
TO AN "INSTITUTIONAL ACCREDITED INVESTOR" WITHIN THE MEANING THEREOF IN RULE
501(a)(1), (2), (3) or (7) OF REGULATION D UNDER THE SECURITIES ACT OR ANY
ENTITY IN WHICH ALL OF THE EQUITY OWNERS COME WITHIN SUCH PARAGRAPHS PURCHASING
NOT FOR DISTRIBUTION IN VIOLATION OF THE SECURITIES ACT, SUBJECT TO (A) THE
RECEIPT BY THE TRUSTEE AND THE CERTIFICATE REGISTRAR OF A LETTER SUBSTANTIALLY
IN THE FORM PROVIDED IN THE AGREEMENT AND (B) THE RECEIPT BY THE TRUSTEE AND THE
CERTIFICATE REGISTRAR OF SUCH OTHER EVIDENCE ACCEPTABLE TO THE TRUSTEE AND THE
CERTIFICATE REGISTRAR THAT SUCH REOFFER, RESALE, PLEDGE OR TRANSFER IS IN
COMPLIANCE WITH THE SECURITIES ACT AND OTHER APPLICABLE LAWS OR IN EACH CASE IN
ACCORDANCE WITH ALL APPLICABLE SECURITIES LAWS OF THE UNITED STATES AND ANY
OTHER APPLICABLE JURISDICTION. NO TRANSFER OF THIS CERTIFICATE MAY BE MADE TO
ANY PERSON, UNLESS THE TRANSFEREE PROVIDES EITHER A CERTIFICATION PURSUANT TO
SECTION 5.07 OF THE AGREEMENT OR ANY OPINION OR COUNSEL SATISFACTORY TO THE
MASTER SERVICER, THE TRUSTEE, THE CERTIFICATE REGISTRAR AND THE SECURITIES
ADMINISTRATOR THAT THE PURCHASE OF THIS CERTIFICATE WILL NOT CONSTITUTE OR
RESULT IN THE ASSETS OF THE TRUST BEING DEEMED TO BE "PLAN ASSETS" SUBJECT TO
THE PROHIBITED TRANSACTION PROVISIONS OF THE EMPLOYEE RETIREMENT INCOME SECURITY
ACT OF 1974, AS AMENDED ("ERISA"), OR SECTION 4975 OF THE CODE, WILL NOT RESULT
IN A NON-EXEMPT PROHIBITED TRANSACTION UNDER ERISA OR SECTION 4975 OF THE CODE
AND WILL NOT SUBJECT THE MASTER SERVICER, THE TRUSTEE, THE CERTIFICATE
REGISTRAR, THE SELLER, ANY SERVICER OR THE SECURITIES ADMINISTRATOR TO ANY
OBLIGATION OR LIABILITY IN ADDITION TO THOSE UNDERTAKEN IN THE AGREEMENT."
F-1-3
"Eligible Purchaser" means a corporation, partnership or other entity which
we have reasonable grounds to believe and do believe (i) can make
representations with respect to itself to substantially the same effect as the
representations set forth herein, and (ii) is either a Qualified Institutional
Buyer as defined under Rule 144A of the Act or an institutional "Accredited
Investor" as defined under Rule 501 of the Act.
Terms not otherwise defined herein shall have the meanings assigned to them
in the Pooling and Servicing Agreement, dated as of May 1, 2005, among
Structured Asset Mortgage Investments II Inc., EMC Mortgage Corporation, Xxxxx
Fargo Bank, National Association and JPMorgan Chase Bank, N.A., as Trustee (the
"Pooling and Servicing Agreement").
If the Purchaser proposes that its Certificates be registered in the name
of a nominee on its behalf, the Purchaser has identified such nominee below, and
has caused such nominee to complete the Nominee Acknowledgment at the end of
this letter.
Name of Nominee (if any):
IN WITNESS WHEREOF, this document has been executed by the undersigned who
is duly authorized to do so on behalf of the undersigned Eligible Purchaser on
the ___ day of ________, 20___.
Very truly yours,
[PURCHASER]
By:
------------------------------
(Authorized Officer)
[By:
------------------------------
Attorney-in-fact]
F-1-4
NOMINEE ACKNOWLEDGMENT
The undersigned hereby acknowledges and agrees that as to the Certificates
being registered in its name, the sole beneficial owner thereof is and shall be
the Purchaser identified above, for whom the undersigned is acting as nominee.
[NAME OF NOMINEE]
By:
------------------------------
(Authorized Officer)
[By:
------------------------------
Attorney-in-fact]
F-1-5
EXHIBIT F-2
FORM OF RULE 144A AND RELATED MATTERS CERTIFICATE
______________________[Date]
[DEPOSITOR]
JPMorgan Chase Bank, N.A.
0 Xxx Xxxx Xxxxx, 0xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Xxxxx Fargo Bank, National Association
Xxxxx Xxxxxx xxx Xxxxxxxxx Xxxxxx
Xxxxxxxxxxx, Xxxxxxxxx 00000
Structured Asset Mortgage Investments II Inc.
