STRUCTURED ASSET MORTGAGE INVESTMENTS II INC.,
DEPOSITOR
U.S. BANK NATIONAL ASSOCIATION,
TRUSTEE
▇▇▇▇▇ FARGO BANK, N.A.,
MASTER SERVICER AND SECURITIES ADMINISTRATOR
and
EMC MORTGAGE CORPORATION,
SELLER AND COMPANY
POOLING AND SERVICING AGREEMENT
Dated as of June 1, 2005
Structured Asset Mortgage Investments II Inc.
Bear ▇▇▇▇▇▇▇ ARM Trust, Mortgage Pass-Through Certificates
Series 2005-4
TABLE OF CONTENTS
ARTICLE I DEFINITIONS......................................................................................
ARTICLE II CONVEYANCE OF MORTGAGE LOANS; ORIGINAL ISSUANCE OF CERTIFICATES.................................
Section 2.01 Conveyance of Mortgage Loans to Trustee...............................................
Section 2.02 Acceptance of Mortgage Loans by Trustee...............................................
Section 2.03 Assignment of Interest in the Mortgage Loan Purchase Agreement........................
Section 2.04 Substitution of Mortgage Loans........................................................
Section 2.05 Issuance of Certificates..............................................................
Section 2.06 Representations and Warranties Concerning the Depositor...............................
ARTICLE III ADMINISTRATION AND SERVICING OF MORTGAGE LOANS.................................................
Section 3.01 Master Servicer.......................................................................
Section 3.02 REMIC-Related Covenants...............................................................
Section 3.03 Monitoring of Servicers...............................................................
Section 3.04 Fidelity Bond.........................................................................
Section 3.05 Power to Act; Procedures..............................................................
Section 3.06 Due-on-Sale Clauses; Assumption Agreements............................................
Section 3.07 Release of Mortgage Files.............................................................
Section 3.08 Documents, Records and Funds in Possession of Master Servicer To Be Held for
Trustee...............................................................................
Section 3.09 Standard Hazard Insurance and Flood Insurance Policies................................
Section 3.10 Presentment of Claims and Collection of Proceeds......................................
Section 3.11 Maintenance of the Primary Mortgage Insurance Policies................................
Section 3.12 Trustee to Retain Possession of Certain Insurance Policies and Documents..............
Section 3.13 Realization Upon Defaulted Mortgage Loans.............................................
Section 3.14 Compensation for the Master Servicer..................................................
Section 3.15 REO Property..........................................................................
Section 3.16 Annual Officer's Certificate as to Compliance.........................................
Section 3.17 Annual Independent Accountant's Servicing Report......................................
Section 3.18 Reports Filed with Securities and Exchange Commission.................................
Section 3.19 UCC...................................................................................
Section 3.20 Optional Purchase of Defaulted Mortgage Loans.........................................
ARTICLE IV ACCOUNTS........................................................................................
Section 4.01 Protected Accounts....................................................................
Section 4.02 Master Servicer Collection Account....................................................
Section 4.03 Permitted Withdrawals and Transfers from the Master Servicer Collection Account.......
Section 4.04 Distribution Account..................................................................
Section 4.05 Permitted Withdrawals and Transfers from the Distribution Account.....................
ARTICLE V CERTIFICATES.....................................................................................
Section 5.01 Certificates..........................................................................
Section 5.02 Registration of Transfer and Exchange of Certificates.................................
Section 5.03 Mutilated, Destroyed, Lost or Stolen Certificates.....................................
Section 5.04 Persons Deemed Owners.................................................................
Section 5.05 Transfer Restrictions on Residual Certificates........................................
Section 5.06 Restrictions on Transferability of Certificates.......................................
Section 5.07 ERISA Restrictions....................................................................
Section 5.08 Rule 144A Information.................................................................
Section 5.09 Appointment of Paying Agent and Certificate Registrar.................................
ARTICLE VI PAYMENTS TO CERTIFICATEHOLDERS..................................................................
Section 6.01 Distributions on the Certificates.....................................................
Section 6.02 Allocation of Losses..................................................................
Section 6.03 Payments..............................................................................
Section 6.04 Statements to Certificateholders......................................................
Section 6.05 Monthly Advances......................................................................
Section 6.06 Compensating Interest Payments........................................................
ARTICLE VII THE MASTER SERVICER............................................................................
Section 7.01 Liabilities of the Master Servicer....................................................
Section 7.02 Merger or Consolidation of the Master Servicer........................................
Section 7.03 Indemnification of the Trustee, the Master Servicer and the Securities
Administrator.........................................................................
Section 7.04 Limitations on Liability of the Master Servicer and Others............................
Section 7.05 Master Servicer Not to Resign.........................................................
Section 7.06 Successor Master Servicer.............................................................
Section 7.07 Sale and Assignment of Master Servicing...............................................
ARTICLE VIII DEFAULT.......................................................................................
Section 8.01 Events of Default.....................................................................
Section 8.02 Trustee to Act; Appointment of Successor..............................................
Section 8.03 Notification to Certificateholders....................................................
Section 8.04 Waiver of Defaults....................................................................
Section 8.05 List of Certificateholders............................................................
ARTICLE IX CONCERNING THE TRUSTEE AND THE SECURITIES ADMINISTRATOR.........................................
Section 9.01 Duties of Trustee.....................................................................
Section 9.02 Certain Matters Affecting the Trustee and the Securities Administrator................
Section 9.03 Trustee and Securities Administrator Not Liable for Certificates or Mortgage Loans....
Section 9.04 Trustee and Securities Administrator May Own Certificates.............................
Section 9.05 Trustee's and Securities Administrator's Fees and Expenses............................
Section 9.06 Eligibility Requirements for Trustee, Paying Agent and Securities Administrator.......
Section 9.07 Insurance.............................................................................
Section 9.08 Resignation and Removal of the Trustee and Securities Administrator...................
Section 9.09 Successor Trustee, Successor Paying Agent and Successor Securities Administrator......
Section 9.10 Merger or Consolidation of Trustee, Paying Agent or Securities Administrator..........
Section 9.11 Appointment of Co-Trustee or Separate Trustee.........................................
Section 9.12 Federal Information Returns and Reports to Certificateholders; REMIC Administration...
ARTICLE X TERMINATION......................................................................................
Section 10.01 Termination Upon Repurchase by the Depositor or its Designee or Liquidation of the
Mortgage Loans........................................................................
Section 10.02 Additional Termination Requirements...................................................
ARTICLE XI MANDATORY AUCTION PROVISIONS....................................................................
Section 11.01 The Market Value Swap and Auction Administration Agreement............................
Section 11.02 Removal of the Auction Administrator..................................................
Section 11.03 Mandatory Auction Certificates........................................................
ARTICLE XII MISCELLANEOUS PROVISIONS.......................................................................
Section 12.01 Intent of Parties.....................................................................
Section 12.02 Amendment.............................................................................
Section 12.03 Recordation of Agreement..............................................................
Section 12.04 Limitation on Rights of Certificateholders............................................
Section 12.05 Acts of Certificateholders............................................................
Section 12.06 Governing Law.........................................................................
Section 12.07 Notices...............................................................................
Section 12.08 Severability of Provisions............................................................
Section 12.09 Successors and Assigns................................................................
Section 12.10 Article and Section Headings..........................................................
Section 12.11 Counterparts..........................................................................
Section 12.12 Notice to Rating Agencies.............................................................
EXHIBITS
Exhibit A-1 - Form of Class A Certificates
Exhibit A-2 - Form of Class B Certificates
Exhibit A-3 - 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 to H-7 - Servicing Agreements
Exhibit I - Assignment Agreements
Exhibit J - Mortgage Loan Purchase Agreement
Exhibit K - Market Value Swap
Exhibit L - Swap Guarantee
POOLING AND SERVICING AGREEMENT
Pooling and Servicing Agreement dated as of June 1, 2005, among
Structured Asset Mortgage Investments II Inc., a Delaware corporation, as
depositor (the "Depositor"), U.S. Bank National Association, a national banking
association, not in its individual capacity but solely as trustee (the
"Trustee"), ▇▇▇▇▇ Fargo Bank, N.A., as master servicer (in such capacity, the
"Master Servicer") and as securities administrator (in such capacity, the
"Securities Administrator"), and EMC Mortgage Corporation, as seller (in such
capacity, the "Seller") and as company (in such capacity, the "Company").
PRELIMINARY STATEMENT
On or prior to the Closing Date, the Depositor acquired the Mortgage
Loans from the Seller. 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 interest" 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 Interests will be designated
"regular interests" in such REMIC and the Class R-II Certificate will be
designated the "residual interest" 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 Interests will be designated
"regular interests" in such REMIC and the Class R-III Certificate will be
designated the "residual interest" 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 $1,617,125,371.37. The initial principal amount of the
Certificates will not exceed such Outstanding Principal Balance. The Group I
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 $334,406,472.48. The Group II 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 $283,281,430.01 The Group III
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 $319,786,170.43. The Group IV 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 $679,651,298.45.
In consideration of the mutual agreements herein contained, the
Depositor, the Master Servicer, the Securities Administrator, the Seller, the
Company, the Auction Administrator and the Trustee agree as follows:
ARTICLE I
DEFINITIONS
Whenever used in this Agreement, the following words and phrases,
unless otherwise expressly provided or unless the context otherwise requires,
shall have the meanings specified in this Article.
ACCEPTED MASTER SERVICING PRACTICES: With respect to any Mortgage Loan,
those customary mortgage servicing practices of prudent mortgage servicing
institutions that master service mortgage loans of the same type and quality as
such Mortgage Loan in the jurisdiction where the related Mortgaged Property is
located, to the extent applicable to the Trustee or the Master Servicer (except
in its capacity as successor to a Servicer).
ACCOUNT: The Master Servicer Collection Account, the Distribution
Account and the Protected Account as the context may require.
ACCRUED CERTIFICATE INTEREST: For any Certificate for any Distribution
Date, the interest accrued during the related Interest Accrual Period at the
applicable Pass-Through Rate on the Current Principal Amount, or Notional Amount
in the case of the Interest Only Certificates, of such Certificate immediately
prior to such Distribution Date, on the basis of a 360-day year consisting of
twelve 30-day months, less (i) in the case of a Senior Certificate, such
Certificate's share of any Net Interest Shortfall from the related Mortgage
Loans and, after the Cross-Over Date, the interest portion of any Realized
Losses on the related Mortgage Loans allocated thereto in accordance with
Section 6.02(g) and (ii) in the case of a Subordinate Certificate, such
Certificate's share of any Net Interest Shortfall from the related Mortgage
Loans and the interest portion of any Realized Losses on the related Mortgage
Loans allocated thereto in accordance with Section 6.02(g).
AFFILIATE: As to any Person, any other Person controlling, controlled
by or under common control with such Person. "Control" means the power to direct
the management and policies of a Person, directly or indirectly, whether through
ownership of voting securities, by contract or otherwise. "Controlled" and
"Controlling" have meanings correlative to the foregoing. The Trustee may
conclusively presume that a Person is not an Affiliate of another Person unless
a Responsible Officer of the Trustee has actual knowledge to the contrary.
AGGREGATE EXPENSE RATE: With respect to any Mortgage Loan, the sum of
the Servicing Fee Rate and the Lender-Paid PMI Rate (if applicable).
AGREEMENT: This Pooling and Servicing Agreement and all amendments
hereof and supplements hereto.
ALLOCABLE SHARE: With respect to each Class of Subordinate
Certificates:
(a) as to any Distribution Date and amounts distributable pursuant to
clauses (i) and (iv) 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 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 (ii), (iii) and (v) of the definition of Subordinate Optimal Principal
Amount, and as to each Class of Subordinate Certificates (other than the Class
of Subordinate Certificates having the lowest numerical designation as to which
the Class Prepayment Distribution Trigger shall not be applicable) for which (x)
the Class Prepayment Distribution Trigger has been satisfied on such
Distribution Date, the fraction, expressed as a percentage, the numerator of
which is the Current Principal Amount of such Class and the denominator of which
is the aggregate Current Principal Amount of all such Classes of Subordinate
Certificates and (y) the 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 Class Prepayment Distribution Trigger was satisfied on such
Distribution Date is reduced to zero, any amounts distributed pursuant to this
clause (b), to the extent of such Class's remaining Allocable Share, shall be
distributed to the remaining Classes of Subordinate Certificates which satisfy
the Class Prepayment Distribution Trigger and to the Class of Subordinate
Certificates having the lowest numerical Class 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 ▇▇▇▇▇'▇. For any
short-term deposit or security, or a rating of A-l+ in the case of S&P and P-1
in the case of ▇▇▇▇▇'▇.
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: For any Mortgaged Property related to a Mortgage Loan,
the amount set forth as the appraised value of such Mortgaged Property in an
appraisal made for the mortgage originator in connection with its origination of
the related Mortgage Loan.
ASSIGNMENT AGREEMENTS: The agreements attached hereto as Exhibit I,
whereby the Servicing Agreements were assigned to the Trustee for the benefit of
the Certificateholders.
ASSUMED FINAL DISTRIBUTION DATE: August 25, 2035, or if such day is not
a Business Day, the next succeeding Business Day.
AUCTION ADMINISTRATION AGREEMENT: The Auction Administration Agreement,
dated as of June 30, 2005, between the Auction Administrator and Bear ▇▇▇▇▇▇▇
International Limited.
AUCTION ADMINISTRATOR: The Securities Administrator, not in its
individual capacity but in its capacity as auction administrator under the
Auction Administration Agreement.
AUCTION PROCEEDS: The portion of the proceeds of an auction of a Class
allocable to a Certificate of such Class as set forth in the Auction
Administration Agreement.
AUCTION PROCEEDS ACCOUNT: The auction proceeds account established
pursuant to Section 3 of the Auction Administration Agreement.
AVAILABLE FUNDS: With respect to any Distribution Date, the sum of the
Group I, Group II, Group III and Group IV 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.
BANK OF AMERICA: Bank of America, National Association, or its
successor in interest.
BANK OF AMERICA SERVICING AGREEMENT: The Flow Mortgage Loan Sale and
Servicing Agreement, dated March 1, 2003 between the Seller and Bank of America,
attached hereto as Exhibit H-1, as modified by the related Assignment Agreement.
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 Federal Reserve is closed or on
which banking institutions in the jurisdiction in which the Trustee, the Master
Servicer, any Servicer or the Securities Administrator is located are authorized
or obligated by law or executive order to be closed.
CERTIFICATE: Any mortgage pass-through certificate evidencing a
beneficial ownership interest in the Trust Fund signed and countersigned by the
Certificate Registrar in substantially the forms annexed hereto as Exhibits ▇-▇,
▇-▇ and A-3 with the blanks therein appropriately completed.
CERTIFICATE GROUP: The Group I Senior Certificates, Group II Senior
Certificates, Group III Senior Certificates and Group IV Senior Certificates, as
applicable.
CERTIFICATE OWNER: Any Person who is the beneficial owner of a
Certificate registered in the name of the Depository or its nominee.
CERTIFICATE REGISTER: The register maintained pursuant to Section 5.02.
CERTIFICATE REGISTRAR: The Securities Administrator or any successor
certificate registrar appointed hereunder.
CERTIFICATEHOLDER: A Holder of a Certificate.
CHEVY CHASE: Chevy Chase Bank, F.S.B., or its successor in interest.
CHEVY CHASE SERVICING AGREEMENT: The Purchase, Warranties and Servicing
Agreement, dated July 1, 2001, as amended by Amendment No. 1, dated January 13,
2003, between EMC and Chevy Chase, attached hereto as Exhibit H-5, as modified
by the related Assignment Agreement.
CLASS: With respect to the Certificates, ▇-▇-▇, ▇▇-▇-▇, ▇▇-▇-▇, ▇▇-▇-▇,
II-X-I, III-A-1, IV-A-1, R-I, R-II, R-III, ▇-▇, ▇-▇, ▇-▇, ▇-▇, ▇-▇, ▇-▇, ▇-▇,
▇-▇, ▇-▇, ▇-▇▇, ▇-▇▇ and B-12.
CLASS PREPAYMENT DISTRIBUTION TRIGGER: For a Class of Subordinate
Certificates for any Distribution Date, the Class Prepayment Distribution
Trigger is satisfied if the fraction (expressed as a percentage), the numerator
of which is the aggregate Current Principal Amount of such Class and each Class
of Subordinate Certificates subordinate thereto, if any, and the denominator of
which is the Scheduled Principal Balance of all of the Mortgage Loans as of the
related Due Date, equals or exceeds such percentage calculated as of the Closing
Date.
CLASS R CERTIFICATES: The Class R-I, Class R-II and Class R-III
Certificates.
CLOSING DATE: June 30, 2005.
CODE: The Internal Revenue Code of 1986, as amended.
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 U.S. Bank Corporate
Trust Services, ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇,
Attention: Corporate Trust Services/BART Series 2005-4. With respect to the
Certificate Registrar and the presentment of Certificates for registration of
transfer, exchange or final payment, ▇▇▇▇▇ Fargo Bank, National Association,
▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention:
Corporate Trust/BART Series 2005-4, and for all other purposes, ▇.▇. ▇▇▇ ▇▇,
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ (or for overnight deliveries, ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇,
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ 21045), Attention: Corporate Trust/BART Series 2005-4.
CORRESPONDING CERTIFICATES: With respect to each REMIC II Regular
Interest, the Class with the same designation.
COUNTRYWIDE: Countrywide Home Loans Servicing LP, as successor to
Countrywide Home Loans, Inc., or its successor in interest.
COUNTRYWIDE SERVICING AGREEMENT: The Seller's Warranties and Servicing
Agreement, dated as of September 1, 2002, as amended on January 1, 2003 and
September 1, 2004, between the Seller and Countrywide, attached hereto as
Exhibit H-2, as modified by the related Assignment Agreement.
CROSS-OVER DATE: The first Distribution Date on which the aggregate
Current Principal Amount of the Subordinate Certificates has been reduced to
zero (giving effect to all distributions on such Distribution Date).
CURRENT PRINCIPAL AMOUNT: With respect to any Certificate (other than
the Interest Only Certificates) as of any Distribution Date, the initial
principal amount of such Certificate plus any Subsequent Recoveries added to the
Current Principal Amount of such Certificate pursuant to Section 6.02(h), and
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 allocated prior to such Distribution Date to such Certificate,
taking account of the 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 (other than the Interest Only
Certificates), the Current Principal Amount thereof will equal the sum of the
Current Principal Amounts of all Certificates in such Class. Notwithstanding the
foregoing, solely for purposes of giving consents, directions, waivers,
approvals, requests and notices, the Class R-I, Class R-II and Class R-III
Certificates after the Distribution Date on which they each receive the
distribution of the last dollar of their respective original principal amount
shall be deemed to have Current Principal Amounts equal to their respective
Current Principal Amounts on the day immediately preceding such Distribution
Date.
CUSTODIAL AGREEMENT: An agreement, dated as of the Closing Date among
the Depositor, the Master Servicer, the Trustee and the Custodian in
substantially the form of Exhibit G hereto.
CUSTODIAN: ▇▇▇▇▇ Fargo Bank, N.A., or any successor custodian appointed
pursuant to the provisions hereof and of the Custodial Agreement.
CUT-OFF DATE: June 1, 2005.
CUT-OFF DATE BALANCE: $1,617,125,371.37.
DEBT SERVICE REDUCTION: Any reduction of the Scheduled Payments which a
Mortgagor is obligated to pay with respect to a Mortgage Loan as a result of any
proceeding under the Bankruptcy Code or any other similar state law or other
proceeding.
DEFICIENT VALUATION: With respect to any Mortgage Loan, a valuation of
the Mortgaged Property by a court of competent jurisdiction in an amount less
than the then outstanding indebtedness under the Mortgage Loan, which valuation
results from a proceeding initiated under the Bankruptcy Code or any other
similar state law or other proceeding.
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., or 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 each Mortgage Loan, the
Determination Date as defined in the related Servicing Agreement.
DISQUALIFIED ORGANIZATION: Any of the following: (i) the United States,
any State or political subdivision thereof, any possession of the United States,
or any agency or instrumentality of any of the foregoing (other than an
instrumentality which is a corporation if all of its activities are subject to
tax and, except for the ▇▇▇▇▇▇▇ Mac or any successor thereto, a majority of its
board of directors is not selected by such governmental unit), (ii) any foreign
government, any international organization, or any agency or instrumentality of
any of the foregoing, (iii) any organization (other than certain farmers'
cooperatives described in Section 521 of the Code) which is exempt from the tax
imposed by Chapter 1 of the Code (including the tax imposed by Section 511 of
the Code on unrelated business taxable income), (iv) rural electric and
telephone cooperatives described in Section 1381(a)(2)(C) of the Code or (v) any
other Person so designated by the Trustee and the Certificate Registrar based
upon an Opinion of Counsel that the holding of an ownership interest in a
Residual Certificate by such Person may cause any REMIC contained in the Trust
or any Person having an ownership interest in the Residual Certificate (other
than such Person) to incur a liability for any federal tax imposed under the
Code that would not otherwise be imposed but for the transfer of an ownership
interest in a Residual Certificate to such Person. The terms "United States,"
"State" and "international organization" shall have the meanings set forth in
Section 7701 of the Code or successor provisions.
DISTRIBUTION ACCOUNT: The trust account or accounts created and
maintained pursuant to Section 4.04, which shall be denominated "▇▇▇▇▇ Fargo
Bank, National Association, as Paying Agent, for the benefit of the registered
holders of Structured Asset Mortgage Investments II Inc., Bear ▇▇▇▇▇▇▇ ARM
Trust, Mortgage Pass-Through Certificates, Series 2005-4 - Distribution
Account." The Distribution Account 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: ▇▇▇▇▇ Fargo Bank N.A., or its successors in interest as
custodian for the Depository.
DUE DATE: With respect to each Mortgage Loan, the date in each month on
which its Scheduled Payment is due if such due date is the first day of a month
and otherwise is deemed to be the first day of the following month or such other
date specified in the related Servicing Agreement.
DUE PERIOD: With respect to any Distribution Date and each Mortgage
Loan, the period commencing on the second day of the month preceding the month
in which the Distribution Date occurs and ending at the close of business on the
first day of the month in which the Distribution Date occurs.
ELIGIBLE ACCOUNT: Any of (i) a segregated account maintained with a
federal or state chartered depository institution (A) the short-term obligations
of which are rated A-2 or better by S&P and P-1 by ▇▇▇▇▇'▇ 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)) delivered to the Trustee
prior to the establishment of such account, the Certificateholders will have a
claim with respect to the funds in such account and a perfected first priority
security interest against any collateral (which shall be limited to Permitted
Investments, each of which shall mature not later than the Business Day
immediately preceding the Distribution Date next following the date of
investment in such collateral or the Distribution Date if such Permitted
Investment is an obligation of the institution that maintains the Distribution
Account) securing such funds that is superior to claims of any other depositors
or general creditors of the depository institution with which such account is
maintained, (ii) a segregated trust account or accounts maintained with a
federal or state chartered depository institution or trust company with trust
powers acting in its fiduciary capacity or (iii) a segregated account or
accounts of a depository institution acceptable to the Rating Agencies (as
evidenced in writing by the Rating Agencies that use of any such account as the
Distribution Account will not have an adverse effect on the then-current ratings
assigned to the Classes of Certificates then rated by the Rating Agencies).
Eligible Accounts may bear interest.
EMC: EMC Mortgage Corporation, or its successor in interest.
EMC MORTGAGE LOANS: Shall mean those Mortgage Loans serviced by EMC
pursuant to the terms of the EMC Servicing Agreement.
EMC SERVICING AGREEMENT: The Servicing Agreement, dated as of June 1,
2005, between the Seller and EMC, attached hereto as Exhibit H-3, as modified by
the related Assignment Agreement.
ERISA: The Employee Retirement Income Security Act of 1974, as amended.
EVENT OF DEFAULT: An event of default described in Section 8.01.
EXCESS LIQUIDATION PROCEEDS: To the extent that such amount is not
required by law to be paid to the related Mortgagor, the amount, if any, by
which Liquidation Proceeds with respect to a Liquidated Mortgage Loan exceed the
sum of (i) the Outstanding Principal Balance of such Mortgage Loan and accrued
but unpaid interest at the related Mortgage Interest Rate through the last day
of the month in which the related Liquidation Date occurs, plus (ii) related
Liquidation Expenses.
▇▇▇▇▇▇ ▇▇▇: Federal National Mortgage Association or any successor
thereto.
FDIC: Federal Deposit Insurance Corporation or any successor thereto.
FINAL CERTIFICATION: The certification substantially in the form of
Exhibit Three to the Custodial Agreement.
FISCAL QUARTER: December 1 to February 29 (or the last day in such
month), March 1 to May 31, June 1 to August 31, or September 1 to 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 the numerator of which is the Current Principal Amount, or the
Notional Amount in the case of the Interest Only Certificates, of such
Certificate and the denominator of which is the Current Principal Amount, or
Notional Amount in the case of the Interest Only Certificates, of such Class.
With respect to the Certificates in the aggregate, the fractional undivided
interest evidenced by (i) each Class of Residual Certificates will be deemed to
equal 0.25% multiplied by the percentage interest of such Residual Certificate,
(ii) the 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 Class and
(iii) a Certificate of any other Class will be deemed to equal 98.25% multiplied
by a fraction, the numerator of which is the Current Principal Amount of such
Certificate and the denominator of which is the aggregate Current Principal
Amount of all the Certificates; provided however, the percentage in clause (iii)
above shall be increased by 1.0% upon the retirement of the Interest Only
Certificates.
▇▇▇▇▇▇▇ MAC: ▇▇▇▇▇▇▇ Mac, formerly the Federal Home Loan Mortgage
Corporation, or any successor thereto.
GLOBAL CERTIFICATE: Any Private Certificate registered in the name of
the Depository or its nominee, beneficial interests in which are reflected on
the books of the Depository or on the books of a Person maintaining an account
with such Depository (directly or as an indirect participant in accordance with
the rules of such depository).
GROSS MARGIN: As to each Mortgage Loan, the fixed percentage set forth
in the related Mortgage Note and indicated on the Mortgage Loan Schedule which
percentage is added to the related Index on each Interest Adjustment Date to
determine (subject to rounding, the minimum and maximum Mortgage Interest Rate
and the Periodic Rate Cap) the Mortgage Interest Rate until the next Interest
Adjustment Date.
GROUP I AVAILABLE FUNDS, GROUP II AVAILABLE FUNDS, GROUP III AVAILABLE
FUNDS AND GROUP IV 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 (including the principal portion of Scheduled
Payments, Principal Prepayments and the principal portion of Net Liquidation
Proceeds) and all previously undistributed payments on account of interest
received after the Cut-off Date and on or prior to the related Determination
Date, (b) any Monthly Advances and Compensating Interest Payments by the
Servicers or the Master Servicer with respect to such Distribution Date and (c)
any reimbursed amount in connection with losses on investments of deposits in an
account, except:
(i) all payments that were due on or before the Cut-off Date;
(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;
(vi) any investment earnings on amounts on deposit in the
Master Servicer Collection Account and the Distribution Account and amounts
permitted to be withdrawn from the Master Servicer Collection Account and the
Distribution Account pursuant to this Agreement;
(vii) amounts needed to pay the Servicing Fees or to
reimburse any Servicer or the Master Servicer for amounts due under the
applicable Servicing Agreement and the Agreement to the extent such amounts have
not been retained by, or paid previously to, such Servicer or the Master
Servicer;
(viii) any fees payable under any lender-paid primary mortgage
insurance policy; and
(ix) any expenses or other amounts reimbursable to the
Trustee, the Securities Administrator and the Custodian pursuant to Section
7.04(c) or Section 9.05.
GROUP I MORTGAGE LOANS: The Mortgage Loans identified as such on the
Mortgage Loan Schedule.
GROUP I SENIOR CERTIFICATES: The Class I-A-1, Class R-I, Class R-II and
Class R-III Certificates.
GROUP I SENIOR OPTIMAL PRINCIPAL AMOUNT, GROUP II SENIOR OPTIMAL
PRINCIPAL AMOUNT, GROUP III SENIOR OPTIMAL PRINCIPAL AMOUNT AND GROUP IV SENIOR
OPTIMAL PRINCIPAL AMOUNT: With respect to each Distribution Date, an amount
equal to the sum, without duplication, of the following (but in no event greater
than the aggregate Current Principal Amount of the Group I, Group II, Group III
or Group IV Senior Certificates, as applicable, immediately prior to such
Distribution Date):
(i) the applicable Senior Percentage of the principal
portion of all Scheduled Payments due on each Outstanding Mortgage Loan in the
related Loan Group on the related Due Date as specified in the amortization
schedule at the time applicable thereto (after 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);
(ii) 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;
(iii) he 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;
(iv) the lesser of (a) the applicable Senior Prepayment
Percentage of the sum of (A) 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 (B)) and all
Subsequent Recoveries received in respect of each Liquidated Mortgage Loan in
the related Loan Group during the related Due Period and (B) 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 (A) 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 (B)) and (B) the Scheduled
Principal Balance of each such Mortgage Loan in the related Loan Group that was
purchased by an insurer from the Trust during the related Prepayment Period
pursuant to the related Primary Mortgage Insurance Policy, if any or otherwise;
and
(v) 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 each Mortgage Loan in the related Loan Group that has been replaced by the
Seller with a Substitute Mortgage Loan pursuant to the Mortgage Loan Purchase
Agreement in connection with such Distribution Date over the Scheduled Principal
Balance of each such Substitute Mortgage Loan.
GROUP I SENIOR PERCENTAGE: Initially, 94.85%. On any Distribution Date,
the lesser of (i) 100% and (ii) the percentage (carried to six places rounded
up) obtained by dividing the aggregate Current Principal Amount of the Group I
Senior Certificates immediately preceding such Distribution Date by the
aggregate Scheduled Principal Balance of the Group I Mortgage Loans as of the
beginning of the related Due Period.
GROUP I SENIOR PREPAYMENT PERCENTAGE: On any Distribution Date
occurring during the periods set forth below, as follows:
Period (dates inclusive) Group I Senior Prepayment Percentage
----------------------------- -------------------------------------------------
July 25, 2005 - June 25, 2012 100%
July 25, 2012 - June 25, 2013 Group I Senior Percentage plus 70% of the Group I
Subordinate Percentage
July 25, 2013 - June 25, 2014 Group I Senior Percentage plus 60% of the Group I
Subordinate Percentage
July 25, 2014 - June 25, 2015 Group I Senior Percentage plus 40% of the Group I
Subordinate Percentage
July 25, 2015 - June 25, 2016 Group I Senior Percentage plus 20% of the Group I
Subordinate Percentage
July 25, 2016 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 July 2012 and June 2013, (b) 35% of the Original Subordinate Principal
Balance if such Distribution Date occurs between and including July 2013 and
June 2014, (c) 40% of the Original Subordinate Principal Balance if such
Distribution Date occurs between and including July 2014 and June 2015, (d) 45%
of the Original Subordinate Principal Balance if such Distribution Date occurs
between and including July 2015 and June 2016, and (e) 50% of the Original
Subordinate Principal Balance if such Distribution Date occurs during or after
July 2016.
In addition, if on any Distribution Date 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 bankruptcy 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 aggregate Current Principal Amount of the Subordinate Certificates does not
exceed 50% and (b)(i) on or prior to the Distribution Date in June 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 June 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, the Group I
Senior Prepayment Percentage for such Distribution Date will equal the Group I
Senior Percentage; provided, however, if on such Distribution Date the current
weighted average of the Subordinate Percentages is equal to or greater than two
times the initial weighted average of the Subordinate Percentages on or prior to
the Distribution Date occurring in June 2008 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 which is the aggregate Current Principal Amount of the
Senior Certificates immediately preceding such Distribution Date, and the
denominator of which is the Scheduled Principal Balance of the Mortgage Loans as
of the beginning of the related Due Period, exceeds such percentage as of the
Cut-off Date, then the Group I Senior Prepayment Percentage for such
Distribution Date will equal 100%. On the Distribution Date on which the Current
Principal Amounts of the Group I Senior Certificates are reduced to zero, the
Group I Senior Prepayment Percentage shall be the minimum percentage sufficient
to effect such reduction and thereafter shall be zero.
GROUP I SUBORDINATE PERCENTAGE: On any Distribution Date, 100% minus
the Group I Senior Percentage.
GROUP I SUBORDINATE PREPAYMENT PERCENTAGE: With respect to the Group I
Mortgage Loans, on any Distribution Date, 100% minus the Group I Senior
Prepayment Percentage, except that on any Distribution Date after the Current
Principal Amounts of the Group I Senior Certificates have each been reduced to
zero, 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%, the Group I
Subordinate Prepayment Percentage will equal 100%. If the test set forth in the
preceding sentence is not satisfied on any Distribution Date after the Current
Principal Amount of the Group I Senior Certificates have each been reduced to
zero, then the Group I Subordinate Prepayment Percentage will equal zero for
such Distribution Date.
GROUP II MORTGAGE LOANS: The Mortgage Loans identified as such on the
Mortgage Loan Schedule.
GROUP II SENIOR CERTIFICATES: The Class II-A-1, Class II-A-2, Class
II-A-3 and Class II-X-1 Certificates.
GROUP II SENIOR PERCENTAGE: Initially, 94.85%. 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 (other than the Interest Only Certificates)
immediately preceding such Distribution Date by the aggregate Scheduled
Principal Balance of the Group II Mortgage Loans as of the beginning of the
related Due Period.
GROUP II SENIOR PREPAYMENT PERCENTAGE: On any Distribution Date
occurring during the periods set forth below, as follows:
Period (dates inclusive) Group II Senior Prepayment Percentage
------------------------------ -------------------------------------
July 25, 2005 - June 25, 2012 100%
July 25, 2012 - June 25, 2013 Group II Senior Percentage plus 70% of the Group II
Subordinate Percentage
July 25, 2013 - June 25, 2014 Group II Senior Percentage plus 60% of the Group II
Subordinate Percentage
July 25, 2014 - June 25, 2015 Group II Senior Percentage plus 40% of the Group II
Subordinate Percentage
July 25, 2015 - June 25, 2016 Group II Senior Percentage plus 20% of the Group II
Subordinate Percentage
July 25, 2016 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 July 2012 and June 2013, (b) 35% of the Original Subordinate Principal
Balance if such Distribution Date occurs between and including July 2013 and
June 2014, (c) 40% of the Original Subordinate Principal Balance if such
Distribution Date occurs between and including July 2014 and June 2015, (d) 45%
of the Original Subordinate Principal Balance if such Distribution Date occurs
between and including July 2015 and June 2016, and (e) 50% of the Original
Subordinate Principal Balance if such Distribution Date occurs during or after
July 2016.
In addition, if on any Distribution Date 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 bankruptcy 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 aggregate Current Principal Amount of the Subordinate Certificates does not
exceed 50% and (b)(i) on or prior to the Distribution Date in June 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 June 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, the Group II
Senior Prepayment Percentage for such Distribution Date will equal the Group II
Senior Percentage; provided, however, if on such Distribution Date the current
weighted average of the Subordinate Percentages is equal to or greater than two
times the initial weighted average of the Subordinate Percentages on or prior to
the Distribution Date occurring in June 2008 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 which is the aggregate Current Principal Amount of the
Senior Certificates (other than the Interest Only Certificates) immediately
preceding such Distribution Date, and the denominator of which is the Scheduled
Principal Balance of the Mortgage Loans as of the beginning of the related Due
Period, exceeds such percentage as of the Cut-off Date, then the Group II Senior
Prepayment Percentage for such Distribution Date will equal 100%. On the
Distribution Date on which the Current Principal Amounts of the Group II Senior
Certificates are reduced to zero, the Group II Senior Prepayment Percentage
shall be the minimum percentage sufficient to effect such reduction and
thereafter shall be zero.
GROUP II SUBORDINATE PERCENTAGE: On any Distribution Date, 100% minus
the Group II Senior Percentage.
GROUP II SUBORDINATE PREPAYMENT PERCENTAGE: With respect to the Group
II Mortgage Loans, on any Distribution Date, 100% minus the Group II Senior
Prepayment Percentage, except that on any Distribution Date after the Current
Principal Amounts of the Group II Senior Certificates have each been reduced to
zero, 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%, the Group II
Subordinate Prepayment Percentage will equal 100%. If the test set forth in the
preceding sentence is not satisfied on any Distribution Date after the Current
Principal Amount of the Group II Senior Certificates have each been reduced to
zero, then the Group II Subordinate Prepayment Percentage will equal zero 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.
GROUP III SENIOR PERCENTAGE: Initially, 94.85%. 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 aggregate Scheduled Principal Balance of the Group III Mortgage Loans as of
the beginning of the related Due Period.
GROUP III SENIOR PREPAYMENT PERCENTAGE: On any Distribution Date
occurring during the periods set forth below, as follows:
Period (dates inclusive) Group III Senior Prepayment Percentage
------------------------------ -----------------------------------------------------
July 25, 2005 - June 25, 2012 100%
July 25, 2012 - June 25, 2013 Group III Senior Percentage plus 70% of the Group III
Subordinate Percentage
July 25, 2013 - June 25, 2014 Group III Senior Percentage plus 60% of the Group III
Subordinate Percentage
July 25, 2014 - June 25, 2015 Group III Senior Percentage plus 40% of the Group III
Subordinate Percentage
July 25, 2015 - June 25, 2016 Group III Senior Percentage plus 20% of the Group III
Subordinate Percentage
July 25, 2016 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 July 2012 and June 2013, (b) 35% of the Original Subordinate Principal
Balance if such Distribution Date occurs between and including July 2013 and
June 2014, (c) 40% of the Original Subordinate Principal Balance if such
Distribution Date occurs between and including July 2014 and June 2015, (d) 45%
of the Original Subordinate Principal Balance if such Distribution Date occurs
between and including July 2015 and June 2016, and (e) 50% of the Original
Subordinate Principal Balance if such Distribution Date occurs during or after
July 2016.
In addition, if on any Distribution Date 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 bankruptcy 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 aggregate Current Principal Amount of the Subordinate Certificates does not
exceed 50% and (b)(i) on or prior to the Distribution Date in June 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 June 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, the Group
III Senior Prepayment Percentage for such Distribution Date will equal the Group
III Senior Percentage; provided, however, if on such Distribution Date the
current weighted average of the Subordinate Percentages is equal to or greater
than two times the initial weighted average of the Subordinate Percentages on or
prior to the Distribution Date occurring in June 2008 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 which is the aggregate Current Principal Amount of the
Senior Certificates immediately preceding such Distribution Date, and the
denominator of which is the Scheduled Principal Balance of the Mortgage Loans as
of the beginning of the related Due Period, exceeds such percentage as of the
Cut-off Date, then the Group III Senior Prepayment Percentage for such
Distribution Date will equal 100%. On the Distribution Date on which the Current
Principal Amounts of the Group III Senior Certificates are reduced to zero, the
Group III Senior Prepayment Percentage shall be the minimum percentage
sufficient to effect such reduction and thereafter shall be zero.
GROUP III SUBORDINATE PERCENTAGE: On any Distribution Date, 100% minus
the Group III Senior Percentage.
GROUP III SUBORDINATE PREPAYMENT PERCENTAGE: With respect to the Group
III Mortgage Loans, on any Distribution Date, 100% minus the Group III Senior
Prepayment Percentage, except that on any Distribution Date after the Current
Principal Amounts of the Group III Senior Certificates have each been reduced to
zero, 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%, the Group III
Subordinate Prepayment Percentage will equal 100%. If the test set forth in the
preceding sentence is not satisfied on any Distribution Date after the Current
Principal Amount of the Group III Senior Certificates have each been reduced to
zero, then the Group III Subordinate Prepayment Percentage will equal zero for
such Distribution Date.
GROUP IV MORTGAGE LOANS: The Mortgage Loans identified as such on the
Mortgage Loan Schedule.
GROUP IV SENIOR CERTIFICATES: The Class IV-A-1 Certificates.
GROUP IV SENIOR PERCENTAGE: Initially, 94.85%. 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 IV Senior Certificates immediately preceding such Distribution Date by the
aggregate Scheduled Principal Balance of the Group IV Mortgage Loans as of the
beginning of the related Due Period.