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Re: Structured Asset Mortgage Investments II Trust 2005-AR2,
Mortgage Pass-Through Certificates, Series 2005-AR2
Class B-4, Class B-5 and Class B-6 Certificates
(the "Privately Offered Certificates")
Dear Ladies and Gentlemen:
In connection with our purchase of Privately Offered Certificates, the
undersigned certifies to each of the parties to whom this letter is addressed
that it is a qualified institutional buyer (as defined in Rule 144A under the
Securities Act of 1933, as amended (the "Act")) as follows:
1. It owned and/or invested on a discretionary basis eligible securities
(excluding affiliate's securities, bank deposit notes and CD's, loan
participations, repurchase agreements, securities owned but subject to a
repurchase agreement and swaps), as described below:
Date: ______________, 20__ (must be on or after the close of its most
recent fiscal year)
Amount: $ _____________________; and
2. The dollar amount set forth above is:
a. greater than $100 million and the undersigned is one of the following
entities:
F-2-1
(i) an insurance company as defined in Section 2(a)(13) of the Act(1);
or
(ii) an investment company registered under the Investment Company Act
of 1940, as amended (the "Investment Company Act"), or any "business
development company" as defined in Section 2(a)(48) of the Investment
Company Act; or
(iii) a Small Business Investment Company licensed by the U.S. Small
Business Administration under Section 301(c) or (d) of the Small Business
Investment Act of 1958; or
(iv) a plan (i) established and maintained by a state, its political
subdivisions, or any agency or instrumentality of a state or its political
subdivisions, the laws of which permit the purchase of securities of this
type, for the benefit of its employees and (ii) the governing investment
guidelines of which permit the purchase of securities of this type; or
(v) a "business development company" as defined in Section 202(a)(22)
of the Investment Advisers Act of 1940; or
(vi) a corporation (other than a U.S. bank, savings and loan
association or equivalent foreign institution), partnership, Massachusetts
or similar business trust, or an organization described in Section
501(c)(3) of the Internal Revenue Code of 1986, as amended; or
(vii) a U.S. bank, savings and loan association or equivalent foreign
institution, which has an audited net worth of at least $25 million as
demonstrated in its latest annual financial statements; or
(viii) an investment adviser registered under the Investment Advisers
Act; or
b. greater than $10 million, and the undersigned is a broker-dealer
registered with the Securities and Exchange Commission ("SEC"); or
c. less than $10 million, and the undersigned is a broker-dealer registered
with the SEC and will only purchase Rule 144A securities in transactions in
which it acts as a riskless principal (as defined in Rule 144A); or
d. less than $100 million, and the undersigned is an investment company
registered under the Investment Company Act of 1940, which, together with one or
more registered investment companies having the same or an affiliated investment
adviser, owns at least $100 million of eligible securities; or
----------------------
(1) A purchase by an insurance company for one or more of its "separate
accounts", as defined by Section 2(a)(37) of the Investment Company Act of
1940, as amended, which are neither registered nor required to be registered
thereunder, shall be deemed to be a purchase for the account of such insurance
company.
F-2-2
e. less than $100 million, and the undersigned is an entity, all the equity
owners of which are "qualified institutional buyers."
The undersigned further certifies that it is purchasing a Privately Offered
Certificate for its own account or for the account of others that independently
qualify as "Qualified Institutional Buyers" as defined in Rule 144A. It is aware
that the sale of the Privately Offered Certificates is being made in reliance on
its continued compliance with Rule 144A. It is aware that the transferor may
rely on the exemption from the provisions of Section 5 of the Act provided by
Rule 144A. The undersigned understands that the Privately Offered Certificates
may be resold, pledged or transferred only to (i) a person reasonably believed
to be a Qualified Institutional Buyer that purchases for its own account or for
the account of a Qualified Institutional Buyer to whom notice is given that the
resale, pledge or transfer is being made in reliance in Rule 144A, or (ii) an
institutional "accredited investor," as such term is defined under Rule 501(a)
of the Act, in a transaction that otherwise does not constitute a public
offering.
The undersigned agrees that if at some future time it wishes to dispose of
or exchange any of the Privately Offered Certificates, it will not transfer or
exchange any of the Privately Offered Certificates to a Qualified Institutional
Buyer without first obtaining a Rule 144A and Related Matters Certificate in the
form hereof from the transferee and delivering such certificate to the
addressees hereof. Prior to making any transfer of Privately Offered
Certificates, if the proposed transferee is an institutional "accredited
investor," the transferor shall obtain from the transferee and deliver to the
addressees hereof an Investment Letter in the form attached as Exhibit F-1 to
the Pooling and Servicing Agreement, dated as of May 1, 2005, among Structured
Asset Mortgage Investments II Inc., EMC Mortgage Corporation, Xxxxx Fargo Bank,
National Association and JPMorgan Chase Bank, N.A., as Trustee, pursuant to
Certificates were issued.
The undersigned certifies that it either: (i) is not acquiring the
Privately Offered Certificate directly or indirectly by, or on behalf of, an
employee benefit plan or other retirement arrangement which is subject to Title
I of the Employee Retirement Income Security Act of 1974, as amended, and/or
Section 4975 of the Internal Revenue Code of 1986, as amended, or (ii) is
providing a representation or an opinion of counsel to the effect that the
proposed transfer and/or holding of a Privately Offered Certificate and the
servicing, management and/or operation of the Trust and its assets: (I) will not
result in any prohibited transaction unless it is covered under an individual or
class prohibited transaction exemption, including, but not limited to, Class
Prohibited Transaction Exemption ("PTCE") 84-14, XXXX 00-00, XXXX 00-0, XXXX
95-60, PTCE 96-23 or Section 401(c) of ERISA and the regulations to be
promulgated thereunder; (II) will not constitute or result in the assets of the
Trust being deemed to be "plan assets" subject to the prohibited transaction
provisions of ERISA or Section 4975 of the Code; and (III) will not give rise to
any additional fiduciary duties on the part of the Depositor, the Master
Servicer, the Certificate Registrar, the Securities Administrator, any Servicer
or the Trustee.
If the Purchaser proposes that its Certificates be registered in the name
of a nominee on its behalf, the Purchaser has identified such nominee below, and
has caused such nominee to complete the Nominee Acknowledgment at the end of
this letter.
F-2-3
Name of Nominee (if any):
IN WITNESS WHEREOF, this document has been executed by the undersigned who
is duly authorized to do so on behalf of the undersigned purchaser (the
"Purchaser") on the ____ day of ___________, 20___.
Very truly yours,
[PURCHASER]
By:
------------------------------
(Authorized Officer)
[By:
------------------------------
Attorney-in-fact]
F-2-4
NOMINEE ACKNOWLEDGMENT
The undersigned hereby acknowledges and agrees that as to the Certificates
being registered in its name, the sole beneficial owner thereof is and shall be
the Purchaser identified above, for whom the undersigned is acting as nominee.
[NAME OF NOMINEE]
By:
------------------------------
(Authorized Officer)
[By:
------------------------------
Attorney-in-fact]
F-2-5
EXHIBIT G
FORM OF CUSTODIAL AGREEMENT
THIS CUSTODIAL AGREEMENT (as amended and supplemented from time to time,
the "Agreement"), dated as of May 1, 2005, by and among JPMORGAN CHASE BANK,
N.A., as trustee (including its successors under the Pooling and Servicing
Agreement defined below, the "Trustee"), STRUCTURED ASSET MORTGAGE INVESTMENTS
II INC., as depositor (together with any successor in interest, the
"Depositor"), XXXXX FARGO BANK, NATIONAL ASSOCIATION, as master servicer and
securities administrator (together with any successor in interest or successor
under the Pooling and Servicing Agreement referred to below, the "Master
Servicer") and XXXXX FARGO BANK, NATIONAL ASSOCIATION, as custodian (together
with any successor in interest or any successor appointed hereunder, the
"Custodian").
WITNESSETH THAT:
WHEREAS, the Depositor, the Master Servicer, the Trustee and EMC Mortgage
Corporation (the "Seller") have entered into a Pooling and Servicing Agreement,
dated as of May 1, 2005, relating to the issuance of Structured Asset Mortgage
Investments II Trust 2005-AR2, Mortgage Pass-Through Certificates, Series
2005-AR2 (as in effect on the date of this agreement, the "Original Pooling and
Servicing Agreement," and as amended and supplemented from time to time, the
"Pooling and Servicing Agreement"); and
WHEREAS, the Custodian has agreed to act as agent for the Trustee for the
purposes of receiving and holding certain documents and other instruments
delivered by (i) the Depositor or the Master Servicer under the Pooling and
Servicing Agreement and (ii) the related Servicer under their respective
Servicing Agreements, all upon the terms and conditions and subject to the
limitations hereinafter set forth;
NOW, THEREFORE, in consideration of the premises and the mutual covenants
and agreements hereinafter set forth, the Trustee, the Depositor, the Master
Servicer and the Custodian hereby agree as follows:
ARTICLE I
DEFINITIONS
Capitalized terms used in this Agreement and not defined herein shall have
the meanings assigned in the Original Pooling and Servicing Agreement, unless
otherwise required by the context herein.
ARTICLE II
CUSTODY OF MORTGAGE DOCUMENTS
Section 2.1 Custodian to Act as Agent: Acceptance of Mortgage Files. The
Custodian, as the duly appointed agent of the Trustee for these purposes,
acknowledges (subject to any exceptions noted in the Initial Certification
referred to in Section 2.3(a)) receipt of the Mortgage Files relating to the
Mortgage Loans identified on Schedule 1 attached hereto (as such Schedule shall
be updated from time to time) (the "Mortgage Files") and declares that it holds
and will hold such Mortgage Files as agent for the Trustee, in trust, for the
use and benefit of all present and future Certificateholders.
Section 2.2 Recordation of Assignments. If any Mortgage File includes one
or more assignments of Mortgage to the Trustee in a state which is specifically
excluded from the Opinion of Counsel delivered by the Seller to the Trustee and
the Custodian pursuant to the provisions of Section 2.01 of the Pooling and
Servicing Agreement, each such assignment shall be delivered by the Custodian to
the Depositor for the purpose of recording it in the appropriate public office
for real property records, and the Depositor, at no expense to the Custodian,
shall promptly cause to be recorded in the appropriate public office for real
property records each such assignment of Mortgage and, upon receipt thereof from
such public office, shall return each such assignment of Mortgage to the
Custodian.
Section 2.3 Review of Mortgage Files.
(a) On or prior to the Closing Date, in accordance with Section 2.02
of the Pooling and Servicing Agreement, the Custodian shall deliver to the
Depositor and the Trustee an Initial Certification in the form annexed hereto as
Exhibit One evidencing receipt (subject to any exceptions noted therein) of a
Mortgage File for each of the Mortgage Loans listed on Schedule 1 attached
hereto (the "Mortgage Loan Schedule").
(b) Within 90 days of the Closing Date (or, with respect to any
Substitute Mortgage Loans, within 5 Business Days after the receipt by the
Custodian thereof), the Custodian agrees, for the benefit of Certificateholders,
to review, in accordance with the provisions of Section 2.02 of the Pooling and
Servicing Agreement, each such document, and shall execute and deliver to the
Depositor and the Trustee an Interim Certification in the form annexed hereto as
Exhibit Two to the effect that all such documents have been executed and
received and that such documents relate to the Mortgage Loans identified on the
Mortgage Loan Schedule, except for any exceptions listed on Schedule A attached
to such Interim Certification. The Custodian shall be under no duty or
obligation to inspect, review or examine said documents, instruments,
certificates or other papers to determine that the same are genuine,
enforceable, or appropriate for the represented purpose or that they have
actually been recorded or that they are other than what they purport to be on
their face.