GROUP IV SENIOR PREPAYMENT PERCENTAGE: On any Distribution Date
occurring during the periods set forth below, as follows:
Period (dates inclusive) Group III Senior Prepayment Percentage
------------------------------ ---------------------------------------------------
July 25, 2005 - June 25, 2012 100%
July 25, 2012 - June 25, 2013 Group IV Senior Percentage plus 70% of the Group IV
Subordinate Percentage
July 25, 2013 - June 25, 2014 Group IV Senior Percentage plus 60% of the Group IV
Subordinate Percentage
July 25, 2014 - June 25, 2015 Group IV Senior Percentage plus 40% of the Group IV
Subordinate Percentage
July 25, 2015 - June 25, 2016 Group IV Senior Percentage plus 20% of the Group IV
Subordinate Percentage
July 25, 2016 and thereafter Group IV Senior Percentage
In addition, no reduction of the Group IV 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 July 2012 and June 2013, (b) 35% of the Original Subordinate Principal
Balance if such Distribution Date occurs between and including July 2013 and
June 2014, (c) 40% of the Original Subordinate Principal Balance if such
Distribution Date occurs between and including July 2014 and June 2015, (d) 45%
of the Original Subordinate Principal Balance if such Distribution Date occurs
between and including July 2015 and June 2016, and (e) 50% of the Original
Subordinate Principal Balance if such Distribution Date occurs during or after
July 2016.
In addition, if on any Distribution Date 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 bankruptcy 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 aggregate Current Principal Amount of the Subordinate Certificates does not
exceed 50% and (b)(i) on or prior to the Distribution Date in June 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 June 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, the Group IV
Senior Prepayment Percentage for such Distribution Date will equal the Group IV
Senior Percentage; provided, however, if on such Distribution Date the current
weighted average of the Subordinate Percentages is equal to or greater than two
times the initial weighted average of the Subordinate Percentages on or prior to
the Distribution Date occurring in June 2008 and the above delinquency and loss
tests are met, then the Group IV Senior Prepayment Percentage for such
Distribution Date will equal the Group IV Senior Percentage plus 50% of the
Group IV Subordinate Percentage.
Notwithstanding the foregoing, if on any Distribution Date, the
percentage, the numerator which is the aggregate Current Principal Amount of the
Senior Certificates immediately preceding such Distribution Date, and the
denominator of which is the Scheduled Principal Balance of the Mortgage Loans as
of the beginning of the related Due Period, exceeds such percentage as of the
Cut-off Date, then the Group IV Senior Prepayment Percentage for such
Distribution Date will equal 100%. On the Distribution Date on which the Current
Principal Amounts of the Group IV Senior Certificates are reduced to zero, the
Group IV Senior Prepayment Percentage shall be the minimum percentage sufficient
to effect such reduction and thereafter shall be zero.
GROUP IV SUBORDINATE PERCENTAGE: On any Distribution Date, 100% minus
the Group IV Senior Percentage.
GROUP IV SUBORDINATE PREPAYMENT PERCENTAGE: With respect to the Group
IV Mortgage Loans, on any Distribution Date, 100% minus the Group IV Senior
Prepayment Percentage, except that on any Distribution Date after the Current
Principal Amounts of the Group IV Senior Certificates have each been reduced to
zero, 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%, the Group IV
Subordinate Prepayment Percentage will equal 100%. If the test set forth in the
preceding sentence is not satisfied on any Distribution Date after the Current
Principal Amount of the Group IV Senior Certificates have each been reduced to
zero, then the Group IV Subordinate Prepayment Percentage will equal zero for
such Distribution Date.
HOLDER: The Person in whose name a Certificate is registered in the
Certificate Register, except that, subject to Subsections 12.02(b) and 12.05(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.
HBMC: HomeBanc Mortgage Corporation, or its successor in interest.
HBMC SERVICING AGREEMENT: The Purchase, Warranties and Servicing
Agreement, dated January 1, 2004, between EMC and HBMC, attached hereto as
Exhibit H-7, as modified by the related Assignment Agreement.
INDEMNIFIED PERSONS: The Trustee, the Master Servicer, the Custodian
and the Securities Administrator and their officers, directors, agents and
employees and, with respect to the Trustee, any separate co-trustee and its
officers, directors, agents and employees.
INDEPENDENT: When used with respect to any specified Person, this term
means that such Person (a) is in fact independent of the Depositor or the Master
Servicer and of any Affiliate of the Depositor or the Master Servicer, (b) does
not have any direct financial interest or any material indirect financial
interest in the Depositor or the Master Servicer or any Affiliate of the
Depositor or the Master Servicer and (c) is not connected with the Depositor or
the Master Servicer or any Affiliate as an officer, employee, promoter,
underwriter, trustee, partner, director or person performing similar functions.
INDEX: The index, if any, specified in a Mortgage Note by reference to
which the related Mortgage Interest Rate will be adjusted from time to time.
INDIVIDUAL CERTIFICATE: Any Private Certificate registered in the name
of the Holder other than the Depository or its nominee.
INITIAL CERTIFICATION: The certification substantially in the form of
Exhibit One to the Custodial Agreement.
INSTITUTIONAL ACCREDITED INVESTOR: Any Person meeting the requirements
of Rule 501(a)(l), (2), (3) or (7) of Regulation D under the Securities Act or
any entity all of the equity holders in which come within such paragraphs.
INSURANCE POLICY: With respect to any Mortgage Loan, any standard
hazard insurance policy, flood insurance policy or title insurance policy.
INSURANCE PROCEEDS: Amounts paid by the insurer under any Insurance
Policy covering any Mortgage Loan or Mortgaged Property other than amounts
required to be paid over to the Mortgagor pursuant to law or the related
Mortgage Note or Security Instrument and other than amounts used to repair or
restore the Mortgaged Property or to reimburse insured expenses.
INTEREST ACCRUAL PERIOD: With respect to each Distribution Date, for
each Class of Certificates, the calendar month preceding the month in which such
Distribution Date occurs.
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 ONLY CERTIFICATES: The Class II-X-1 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 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 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.
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 each Mortgage Loan covered by a
lender-paid primary mortgage insurance policy, the amount payable to the related
insurer, as stated in the Mortgage Loan Schedule.
LIQUIDATED MORTGAGE LOAN: Any defaulted Mortgage Loan as to which the
related Servicer or the Master Servicer has determined that all amounts it
expects to recover from or on account of such Mortgage Loan have been recovered.
LIQUIDATION DATE: With respect to any Liquidated Mortgage Loan, the
date on which the Master Servicer or 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 Master
Servicer or the related Servicers in connection with the liquidation of such
Mortgage Loan and the related Mortgage 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 liquidation.
LIQUIDATION PROCEEDS: Cash received in connection with the liquidation
of a defaulted Mortgage Loan, whether through trustee's sale, foreclosure sale,
Insurance Proceeds, condemnation proceeds or otherwise and any Subsequent
Recoveries.
LOAN GROUP: Loan Group I, Loan Group II, Loan Group III or Loan Group
IV, 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 GROUP IV: The group of Mortgage Loans designated as belonging to
Loan Group IV 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 original principal
balance of the related Mortgage Loan and the denominator of which is the
Original Value of the related Mortgaged Property.
LOSS ALLOCATION LIMITATION: The meaning specified in Section 6.02(c)
hereof.
LOSS SEVERITY PERCENTAGE: With respect to any Distribution Date, the
percentage equivalent of a fraction, the numerator of which is the amount of
Realized Losses incurred on a 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.
MANDATORY AUCTION CERTIFICATES: The Class II-A-2 Certificates and the
Class II-A-3 Certificates.
MANDATORY AUCTION DISTRIBUTION DATE: With respect to each Mandatory
Auction Certificate, February 25, 2010, or if such date is not a Business Day,
the next succeeding Business Day; provided, however, that in the event that no
bids are received (or it is deemed that no bids are received) for all or a
portion of a Class of Mandatory Auction Certificates in the manner set forth in
the Auction Administration Agreement, the Mandatory Auction Distribution Date
for each such Mandatory Auction Certificate shall mean, with respect to such
Mandatory Auction Certificate, the Distribution Date in the month in which the
Auction Administrator receives at least one bid for such Mandatory Auction
Certificate in the manner set forth in the Auction Administration Agreement.
MANDATORY AUCTION WINNER: The winning bidder or bidders, if any, for
the Mandatory Auction Certificates with respect to the Mandatory Auction
Distribution Date in accordance with the Auction Administration Agreement.
MARKET VALUE SWAP: The ISDA Master Agreement and Confirmation between
the Swap Counterparty and the Auction Administrator, attached hereto as Exhibit
K
MARKET VALUE SWAP PROCEEDS: The amount payable by the Swap Counterparty
pursuant to the Market Value Swap on the Mandatory Auction Distribution Date, if
any.
MASTER SERVICER: As of the Closing Date, ▇▇▇▇▇ Fargo Bank, N.A. and,
thereafter, its respective successors in interest who meet the qualifications of
the Servicing Agreements and this Agreement.
MASTER SERVICER CERTIFICATION: A written certification covering
servicing of the Mortgage Loans by all Servicers and signed by an officer of the
Master Servicer that complies with (i) the ▇▇▇▇▇▇▇▇-▇▇▇▇▇ 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 ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act of 2002 is amended, (b) the Statement referred to in
clause (ii) is modified or superceded by any subsequent statement, rule or
regulation of the Securities and Exchange Commission or any statement of a
division thereof, or (c) any future releases, rules and regulations are
published by the Securities and Exchange Commission from time to time pursuant
to the ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act of 2002, which in any such case affects the form or
substance of the required certification and results in the required
certification being, in the reasonable judgment of the Master Servicer,
materially more onerous than the form of the required certification as of the
Closing Date, the Master Servicer Certification shall be as agreed to by the
Master Servicer and the Depositor following a negotiation in good faith to
determine how to comply with any such new requirements.
MASTER SERVICER COLLECTION ACCOUNT: The trust account or accounts
created and maintained pursuant to Section 4.02, which shall be denominated
"U.S. Bank National Association, as Trustee f/b/o holders of Structured Asset
Mortgage Investments II Inc., Bear ▇▇▇▇▇▇▇ ARM Trust, Mortgage Pass-Through
Certificates, Series 2005-4 - Master Servicer Collection Account." The Master
Servicer Collection Account shall be an Eligible Account.
MASTER SERVICING COMPENSATION: The meaning specified in Section 3.14.
MATERIAL DEFECT: The meaning specified in Section 2.02(a).
MAXIMUM LIFETIME MORTGAGE RATE: The maximum level to which a Mortgage
Interest Rate can adjust in accordance with its terms, regardless of changes in
the applicable Index.
MERS: Mortgage Electronic Registration Systems, Inc., a corporation
organized and existing under the laws of the State of Delaware, or 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: 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 the applicable Servicer pursuant to the related Servicing Agreement or
the Master Servicer pursuant to Section 6.05.
MOODY'S: ▇▇▇▇▇'▇ Investors Service, Inc. or 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.
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 initially 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 (which shall include, without
limitation, each related Mortgage Note, Mortgage and Mortgage File and all
rights appertaining thereto), including a mortgage loan the property securing
which has become an REO Property.
MORTGAGE LOAN PURCHASE AGREEMENT: The Mortgage Loan Purchase Agreement
dated as of June 30, 2005, between EMC Mortgage Corporation, as seller, and
Structured Asset Mortgage Investments II Inc., as purchaser, and all amendments
thereof and supplements thereto, attached as Exhibit J.
MORTGAGE LOAN SCHEDULE: The schedule, attached hereto as Exhibit B with
respect to the Mortgage Loans, and 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.
MORTGAGED PROPERTY: Land and improvements securing the indebtedness of
a Mortgagor under the related Mortgage Loan or, in the case of REO Property,
such REO Property.
MORTGAGOR: The obligor on a Mortgage Note.
NATIONAL CITY: National City Mortgage Company, or its successor in
interest.
NATIONAL CITY SERVICING AGREEMENT: The Purchase, Warranties and
Servicing Agreement, dated as of October 1, 2001, between EMC and National City,
which is attached hereto as Exhibit H-4, as modified by the related Assignment
Agreement
NET INTEREST SHORTFALL: With respect to any Distribution Date, the
Interest Shortfall, if any, for such Distribution Date net of Compensating
Interest Payments made with respect to such Distribution Date.
NET LIQUIDATION PROCEEDS: As to any Liquidated Mortgage Loan,
Liquidation Proceeds net of (i) Liquidation Expenses which are payable therefrom
to the related Servicer or the Master Servicer in accordance with the related
Servicing Agreement or this Agreement and (ii) unreimbursed advances by the
related Servicer or the Master Servicer and Monthly Advances.
NET RATE: With respect to each Mortgage Loan, the Mortgage Interest
Rate in effect from time to time less the Aggregate Expense Rate (expressed as a
per annum rate).
NON-OFFERED SUBORDINATE CERTIFICATES: The Class B-10, Class B-11 and
Class B-12 Certificates.
NONRECOVERABLE ADVANCE: Any advance or Monthly Advance (i) which was
previously made or is proposed to be made by the Master Servicer, the Trustee
(as successor Master Servicer) or the applicable Servicer and (ii) which, in the
good faith judgment of the Master Servicer, the Trustee or the applicable
Servicer, will not or, in the case of a proposed advance or Monthly Advance,
would not, be ultimately recoverable by the Master Servicer, the Trustee (as
successor Master Servicer) or the applicable Servicer from Liquidation Proceeds,
Insurance Proceeds or future payments on the Mortgage Loan for which such
advance or Monthly Advance was made or is proposed to be made.
NOTIONAL AMOUNT: On or prior to the Distribution Date in February 2010,
the Notional Amount of the Class II-X-1 Certificates, as of any date of
determination, is equal to the aggregate Current Principal Amount of the Class
II-A-2 Certificates and the Class II-A-3 Certificates. After the Distribution
Date in February 2010, the Class II-X-1 Notional Amount shall equal zero and
such Certificate shall not receive any more payments of interest. Reference to
the Notional Amount of the Class II-X-1 Certificates is solely for convenience
in calculation and does not represent the right to receive any distributions
allocable to principal. For federal income tax purposes, however, the Notional
Amount of the Class II-X-1 Certificates is the aggregate Uncertificated
Principal Balance of REMIC II Regular Interest II-A-2 and REMIC II Regular
Interest II-A-3.
OFFERED CERTIFICATES: The Class I-A-1, Class II-A-1, Class II-A-2,
Class II-A-3, Class II-X-1, Class III-A-1, Class IV-A-1, Class R-I, Class R-II,
Class R-III, Class ▇-▇, Class B-2, Class B-3, Class B-4, Class B-5, Class B-6,
Class B-7, Class B-8 and Class B-9 Certificates.
OFFERED SUBORDINATE CERTIFICATES: The Class ▇-▇, Class B-2, Class B-3,
Class B-4, Class B-5, Class B-6, Class B-7, Class B-8 and Class B-9
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.
OPINION OF COUNSEL: A written opinion of counsel who is or are
acceptable to the Trustee and who, unless required to be Independent (an
"Opinion of Independent Counsel"), may be internal counsel for the Company, the
Master Servicer or the Depositor.
ORIGINAL SUBORDINATE PRINCIPAL BALANCE: The sum of the aggregate
Current Principal Amounts of each Class of Subordinate Certificates as of the
Closing Date.
ORIGINAL VALUE: The lesser of (i) the Appraised Value or (ii) the sales
price of a Mortgaged Property at the time of origination of a Mortgage Loan,
except in instances where either clauses (i) or (ii) is unavailable, the other
may be used to determine the Original Value, or if both clauses (i) and (ii) are
unavailable, Original Value may be determined from other sources reasonably
acceptable to the Depositor.
OUTSTANDING MORTGAGE LOAN: With respect to any Due Date, a Mortgage
Loan which, prior to such Due Date, was not the subject of a Principal
Prepayment in full, did not become a Liquidated Mortgage Loan and was not
purchased or replaced.
OUTSTANDING PRINCIPAL BALANCE: As of the time of any determination, the
principal balance of a Mortgage Loan remaining to be paid by the Mortgagor, or,
in the case of an REO Property, the principal balance of the related Mortgage
Loan remaining to be paid by the Mortgagor at the time such property was
acquired by the Trust Fund less any Net Liquidation Proceeds with respect
thereto to the extent applied to principal.
PAR PRICE: An amount equal to 100% of the outstanding Current Principal
Amount of the Mandatory Auction Certificates after application of amounts
distributed on the Mandatory Auction Distribution Date, plus accrued interest on
such Certificates at the related Pass-Through Rate from the first day of the
calendar month in which the Mandatory Auction Distribution Date occurs, up to
but excluding the Mandatory Auction Distribution Date, on the Current Principal
Amount of such Certificates following distributions to such Certificates on the
Mandatory Auction Distribution Date.
PAR PRICE ACCOUNT: The par price account established pursuant to
Section 3 of the Auction Administration Agreement.
PASS-THROUGH RATE: As to each Class of Certificates, the REMIC I
Regular Interests and the REMIC II Regular Interests, the rate of interest
determined as provided with respect thereto in Section 5.01(c). Any monthly
calculation of interest at a stated rate shall be based upon annual interest at
such rate divided by twelve.
PAYING AGENT: The Securities Administrator or any successor paying
agent appointed hereunder.
PERIODIC RATE CAP: With respect to each Mortgage Loan, the maximum
adjustment that can be made to the Mortgage Interest Rate on each Interest
Adjustment Date in accordance with its terms, regardless of changes in the
applicable Index.
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;
(ii) (a) demand or time deposits, federal funds or
bankers' acceptances issued by any depository institution or trust company
incorporated under the laws of the United States of America or any state thereof
(including the Trustee or the Master Servicer or its Affiliates acting in its
commercial banking capacity) and subject to supervision and examination by
federal and/or state banking authorities, provided that the commercial paper
and/or the short-term debt rating and/or the long-term unsecured debt
obligations of such depository institution or trust company at the time of such
investment or contractual commitment providing for such investment have the
Applicable Credit Rating or better from each Rating Agency and (b) any other
demand or time deposit or certificate of deposit that is fully insured by the
Federal Deposit Insurance Corporation;
(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;
(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;
(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) interests in any money market fund (including any
such fund managed or advised by the Trustee or Master Servicer or any affiliate
thereof) which at the date of acquisition of the interests in such fund and
throughout the time such interests are held in such fund has the highest
applicable long term rating by each Rating Agency or such lower rating as will
not result in the downgrading or withdrawal of the ratings then assigned to the
Certificates by each Rating Agency; provided, however, that no instrument or
security shall be a Permitted Investment if such instrument or security
evidences a right to receive only interest payments with respect to the
obligations underlying such instrument or if such security provides for payment
of both principal and interest with a yield to maturity in excess of 120% of the
yield to maturity at par or if such instrument or security is purchased at a
price greater than par.
PERMITTED TRANSFEREE: Any Person other than a Disqualified Organization
or an "electing large partnership" (as defined by Section 775 of the Code).
PERSON: Any individual, corporation, partnership, joint venture,
association, limited liability company, joint-stock company, trust,
unincorporated organization or government or any agency or political subdivision
thereof.
PHYSICAL CERTIFICATES: The Residual Certificates and the Private
Certificates.
PREPAYMENT CHARGE: With respect to any Mortgage Loan, the charges or
premiums, if any, due in connection with a full or partial prepayment of such
Mortgage Loan in accordance with the terms thereof.
PREPAYMENT PERIOD: As to any Distribution Date and (i) each EMC
Mortgage Loan, the period commencing on the 16th day of the month prior to the
month in which the related Distribution Date occurs (or, with respect to the
first Distribution Date, the Cut-off Date) and ending on the 15th day of the
month in which such Distribution Date occurs and (ii) any other Mortgage Loan,
the period set forth in the related Servicing Agreement.
PRIMARY MORTGAGE INSURANCE POLICY: Any primary mortgage guaranty
insurance policy issued in connection with a Mortgage Loan which provides
compensation to a Mortgage Note holder in the event of default by the obligor
under such Mortgage Note or the related Security Instrument, if any or any
replacement policy therefor through the related Interest Accrual Period for such
Class relating to a Distribution Date.
PRINCIPAL PREPAYMENT: Any payment (whether partial or full) or other
recovery of 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.
PRIVATE CERTIFICATES: The Class B-10, Class B-11 and Class B-12
Certificates.
PROTECTED ACCOUNT: An account established and maintained for the
benefit of Certificateholders by each Servicer with respect to the related
Mortgage Loans and with respect to REO Property pursuant to the respective
Servicing Agreements.
QIB: A Qualified Institutional Buyer as defined in Rule 144A
promulgated under the Securities Act.
QUALIFIED INSURER: Any insurance company duly qualified as such under
the laws of the state or states in which the related Mortgaged Property or
Mortgaged Properties is or are located, duly authorized and licensed in such
state or states to transact the type of insurance business in which it is
engaged and approved as an insurer by the Master Servicer, so long as the claims
paying ability of which is acceptable to the Rating Agencies for pass-through
certificates having the same rating as the Certificates rated by the Rating
Agencies as of the Closing Date.
RATING AGENCIES: ▇▇▇▇▇'▇ and S&P.
REALIZED LOSS: Any (i) Bankruptcy Loss or (ii) as to any Liquidated
Mortgage Loan, (x) the Outstanding Principal Balance of such Liquidated Mortgage
Loan plus accrued and unpaid interest thereon at the Mortgage Interest Rate
through the last day of the month of such liquidation, less (y) the related Net
Liquidation Proceeds with respect to such Mortgage Loan and the related
Mortgaged Property. In addition, to the extent the Paying Agent receives
Subsequent Recoveries with respect to any Mortgage Loan, the amount of the
Realized Loss with respect to that Mortgage Loan will be reduced to the extent
such recoveries are applied to reduce the Current Principal Amount of any Class
of Certificates on any Distribution Date.
RECORD DATE: With respect to any Distribution Date, the close of
business on the last Business Day of the month immediately preceding the month
of such Distribution Date.
REINVESTMENT AGREEMENTS: One or more reinvestment agreements,
acceptable to the Rating Agencies, from a bank, insurance company or other
corporation or entity (including the Trustee).
RELIEF ACT: The Servicemembers Civil Relief Act, or similar state law.
RELIEF ACT MORTGAGE LOAN: Any Mortgage Loan as to which the Scheduled
Payment thereof has been reduced due to the application of the Relief Act.
REMIC: A real estate mortgage investment conduit, as defined in the
Code.
REMIC I: That group of assets contained in the Trust Fund designated as
a REMIC consisting of (i) the Mortgage Loans, (ii) the Master Servicer
Collection Account, (iii) the Distribution Account, (iv) any REO Property
relating to the Mortgage Loans, (v) the rights with respect to any related
Servicing Agreement, (vi) the rights with respect to any related Assignment
Agreement and (vii) any proceeds of the foregoing. For the avoidance of doubt,
the Market Value Swap will not be an asset of any REMIC created hereunder.
REMIC I INTERESTS: The REMIC I Regular Interests and the Class R-I
Certificates.
REMIC I REGULAR INTERESTS: REMIC I Regular Interests I-Sub, I-Grp,
II-Sub, II-Grp, III-Sub, III-Grp, IV-Sub and IV-Grp and ZZZ.
REMIC I SUBORDINATED BALANCE RATIO: The ratio among the Uncertificated
Principal Balances of each of the REMIC I Regular Interests ending with the
designation "Sub," equal to the ratio among, 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 in the related Certificate 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: REMIC II Regular Interests ▇-▇-▇, ▇▇-▇-▇,
▇▇-▇-▇, ▇▇-▇-▇, ▇▇▇-▇-▇, IV-A-1, ▇-▇, ▇-▇, ▇-▇, ▇-▇, ▇-▇, ▇-▇, ▇-▇, ▇-▇, ▇-▇,
▇-▇▇, ▇-▇▇, ▇-▇▇ and R-III.
REMIC III: That group of assets contained in the Trust Fund designated
as a REMIC consisting of the REMIC II Regular Interests.
REMIC III CERTIFICATES: The Class I-A-1, Class II-A-1, Class II-A-2,
Class II-A-3, Class II-X-1, Class III-A-1, Class IV-A-1, Class B-1, Class B-2,
Class B-3, Class B-4, Class B-5, Class B-6, Class B-7, Class B-8, Class B-9,
Class B-10, Class B-11, Class B-12 and Class R-III Certificates.
REMIC OPINION: An Opinion of Independent Counsel, to the effect that
the proposed action described therein would not, under the REMIC Provisions, (i)
cause any REMIC 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 the REMIC, which appear at Sections 860A through 860G of the Code, and
related provisions and regulations promulgated thereunder, as the foregoing may
be in effect from time to time.
REO PROPERTY: A Mortgaged Property acquired in the name of the Trustee,
for the benefit of Certificateholders, by foreclosure or deed-in-lieu of
foreclosure in connection with a defaulted Mortgage Loan.
REPURCHASE PRICE: With respect to any Mortgage Loan (or any property
acquired with respect thereto) required to be repurchased by the Seller pursuant
to the Mortgage Loan Purchase Agreement or Article II 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 at the date of the acquisition), plus (b) accrued but unpaid interest on
the Outstanding Principal Balance at the related Mortgage Interest Rate, through
and including the last day of the month of repurchase, plus (c) any unreimbursed
Monthly Advances and servicing advances payable to the Servicer of the Mortgage
Loan or to the Master Servicer and (ii) any costs and damages (if any) incurred
by the Trust in connection with any violation of such Mortgage Loan of any
anti-predatory lending laws.
REPURCHASE PROCEEDS: the Repurchase Price in connection with any
repurchase of a Mortgage Loan by the Seller and any cash deposit in connection
with the substitution of a Mortgage Loan.
REQUEST FOR RELEASE: A request for release in the form attached hereto
as Exhibit D.
REQUIRED INSURANCE POLICY: With respect to any Mortgage Loan, any
insurance policy which is required to be maintained from time to time under this
Agreement with respect to such Mortgage Loan.
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 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 ▇▇▇▇▇▇-▇▇▇▇ Companies, Inc.,
and its successors in interest.
SCHEDULED 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 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 on any
Distribution Date, (i) the unpaid principal balance of such Mortgage Loan as of
the close of business on the related Due Date (i.e., taking account of the
principal payment to be made on such Due Date and 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) and less (ii) any Principal Prepayments (including the principal portion
of Net Liquidation Proceeds) received during or prior to the related Prepayment
Period; provided that the Scheduled Principal Balance of a Liquidated Mortgage
Loan is zero.
SECURITIES ACT: The Securities Act of 1933, as amended.
SECURITIES ADMINISTRATOR: ▇▇▇▇▇ Fargo Bank, N.A., or its successor in
interest, or any successor securities administrator appointed as herein
provided.
SECURITIES LEGEND: "THIS CERTIFICATE HAS NOT BEEN AND WILL NOT BE
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"),
OR UNDER ANY STATE SECURITIES LAWS. THE HOLDER HEREOF, BY PURCHASING THIS
CERTIFICATE, AGREES THAT THIS CERTIFICATE MAY BE REOFFERED, RESOLD, PLEDGED OR
OTHERWISE TRANSFERRED ONLY IN COMPLIANCE WITH THE SECURITIES ACT AND OTHER
APPLICABLE LAWS AND ONLY (1) PURSUANT TO RULE 144A UNDER THE SECURITIES ACT
("RULE 144A") TO A PERSON THAT THE HOLDER REASONABLY BELIEVES IS A QUALIFIED
INSTITUTIONAL BUYER WITHIN THE MEANING OF RULE 144A (A "QIB"), PURCHASING FOR
ITS OWN ACCOUNT OR A QIB PURCHASING FOR THE ACCOUNT OF A QIB, WHOM THE HOLDER
HAS INFORMED, IN EACH CASE, THAT THE REOFFER, RESALE, PLEDGE OR OTHER TRANSFER
IS BEING MADE IN RELIANCE ON RULE 144A, (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 ACT
OR ANY ENTITY IN WHICH ALL OF THE EQUITY OWNERS COME WITHIN SUCH PARAGRAPHS
PURCHASING NOT FOR DISTRIBUTION IN VIOLATION OF THE SECURITIES ACT, SUBJECT TO
(A) THE RECEIPT BY THE TRUSTEE AND THE CERTIFICATE REGISTRAR OF A LETTER
SUBSTANTIALLY IN THE FORM PROVIDED IN THE AGREEMENT AND (B) THE RECEIPT BY THE
TRUSTEE AND THE CERTIFICATE REGISTRAR OF SUCH OTHER EVIDENCE ACCEPTABLE TO THE
TRUSTEE AND THE CERTIFICATE REGISTRAR THAT SUCH REOFFER, RESALE, PLEDGE OR
TRANSFER IS IN COMPLIANCE WITH THE SECURITIES ACT AND OTHER APPLICABLE LAWS OR
IN EACH CASE IN ACCORDANCE WITH ALL APPLICABLE SECURITIES LAWS OF THE UNITED
STATES AND ANY OTHER APPLICABLE JURISDICTION. THIS CERTIFICATE MAY NOT BE
ACQUIRED DIRECTLY OR INDIRECTLY BY, OR ON BEHALF OF, AN EMPLOYEE BENEFIT PLAN OR
OTHER RETIREMENT ARRANGEMENT WHICH IS SUBJECT TO TITLE I OF THE EMPLOYEE
RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED, OR SECTION 4975 OF THE
INTERNAL REVENUE CODE OF 1986, AS AMENDED [in the case of a Residual
Certificate:] UNLESS THE PROPOSED TRANSFEREE PROVIDES THE TRUSTEE WITH AN
OPINION OF COUNSEL ADDRESSED TO THE DEPOSITOR, TRUSTEE, MASTER SERVICER AND
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 MASTER SERVICER, THE SECURITIES ADMINISTRATOR OR THE
TRUSTEE [in the case of the Class B-10, Class B-11 and Class B-12Certificates:],
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,
▇▇▇ ▇▇-▇▇, ▇▇▇ ▇▇-▇, ▇▇▇ 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, ANY SERVICER OR THE TRUSTEE, WHICH WILL BE
DEEMED REPRESENTED BY AN OWNER OF A BOOK-ENTRY CERTIFICATE OR A GLOBAL
CERTIFICATE OR UNLESS AN OPINION OF COUNSEL SPECIFIED IN SECTION 5.07 OF THE
AGREEMENT IS PROVIDED."
SECURITY AGREEMENT: With respect to a Cooperative Loan, the agreement
creating a security interest in favor of the originator in the related
Cooperative Stock.
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 mortgage loan seller under the
Mortgage Loan Purchase Agreement.
SENIOR CERTIFICATES: The Class I-A-1, Class II-A-1, Class II-A-2, Class
II-A-3, Class II-X-1, Class III-A-1, Class IV-A-1, Class R-I, Class R-II and
Class R-III Certificates.
SENIOR OPTIMAL PRINCIPAL AMOUNT: The Group I Senior Optimal Principal
Amount, Group II Senior Optimal Principal Amount, Group III Senior Optimal
Principal Amount or Class IV Senior Optimal Principal Amount, as applicable.
SENIOR PERCENTAGE: The Group I Senior Percentage, Group II Senior
Percentage, Group III Senior Percentage or Group IV Senior Percentage, as
applicable.
SENIOR PREPAYMENT PERCENTAGE: The Group I Senior Prepayment Percentage,
Group II Senior Prepayment Percentage, Group III Senior Prepayment Percentage or
Group IV Senior Prepayment Percentage, as applicable.
SERVICER: With respect to each Mortgage Loan, Bank of America, Chevy
Chase, Countrywide, EMC, HBMC, National City and ▇▇▇▇▇ Fargo Bank.
SERVICER REMITTANCE DATE: With respect to each Mortgage Loan, the date
set forth in the related Servicing Agreement.
SERVICING AGREEMENTS: The Bank of America Servicing Agreement, Chevy
Chase Servicing Agreement, Countrywide Servicing Agreement, EMC Servicing
Agreement, HBMC Servicing Agreement, National City Servicing Agreement and ▇▇▇▇▇
Fargo Servicing Agreement.
SERVICING FEE: As to any Mortgage Loan and 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 preceding calendar month and (ii) the applicable
Servicing Fee Rate.
SERVICING FEE RATE: As to any Mortgage Loan, a per annum rate as set
forth in the Mortgage Loan Schedule.
SERVICING OFFICER: Any officer of the related Servicer or Master
Servicer involved in or responsible for the administration and servicing or
master servicing, as applicable, of the Mortgage Loans as to which officer
evidence, reasonably acceptable to the Trustee, of due authorization of such
officer by such Servicer or Master Servicer, has been furnished from time to
time to the Trustee.
STARTUP DAY: June 30, 2005.
SUBORDINATE CERTIFICATES: The Class B-1, Class B-2, Class B-3, Class
B-4, Class B-5, Class B-6, Class B-7, Class B-8, Class B-9, Class B-10, Class
B-11 and Class B-12 Certificates.
SUBORDINATE CERTIFICATE WRITEDOWN AMOUNT: As to any Distribution Date,
the amount by which (a) the sum of the Current Principal Amounts of all the
Certificates (after giving effect to the distribution of principal and the
allocation of applicable Realized Losses in reduction of the Current Principal
Amounts of the Certificates on such Distribution Date) exceeds (b) the aggregate
Scheduled Principal Balances of the Mortgage Loans on the Due Date related to
such Distribution Date.
SUBORDINATE OPTIMAL PRINCIPAL AMOUNT: As to any Distribution Date, an
amount equal to the sum, without duplication, of the following for the Group I,
Group II, Group III and Group IV Mortgage Loans (but in no event greater than
the aggregate Current Principal Amount of the Subordinate Certificates
immediately prior to such Distribution Date):
(i) the applicable Subordinate Percentage of the principal
portion of all Scheduled Payments due on each Outstanding
Mortgage Loan in the related Loan Group on the related Due
Date as specified in the amortization schedule at the time
applicable thereto (after adjustment for previous Principal
Prepayments but before any adjustment to such amortization
schedule by reason of any bankruptcy or similar proceeding or
any moratorium or similar waiver or grace period);
(ii) the applicable Subordinate Prepayment Percentage of the
Scheduled Principal Balance of each Mortgage Loan in the
related Loan Group that was the subject of a Principal
Prepayment in full received by the Master Servicer during the
related Prepayment Period;
(iii) the applicable Subordinate Prepayment Percentage of each
Principal Prepayment in part received during the related
Prepayment Period with respect to each Mortgage Loan in the
related Loan Group;
(iv) the excess, if any, of (a) all Net Liquidation Proceeds
allocable to principal received during the related Prepayment
Period in respect of each Liquidated Mortgage Loan in the
related Loan Group and all Subsequent Recoveries received in
respect of each Liquidated Mortgage Loan in the related Loan
Group during the related Due Period over (b) the sum of the
amounts distributable to the related Senior Certificateholders
pursuant to clause (iv) of the related definition of Senior
Optimal Principal Amount on such Distribution Date;
(v) the applicable Subordinate Prepayment Percentage of the
sum of (a) the Scheduled Principal Balance of each Mortgage
Loan in the related Loan Group which was purchased with
respect to such Distribution Date and (b) the difference, if
any, between the Scheduled Principal Balance of each Mortgage
Loan in the related Loan Group that has been replaced by the
Seller with a Substitute Mortgage Loan pursuant to the
Mortgage Loan Purchase Agreement in connection with such
Distribution Date over the Scheduled Principal Balance of each
such Substitute Mortgage Loan; and
(vi) on the Distribution Date on which the Current Principal
Amounts of the Group I Senior Certificates, Group II Senior
Certificates (other than the Interest Only Certificates),
Group III Senior Certificates or the Group IV Senior
Certificates have all been reduced to zero, 100% of the
related Senior Optimal Principal Amount. After the aggregate
Current Principal Amount of the Subordinate Certificates has
been reduced to zero, the Subordinate Optimal Principal Amount
shall be zero.
SUBORDINATE PERCENTAGE: The Group I Subordinate Percentage, Group II
Subordinate Percentage, Group III Subordinate Percentage or Group IV Subordinate
Percentage with respect to the Group I Mortgage Loans, Group II Mortgage Loans,
Group III Mortgage Loans and Group IV Mortgage Loans, respectively.
SUBORDINATE PREPAYMENT PERCENTAGE: The Group I Subordinate Prepayment
Percentage, Group II Subordinate Prepayment Percentage, Group III Subordinate
Prepayment Percentage or Group IV Subordinate Prepayment Percentage with respect
to the Group I Mortgage Loans, Group II Mortgage Loans, Group III Mortgage Loans
and Group IV Mortgage Loans, respectively.
SUBSEQUENT RECOVERIES: As of any Distribution Date, amounts received by
the Master Servicer during the related Due Period or surplus amounts held by the
Master Servicer to cover estimated expenses (including, but not limited to,
recoveries in respect of the representations and warranties made by the Seller
pursuant to the Mortgage Loan Purchase Agreement) specifically related to a
Liquidated Mortgage Loan or disposition of an REO Property prior to the related
Prepayment Period that resulted in a Realized Loss, after the 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 greater nor materially less than
the Mortgage Loan for which it is to be substituted; (ii) which has a Mortgage
Interest Rate and Net Rate not less than, and not materially greater than, such
Mortgage Loan; (iii) which has a maturity date not materially earlier or later
than such Mortgage Loan and not later than the latest maturity date of any
Mortgage Loan; (iv) which is of the same property type and occupancy type as
such Mortgage Loan; (v) which has a Loan-to-Value Ratio not greater than the
Loan-to-Value Ratio of such Mortgage Loan; (vi) which is current in payment of
principal and interest as of the date of substitution; (vii) as to which the
payment terms do not vary in any material respect from the payment terms of the
Mortgage Loan for which it is to be substituted and (viii) which has a Gross
Margin, Periodic Rate Cap and Maximum Lifetime Mortgage Rate no less than those
of such Mortgage Loan, has the same Index and interval between Interest
Adjustment Dates as such Mortgage Loan, and a Minimum Lifetime Mortgage Rate no
lower than that of such Mortgage Loan.
SWAP COUNTERPARTY: Bear ▇▇▇▇▇▇▇ International Limited, or any successor
swap counterparty appointed in accordance with the Market Value Swap.
SWAP GUARANTEE: The guarantee of the Swap Guarantor of the obligations
of the Swap Counterparty attached hereto as Exhibit L.
SWAP GUARANTOR: The Bear ▇▇▇▇▇▇▇ Companies, Inc., or any successor
thereto.
SWAP TERMINATION EVENT: A default by the Swap Counterparty of its
obligations under the Market Value Swap and the failure of the Swap Guarantor to
honor the obligations of the Swap Counterparty under the Swap Guarantee.
TAX ADMINISTRATION AND TAX MATTERS PERSON: 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 EVENT: As defined in the Market Value Swap.
TERMINATION PURCHASE PRICE: The price, calculated as set forth in
Section 10.01, to be paid in connection with the repurchase of the Mortgage
Loans pursuant to Section 10.01.
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: U.S. Bank National Association, or 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 as set forth in Sections 5.01(c)(i)
and (ii), reduced by (i) all amounts distributed on previous Distribution Dates
on such regular interest with respect to principal, and (ii) the principal
portion of all Realized Losses allocated prior to such Distribution Date to such
regular interest, taking account of the Loss Allocation Limitation.
UNDERLYING SELLER: With respect to each Mortgage Loan, Bank of America,
Chevy Chase, Countrywide Home Loans, Inc., EMC, HBMC, National City and ▇▇▇▇▇
Fargo Bank, 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
required to be maintained pursuant the related Servicing Agreement, without
regard to whether or not such policy is maintained.
UNITED STATES PERSON: A citizen or resident of the United States, a
corporation or partnership (including an entity treated as a corporation or
partnership for federal income tax purposes) created or organized in, or under
the laws of, the United States or any state thereof or the District of Columbia
(except, in the case of a partnership, to the extent provided in regulations),
provided that, for purposes solely of the Class R Certificates, no partnership
or other entity treated as a partnership for United States federal income tax
purposes shall be treated as a United States Person unless all persons that own
an interest in such partnership either directly or through any entity that is
not a corporation for United States federal income tax purposes are United
States Persons, or an estate whose income is subject to United States federal
income tax regardless of its source, or a trust if a court within the United
States is able to exercise primary supervision over the administration of the
trust and one or more such United States Persons have the authority to control
all substantial decisions of the trust. To the extent prescribed in regulations
by the Secretary of the Treasury, which have not yet been issued, a trust which
was in existence on August 20, 1996 (other than a trust treated as owned by the
grantor under subpart E of part I of subchapter J of chapter 1 of the Code), and
which was treated as a United States Person on August 20, 1996, may elect to
continue to be treated as a United States Person notwithstanding the previous
sentence.
▇▇▇▇▇ FARGO: ▇▇▇▇▇ Fargo Bank, N.A., or its successor in interest.
▇▇▇▇▇ FARGO SERVICING AGREEMENT: The Master Seller's Warranties and
Servicing Agreement, dated as of October 1, 2004, between the Seller and ▇▇▇▇▇
Fargo, which is attached hereto as Exhibit H-6, as modified by the related
Assignment Agreement.