(c) Not later than 180 days after the Closing Date or, with respect to
any Substitute Mortgage Loans, within 5 Business Days after the receipt by the
Custodian thereof), the Custodian shall review the Mortgage Files as provided in
Section 2.02 of the Pooling and Servicing Agreement and execute and deliver to
the Depositor and the Trustee (and if the Custodian is not also the Master
Servicer, then to the Master Servicer) a Final Certification in the form annexed
hereto as Exhibit Three evidencing the completeness of the Mortgage Files.
(d) In reviewing the Mortgage Files as provided herein and in the
Pooling and Servicing Agreement, the Custodian shall make no representation as
to and shall not be responsible to verify (i) the validity, legality,
enforceability, due authorization, recordability, sufficiency or genuineness of
any of the documents included in any Mortgage File or (ii) the collectibility,
insurability, effectiveness or suitability of any of the documents in any
Mortgage File.
G-2
Upon receipt of written request from the Trustee, the Custodian shall as
soon as practicable supply the Trustee with a list of all of the documents
relating to the Mortgage Loans then contained in the Mortgage Files.
Section 2.4 Notification of Breaches of Representations and Warranties.
Upon discovery by the Custodian of a breach of any representation or warranty
made by the Depositor as set forth in the Pooling and Servicing Agreement with
respect to a Mortgage Loan relating to a Mortgage File, the Custodian shall give
prompt written notice to the Company, the applicable Servicer and the Trustee.
Section 2.5 Custodian to Cooperate: Release of Mortgage Files. Upon receipt
of written notice from the Trustee that the Mortgage Loan Seller has repurchased
a Mortgage Loan pursuant to Article II of the Pooling and Servicing Agreement,
and that the Repurchase Price therefor has been deposited in the Distribution
Account, and a Request for Release (as defined below), the Custodian agrees to
promptly release to the Mortgage Loan Seller the related Mortgage File.
Upon the Custodian's receipt of a request for release (a "Request for
Release") substantially in the form of Exhibit D to the Pooling and Servicing
Agreement signed by a Servicing Officer of the related Servicer stating that it
has received payment in full of a Mortgage Loan or that payment in full will be
escrowed in a manner customary for such purposes, the Custodian agrees to
promptly release to such Servicer the related Mortgage File. The Depositor shall
deliver to the Custodian, and the Custodian agrees to accept, the Mortgage Note
and other documents constituting the Mortgage File with respect to any
Substitute Mortgage Loan, which documents the Custodian will review to the
extent provided in Article II of the Pooling and Servicing Agreement.
From time to time as is appropriate for the servicing or foreclosure of any
Mortgage Loan, including, for this purpose, collection under any Primary
Mortgage Insurance Policy, the related Servicer shall (or, if the related
Servicer does not, then the Master Servicer may) deliver to the Custodian a
Request for Release signed by a Servicing Officer requesting that possession of
all of the related Mortgage File be released to such Servicer and certifying as
to the reason for such release and that such release will not invalidate any
insurance coverage provided in respect of the related Mortgage Loan under any of
the Insurance Policies. Upon receipt of the foregoing, the Custodian shall
deliver such Mortgage File to the related Servicer. The related Servicer shall
cause each Mortgage File or any document therein so released to be returned to
the Custodian when the need therefor by such Servicer no longer exists, unless
(i) such Mortgage Loan has been liquidated and the Liquidation Proceeds relating
to the related Mortgage Loan have been deposited in the Distribution Account or
(ii) such Mortgage File or such document has been delivered to an attorney, or
to a public trustee or other public official as required by law, for purposes of
initiating or pursuing legal action or other proceedings for the foreclosure of
the related Mortgaged Property either judicially or non-judicially, and the
related Servicer has delivered to the Custodian a certificate of a Servicing
Officer certifying as to the name and address of the Person to which such
Mortgage File or such document was delivered and the purpose or purposes of such
delivery.
G-3
At any time that a Servicer or the Master Servicer is required to deliver
to the Custodian a Request for Release, such Servicer or the Master Servicer
shall deliver two copies of the Request for Release if delivered in hard copy or
such Servicer or the Master Servicer may furnish such Request for Release
electronically to the Custodian, in which event the Servicing Officer
transmitting the same shall be deemed to have signed such Request for Release.
In connection with any Request for Release of a Mortgage File because of a
repurchase of a Mortgage Loan, the assignment of mortgage and the related
Mortgage Note shall be returned to the related Servicer or the Master Servicer,
as applicable, for execution and endorsement, respectively, pursuant to a power
of attorney from the Trustee and for delivery to the Seller. If the related
Servicer or the Master Servicer does not have a power of attorney from the
Trustee to execute the applicable assignment and to endorse the related Mortgage
Note, such Request for Release shall be accompanied by an assignment of
mortgage, without recourse, executed by the Trustee to the Seller and the
related Mortgage Note shall be endorsed without recourse by the Trustee (if not
in blank) and be returned to the related Servicer or the Master Servicer, as
applicable, for delivery to the Seller; provided, however, that in the case of a
Mortgage Loan that is registered on the MERS(R) System, no assignment of
mortgage or endorsement of the Mortgage Note by the Trustee, or by the related
Servicer or the Master Servicer pursuant to a power of attorney from the
Trustee, shall be required. In connection with any Request for Release of a
Mortgage File because of the payment in full of a Mortgage Loan and if the
related Servicer or the Master Servicer does not have a power of attorney from
the Trustee to execute the applicable certificate of satisfaction or similar
instrument, such Request for Release shall be accompanied by a certificate of
satisfaction or other similar instrument to be executed by or on behalf of the
Trustee and returned to the related Servicer or the Master Servicer, as
applicable.
Section 2.6 Assumption Agreements. In the event that any assumption
agreement, substitution of liability agreement or sale of servicing agreement is
entered into with respect to any Mortgage Loan subject to this Agreement in
accordance with the terms and provisions of the Pooling and Servicing Agreement,
the Master Servicer, to the extent provided in the related Servicing Agreement,
shall cause the related Servicer to notify the Custodian that such assumption
agreement, substitution of liability agreement or sale of servicing agreement
has been completed by forwarding to the Custodian the original of such
assumption agreement, substitution of liability agreement or sale of servicing
agreement, which shall be added to the related Mortgage File and, for all
purposes, shall be considered a part of such Mortgage File to the same extent as
all other documents and instruments constituting parts thereof.
ARTICLE III
CONCERNING THE CUSTODIAN
Section 3.1 Custodian a Bailee and Agent of the Trustee. With respect to
each Mortgage Note and other documents constituting each Mortgage File which are
delivered to the Custodian, the Custodian is exclusively the bailee and agent of
the Trustee and has no instructions to hold any Mortgage Note or Mortgage File
for the benefit of any person other than the Trustee and the Certificateholders
and undertakes to perform such duties and only such duties as are specifically
set forth in this Agreement. Except upon compliance with the provisions of
Section 2.5 of this Agreement, no Mortgage Note or Mortgage File shall be
delivered by the Custodian to the Depositor, the Seller, any Servicer or the
Master Servicer or otherwise released from the possession of the Custodian.
G-4
Section 3.2 Reserved.
Section 3.3 Custodian May Own Certificates. The Custodian in its individual
or any other capacity may become the owner or pledgee of Certificates with the
same rights it would have if it were not Custodian.
Section 3.4 Master Servicer to Pay Custodian's Fees and Expenses. The
Master Servicer covenants and agrees to pay to the Custodian from time to time,
and the Custodian shall be entitled to, reasonable compensation for all services
rendered by it in the exercise and performance of any of the powers and duties
hereunder of the Custodian, and the Master Servicer will pay or reimburse the
Custodian upon its request for all reasonable expenses, disbursements and
advances incurred or made by the Custodian in accordance with any of the
provisions of this Agreement (including the reasonable compensation and the
expenses and disbursements of its counsel and of all persons not regularly in
its employ), except any such expense, disbursement or advance as may arise from
its negligence or bad faith, to the extent that such cost or expense is
indemnified by the Depositor pursuant to the Pooling and Servicing Agreement.
Section 3.5 Custodian May Resign; Trustee May Remove Custodian. The
Custodian may resign from the obligations and duties hereby imposed upon it as
such obligations and duties relate to its acting as Custodian of the Mortgage
Loans. Upon receiving such notice of resignation, the Trustee shall either take
custody of the Mortgage Files itself and give prompt notice thereof to the
Depositor, the Master Servicer, the Servicers and the Custodian, or promptly
appoint a successor Custodian by written instrument, in duplicate, one copy of
which instrument shall be delivered to the resigning Custodian and one copy to
the successor Custodian. If the Trustee shall not have taken custody of the
Mortgage Files and no successor Custodian shall have been so appointed and have
accepted appointment within 30 days after the giving of such notice of
resignation, the resigning Custodian may petition any court of competent
jurisdiction for the appointment of a successor Custodian.
The Trustee may remove the Custodian at any time with the consent of the
Master Servicer. In such event, the Trustee shall appoint, or petition a court
of competent jurisdiction to appoint, a successor Custodian hereunder. Any
successor Custodian shall be a depository institution subject to supervision or
examination by federal or state authority, shall be able to satisfy the other
requirements contained in Section 3.7 and shall be unaffiliated with any
Servicer or the Depositor.
Any resignation or removal of the Custodian and appointment of a successor
Custodian pursuant to any of the provisions of this Section 3.5 shall become
effective upon acceptance of appointment by the successor Custodian. The Trustee
shall give prompt notice to the Depositor and the Master Servicer of the
appointment of any successor Custodian. No successor Custodian shall be
appointed by the Trustee without the prior approval of the Depositor and the
Master Servicer.
Section 3.6 Merger or Consolidation of Custodian. Any Person into which the
Custodian may be merged or converted or with which it may be consolidated, or
any Person resulting from any merger, conversion or consolidation to which the
Custodian shall be a party, or any Person succeeding to the business of the
Custodian, shall be the successor of the
G-5
Custodian hereunder (provided such Person shall satisfy the requirements
set forth in Section 3.7), without the execution or filing of any paper or any
further act on the part of any of the parties hereto, anything herein to the
contrary notwithstanding.
Section 3.7 Representations of the Custodian. The Custodian hereby
represents, and any successor Custodian hereunder shall represent, that it is a
depository institution subject to supervision or examination by a federal or
state authority, has a combined capital and surplus of at least $15,000,000 and
is qualified to do business in the jurisdictions in which it will hold any
Mortgage File.
ARTICLE IV
MISCELLANEOUS PROVISIONS
Section 4.1 Notices. All notices, requests, consents and demands and other
communications required under this Agreement or pursuant to any other instrument
or document delivered hereunder shall be in writing and, unless otherwise
specifically provided, may be delivered personally, by telegram or telex, or by
registered or certified mail, postage prepaid, return receipt requested, at the
addresses specified on the signature page hereof (unless changed by the
particular party whose address is stated herein by similar notice in writing),
in which case the notice will be deemed delivered when received.