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 their
respective Mortgage Loan Schedules, including all interest and principal due
with respect to the Mortgage Loans after the Cut-off Date but excluding any
payments of principal and interest due on or prior to the Cut-off Date; (ii)
such assets as shall from time to time be credited or are required by the terms
of this Agreement to be credited to the Master Servicer Collection Account,
(iii) such assets relating to the Mortgage Loans as from time to time may be
held by the Servicers in Protected Accounts, the Master Servicer in the Master
Servicer Collection Account and the Paying Agent in the Distribution Account,
(iv) any REO Property, (v) the Required Insurance Policies and any amounts paid
or payable by the insurer under any Insurance Policy (to the extent the
mortgagee has a claim thereto), (vi) the Mortgage Loan Purchase Agreement to the
extent provided in 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) such assets as shall
from time to time be credited or are required by the terms of this Agreement to
be credited to the Distribution Account and (ix) any proceeds of the foregoing.
Although it is the intent of the parties to this Agreement that the conveyance
of the Depositor's right, title and interest in and to the Mortgage Loans and
other assets in the Trust Fund pursuant to this Agreement shall constitute a
purchase and sale and not a loan, in the event that such conveyance is deemed to
be a loan, it is the intent of the parties to this Agreement that the Depositor
shall be deemed to have granted to the Trustee a first priority perfected
security interest in all of the Depositor's right, title and interest in, to and
under the Mortgage Loans and other assets in the Trust Fund, and that this
Agreement shall constitute a security agreement under applicable law.
(b) In connection with the above transfer and assignment, the Depositor
hereby delivers to the Custodian, as agent for the Trustee, with respect to each
Mortgage Loan:
(i) the original Mortgage Note, endorsed without recourse (A)
to the order of the Trustee, or (B) in the case of a loan registered on the MERS
system, in blank, and in each case showing an unbroken chain of endorsements
from the originator thereof to the Person endorsing it to the Trustee, or lost
note affidavit together with a copy of the related Mortgage Note;
(ii) the original Mortgage and, if the related Mortgage Loan
is a MOM Loan, noting the presence of the MIN and language indicating that such
Mortgage Loan is a MOM Loan, which shall have been recorded (or if the original
is not available, a copy), with evidence of such recording indicated thereon (or
if clause (w) in the proviso below applies, shall be in recordable form);
(iii) unless the Mortgage Loan is a MOM Loan, a certified copy
of the assignment (which may be in the form of a blanket assignment if permitted
in the jurisdiction in which the Mortgaged Property is located) to "U.S. Bank
National Association, as Trustee", with evidence of recording with respect to
each Mortgage Loan in the name of the Trustee thereon (or if clause (w) in the
proviso below applies or for Mortgage Loans with respect to which the related
Mortgaged Property is located in a state other than Maryland or an Opinion of
Counsel has been provided as set forth in this Section 2.01(b), shall be in
recordable form);
(iv) all intervening assignments of the Security Instrument,
if applicable and only to the extent available to the Depositor with evidence of
recording thereon;
(v) the original or a copy of the policy or certificate of
primary mortgage guaranty insurance, to the extent available, if any;
(vi) the original policy of title insurance or mortgagee's
certificate of title insurance or commitment or binder for title insurance; and
(vii) originals of all modification agreements, if applicable
and available;
PROVIDED, HOWEVER, that in lieu of the foregoing, the Depositor may deliver to
the Custodian, as agent of the Trustee, the following documents, under the
circumstances set forth below: (w) in lieu of the original Security Instrument,
assignments to the Trustee or intervening assignments thereof which have been
delivered, are being delivered or will, upon receipt of recording information
relating to the Security Instrument required to be included thereon, be
delivered to recording offices for recording and have not been returned to the
Depositor in time to permit their delivery as specified above, the Depositor may
deliver a true copy thereof with a certification by the Depositor, on the face
of such copy, substantially as follows: "Certified to be a true and correct copy
of the original, which has been transmitted for recording"; (x) in lieu of the
Security Instrument, assignment to the Trustee or intervening assignments
thereof, if the applicable jurisdiction retains the originals of such documents
(as evidenced by a certification from the Depositor to such effect) the
Depositor may deliver photocopies of such documents containing an original
certification by the judicial or other governmental authority of the
jurisdiction where such documents were recorded; (y) in lieu of the Mortgage
Notes relating to the Mortgage Loans identified on Exhibit 5 to the Mortgage
Loan Purchase Agreement, the Depositor may deliver lost note affidavits from the
Seller; and (z) the Depositor shall not be required to deliver intervening
assignments or Mortgage Note endorsements between the related Underlying Seller
and the Seller, between the Seller and the Depositor, and between the Depositor
and the Trustee; and provided, further, however, that in the case of Mortgage
Loans which have been prepaid in full after the Cut-off Date and prior to the
Closing Date, the Depositor, in lieu of delivering the above documents, may
deliver to the Trustee or the Custodian, as its agent, a certification to such
effect and shall deposit all amounts paid in respect of such Mortgage Loans in
the Master Servicer Collection Account on the Closing Date. The Depositor shall
deliver such original documents (including any original documents as to which
certified copies had previously been delivered) to the Trustee or the Custodian,
as its agent, promptly after they are received. The Depositor shall cause the
Seller, at its expense, to cause each assignment of the Security Instrument to
the Trustee to be recorded not later than 180 days after the Closing Date,
unless (a) such recordation is not required by the Rating Agencies or an Opinion
of Counsel addressed to the Trustee has been provided to the Trustee (with a
copy to the Custodian) which states that recordation of such Security Instrument
is not required to protect the interests of the Certificateholders in the
related Mortgage Loans or (b) MERS is identified on the Mortgage or on a
properly recorded assignment of the Mortgage as the mortgagee of record solely
as nominee for the Seller and its successor and assigns; provided, however,
notwithstanding the foregoing, each assignment shall be submitted for recording
by the Seller 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 Seller and (iv) the occurrence of a
servicing transfer as described in Section 8.02 hereof. Notwithstanding the
foregoing, if the Seller fails to pay the cost of recording the assignments,
such expense will be paid by the Trustee and the Trustee shall be reimbursed for
such expenses by the Trust in accordance with Section 9.05.
Section 2.02 Acceptance of Mortgage Loans by Trustee.
(a) The Trustee acknowledges the sale, transfer and assignment of the
Trust 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 the Custodian, as its agent, pursuant to Section 2.01, and declares
that it will continue to hold those documents and any amendments, replacements
or supplements thereto and all other assets of the Trust Fund delivered to it as
Trustee in trust for the use and benefit of all present and future Holders of
the Certificates. On the Closing Date, with respect to the Mortgage Loans, the
Custodian shall acknowledge with respect to each Mortgage Loan by delivery to
the Depositor and the Trustee of an Initial Certification receipt of the
Mortgage File, but without review of such Mortgage File, except to the extent
necessary to confirm that such Mortgage File contains the related Mortgage Note
or lost note affidavit. No later than 90 days after the Closing Date (or with
respect to any Substitute Mortgage Loan, within five Business Days after the
receipt by the Trustee or Custodian thereof), the Trustee agrees, for the
benefit of the Certificateholders, to review or cause to be reviewed by the
Custodian on its behalf (under the Custodial Agreement), each Mortgage File
delivered to it and to execute and deliver, or cause to be executed and
delivered, to the Depositor and the Trustee an Interim Certification. In
conducting such review, the Trustee or Custodian will ascertain whether all
required documents have been executed and received, and based on the related
Mortgage Loan Schedule, whether those documents relate, determined on the basis
of the Mortgagor name, original principal balance and loan number, to the
Mortgage Loans it has received, as identified in the related Mortgage Loan
Schedule. In performing any such review, the Trustee or the Custodian, as its
agent, may conclusively rely on the purported due execution and genuineness of
any such document and on the purported genuineness of any signature thereon. If
the Trustee or the Custodian, as its agent, finds any document constituting part
of the Mortgage File has not been executed or received, or to be unrelated,
determined on the basis of the Mortgagor name, original principal balance and
loan number, to the Mortgage Loans identified in Exhibit B, or to appear
defective on its face (a "Material Defect"), the Trustee or the Custodian, as
its agent, shall promptly notify the Seller. 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
shall enforce the Seller's obligation under the Mortgage Loan Purchase
Agreement, 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 because the originals of such documents, or a certified copy
have not been returned by the applicable jurisdiction, the Seller shall not be
required to purchase such Mortgage Loan if the Seller delivers such original
documents or certified copy promptly upon receipt, but in no event later than
360 days after the Closing Date. The foregoing repurchase obligation shall not
apply in the event that the Seller cannot deliver such original or copy of any
document submitted for recording to the appropriate recording office in the
applicable jurisdiction because such document has not been returned by such
office; provided that the Seller shall instead deliver a recording receipt of
such recording office or, if such receipt is not available, a certificate
confirming that such documents have been accepted for recording, and delivery to
the Trustee or the Custodian, as its agent, shall be effected by the Seller
within thirty days of its receipt of the original recorded document.
(b) No later than 180 days after the Closing Date (or with respect to
any Substitute Mortgage Loan, within five Business Days after the receipt by the
Trustee or the Custodian thereof), the Trustee or the Custodian, as its agent,
will review, for the benefit of the Certificateholders, the Mortgage Files
delivered to it and will execute and deliver or cause to be executed and
delivered to the Depositor and the Trustee a Final Certification. In conducting
such review, the Trustee or the Custodian, as its agent, will ascertain whether
an original of each document required to be recorded has been returned from the
recording office with evidence of recording thereon or a certified copy has been
obtained from the recording office. If the Trustee or the Custodian, as its
agent, finds a Material Defect, the Trustee or the Custodian, as its agent,
shall promptly notify the Seller (provided, however, that with respect to those
documents described in subsections (b)(iv), (v) and (vii) of Section 2.01, the
Trustee's and Custodian's obligations shall extend only to the documents
actually delivered to the Custodian pursuant to such subsections). In accordance
with the Mortgage Loan Purchase Agreement, the Seller shall correct or cure any
such defect within 90 days from the date of notice from the Trustee or the
Custodian, as its agent, of the Material Defect and if the Seller is unable to
cure such defect within such period, and if such defect materially and adversely
affects the interests of the Certificateholders in the related Mortgage Loan,
the Trustee shall enforce the Seller's obligation under the Mortgage Loan
Purchase Agreement, 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, however, that if such defect relates solely to the
inability of the Seller to deliver the original Security Instrument or
intervening assignments thereof, or a certified copy, because the originals of
such documents or a certified copy, have not been returned by the applicable
jurisdiction, the Seller shall not be required to purchase such Mortgage Loan,
if the Seller delivers such original documents or certified copy promptly upon
receipt, but in no event later than 360 days after the Closing Date. The
foregoing repurchase obligation shall not apply in the event that the Seller
cannot deliver such original or copy of any document submitted for recording to
the appropriate recording office in the applicable jurisdiction because such
document has not been returned by such office; provided that the Seller shall
instead deliver a recording receipt of such recording office or, if such receipt
is not available, a certificate confirming that such documents have been
accepted for recording, and delivery to the Trustee or the Custodian, as its
agent, shall be effected by the Seller within thirty days of its receipt of the
original recorded document.
(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
Master Servicer the Repurchase Price for deposit in the Master Servicer
Collection Account and the Seller shall provide to the Master Servicer,
Securities Administrator, the Paying Agent and the Trustee written notification
detailing the components of the Repurchase Price to the Trustee, the Paying
Agent and the Master Servicer. Upon deposit of the Repurchase Price in the
Master Servicer Collection Account, the Depositor shall notify the Trustee and
the Custodian, as agent of the Trustee (upon receipt of a Request for Release in
the form of Exhibit D attached hereto with respect to such Mortgage Loan), shall
release to the Seller the related Mortgage File and the Trustee shall execute
and deliver all instruments of transfer or assignment, without recourse,
representation or warranty, furnished to it by the Seller, as are necessary to
vest in the Seller title to and rights under the Mortgage Loan. Such purchase
shall be deemed to have occurred on the date on which the Repurchase Price in
available funds is received by the Paying Agent. The Trustee or the Custodian,
as agent of 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 or substitute for any Mortgage Loan a Substitute
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 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 borrower. Any such purchase by the Seller
shall be made by providing an amount equal to the Repurchase Price to the Master
Servicer for deposit in the Master Servicer Collection Account and written
notification detailing the components of such Repurchase Price to the Trustee,
the Paying Agent and the Master Servicer. The Depositor shall notify the Trustee
and submit to the Custodian, as agent for the Trustee, a Request for Release,
and the Custodian shall release, or the Trustee shall cause the Custodian to
release, to the Seller the related Mortgage File and the Trustee shall execute
and deliver all instruments of transfer or assignment furnished to it by the
Seller, without recourse, representation or warranty as are necessary to vest in
the Seller title to and rights under the Mortgage Loan or any property acquired
with respect thereto. Such purchase shall be deemed to have occurred on the date
on which the Repurchase Price in available funds is received by the Trustee. The
Master Servicer shall amend the Mortgage Loan Schedule to reflect such
repurchase and shall promptly notify the Trustee and the Rating Agencies of such
amendment. Enforcement of the obligation of the Seller to purchase (or
substitute a Substitute Mortgage Loan for) any Mortgage Loan or any property
acquired with respect thereto (or pay the Repurchase Price as set forth in the
above proviso) as to which a breach has occurred and is continuing shall
constitute the sole remedy respecting such breach available to the
Certificateholders or the Trustee on their behalf.
Section 2.04 Substitution of Mortgage Loans.
Notwithstanding anything to the contrary in this Agreement, in lieu of
purchasing a Mortgage Loan pursuant to the Mortgage Loan Purchase Agreement or
Sections 2.02 or 2.03 of this Agreement, the Seller may, no later than the date
by which such purchase by the Seller would otherwise be required, tender to the
Trustee a Substitute Mortgage Loan accompanied by a certificate of an authorized
officer of the Seller that such Substitute Mortgage Loan conforms to the
requirements set forth in the definition of "Substitute Mortgage Loan" in this
Agreement; 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 would cause
the Mortgage Loan to be other than a "qualified mortgage" as defined in Section
860G(a)(3) of the Code, any such cure or substitution must occur within 90 days
from the date the breach was discovered. The Custodian, as agent for the
Trustee, 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 fifth 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 the Scheduled
Principal due on such date, exceeds the Outstanding Principal Balance as of such
date of the Substitute Mortgage Loan, after giving effect to Scheduled Principal
due on such date, which amount shall be treated for the purposes of this
Agreement as if it were the payment by the Seller of the Repurchase Price for
the purchase of a Mortgage Loan by the Seller. After such notification to the
Seller and, if any such excess exists, upon receipt of such deposit, the Trustee
shall accept such Substitute Mortgage Loan which shall thereafter be deemed to
be a Mortgage Loan hereunder. In the event of such a substitution, accrued
interest on the Substitute Mortgage Loan for the month in which the substitution
occurs and any Principal Prepayments made thereon during such month shall be the
property of the Trust Fund and accrued interest for such month on the Mortgage
Loan for which the substitution is made and any Principal Prepayments made
thereon during such month shall be the property of the Seller. The Scheduled
Principal on a Substitute Mortgage Loan due on the Due Date in the month of
substitution shall be the property of the Seller and the Scheduled Principal on
the Mortgage Loan for which the substitution is made due on such Due Date shall
be the property of the Trust Fund. Upon acceptance of the Substitute Mortgage
Loan (and delivery to the Custodian of a Request for Release for such Mortgage
Loan), the Custodian, as agent for the Trustee, shall release to the Seller the
related Mortgage File related to any Mortgage Loan released pursuant to the
Mortgage Loan Purchase Agreement or Section 2.04 of this Agreement, as
applicable, and shall execute and deliver all instruments of transfer or
assignment, without recourse, representation or warranty in form as provided to
it as are necessary to vest in the Seller title to and rights under any Mortgage
Loan released pursuant to the Mortgage Loan Purchase Agreement or Section 2.04
of this Agreement, as applicable. The Seller shall deliver to the Custodian 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 Master Servicer shall amend
the Mortgage Loan Schedule to reflect such substitution and shall provide a copy
of such amended Mortgage Loan Schedule to the Trustee and the Rating Agencies.
Section 2.05 Issuance of Certificates.
(a) The Trustee acknowledges the assignment to it of the Mortgage Loans
and the other assets comprising the Trust Fund and, concurrently therewith, the
Securities Administrator has signed, and countersigned and delivered to the
Depositor, in exchange therefor, Certificates in such authorized denominations
representing such Fractional Undivided Interests as the Depositor has requested.
The Trustee agrees that it will hold the Mortgage Loans and such other assets as
may from time to time be delivered to it segregated on the books of the Trustee
in trust for the benefit of the Certificateholders.
(b) 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 Mortgage Loans and the other assets of REMIC I (other than, for the
avoidance of doubt, the Market Value Swap) for the benefit of the holders of the
REMIC I Interests. The Trustee acknowledges receipt of such assets and declares
that it holds and will hold the same in trust for the exclusive use and benefit
of the holders of the REMIC I Interests.
(c) 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
Interests.
(d) 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 II 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);
(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 to the
Trustee, each Mortgage Note and each Mortgage were not subject to an assignment
or pledge, and the Depositor had good and marketable title to and was the sole
owner thereof and had full right to transfer and sell such Mortgage Loan to the
Trustee free and clear of any encumbrance, equity, lien, pledge, charge, claim
or security interest.
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 applicable
Servicing Agreements 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 its applicable
Servicing Agreement. The Master Servicer shall independently and separately
monitor each Servicer's servicing activities with respect to each related
Mortgage Loan, reconcile the results of such monitoring with such information
provided in the previous sentence on a monthly basis and coordinate corrective
adjustments to the Servicers' and Master Servicer's records, and based on such
reconciled and corrected information, the Master Servicer shall provide such
information to the Securities Administrator as shall be necessary in order for
it to prepare the statements specified in Section 6.04, and prepare any other
information and statements required to be forwarded by the Master Servicer
hereunder. The Master Servicer shall reconcile the results of its Mortgage Loan
monitoring with the actual remittances of the Servicers pursuant to the
applicable Servicing Agreements.
The Trustee shall furnish the Servicers and the Master Servicer with
any powers of attorney and other documents in form as provided to it necessary
or appropriate to enable the Servicers and the Master Servicer to service and
administer the related Mortgage Loans and REO Property.
The Trustee or the Custodian, as its agent, shall provide access to the
records and documentation in the possession of the Custodian 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 Custodian; provided, however,
that, unless otherwise required by law, the Trustee or the Custodian, as its
agent, 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 or the Custodian, as its agent, 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 or the Custodian'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.
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 related Servicer or the Master
Servicer to assure such continuing treatment. In particular, the Trustee shall
not (a) sell or permit the sale of all or any portion of the Mortgage Loans or
of any investment of deposits in an Account unless such sale is as a result of a
repurchase of the Mortgage Loans pursuant to this Agreement or the Trustee has
received a REMIC Opinion addressed to the Trustee 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 addressed to the Trustee .
Section 3.03 Monitoring of Servicers.
(a) The Master Servicer shall be responsible for reporting to the
Trustee and the Depositor the compliance by each Servicer with its duties under
the related Servicing Agreement. In the review of each Servicer's activities,
the Master Servicer may rely upon an officer's certificate of the Servicer (or
similar document signed by an officer of the Servicer) with regard to such
Servicer's compliance with the terms of its Servicing Agreement. In the event
that the Master Servicer, in its judgment, determines that a Servicer (other
than ▇▇▇▇▇ Fargo) should be terminated in accordance with its Servicing
Agreement, or that a notice should be sent pursuant to such Servicing Agreement
with respect to the occurrence of an event that, unless cured, would constitute
grounds for such termination, the Master Servicer shall notify the Depositor and
the Trustee thereof and the Master Servicer shall issue such notice or take such
other action as it deems appropriate. In the event that the Master Servicer, in
its judgment, determines that ▇▇▇▇▇ Fargo should be terminated in accordance
with the ▇▇▇▇▇ Fargo Servicing Agreement, or that a notice should be sent
pursuant to the ▇▇▇▇▇ Fargo 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 in
writing. Pursuant to its receipt of such written notification from the Master
Servicer, the Trustee shall issue such notice of termination to ▇▇▇▇▇ Fargo 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 other than
▇▇▇▇▇ Fargo fails to perform its obligations in accordance with the related
Servicing Agreement, subject to the preceding paragraph, terminate the rights
and obligations of such Servicer thereunder and act as servicer of the related
Mortgage Loans or to cause the Trustee to enter 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. In the event that ▇▇▇▇▇ Fargo
fails to perform its obligations in accordance with the ▇▇▇▇▇ Fargo Servicing
Agreement, subject to the preceding paragraph, the Master Servicer shall notify
the Trustee in writing of such failure. Pursuant to its receipt of such
notification from the Master Servicer, the Trustee shall terminate the rights
and obligations of ▇▇▇▇▇ Fargo under the ▇▇▇▇▇ Fargo Servicing Agreement and
enter in to a new Servicing Agreement with a successor Servicer selected by the
Trustee; 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. In either event, such enforcement, including, without limitation, the
legal prosecution of claims, termination of Servicing Agreements and the pursuit
of other appropriate remedies, shall be in such form and carried out to such an
extent and at such time as the Master Servicer (or in the case ▇▇▇▇▇ Fargo is
terminated as the Servicer, the Trustee) 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. In the
event that ▇▇▇▇▇ Fargo is terminated as the Servicer, the Trustee shall pay the
costs of such enforcement at its own expense, subject to its right to be
reimbursed for such costs from the Master Servicer Collection Account pursuant
to Section 3.03(c); provided that the Trustee shall not be required to prosecute
or defend any legal action except to the extent that the Trustee shall have
received reasonable indemnity for its costs and expenses in pursuing such
action. Nothing herein shall impose any obligation on the part of the Trustee to
assume or succeed to the duties or obligations of ▇▇▇▇▇ Fargo or the Master
Servicer.
(c) In the event that ▇▇▇▇▇ Fargo is terminated as Servicer, to the
extent that the costs and expenses of the Trustee related to any termination of
▇▇▇▇▇ Fargo, or the enforcement or prosecution of related claims, rights or
remedies, or the appointment of a successor Servicer (including, without
limitation, (i) all legal costs and expenses and all due diligence costs and
expenses associated with an evaluation of the potential termination of the ▇▇▇▇▇
Fargo as a result of an event of default by ▇▇▇▇▇ Fargo 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 ▇▇▇▇▇
Fargo after such termination, the Trustee shall be entitled to reimbursement of
such costs and expenses from the Master Servicer Collection Account (which the
Master Servicer hereby agrees to pay to the Trustee from the Master Servicer
Collection Account upon demand) or, to the extent not paid from such account,
the Trustee shall be entitled to reimburse itself for such costs and expenses
from the Distribution Account. In all other cases, to the extent that the costs
and expenses of the Master Servicer related to any termination of a Servicer
(other than ▇▇▇▇▇ Fargo), appointment of a successor Servicer or the transfer
and assumption of servicing by the Master Servicer with respect to any Servicing
Agreement (including, without limitation, (i) all legal costs and expenses and
all due diligence costs and expenses associated with an evaluation of the
potential termination of the Servicer as a result of an event of default by such
Servicer and (ii) all costs and expenses associated with the complete transfer
of servicing, including all servicing files and all servicing data and the
completion, correction or manipulation of such servicing data as may be required
by the successor servicer to correct any errors or insufficiencies in the
servicing data or otherwise to enable the successor 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 Master Servicer
Collection Account.
(d) The Master Servicer shall require each Servicer to comply with the
remittance requirements and other obligations set forth in the related Servicing
Agreements.
(e) If the Master Servicer acts as Servicer, it will not assume
liability for the representations and warranties of the Servicer (other than
▇▇▇▇▇ Fargo), if any, that it replaces.
Section 3.04 Fidelity Bond.
The Master Servicer, at its expense, shall maintain in effect a blanket
fidelity bond and an errors and omissions insurance policy, affording coverage
with respect to all directors, officers, employees and other Persons acting on
such Master Servicer's behalf, and covering errors and omissions in the
performance of the Master Servicer's obligations hereunder. The errors and
omissions insurance policy and the fidelity bond shall be in such form and
amount generally acceptable for entities serving as master servicers or
trustees.
Section 3.05 Power to Act; Procedures.
The Master Servicer shall master service the Mortgage Loans and shall
have full power and authority, subject to the REMIC Provisions and the
provisions of Article X hereof, to do any and all things that it may deem
necessary or desirable in connection with the master servicing and
administration of the Mortgage Loans, including but not limited to the power and
authority (i) to execute and deliver, on behalf of the Certificateholders and
the Trustee, customary consents or waivers and other instruments and documents,
(ii) to consent to transfers of any Mortgaged Property and assumptions of the
Mortgage Notes and related Mortgages, (iii) to collect any Insurance Proceeds
and Liquidation Proceeds, and (iv) to effectuate foreclosure or other conversion
of the ownership of the Mortgaged Property securing any Mortgage Loan, in each
case, in accordance with the provisions of this Agreement and the related
Servicing Agreement, as applicable; provided, however, that the Master Servicer
shall not (and, consistent with its responsibilities under Section 3.03, shall
not permit any Servicer to) knowingly or intentionally take any action, or fail
to take (or fail to cause to be taken) any action reasonably within its control
and the scope of duties more specifically set forth herein, that, under the
REMIC Provisions, if taken or not taken, as the case may be, would cause any
REMIC 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 Opinion of Counsel (but not at the expense of the Master Servicer)
to the effect that the contemplated action would not cause any REMIC to fail to
qualify as a REMIC or result in the imposition of a tax upon any REMIC. The
Trustee shall furnish the Master Servicer, upon written request from a Servicing
Officer, with any powers of attorney empowering the Master Servicer or any
Servicer to execute and deliver instruments of satisfaction or cancellation, or
of partial or full release or discharge, and to foreclose upon or otherwise
liquidate Mortgaged Property, and to appeal, prosecute or defend in any court
action relating to the Mortgage Loans or the Mortgaged Property, in accordance
with the applicable Servicing Agreement and this Agreement, and the Trustee
shall execute and deliver such other documents, as the Master Servicer may
request, to enable the Master Servicer to master service and administer the
Mortgage Loans and carry out its duties hereunder, in each case in accordance
with Accepted Master Servicing Practices (and the Trustee shall have no
liability for misuse of any such powers of attorney by the Master Servicer or
any Servicer). If the Master Servicer or the Trustee has been advised that it is
likely that the laws of the state in which action is to be taken prohibit such
action if taken in the name of the Trustee or that the Trustee would be
adversely affected under the "doing business" or tax laws of such state if such
action is taken in its name, the Master Servicer shall join with the Trustee in
the appointment of a co-trustee pursuant to Section 9.11 hereof. In the
performance of its duties hereunder, the Master Servicer shall be an independent
contractor and shall not, except in those instances where it is taking action in
the name of the Trustee, be deemed to be the agent of the Trustee.
Section 3.06 Due-on-Sale Clauses; Assumption Agreements.
To the extent provided in the applicable Servicing Agreement, to the
extent Mortgage Loans contain enforceable due-on-sale clauses, the Master
Servicer shall cause the Servicers to enforce such clauses in accordance with
the applicable Servicing Agreement. If applicable law prohibits the enforcement
of a due-on-sale clause or such clause is otherwise not enforced in accordance
with the applicable Servicing Agreement, and, as a consequence, a Mortgage Loan
is assumed, the original Mortgagor may be released from liability in accordance
with the applicable Servicing Agreement.
Section 3.07 Release of Mortgage Files.
(a) Upon becoming aware of the payment in full of any Mortgage Loan, or
the receipt by any Servicer of a notification that payment in full has been
escrowed in a manner customary for such purposes for payment to
Certificateholders on the next Distribution Date, the Servicer will, if required
under the applicable Servicing Agreement (or if the Servicer does not, the
Master Servicer may), promptly furnish to the Custodian, on behalf of the
Trustee, two copies of a certification substantially in the form of Exhibit D
hereto signed by a Servicing Officer or in a mutually agreeable electronic
format which will, in lieu of a signature on its face, originate from a
Servicing Officer (which certification shall include a statement to the effect
that all amounts received in connection with such payment that are required to
be deposited in the Protected Account maintained by the applicable Servicer
pursuant to Section 4.01 or by the applicable Servicer pursuant to its Servicing
Agreement have been or will be so deposited) and shall request that the
Custodian, on behalf of the Trustee, deliver to the applicable Servicer the
related Mortgage File. Upon receipt of such certification and request, the
Custodian, on behalf of the Trustee, shall promptly release the related Mortgage
File to the applicable Servicer and the Trustee and Custodian shall have no
further responsibility with regard to such Mortgage File. Upon any such payment
in full, each Servicer is authorized, to give, as agent for the Trustee, as the
mortgagee under the Mortgage that secured the Mortgage Loan, an instrument of
satisfaction (or assignment of mortgage without recourse) regarding the
Mortgaged Property subject to the Mortgage, which instrument of satisfaction or
assignment, as the case may be, shall be delivered to the Person or Persons
entitled thereto against receipt therefor of such payment, it being understood
and agreed that no expenses incurred in connection with such instrument of
satisfaction or assignment, as the case may be, shall be chargeable to the
Protected Account.
(b) From time to time and as appropriate for the servicing or
foreclosure of any Mortgage Loan and in accordance with the applicable Servicing
Agreement, the Trustee shall execute such documents as shall be prepared and
furnished to the Trustee by a Servicer or the Master Servicer (in form
reasonably acceptable to the Trustee) and as are necessary to the prosecution of
any such proceedings. The Custodian, on behalf of the Trustee, shall, upon the
request of a Servicer or the Master Servicer, and delivery to the Custodian, on
behalf of the Trustee, of two copies of a request for release signed by a
Servicing Officer substantially in the form of Exhibit D (or in a mutually
agreeable electronic format which will, in lieu of a signature on its face,
originate from a Servicing Officer), release the related Mortgage File held in
its possession or control to the Servicer or the Master Servicer, as applicable.
Such trust receipt shall obligate the Servicer or the Master Servicer to return
the Mortgage File to the Custodian on behalf of the Trustee, when the need
therefor by the Servicer or the Master Servicer no longer exists unless the
Mortgage Loan shall be liquidated, in which case, upon receipt of a certificate
of a Servicing Officer similar to that hereinabove specified, the Mortgage File
shall be released by the Custodian, on behalf of the Trustee, to the Servicer or
the Master Servicer.
Section 3.08 Documents, Records and Funds in Possession of Master
Servicer To Be Held for Trustee.
(a) The Master Servicer and each Servicer (to the extent required by
the related Servicing Agreement) shall transmit to the Trustee or Custodian such
documents and instruments coming into the possession of the Master Servicer or
such Servicer from time to time as are required by the terms hereof, or in the
case of the Servicers, the applicable Servicing Agreement, to be delivered to
the Trustee or Custodian. Any funds received by the Master Servicer or by a
Servicer in respect of any Mortgage Loan or which otherwise are collected by the
Master Servicer or by a Servicer as Liquidation Proceeds or Insurance Proceeds
in respect of any Mortgage Loan shall be held for the benefit of the Trustee and
the Certificateholders subject to the Master Servicer's right to retain or
withdraw from the Master Servicer Collection Account the Master Servicing
Compensation and other amounts provided in this Agreement, and to the right of
each Servicer to retain its Servicing Fee and other amounts as provided in the
applicable Servicing Agreement. The Master Servicer shall, and (to the extent
provided in the applicable Servicing Agreement) shall cause each Servicer to,
provide access to information and documentation regarding the Mortgage Loans to
the Trustee, its agents and accountants at any time upon reasonable request and
during normal business hours, and to Certificateholders that are savings and
loan associations, banks or insurance companies, the Office of Thrift
Supervision, the FDIC and the supervisory agents and examiners of such Office
and Corporation or examiners of any other federal or state banking or insurance
regulatory authority if so required by applicable regulations of the Office of
Thrift Supervision or other regulatory authority, such access to be afforded
without charge but only upon reasonable request in writing and during normal
business hours at the offices of the Master Servicer designated by it. In
fulfilling such a request the Master Servicer shall not be responsible for
determining the sufficiency of such information.
(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 each Servicer shall be entitled to setoff against, and deduct from, any such
funds any amounts that are properly due and payable to the Master Servicer or
such Servicer under this Agreement or the applicable Servicing Agreement.
Section 3.09 Standard Hazard Insurance and Flood Insurance Policies.
(a) For each Mortgage Loan, the Master Servicer shall enforce any
obligation of the Servicers under the related Servicing Agreements to maintain
or cause to be maintained standard fire and casualty insurance and, where
applicable, flood insurance, all in accordance with the provisions of the
related Servicing Agreements. It is understood and agreed that such insurance
shall be with insurers meeting the eligibility requirements set forth in the
applicable Servicing Agreement and that no earthquake or other additional
insurance is to be required of any Mortgagor or to be maintained on property
acquired in respect of a defaulted loan, other than pursuant to such applicable
laws and regulations as shall at any time be in force and as shall require such
additional insurance.
(b) Pursuant to Section 4.01 and 4.02, any amounts collected by the
Servicers or the Master Servicer, or by any Servicer, under any insurance
policies (other than amounts to be applied to the restoration or repair of the
property subject to the related Mortgage or released to the Mortgagor in
accordance with the applicable Servicing Agreement) shall be deposited into the
Master Servicer Collection Account, subject to withdrawal pursuant to Section
4.02 and 4.03. Any cost incurred by the Master Servicer or any Servicer in
maintaining any such insurance if the Mortgagor defaults in its obligation to do
so shall be added to the amount owing under the Mortgage Loan where the terms of
the Mortgage Loan so permit; provided, however, that the addition of any such
cost shall not be taken into account for purposes of calculating the
distributions to be made to Certificateholders and shall be recoverable by the
Master Servicer or such Servicer pursuant to Section 4.02 and 4.03.
Section 3.10 Presentment of Claims and Collection of Proceeds.
The Master Servicer shall (to the extent provided in the applicable
Servicing Agreement) cause the related Servicer to prepare and present on behalf
of the Trustee and the Certificateholders all claims under the Insurance
Policies and take such actions (including the negotiation, settlement,
compromise or enforcement of the insured's claim) as shall be necessary to
realize recovery under such policies. Any proceeds disbursed to the Master
Servicer (or disbursed to a Servicer and remitted to the Master Servicer) in
respect of such policies, bonds or contracts shall be promptly deposited in the
Master Servicer Collection Account upon receipt, except that any amounts
realized that are to be applied to the repair or restoration of the related
Mortgaged Property as a condition precedent to the presentation of claims on the
related Mortgage Loan to the insurer under any applicable Insurance Policy need
not be so deposited (or remitted).
Section 3.11 Maintenance of the Primary Mortgage Insurance Policies.
(a) The Master Servicer shall not take, or permit any Servicer (to the
extent such action is prohibited under the applicable Servicing Agreement) to
take, any action that would result in noncoverage under any applicable Primary
Mortgage Insurance Policy of any loss which, but for the actions of the Master
Servicer or such Servicer, would have been covered thereunder. The Master
Servicer shall use its best reasonable efforts to cause each Servicer (to the
extent required under the related Servicing Agreement) to keep in force and
effect (to the extent that the Mortgage Loan requires the Mortgagor to maintain
such insurance), primary mortgage insurance applicable to each Mortgage Loan in
accordance with the provisions of this Agreement and the related Servicing
Agreement, as applicable. The Master Servicer shall not, and shall not permit
any Servicer (to the extent required under the related Servicing Agreement) to,
cancel or refuse to renew any such Primary Mortgage Insurance Policy that is in
effect at the date of the initial issuance of the Mortgage Note and is required
to be kept in force hereunder except in accordance with the provisions of this
Agreement and the related Servicing Agreement, as applicable.
(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. Pursuant to
Section 4.01 and 4.02, any amounts collected by the Master Servicer or any
Servicer under any Primary Mortgage Insurance Policies shall be deposited in the
Master Servicer Collection Account, subject to withdrawal pursuant to Sections
4.02 and 4.03.
Section 3.12 Trustee to Retain Possession of Certain Insurance Policies
and Documents.
The Trustee (or the Custodian, as directed by the Trustee), shall
retain possession and custody of the originals (to the extent available) of any
Primary Mortgage Insurance Policies, or certificate of insurance if applicable,
and any certificates of renewal as to the foregoing as may be issued from time
to time as contemplated by this Agreement. Until all amounts distributable in
respect of the Certificates have been distributed in full and the Master
Servicer otherwise has fulfilled its obligations under this Agreement, the
Trustee (or its Custodian, if any, as directed by the Trustee) shall also retain
possession and custody of each Mortgage File in accordance with and subject to
the terms and conditions of this Agreement. The Master Servicer shall promptly
deliver or cause to be delivered to the Trustee (or the Custodian, as directed
by the Trustee), upon the execution or receipt thereof the originals of any
Primary Mortgage Insurance Policies, any certificates of renewal, and such other
documents or instruments that constitute portions of the Mortgage File that come
into the possession of the Master Servicer from time to time.
Section 3.13 Realization Upon Defaulted Mortgage Loans.
The Master Servicer shall cause each Servicer (to the extent required
under the related Servicing Agreement) to foreclose upon, repossess or otherwise
comparably convert the ownership of Mortgaged Properties securing such of the
Mortgage Loans as come into and continue in default and as to which no
satisfactory arrangements can be made for collection of delinquent payments, all
in accordance with the applicable Servicing Agreement.
Section 3.14 Compensation for the Master Servicer.
The Master Servicer will be entitled to all income and gain realized
from any investment of funds in the Distribution Account and the Master Servicer
Collection Account, pursuant to Article IV, for the performance of its
activities hereunder. Servicing compensation in the form of assumption fees, if
any, late payment charges, as collected, if any, or otherwise (but not including
any prepayment premium or penalty) shall be retained by the applicable Servicer
and shall not be deposited in the Protected Account. The Master Servicer 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
applicable Servicing Agreement, cause the applicable Servicer to sell any REO
Property as expeditiously as possible and in accordance with the provisions of
this Agreement and the related Servicing Agreement, as applicable. Pursuant to
its efforts to sell such REO Property, the Master Servicer shall cause the
applicable Servicer to protect and conserve, such REO Property in the manner and
to the extent required by the applicable Servicing Agreement, in accordance with
the REMIC Provisions and in a manner that does not result in a tax on "net
income from foreclosure property" 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 related
Servicing Agreement, cause the applicable Servicer to deposit all funds
collected and received in connection with the operation of any REO Property in
the Protected Account.
(c) The Master Servicer and the applicable Servicer, upon the final
disposition of any REO Property, shall be entitled to reimbursement for any
related unreimbursed Monthly Advances and other unreimbursed advances as well as
any unpaid Servicing Fees from Liquidation Proceeds received in connection with
the final disposition of such REO Property; provided, that any such unreimbursed
Monthly Advances as well as any unpaid Servicing Fees may be reimbursed or paid,
as the case may be, prior to final disposition, out of any net rental income or
other net amounts derived from such REO Property.
(d) To the extent provided in the related Servicing Agreement, the
Liquidation Proceeds from the final disposition of the REO Property, net of any
payment to the Master Servicer and the applicable Servicer as provided above
shall be deposited in the Protected Account on or prior to the Determination
Date in the month following receipt thereof and be remitted by wire transfer in
immediately available funds to the Master Servicer for deposit into the related
Master Servicer Collection Account on the next succeeding Servicer Remittance
Date.
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 period ending
December 31 of the prior year: (i) such Servicing Officer has reviewed the
activities of such Master Servicer during the preceding calendar year or portion
thereof and its performance under this Agreement, (ii) to the best of such
Servicing Officer's knowledge, based on such review, such Master Servicer has
performed and fulfilled its duties, responsibilities and obligations under this
Agreement in all material respects throughout such year, or, if there has been a
default in the fulfillment of any such duties, responsibilities or obligations,
specifying each such default known to such Servicing Officer and the nature and
status thereof, (iii) nothing has come to the attention of such Servicing
Officer to lead such Servicing Officer to believe that any Servicer has failed
to perform any of its duties, responsibilities and obligations under its
Servicing Agreement in all material respects throughout such year, or, if there
has been a material default in the performance or fulfillment of any such
duties, responsibilities or obligations, specifying each such default known to
such Servicing Officer and the nature and status thereof.
(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
▇▇▇▇▇▇▇ Mac or the Uniform Single Attestation Program for Mortgage Bankers, such
firm is of the opinion that the Master Servicer's activities have been conducted
in compliance with this Agreement, or that such examination has disclosed no
material items of noncompliance except for (i) such exceptions as such firm
believes to be immaterial, (ii) such other exceptions as are set forth in such
statement and (iii) such exceptions that the Uniform Single Attestation Program
for Mortgage Bankers or the Audit Program for Mortgages Serviced by ▇▇▇▇▇▇▇ Mac
requires it to report. Copies of such statements shall be provided to any
Certificateholder upon request by the Master Servicer, or by the Trustee at the
expense of the Master Servicer if the Master Servicer shall fail to provide such
copies. If such report discloses exceptions that are material, the Master
Servicer shall advise the Trustee whether such exceptions have been or are
susceptible of cure, and will take prompt action to do so.