Section 4.2 Amendments. No modification or amendment of or supplement to
this Agreement shall be valid or effective unless the same is in writing and
signed by all parties hereto, and neither the Depositor, the Master Servicer nor
the Trustee shall enter into any amendment hereof except as permitted by the
Pooling and Servicing Agreement. The Trustee shall give prompt notice to the
Custodian of any amendment or supplement to the Pooling and Servicing Agreement
and furnish the Custodian with written copies thereof.
Section 4.3 GOVERNING LAW. THIS AGREEMENT SHALL BE DEEMED A CONTRACT MADE
UNDER THE LAWS OF THE STATE OF NEW YORK AND SHALL BE CONSTRUED AND ENFORCED IN
ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF NEW YORK WITHOUT
REFERENCE TO ITS CONFLICT OF LAWS RULES (OTHER THAN SECTION 5-1401 OF THE NEW
YORK GENERAL OBLIGATIONS LAW, WHICH SHALL APPLY HERETO).
Section 4.4 Recordation of Agreement. To the extent permitted by applicable
law, this Agreement is subject to recordation in all appropriate public offices
for real property records in all the counties or other comparable jurisdictions
in which any or all of the properties subject to the Mortgages are situated, and
in any other appropriate public recording office or elsewhere, such recordation
to be effected by the Depositor and at the Trust's expense on direction by the
Trustee, but only upon direction accompanied by an Opinion of Counsel reasonably
satisfactory to the Depositor to the effect that the failure to effect such
recordation is likely to materially and adversely affect the interests of the
Certificateholders.
For the purpose of facilitating the recordation of this Agreement as herein
provided and for other purposes, this Agreement may be executed simultaneously
in any number of counterparts, each of which counterparts shall be deemed to be
an original, and such counterparts shall constitute but one and the same
instrument.
G-6
Section 4.5 Severability of Provisions. If any one or more of the
covenants, agreements, provisions or terms of this Agreement shall be for any
reason whatsoever held invalid, then such covenants, agreements, provisions or
terms shall be deemed severable from the remaining covenants, agreements,
provisions or terms of this Agreement and shall in no way affect the validity or
enforceability of the other provisions of this Agreement or of the Certificates
or the rights of the holders thereof.
[Signature page follows]
G-7
IN WITNESS WHEREOF, this Agreement is executed as of the date first above
written.
Address: JPMORGAN CHASE BANK, N.A., as Trustee
By:
------------------------------------
0 Xxx Xxxx Xxxxx, 0xx Xxxxx Name:
Xxx Xxxx, Xxx Xxxx 00000 Title:
Attention: Worldwide Securities Services-Global Debt
XXXX XX Series 2005-AR2
Telecopy: (000) 000-0000
Address: STRUCTURED ASSET MORTGAGE INVESTMENTS II INC.
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000 By:
------------------------------------
Name:
Title:
Address: XXXXX FARGO BANK,
NATIONAL ASSOCIATION, as Master Servicer
0000 Xxx Xxxxxxxxx Xxxx
Xxxxxxxx, Xxxxxxxx 00000
By:
------------------------------------
Name:
Title:
Address: XXXXX FARGO BANK,
NATIONAL ASSOCIATION, as Custodian
0000 Xxx Xxxxxxxxx Xxxx
Xxxxxxxx, Xxxxxxxx 00000 By:
------------------------------------
Name:
Title:
X-0
XXXXX XX XXX XXXX )
: ss:
COUNTY OF NEW YORK )
On the 31st day of May 2005 before me, a notary public in and for said
State, personally appeared _______________, known to me to be a
_________________of JPMorgan Chase Bank, N.A., a banking association organized
under the laws of the United States of America that executed the within
instrument, and also known to me to be the person who executed it on behalf of
said banking association and acknowledged to me that such banking association
executed the within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official
seal the day and year in this certificate first above written.
--------------------------
Notary Public
[SEAL]
X-0
XXXXX XX XXXXXXXX )
: ss:
COUNTY OF XXXXXX )
On the 31st day of May 2005 before me, a notary public in and for said
State, personally appeared _________________, known to me to be an _______ of
Xxxxx Fargo Bank, National Association, a national banking association that
executed the within instrument, and also known to me to be the person who
executed it on behalf of said national banking association, and acknowledged to
me that such national banking association executed the within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official
seal the day and year in this certificate first above written.
--------------------------
Notary Public
[SEAL]
X-00
XXXXX XX XXX XXXX )
: ss:
COUNTY OF NEW YORK )
On the 31st day of May 2005 before me, a notary public in and for said
State, personally appeared _________________, known to me to be a
_________________ of Structured Asset Mortgage Investments II Inc., one of the
corporations that executed the within instrument, and also known to me to be the
person who executed it on behalf of said corporation, and acknowledged to me
that such corporation executed the within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official
seal the day and year in this certificate first above written.
--------------------------
Notary Public
[SEAL]
X-00
XXXXX XX XXXXXXXX )
: ss:
COUNTY OF XXXXXX )
On the 31st day of May 2005 before me, a notary public in and for said
State, personally appeared ____________, known to me to be a ______________ of
Xxxxx Fargo Bank, National Association, one of the corporations that executed
the within instrument, and also known to me to be the person who executed it on
behalf of said corporation, and acknowledged to me that such corporation
executed the within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official
seal the day and year in this certificate first above written.
--------------------------
Notary Public
[SEAL]
G-12
SCHEDULE 1
MORTGAGE LOANS
G-13
EXHIBIT ONE
FORM OF CUSTODIAN INITIAL CERTIFICATION
May 31, 2005
JPMorgan Chase Bank, N.A.
0 Xxx Xxxx Xxxxx, 0xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Structured Asset Mortgage Investments II Inc.
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Structured Asset Mortgage Investments II Inc., Series 2005-AR2
Re: Custodial Agreement, dated as of May 31,
2005, by and among JPMorgan Chase Bank, N.A.,
Structured Asset Mortgage Investments II Inc.
and Xxxxx Fargo Bank, National Association
relating to Structured Asset Mortgage
Investments II Trust 2005-AR2, Mortgage
Pass-Through Certificates, Series 2005-AR2
Ladies and Gentlemen:
In accordance with Section 2.3 of the above-captioned Custodial Agreement,
and subject to Section 2.02 of the Pooling and Servicing Agreement, the
undersigned, as Custodian, hereby certifies that it has received a Mortgage File
(which contains an original Mortgage Note or lost note affidavit) to the extent
required in Section 2.01 of the Pooling and Servicing Agreement with respect to
each Mortgage Loan listed in the Mortgage Loan Schedule, with any exceptions
listed on Schedule A attached hereto.
Capitalized words and phrases used herein shall have the respective
meanings assigned to them in the above-captioned Custodial Agreement.
XXXXX FARGO BANK, NATIONAL ASSOCIATION
By:_________________________________
Name: _________________
Title: _________________
G-14
Schedule A to Exhibit One
Exceptions
G-15
EXHIBIT TWO
FORM OF CUSTODIAN INTERIM CERTIFICATION
_______ __, 20__
JPMorgan Chase Bank, N.A.
4 New York Plaza, 6th Floor
New York, New York 10004
Structured Asset Mortgage Investments II Inc.
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Structured Asset Mortgage Investments II Inc., Series 2005-AR2
Re: Custodial Agreement, dated as of May 31,
2005, by and among JPMorgan Chase Bank, N.A.,
Structured Asset Mortgage Investments II Inc.
and Xxxxx Fargo Bank, National Association
relating to Structured Asset Mortgage
Investments II Trust 2005-AR2, Mortgage
Pass-Through Certificates, Series 2005-AR2
Ladies and Gentlemen:
In accordance with Section 2.3 of the above-captioned Custodial Agreement,
the undersigned, as Custodian, hereby certifies that it has received a Mortgage
File to the extent required pursuant to Section 2.01 of the Pooling and
Servicing Agreement with respect to each Mortgage Loan listed in the Mortgage
Loan Schedule, and it has reviewed the Mortgage File and the Mortgage Loan
Schedule and has determined that: all required documents have been executed and
received and that such documents related to the Mortgage Loans identified on the
Mortgage Loan Schedule, with any exceptions listed on Schedule A attached
hereto.
Capitalized words and phrases used herein shall have the respective
meanings assigned to them in the above-captioned Custodial Agreement.
XXXXX FARGO BANK, NATIONAL ASSOCIATION
By:___________________________________
Name:_________________________________
Title:________________________________
G-16
Schedule A to Exhibit Two
Exceptions
G-17
EXHIBIT THREE
FORM OF CUSTODIAN FINAL CERTIFICATION
_______ __, 20__
JPMorgan Chase Bank, N.A.
4 New York Plaza, 6th Floor
New York, New York 10004
Structured Asset Mortgage Investments II Inc.
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Structured Asset Mortgage Investments II Inc.,
Series 2005-AR2
Re: Custodial Agreement, dated as of May 31,
2005, by and among JPMorgan Chase Bank, N.A.,
Structured Asset Mortgage Investments II Inc.
and Xxxxx Fargo Bank, National Association
relating to Structured Asset Mortgage
Investments II Trust 2005-AR2, Mortgage
Pass-Through Certificates, Series 2005-AR2
Ladies and Gentlemen:
In accordance with Section 2.3 of the above-captioned Custodial Agreement,
the undersigned, as Custodian, hereby certifies that it has received a Mortgage
File to the extent required pursuant to the Pooling and Servicing Agreement with
respect to each Mortgage Loan listed in the Mortgage Loan Schedule, and it has
reviewed the Mortgage File and the Mortgage Loan Schedule and has determined
that an original of each document related thereto required to be recorded has
been returned from the related recording office with evidence of recording
thereon, or a certified copy has been obtained from the related recording
office, with any exceptions listed on Schedule A attached hereto.
Capitalized words and phrases used herein shall have the respective
meanings assigned to them in the above-captioned Custodial Agreement.
XXXXX FARGO BANK, NATIONAL ASSOCIATION
By:___________________________________
Name:_________________________________
Title:________________________________
G-18
EXHIBIT H-1
EMC MORTGAGE CORPORATION
AND
EVERHOME MORTGAGE COMPANY
SUBSERVICING AGREEMENT
DATED AS OF AUGUST 1, 2002
EXHIBIT H-2
COUNTRYWIDE HOME LOANS, INC.
AND
EMC MORTGAGE CORPORATION
SELLER'S WARRANTIES AND SERVICING AGREEMENT,
DATED SEPTEMBER 1, 2002 AS AMENDED
EXHIBIT H-3
WASHINGTON MUTUAL BANK
AND
EMC MORTGAGE CORPORATION
SERVICING AGREEMENT
DATED AS OF APRIL 1, 2005
EXHIBIT H-4
EMC MORTGAGE CORPORATION
AND
STRUCTURED ASSET MORTGAGE INVESTMENTS II INC.