Section 3.18 Reports Filed with Securities and Exchange Commission.
Within 15 days after each Distribution Date, the Securities
Administrator shall, in accordance with industry standards, file with the
Commission via the Electronic Data Gathering and Retrieval System ("▇▇▇▇▇"), 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 independent accountant's servicing report and annual statement of
compliance to be delivered by the Master Servicer pursuant to Sections 3.16 and
3.17. Prior to (i) March 31, 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 file a Form 10-K, in substance conforming to industry standards, with
respect to the Trust. Such Form 10-K shall include the Master Servicer
Certification and other documentation provided by the Master Servicer pursuant
to the second preceding sentence. The Depositor hereby grants to the Securities
Administrator a limited power of attorney to execute and file each such document
on behalf of the Depositor. Such power of attorney shall continue until either
the earlier of (i) receipt by the Securities Administrator from the Depositor of
written termination of such power of attorney and (ii) the termination of the
Trust Fund. The Depositor agrees to promptly furnish to the Securities
Administrator, from time to time upon request, such further information, reports
and financial statements within its control related to this Agreement and the
Mortgage Loans as the Securities Administrator reasonably deems appropriate to
prepare and file all necessary reports with the Commission. The Securities
Administrator shall have no responsibility to file any items other than those
specified in this Section 3.18; provided, however, the Securities Administrator
will cooperate with the Depositor in connection with any additional filings with
respect to the Trust Fund as the Depositor deems necessary under the Securities
Exchange Act of 1934, as amended (the "Exchange Act"). Fees and expenses
incurred by the Securities Administrator in connection with this Section 3.18
shall not be reimbursable from the Trust Fund.
Section 3.19 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 3.20 Optional Purchase of Defaulted Mortgage Loans.
(a) 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, the
Company 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.
(b) If at any time the Company remits to the Master Servicer a payment for
deposit in the Master Servicer Collection Account covering the amount of the
Repurchase Price for such a Mortgage Loan, and the Company provides to the
Trustee a certification signed by a Servicing Officer stating that the amount of
such payment has been deposited in the Master Servicer Collection Account, then
the Trustee shall execute the assignment of such Mortgage Loan to the Company at
the request of the Company without recourse, representation or warranty and the
Company shall succeed to all of the Trustee's right, title and interest in and
to such Mortgage Loan, and all security and documents relative thereto. Such
assignment shall be an assignment outright and not for security. The Company
will thereupon own such Mortgage, and all such security and documents, free of
any further obligation to the Trustee or the Certificateholders with respect
thereto.
ARTICLE IV
ACCOUNTS
Section 4.01 Protected Accounts.
(a) The Master Servicer shall enforce the obligation of each Servicer
to establish and maintain a Protected Account in accordance with the applicable
Servicing Agreement, with records to be kept with respect thereto on a Mortgage
Loan by Mortgage Loan basis, into which accounts shall be deposited within 48
hours (or as of such other time specified in the related Servicing Agreement) of
receipt, all collections of principal and interest on any Mortgage Loan and any
REO Property received by a Servicer, including Principal Prepayments, Insurance
Proceeds, Liquidation Proceeds, and advances made from the Servicer's own funds
(less servicing compensation as permitted by the applicable Servicing Agreement
in the case of any Servicer) and all other amounts to be deposited in the
Protected Account. The Servicer is hereby authorized to make withdrawals from
and deposits to the related Protected Account for purposes required or permitted
by this Agreement. To the extent provided in the related Servicing Agreement,
the Protected Account shall be held by a Designated Depository Institution and
segregated on the books of such institution in the name of the Trustee for the
benefit of Certificateholders.
(b) To the extent provided in the related Servicing Agreement, amounts
on deposit in a Protected Account may be invested in Permitted Investments in
the name of the Trustee for the benefit of Certificateholders and, except as
provided in the preceding paragraph, not commingled with any other funds. Such
Permitted Investments shall mature, or shall be subject to redemption or
withdrawal, no later than the date on which such funds are required to be
withdrawn for deposit in the Master Servicer Collection Account, and shall be
held until required for such deposit. The income earned from Permitted
Investments made pursuant to this Section 4.01 shall be paid to the related
Servicer under the applicable Servicing Agreement, and the risk of loss of
moneys required to be distributed to the Certificateholders resulting from such
investments shall be borne by and be the risk of the related Servicer. The
related Servicer (to the extent provided in the Servicing Agreement) shall
deposit the amount of any such loss in the Protected Account within two Business
Days of receipt of notification of such loss but not later than the second
Business Day prior to the Distribution Date on which the moneys so invested are
required to be distributed to the Certificateholders.
(c) To the extent provided in the related Servicing Agreement and
subject to this Article IV, on or before each Servicer Remittance Date, the
related Servicer shall withdraw or shall cause to be withdrawn from its
Protected Accounts and shall immediately deposit or cause to be deposited in the
Master Servicer Collection Account amounts representing the following
collections and payments (other than with respect to principal of or interest on
the Mortgage Loans due on or before the Cut-off Date) with respect to each Loan
Group:
(i) Scheduled Payments on the Mortgage Loans received or any
related portion thereof advanced by such Servicer pursuant to its Servicing
Agreement which were due on or before the related Due Date, net of the amount
thereof comprising its Servicing Fee or any fees with respect to any lender-paid
primary mortgage insurance policy;
(ii) Full Principal Prepayments and any Liquidation Proceeds
received by such Servicer with respect to the Mortgage Loans in the related
Prepayment Period, with interest to the date of prepayment or liquidation, net
of the amount thereof comprising its Servicing Fee;
(iii) Partial Principal Prepayments received by such Servicer
for the Mortgage Loans in the related Prepayment Period; and
(iv) Any amount to be used as a Monthly Advance.
(d) Withdrawals may be made from an Account only to make remittances as
provided in Section 4.01(c), 4.02 and 4.03; to reimburse the Master Servicer or
a Servicer for Monthly Advances which have been recovered by subsequent
collections 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 Sections 4.01(a) and 4.02(b)
certain amounts otherwise due to the Servicers may be retained by them and need
not be deposited in the Master Servicer Collection Account.
Section 4.02 Master Servicer Collection Account.
(a) The Master Servicer shall establish and maintain in the name of the
Trustee, for the benefit of the Certificateholders, the Master Servicer
Collection Account as a segregated trust account or accounts. The Master
Servicer Collection Account shall be an Eligible Account. The Master Servicer
will deposit in the Master Servicer Collection Account as identified by the
Master Servicer and as received by the Master Servicer, the following amounts:
(i) Any amounts withdrawn from a Protected Account;
(ii) Any Monthly Advance and any Compensating Interest
Payments;
(iii) Any Insurance Proceeds or Net Liquidation Proceeds
received by or on behalf of the Master Servicer or which were not deposited in a
Protected Account;
(iv) The Repurchase Price with respect to any Mortgage Loans
purchased by the Seller pursuant to the Mortgage Loan Purchase Agreement or
Sections 2.02 or 2.03 hereof, any amounts which are to be treated pursuant to
Section 2.04 of this Agreement as the payment of a Repurchase Price in
connection with the tender of a Substitute Mortgage Loan by the Seller, the
Repurchase Price with respect to any Mortgage Loans purchased by the Company
pursuant to Section 3.20, and all proceeds of any Mortgage Loans or property
acquired with respect thereto repurchased by the Depositor or its designee
pursuant to Section 10.01;
(v) Any amounts required to be deposited with respect to
losses on investments of deposits in an Account; and
(vi) Any other amounts received by or on behalf of the Master
Servicer and required to be deposited in the Master Servicer Collection Account
pursuant to this Agreement.
(b) All amounts deposited to the Master Servicer Collection Account
shall be held by the Master Servicer in the name of the Trustee in trust for the
benefit of the Certificateholders in accordance with the terms and provisions of
this Agreement. The requirements for crediting the Master Servicer Collection
Account or the Distribution Account shall be exclusive, it being understood and
agreed that, without limiting the generality of the foregoing, payments in the
nature of (i) prepayment or late payment charges or assumption, tax service,
statement account or payoff, substitution, satisfaction, release and other like
fees and charges and (ii) the items enumerated in Subsections 4.05(a)(i), (ii),
(iii), (iv), (vi), (vii), (viii), (ix) and (x), need not be credited by the
Master Servicer or the related Servicer to the Distribution Account or the
Master Servicer Collection Account, as applicable. In the event that the Master
Servicer shall deposit or cause to be deposited to the Distribution Account any
amount not required to be credited thereto, the Trustee, upon receipt of a
written request therefor signed by a Servicing Officer of the Master Servicer,
shall promptly transfer such amount to the Master Servicer, any provision herein
to the contrary notwithstanding.
(c) The amount at any time credited to the Master Servicer Collection
Account may be invested, in the name of the Trustee, or its nominee, for the
benefit of the Certificateholders, in Permitted Investments as directed by
Master Servicer. All Permitted Investments shall mature or be subject to
redemption or withdrawal on or before, and shall be held until, the next
succeeding Distribution Account Deposit Date. Any and all investment earnings on
amounts on deposit in the Master Servicer Collection Account from time to time
shall be for the account of the Master Servicer. The Master Servicer from time
to time shall be permitted to withdraw or receive distribution of any and all
investment earnings from the Master Servicer Collection Account. The risk of
loss of moneys required to be distributed to the Certificateholders resulting
from such investments shall be borne by and be the risk of the Master Servicer.
The Master Servicer shall deposit the amount of any such loss in the Master
Servicer Collection Account within two Business Days of receipt of notification
of such loss but not later than the second Business Day prior to the
Distribution Date on which the moneys so invested are required to be distributed
to the Certificateholders.
Section 4.03 Permitted Withdrawals and Transfers from the Master
Servicer Collection Account.
(a) The Master Servicer will, from time to time on demand of a Servicer
or the Securities Administrator, make or cause to be made such withdrawals or
transfers from the Master Servicer Collection Account as the Master Servicer has
designated for such transfer or withdrawal pursuant to this Agreement and the
related Servicing Agreement. The Master Servicer may clear and terminate the
Master Servicer Collection Account pursuant to Section 10.01 and remove amounts
from time to time deposited in error.
(b) On an ongoing basis, the Master Servicer shall withdraw from the
Master Servicer Collection Account (i) any expenses, costs and liabilities
recoverable by the Trustee, the Master Servicer or the Securities Administrator
or the Custodian pursuant to Sections 3.03, 7.04 and 9.05 and (ii) any amounts
payable to the Master Servicer as set forth in Section 3.14; provided, however,
that the Master Servicer shall be obligated to pay from its own funds any
amounts which it is required to pay under Section 7.03(a).
(c) In addition, on or before each Distribution Account Deposit Date,
the Master Servicer shall deposit in the Distribution Account (or remit to the
Trustee for deposit therein) any Monthly Advances required to be made by the
Master Servicer with respect to the Mortgage Loans.
(d) No later than 3:00 p.m. New York time on each Distribution Account
Deposit Date, the Master Servicer will transfer all Available Funds on deposit
in the Master Servicer Collection Account with respect to the related
Distribution Date to the Paying Agent for deposit in the Distribution Account.
Section 4.04 Distribution Account.
(a) The Paying Agent shall establish and maintain in the name of the
Paying Agent, for the benefit of the Certificateholders, the Distribution
Account as a segregated trust account or accounts.
(b) All amounts deposited to the Distribution Account shall be held by
the Paying Agent in the name of the Paying Agent in trust for the benefit of the
Certificateholders in accordance with the terms and provisions of this
Agreement.
(c) The Paying Agent shall deposit in the Distribution Account the
Repurchase Price with respect to any Mortgage Loans purchased by the Seller
pursuant to the Mortgage Loan Purchase Agreement or Sections 2.02 or 2.03
hereof, any amounts which are to be treated pursuant to Section 2.04 of this
Agreement as the payment of a Repurchase Price in connection with the tender of
a Substitute Mortgage Loan by the Seller, the Repurchase Price with respect to
any Mortgage Loans purchased by the Company pursuant to Section 3.20, and all
proceeds of any Mortgage Loans or property acquired with respect thereto
repurchased by the Depositor or its designee pursuant to Section 10.01;
(d) The Distribution Account shall constitute a trust account of the
Trust Fund segregated on the books of the Paying Agent and held by the Paying
Agent in trust in its Corporate Trust Office, and the Distribution Account and
the funds deposited therein shall not be subject to, and shall be protected
from, all claims, liens, and encumbrances of any creditors or depositors of the
Paying Agent or the Master Servicer (whether made directly, or indirectly
through a liquidator or receiver of the Paying Agent or the Master Servicer).
The Distribution Account shall be an Eligible Account. The amount at any time
credited to the Distribution Account shall be (i) held in cash and fully insured
by the FDIC to the maximum coverage provided thereby or (ii) invested in the
name of the Paying Agent, in such Permitted Investments as may be selected by
the Master Servicer or deposited in demand deposits with such depository
institutions as may be selected by the Master Servicer, provided that time
deposits of such depository institutions would be a Permitted Investment. All
Permitted Investments shall mature or be subject to redemption or withdrawal on
or before, and shall be held until, the next succeeding Distribution Date if the
obligor for such Permitted Investment is the Paying Agent or, if such obligor is
any other Person, the Business Day preceding such Distribution Date. All
investment earnings on amounts on deposit in the Distribution Account or benefit
from funds uninvested therein from time to time shall be for the account of the
Master Servicer. The Master Servicer shall be permitted to withdraw or receive
distribution of any and all investment earnings from the Distribution Account on
each Distribution Date. If there is any loss on a Permitted Investment or demand
deposit, the Master Servicer shall remit the amount of the loss to the Paying
Agent who shall deposit such amount in the Distribution Account. With respect to
the Distribution Account and the funds deposited therein, the Master Servicer
shall take such action as may be necessary to ensure that the Certificateholders
shall be entitled to the priorities afforded to such a trust account (in
addition to a claim against the estate of the 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 4.05 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 this Agreement and
the Servicing Agreements or as the Securities Administrator has instructed
hereunder for the following purposes (limited in the case of amounts due the
Master Servicer to those not withdrawn from the Master Servicer Collection
Account in accordance with the terms of this Agreement):
(i) to reimburse the Master Servicer or any Servicer for any
Monthly Advance of its own funds, the right of the Master Servicer or a Servicer
to reimbursement pursuant to this subclause (i) being limited to amounts
received on a particular Mortgage Loan (including, for this purpose, the
Repurchase Price therefor, Insurance Proceeds and Liquidation Proceeds) which
represent late payments or recoveries of the principal of or interest on such
Mortgage Loan respecting which such Monthly Advance was made;
(ii) to reimburse the Master Servicer or any Servicer from
Insurance Proceeds or Liquidation Proceeds relating to a particular Mortgage
Loan for amounts expended by the Master Servicer or such Servicer in good faith
in connection with the restoration of the related Mortgaged Property which was
damaged by an Uninsured Cause or in connection with the liquidation of such
Mortgage Loan;
(iii) to reimburse the Master Servicer or any Servicer from
Insurance Proceeds relating to a particular Mortgage Loan for insured expenses
incurred with respect to such Mortgage Loan and to reimburse the Master Servicer
or such Servicer from Liquidation Proceeds from a particular Mortgage Loan for
Liquidation Expenses incurred with respect to such Mortgage Loan; provided that
the Master Servicer shall not be entitled to reimbursement for Liquidation
Expenses with respect to a Mortgage Loan to the extent that (i) any amounts with
respect to such Mortgage Loan were paid as Excess Liquidation Proceeds pursuant
to clause (viii) of this Subsection 4.05 (a) to the Master Servicer; and (ii)
such Liquidation Expenses were not included in the computation of such Excess
Liquidation Proceeds;
(iv) to reimburse the Master Servicer or any Servicer for
advances of funds (other than Monthly Advances) made with respect to the
Mortgage Loans, and the right to reimbursement pursuant to this 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;
(v) to reimburse the Master Servicer or any Servicer for any
Monthly Advance or advance, after a Realized Loss has been allocated with
respect to the related Mortgage Loan if the Monthly Advance or advance has not
been reimbursed pursuant to clauses (i) and (iv);
(vi) to pay the Master Servicer as set forth in Section 3.14;
(vii) to reimburse the Master Servicer for expenses, costs and
liabilities incurred by and reimbursable to it pursuant to Sections 3.03 and
7.04(c) and (d);
(viii) to pay to the Master Servicer, as additional servicing
compensation, any Excess Liquidation Proceeds to the extent not retained by the
related Servicer;
(ix) to reimburse or pay any Servicer any such amounts as are
due thereto under the applicable Servicing Agreement and have not been retained
by or paid to the Servicer, to the extent provided in the related Servicing
Agreement;
(x) to reimburse the Trustee, the Securities Administrator or
the Custodian for expenses, costs and liabilities incurred by or reimbursable to
it pursuant to this Agreement;
(xi) to remove amounts deposited in error; and
(xii) to clear and terminate the Distribution Account pursuant
to Section 10.01.
(b) The Master Servicer shall keep and maintain separate accounting, on
a Mortgage Loan by Mortgage Loan basis, for the purpose of accounting for any
reimbursement from the Distribution Account pursuant to subclauses (i) through
(iv) or with respect to any such amounts which would have been covered by such
subclauses had the amounts not been retained by the Master Servicer without
being deposited in the Distribution Account under Section 4.02(b).
(c) On each Distribution Date, the Paying Agent shall distribute the
Available Funds to the extent on deposit in the Distribution Account for each
Loan Group to the Holders of the Certificates in accordance with distribution
instructions provided to it by the Securities Administrator no later than two
Business Days prior to such Distribution Date and determined by the Securities
Administrator in accordance with Section 6.01.
ARTICLE V
CERTIFICATES
Section 5.01 Certificates.
(a) The Depository, the Depositor and the Securities Administrator 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 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 may rely and shall be fully protected in relying
upon information furnished by the Depository with respect to its Depository
Participants.
The Residual Certificates and the Private Certificates are initially
Physical Certificates. If at any time the Holders of all of the Certificates of
one or more such Classes request that the Certificate Registrar cause such Class
to become Global Certificates, the Certificate Registrar and the Depositor will
take such action as may be reasonably required to cause the Depository to accept
such Class or Classes for trading if it may legally be so traded.
All transfers by Certificate Owners of such respective Classes of
Book-Entry Certificates and any Global Certificates shall be made in accordance
with the procedures established by the Depository Participant or brokerage firm
representing such Certificate Owners. Each Depository Participant shall only
transfer Book-Entry Certificates of Certificate Owners it represents or of
brokerage firms for which it acts as agent in accordance with the Depository's
normal procedures.
(b) If (i)(A) the Depositor advises the Certificate Registrar in
writing that the Depository is no longer willing or able to properly discharge
its responsibilities as Depository and (B) the Certificate Registrar or the
Depositor is unable to locate a qualified successor within 30 days or (ii) the
Depositor at its option advises the Certificate Registrar 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. Neither the Depositor nor the
Certificate Registrar shall be liable for any delay in delivery of any
instructions required under this section and may conclusively rely on, and shall
be protected in relying on, such instructions.
In addition, if an Event of Default has occurred and is continuing,
each Certificate Owner materially adversely affected thereby may at its option
request a definitive Certificate evidencing such Certificate Owner's Fractional
Undivided 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 Fractional Undivided Interest in fully registered definitive form.
Upon receipt by the Certificate Registrar 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 Amount being exchanged, the Depository Participant account to be
debited with the decrease, the registered holder of and delivery instructions
for the definitive Certificate, and any other information reasonably required by
the Certificate Registrar), (i) the Certificate Registrar shall instruct the
Depository to reduce the related Depository Participant's account by the
aggregate Current Principal Amount of the definitive Certificate, (ii) the
Certificate Registrar shall execute, authenticate and deliver, in accordance
with the registration and delivery instructions provided by the Depository, a
definitive Certificate evidencing such Certificate Owner's Fractional Undivided
Interest in such Class of Certificates and (iii) the Certificate Registrar shall
execute and authenticate a new Book-Entry Certificate reflecting the reduction
in the Current Principal Amount of such Class of Certificates by the amount of
the definitive Certificates.
(c) (i) REMIC I will be evidenced by (x) the REMIC I Regular
Interests, which will be uncertificated and non-transferable and are hereby
designated as the "regular interests" in REMIC I and have the initial principal
amounts 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 representing the sole class of "residual interests" in REMIC I.
The REMIC I Regular Interests and the Class R-I Certificate will have
the following designations, initial principal amounts and Pass-Through Rates:
REMIC I INTEREST INITIAL PRINCIPAL AMOUNT PASS-THROUGH RATE RELATED LOAN GROUP
---------------- ------------------------ ----------------- -----------------------------------
I-Sub $ 1,722.23 (1) Loan Group I
I-Grp $ 33,440.65 (2) Loan Group I
II-Sub $ 1,458.94 (1) Loan Group II
II-Grp $ 28,328.14 (3) Loan Group II
III-Sub $ 1,646.92 (1) Loan Group III
III-Grp $ 31,978.62 (4) Loan Group III
IV-Sub $ 3,500.23 (1) Loan Group IV
IV-Grp $ 67,965.13 (5) Loan Group IV
ZZZ $ 1,616,955,280.51 (1) Loan Group I through Loan Group IV
Class R-I $ 50.00 (2) Group I
(1) The weighted average of the Net Rates of the Mortgage Loans, 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.
(2) The weighted average of the Net Rates of the Group I Mortgage Loans,
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.
(3) The weighted average of the Net Rates of the Group II Mortgage Loans,
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.
(4) The weighted average of the Net Rates of the Group III Mortgage Loans,
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.
(5) The weighted average of the Net Rates of the Group IV Mortgage Loans,
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.
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 "Grp" 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 "Sub," 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 aggregate Current
Principal Amount of the Senior Certificates (other than the Interest Only
Certificates) in the related Certificate 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 "Grp" 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
"Sub," 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 Interest
Only Certificates) in the related Certificate Group (except that if any such
excess is a larger number than in the preceding distribution period, the least
amount of Realized Losses 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.
The aggregate amount of any Net Interest Shortfalls for any
Distribution Date shall be allocated to accrued interest payable to REMIC I
Regular Interest I-Sub, REMIC I Regular Interest I-Grp, REMIC I Regular Interest
II-Sub, REMIC I Regular Interest II-Grp, REMIC I Regular Interest III-Sub, REMIC
I Regular Interest III-Grp, REMIC I Regular Interest IV-Sub, REMIC I Regular
Interest IV-Grp and REMIC I Regular Interest ZZZ, PRO RATA, based on, and to the
extent of, one month's interest at the then applicable respective Pass-Through
Rates on the respective Uncertificated Principal Balances of each such REMIC I
Regular Interest.
(ii) REMIC II will be evidenced by (x) the REMIC II Regular Interests, which
will be uncertificated and non-transferable and are hereby designated as the
"regular interests" in REMIC II and have the initial principal amounts 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 Certificates, which are hereby
designated as representing the sole class of "residual interests" in REMIC II.
The REMIC II Regular Interests and the Class R-II Certificates will
have the following designations, initial principal amounts and Pass-Through
Rates:
INITIAL PRINCIPAL
REMIC II INTEREST AMOUNT PASS-THROUGH RATE RELATED LOAN GROUP
------------------------- ---------------------- ----------------------- ------------------------------------------
I-A-1 $ 317,184,000.00 (1) Loan Group I
II-A-1 $ 172,239,000.00 (2) Loan Group II
II-A-2 $ 30,735,000.00 (2) Loan Group II
II-A-3 $ 65,718,000.00 (2) Loan Group II
III-A-1 $ 303,317,000.00 (3) Loan Group III
IV-A-1 $ 644,649,000.00 (4) Loan Group IV
Class R-II $ 50.00 (1) Loan Group I
R-III $ 50.00 (1) Loan Group I
B-1 $ 14,553,000.00 (5) Loan Group I through Loan Group IV
B-2 $ 14,554,000.00 (5) Loan Group I through Loan Group IV
B-3 $ 7,277,000.00 (5) Loan Group I through Loan Group IV
B-4 $ 6,469,000.00 (5) Loan Group I through Loan Group IV
B-5 $ 6,468,000.00 (5) Loan Group I through Loan Group IV
B-6 $ 4,851,000.00 (5) Loan Group I through Loan Group IV
B-7 $ 4,042,000.00 (5) Loan Group I through Loan Group IV
B-8 $ 2,426,000.00 (5) Loan Group I through Loan Group IV
B-9 $ 6,469,000.00 (5) Loan Group I through Loan Group IV
B-10 $ 6,468,000.00 (5) Loan Group I through Loan Group IV
B-11 $ 5,660,000.00 (5) Loan Group I through Loan Group IV
B-12 $ 4,046,221.37 (5) Loan Group I through Loan Group IV
(1) A variable Pass-Through Rate equal to the weighted average of the
Pass-Through Rate on REMIC I Regular Interest I-Grp, weighted on the
basis of the Uncertificated Principal Balance of such REMIC I Regular
Interest immediately preceding the related Distribution Date.
(2) A variable Pass-Through Rate equal to the weighted average of the
Pass-Through Rate on REMIC I Regular Interest II-Grp, weighted on the
basis of the Uncertificated Principal Balance of such REMIC I Regular
Interest immediately preceding the related Distribution Date.
(3) A variable Pass-Through Rate equal to the weighted average of the
Pass-Through Rate on REMIC I Regular Interest III-Grp, weighted on the
basis of the Uncertificated Principal Balance of such REMIC I Regular
Interest immediately preceding the related Distribution Date.
(4) A variable Pass-Through Rate equal to the weighted average of the
Pass-Through Rate on REMIC I Regular Interest IV-Grp, weighted on the
basis of the Uncertificated Principal Balance of such REMIC I Regular
Interest immediately preceding the related Distribution Date.
(5) A variable Pass-Through Rate equal to the weighted average of the
Pass-Through Rates on REMIC I Regular Interests I-Sub, II- Sub, III-
Sub and IV- Sub, weighted on the basis of the Uncertificated Principal
Balances of each such REMIC I Regular Interest immediately preceding
the related Distribution Date, provided that for purposes of
calculating such 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 "Grp".
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; provided that, solely for purposes
of the foregoing, any shortfalls or losses otherwise allocable to the Class
II-X-1 Certificates shall be deemed to be allocated entirely to the Class II-A-2
Certificates and Class II-A-3 Certificates on a PRO RATA basis. Interest shall
be payable to the REMIC II Regular Interests at the Pass-Through Rate for each
such REMIC II Regular Interest on each such REMIC II Regular Interest's
Uncertificated Principal Balance.
(iii) The Classes of the Certificates shall have the following
designations, initial principal amounts and Pass-Through Rates:
DESIGNATION INITIAL PRINCIPAL AMOUNT PASS-THROUGH RATE
I-A-1 $ 317,184,000.00 (1)
II-A-1 $ 172,239,000.00 (2)
II-X-1 $ (3) (4)
II-A-2 $ 30,735,000.00 (5)
II-A-3 $ 65,718,000.00 (6)
III-A-1 $ 303,317,000.00 (7)
IV-A-1 $ 644,649,000.00 (8)
R-I $ 50.00 (9)
R-II $ 50.00 (9)
R-III $ 50.00 (9)
B-1 $ 14,553,000.00 (10)
B-2 $ 14,554,000.00 (10)
B-3 $ 7,277,000.00 (10)
B-4 $ 6,469,000.00 (10)
B-5 $ 6,468,000.00 (10)
B-6 $ 4,851,000.00 (10)
B-7 $ 4,042,000.00 (10)
B-8 $ 2,426,000.00 (10)
B-9 $ 6,469,000.00 (10)
B-10 $ 6,468,000.00 (10)
B-11 $ 5,660,000.00 (10)
B-12 $ 4,046,221.37 (10)
(1) The Class I-A-1 Certificates will bear interest at a variable
Pass-Through Rate equal to the weighted average of the Net Rates of the Group I
Mortgage Loans, 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, for federal
income tax purposes the Class I-A-1 Certificates will bear interest at a rate
equivalent to the foregoing, 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 with
respect to the first Interest Accrual Period is 5.350% per annum.
(2) The Class II-A-1 Certificates will bear interest at a variable
Pass-Through Rate equal to the weighted average of the Net Rates of the Group II
Mortgage Loans, 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, for federal
income tax purposes the Class II-A-1 Certificates will bear interest at a rate
equivalent to the foregoing, 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 with
respect to the first Interest Accrual Period is 4.595% per annum.
(3) As described in the definition of Notional Amount herein.
(4) On or prior to the Distribution Date in February 2010, the Class
II-X-1 Certificates will bear interest at a variable Pass-Through Rate equal to
the greater of (i) zero and (ii) the excess, if any, of (a) the weighted average
of the Net Rates of the Group II Mortgage Loans, 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,
over (b) the weighted average of the Pass-Through Rates of the Class II-A-2
Certificates and Class II-A-3 Certificates, weighted on the basis of the Current
Principal Amounts of such Certificates immediately preceding the related
Distribution Date; provided that, on or prior to such Distribution Date, for
federal income tax purposes the Class II-X-1 Certificates will bear interest at
a rate equivalent to the foregoing, expressed as the greater of (i) zero and
(ii) the weighted average of the Pass-Through Rates on REMIC II Regular Interest
II-A-2 and REMIC II Regular Interest II-A-3, weighted on the basis of the
Uncertificated Principal Balances of such REMIC II Regular Interests immediately
preceding the related Distribution Date, minus the weighted average of the
Pass-Through Rates on the Class II-A-2 Certificates and Class II-A-3
Certificates, weighted on the basis of the Current Principal Amounts of such
Certificates immediately preceding the related Distribution Date. After the
Distribution Date in February 2010, the Class II-X-1 Certificates will not bear
any interest.
(5) On or prior to the Distribution Date in February 2010, the Class
II-A-2 Certificates will bear interest at a fixed Pass-Through Rate equal to
4.567% per annum, subject to an interest rate cap equal to the weighted average
of the Net Rates of the Group II Mortgage Loans, 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.
After the Distribution Date in February 2010, the Class II-A-2 Certificates will
bear interest at a variable Pass-Through Rate equal to the weighted average of
the Net Rates of the Group II Mortgage Loans, provided that, after such
Distribution Date, for federal income tax purposes the Class II-A-2 Certificates
will bear interest at a rate equivalent to the foregoing, 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.
(6) On or prior to the Distribution Date in February 2010, the Class
II-A-3 Certificates will bear interest at a fixed Pass-Through Rate equal to
4.450% per annum, subject to an interest rate cap equal to the weighted average
of the Net Rates of the Group II Mortgage Loans, 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.
After the Distribution Date in February 2010, the Class II-A-3 Certificates will
bear interest at a variable Pass-Through Rate equal to the weighted average of
the Net Rates of the Group II Mortgage Loans, provided that, after such
Distribution Date, for federal income tax purposes the Class II-A-3 Certificates
will bear interest at a rate equivalent to the foregoing, 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.
(7) 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, 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, for federal
income tax purposes the Class III-A-1 Certificates will bear interest at a rate
equivalent to the foregoing, 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 with
respect to the first Interest Accrual Period is 5.399% per annum.
(8) The Class IV-A-1 Certificates will bear interest at a variable
Pass-Through Rate equal to the weighted average of the Net Rates of the Group IV
Mortgage Loans, 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, for federal
income tax purposes the Class IV-A-1 Certificates will bear interest at a rate
equivalent to the foregoing, expressed as the weighted average of the
Pass-Through Rate on REMIC II Regular Interest IV-A-1, weighted on the basis of
the Uncertificated Principal Balance of such REMIC II Regular Interest
immediately preceding the related Distribution Date. The Pass-Through Rate with
respect to the first Interest Accrual Period is 5.214% per annum.
(9) The Class R-I, Class R-II and Class R-III Certificates will bear
interest at a variable Pass-Through Rate equal to the weighted average of the
Net Rates of the Group I Mortgage Loans, 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.
(10) The Class B-1, Class B-2, Class B-3, Class B-4, Class B-5, Class
B-6, Class B-7, Class B-8, Class B-9, Class B-10, Class B-11, and Class B-12
Certificates will each bear interest at a variable Pass-Through Rate equal to
the weighted average of the weighted average of the Net Rates of the Mortgage
Loans in each Loan Group, weighted in proportion to the results of subtracting
from the aggregate Scheduled Principal Balance of the Mortgage Loans of each
Loan Group, the aggregate Current Principal Amount of the related Class or
Classes of Senior Certificates; 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 ▇-▇, ▇-▇, ▇-▇, ▇-▇, ▇-▇, ▇-▇, ▇-▇, ▇-▇, ▇-▇, ▇-▇▇, ▇-▇▇ and B-12,
weighted on the basis of the Uncertificated Principal Balances of such REMIC II
Regular Interests immediately preceding the related Distribution Date. The
Pass-Through Rate with respect to the first Interest Accrual Period is 5.170%
per annum.
(d) 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 (other than the Class
R Certificates).
(e) With respect to each Distribution Date, each Class of Certificates
shall accrue interest during the related Interest Accrual Period. With respect
to each Distribution Date and each such Class of Certificates, interest shall be
calculated, on the basis of a 360-day year comprised of twelve 30-day months,
based upon the respective Pass-Through Rate set forth, or determined as
provided, above and the Current Principal Amount (or Notional Amount in the case
of the Interest Only Certificates) of such Class applicable to such Distribution
Date.
(f) The Certificates shall be substantially in the forms set forth in
Exhibits ▇-▇, ▇-▇ and A-3. On original issuance, the Certificate Registrar shall
sign, countersign and shall deliver them at the direction of the Depositor.
Pending the preparation of definitive Certificates of any Class, the Certificate
Registrar may sign and countersign temporary Certificates that are printed,
lithographed or typewritten, in authorized denominations for Certificates of
such Class, substantially of the tenor of the definitive Certificates in lieu of
which they are issued and with such appropriate insertions, omissions,
substitutions and other variations as the officers or authorized signatories
executing such Certificates may determine, as evidenced by their execution of
such Certificates. If temporary Certificates are issued, the Depositor will
cause definitive Certificates to be prepared without unreasonable delay. After
the preparation of definitive Certificates, the temporary Certificates shall be
exchangeable for definitive Certificates upon surrender of the temporary
Certificates at the office of the Certificate Registrar, without charge to the
Holder. Upon surrender for cancellation of any one or more temporary
Certificates, the Certificate Registrar shall sign and countersign and deliver
in exchange therefor a like aggregate principal amount, in authorized
denominations for such Class, of definitive Certificates of the same Class.
Until so exchanged, such temporary Certificates shall in all respects be
entitled to the same benefits as definitive Certificates.
(g) Each Class of Book-Entry Certificates will be registered as a
single Certificate of such Class held by a nominee of the Depository or the DTC
Custodian, and beneficial interests will be held by investors through the
book-entry facilities of the Depository in minimum denominations of (i) in the
case of the Senior Certificates (other than the Residual Certificates), $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 of such
Class on the Closing Date. On the Closing Date, the Certificate Registrar shall
execute and countersign Physical Certificates all in an aggregate principal
amount that shall equal the Current Principal Amount of such Class on the
Closing Date. The Private Certificates shall be issued in certificated
fully-registered form in minimum dollar denominations of $25,000 and integral
multiples of $1.00 in excess thereof, except that one Private Certificate of
each 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 of such Class on the Closing Date. The Residual
Certificates shall each be issued in certificated fully-registered form, each,
in the denomination of $50. 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 of such Class on the Closing Date. On the Closing Date,
the Certificate Registrar shall execute and countersign (i) in the case of each
Class of Offered Certificates, the Certificate in the entire Current Principal
Amount of the respective Class and (ii) in the case of each Class of Private
Certificates, Individual Certificates all in an aggregate principal amount that
shall equal the Current Principal Amount of each such respective Class on the
Closing Date. The Certificates referred to in clause (i) and if at any time
there are to be Global Certificates, the Global Certificates shall be delivered
by the Depositor to the Depository or pursuant to the Depository's instructions,
shall be delivered by the Depositor on behalf of the Depository to and deposited
with the DTC Custodian. The Certificate Registrar shall sign the Certificates by
facsimile or manual signature and countersign them by manual signature on behalf
of the Trustee by one or more authorized signatories, each of whom shall be
Responsible Officers of the Certificate Registrar or its agent. A Certificate
bearing the manual and facsimile signatures of individuals who were the
authorized signatories of the Certificate Registrar or its agent at the time of
issuance shall bind the Certificate Registrar, notwithstanding that such
individuals or any of them have ceased to hold such positions prior to the
delivery of such Certificate.
(h) No Certificate shall be entitled to any benefit under this
Agreement, or be valid for any purpose, unless there appears on such Certificate
the manually executed countersignature of the Certificate Registrar or its
agent, and such countersignature upon any Certificate shall be conclusive
evidence, and the only evidence, that such Certificate has been duly executed
and delivered hereunder. All Certificates issued on the Closing Date shall be
dated the Closing Date. All Certificates issued thereafter shall be dated the
date of their countersignature.
(i) The Closing Date is hereby designated as the "startup" day of each
REMIC within the meaning of Section 860G(a)(9) of the Code.
(j) For federal income tax purposes, each REMIC shall have a tax year
that is a calendar year and shall report income on an accrual basis.
(k) The Trustee on behalf of the Trust shall cause each REMIC to timely
elect to be treated as a REMIC under Section 860D of the Code. Any
inconsistencies or ambiguities in this Agreement or in the administration of any
Trust established hereby shall be resolved in a manner that preserves the
validity of such elections.
(l) The following legend shall be placed on the Residual Certificates,
whether upon original issuance or upon issuance of any other Certificate of any
such Class in exchange therefor or upon transfer thereof:
THIS CERTIFICATE MAY NOT BE ACQUIRED DIRECTLY OR INDIRECTLY
BY, OR ON BEHALF OF, AN EMPLOYEE BENEFIT PLAN OR OTHER RETIREMENT
ARRANGEMENT WHICH IS SUBJECT TO TITLE I OF THE EMPLOYEE RETIREMENT
INCOME SECURITY ACT OF 1974, AS AMENDED, OR SECTION 4975 OF THE
INTERNAL REVENUE CODE OF 1986, AS AMENDED, UNLESS THE PROPOSED
TRANSFEREE PROVIDES THE TRUSTEE WITH AN OPINION OF COUNSEL ADDRESSED TO
THE DEPOSITOR, TRUSTEE, CERTIFICATE REGISTRAR, MASTER SERVICER AND
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 MASTER
SERVICER, THE SECURITIES ADMINISTRATOR, CERTIFICATE REGISTRAR OR THE
TRUSTEE.
The following legend shall be placed upon the Private Certificates, whether upon
original issuance or upon issuance of any other Certificate of any such Class in
exchange therefor or upon transfer thereof:
THIS CERTIFICATE MAY NOT BE ACQUIRED DIRECTLY OR INDIRECTLY BY, OR ON
BEHALF OF, AN EMPLOYEE BENEFIT PLAN OR OTHER RETIREMENT ARRANGEMENT WHICH IS
SUBJECT TO TITLE I OF THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS
AMENDED, OR SECTION 4975 OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED,
UNLESS THE 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,
▇▇▇ ▇▇-▇▇, ▇▇▇ ▇▇-▇, ▇▇▇ 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 CERTIFICATE REGISTRAR, 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 Corporate Trust
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 Certificate Registrar shall sign, countersign and shall deliver, in the name
of the designated transferee or transferees, a new Certificate of a like Class
and aggregate Fractional Undivided Interest, but bearing a different number.
(c) By acceptance of an Individual Certificate, whether upon original
issuance or subsequent transfer, each holder of such a Certificate acknowledges
the restrictions on the transfer of such Certificate set forth in the Securities
Legend and agrees that it will transfer such a Certificate only as provided
herein. In addition to the provisions of 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 addressed to the Certificate Registrar to the effect that the
delivery of (x) and (y) above are not sufficient to confirm that the proposed
transfer is being made pursuant to an exemption from, or in a transaction not
subject to, the registration requirements of the Securities Act and other
applicable laws, the Certificate Registrar shall as a condition of the
registration of any such transfer require the transferor to furnish such other
certifications, legal opinions or other information prior to registering the
transfer of an Individual Certificate as shall be set forth in such Opinion of
Counsel.
(d) Subject to Subsection 5.02(h), so long as a Global Certificate of
such Class is outstanding and is held by or on behalf of the Depository,
transfers of beneficial interests in such Global Certificate, or transfers by
holders of Individual Certificates of such Class to transferees that take
delivery in the form of beneficial interests in the Global Certificate, may be
made only in accordance with this Subsection 5.02(d) and in accordance with the
rules of the Depository:
(i) In the case of a beneficial interest in the Global
Certificate being transferred to an Institutional Accredited Investor, such
transferee shall be required to take delivery in the form of an Individual
Certificate or Certificates and the Certificate Registrar shall register such
transfer only upon compliance with the provisions of Subsection 5.02(c)(ii).
(ii) In the case of a beneficial interest in a Class of Global
Certificates being transferred to a transferee that takes delivery in the form
of an Individual Certificate or Certificates of such Class, except as set forth
in clause (i) above, the Certificate Registrar shall register such transfer only
upon compliance with the provisions of Subsection 5.02(c)(i).
(iii) In the case of an Individual Certificate of a Class
being transferred to a transferee that takes delivery in the form of a
beneficial interest in a Global Certificate of such Class, the Certificate
Registrar shall register such transfer if the transferee has provided the
Certificate Registrar 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:
(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 Trustee shall cancel such Individual Certificate
and shall (or shall request the Depository to) endorse on the schedule affixed
to the applicable Global Certificate (or on a continuation of such schedule
affixed to the Global Certificate and made a part thereof) or otherwise make in
its books and records an appropriate notation evidencing the date of such
exchange or transfer and an increase in the certificate balance of the Global
Certificate equal to the certificate balance of such Individual Certificate
exchanged or transferred therefor.
(ii) Upon acceptance for exchange or transfer of a beneficial
interest in a Global Certificate of a Class for an Individual Certificate of
such Class as provided herein, the 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 in writing of a request for transfer or exchange of such beneficial
interest for an Individual Certificate or Certificates. Following a proper
request for transfer or exchange, the Certificate Registrar shall, within five
Business Days of such request made at the Corporate Trust Office, sign,
countersign and deliver at the Corporate Trust Office, to the transferee (in the
case of transfer) or holder (in the case of exchange) or send by first class
mail at the risk of the transferee (in the case of transfer) or holder (in the
case of exchange) to such address as the transferee or holder, as applicable,
may request, an Individual Certificate or Certificates, as the case may require,
for a like aggregate Fractional Undivided Interest and in such authorized
denomination or denominations as may be requested. The presentation for transfer
or exchange of any Individual Certificate shall not be valid unless made at the
Corporate Trust Office by the registered holder in person, or by a duly
authorized attorney-in-fact.
(i) At the option of the Certificateholders, Certificates may be
exchanged for other Certificates of authorized denominations of a like Class and
aggregate Fractional Undivided Interest, upon surrender of the Certificates to
be exchanged at the Corporate Trust Office; provided, however, that no
Certificate may be exchanged for new Certificates unless the original Fractional
Undivided Interest represented by each such new Certificate (i) is at least
equal to the minimum authorized denomination or (ii) is acceptable to the
Depositor as indicated to the Trustee in writing. Whenever any Certificates are
so surrendered for exchange, the Certificate Registrar shall sign and
countersign and the Certificate Registrar shall 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 Securities Exchange Act of 1934, as
amended, and thereafter may destroy such Certificates.
(m) The following legend shall be placed on the Mandatory Auction
Certificates, whether upon initial issuance or upon issuance of any other
Certificate of any such Class in exchange therefor or upon transfer thereof:
ANY TRANSFEREE OF THIS CERTIFICATE, PRIOR TO THE MANDATORY AUCTION
DISTRIBUTION DATE (AS DEFINED IN THE AGREEMENT), WILL BE DEEMED TO HAVE
REPRESENTED BY VIRTUE OF ITS PURCHASE OR HOLDING OF THIS CERTIFICATE
(OR INTEREST HEREIN) THAT EITHER (A) SUCH TRANSFEREE IS NOT A PERSON
(INCLUDING AN INVESTMENT MANAGER, A NAMED FIDUCIARY OR A TRUSTEE OF ANY
SUCH PLAN) ACTING, DIRECTLY OR INDIRECTLY, ON BEHALF OF OR PURCHASING
ANY CERTIFICATE WITH "PLAN ASSETS" OF ANY PLAN (A "PLAN INVESTOR") OR
(B) ITS HOLDING OR ACQUISITION OF THIS CERTIFICATE SHALL NOT RESULT IN
A NON-EXEMPT PROHIBITED TRANSACTION UNDER SECTION 406 OF THE EMPLOYEE
RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED ("ERISA"), OR
SECTION 4975 OF THE INTERNAL REVENUE CODE (THE "CODE") BECAUSE IT
SATISFIES THE REQUIREMENTS FOR EXEMPTIVE RELIEF PROVIDED UNDER
PROHIBITED TRANSACTION CLASS EXEMPTION ("PTE") 84-14, 90-1, 91-38,
95-60 OR 96-23.
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 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 Certificate
Registrar shall sign, countersign and deliver, in exchange for or in lieu of any
such mutilated, destroyed, lost or stolen Certificate, a new Certificate of like
tenor and Fractional Undivided Interest but in each case bearing a different
number. The mutilated, destroyed, lost or stolen Certificate shall thereupon be
canceled of record by the Certificate Registrar and shall be of no further
effect and evidence no rights.
(b) Upon the issuance of any new Certificate under this Section 5.03,
the Certificate Registrar may require the payment of a sum sufficient to cover
any tax or other governmental charge that may be imposed in relation thereto and
any other expenses (including the fees and expenses of the Certificate
Registrar) connected therewith. Any duplicate Certificate issued pursuant to
this Section 5.03 shall constitute complete and indefeasible evidence of
ownership in the Trust Fund, as if originally issued, whether or not the lost,
stolen or destroyed Certificate shall be found at any time.
Section 5.04 Persons Deemed Owners.
Prior to due presentation of a Certificate for registration of
transfer, the Depositor, the Paying Agent, the Certificate Registrar, the
Trustee and any agent of the Depositor, the Paying Agent, the Certificate
Registrar or the Trustee may treat the Person in whose name any Certificate is
registered as the owner of such Certificate for the purpose of receiving
distributions pursuant to Section 6.01 and for all other purposes whatsoever.
Neither the Depositor, the Paying Agent, the Certificate Registrar, the Trustee
nor any agent of the Depositor, the Paying Agent, the Certificate Registrar, or
the Trustee shall be affected by notice to the contrary. No Certificate shall be
deemed duly presented for a transfer effective on any Record Date unless the
Certificate to be transferred is presented no later than the close of business
on the third Business Day preceding such Record Date.
Section 5.05 Transfer Restrictions on Residual Certificates.
(a) Residual Certificates, or interests therein, may not be transferred
without the prior express written consent of the Tax Matters Person and the
Depositor. As a prerequisite to such consent, the proposed transferee must
provide the Tax Matters Person, the Depositor, the Certificate Registrar and the
Trustee with an affidavit that the proposed transferee is a Permitted Transferee
(and an affidavit that it is a United States 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 Trustee, the Certificate Registrar and the Depositor an
affidavit in the form attached hereto as Exhibit E stating, among other things,
that as of the date of such transfer (i) such transferee is a Permitted
Transferee and that (ii) such transferee is not acquiring such Residual
Certificate for the account of any Person who is not a Permitted Transferee. The
Tax Matters Person shall not consent to a transfer of a Residual Certificate if
it has actual knowledge that any statement made in the affidavit issued pursuant
to the preceding sentence is not true. Notwithstanding any transfer, sale or
other disposition of a Residual Certificate to any Person who is not a Permitted
Transferee, such transfer, sale or other disposition shall be deemed to be of no
legal force or effect whatsoever and such Person shall not be deemed to be a
Holder of a Residual Certificate for any purpose hereunder, including, but not
limited to, the receipt of distributions thereon. If any purported transfer
shall be in violation of the provisions of this Subsection 5.05(b), then the
prior Holder thereof shall, upon discovery that the transfer of such Residual
Certificate was not in fact permitted by this Subsection 5.05(b), be restored to
all rights as a Holder thereof retroactive to the date of the purported
transfer. None of the Trustee, the Certificate Registrar, the Tax Matters
Person or the Depositor shall be under any liability to any Person for any
registration or transfer of a Residual Certificate that is not permitted by this
Subsection 5.05(b) or for making payments due on such Residual Certificate to
the purported Holder thereof or taking any other action with respect to such
purported Holder under the provisions of this Agreement so long as the written
affidavit referred to above was received with respect to such transfer, and the
Tax Matters Person, the Trustee, the Certificate Registrar 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) 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-l hereto, or a Rule 144A Certificate, if the transferee
is a QIB, in the form set forth as Exhibit F-2 hereto. Notwithstanding the
provisions of the immediately preceding sentence, no restrictions shall apply
with respect to the transfer or registration of transfer of a beneficial
interest in any Certificate that is a Global Certificate of a Class to a
transferee that takes delivery in the form of a beneficial interest in the
Global Certificate of such Class provided that each such transferee shall be
deemed to have made such representations and warranties contained in the Rule
144A Certificate as are sufficient to establish that it is a QIB. In the case of
a proposed transfer of any Certificate to a transferee other than a QIB, the
Certificate Registrar may require an Opinion of Counsel addressed to the
Certificate Registrar that such transaction is exempt from the registration
requirements of the Securities Act. The cost of such opinion shall not be an
expense of the Trustee or the Trust Fund.
(b) The Private Certificates shall each bear a Securities Legend.
Section 5.07 ERISA Restrictions.
(a) Subject to the provisions of subsection (b), no Residual
Certificates or Private Certificates may be acquired directly or indirectly by,
or on behalf of, an employee benefit plan or other retirement arrangement which
is subject to Title I of ERISA or Section 4975 of the Code, unless the proposed
transferee provides either (i) the Trustee or the Securities Administrator, with
an Opinion of Counsel addressed to the Depositor, the Trustee, the Certificate
Registrar, the Master Servicer and the Securities Administrator (upon which they
may rely) which is satisfactory to the Trustee or the Securities Administrator,
which opinion will not be at the expense of the Depositor, the Trustee, the
Certificate Registrar, the Master Servicer or the Securities Administrator, that
the purchase of such Certificates by or on behalf of such Plan is permissible
under applicable law, will not constitute or result in a nonexempt prohibited
transaction under ERISA or Section 4975 of the Code and will not subject the
Depositor, the Master Servicer, the Certificate Registrar, the Securities
Administrator or the Trustee to any obligation in addition to those undertaken
in the Agreement or (ii) in the case of the Private Certificates, a
representation or certification to the Certificate Registrar (upon which the
Trustee and the Certificate Registrar are authorized to rely) to the effect that
the proposed transfer and 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 which is not
covered under an individual or class prohibited transaction exemption including
but not limited to Department of Labor Prohibited Transaction Exemption ("PTE")
84-14 (Class Exemption for Plan Asset Transactions Determined by Independent
Qualified Professional Asset Managers); PTE 91-38 (Class Exemption for Certain
Transactions Involving Bank Collective Investment Funds); PTE 90-1 (Class
Exemption for Certain Transactions Involving Insurance Company Pooled Separate
Accounts), PTE 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 and (II) will not
subject the Depositor, the Securities Administrator, the Master Servicer or the
Trustee to any obligation in addition to those undertaken in the Agreement.
(b) Any Person acquiring an interest in a Global Certificate which is a
Private Certificate, by acquisition of such Certificate, shall be deemed to have
represented to the Trustee that either: (i) it is not acquiring an interest in
such Certificate directly or indirectly by, or on behalf of, an employee benefit
plan or other retirement arrangement which is subject to Title I of ERISA or
Section 4975 of the Code, or (ii) the transfer and holding of an interest in
such Certificate to that Person and the subsequent 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, ▇▇▇ ▇▇-▇▇, ▇▇▇ ▇▇-▇▇, ▇▇▇
▇▇-▇, ▇▇▇ 95-60 or PTE 96-23 and (II) will not subject the Depositor, the
Securities Administrator, the Master Servicer or the Trustee to any obligation
in addition to those undertaken in the Agreement.
(c) Each beneficial owner of a Class B-1, Class B-2, Class B-3, Class
B-4, Class B-5, Class B-6, Class B-7, Class B-8 or Class B-9 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 90-30,
as amended from time to time (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 or ▇▇▇▇▇'▇ 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.
(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. 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 be liable for transfer of any such
Global Certificates in or through book-entry facilities of any Depository or
between or among Depository Participants or Certificate Owners made in violation
of the transfer restrictions set forth herein.
(e) Any person acquiring an interest in a Mandatory Auction Certificate
before the Mandatory Auction Distribution Date shall be deemed to have
represented to the Trustee that either (i) it is not acquiring an interest in
such Certificate directly or indirectly by, or on behalf of, or with assets of
an employee benefit plan or other retirement arrangement which is subject to
Title I of ERISA and/or Section 4975 of the Code, or (ii) the acquisition and
holding of the Certificate are eligible for the exemptive relief available under
Department of Labor Prohibited Transaction Exemption ("PTE") 84-14 (Class
Exemption for Plan Asset Transactions Determined by Independent Qualified
Professional Asset Managers); PTE 91-38 (Class Exemption for Certain
Transactions Involving Bank Collective Investment Funds); PTE 90-1 (Class
Exemption for Certain Transactions Involving Insurance Company Pooled Separate
Accounts), PTE 95-60 or PTE 96-23 (Class Exemption for Plan Asset Transactions
Determined by In-House Asset Managers).
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.
▇▇▇▇▇ Fargo Bank, National Association, as Securities Administrator,
shall act as the initial Paying Agent and Certificate Registrar for so long as
it is also the Master Servicer. Each of the Paying Agent and the Certificate
Registrar may resign upon thirty (30) days' prior written notice to the Trustee;
provided hereto that no such resignation shall be effective until the
appointment of a successor paying agent or certificate registrar. In the event
the Paying Agent and/or the Certificate Registrar resigns or is removed by the
Trustee for cause, the Trustee may appoint a successor paying agent or
certificate registrar, as applicable. The Trustee shall cause such successor
paying agent, if other than the Trustee or the Master Servicer or the Securities
Administrator, to execute and deliver to the Trustee an instrument in which such
paying agent shall agree with the Trustee that such paying agent will hold all
sums held by it for the payment to Certificateholders in trust for the benefit
of the Certificateholders entitled thereto until such sums have been paid to the
Certificateholders.
ARTICLE VI
PAYMENTS TO CERTIFICATEHOLDERS
Section 6.01 Distributions on the Certificates.
(a) Interest and principal (as applicable) on the Certificates (other
than the Residual Certificates) will be distributed monthly on each Distribution
Date, commencing in July 2005, in an amount equal to the Available Funds on
deposit in the Distribution Account for such Distribution Date. On each
Distribution Date, the Available Funds on deposit in the Distribution Account
shall be distributed as follows:
(i) on each Distribution Date, the Group I Available Funds
will be distributed to the Group I Senior Certificates as follows:
FIRST, to the Class I-A-1, Class R-I, Class R-II and Class
R-III Certificates, on a pro rata basis, the Accrued
Certificate Interest on such Classes for such Distribution
Date. As described below, Accrued Certificate Interest on the
Class I-A-1, Class R-I, Class R-II and Class R-III
Certificates is subject to reduction in the event of certain
Net Interest Shortfalls allocable thereto;
SECOND, to the Class I-A-1, Class R-I, Class R-II and Class
R-III Certificates, on a pro rata basis, any Accrued
Certificate Interest thereon remaining undistributed from
previous Distribution Dates, to the extent of remaining Group
I Available Funds;
THIRD, to the Class R-I, Class R-II and Class R-III
Certificates, on a pro rata basis, in reduction of the Current
Principal Amounts thereof, the Group I Senior Optimal
Principal Amount for such Distribution Date to the extent of
remaining Group I Available Funds, until the Current Principal
Amounts of each such Class has been reduced to zero; and
FOURTH, to the Class I-A-1 Certificates, in reduction of the
Current Principal Amount thereof, the remaining Group I Senior
Optimal Principal Amount for such Distribution Date to the
extent of remaining Group I Available Funds, until the Current
Principal Amount of such Class has been reduced to zero.
(ii) on each Distribution Date, the Group II Available Funds
will be distributed to the Group II Senior Certificates as follows:
FIRST, to the Class II-A-1, Class II-A-2, Class II-A-3 and
Class II-X-1 Certificates, on a pro rata basis, the Accrued
Certificate Interest on each such Class for such Distribution
Date. As described below, Accrued Certificate Interest on the
Class II-A-1, Class II-A-2, Class II-A-3 and Class II-X-1
Certificates is subject to reduction in the event of certain
Net Interest Shortfalls allocable thereto;
SECOND, to the Class II-A-1, Class II-A-2, Class II-A-3 and
Class II-X-1 Certificates, on a pro rata basis, any Accrued
Certificate Interest thereon remaining undistributed from
previous Distribution Dates, to the extent of remaining Group
II Available Funds; and
THIRD, to the Class II-A-1, Class II-A-2 and Class II-A-3
Certificates, sequentially, in that order, in reduction of the
Current Principal Amounts thereof, the Group II Senior Optimal
Principal Amount for such Distribution Date to the extent of
remaining Group II Available Funds, until the Current
Principal Amounts of such Classes have been reduced to zero.
(iii) on each Distribution Date, the Group III Available Funds
will be distributed to the Group III Senior Certificates as follows:
FIRST, to the Class III-A-1 Certificates, the Accrued
Certificate Interest on such Class for such Distribution Date.
As described below, Accrued Certificate Interest on the Class
III-A-1 Certificates is subject to reduction in the event of
certain Net Interest Shortfalls allocable thereto;
SECOND, to the Class III-A-1 Certificates, any Accrued
Certificate Interest thereon remaining undistributed from
previous Distribution Dates, to the extent of remaining Group
III Available Funds; and
THIRD, to the Class III-A-1 Certificates, in reduction of the
Current Principal Amount thereof, the Group III Senior Optimal
Principal Amount for such Distribution Date to the extent of
remaining Group III Available Funds, until the Current
Principal Amount of such Class has been reduced to zero.
(iv) on each Distribution Date, the Group IV Available Funds
will be distributed to the Group IV Senior Certificates as follows:
FIRST, to the Class IV-A-1 Certificates, the Accrued
Certificate Interest on such Class for such Distribution Date.
As described below, Accrued Certificate Interest on the Class
IV-A-1 Certificates is subject to reduction in the event of
certain Net Interest Shortfalls allocable thereto;
SECOND, to the Class IV-A-1 Certificates, any Accrued
Certificate Interest thereon remaining undistributed from
previous Distribution Dates, to the extent of remaining Group
IV Available Funds; and
THIRD, to the Class IV-A-1 Certificates, in reduction of the
Current Principal Amount thereof, the Group IV Senior Optimal
Principal Amount for such Distribution Date to the extent of
remaining Group IV Available Funds, until the Current
Principal Amount of such Class has been reduced to zero.
(v) Except as provided in clauses (vi) and (vii) below, on
each Distribution Date on or prior to the Cross-Over Date, an amount equal to
the sum of any remaining Group I, Group II, Group III and Group IV Available
Funds after the distributions in clauses (i), (ii), (iii) and (iv) above will be
distributed sequentially, in the following order, to the Class B-1, Class B-2,
Class B-3, Class B-4, Class B-5, Class B-6, Class B-7, Class B-8, Class B-9,
Class B-10, Class B-11 and Class B-12 Certificates, in each case up to an amount
equal to and in the following order: (A) the Accrued Certificate Interest
thereon for such Distribution Date, (B) any Accrued Certificate Interest thereon
remaining undistributed from previous Distribution Dates and (C) such Class's
Allocable Share for such Distribution Date, in each case, to the extent of
remaining Group I, Group II, Group III and Group IV Available Funds.
(vi) On each Distribution Date prior to the Cross-Over Date
but after the reduction of the Current Principal Amount of all of the Senior
Certificates of a Certificate Group to zero, the remaining Class or Classes of
Senior Certificates in the remaining Certificate Groups (other than the Interest
Only Certificates) will be entitled to receive in reduction of their Current
Principal Amounts, pro rata based upon their Current Principal Amounts
immediately prior to such Distribution Date, in addition to any Principal
Prepayments related to such remaining Senior Certificates' respective Loan Group
allocated to such Senior Certificates, 100% of the Principal Prepayments on any
Mortgage Loan in the Loan Group relating to the Class or Classes of Senior
Certificates of the fully repaid Certificate Group; 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 bankruptcy 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 100%, then the additional
allocation of Principal Prepayments to the Senior Certificates in accordance
with this clause (vi) will not be made and 100% of the Principal Prepayments on
any Mortgage Loan in the Loan Group relating to the fully repaid Class or
Classes of Senior Certificates will be allocated to the Subordinate
Certificates.
(vii) If on any Distribution Date on which the aggregate
Current Principal Amount of the Group I, Group II, Group III or Group IV 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, (A) 100% of amounts otherwise allocable to the
Subordinate Certificates in respect of principal will be distributed to the
Group I, Group II, Group III or Group IV Senior Certificates (other than the
Interest Only Certificates) in reduction of the Current Principal Amounts
thereof, until the aggregate Current Principal Amount of such Class or Classes
of Senior Certificates is an amount equal to the aggregate Scheduled Principal
Balance of the Mortgage Loans in the related Loan Group, and (B) the Accrued
Certificate Interest otherwise allocable to the Subordinate Certificates on such
Distribution Date will be reduced, if necessary, and distributed 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 Mortgage Loans in the related Loan
Group. Any such reduction in the Accrued Certificate Interest on the Subordinate
Certificates will be allocated in reverse order of the Subordinate Certificates
numerical designations, commencing with the Class B-12 Certificates.
(b) If, after distributions have been made pursuant to priorities FIRST
and SECOND of clauses (a)(i), (ii), (iii) and (iv) above on any Distribution
Date, the remaining Group I, Group II, Group III or Group IV Available Funds are
less than the Group I, Group II, Group III and Group IV Senior Optimal Principal
Amounts, respectively, the Senior Optimal Principal Amount for such Loan Group
shall be reduced, and such remaining Available Funds will be distributed on the
related Senior Certificates (other than the Interest Only Certificates), on a
pro rata basis, on the basis of such reduced amount.
(c) 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,
Group II, Group III or Group IV 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,
pro rata, based upon their Current Principal Amounts, until all amounts due to
all Classes of Senior Certificates have been paid in full, before any amounts
are distributed to the Class R-III Certificates.
(d) For any Distribution Date, "pro rata" distributions among Classes
of Certificates in respect of Accrued Certificate Interest or unpaid Accrued
Certificate Interest will be made in proportion to the amount of Accrued
Certificate Interest or unpaid Accrued Certificate Interest, respectively, due
on such Classes for such Distribution Date. For any Distribution Date, "pro
rata" distributions among Classes of Certificates in respect of principal will
be made in proportion to the Current Principal Amount of such Classes
immediately prior to such Distribution Date.
(e) No Accrued Certificate Interest will be payable with respect to any
Class of Certificates after the Distribution Date on which the Current Principal
Amount or Notional Amount of such Certificate has been reduced to zero.
(f) If on any Distribution Date the Available Funds for the Senior
Certificates in any Certificate Group is less than the Accrued Certificate
Interest on the related Senior Certificates for such Distribution Date prior to
reduction for Net Interest Shortfalls and the interest portion of Realized
Losses, the shortfall will be allocated among the holders of each Class of
Senior Certificates in such Certificate Group in proportion to the respective
amounts of Accrued Certificate Interest that would have been allocated thereto
in the absence of such Net Interest Shortfalls and/or Realized Losses for such
Distribution Date. In addition, the amount of any interest shortfalls will
constitute unpaid Accrued Certificate Interest and will be distributable to
holders of the Certificates of the related Classes entitled to such amounts on
subsequent Distribution Dates, to the extent of the applicable Available Funds
after current interest distributions as required herein. Any such amounts so
carried forward will not bear interest. Shortfalls in interest payments will not
be offset by a reduction in the servicing compensation of the Master Servicer or
otherwise, except to the extent of applicable Compensating Interest Payments.
(g) The expenses and fees of the Trust shall be paid by each of the
REMICs, to the extent that such expenses relate to the assets of each of such
respective REMICs, and all other expenses and fees of the Trust shall be paid
pro rata by each of the REMICs.
Section 6.02 Allocation of Losses.
(a) On or prior to each Determination Date, the Master Servicer shall
determine the amount of any Realized Loss in respect of each Mortgage Loan that
occurred during the immediately preceding calendar month, based on information
provided by the related Servicer.
(b) With respect to any Certificates (other than the Interest Only
Certificates) on any Distribution Date, the principal portion of each Realized
Loss on a Mortgage Loan shall be allocated as follows:
FIRST, to the Class B-12 Certificates until the Current
Principal Amount thereof has been reduced to zero;
SECOND, to the Class B-11 Certificates until the Current
Principal Amount thereof has been reduced to zero;
THIRD, to the Class B-10 Certificates until the Current
Principal Amount thereof has been reduced to zero;
FOURTH, to the Class B-9 Certificates until the Current
Principal Amount thereof has been reduced to zero;
FIFTH, to the Class B-8 Certificates until the Current
Principal Amount thereof has been reduced to zero;
SIXTH, to the Class B-7 Certificates until the Current
Principal Amount thereof has been reduced to zero;
SEVENTH, to the Class B-6 Certificates until the Current
Principal Amount thereof has been reduced to zero;
EIGHTH, to the Class B-5 Certificates until the Current
Principal Amount thereof has been reduced to zero;
NINTH, to the Class B-4 Certificates until the Current
Principal Amount thereof has been reduced to zero;
TENTH, to the Class B-3 Certificates until the Current
Principal Amount thereof has been reduced to zero;
ELEVENTH, to the Class B-2 Certificates until the Current
Principal Amount thereof has been reduced to zero;
TWELVTH, to the Class B-1 Certificates until the Current
Principal Amount thereof has been reduced to zero;
THIRTEENTH, if such loss is on (w) a Group I Mortgage Loan, to
the Class I-A-1 Certificates until the Current Principal Amount thereof
has been reduced to zero; (x) a Group II Mortgage Loan, to the Class
II-A-1, Class II-A-2, Class II-A-3 Certificates, on a pro rata basis,
until the Current Principal Amounts thereof have been reduced to zero;
(y) a Group III Mortgage Loan, to the Class III-A-1 Certificates until
the Current Principal Amount thereof has been reduced to zero; or (z) a
Group IV Mortgage Loan, to the Class IV-A-1 Certificates until the
Current Principal Amount thereof has been reduced to zero; and
FOURTEENTH, to the Senior Certificates (other than the
Interest Only Certificates and the Class R Certificates), on a pro rata
basis.
(c) Notwithstanding the foregoing clause (b), no such allocation of any
Realized Loss shall be made on a Distribution Date to any Class of Certificates
to the extent that such allocation would result in the reduction of the
aggregate Current Principal Amount of all the Certificates as of such
Distribution Date, after giving effect to all distributions and prior
allocations of Realized Losses on the Mortgage Loans on such date, to an amount
less than the aggregate Scheduled Principal Balance of all of the Mortgage Loans
as of the first day of the month of such Distribution Date (such limitation, the
"Loss Allocation Limitation").
(d) Any Realized Losses allocated to a Class of Certificates shall be
allocated among the Certificates of such Class (other than the Interest Only
Certificates) in proportion to their respective Current Principal Amounts. Any
allocation of Realized Losses shall be accomplished by reducing the Current
Principal Amount of the related Certificates on the related Distribution Date.
(e) Realized Losses 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 Subordinate Certificate Writedown Amount shall effect a
corresponding reduction in the Current Principal Amount of (i) if prior to the
Cross-Over Date, the Current Principal Amounts of 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 Interest Only
Certificates), in accordance with priorities set forth in clause (b) above,
which reduction shall occur on such Distribution Date after giving effect to
distributions made on such Distribution Date.
(g) Any Net Interest Shortfall will be allocated among the Classes of
Certificates in proportion to the respective amounts of Accrued Certificate
Interest that would have been allocated thereto in the absence of such Net
Interest Shortfall for such Distribution Date. The interest portion of any
Realized Losses with respect to the Mortgage Loans occurring on or prior to the
Cross-Over Date will not be allocated among any Certificates, but will reduce
the amount of Available Funds 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 numerical Class designations. Following
the Cross-Over Date, the interest portion of Realized Losses on the Mortgage
Loans will be allocated to the Senior Certificates in the manner described in
the first sentence of this clause (g).
(h) In addition, in the event that the Master Servicer receives any
Subsequent Recoveries from a Servicer, the Master Servicer shall deposit such
funds into the Master Servicer Collection Account pursuant to Section 4.02. If,
after taking into account such Subsequent Recoveries, the amount of a Realized
Loss is reduced, the amount of such Subsequent Recoveries will be applied to
increase the Current Principal Amount of the Class of Subordinate Certificates
with the highest payment priority to which Realized Losses have been allocated,
but not by more than the amount of Realized Losses previously allocated to that
Class of Subordinate Certificates pursuant to this Section 6.02. The amount of
any remaining Subsequent Recoveries 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 previously allocated to such Class of
Certificates pursuant to this Section 6.02. Holders of such Certificates will
not be entitled to any payment in respect of current interest on the amount of
such increases for any Interest Accrual Period preceding the Distribution Date
on which such increase occurs. Any such increases shall be applied to the
Current Principal Amount of each Subordinate Certificate of such Class in
accordance with its respective Fractional Undivided Interest.
Section 6.03 Payments.
(a) On each Distribution Date, other than the final Distribution Date,
the Paying Agent shall distribute to each Certificateholder of record as of the
immediately preceding Record Date the Certificateholder's pro rata share of its
Class (based on the aggregate Fractional Undivided Interest represented by such
Holder's Certificates) of all amounts required to be distributed on such
Distribution Date to such Class, based on information provided to the Paying
Agent by the Securities Administrator. The Securities Administrator shall
calculate the amount to be distributed to each Class and, based on such amounts,
the Securities Administrator shall determine the amount to be distributed to
each Certificateholder. All of the Securities Administrator's calculations of
payments shall be based solely on information provided to the Securities
Administrator by the Master Servicer. Neither the Securities Administrator nor
the Paying Agent shall 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, or in the case of
the Residual Certificates, an initial Current Principal Amount of $50:
(i) the Current Principal Amount or Notional Amount of each
Class of Certificates immediately prior to such Distribution Date;
(ii) the amount of the distribution allocable to principal on
each applicable Class of Certificates;
(iii) the aggregate amount of interest accrued at the related
Pass-Through Rate with respect to each Class during the related Interest Accrual
Period;
(iv) the Net Interest Shortfall and any other adjustments to
interest at the related Pass-Through Rate necessary to account for any
difference between interest accrued and aggregate interest distributed with
respect to each Class of Certificates;
(v) the amount of the distribution allocable to interest on
each Class of Certificates;
(vi) the Pass-Through Rates for each Class of Certificates
with respect to such Distribution Date;
(vii) the 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 Servicer included in such distribution separately stated for each Loan
Group;
(ix) the aggregate amount of any Realized Losses (listed
separately for each category of Realized Loss and for each Loan Group) during
the related Prepayment Period and cumulatively since the Cut-off Date and the
amount and source (separately identified) of any distribution in respect thereof
included in such distribution;
(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,
(ii) the Scheduled Principal Balance of such Mortgage Loan as of the beginning
of the related Due Period, (iii) the Net Liquidation Proceeds with respect to
such Mortgage Loan and (iv) the amount of the Realized Loss with respect to such
Mortgage Loan;
(xi) with respect to each Loan Group, the amount of Scheduled
Principal and Principal Prepayments, (including but separately identifying the
principal amount of Principal Prepayments, Insurance Proceeds, the purchase
price in connection with the purchase of Mortgage Loans, cash deposits in
connection with substitutions of Mortgage Loans and Net Liquidation Proceeds)
and the number and principal balance of Mortgage Loans purchased or substituted
for during the relevant period and cumulatively since the Cut-off Date;
(xii) the number of Mortgage Loans (excluding REO Property) in
each Loan Group remaining in the Trust Fund as of the end of the related
Prepayment Period;
(xiii) information for each Loan Group 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 Business Day of the immediately preceding month;
(xiv) for each Loan Group, the number of Mortgage Loans in the
foreclosure process as of the end of the related Due Period and the aggregate
Outstanding Principal Balance of such Mortgage Loans;
(xv) for each Loan Group, the number and aggregate Outstanding
Principal Balance of all Mortgage Loans as to which the Mortgaged Property was
REO Property as of the end of the related Due Period;
(xvi) the book value (the sum of (A) the Outstanding Principal
Balance of the Mortgage Loan, (B) accrued interest through the date of
foreclosure and (C) foreclosure expenses) of any REO Property in each Loan
Group; provided that, in the event that such information is not available to the
Securities Administrator on the Distribution Date, such information shall be
furnished promptly after it becomes available;
(xvii) the amount of Realized Losses allocated to each Class
of Certificates since the prior Distribution Date and in the aggregate for all
prior Distribution Dates; and
(xviii) the Average Loss Severity Percentage for each Loan
Group; and
(xix) the then applicable Group I, Group II, Group III and
Group IV Senior Percentage, Group I, Group II, Group III and Group IV Senior
Prepayment Percentage, Group I, Group II, Group III and Group IV Subordinate
Percentage and Group I, Group II, Group III and Group IV Subordinate Prepayment
Percentage.
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 "▇▇▇.▇▇▇▇▇▇▇.▇▇▇." Assistance in
using the website can be obtained by calling the Securities Administrator's
customer service desk at (▇▇▇) ▇▇▇-▇▇▇▇. 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.
(b) By April 30 of each year beginning in 2006, the Securities
Adminsitrator 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 to be necessary and/or to be required by the
Internal Revenue Service or by a federal or state law or rules or regulations to
enable such Holders to prepare their tax returns for such calendar year. Such
obligations shall be deemed to have been satisfied to the extent that
substantially comparable information shall be provided by the Securities
Administrator or the Trustee pursuant to the requirements of the Code.
Section 6.05 Monthly Advances.
If the Scheduled Payment on a Mortgage Loan that was due on a related
Due Date is delinquent other than as a result of application of the Relief Act
and for which the related Servicer was required to make an advance pursuant to
the related Servicing Agreement exceeds the amount deposited in the Master
Servicer Collection Account which will be used for an advance with respect to
such Mortgage Loan, the Master Servicer will deposit in the Master Servicer
Collection Account not later than the Distribution Account Deposit Date
immediately preceding the related Distribution Date an amount equal to such
deficiency, net of the Servicing Fee for such Mortgage Loan except to the extent
the Master Servicer determines any such advance to be a Nonrecoverable Advance.
Subject to the foregoing, the Master Servicer shall continue to make such
advances through the date that the related Servicer is required to do so under
its Servicing Agreement. If the Master Servicer deems an advance to be a
Nonrecoverable Advance, on the Distribution Account Deposit Date, the Master
Servicer shall present an Officer's Certificate to the Trustee and Securities
Administrator (i) stating that the Master Servicer elects not to make a Monthly
Advance in a stated amount and (ii) detailing the reason it deems the advance to
be a Nonrecoverable Advance.
Section 6.06 Compensating Interest Payments.
The Master Servicer shall deposit in the Master Servicer Collection
Account not later than each Distribution Account Deposit Date an amount equal to
the lesser of (i) the sum of the aggregate amounts required to be paid by the
Servicers under the Servicing Agreements with respect to 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 the related Servicers and (ii)
the Master Servicer Compensation for such Distribution Date (such amount, the
"Compensating Interest Payment"). The Master Servicer shall not be entitled to
any reimbursement of any Compensating Interest Payment.
ARTICLE VII
THE MASTER SERVICER
Section 7.01 Liabilities of the Master Servicer.
The Master Servicer shall be liable in accordance herewith only to the
extent of the obligations specifically imposed upon and undertaken by it herein.
Section 7.02 Merger or Consolidation of the Master Servicer.
(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 Master Servicer and
the Securities Administrator.
(a) The Master Servicer agrees to indemnify the Indemnified Persons
for, and to hold them harmless against, any loss, liability or expense
(including reasonable legal fees and disbursements of counsel) incurred on their
part that may be sustained in connection with, arising out of, or relating to,
any claim or legal action (including any pending or threatened claim or legal
action) relating to this Agreement, the Servicing Agreements, the Assignment
Agreements or the Certificates or the powers of attorney delivered by the
Trustee hereunder (i) related to the 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 its duties hereunder or by reason of
reckless disregard of its obligations and duties hereunder, provided, in each
case, that with respect to any such claim or legal action (or pending or
threatened claim or legal action), the Trustee shall have given the Master
Servicer and the Depositor written notice thereof promptly after the Trustee
shall have with respect to such claim or legal action knowledge thereof. The
Master Servicer's failure to receive any such notice shall not affect the
Trustee's right to indemnification hereunder, except to the extent the Master
Servicer is materially prejudiced by such failure to give notice. This indemnity
shall survive the resignation or removal of the Trustee, Master Servicer or the
Securities Administrator and the termination of this Agreement.
(b) The Depositor will indemnify any Indemnified Person for any loss,
liability or expense of any Indemnified Person not otherwise covered by the
Master Servicer's indemnification pursuant to Subsection (a) above.
Section 7.04 Limitations on Liability of the Master Servicer and
Others.
Subject to the obligation of the Master Servicer to indemnify the
Indemnified Persons pursuant to Section 7.03:
(a) Neither the Master Servicer nor any of the directors, officers,
employees or agents of the Master Servicer shall be under any liability to the
Indemnified Persons, the Depositor, the Trust Fund or the Certificateholders for
taking any action or for refraining from taking any action in good faith
pursuant to this Agreement, or for errors in judgment; provided, however, that
this provision shall not protect the Master Servicer or any such Person against
any breach of warranties or representations made herein or any liability which
would otherwise be imposed by reason of such Person's willful misfeasance, bad
faith or gross negligence in the performance of duties or by reason of reckless
disregard of obligations and duties hereunder.
(b) The Master Servicer and any director, officer, employee or agent of
the Master Servicer may rely in good faith on any document of any kind prima
facie properly executed and submitted by any Person respecting any matters
arising hereunder.
(c) The Master Servicer, the Custodian and any director, officer,
employee or agent of the Master Servicer or the Custodian, and the Trustee, to
the extent it becomes a party to the ▇▇▇▇▇ Fargo Servicing Agreement pursuant to
Section 3.03, and any officer, director, employee or agent of the Trustee, shall
be indemnified by the Trust and held harmless thereby against any loss,
liability or expense (including reasonable legal fees and disbursements of
counsel) incurred on their part that may be sustained in connection with,
arising out of, or related to, any claim or legal action (including any pending
or threatened claim or legal action) relating to this Agreement, the
Certificates or any Servicing Agreement (except to the extent that the Master
Servicer or the Trustee, as the case may be, is indemnified by the Servicer
thereunder), other than (i) any such loss, liability or expense related to the
Master Servicer's failure to perform its duties in compliance with this
Agreement (except as any such loss, liability or expense shall be otherwise
reimbursable pursuant to this Agreement), or to the Custodian's failure to
perform its duties under the Custodial Agreement, respectively, or (ii) any such
loss, liability or expense incurred by reason of the Master Servicer's or the
Custodian's willful misfeasance, bad faith or gross negligence in the
performance of duties hereunder or under the Custodial Agreement, as applicable,
or by reason of reckless disregard of obligations and duties hereunder or under
the Custodial Agreement, as applicable.
(d) The Master Servicer shall not be under any obligation to appear in,
prosecute or defend any legal action that is not incidental to its duties under
this Agreement and that in its opinion may involve it in any expense or
liability; provided, however, the Master Servicer may in its discretion, with
the consent of the Trustee (which consent shall not be unreasonably withheld),
undertake any such action which it may deem necessary or desirable with respect
to this Agreement and the rights and duties of the parties hereto and the
interests of the Certificateholders hereunder. In such event, the legal expenses
and costs of such action and any liability resulting therefrom shall be
expenses, costs and liabilities of the Trust Fund, and the Master Servicer shall
be entitled to be reimbursed therefor out of the Master Servicer Collection
Account as provided by Section 4.03. Nothing in this 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 Subsection 3.01(a).
(e) In taking or recommending any course of action pursuant to this
Agreement, unless specifically required to do so pursuant to this Agreement, the
Master Servicer shall not be required to investigate or make recommendations
concerning potential liabilities which the Trust might incur as a result of such
course of action by reason of the condition of the Mortgaged Properties but
shall give notice to the Trustee if it has notice of such potential liabilities.
(f) The Master Servicer shall not be liable for any acts or omissions
of any Servicers, with the exception of ▇▇▇▇▇ Fargo, 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 addressed to the Trustee to such effect delivered
to the Trustee. No such resignation by the Master Servicer shall become
effective until the Company 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, the Company or the Trustee
may make such arrangements for the compensation of such successor master
servicer out of payments on the Mortgage Loans as the Company 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.