SERVICING AGREEMENT
DATED AS OF MAY 31, 2005
EXHIBIT I
ASSIGNMENT AGREEMENTS
(Available upon request)
EXHIBIT J
MORTGAGE LOAN PURCHASE AGREEMENT
(Available upon request)
EXHIBIT K
FORM OF TRUSTEE LIMITED POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that JPMorgan Chase Bank, N.A., a banking
association organized under the laws of the United States of America,
having a place of business at 0 Xxx Xxxx Xxxxx, 0xx Xxxxx, Xxx Xxxx,
X.X. 00000, as Trustee (and in no personal or other representative
capacity) under the Pooling and Servicing Agreement, dated as of May 1,
2005, by and among Structured Asset Mortgage Investments II Inc., the
Trustee, Xxxxx Fargo Bank, National Association and EMC Mortgage
Corporation (as amended, restated, supplemented or otherwise modified
from time to time, the "Agreement"; capitalized terms not defined
herein have the definitions assigned to such terms in the Agreement),
relating to the Structured Asset Mortgage Investments II Trust
2005-AR2, Mortgage Pass-Through Certificates, Series 2005-AR2, hereby
appoints _______________, in its capacity as a Servicer under the
Agreement, as the Trustee's true and lawful Special Attorney-in-Fact,
in the Trustee's name, place and stead and for the Trustee's benefit,
but only in its capacity as Trustee aforesaid, to perform all acts and
execute all documents as may be customary, necessary and appropriate to
effectuate the following enumerated transactions in respect of any
mortgage, deed of trust, promissory note or real estate owned from time
to time owned (beneficially or in title, whether the Trustee is named
therein as mortgagee or beneficiary or has become mortgagee or
beneficiary by virtue of endorsement, assignment or other conveyance)
or held by or registered to the Trustee (directly or through custodians
or nominees), or in respect of which the Trustee has a security
interest or other lien, all as provided under the applicable Agreement
and only to the extent the respective Trustee has an interest therein
under the Agreement, and in respect of which the Servicer is acting as
servicer pursuant to the Agreement (the "Mortgage Documents").
This appointment shall apply to the following enumerated transactions under the
Agreement only:
1. The modification or re-recording of any Mortgage Document for the purpose of
correcting it to conform to the original intent of the parties thereto or to
correct title errors discovered after title insurance was issued and where such
modification or re-recording does not adversely affect the lien under the
Mortgage Document as insured.
2. The subordination of the lien under a Mortgage Document to an easement in
favor of a public utility company or a state or federal agency or unit with
powers of eminent domain including, without limitation, the execution of partial
satisfactions/releases, partial reconveyances and the execution of requests to
trustees to accomplish same.
3. The conveyance of the properties subject to a Mortgage Document to the
applicable mortgage insurer, or the closing of the title to the property to be
acquired as real estate so owned, or conveyance of title to real estate so
owned.
4. The completion of loan assumption and modification agreements in respect of
Mortgage Documents.
5. The full or partial satisfaction/release of a Mortgage Document or full
conveyance upon payment and discharge of all sums secured thereby, including,
without limitation, cancellation of the related note.
6. The assignment of any Mortgage Document, in connection with the repurchase of
the mortgage loan secured and evidenced thereby.
7. The full assignment of a Mortgage Document upon payment and discharge of all
sums secured thereby in conjunction with the refinancing thereof, including,
without limitation, the assignment of the related note.
8. With respect to a Mortgage Document, the foreclosure, the taking of a deed in
lieu of foreclosure, or the completion of judicial or non-judicial foreclosure
or termination, cancellation or rescission of any such foreclosure, including,
without limitation, any and all of the following acts:
a. the substitution of trustee(s) serving under a deed of trust, in
accordance with state law and the deed of trust;
b. the preparation and issuance of statements of breach or
non-performance;
c. the preparation and filing of notices of default and/or notices of
sale;
d. the cancellation/rescission of notices of default and/or notices of
sale;
e. the taking of a deed in lieu of foreclosure; and
f. the preparation and execution of such other documents and performance
of such other actions as may be necessary under the terms of the
Mortgage Document or state law to expeditiously complete said
transactions in paragraphs 8(a) through 8(e), above.
9. Demand, xxx for, recover, collection and receive each and every sum of money,
debt, account and interest (which now is, or hereafter shall become due and
payable) belonging to or claimed by the Trustee under the Mortgage Documents,
and to use or take any lawful means for recovery thereof by legal process or
otherwise.
10. Endorse on behalf of the Trustee all checks, drafts and/or negotiable
instruments made payable to the Trustee in respect of the Mortgage Documents.
L-2
The Trustee gives the Special Attorney-in-Fact full power and authority to
execute such instruments and to do and perform all and every act and thing
necessary and proper to carry into effect the power or powers granted by this
Limited Power of Attorney, subject to the terms and conditions set forth in the
Agreement including the standard of care applicable to servicers in the
Agreement, and hereby does ratify and confirm what such Special Attorney-in-Fact
shall lawfully do or cause to be done by authority hereof.
IN WITNESS WHEREOF, the Trustee has caused its corporate name and seal to be
hereto signed and affixed and these presents to be acknowledged by its duly
elected and authorized officer this ___ day of ___ , 2005.
JPMORGAN CHASE BANK, N.A., AS TRUSTEE
By:
--------------------------------------
Name:
Title:
WITNESS: WITNESS:
---------------------------- -----------------------------------------
Name: Name:
Title: Title:
XXXXX XX XXX XXXX
XX
XXXXXX XX XXX XXXX
Xx ______________, 2005, before me, the undersigned, a Notary Public in and
for said state, personally appeared __________________, personally known to me
to be the person whose name is subscribed to the within instrument and to be a
duly authorized and acting Senior Vice President of JPMorgan Chase Bank, N.A.,
and such person acknowledged to me that such person executed the within
instrument in such person's authorized capacity as a Senior Vice President of
JPMorgan Chase Bank, N.A., and that by such signature on the within instrument
the entity upon behalf of which such person acted executed the instrument.
WITNESS my hand and official seal.
------------------------------------------
Notary Public
L-3