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 the Company may terminate the Master Servicer without cause and select a new
Master Servicer; provided, however, that: (i) the purchaser or transferee
accepting such assignment and delegation (a) shall be a Person which shall be
qualified to service mortgage loans for ▇▇▇▇▇▇ Mae or ▇▇▇▇▇▇▇ Mac; (b) shall
have a net worth of not less than $10,000,000 (unless otherwise approved by each
Rating Agency pursuant to clause (ii) below); (c) shall be reasonably
satisfactory to the Trustee (as evidenced in a writing signed by the Trustee);
and (d) shall execute and deliver to the Trustee an agreement, in form and
substance reasonably satisfactory to the Trustee, which contains an assumption
by such Person of the due and punctual performance and observance of each
covenant and condition to be performed or observed by it as master servicer
under this Agreement, any custodial agreement from and after the effective date
of such agreement; (ii) each Rating Agency shall be given prior written notice
of the identity of the proposed successor to the Master Servicer and each Rating
Agency's rating of the Certificates in effect immediately prior to such
assignment, sale and delegation will not be downgraded, qualified or withdrawn
as a result of such assignment, sale and delegation, as evidenced by a letter to
such effect delivered to the Master Servicer and the Trustee; (iii) the Master
Servicer assigning and selling the master servicing shall deliver to the Trustee
an Officer's Certificate and an Opinion of Independent Counsel addressed to the
Trustee, each stating that all conditions precedent to such action under this
Agreement have been completed and such action is permitted by and complies with
the terms of this Agreement; and (iv) in the event the Master Servicer is
terminated without cause by the Company, the Company 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.
ARTICLE VIII
DEFAULT
Section 8.01 Events of Default.
"Event of Default," wherever used herein, means any one of the
following events (whatever the reason for such Event of Default and whether it
shall be voluntary or involuntary or be effected by operation of law or pursuant
to any judgment, decree or order of any court or any order, rule or regulation
of any administrative or governmental body) and only with respect to the
defaulting Master Servicer:
(i) The Master Servicer fails to cause to be deposited in the
Distribution Account any amount so required to be deposited pursuant to this
Agreement (other than a Monthly Advance), and such failure continues unremedied
for a period of three Business Days after the date upon which written notice of
such failure, requiring the same to be remedied, shall have been given to the
Master Servicer; or
(ii) The Master Servicer fails to observe or perform in any
material respect any other material covenants and agreements set forth in this
Agreement to be performed by it, which covenants and agreements materially
affect the rights of Certificateholders, and such failure continues unremedied
for a period of 60 days after the date on which written notice of such failure,
properly requiring the same to be remedied, shall have been given to the Master
Servicer by the Trustee or to the Master Servicer and the Trustee by the Holders
of Certificates evidencing Fractional Undivided Interests aggregating not less
than 25% of the Trust Fund; or
(iii) There is entered against the Master Servicer a decree or
order by a court or agency or supervisory authority having jurisdiction in the
premises for the appointment of a conservator, receiver or liquidator in any
insolvency, readjustment of debt, marshaling of assets and liabilities or
similar proceedings, or for the winding up or liquidation of its affairs, and
the continuance of any such decree or order is unstayed and in effect for a
period of 60 consecutive days, or an involuntary case is commenced against the
Master Servicer under any applicable insolvency or reorganization statute and
the petition is not dismissed within 60 days after the commencement of the case;
or
(iv) The Master Servicer consents to the appointment of a
conservator or receiver or liquidator in any insolvency, readjustment of debt,
marshaling of assets and liabilities or similar proceedings of or relating to
the Master Servicer or substantially all of its property; or the Master Servicer
admits in writing its inability to pay its debts generally as they become due,
files a petition to take advantage of any applicable insolvency or
reorganization statute, makes an assignment for the benefit of its creditors, or
voluntarily suspends payment of its obligations;
(v) The Master Servicer assigns or delegates its duties or
rights under this Agreement in contravention of the provisions permitting such
assignment or delegation under Sections 7.05 or 7.07; or
(vi) The Master Servicer fails to deposit, or cause to be
deposited, in the Distribution Account any Monthly Advance (other than a
Nonrecoverable Advance) by 5:00 p.m. New York City time on the Distribution
Account Deposit Date.
In each and every such case, so long as such Event of Default with respect to
the Master Servicer shall not have been remedied, either the Trustee or the
Holders of Certificates evidencing Fractional Undivided Interests aggregating
not less than 51% of the principal of the Trust Fund, by notice in writing to
the Master Servicer (and to the Trustee if given by such Certificateholders),
with a copy to the Rating Agencies, and with the consent of the Company, may
terminate all of the rights and obligations (but not the liabilities) of the
Master Servicer under this Agreement and in and to the Mortgage Loans and/or the
REO Property serviced by the Master Servicer and the proceeds thereof. Upon the
receipt by the Master Servicer of the written notice, all authority and power of
the Master Servicer under this Agreement, whether with respect to the
Certificates, the Mortgage Loans, REO Property or under any other related
agreements (but only to the extent that such other agreements relate to the
Mortgage Loans or related REO Property) shall, subject to Section 8.02,
automatically and without further action pass to and be vested in the Trustee
pursuant to this Section 8.01; and, without limitation, the Trustee is hereby
authorized and empowered to execute and deliver, on behalf of the Master
Servicer as attorney-in-fact or otherwise, any and all documents and other
instruments and to do or accomplish all other acts or things necessary or
appropriate to effect the purposes of such notice of termination, whether to
complete the transfer and endorsement or assignment of the Mortgage Loans and
related documents, or otherwise. The Master Servicer agrees to cooperate with
the Trustee in effecting the termination of the Master Servicer's rights and
obligations hereunder, including, without limitation, the transfer to the
Trustee of (i) the property and amounts which are then or should be part of the
Trust or which thereafter become part of the Trust; and (ii) originals or copies
of all documents of the Master Servicer reasonably requested by the Trustee to
enable it to assume the Master Servicer's duties thereunder. In addition to any
other amounts which are then, or, notwithstanding the termination of its
activities under this Agreement, may become payable to the Master Servicer under
this Agreement, the Master Servicer shall be entitled to receive, out of any
amount received on account of a Mortgage Loan or related REO Property, that
portion of such payments which it would have received as reimbursement under
this Agreement if notice of termination had not been given. The termination of
the rights and obligations of the Master Servicer shall not affect any
obligations incurred by the Master Servicer prior to such termination.
Notwithstanding the foregoing, if an Event of Default described in
clause (vi) of this Section 8.01 shall occur, the Trustee shall, by notice in
writing to the Master Servicer, which may be delivered by telecopy, immediately
terminate all of the rights and obligations of the Master Servicer thereafter
arising under this Agreement, but without prejudice to any rights it may have as
a Certificateholder or to reimbursement of Monthly Advances and other advances
of its own funds, and the Trustee shall act as provided in Section 8.02 to carry
out the duties of the Master Servicer, including the obligation to make any
Monthly Advance the nonpayment of which was an Event of Default described in
clause (vi) of this Section 8.01. Any such action taken by the Trustee must be
prior to the distribution on the relevant Distribution Date.
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 the Company
shall have the right to either (a) immediately assume the duties of the Master
Servicer or (b) select a successor Master Servicer; provided further, however,
that the Trustee shall have no obligation whatsoever with respect to any
liability (other than advances deemed recoverable and not previously made)
incurred by the Master Servicer at or prior to the time of termination. As
compensation therefor, but subject to Section 7.06, the Trustee shall be
entitled to compensation which the Master Servicer would have been entitled to
retain if the Master Servicer had continued to act hereunder, except for those
amounts due the Master Servicer as reimbursement permitted under this Agreement
for advances previously made or expenses previously incurred. Notwithstanding
the above, the Trustee may, if it shall be unwilling so to act, or shall, if it
is legally unable so to act, appoint or petition a court of competent
jurisdiction to appoint, any established housing and home finance institution
which is a ▇▇▇▇▇▇ Mae- or ▇▇▇▇▇▇▇ Mac-approved servicer, and with respect to a
successor to the Master Servicer only, having a net worth of not less than
$10,000,000, as the successor to the Master Servicer hereunder in the assumption
of all or any part of the responsibilities, duties or liabilities of the Master
Servicer hereunder; provided, that the Trustee shall obtain a letter from each
Rating Agency that the ratings, if any, on each of the Certificates will not be
lowered as a result of the selection of the successor to the Master Servicer.
Pending appointment of a successor to the Master Servicer hereunder, the Trustee
shall act in such capacity as hereinabove provided. In connection with such
appointment and assumption, the Trustee may make such arrangements for the
compensation of such successor out of payments on the Mortgage Loans as it and
such successor shall agree; provided, however, that the provisions of Section
7.06 shall apply, the compensation shall not be in excess of that which the
Master Servicer would have been entitled to if the Master Servicer had continued
to act hereunder, and that such successor shall undertake and assume the
obligations of the Trustee to pay compensation to any third Person acting as an
agent or independent contractor in the performance of master servicing
responsibilities hereunder. The Trustee and such successor shall take such
action, consistent with this Agreement, as shall be necessary to effectuate any
such succession.
(b) If the Trustee shall succeed to any duties of the Master Servicer
respecting the Mortgage Loans as provided herein, it shall do so in a separate
capacity and not in its capacity as Trustee and, accordingly, the provisions of
Article IX shall be inapplicable to the Trustee in its duties as the successor
to the Master Servicer in the servicing of the Mortgage Loans (although such
provisions shall continue to apply to the Trustee in its capacity as Trustee);
the provisions of Article VII, however, shall apply to it in its capacity as
successor master servicer.
Section 8.03 Notification to Certificateholders.
Upon any termination or appointment of a successor to the Master
Servicer, the Trustee shall give prompt written notice thereof to
Certificateholders at their respective addresses appearing in the Certificate
Register and to the Rating Agencies.
Section 8.04 Waiver of Defaults.
The Trustee shall transmit by mail to all Certificateholders, within 60
days after the occurrence of any Event of Default actually known to a
Responsible Officer of the Trustee, unless such Event of Default shall have been
cured, notice of each such Event of Default. The Holders of Certificates
evidencing Fractional Undivided Interests aggregating not less than 51% of the
Trust Fund may, on behalf of all Certificateholders, waive any default by the
Master Servicer in the performance of its obligations hereunder and the
consequences thereof, except a default in the making of or the causing to be
made any required distribution on the Certificates, which default may only be
waived by Holders of Certificates evidencing Fractional Undivided Interests
aggregating 100% of the Trust Fund. Upon any such waiver of a past default, such
default shall be deemed to cease to exist, and any Event of Default arising
therefrom shall be deemed to have been timely remedied for every purpose of this
Agreement. No such waiver shall extend to any subsequent or other default or
impair any right consequent thereon except to the extent expressly so waived.
The Trustee shall give notice of any such waiver to the Rating Agencies.
Section 8.05 List of Certificateholders.
Upon written request of three or more Certificateholders of record, for
purposes of communicating with other Certificateholders with respect to their
rights under this Agreement, the Trustee will afford such Certificateholders
access during business hours to the most recent list of Certificateholders held
by the Trustee.
ARTICLE IX
CONCERNING THE TRUSTEE AND THE SECURITIES ADMINISTRATOR
Section 9.01 Duties of Trustee.
(a) The Trustee, prior to the occurrence of an Event of Default and
after the curing or waiver of all Events of Default which may have occurred, and
the Securities Administrator each undertake to perform such duties and only such
duties as are specifically set forth in this Agreement as duties of the Trustee
and the Securities Administrator, respectively. If an Event of Default has
occurred and has not been cured or waived, the Trustee shall exercise such of
the rights and powers vested in it by this Agreement, and subject to Section
8.02(b) use the same degree of care and skill in their exercise, as a prudent
person would exercise under the circumstances in the conduct of his own affairs.
(b) Upon receipt of all resolutions, certificates, statements,
opinions, reports, documents, orders or other instruments which are specifically
required to be furnished to the Trustee and the Securities Administrator
pursuant to any provision of this Agreement, the Trustee and the Securities
Administrator, respectively, shall examine them to determine whether they are in
the form required by this Agreement; provided, however, that neither the Trustee
nor the Securities Administrator shall be responsible for the accuracy or
content of any resolution, certificate, statement, opinion, report, document,
order or other instrument furnished hereunder; provided, further, that neither
the Trustee nor the Securities Administrator shall be responsible for the
accuracy or verification of any calculation provided to it pursuant to this
Agreement.
(c) On each Distribution Date, the 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
solely on the report of the Securities Administrator.
(d) No provision of this Agreement shall be construed to relieve the
Trustee or the Securities Administrator from liability for its own negligent
action, its own negligent failure to act or its own willful misconduct;
provided, however, that:
(i) Prior to the occurrence of an Event of Default, and after
the curing or waiver of all such Events of Default which may have occurred, the
duties and obligations of the Trustee and the Securities Administrator shall be
determined solely by the express provisions of this Agreement, neither the
Trustee nor the Securities Administrator shall be liable except for the
performance of their respective duties and obligations as are specifically set
forth in this Agreement, no implied covenants or obligations shall be read into
this Agreement against the Trustee or the Securities Administrator and, in the
absence of bad faith on the part of the Trustee or the Securities Administrator,
respectively, the Trustee or the Securities Administrator, respectively, may
conclusively rely, as to the truth of the statements and the correctness of the
opinions expressed therein, upon any certificates or opinions furnished to the
Trustee or the Securities Administrator, respectively, and conforming to the
requirements of this Agreement;
(ii) Neither the Trustee nor the Securities Administrator
shall be liable in its individual capacity for an error of judgment made in good
faith by a Responsible Officer or Responsible Officers of the Trustee or an
officer of the Securities Administrator, respectively, unless it shall be proved
that the Trustee or the Securities Administrator, respectively, was negligent in
ascertaining the pertinent facts;
(iii) Neither the Trustee nor the Securities Administrator
shall be liable with respect to any action taken, suffered or omitted to be
taken by it in good faith in accordance with the directions of the Holders of
Certificates evidencing Fractional Undivided Interests aggregating not less than
25% of the Trust Fund, if such action or non-action relates to the time, method
and place of conducting any proceeding for any remedy available to the Trustee
or the Securities Administrator, respectively, or exercising any trust or other
power conferred upon the Trustee or the Securities Administrator, respectively,
under this Agreement;
(iv) The Trustee shall not be required to take notice or be
deemed to have notice or knowledge of any default or Event of Default unless a
Responsible Officer of the Trustee's Corporate Trust Office shall have actual
knowledge thereof. In the absence of such notice, the Trustee may conclusively
assume there is no such default or Event of Default;
(v) The Trustee shall not in any way be liable by reason of
any insufficiency in any Account held by or in the name of Trustee unless it is
determined by a court of competent jurisdiction that the Trustee's gross
negligence or willful misconduct was the primary cause of such insufficiency
(except to the extent that the Trustee is obligor and has defaulted thereon);
(vi) Anything in this Agreement to the contrary
notwithstanding, in no event shall the Trustee or the Securities Administrator
be liable for special, indirect or consequential loss or damage of any kind
whatsoever (including but not limited to lost profits), even if the Trustee or
the Securities Administrator, respectively, has been advised of the likelihood
of such loss or damage and regardless of the form of action;
(vii) None of the Securities Administrator, the Depositor, the
Company or the Trustee shall be responsible for the acts or omissions of the
other, it being understood that this Agreement shall not be construed to render
them partners, joint venturers or agents of one another and
(viii) Neither the Trustee nor the Securities Administrator
shall be required to expend or risk its own funds or otherwise incur financial
liability in the performance of any of its duties hereunder, or in the exercise
of any of its rights or powers, if there is reasonable ground for believing that
the repayment of such funds or adequate indemnity against such risk or liability
is not reasonably assured to it, and none of the provisions contained in this
Agreement shall in any event require the Trustee or the Securities Administrator
to perform, or be responsible for the manner of performance of, any of the
obligations of the Master Servicer under the Servicing Agreements, except during
such time, if any, as the Trustee shall be the successor to, and be vested with
the rights, duties, powers and privileges of, the Master Servicer in accordance
with the terms of this Agreement.
(e) All funds received by the Master Servicer and the Trustee and
required to be deposited in the Master Servicer Collection Account or
Distribution Account pursuant to this Agreement will be promptly so deposited by
the Master Servicer and the Trustee.
(f) Except for those actions that the Trustee or the Securities
Administrator is required to take hereunder, neither the Trustee nor the
Securities Administrator shall have any obligation or liability to take any
action or to refrain from taking any action hereunder in the absence of written
direction as provided hereunder.
Section 9.02 Certain Matters Affecting the Trustee and the Securities
Administrator.
Except as otherwise provided in Section 9.01:
(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 the Depositor, the Master Servicer or a 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 has actual knowledge (which has not been
cured or waived), 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;
(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 Trustee functions under this Agreement without
the express written consent of the Master Servicer, which consent will not be
unreasonably withheld. Neither the Trustee nor the Securities Administrator
shall be liable or responsible for the misconduct or negligence of any of the
Trustee's or the Securities Administrator's agents or attorneys or a custodian
or Trustee 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 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 or the Mortgage Loan Purchase Agreement, as
applicable, or the eligibility of any Mortgage Loan for purposes of this
Agreement.
Section 9.03 Trustee and Securities Administrator Not Liable for
Certificates or Mortgage Loans.
The recitals contained herein and in the Certificates (other than the
signature and countersignature of the Certificate Registrar on the Certificates)
shall be taken as the statements of the Depositor, and neither the Trustee, or
the Custodian on its behalf, 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
Auction Administration Agreement, the Market Value Swap or Certificates (other
than the signature and countersignature of the Certificate Registrar 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, or the Custodian on its behalf, of the obligation to review the
Mortgage Files pursuant to Sections 2.02 and 2.04. The Trustee's signature and
countersignature (or countersignature of its agent) on the Certificates shall be
solely in its capacity as Trustee and shall not constitute the Certificates an
obligation of the Trustee in any other capacity. Neither the Trustee 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 statement
or continuation statement in any public office at any time or to otherwise
perfect or maintain the perfection of any security interest or lien granted to
it hereunder or to record this Agreement.
Section 9.04 Trustee and Securities Administrator May Own Certificates.
The Trustee and the Securities Administrator in its individual capacity
or in any capacity other than as Trustee hereunder may become the owner or
pledgee of any Certificates with the same rights it would have if it were not
Trustee or the Securities Administrator, as applicable, and may otherwise deal
with the parties hereto.
Section 9.05 Trustee's and Securities Administrator's Fees and
Expenses.
The fees and expenses of the Trustee and the Securities Administrator
shall be paid in accordance with a side letter agreement between the Trustee and
the Master Servicer. In addition, the Trustee and the Securities Administrator
will be entitled to recover from the Master Servicer Collection Account pursuant
to Section 4.03(b) all reasonable out-of-pocket expenses, disbursements and
advances and the expenses of the Trustee and the Securities Administrator,
respectively, in connection with any Event of Default, any breach of this
Agreement or any claim or legal action (including any pending or threatened
claim or legal action) or incurred or made by the Trustee or the Securities
Administrator, respectively, in the administration of the trusts hereunder and
under the Auction Administration Agreement and the Market Value Swap (including
the reasonable compensation, expenses and disbursements of its counsel) except
any such expense, disbursement or advance as may arise from its negligence or
intentional misconduct or which is the responsibility of the Certificateholders.
If funds in the Master Servicer Collection Account are insufficient therefor,
the Trustee and the Securities Administrator shall recover such expenses from
the Depositor and the Depositor hereby agrees to pay such expenses,
disbursements or advances upon demand. 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, 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 ▇▇▇▇▇'▇ 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 or
the Securities Administrator shall resign immediately in the manner and with the
effect specified in Section 9.08.
Section 9.07 Insurance.
The Trustee, 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, 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, the successor Trustee or Securities Administrator, as applicable. If
no successor Trustee or Securities Administrator shall have been so appointed
and have accepted appointment within 30 days after the giving of such notice of
resignation, the resigning Trustee or Securities Administrator may petition any
court of competent jurisdiction for the appointment of a successor Trustee or
Securities Administrator.
(b) If at any time the Trustee, 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 or if at any time the Trustee, the Paying Agent or the Securities
Administrator shall become incapable of acting, or shall be adjudged a 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 in the event of a
Termination Event in respect of the Auction Administrator under the Market Value
Swap, 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 Trustee, the Paying Agent or Securities
Administrator, as applicable, so removed, the successor Trustee or Securities
Administrator, as applicable.
(c) The Holders of Certificates evidencing Fractional Undivided
Interests aggregating not less than 51% of the Trust Fund may at any time remove
the Trustee, the Paying Agent or the Securities Administrator and appoint a
successor Trustee, the Paying Agent or Securities Administrator by written
instrument or instruments, in quadruplicate, signed by such Holders or their
attorneys-in-fact duly authorized, one complete set of which instruments shall
be delivered to the Depositor, the Paying Agent, the Master Servicer, the
Securities Administrator (if the Trustee is removed), the Trustee (if the
Securities Administrator or Paying Agent is removed), and the Trustee, the
Paying Agent or Securities Administrator so removed and the successor so
appointed. In the event that the Trustee, the Paying Agent or Securities
Administrator is removed by the Holders of Certificates in accordance with this
Section 9.08(c), the Holders of such Certificates shall be responsible for
paying any compensation payable to a successor Trustee, 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, the 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.
(e) No resignation or removal of the Securities Administrator and
appointment of a successor Securities Administrator pursuant to any of the
provisions of this Section 9.08 shall become effective except upon the
simultaneous appointment of and acceptance of a successor Auction Administrator
as provided in Section 11.02.
Section 9.09 Successor Trustee, Successor Paying Agent and Successor
Securities Administrator.
(a) Any successor Trustee, Paying Agent or Securities Administrator
appointed as provided in Section 9.08 shall execute, acknowledge and deliver to
the Depositor and to its predecessor Trustee, Paying Agent or Securities
Administrator 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 payment of its outstanding fees
and expenses 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. The Company shall pay the cost of any
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, 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 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, Paying Agent or the Securities Administrator,
respectively, shall be the successor of the Trustee, 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 to act as co-trustee or co-trustees, jointly with the
Trustee, or separate trustee or separate trustees, of all or any part of the
Trust, and to vest in such Person or Persons, in such capacity, such title to
the Trust, or any part thereof, and, subject to the other provisions of this
Section 9.11, such powers, duties, obligations, rights and trusts as the
Depositor and the Trustee may consider necessary or desirable.
(b) If the Depositor shall not have joined in such appointment within
15 days after the receipt by it of a written request so to do, the Trustee shall
have the power to make such appointment without the Depositor.
(c) No co-trustee or separate trustee hereunder shall be required to
meet the terms of eligibility as a successor Trustee under Section 9.06
hereunder and no notice to Certificateholders of the appointment of
co-trustee(s) or separate trustee(s) shall be required under Section 9.08
hereof.
(d) In the case of any appointment of a co-trustee or separate trustee
pursuant to this Section 9.11, all rights, powers, duties and obligations
conferred or imposed upon the Trustee and required to be conferred on such
co-trustee shall be conferred or imposed upon and exercised or performed by the
Trustee and such separate trustee or co-trustee jointly, except to the extent
that under any law of any jurisdiction in which any particular act or acts are
to be performed (whether as Trustee hereunder or as successor to the Master
Servicer hereunder), the Trustee shall be incompetent or unqualified to perform
such act or acts, in which event such rights, powers, duties and obligations
(including the holding of title to the Trust or any portion thereof in any such
jurisdiction) shall be exercised and performed by such separate trustee or
co-trustee at the direction of the Trustee.
(e) Any notice, request or other writing given to the Trustee shall be
deemed to have been given to each of the then separate trustees and co-trustees,
as effectively as if given to each of them. Every instrument appointing any
separate trustee or co-trustee shall refer to this Agreement and the conditions
of this Article IX. Each separate trustee and co-trustee, upon its acceptance of
the trusts conferred, shall be vested with the estates or property specified in
its instrument of appointment, either jointly with the Trustee or separately, as
may be provided therein, subject to all the provisions of this Agreement,
specifically including every provision of this Agreement relating to the conduct
of, affecting the liability of, or affording protection to, the Trustee. Every
such instrument shall be filed with the Trustee.
(f) To the extent not prohibited by law, any separate trustee or
co-trustee may, at any time, request the Trustee, its agent or attorney-in-fact,
with full power and authority, to do any lawful act under or with respect to
this Agreement on its behalf and in its name. If any separate trustee or
co-trustee shall die, become incapable of acting, resign or be removed, all of
its estates, properties rights, remedies and trusts shall vest in and be
exercised by the Trustee, to the extent permitted by law, without the
appointment of a new or successor Trustee.
(g) No trustee under this Agreement shall be personally liable by
reason of any act or omission of another trustee under this Agreement. The
Depositor and the Trustee acting jointly may at any time accept the resignation
of or remove any separate trustee or co-trustee.
Section 9.12 Federal Information Returns and Reports to
Certificateholders; REMIC Administration.
(a) For federal income tax purposes, the taxable year of each REMIC
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) 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 will
apply for an Employee Identification Number from the Internal Revenue Service
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, Internal Revenue Service Form 8811, which
shall provide the name and address of the person who can be contacted to obtain
information required to be reported to the holders of regular interests in each
REMIC (the "REMIC Reporting Agent"). The Trustee shall make elections to treat
each REMIC 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 as described by the
Securities Administrator. The Trustee shall sign all tax information returns
filed pursuant to this Section and any other returns as may be required by the
Code. The Holder of the Class R-I Certificate is hereby designated as the "Tax
Matters Person" (within the meaning of Treasury Regulation Section 1.860F-4(d))
for REMIC I, the Holder of the Class R-II Certificate is hereby designated as
the "Tax Matters Person" for REMIC II, and the Holder of the Class R-III
Certificate is hereby designated as the "Tax Matters Person" for REMIC III. The
Securities Administrator is hereby designated and appointed as the agent of each
such Tax Matters Person. Any Holder of a Residual Certificate will by acceptance
thereof appoint the Securities Administrator as agent and attorney-in-fact for
the purpose of acting as Tax Matters Person for each REMIC during such time as
the Securities Administrator does not own any such Residual Certificate. In the
event that the Code or applicable Treasury regulations prohibit the Trustee from
signing tax or information returns or other statements, or the Securities
Administrator from acting as agent for the Tax Matters Person, the Trustee and
the Securities Administrator shall take whatever action that in its sole good
faith judgment is necessary for the proper filing of such information returns or
for the provision of a Tax Matters Person, including designation of the Holder
of a Residual Certificate to sign such returns or act as Tax Matters Person.
Each Holder of a Residual Certificate shall be bound by this Section.
(c) The Securities Administrator shall provide upon request and receipt
of reasonable compensation, such information as required in Section
860D(a)(6)(B) of the Code to the Internal Revenue Service, to any Person
purporting to transfer a Residual Certificate to a Person other than a
transferee permitted by Section 5.05(b), and to any regulated investment
company, real estate investment trust, common trust fund, partnership, trust,
estate, organization described in Section 1381 of the Code, or nominee holding
an interest in a pass-through entity described in Section 860E(e)(6) of the
Code, any record holder of which is not a transferee permitted by Section
5.05(b) (or which is deemed by statute to be an entity with a disqualified
member).
(d) The Securities Administrator shall prepare and file or cause to be
filed, and the Trustee shall sign, any state income tax returns required under
Applicable State Law with respect to each REMIC or the Trust Fund.
(e) Notwithstanding any other provision of this Agreement, the Trustee
and the Securities Administrator shall comply with all federal withholding
requirements respecting payments to Certificateholders of, or in respect 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
payments of, or in respect of, interest or original issue discount or advances
thereof to any Certificateholder pursuant to federal withholding requirements,
the Trustee or the Securities Administrator shall, together with its monthly
report to such Certificateholders, indicate such amount withheld.
(f) The Trustee and the Securities Administrator agree to indemnify the
Trust Fund and the Depositor for any taxes and costs including, without
limitation, any reasonable attorneys fees imposed on or incurred by the Trust
Fund, the Depositor or the Master Servicer, as a result of a breach of the
Trustee's covenants and the Securities Administrator's covenants, respectively,
set forth in this Section 9.12; provided, however, such liability and obligation
to indemnify in this paragraph shall not be joint and several, and neither the
Trustee nor the Securities Administrator shall be liable or be obligated to
indemnify the Trust Fund for the failure by the other to perform any duty under
this Agreement or the breach by the other of any covenant in this Agreement.
ARTICLE X
TERMINATION
Section 10.01 Termination Upon Repurchase 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 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:
(i) 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 (in each case, 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
Master Servicer, including unreimbursed servicing advances and the principal
portion of any unreimbursed Monthly Advances, made on the Mortgage Loans prior
to the exercise of such repurchase right and (d) any unreimbursed costs and
expenses of the Trustee and the Securities Administrator payable pursuant to
Section 9.05; or
(ii) the later of the making of the final payment or other
liquidation, or any advance with respect thereto, of the last Mortgage Loan
remaining in the Trust Fund or the disposition of all property acquired with
respect to any Mortgage Loan; provided, however, that in the event that an
advance has been made, but not yet recovered, at the time of such termination,
the Person having made such advance shall be entitled to receive,
notwithstanding such termination, any payments received subsequent thereto with
respect to which such advance was made; or
(iii) the payment to the 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 earlier of (i) the latest possible maturity date specified in Section
5.01(d) and (ii) the expiration of 21 years from the death of the last survivor
of the descendants of ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, the late Ambassador of the United
States to the Court of St. James's, living on the date of this Agreement.
(c) The right of the Depositor or its designee to repurchase all the
assets of the Trust Fund as described in Subsection 10.01(a)(i) above is
conditioned upon (i) such purchase occurring after the Distribution Date on
which the the aggregate Scheduled Principal Balance of the Mortgage Loans is
less than 10% of the sum of the aggregate Scheduled Principal Balance of the
Mortgage Loans as of the Cut-off Date, or (ii) the Depositor making a
determination, based upon an Opinion of Counsel addressed to the Depositor, the
Trustee and the Securities Administrator, that the REMIC status of REMIC I,
REMIC II or REMIC III 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 and REMIC III at any time, and upon such election,
the Depositor or its designee, shall repurchase all the assets of the Trust Fund
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, the Trustee 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 l5th day and not later than the 25th day
of the month next preceding the month of such final distribution, and shall
specify (i) the Distribution Date upon which final payment of the Certificates
will be made upon presentation and surrender of the Certificates at the office
of the 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 the assets in 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 such Certificateholders
as directed by the Securities Administrator in writing an amount determined as
follows: with respect to each Certificate (other than the Interest Only
Certificates and 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 in such Certificate Group (other than the Class R
Certificates). If the proceeds with respect to the Mortgage Loans of a Loan
Group are not sufficient to pay all of the Senior Certificates of the related
Certificate Group in full, any such deficiency shall be allocated first, to the
Subordinate Certificates, in inverse order of their numerical designation and
then to the Senior Certificates of the related Certificate Group on a pro rata
basis. Upon deposit of the Termination Purchase Price and following such final
Distribution Date, the Trustee or the Custodian, as its agent, shall release
promptly to the Depositor and/or its designee the Mortgage Files for the
remaining Mortgage Loans, and the Accounts with respect thereto shall terminate,
subject to the Paying Agent's obligation to hold any amounts payable to the
Certificateholders in trust without interest pending final distributions
pursuant to Subsection 10.01(g). Any other amounts remaining in the Accounts
will belong to the Depositor.
(f) In the event that this Agreement is terminated by reason of the
payment or liquidation of all Mortgage Loans or the disposition of all property
acquired with respect to all Mortgage Loans under Subsection 10.01(a)(ii) above,
the Master Servicer shall deliver to the Paying Agent for deposit in the
Distribution Account all distributable amounts remaining in the Master Servicer
Collection Account. 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. Upon deposit by the Master Servicer of such distributable
amounts, and following such final Distribution Date, the Paying Agent shall
release promptly to the Depositor or its designee the Mortgage Files for the
remaining Mortgage Loans, and the Master Servicer Collection Account and the
Distribution Account shall terminate, subject to the Paying Agent's obligation
to hold any amounts payable to the Certificateholders in trust without interest
pending final distributions pursuant to this Subsection 10.01(f).
(g) If not all of the Certificateholders shall surrender their
Certificates for cancellation within six months after the time specified in the
above-mentioned written notice, the 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 of the Mortgage
Loans under Subsection 10.01(a)(i) above is exercised, the Trust Fund and each
REMIC shall be terminated in accordance with the following additional
requirements, unless the Trustee has been furnished with an Opinion of Counsel
addressed to the Trustee to the effect that the failure of the Trust to comply
with the requirements of this Section 10.02 will not (i) result in the
imposition of taxes on "prohibited transactions" as defined in Section 860F of
the Code on any REMIC 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 each REMIC in
the case of a termination under Subsection 10.01(a)(i), provided to it by the
Depositor, which meets 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 each REMIC, and at or prior to the final Distribution
Date relating thereto, the Trustee shall sell for cash all of the assets of the
Trust to or at the direction of the Depositor.
(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
REMIC shall terminate.
ARTICLE XI
MANDATORY AUCTION PROVISIONS
Section 11.01 The Market Value Swap and Auction Administration
Agreement. On the Closing Date, the Securities Administrator shall authorize and
direct the Auction Administrator to enter into the Market Value Swap and the
Auction Administration Agreement with the Swap Counterparty. The Market Value
Swap will not be part of the Trust Fund or of REMIC I, REMIC II or REMIC III.
Section 11.02 Removal of the Auction Administrator. In the event of
resignation or removal of the Auction Administrator under the Auction
Administration Agreement, the Depositor shall select a new Auction Administrator
in accordance with this Section 11.02 and Article IX. Any successor Auction
Administrator shall meet the requirements of a successor Securities
Administrator under this Agreement.
Section 11.03 Mandatory Auction Certificates. On the Mandatory Auction
Distribution Date with respect to each Mandatory Auction Certificate, except
after the occurrence of a Swap Termination Event, the Holder of such Mandatory
Auction Certificate hereby agrees to tender its Certificate to the Securities
Administrator on such Mandatory Auction Distribution Date in exchange for the
Par Price and acknowledges that the Securities Administrator shall cause the
Depository to terminate its ownership interest at that time. If a
Certificateholder fails to surrender a Certificate not held in book-entry form
by the close of business on the related Mandatory Auction Distribution Date for
any reason, such Certificate shall be deemed to be tendered and surrendered for
registration of transfer to the Securities Administrator and the Securities
Administrator shall sign, countersign and deliver in the name of the Mandatory
Auction Winner a new Certificate of a like Class and aggregated Fractional
Undivided Interest, but bearing a different number. The Par Price due to the
holders of cancelled, but not surrendered, Certificates shall be paid only upon
surrender of the Certificates, without any accrued interest on such Par Price
from the related Mandatory Auction Distribution Date.
ARTICLE XII
MISCELLANEOUS PROVISIONS
Section 12.01 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.
Section 12.02 Amendment.
(a) This Agreement may be amended from time to time by the Company, the
Depositor, the Master Servicer, the Securities Administrator and the Trustee,
without notice to or the consent of any of the Certificateholders, to cure any
ambiguity, to correct or supplement any provisions herein or therein that may be
defective or inconsistent with any other provisions herein or therein, to comply
with any changes in the Code or to make any other provisions with respect to
matters or questions arising under this Agreement which shall not be
inconsistent with the provisions of this Agreement; provided, however, that 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, and provided, further, that any amendment to Article XI of
this Agreement shall also require the consent of the Auction Administrator.
(b) This Agreement may also be amended from time to time by the
Company, the Master Servicer, the Depositor, the Securities Administrator and
the Trustee, with the consent of the Holders of Certificates evidencing
Fractional Undivided Interests aggregating not less than 51% of the Trust Fund
or of the applicable Class or Classes, if such amendment affects only such Class
or Classes, for the purpose of adding any provisions to or changing in any
manner or eliminating any of the provisions of this Agreement or of modifying in
any manner the rights of the Certificateholders; provided, however, that no such
amendment shall (i) reduce in any manner the amount of, or delay the timing of,
payments received on Mortgage Loans which are required to be distributed on any
Certificate without the consent of the Holder of such Certificate, (ii) reduce
the aforesaid percentage of Certificates the Holders of which are required to
consent to any such amendment, without the consent of the Holders of all
Certificates then outstanding, or (iii) cause any REMIC to fail to qualify as a
REMIC for federal income tax purposes, as evidenced by an Opinion of Independent
Counsel addressed to the Trustee which shall be provided to the Trustee other
than at the Trustee's expense, and provided, further, that any amendment to
Article XI of this Agreement shall also require the consent of the Auction
Administrator. Notwithstanding any other provision of this Agreement, for
purposes of the giving or withholding of consents pursuant to this Section
12.02(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 12.02(b) above, it
shall not be necessary for the Certificateholders to approve the particular form
of such an amendment. Rather, it shall be sufficient if the Certificateholders
approve the substance of the amendment. The manner of obtaining such consents
and of evidencing the authorization of the execution thereof by
Certificateholders shall be subject to such reasonable regulations as the
Trustee may prescribe.
(e) Prior to the execution of any amendment to this Agreement, the
Trustee shall be entitled to receive and rely upon an Opinion of Counsel
addressed to the Trustee stating that the execution of such amendment is
authorized or permitted by this Agreement. The Trustee and the Securities
Administrator may, but shall not be obligated to, enter into any such amendment
which affects the Trustee's or the Securities Administrator's own respective
rights, duties or immunities under this Agreement.
Section 12.03 Recordation of Agreement.
To the extent permitted by applicable law, this Agreement is subject to
recordation in all appropriate public offices for real property records in all
the counties or other comparable jurisdictions in which any or all of the
Mortgaged Properties are situated, and in any other appropriate public recording
office or elsewhere. The Depositor shall effect such recordation, at the expense
of the Trust upon the request in writing of a Certificateholder, but only if
such direction is accompanied by an Opinion of Counsel (provided at the expense
of the Certificateholder requesting recordation) to the effect that such
recordation would materially and beneficially affect the interests of the
Certificateholders or is required by law.
Section 12.04 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 12.04, each and every Certificateholder and the
Trustee shall be entitled to such relief as can be given either at law or in
equity.
Section 12.05 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 12.05.
(b) The fact and date of the execution by any Person of any such
instrument or writing may be proved by the affidavit of a witness of such
execution or by a certificate of a notary public or other officer authorized by
law to take acknowledgments of deeds, certifying that the individual signing
such instrument or writing acknowledged to him the execution thereof. Where such
execution is by a signer acting in a capacity other than his or her individual
capacity, such certificate or affidavit shall also constitute sufficient proof
of his or her authority. The fact and date of the execution of any such
instrument or writing, or the authority of the individual executing the same,
may also be proved in any other manner which the Trustee deems sufficient.
(c) The ownership of Certificates (notwithstanding any notation of
ownership or other writing on such Certificates, except an endorsement in
accordance with Section 5.02 made on a Certificate presented in accordance with
Section 5.04) shall be proved by the Certificate Register, and neither the
Trustee, the Securities Administrator, the Depositor, the Master Servicer nor
any successor to any such parties shall be affected by any notice to the
contrary.
(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 12.02(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 a
Responsible Officer of the Trustee actually 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 12.06 Governing Law.
THIS AGREEMENT AND THE CERTIFICATES SHALL BE CONSTRUED IN ACCORDANCE
WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT REFERENCE TO ITS CONFLICT OF LAWS
RULES (OTHER THAN SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAW, WHICH THE
PARTIES HERETO EXPRESSLY RELY UPON IN THE CHOICE OF SUCH LAW AS THE GOVERNING
LAW HEREUNDER) AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER
SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.
Section 12.07 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, ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇
▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention: Vice President-Servicing, telecopier number:
(▇▇▇) ▇▇▇-▇▇▇▇, 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 the Company, ▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention: Vice President-Servicing,
telecopier number: (▇▇▇) ▇▇▇-▇▇▇▇, or to such other address as may hereafter be
furnished to the other parties hereto in writing; (iv) in the case of the Master
Servicer or Securities Administrator, ▇▇▇▇▇ Fargo Bank, N.A., ▇.▇. ▇▇▇ ▇▇,
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ (or, in the case of overnight deliveries, ▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ 21045) (Attention: Corporate Trust Services -
BART 2005-4), facsimile no.: (▇▇▇) ▇▇▇-▇▇▇▇, 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's Office, (vi) in the
case of the Rating Agencies, ▇▇▇▇▇'▇ Investors Service, Inc., ▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ and Standard & Poor's, a division of The ▇▇▇▇▇▇-▇▇▇▇
Companies, Inc., ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ or (vii) in the case
of the Auction Administrator, at its Corporate Trust Office, or such other
address as may hereafter be furnished to the other parties hereto in writing.
Any notice delivered to the Depositor, the Master Servicer, the Securities
Administrator or the Trustee under this Agreement shall be effective only upon
receipt. Any notice required or permitted to be mailed to a Certificateholder,
unless otherwise provided herein, shall be given by first-class mail, postage
prepaid, at the address of such Certificateholder as shown in the Certificate
Register. Any notice so mailed within the time prescribed in this Agreement
shall be conclusively presumed to have been duly given when mailed, whether or
not the Certificateholder receives such notice.
Section 12.08 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 12.09 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 12.10 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 12.11 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 12.12 Notice to Rating Agencies.
The article and section headings herein are for convenience of
reference only, and shall not limited or otherwise affect the meaning hereof.
The Trustee shall promptly provide notice to each Rating Agency with respect to
each of the following of which a Responsible Officer of the Trustee has actual
knowledge:
1. Any material change or amendment to this Agreement or the Servicing
Agreements;
2. The occurrence of any Event of Default that has not been cured;
3. The resignation or termination of the Master Servicer, the Trustee
or the Securities Administrator;
4. The repurchase or substitution of Mortgage Loans;
5. The final payment to Certificateholders; and
6. Any change in the location of the Master Servicer Collection Account
or the Distribution Account.
IN WITNESS WHEREOF, the Depositor, the Trustee, the Master Servicer and
the Securities Administrator have caused their names to be signed hereto by
their respective officers thereunto duly authorized as of the day and year first
above written.
STRUCTURED ASSET MORTGAGE
INVESTMENTS II INC., as Depositor
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
---------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
Title: Vice President
U.S. BANK NATIONAL ASSOCIATION, as
Trustee
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇
---------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇
Title: Vice President
▇▇▇▇▇ FARGO BANK, N.A., as Master
Servicer
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇
---------------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇
Title: Vice President
▇▇▇▇▇ FARGO BANK, N.A., as Securities
Administrator
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇
---------------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇
Title: Vice President
EMC MORTGAGE CORPORATION
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇
---------------------------------
Name: ▇▇▇▇ ▇▇▇▇▇▇▇
Title: Executive 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
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
------------------------------
Name: ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
Title: Senior Vice President
STATE OF NEW YORK )
) ss.:
COUNTY OF NEW YORK )
On the ___ day of June, 2005 before me, a notary public in and for said
State, personally appeared ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇, known to me to be a Vice President
of Structured Asset Mortgage Investments II Inc., the corporation that executed
the within instrument, and also known to me to be the person who executed it on
behalf of said corporation, and acknowledged to me that such corporation
executed the within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official
seal the day and year in this certificate first above written.
--------------------------------
Notary Public
[Notarial Seal]
STATE OF MASSACHUSETTS )
) ss.:
COUNTY OF SUFFOLK )
On the ___ day of June, 2005 before me, a notary public in and for said
State, personally appeared ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, known to me to be a Vice President
of U.S. Bank National Association, the entity that executed the within
instrument, and also known to me to be the person who executed it on behalf of
said entity, and acknowledged to me that such entity executed the within
instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official
seal the day
and year in this certificate first above written.
--------------------------------
Notary Public
[Notarial Seal]
STATE OF MARYLAND )
) ss.:
COUNTY OF ▇▇▇▇▇▇ )
On the ____ day of June, 2005 before me, a notary public in and for
said State, personally appeared ▇▇▇▇▇▇ ▇▇▇▇▇▇, known to me to be an Vice
President of ▇▇▇▇▇ Fargo Bank, N.A., the entity that executed the within
instrument, and also known to me to be the person who executed it on behalf of
said entity, and acknowledged to me that such entity executed the within
instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official
seal the day
and year in this certificate first above written.
--------------------------------
Notary Public
[Notarial Seal]
STATE OF TEXAS )
) ss.:
COUNTY OF DALLAS )
On the ___ day of June, 2005 before me, a notary public in and for said
State, personally appeared ▇▇▇▇ ▇▇▇▇▇▇▇, known to me to be an Executive Vice
President of EMC Mortgage Corporation, the corporation that executed the within
instrument, and also known to me to be the person who executed it on behalf of
said corporation, and acknowledged to me that such corporation executed the
within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official
seal the day and year in this certificate first above written.
--------------------------------
Notary Public
[Notarial Seal]
STATE OF TEXAS )
) ss.:
COUNTY OF DALLAS )
On the ___ day of June, 2005 before me, a notary public in and for said
State, personally appeared ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, 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.
--------------------------------
Notary Public
[Notarial Seal]
EXHIBIT A-1
FORM OF CLASS [_-[A][ X ]-_] CERTIFICATE
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 (THE "CODE").
[THE CURRENT PRINCIPAL AMOUNT OF THIS CERTIFICATE WILL BE
DECREASED BY THE PRINCIPAL PAYMENTS HEREON AND 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 THE SECURITIES ADMINISTRATOR NAMED HEREIN.]
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY TO THE SECURITIES ADMINISTRATOR
OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY
CERTIFICATE ISSUED WILL BE 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 WILL BE 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.
[ANY TRANSFEREE OF THIS CERTIFICATE, PRIOR TO THE MANDATORY
AUCTION DISTRIBUTION DATE (AS DEFINED IN THE AGREEMENT), WILL BE DEEMED TO HAVE
REPRESENTED BY VIRTUE OF ITS PURCHASE OR HOLDING OF THIS CERTIFICATE (OR
INTEREST HEREIN) THAT EITHER (A) SUCH TRANSFEREE IS NOT A PERSON (INCLUDING AN
INVESTMENT MANAGER, A NAMED FIDUCIARY OR A TRUSTEE OF ANY SUCH PLAN) ACTING,
DIRECTLY OR INDIRECTLY, ON BEHALF OF OR PURCHASING ANY CERTIFICATE WITH "PLAN
ASSETS" OF ANY PLAN (A "PLAN INVESTOR") OR (B) ITS HOLDING OR ACQUISITION OF
THIS CERTIFICATE SHALL NOT RESULT IN A NON-EXEMPT PROHIBITED TRANSACTION UNDER
SECTION 406 OF THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED
("ERISA"), OR SECTION 4975 OF THE INTERNAL REVENUE CODE (THE "CODE") BECAUSE IT
SATISFIES THE REQUIREMENTS FOR EXEMPTIVE RELIEF PROVIDED UNDER PROHIBITED
TRANSACTION CLASS EXEMPTION ("PTE") 84-14, 90-1, 91-38, 95-60 OR 96-23.]
Certificate No. 1 [Variable] Pass-Through Rate
Class [_-[A][ X ]-_] Senior
Date of Pooling and Servicing Agreement Aggregate Initial [Current Principal][Notional] Amount
and Cut-off Date: June 1, 2005 of this Senior Certificate as of the Cut-off Date:
$[_____________]
First Distribution Date: Initial [Current Principal][Notional] Amount of this
July 25, 2005 Senior Certificate as of the Cut-off Date:
$[_____________]
Master Servicer: CUSIP: [____________]
▇▇▇▇▇ Fargo Bank, N.A.
Assumed Final Distribution Date:
August 2035
BEAR ▇▇▇▇▇▇▇ ARM TRUST 2005-4
MORTGAGE PASS-THROUGH CERTIFICATE
SERIES 2005-4
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 adjustable rate mortgage
loans secured by first liens on one-to-four family residential
properties 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 Securities
Administrator 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, Securities Administrator 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") primarily consisting of adjustable rate mortgage loans secured by
first liens on one- to four- family residential properties (collectively, the
"Mortgage Loans") sold by Structured Asset Mortgage Investments II Inc. ("▇▇▇▇
▇▇"). The Mortgage Loans were sold by EMC Mortgage Corporation ("EMC") to ▇▇▇▇
▇▇. ▇▇▇▇▇ Fargo Bank, N.A. ("▇▇▇▇▇ Fargo") will act as master servicer and as
securities administrator of the Mortgage Loans (the "Master Servicer" and the
"Securities Administrator", which terms include 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 ▇▇▇▇ ▇▇, as depositor (the "Depositor"), ▇▇▇▇▇ Fargo, as
Master Servicer, securities administrator (in such capacity, the "Securities
Administrator") and auction administrator (in such capacity, the "Auction
Administrator"), EMC as seller and company and U.S. Bank National Association 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][Notional] Amount hereof at a per annum rate equal to
the Pass-Through Rate described in the Agreement. The Trustee 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 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 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 Securities Administrator in writing as specified in
the Agreement by wire transfer. 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
Securities Administrator for that purpose and designated in such notice. The
Initial [Current Principal][Notional] 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-two 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
the Trustee is not 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 Agreement permits, with certain exceptions therein
provided, the amendment thereof and the modification of the rights and
obligations of the Depositor, the Master Servicer, the Securities Administrator
and the Trustee and the rights of the Certificateholders under the Agreement
from time to time by the parties thereto 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 Securities
Administrator for such purposes, duly endorsed by, or accompanied by a written
instrument of transfer in form satisfactory to the Securities Administrator 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 Securities Administrator 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
Securities Administrator, 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 Securities
Administrator, 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 the earlier of (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 upon
foreclosure or deed in lieu of foreclosure of any Mortgage Loan and the
remittance of all funds due under the Agreement, or (ii) 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 on or after the Distribution Date on which the
aggregate unpaid principal balance of the Mortgage Loans is less than the
percentage of the aggregate Outstanding Principal Balance specified in the
Agreement of the Mortgage Loans at the Cut-off Date. 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 Securities Administrator by manual signature, this
Certificate shall not be entitled to any benefit under the Agreement, or be
valid for any purpose.
IN WITNESS WHEREOF, the Securities Administrator has caused
this Certificate to be duly executed.
Dated: June 30, 2005 ▇▇▇▇▇ FARGO BANK, N.A.
Not in its individual capacity but
solely as Securities Administrator
By:
------------------------------
Authorized Signatory
CERTIFICATE OF AUTHENTICATION
This is one of the Class [_-[A][X]-_] Certificates referred to
in the within-mentioned Agreement.
▇▇▇▇▇ FARGO BANK, N.A.
Authorized signatory of ▇▇▇▇▇ Fargo
Bank N.A., not in its individual
capacity but solely as Securities
Administrator
By:
-------------------------------
Authorized Signatory
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.
EXHIBIT A-2
FORM OF CLASS B CERTIFICATE
THIS CERTIFICATE IS SUBORDINATED IN RIGHT OF PAYMENT TO THE
SENIOR CERTIFICATES[,] [AND] [CLASS B-[_] CERTIFICATES][,] [AND] [CLASS B-[_]
CERTIFICATES][,] [AND] [CLASS B-[_] CERTIFICATES][,] [AND] [CLASS B-[_]
CERTIFICATES][,] [AND] [CLASS B-[_] CERTIFICATES][,] [AND] [CLASS B-[_]
CERTIFICATES] [AND THE CLASS B-[_] CERTIFICATES], AS DESCRIBED IN THE AGREEMENT
(AS DEFINED BELOW).
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 (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 THE SECURITIES ADMINISTRATOR NAMED
HEREIN.
[FOR CLASS B-1, CLASS B-2, CLASS B-3, CLASS B-4, CLASS B-5,
CLASS B-6, CLASS B-7, CLASS B-8 AND CLASS B-9] [UNLESS THIS CERTIFICATE IS
PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY TO THE
TRUSTEE OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, ANY
CERTIFICATE ISSUED WILL BE 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 WILL BE 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, CLASS B-3, CLASS B-4, CLASS B-5,
CLASS B-6, CLASS B-7, CLASS B-8 AND CLASS B-9] [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 OR OTHER RETIREMENT
ARRANGEMENT 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 THE
CERTIFICATE MUST BE RATED, AT THE TIME OF PURCHASE, NOT LOWER THAN "BBB-" (OR
ITS EQUIVALENT) BY STANDARD & POOR'S, FITCH, INC. OR ▇▇▇▇▇'▇ 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-10, CLASS B-11 AND CLASS B-12] [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 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 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-10, CLASS B-11 AND CLASS B-12] [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 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, ▇▇▇ ▇▇-▇▇, ▇▇▇ ▇▇-▇, ▇▇▇ 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 CERTIFICATE REGISTRAR,
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.]
Certificate No. 1 Variable Pass-Through Rate
Class [B-_] Subordinate
Date of Pooling and Servicing Agreement Aggregate Initial Current Principal Amount of this
and Cut-off Date: Subordinate Certificate as of the Cut-off Date:
June 1, 2005 $[_______________]
First Distribution Date: Initial Current Principal Amount of this Subordinate
July 25, 2005 Certificate as of the Cut-off Date: $[_________]
Master Servicer: CUSIP: [____________]
▇▇▇▇▇ Fargo Bank, N.A.
Assumed Final Distribution Date:
August 2035
BEAR ▇▇▇▇▇▇▇ ARM TRUST 2005-4
MORTGAGE PASS-THROUGH CERTIFICATE
SERIES 2005-4
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 adjustable rate mortgage loans
secured by first liens on one-to-four family residential properties
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 Securities
Adminsitrator 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 Securities Administrator 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 [_____________] 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") primarily consisting of adjustable rate mortgage loans secured by
first liens on one- to four- family residential properties (collectively, the
"Mortgage Loans") sold by Structured Asset Mortgage Investments II Inc. ("▇▇▇▇
▇▇"). The Mortgage Loans were sold by EMC Mortgage Corporation ("EMC") to ▇▇▇▇
▇▇. ▇▇▇▇▇ Fargo Bank, N.A. ("▇▇▇▇▇ Fargo") will act as master servicer and
securities administrator of the Mortgage Loans (the "Master Servicer" and the
"Securities Administrator", which terms include 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 ▇▇▇▇ ▇▇, as depositor (the "Depositor"), ▇▇▇▇▇ Fargo, as
Master Servicer, securities administrator (in such capacity, the "Securities
Administrator") and auction administrator (in such capacity, the "Auction
Administrator"), EMC as seller and company and U.S. Bank National Association 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 rate equal to the
Pass-Through Rate as described in the Agreement. The Trustee 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 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 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 Securities Administrator in writing as specified in
the Agreement by wire transfer. 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
Securities Administrator 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-10, Class B-11 and Class B-12] [No transfer of
this Class B-[_] Certificate will be made unless such transfer is (i) exempt
from the registration requirements of the Securities act of 1933, as amended,
and any applicable state securities laws or is made in accordance with said Act
and laws and (ii) made in accordance with Section 5.02 of the Agreement. In the
event that such transfer is to be made the Trustee shall register such transfer
if, (i) made to a transferee who has provided the Trustee with evidence as to
its QIB status; or (ii) (A) the transferor has advised the Trustee 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
an Investment Letter; provided that if based upon an Opinion of Counsel to the
effect that (A) and (B) above are not 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,
the Trustee shall as a condition of the registration of any such transfer
require the transferor to furnish such other certifications, legal opinions or
other information prior to registering the transfer of this Certificate as shall
be set forth in such Opinion of Counsel.]
[For Class B-1, Class B-2, Class B-3, Class B-4, Class B-5,
Class B-6, Class B-7, Class B-8 and Class B-9] [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 a 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 the certificate must be rated, at the time of
purchase, not lower than "BBB-" (or its equivalent) by Standard & Poor's, Fitch,
Inc. or ▇▇▇▇▇'▇ 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-10, Class B-11 and Class B-12] [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 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, ▇▇▇ ▇▇-▇▇, ▇▇▇ ▇▇-▇, ▇▇▇ ▇▇-▇▇
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.]
This Certificate is one of a duly authorized issue of
Certificates designated as set forth on the face hereof (the "Certificates"),
issued in twenty-two 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
the Trustee is not 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 Agreement permits, with certain exceptions therein
provided, the amendment thereof and the modification of the rights and
obligations of the Depositor, the Master Servicer, the Securities Administrator
and the Trustee and the rights of the Certificateholders under the Agreement
from time to time by the parties thereto 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 Securities
Administrator for such purposes, duly endorsed by, or accompanied by a written
instrument of transfer in form satisfactory to the Securities Administrator 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 Trustee 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 Securities Administrator, 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 Securities Administrator, 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 the earlier of (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 upon
foreclosure or deed in lieu of foreclosure of any Mortgage Loan and the
remittance of all funds due under the Agreement, or (ii) 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 on or after the Distribution Date on which the
aggregate unpaid principal balance of the Mortgage Loans is less than the
percentage of the aggregate Outstanding Principal Balance specified in the
Agreement of the Mortgage Loans at the Cut-off Date. 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 Securities Administrator by manual signature, this
Certificate shall not be entitled to any benefit under the Agreement, or be
valid for any purpose.
IN WITNESS WHEREOF, the Securities Administrator has caused
this Certificate to be duly executed.
Dated: June 30, 2005 ▇▇▇▇▇ FARGO BANK, N.A.
Not in its individual capacity but
solely as Securities Administrator
By:
-------------------------------
Authorized Signatory
CERTIFICATE OF AUTHENTICATION
This is one of the Class [B-_] Certificates referred to in the
within-mentioned Agreement.
▇▇▇▇▇ FARGO BANK, N.A.
Authorized signatory of ▇▇▇▇▇ Fargo
Bank, N.A., not in its individual
capacity but solely as Securities
Administrator
By:
-------------------------------
Authorized Signatory
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.
EXHIBIT A-3
FORM OF 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 (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, OR SECTION 4975 OF THE INTERNAL REVENUE CODE OF 1986, AS
AMENDED, UNLESS THE PROPOSED TRANSFEREE PROVIDES THE TRUSTEE WITH AN OPINION OF
COUNSEL FOR THE BENEFIT OF THE DEPOSITOR, MASTER SERVICER, THE CERTIFICATE
REGISTRAR AND THE SECURITIES ADMINISTRATOR AND ON WHICH THEY MAY RELY (WHICH
SHALL NOT BE AT THE EXPENSE OF THE TRUSTEE) WHICH IS ACCEPTABLE TO 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 OBLIGATIONS ON THE PART OF THE SELLER, THE
MASTER SERVICER, ANY SERVICER, THE CERTIFICATE REGISTRAR, THE SECURITIES
ADMINISTRATOR OR THE TRUSTEE.
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 STRUCTURED ASSET MORTGAGE INVESTMENTS II
INC., THE SECURITIES ADMINISTRATOR AND THE TRUSTEE THAT (1) SUCH TRANSFEREE IS
NOT (A) THE UNITED STATES, ANY STATE OR POLITICAL SUBDIVISION THEREOF, ANY
FOREIGN GOVERNMENT, ANY INTERNATIONAL ORGANIZATION, OR ANY AGENCY OR
INSTRUMENTALITY OF ANY OF THE FOREGOING, (B) ANY ORGANIZATION (OTHER THAN A
COOPERATIVE DESCRIBED IN SECTION 521 OF THE CODE) WHICH IS EXEMPT FROM THE TAX
IMPOSED BY CHAPTER 1 OF THE CODE UNLESS SUCH ORGANIZATION IS SUBJECT TO THE TAX
IMPOSED BY SECTION 511 OF THE CODE, (C) ANY ORGANIZATION DESCRIBED IN SECTION
1381(A)(2)(C) OF THE CODE, (ANY SUCH PERSON DESCRIBED IN THE FOREGOING CLAUSES
(A), (B) OR (C) BEING HEREIN REFERRED TO AS A "DISQUALIFIED ORGANIZATION") OR
(D) 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.
Certificate No. 1
Class R-[_]
Date of Pooling and Servicing Agreement Aggregate Initial Current Principal Amount of this
and Cut-off Date: Certificate as of the Cut-off Date:
June 1, 2005 $___________
First Distribution Date: Initial Current Principal Amount of this Certificate as
July 25, 2005 of the Cut-off Date: $_________
Master Servicer: CUSIP: [_____________]
▇▇▇▇▇ Fargo Bank, N.A.
Assumed Final Distribution Date:
August 2035
BEAR ▇▇▇▇▇▇▇ ARM TRUST 2005-4
MORTGAGE PASS-THROUGH CERTIFICATE
SERIES 2005-4
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 adjustable rate mortgage loans
secured by first liens on one-to-four family residential properties
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 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 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 [_____________] 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") primarily consisting of adjustable rate mortgage loans secured by
first liens on one- to four- family residential properties (collectively, the
"Mortgage Loans") sold by Structured Asset Mortgage Investments II Inc. ("▇▇▇▇
▇▇"). The Mortgage Loans were sold by EMC Mortgage Corporation ("EMC") to ▇▇▇▇
▇▇. ▇▇▇▇▇ Fargo Bank, N.A. ("▇▇▇▇▇ Fargo") will act as master servicer and the
securities administrator of the Mortgage Loans (the "Master Servicer" and the
"Securities Administrator", which terms include 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 ▇▇▇▇ ▇▇, as depositor (the "Depositor"), ▇▇▇▇▇ Fargo, as
Master Servicer and securities administrator (in such capacity, the "Securities
Administrator"), EMC as seller and company and U.S. Bank National Association 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.
The Trustee 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 of such Distribution Date, an amount equal to the product of the
Fractional Undivided Interest evidenced by this Certificate and the amount (of
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
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 Securities Administrator in writing as specified in
the Agreement by wire transfer. 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
Securities Administrator for that purpose and designated in such notice. The
Initial Current Principal Amount of this Certificate is set forth above. The
Current Principal Amount hereof will be reduced to the extent of distributions
allocable to principal hereon and any Realized Losses allocable hereto.
Each Holder of this Certificate will be deemed to have agreed
to be bound by the restrictions set forth in the Agreement to the effect that
(i) each person holding or acquiring any Ownership Interest in this Certificate
must be a United States Person and a Permitted Transferee, (ii) the transfer of
any Ownership Interest in this Certificate will be conditioned upon the delivery
to ▇▇▇▇ ▇▇, the Trustee and the Securities Administrator 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 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, which purchaser may be the Depositor, or any affiliate of the
Depositor, on such terms and conditions as the Depositor may choose.
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 for the benefit of the Depositor, Master Servicer and the Securities
Administrator and on which they may rely (which shall not be at the expense of
the Trustee) which is acceptable to 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
obligations on the part of the Seller, the Master Servicer, any Servicer, the
Securities Administrator 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-two 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
the Trustee is not 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 Agreement permits, with certain exceptions therein
provided, the amendment thereof and the modification of the rights and
obligations of the Depositor, the Master Servicer, the Securities Administrator
and the Trustee and the rights of the Certificateholders under the Agreement
from time to time by the parties thereto 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 Securities
Administrator for such purposes, duly endorsed by, or accompanied by a written
instrument of transfer in form satisfactory to the Securities Administrator 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 Trustee 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 Securities Administrator, 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 Securities Administrator, 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 the earlier of (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 upon
foreclosure or deed in lieu of foreclosure of any Mortgage Loan and the
remittance of all funds due under the Agreement, or (ii) 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 on or after the Distribution Date on which the
aggregate unpaid principal balance of the Mortgage Loans is less than the
percentage of the aggregate Outstanding Principal Balance specified in the
Agreement of the Mortgage Loans at the Cut-off Date. 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 Securities Administrator by manual signature, this
Certificate shall not be entitled to any benefit under the Agreement, or be
valid for any purpose.
IN WITNESS WHEREOF, the Securities Administrator has caused
this Certificate to be duly executed.
Dated: June 30, 2005 ▇▇▇▇▇ FARGO BANK, N.A.
Not in its individual capacity but
solely as Securities Administrator
By:
------------------------------
Authorized Signatory
CERTIFICATE OF AUTHENTICATION
This is one of the Class R-[_] Certificates referred to in the
within-mentioned Agreement.
▇▇▇▇▇ FARGO BANK, N.A.
Authorized signatory of ▇▇▇▇▇ Fargo
Bank N.A., not in its individual
capacity but solely as Securities
Administrator
By:
-------------------------------
Authorized Signatory
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.
EXHIBIT B
MORTGAGE LOAN SCHEDULE
The Preliminary and Final Mortgage Loan Schedules shall set
forth the following information with respect to each Mortgage Loan:
(a) the loan number;
(b) [reserved];
(c) the city, state and zip code of the Mortgaged Property;
(d) the property type;
(e) the Mortgage Rate;
(f) the Servicer;
(g) the Servicing Rate;
(h) the Net Rate;
(i) the original term;
(j) the maturity date;
(k) the stated remaining term to maturity;
(l) the original principal balance;
(m) the first payment date;
(n) the principal and interest payment in effect as of the Cut-off Date;
(o) the unpaid principal balance as of the Cut-off Date;
(p) the Loan-to-Value Ratio at origination;
(q) paid-through date;
(r) the insurer of any Primary Mortgage Insurance Policy;
(s) the Gross Margin, if applicable;
(t) the Maximum Lifetime Mortgage Rate, if applicable;
(u) the Minimum Lifetime Mortgage Rate, if applicable;
(v) the Periodic Rate Cap, if applicable;
(w) the number of days delinquent, if any;
(x) which Mortgage Loans adjust after an initial fixed-rate period of three,
five, seven or ten years;
(y) The Loan Group; and
(z) The Prepayment Charge Loans.
Such schedule also shall set forth for all of the Mortgage Loans, the total
number of Mortgage Loans, the total of each of the amounts described under (k)
and (n) above, the weighted average by principal balance as of the Cut-off Date
of each of the rates described under (e), (f) and (g) above, and the weighted
average remaining term to maturity by unpaid principal balance as of the Cut-off
Date.
EXHIBIT C
[RESERVED]
EXHIBIT D
REQUEST FOR RELEASE OF DOCUMENTS
To: ▇▇▇▇▇ Fargo Bank, N.A.
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇.▇.
▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attn: Inventory Control
RE: Pooling and Servicing Agreement, dated as of
June 1, 2005, among ▇▇▇▇ ▇▇,
▇▇▇▇▇ Fargo Bank, N.A., as Master Servicer
and Securities Administrator,
EMC Mortgage Corporation, as Seller
and company and U.S. Bank National Association, as Trustee
In connection with the administration of the Mortgage Loans held by you
pursuant to the above-captioned Pooling and Servicing Agreement, we request the
release, and hereby acknowledge receipt, of the Mortgage File for the Mortgage
Loan described below, for the reason indicated.
MORTGAGE LOAN NUMBER:
MORTGAGOR NAME, ADDRESS & ZIP CODE:
REASON FOR REQUESTING DOCUMENTS (CHECK ONE):
_____ 1. Mortgage 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
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 Inc., Bear ▇▇▇▇▇▇▇ ARM Trust, Mortgage Pass-Through Certificates,
Series 2005-4 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.
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:
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___.
EXHIBIT F-1
FORM OF INVESTMENT LETTER
[Date]
[SELLER]
U.S. Bank National Association
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Structured Asset Mortgage Investments II Inc.
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Re: Structured Asset Mortgage Investments II Inc., Bear ▇▇▇▇▇▇▇ ARM Trust,
Series 2005-4 Mortgage Pass-Through Certificates (the "Certificates"),
including the Class B-10 Class B-11 and Class B-12 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 to the Pooling and Servicing
Agreement (as defined below) (or such other
documentation as may be acceptable to the Trustee) 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 U.S. Bank National Association (the "Trustee") so
requests, a satisfactory Opinion of Counsel 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, 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, or section 4975 of the Internal Revenue
Code of 1986, as amended, or (ii) are providing a
representation to the effect that the proposed
transfer and holding of a Privately Offered
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, ▇▇▇
▇▇-▇▇, ▇▇▇ ▇▇-▇, ▇▇▇ 95-60, or PTE 96-23 and (II)
will not give rise to any additional obligations on
the part of the Depositor, the Master Servicer, the
Securities Administrator or the Trustee or (iii) have
attached hereto the opinion specified in Section 5.07
of the Agreement.
(ix) We understand that each of the Privately Offered
Certificates bears, and will continue to bear, a
legend to substantiate 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 ACT OR ANY ENTITY IN
WHICH ALL OF THE EQUITY OWNERS COME WITHIN SUCH
PARAGRAPHS PURCHASING NOT FOR DISTRIBUTION IN
VIOLATION OF THE SECURITIES ACT, SUBJECT TO (A) THE
RECEIPT BY THE TRUSTEE OF A LETTER SUBSTANTIALLY IN
THE FORM PROVIDED IN THE AGREEMENT AND (B) THE
RECEIPT BY THE TRUSTEE OF SUCH OTHER EVIDENCE
ACCEPTABLE TO THE TRUSTEE THAT SUCH REOFFER, RESALE,
PLEDGE OR TRANSFER IS IN COMPLIANCE WITH THE
SECURITIES ACT AND OTHER APPLICABLE LAWS OR IN EACH
CASE IN ACCORDANCE WITH ALL APPLICABLE SECURITIES
LAWS OF THE UNITED STATES AND ANY OTHER APPLICABLE
JURISDICTION. THIS CERTIFICATE MAY NOT BE ACQUIRED
DIRECTLY OR INDIRECTLY BY, OR ON BEHALF OF, AN
EMPLOYEE BENEFIT PLAN OR OTHER RETIREMENT ARRANGEMENT
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 TRANSFER AND HOLDING
OF A CERTIFICATE AND THE SERVICING, MANAGEMENT AND
OPERATION OF THE TRUST AND ITS ASSETS: (1) 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, ▇▇▇
▇▇-▇▇, ▇▇▇ ▇▇-▇, ▇▇▇ 95-60 OR PTE 96-23 AND (II) WILL
NOT GIVE RISE TO ANY ADDITIONAL OBLIGATIONS ON THE
PART OF THE DEPOSITOR, THE MASTER SERVICER, THE
SECURITIES ADMINISTRATOR OR THE TRUSTEE, WHICH WILL
BE DEEMED REPRESENTED BY AN OWNER OF A BOOK-ENTRY
CERTIFICATE OR A GLOBAL CERTIFICATE OR UNLESS THE
OPINION PROVIDED IN SECTION 5.07 OF THE AGREEMENT IS
PROVIDED."
"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 June 1, 2005, among
Structured Asset Mortgage Investments II Inc., ▇▇▇▇▇ Fargo Bank, N.A. as master
servicer, securities administrator and auction administrator, EMC Mortgage
Corporation, as seller and company and U.S. Bank National Association, 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]
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]
EXHIBIT F-2
FORM OF RULE 144A AND RELATED MATTERS CERTIFICATE
[SELLER] [Date]
U.S. Bank National Association
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Structured Asset Mortgage Investments II Inc.
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Re: Structured Asset Mortgage Investments II Inc., Bear ▇▇▇▇▇▇▇ ARM Trust,
Series 2005-4 Mortgage Pass-Through Certificates, Class B-10 Class B-11
and Class B-12 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:
(x) [ ] an insurance company as defined in Section
2(13) of the Act(1); or
(y) [ ] an investment company registered under the
Investment Company Act or any business
development company as defined in Section
2(a)(48) of the Investment Company Act of
1940; or
(z) [ ] 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
(aa) [ ] 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
(bb) [ ] a business development company as defined in
Section 202(a)(22) of the Investment
Advisers Act of 1940; or
(cc) [ ] 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; or
(dd) [ ] 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
(ee) [ ] 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 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
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 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 to the Pooling and
Servicing Agreement, dated as of June 1, 2005, among Structured Asset Mortgage
Investments II Inc., ▇▇▇▇▇ Fargo Bank, N.A., EMC Mortgage Corporation and U.S.
Bank National Association, 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, 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 holding of a Privately Offered 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 a prohibited transaction exemption,
including, but not limited to, Prohibited Transaction Exemption ("PTE") 84-14,
▇▇▇ ▇▇-▇▇, ▇▇▇ ▇▇-▇, ▇▇▇ ▇▇-▇▇, ▇▇▇ ▇▇-▇▇ and (II) will not give rise to any
additional obligations on the part of the Depositor, the Master Servicer, the
Securities Administrator or the Trustee or (iii) has attached hereto the opinion
specified in Section 5.07 of the 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.
------------------------
(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, which are
neither registered nor required to be registered thereunder, shall be deemed to
be a purchase for the account of such insurance company.
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]
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]
EXHIBIT G
FORM OF CUSTODIAL AGREEMENT
THIS CUSTODIAL AGREEMENT (as amended and supplemented from
time to time, the "Agreement'), dated as of June 30, 2005, by and among U.S.
BANK NATIONAL ASSOCIATION, not individually but solely as trustee under the
Pooling and Servicing Agreement defined below (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"), ▇▇▇▇▇ FARGO BANK, N.A., 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 ▇▇▇▇▇ FARGO BANK, N.A., 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 June 1, 2005, relating to the issuance of Bear
▇▇▇▇▇▇▇ ARM Trust 2005-4, Mortgage Pass-Through Certificates, Series 2005-4 (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 the Depositor or the Master Servicer under the Pooling
and Servicing Agreement and the Servicers 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 custodial 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 the schedule attached hereto (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 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 the Schedule attached hereto (the
"Mortgage Loan Schedule").
(b) Within 90 days of the Closing Date, 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 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, the
Custodian shall review the Mortgage Files as provided in Section 2.02 of the
Pooling and Servicing Agreement and deliver to the Depositor and the Trustee 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.
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 missing from 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 Depositor, the related
Servicer and the Trustee.
Section 2.5. CUSTODIAN TO COOPERATE: RELEASE OF MORTGAGE
FILES. Upon receipt of written notice from the Trustee that the Seller has
repurchased a Mortgage Loan pursuant to Article II of the Pooling and Servicing
Agreement, and that the purchase price therefore has been deposited in the
Master Servicer Collection Account or the Distribution Account, then the
Custodian agrees to promptly release to the 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 promptly to release to the related 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.
From time to time as is appropriate for the servicing or
foreclosure of any Mortgage Loan, including, for this purpose, collection under
any Primary Insurance Policy, the related Servicer (or if the Servicer does not,
the Master Servicer) shall deliver to the Custodian a Request for Release signed
by a Servicing Officer requesting that possession of all of the Mortgage File be
released to the related Servicer and certifying as to the reason for such
release and that such release will not invalidate any insurance coverage
provided in respect of the Mortgage Loan under any of the Insurance Policies.
Upon receipt of the foregoing, the Custodian shall deliver the Mortgage File to
the related Servicer. The related Servicer shall cause each Mortgage File or any
document therein so released to be returned to the Custodian when the need
therefore by the related Servicer no longer exists, unless (i) the Mortgage Loan
has been liquidated and the Liquidation Proceeds relating to the Mortgage Loan
have been deposited in the Master Servicer Collection Account or the
Distribution Account or (ii) the Mortgage File or such document has been
delivered to an attorney, or to a public trustee or other public official as
required by law, for purposes of initiating or pursuing legal action or other
proceedings for the foreclosure of the Mortgaged Property either judicially or
non-judicially, and the related Servicer has delivered to the Custodian a
certificate of a Servicing Officer certifying as to the name and address of the
Person to which such Mortgage File or such document was delivered and the
purpose or purposes of such delivery.
At any time that a Servicer is required to deliver to the
Custodian a Request for Release, the Servicer shall deliver two copies of the
Request for Release if delivered in hard copy or the Servicer may furnish such
Request for Release electronically to the Custodian, in which event the
Servicing Officer transmitting the same shall be deemed to have signed the
Request for Release. In connection with any Request for Release of a Mortgage
File because of a repurchase of a Mortgage Loan, such Request for Release shall
be followed by an assignment of mortgage, without recourse, representation or
warranty from the Trustee to the Seller and the related Mortgage Note shall be
endorsed without recourse by the Trustee and be returned to the Seller. In
connection with any Request for Release of a Mortgage File because of the
payment in full of a Mortgage Loan, 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.
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 or substitution agreement has been completed by forwarding
to the Custodian the original of such assumption or substitution 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 AS BAILEE AND AGENT OF THE TRUSTEE.
With respect to each Mortgage Note, Mortgage and other documents constituting
each Mortgage File which are delivered to the Custodian, the Custodian is
exclusively the bailee and custodial agent of the Trustee and has no
instructions to hold any Mortgage Note or Mortgage 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 and
in the Pooling and Servicing Agreement. Except upon compliance with the
provisions of Section 2.5 of this Agreement, no Mortgage Note, Mortgage or
Mortgage File shall be delivered by the Custodian to the Depositor, the
Servicers or the Master Servicer or otherwise released from the possession of
the Custodian.
Section 3.2. RESERVED.
Section 3.3. CUSTODIAN MAY OWN CERTIFICATES. The Custodian in
its individual or any other capacity may become the owner or pledgee of
Certificates with the same rights it would have if it were not Custodian.
Section 3.4. MASTER SERVICER TO PAY CUSTODIAN'S FEES AND
EXPENSES. The Master Servicer covenants and agrees to pay to the Custodian from
time to time, and the Custodian shall be entitled to, reasonable compensation
for all services rendered by it in the exercise and performance of any of the
powers and duties hereunder of the Custodian, and the Master Servicer will pay
or reimburse the Custodian upon its request for all reasonable expenses,
disbursements and advances incurred or made by the Custodian in accordance with
any of the provisions of this Agreement (including the reasonable compensation
and the expenses and disbursements of its counsel and of all persons not
regularly in its employ), except any such expense, disbursement or advance as
may arise from its negligence or bad faith or 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 written notice of resignation, the
Trustee shall either take custody of the Mortgage Files itself and give prompt
written notice thereof to the Depositor, the Master Servicer 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 written
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 the 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 Custodian
hereunder, without the execution or filing of any paper or any further act on
the part of any of the parties hereto, anything herein to the contrary
notwithstanding.
Section 3.7. REPRESENTATIONS OF THE CUSTODIAN. The Custodian
hereby represents 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
INCLUDING SECTIONS 5-1401 AND 5-1402 OF NEW YORK GENERAL OBLIGATIONS LAW BUT
OTHERWISE WITHOUT REGARD TO CONFLICT OF LAW PRINCIPALS.
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, 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.
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.
CUSTODIAL AGREEMENT
G-7
IN WITNESS WHEREOF, this Agreement is executed as of the date
first above written.
Address: U.S. BANK NATIONAL ASSOCIATION, not
individually but solely as Trustee
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ By:
-------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇
Attention: Title: Vice President
Telecopy:
Confirmation:
Address: STRUCTURED ASSET MORTGAGE
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ INVESTMENTS II INC.
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
By:
-------------------------------
Name:
Title:
Address: ▇▇▇▇▇ FARGO BANK, N.A.,
-----------------------------------
as Master Servicer
▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
By:
-------------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇
Title: Vice President
Address: ▇▇▇▇▇ FARGO BANK, N.A.,
-----------------------------------
as Custodian
▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
By:
-------------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇
Title: Vice President
STATE OF MASSACHUSETTS )
)ss.:
COUNTY OF SUFFOLK )
On the 30th day of June 2005 before me, a notary public in and
for said State, personally appeared ▇▇▇▇▇ ▇▇▇▇▇, known to me to be a Vice
President of U.S. 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 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]
STATE OF MARYLAND )
) ss.:
COUNTY OF ▇▇▇▇▇▇ )
On the 30th day of June 2005 before me, a notary public in and
for said State, personally appeared ▇▇▇▇▇▇ ▇▇▇▇▇▇, known to me to be an Vice
President of ▇▇▇▇▇ Fargo Bank, N.A., 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]
STATE OF NEW YORK )
)ss.:
COUNTY OF NEW YORK )
On the 30th day of June 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
[Notarial Seal]
STATE OF MARYLAND )
)ss.:
COUNTY OF ▇▇▇▇▇▇ )
On the 30th day of June 2005 before me, a notary public in and
for said State, personally appeared ▇▇▇▇▇▇ ▇▇▇▇▇▇, known to me to be an Vice
President of ▇▇▇▇▇ Fargo Bank, N.A., one of the corporations that executed the
within instrument, and also known to me to be the person who executed it on
behalf of said corporation, and acknowledged to me that such corporation
executed the within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my
official seal the day and year in this certificate first above written.
-----------------------------------
Notary Public
[Notarial Seal]
EXHIBIT ONE
FORM OF CUSTODIAN INITIAL CERTIFICATION
June 30, 2005
U.S. Bank National Association Structured Asset Mortgage Investments II Inc. ▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇
▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: Structured Asset Mortgage Investments II Inc.
Bear ▇▇▇▇▇▇▇ ARM Trust 2005-4, Mortgage Pass-Through Certificates, Series 2005-4
Re: Custodial Agreement, dated as of June 30, 2005, by and among U.S. Bank
National Association, Structured Asset Mortgage Investments II Inc. and
▇▇▇▇▇ Fargo Bank, N.A. relating to Bear ▇▇▇▇▇▇▇ ARM Trust 2005-4,
Mortgage Pass-Through Certificates, Series 2005-4
-----------------------------------------------------------------------
Ladies and Gentlemen:
In accordance with Section 2.3(a) of the above-captioned
Custodial Agreement and, subject to Section 2.02(a) 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.
▇▇▇▇▇ FARGO BANK, N.A.
By:
-------------------------------
Name:
Title:
EXHIBIT TWO
FORM OF CUSTODIAN INTERIM CERTIFICATION
___________, 20__
U.S. Bank National Association Structured Asset Mortgage Investments II Inc. ▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇
▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: Structured Asset Mortgage Investments II Inc.
Bear ▇▇▇▇▇▇▇ ARM Trust 2005-4, Mortgage Pass-Through Certificates, Series 2005-4
Re: Custodial Agreement, dated as of June 30, 2005, by and among U.S. Bank
National Association, Structured Asset Mortgage Investments II Inc. and
▇▇▇▇▇ Fargo Bank, N.A. relating to Bear ▇▇▇▇▇▇▇ ARM Trust 2005-4,
Mortgage Pass-Through Certificates, Series 2005-4
-----------------------------------------------------------------------
Ladies and Gentlemen:
In accordance with Section 2.3(b) of the above-captioned
Custodial Agreement and, subject to Section 2.02(a) of the Pooling and Servicing
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 relate 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.
▇▇▇▇▇ FARGO BANK, N.A.
By:
-------------------------------
Name:
Title:
EXHIBIT THREE
FORM OF CUSTODIAN FINAL CERTIFICATION
_______, 20__
U.S. Bank National Association Structured Asset Mortgage Investments II Inc. ▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇
▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: Structured Asset Mortgage Investments II Inc.
Bear ▇▇▇▇▇▇▇ ARM Trust 2005-4, Mortgage Pass-Through Certificates, Series 2005-4
Re: Custodial Agreement, dated as of June 30, 2005, by and among U.S.
Bank National Association, Structured Asset Mortgage Investments II
Inc. and ▇▇▇▇▇ Fargo Bank , National Association relating to Bear
▇▇▇▇▇▇▇ ARM Trust 2005-4, Mortgage Pass-Through Certificates, Series
2005-4 __________________________________.
---------------------------------------------------------------------
Ladies and Gentlemen:
In accordance with Section 2.3(c) of the above-captioned
Custodial Agreement and, subject to Section 2.02(b) of the Pooling and Servicing
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 relate 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
or in the Pooling and Servicing Agreement, as applicable.
▇▇▇▇▇ FARGO BANK, N.A.
By:
-------------------------------
Name:
Title:
EXHIBIT H-1
SERVICING AGREEMENT
BANK OF AMERICA, N.A.
[Provided upon request]
EXHIBIT H-2
SERVICING AGREEMENT
COUNTRYWIDE HOME LOANS SERVICING LP
[Provided upon request]
EXHIBIT H-3
SERVICING AGREEMENT
EMC MORTGAGE CORPORATION
[Provided upon request]
EXHIBIT H-4
SERVICING AGREEMENT
NATIONAL CITY MORTGAGE CORPORATION
[Provided upon request]
EXHIBIT H-5
SERVICING AGREEMENT
CHEVY CHASE BANK
[Provided upon request]
EXHIBIT H-6
SERVICING AGREEMENT
▇▇▇▇▇ FARGO HOME MORTGAGE, INC.
[Provided upon request]
EXHIBIT H-7
SERVICING AGREEMENT
HOMEBANC MORTGAGE CORPORATION
[Provided upon request]
EXHIBIT I
ASSIGNMENT AGREEMENTS
[Provided upon request]
EXHIBIT J
FORM OF MORTGAGE LOAN PURCHASE AGREEMENT
MORTGAGE LOAN PURCHASE AGREEMENT, dated as of June 30, 2005,
as amended and supplemented by any and all amendments hereto (collectively, the
"AGREEMENT"), by and between EMC MORTGAGE CORPORATION, a Delaware corporation
(the "MORTGAGE LOAN SELLER") and STRUCTURED ASSET MORTGAGE INVESTMENTS II INC.,
a Delaware corporation (the "PURCHASER").
Upon the terms and subject to the conditions of this
Agreement, the Mortgage Loan Seller agrees to sell, and the Purchaser agrees to
purchase, certain conventional, first lien mortgage loans secured primarily by
one- to four-family residential properties and individual condominium units
(collectively, the "MORTGAGE Loans") as described herein. The Purchaser intends
to deposit the Mortgage Loans into a trust fund (the "TRUST FUND") and create
Bear ▇▇▇▇▇▇▇ ARM Trust 2005-4, Mortgage Pass-Through Certificates, Series 2005-4
(the "CERTIFICATES"), under a pooling and servicing agreement, to be dated as of
June 1, 2005 (the "POOLING AND SERVICING AGREEMENT"), among the Purchaser, as
depositor, ▇▇▇▇▇ Fargo Bank, N.A., as master servicer and securities
administrator, U.S. Bank National Association, as trustee (the "TRUSTEE") and
EMC Mortgage Corporation, as seller and company.
The Purchaser has filed with the Securities and Exchange
Commission (the "COMMISSION") a registration statement on Form S-3 (Number
333-120916) relating to its Mortgage Pass-Through Certificates and the offering
of certain series thereof (including certain classes of the Certificates) from
time to time in accordance with Rule 415 under the Securities Act of 1933, as
amended, and the rules and regulations of the Commission promulgated thereunder
(the "SECURITIES ACT"). Such registration statement, when it became effective
under the Securities Act, and the prospectus relating to the public offering of
certain classes of the Certificates by the Purchaser (the "PUBLIC OFFERING"), as
each may be amended or supplemented from time to time pursuant to the Securities
Act or otherwise, are referred to herein as the "REGISTRATION STATEMENT" and the
"PROSPECTUS," respectively. The "PROSPECTUS SUPPLEMENT" shall mean that
supplement, dated June 28, 2005, to the Prospectus, dated December 20, 2004,
relating to certain classes of the Certificates. With respect to the Public
Offering of certain classes of the Certificates, the Purchaser and Bear, ▇▇▇▇▇▇▇
& Co. Inc. ("BEAR ▇▇▇▇▇▇▇") have entered into a terms agreement dated as of June
28, 2005 to an underwriting agreement dated January 25, 2005, between the
Purchaser and Bear ▇▇▇▇▇▇▇ (together, the "UNDERWRITING AGREEMENT").
Now, therefore, in consideration of the premises and the
mutual agreements set forth herein, the parties hereto agree as follows:
ARTICLE V. DEFINITIONS. CERTAIN TERMS ARE DEFINED HEREIN.
CAPITALIZED TERMS USED HEREIN BUT NOT DEFINED HEREIN SHALL HAVE THE MEANINGS
SPECIFIED IN THE POOLING AND SERVICING AGREEMENT. THE FOLLOWING OTHER TERMS ARE
DEFINED AS FOLLOWS:
ACQUISITION PRICE: Cash in an amount equal to $______ (plus
$______ in accrued interest).(2)
BEAR ▇▇▇▇▇▇▇: Bear, ▇▇▇▇▇▇▇ & Co. Inc.
CLOSING DATE: June 30, 2005.
CUT-OFF DATE: June 1, 2005.
CUT-OFF DATE BALANCE: $1,617,125,371.
DELETED MORTGAGE LOAN: A Mortgage Loan replaced or to be
replaced by a Substitute Mortgage Loan.
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.
(2) Please contact Bear, Stearms & Co. Inc. for Purchase Price.
MASTER SERVICER: ▇▇▇▇▇ Fargo Bank, N.A..
MERS: Mortgage Electronic Registration Systems, Inc., a
corporation organized and existing under the laws of the State of Delaware, or
any successor thereto.
MERS(R) SYSTEM: The system of recording transfers of Mortgages
electronically maintained by MERS.
MOODY'S: ▇▇▇▇▇'▇ Investors Service, Inc., or its successors in
interest.
MORTGAGE: The mortgage or deed of trust creating a first lien
on an interest in real property securing a Mortgage Note.
MORTGAGE FILE: The items referred to in EXHIBIT 1 pertaining
to a particular Mortgage Loan and any additional documents required to be added
to such documents pursuant to this Agreement or the Pooling and Servicing
Agreement.
MORTGAGE INTEREST RATE: The annual rate of interest borne by a
Mortgage Note as stated therein.
MORTGAGOR: The obligor(s) on a Mortgage Note.
NET RATE: For each Mortgage Loan, the Mortgage Interest Rate
for such Mortgage Loan less the Servicing Fee Rate and the Lender-Paid PMI Rate
(if applicable).
OPINION OF COUNSEL: A written opinion of counsel, who may be
counsel for the Mortgage Loan Seller or the Purchaser, reasonably acceptable to
the Trustee.
PERSON: Any legal person, including any individual,
corporation, partnership, joint venture, association, joint stock company,
trust, unincorporated organization or government or any agency or political
subdivision thereof.
PURCHASE PRICE: With respect to any Mortgage Loan (or any
property acquired with respect thereto) required to be repurchased by the
Mortgage Loan Seller pursuant to this Agreement or Article II of the Pooling and
Servicing 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 at the date of the acquisition), plus (b)
accrued but unpaid interest on the Outstanding Principal Balance at the related
Mortgage Interest Rate, through and including the last day of the month of
repurchase, plus (c) any unreimbursed Monthly Advances and servicing advances
payable to the Servicer of the Mortgage Loan and (ii) any costs and damages (if
any) incurred by the Trust in connection with any violation of such Mortgage
Loan of any anti-predatory lending laws.
RATING AGENCIES: Standard & Poor's and Moody's, each a "RATING
AGENCY."
SECURITIES ACT: The Securities Act of 1933, as amended.
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.
SERVICING AGREEMENTS: Shall have the meaning assigned to such
term in the Pooling and Servicing Agreement.
STANDARD & POOR'S: Standard & Poor's, a division of The
▇▇▇▇▇▇-▇▇▇▇ Companies, Inc. or its successors in interest.
SUBSTITUTE MORTGAGE LOAN: A mortgage loan substituted for a
Deleted Mortgage Loan which must meet, on the date of such substitution, the
requirements stated herein and in the Pooling and Servicing Agreement with
respect to such substitution; upon such substitution, such mortgage loan shall
be a "Mortgage Loan" hereunder.
VALUE: The value of the Mortgaged Property at the time of
origination of the related Mortgage Loan, such value being the lesser of (i) the
value of such property set forth in an appraisal accepted by the applicable
originator of the Mortgage Loan or (ii) the sales price of such property at the
time of origination.
ARTICLE VI. PURCHASE AND SALE OF THE MORTGAGE LOANS AND
RELATED RIGHTS. SECTION 6.1.UPON SATISFACTION OF THE CONDITIONS SET FORTH IN
SECTION 10 HEREOF, THE MORTGAGE LOAN SELLER AGREES TO SELL, AND THE PURCHASER
AGREES TO PURCHASE MORTGAGE LOANS HAVING AN AGGREGATE OUTSTANDING PRINCIPAL
BALANCE AS OF THE CUT-OFF DATE EQUAL TO THE CUT-OFF DATE BALANCE.
Section 6.2. The closing for the purchase and sale of the
Mortgage Loans and the closing for the issuance of the Certificates will take
place on the Closing Date at the office of the Purchaser's counsel in New York,
New York or such other place as the parties shall agree.
Section 6.3. Upon the satisfaction of the conditions set forth
in Section 10 hereof, on the Closing Date, the Purchaser shall pay to the
Mortgage Loan Seller the Acquisition Price for the Mortgage Loans in immediately
available funds by wire transfer to such account or accounts as shall be
designated by the Mortgage Loan Seller.
Section 6.4. In addition to the foregoing, on the Closing Date
the Mortgage Loan Seller assigns to the Purchaser all of its right, title and
interest in the Servicing Agreements (other than its right to enforce the
representations and warranties set forth therein).
ARTICLE VII. MORTGAGE LOAN SCHEDULES. THE MORTGAGE LOAN SELLER
AGREES TO PROVIDE TO THE PURCHASER AS OF THE DATE HEREOF A PRELIMINARY LISTING
OF THE MORTGAGE LOANS (THE "PRELIMINARY MORTGAGE LOAN SCHEDULE") SETTING FORTH
THE INFORMATION LISTED ON EXHIBIT 2 TO THIS AGREEMENT WITH RESPECT TO EACH OF
THE MORTGAGE LOANS BEING SOLD BY THE MORTGAGE LOAN SELLER. IF THERE ARE CHANGES
TO THE PRELIMINARY MORTGAGE LOAN SCHEDULE, THE MORTGAGE LOAN SELLER SHALL
PROVIDE TO THE PURCHASER AS OF THE CLOSING DATE A FINAL SCHEDULE (THE "FINAL
MORTGAGE LOAN SCHEDULE") SETTING FORTH THE INFORMATION LISTED ON EXHIBIT 2 TO
THIS AGREEMENT WITH RESPECT TO EACH OF THE MORTGAGE LOANS BEING SOLD BY THE
MORTGAGE LOAN SELLER TO THE PURCHASER. THE FINAL MORTGAGE LOAN SCHEDULE SHALL BE
DELIVERED TO THE PURCHASER ON THE CLOSING DATE, SHALL BE ATTACHED TO AN
AMENDMENT TO THIS AGREEMENT TO BE EXECUTED ON THE CLOSING DATE BY THE PARTIES
HERETO AND SHALL BE IN FORM AND SUBSTANCE MUTUALLY AGREED TO BY THE MORTGAGE
LOAN SELLER AND THE PURCHASER (THE "AMENDMENT"). IF THERE ARE NO CHANGES TO THE
PRELIMINARY MORTGAGE LOAN SCHEDULE, THE PRELIMINARY MORTGAGE LOAN SCHEDULE SHALL
BE THE FINAL MORTGAGE LOAN SCHEDULE FOR ALL PURPOSES HEREOF.
ARTICLE VIII. MORTGAGE LOAN TRANSFER.
Section 8.1. The Purchaser will be entitled to all scheduled
payments of principal and interest on the Mortgage Loans due after the Cut-off
Date (regardless of when actually collected) and all payments thereon, other
than scheduled principal and interest due on or before the Cut-off Date but
received after the Cut-off Date. The Mortgage Loan Seller will be entitled to
all scheduled payments of principal and interest on the Mortgage Loans due on or
before the Cut-off Date (including payments collected after the Cut-off Date)
and all payments thereon, other than scheduled principal and interest due after
the Cut-off Date but received on or before the Cut-off Date. Such principal
amounts and any interest thereon belonging to the Mortgage Loan Seller as
described above will not be included in the aggregate outstanding principal
balance of the Mortgage Loans as of the Cut-off Date as set forth on the Final
Mortgage Loan Schedule.
Section 8.2. Pursuant to various conveyancing documents to be
executed on the Closing Date and pursuant to the Pooling and Servicing
Agreement, the Purchaser will assign on the Closing Date all of its right, title
and interest in and to the Mortgage Loans to the Trustee for the benefit of the
Certificateholders. In connection with the transfer and assignment of the
Mortgage Loans, the Mortgage Loan Seller has delivered or will deliver or cause
to be delivered to the Trustee by the Closing Date or such later date as is
agreed to by the Purchaser and the Mortgage Loan Seller (each of the Closing
Date and such later date is referred to as a "MORTGAGE FILE DELIVERY DATE"), the
items of each Mortgage File, PROVIDED, HOWEVER, that in lieu of the foregoing,
the Mortgage Loan Seller may deliver the following documents, under the
circumstances set forth below: (i) 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
Mortgage Loan Seller in time to permit their delivery as specified above, the
Mortgage Loan Seller may deliver a true copy thereof with a certification by the
Mortgage Loan Seller, 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"; (ii) in lieu of the Security Instrument, assignments
to the Trustee or intervening assignments thereof, if the applicable
jurisdiction retains the originals of such documents (as evidenced by a
certification from the Mortgage Loan Seller to such effect) the Mortgage Loan
Seller may deliver photocopies of such documents containing an original
certification by the judicial or other governmental authority of the
jurisdiction where such documents were recorded; (iii) in lieu of the Mortgage
Notes relating to the Mortgage Loans, each identified in the list delivered by
the Purchaser to the Trustee on the Closing Date and attached hereto as Exhibit
5, the Mortgage Loan Seller may deliver lost note affidavits and indemnities of
the Mortgage Loan Seller; and (iv) the Mortgage Loan Seller shall not be
required to deliver intervening assignments or Mortgage Note endorsements
between the related Underlying Seller and the Mortgage Loan Seller, between the
Mortgage Loan Seller 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 Mortgage Loan Seller, in lieu of delivering the above documents, may deliver
to the Trustee a certification by the Mortgage Loan Seller or the Master
Servicer to such effect and shall deposit all amounts paid in respect of such
Mortgage Loans in the Master Servicer Collection Account on the Closing Date.
The Mortgage Loan Seller shall deliver such original documents (including any
original documents as to which certified copies had previously been delivered)
or such certified copies to the Trustee promptly after they are received. The
Mortgage Loan Seller shall cause the Mortgage and intervening assignments, if
any, and the assignment of the Security Instrument to be recorded not later than
180 days after the Closing Date, unless such assignment is not required to be
recorded under the terms set forth in Section 6(a) hereof.
Section 8.3. In connection with the assignment of any Mortgage
Loan registered on the MERS(R) System, the Mortgage Loan Seller further agrees
that it will cause, at the Mortgage Loan Seller's own expense, within 30 days
after the Closing Date, the MERS(R) System to indicate that such Mortgage Loans
have been assigned by the Mortgage Loan Seller to the Purchaser and by the
Purchaser to the Trustee in accordance with this Agreement for the benefit of
the Certificateholders by including (or deleting, in the case of Mortgage Loans
which are repurchased in accordance with this Agreement) in such computer files
(a) the code in the field which identifies the specific Trustee and (b) the code
in the field "Pool Field" which identifies the series of the Certificates issued
in connection with such Mortgage Loans. The Mortgage Loan Seller further agrees
that it will not, and will not permit any Servicer or the Master Servicer to,
and the Master Servicer agrees that it will not, alter the codes referenced in
this paragraph with respect to any Mortgage Loan during the term of the Pooling
and Servicing Agreement unless and until such Mortgage Loan is repurchased in
accordance with the terms of the Pooling and Servicing Agreement.
Section 8.4. The Mortgage Loan Seller and the Purchaser
acknowledge hereunder that all of the Mortgage Loans and the related servicing
will ultimately be assigned to U.S. Bank National Association, as Trustee for
the Certificateholders, on the date hereof.
ARTICLE IX. EXAMINATION OF MORTGAGE FILES.
Section 9.1. On or before the Mortgage File Delivery Date, the
Mortgage Loan Seller will have made the Mortgage Files available to the
Purchaser or its agent for examination which may be at the offices of the
Trustee or the Mortgage Loan Seller and/or the Mortgage Loan Seller's custodian.
The fact that the Purchaser or its agent has conducted or has failed to conduct
any partial or complete examination of the Mortgage Files shall not affect the
Purchaser's rights to demand cure, repurchase, substitution or other relief as
provided in this Agreement. In furtherance of the foregoing, the Mortgage Loan
Seller shall make the Mortgage Files available to the Purchaser or its agent
from time to time so as to permit the Purchaser to confirm the Mortgage Loan
Seller's compliance with the delivery and recordation requirements of this
Agreement and the Pooling and Servicing Agreement. In addition, upon request of
the Purchaser, the Mortgage Loan Seller agrees to provide to the Purchaser, Bear
▇▇▇▇▇▇▇ and to any investors or prospective investors in the Certificates
information regarding the Mortgage Loans and their servicing, to make the
Mortgage Files available to the Purchaser, Bear ▇▇▇▇▇▇▇ and to such investors or
prospective investors (which may be at the offices of the Mortgage Loan Seller
and/or the Mortgage Loan Seller's custodian) and to make available personnel
knowledgeable about the Mortgage Loans for discussions with the Purchaser, Bear
▇▇▇▇▇▇▇ and such investors or prospective investors, upon reasonable request
during regular business hours, sufficient to permit the Purchaser, Bear ▇▇▇▇▇▇▇
and such investors or potential investors to conduct such due diligence as any
such party reasonably believes is appropriate.
Section 9.2. Pursuant to the Pooling and Servicing Agreement,
on the Closing Date the Custodian, on behalf of the Trustee, for the benefit of
the Certificateholders, will acknowledge receipt of each Mortgage Loan, by
delivery to the Mortgage Loan Seller, the Purchaser and the Trustee of an
initial certification in the form attached as Exhibit One to the Custodial
Agreement.
Section 9.3. Pursuant to the Pooling and Servicing Agreement,
within 90 days of 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 will review or shall cause the Custodian to review items
of the Mortgage Files as set forth on EXHIBIT 1 and will deliver to the Mortgage
Loan Seller, the Purchaser and the Trustee an interim certification
substantially in the form of Exhibit Two to the Custodial Agreement. If the
Trustee or Custodian, as its agent, finds any document listed on EXHIBIT 1 not
to have been executed or received, or to be unrelated, determined on the basis
of the Mortgagor name, original principal balance and loan number, to the
Mortgage Loans identified in the Final Mortgage Loan Schedule or to appear
defective on its face (a "MATERIAL DEFECT"), the Trustee or the Custodian, as
its agent, shall promptly notify the Mortgage Loan Seller of such Material
Defect. The Mortgage Loan Seller shall correct or cure any such Material Defect
within 90 days from the date of notice from the Trustee or the Custodian, as its
agent, of the Material Defect and if the Mortgage Loan Seller fails to correct
or cure such Material Defect within such period and such defect materially and
adversely affects the interests of the Certificateholders in the related
Mortgage Loan, the Mortgage Loan Seller will, in accordance with the terms of
the Pooling and Servicing Agreement, within 90 days of the date of notice,
provide the Trustee with a Substitute Mortgage Loan (if within two years of the
Closing Date) or purchase the related Mortgage Loan at the applicable Purchase
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, HOWEVER, that if such defect relates
solely to the inability of the Mortgage Loan Seller to deliver the original
Security Instrument or intervening assignments thereof, or a certified copy
because the originals of such documents, or a certified copy, have not been
returned by the applicable jurisdiction, the Mortgage Loan Seller shall not be
required to purchase such Mortgage Loan if the Mortgage Loan 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 Mortgage Loan Seller cannot deliver such
original or copy of any document submitted for recording to the appropriate
recording office in the applicable jurisdiction because such document has not
been returned by such office; provided that the Mortgage Loan 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 Mortgage Loan Seller within thirty days of its
receipt of the original recorded document.
Section 9.4. Pursuant to the Pooling and Servicing Agreement,
within 180 days of 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 will review or cause the Custodian to review items of the
Mortgage Files as set forth on EXHIBIT 1 and will deliver to the Mortgage Loan
Seller, the Purchaser and the Trustee a final certification substantially in the
form of Exhibit Three to the Custodial Agreement. If the Trustee or Custodian,
as its agent, finds a Material Defect, the Trustee or the Custodian, as its
agent, shall promptly notify the Mortgage Loan Seller of such Material Defect.
The Mortgage Loan Seller shall correct or cure any such Material Defect within
90 days from the date of notice from the Trustee or the Custodian, as its agent,
of the Material Defect and if the Mortgage Loan Seller fails to correct or cure
such Material Defect within such period and such defect materially and adversely
affects the interests of the Certificateholders in the related Mortgage Loan,
the Mortgage Loan Seller will, in accordance with the terms of the Pooling and
Servicing Agreement, within 90 days of the date of notice, provide the Trustee
with a Substitute Mortgage Loan (if within two years of the Closing Date) or
purchase the related Mortgage Loan at the applicable Purchase 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, HOWEVER, that if such defect relates solely to the
inability of the Mortgage Loan Seller to deliver the original Security
Instrument or intervening assignments thereof, or a certified copy because the
originals of such documents, or a certified copy, have not been returned by the
applicable jurisdiction, the Mortgage Loan Seller shall not be required to
purchase such Mortgage Loan if the Mortgage Loan 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 Mortgage Loan Seller cannot deliver such original or
copy of any document submitted for recording to the appropriate recording office
in the applicable jurisdiction because such document has not been returned by
such office; provided that the Mortgage Loan 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 Mortgage Loan Seller within thirty days of its receipt of the original
recorded document.
Section 9.5. At the time of any substitution, the Mortgage
Loan Seller shall deliver or cause to be delivered the Substitute Mortgage Loan,
the related Mortgage File and any other documents and payments required to be
delivered in connection with a substitution pursuant to the Pooling and
Servicing Agreement. At the time of any purchase or substitution, the Trustee in
accordance with the terms of the Pooling and Servicing Agreement shall (i)
assign to the Mortgage Loan Seller and cause the Custodian to release the
documents (including, but not limited to, the Mortgage, Mortgage Note and other
contents of the Mortgage File) in the possession of the Custodian relating to
the Deleted Mortgage Loan and (ii) execute and deliver such instruments of
transfer or assignment, in each case without recourse, as shall be necessary to
vest in the Mortgage Loan Seller title to such Deleted Mortgage Loan.
ARTICLE X. RECORDATION OF ASSIGNMENTS OF MORTGAGE.
Section 10.1. The Mortgage Loan Seller shall cause each
assignment of the Security Instrument from the Mortgage Loan Seller to the
Trustee to be recorded not later than 180 days after the Closing Date, unless
(a) such recordation is not required by the Rating Agencies or an Opinion of
Counsel has been provided to the Trustee (with a copy to the Custodian) which
states that the recordation of such assignment is not necessary to protect the
interests of the Certificateholders in the related Mortgage Loans or (b) MERS is
identified on the Mortgage or on a properly recorded assignment of the Mortgage,
as the Mortgagee of record solely as nominee for the Mortgage Loan Seller and
its successors and assigns; PROVIDED, HOWEVER, notwithstanding the delivery of
any such Opinion of Counsel, each assignment of Mortgage shall be submitted for
recording by the Mortgage Loan Seller in the manner described above, at no
expense to the Trust Fund or Trustee, 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 Mortgage Loan Seller and, (iv) the
occurrence of a servicing transfer as described in Section 8.02 of the Pooling
and Servicing Agreement.
While each such Mortgage or assignment is being recorded, if
necessary, the Mortgage Loan Seller shall leave or cause to be left with the
Trustee a certified copy of such Mortgage or assignment. All customary recording
fees and reasonable expenses relating to the recordation of the assignments of
mortgage to the Trustee or the Opinion of Counsel, as the case may be, shall be
borne by the Mortgage Loan Seller.
Section 10.2. It is the express intent of the parties hereto
that the conveyance of the Mortgage Loans by the Mortgage Loan Seller to the
Purchaser, as contemplated by this Agreement be, and be treated as, a sale. It
is, further, not the intention of the parties that such conveyance be deemed a
pledge of the Mortgage Loans by the Mortgage Loan Seller to the Purchaser to
secure a debt or other obligation of the Mortgage Loan Seller. However, in the
event that, notwithstanding the intent of the parties, the Mortgage Loans are
held by a court of competent jurisdiction to continue to be property of the
Mortgage Loan Seller, then (i) this Agreement shall also be deemed to be a
security agreement within the meaning of Articles 8 and 9 of the applicable
Uniform Commercial Code; (ii) the transfer of the Mortgage Loans provided for
herein shall be deemed to be a grant by the Mortgage Loan Seller to the
Purchaser of a security interest in all of the Mortgage Loan Seller's right,
title and interest in and to the Mortgage Loans and all amounts payable to the
holders of the Mortgage Loans in accordance with the terms thereof and all
proceeds of the conversion, voluntary or involuntary, of the foregoing into
cash, instruments, securities or other property, to the extent the Purchaser
would otherwise be entitled to own such Mortgage Loans and proceeds pursuant to
Section 4 hereof, including all amounts, other than investment earnings, from
time to time held or invested in any accounts created pursuant to the Pooling
and Servicing Agreement, whether in the form of cash, instruments, securities or
other property; (iii) the possession by the Purchaser or the Trustee of Mortgage
Notes and such other items of property as constitute instruments, money,
negotiable documents or chattel paper shall be deemed to be "possession by the
secured party" for purposes of perfecting the security interest pursuant to
Section 9-313 (or comparable provision) of the applicable Uniform Commercial
Code; and (iv) notifications to persons holding such property, and
acknowledgments, receipts or confirmations from persons holding such property,
shall be deemed notifications to, or acknowledgments, receipts or confirmations
from, financial intermediaries, bailees or agents (as applicable) of the
Purchaser for the purpose of perfecting such security interest under applicable
law. Any assignment of the interest of the Purchaser pursuant to any provision
hereof or pursuant to the Pooling and Servicing Agreement shall also be deemed
to be an assignment of any security interest created hereby. The Mortgage Loan
Seller and the Purchaser shall, to the extent consistent with this Agreement,
take such actions as may be reasonably necessary to ensure that, if this
Agreement were deemed to create a security interest in the Mortgage Loans, 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 Pooling and Servicing Agreement.
ARTICLE XI. REPRESENTATIONS AND WARRANTIES OF MORTGAGE LOAN
SELLER CONCERNING THE MORTGAGE LOANS. THE MORTGAGE LOAN SELLER HEREBY REPRESENTS
AND WARRANTS TO THE PURCHASER AS OF THE CLOSING DATE, OR SUCH OTHER DATE AS MAY
BE SPECIFIED BELOW WITH RESPECT TO EACH MORTGAGE LOAN BEING SOLD BY IT, THAT:
(a) the information set forth in the Mortgage Loan Schedule
hereto is true and correct in all material respects and the information
provided to the Rating Agencies, including the Mortgage Loan level
detail, is true and correct according to the Rating Agency
requirements;
(b) immediately prior to the transfer to the Purchaser, the
Mortgage Loan Seller was the sole owner of beneficial title and holder
of each Mortgage and Mortgage Note relating to the Mortgage Loans and
is conveying the same free and clear of any and all liens, claims,
encumbrances, participation interests, equities, pledges, charges or
security interests of any nature and the Mortgage Loan Seller has full
right and authority to sell or assign the same pursuant to this
Agreement;
(c) to the best of the Mortgage Loan Seller's knowledge, each
Mortgage Loan at the time it was made complied in all material respects
with all applicable laws and regulations, including, without
limitation, usury, equal credit opportunity, disclosure and recording
laws and all applicable anti-predatory lending laws; and to the best of
the Mortgage Loan Seller's knowledge, each Mortgage Loan has been
serviced in all material respects in accordance with all applicable
laws and regulations, including, without limitation, usury, equal
credit opportunity, disclosure and recording laws and all applicable
anti-predatory lending laws and the terms of the related Mortgage Note,
the Mortgage and other loan documents;
(d) there is no monetary default existing under any Mortgage
or the related Mortgage Note and there is no material event which, with
the passage of time or with notice and the expiration of any grace or
cure period, would constitute a default, breach or event of
acceleration; and neither the Mortgage Loan Seller, any of its
affiliates nor any servicer of any related Mortgage Loan has taken any
action to waive any default, breach or event of acceleration; and no
foreclosure action is threatened or has been commenced with respect to
the Mortgage Loan;
(e) the terms of the Mortgage Note and the Mortgage have not
been impaired, waived, altered or modified in any respect, except by
written instruments, (i) if required by law in the jurisdiction where
the Mortgaged Property is located, or (ii) to protect the interests of
the Trustee on behalf of the Certificateholders;
(f) no selection procedure reasonably believed by the Mortgage
Loan Seller to be adverse to the interests of the Certificateholders
was utilized in selecting the Mortgage Loans;
(g) each Mortgage is a valid and enforceable first lien on the
property securing the related Mortgage Note and each Mortgaged Property
is owned by the Mortgagor in fee simple (except with respect to common
areas in the case of condominiums, PUDs and DE MINIMIS PUDs) or by
leasehold for a term longer than the term of the related Mortgage,
subject only to (i) the lien of current real property taxes and
assessments, (ii) covenants, conditions and restrictions, rights of
way, easements and other matters of public record as of the date of
recording of such Mortgage, such exceptions being acceptable to
mortgage lending institutions generally or specifically reflected in
the appraisal obtained in connection with the origination of the
related Mortgage Loan or referred to in the lender's title insurance
policy delivered to the originator of the related Mortgage Loan and
(iii) other matters to which like properties are commonly subject which
do not materially interfere with the benefits of the security intended
to be provided by such Mortgage;
(h) there is no mechanics' lien or claim for work, labor or
material affecting the premises subject to any Mortgage which is or may
be a lien prior to, or equal with, the lien of such Mortgage except
those which are insured against by the title insurance policy referred
to in (xiii) below;
(i) as of the Cut-off Date, to the best of the Mortgage Loan
Seller's knowledge, there was no delinquent tax or assessment lien
against the property subject to any Mortgage, except where such lien
was being contested in good faith and a stay had been granted against
levying on the property;
(j) there is no valid offset, defense or counterclaim to any
Mortgage Note or Mortgage, including the obligation of the Mortgagor to
pay the unpaid principal and interest on such Mortgage Note;
(k) to the best of the Mortgage Loan Seller's knowledge,
except to the extent insurance is in place which will cover such
damage, the physical property subject to any Mortgage is free of
material damage and is in good repair and there is no proceeding
pending or threatened for the total or partial condemnation of any
Mortgaged Property;
(l) to the best of the Mortgage Loan Seller's knowledge, the
Mortgaged Property and all improvements thereon comply with all
requirements of any applicable zoning and subdivision laws and
ordinances;
(m) a lender's title insurance policy (on an ALTA or CLTA
form) or binder, or other assurance of title customary in the relevant
jurisdiction therefor in a form acceptable to ▇▇▇▇▇▇ ▇▇▇ or ▇▇▇▇▇▇▇
Mac, was issued on the date that each Mortgage Loan was created by a
title insurance company which, to the best of the Mortgage Loan
Seller's knowledge, was qualified to do business in the jurisdiction
where the related Mortgaged Property is located, insuring the Mortgage
Loan Seller and its successors and assigns that the Mortgage is a first
priority lien on the related Mortgaged Property in the original
principal amount of the Mortgage Loan. The Mortgage Loan Seller is the
sole insured under such lender's title insurance policy, and such
policy, binder or assurance is valid and remains in full force and
effect, and each such policy, binder or assurance shall contain all
applicable endorsements including a negative amortization endorsement,
if applicable;
(n) at the time of origination, each Mortgaged Property was
the subject of an appraisal which conformed to the underwriting
requirements of the originator of the Mortgage Loan and, the appraisal
is in a form acceptable to ▇▇▇▇▇▇ Mae or FHLMC;
(o) as of the Closing Date, the improvements on each Mortgaged
Property securing a Mortgage Loan are insured (by an insurer which is
acceptable to the Mortgage Loan Seller) against loss by fire and such
hazards as are covered under a standard extended coverage endorsement
in the locale in which the Mortgaged Property is located, in an amount
which is not less than the lesser of the maximum insurable value of the
improvements securing such Mortgage Loan or the outstanding principal
balance of the Mortgage Loan, but in no event in an amount less than an
amount that is required to prevent the Mortgagor from being deemed to
be a co-insurer thereunder; if the improvement on the Mortgaged
Property is a condominium unit, it is included under the coverage
afforded by a blanket policy for the condominium project; if upon
origination of the related Mortgage Loan, the improvements on the
Mortgaged Property were in an area identified as a federally designated
flood area, a flood insurance policy is in effect in an amount
representing coverage not less than the least of (i) the outstanding
principal balance of the Mortgage Loan, (ii) the restorable cost of
improvements located on such Mortgaged Property or (iii) the maximum
coverage available under federal law; and each Mortgage obligates the
Mortgagor thereunder to maintain the insurance referred to above at the
Mortgagor's cost and expense;
(p) each Mortgage Loan constitutes a "qualified mortgage"
under Section 860G(a)(3)(A) of the Code and Treasury Regulation Section
1.860G-2(a)(1);
(q) Each Mortgage Loan was originated with an initial
mortgagee of record, or was originated in conformity with the
underwriting standards of and purchased by a subsequent mortgagee, that
was either (x) a savings and loan association, savings bank, commercial
bank, credit union, insurance company, or similar institution which is
supervised and examined by a Federal or State authority or (y) a
mortgagee approved by the Secretary of Housing and Urban Development
pursuant to sections 203 and 211 of the National Housing Act.
(r) none of the Mortgage Loans are (a) loans subject to 12 CFR
Part 226.31, 12 CFR Part 226.32 or 12 CFR Part 226.34 of Regulation Z,
the regulation implementing TILA, which implements the Home Ownership
and Equity Protection Act of 1994, as amended or (b) classified and/or
defined as a "high cost home loan" under any federal, state or local
law, including, but not limited to, the States of Georgia or North
Carolina;
(s) the information set forth in Schedule A of the Prospectus
Supplement with respect to the Mortgage Loans is true and correct in
all material respects; and
(t) no Mortgage Loan is a High Cost Loan or Covered Loan, as
applicable (as such terms are defined in the then current Standard &
Poor's LEVELS(R) Glossary, which is now, Version 5.6b Revised, Appendix
E, attached hereto as Exhibit 6) and no Mortgage Loan originated on or
after October 1, 2002 through March 6, 2003 is governed by the "Georgia
Fair Lending Act."
(xxi) each Mortgage Loan was originated in accordance with the
underwriting guidelines of the related originator;
(xxii) each original Mortgage has been recorded or is in the
process of being recorded in accordance with the requirements of
Section 2.01 of the Pooling and Servicing Agreement in the appropriate
jurisdictions wherein such recordation is required to perfect the lien
thereof for the benefit of the Trust Fund;
(xxiii) the related Mortgage File contains each of the
documents and instruments listed in Section 2.01 of the Pooling and
Servicing Agreement, subject to any exceptions, substitutions and
qualifications as are set forth in such Section;
(xxiv) the Mortgage Loans are currently being serviced in
accordance with accepted servicing practices;
(xxv) at the time of origination, each Mortgaged Property was
the subject of an appraisal which conformed to the underwriting
requirements of the originator of the Mortgage Loan, and the appraisal
is in a form which was acceptable to ▇▇▇▇▇▇ ▇▇▇ or FHLMC at the time of
origination; and
(xxvi) none of the Mortgage Loans that are secured by property
located in the State of Illinois are in violation of the provisions of
the Illinois Interest Act.
It is understood and agreed that the representations and
warranties set forth in this Section 7 will inure to the benefit of the
Purchaser, its successors and assigns, notwithstanding any restrictive or
qualified endorsement on any Mortgage Note or assignment of Mortgage or the
examination of any Mortgage File. Upon any substitution for a Mortgage Loan, the
representations and warranties set forth above shall be deemed to be made by the
Mortgage Loan Seller as to any Substitute Mortgage Loan as of the date of
substitution.
Upon discovery or receipt of notice by the Mortgage Loan
Seller, the Purchaser or the Trustee of a breach of any representation or
warranty of the Mortgage Loan Seller set forth in this Section 7 which
materially and adversely affects the value of the interests of the Purchaser,
the Certificateholders or the Trustee in any of the Mortgage Loans delivered to
the Purchaser pursuant to this Agreement, the party discovering or receiving
notice of such breach shall give prompt written notice to the others. In the
case of any such breach of a representation or warranty set forth in this
Section 7, within 90 days from the date of discovery by the Mortgage Loan
Seller, or the date the Mortgage Loan Seller is notified by the party
discovering or receiving notice of such breach (whichever occurs earlier), the
Mortgage Loan Seller will (i) cure such breach in all material respects, (ii)
purchase the affected Mortgage Loan at the applicable Purchase Price or (iii) if
within two years of the Closing Date, substitute a qualifying Substitute
Mortgage Loan in exchange for such Mortgage Loan. The obligations of the
Mortgage Loan Seller to cure, purchase or substitute a qualifying Substitute
Mortgage Loan shall constitute the Purchaser's, the Trustee's and the
Certificateholder's sole and exclusive remedy under this Agreement or otherwise
respecting a breach of representations or warranties hereunder with respect to
the Mortgage Loans, except for the obligation of the Mortgage Loan Seller to
indemnify the Purchaser for such breach as set forth in and limited by Section
13 hereof.
Any cause of action against the Mortgage Loan Seller or
relating to or arising out of a breach by the Mortgage Loan Seller of any
representations and warranties made in this Section 7 shall accrue as to any
Mortgage Loan upon (i) discovery of such breach by the Mortgage Loan Seller or
notice thereof by the party discovering such breach and (ii) failure by the
Mortgage Loan Seller to cure such breach, purchase such Mortgage Loan or
substitute a qualifying Substitute Mortgage Loan pursuant to the terms hereof.
ARTICLE XII. REPRESENTATIONS AND WARRANTIES CONCERNING THE
MORTGAGE LOAN SELLER. AS OF THE DATE HEREOF AND AS OF THE CLOSING DATE, THE
MORTGAGE LOAN SELLER REPRESENTS AND WARRANTS TO THE PURCHASER AS TO ITSELF IN
THE CAPACITY INDICATED AS FOLLOWS:
Section 12.1. the Mortgage Loan Seller (i) is a corporation
duly organized, validly existing and in good standing under the laws of the
State of Delaware and (ii) is qualified and in good standing 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 Mortgage Loan Seller's business as presently conducted or
on the Mortgage Loan Sellers ability to enter into this Agreement and to
consummate the transactions contemplated hereby;
Section 12.2. the Mortgage Loan Seller 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;
Section 12.3. the execution and delivery by the Mortgage Loan
Seller of this Agreement have been duly authorized by all necessary action on
the part of the Mortgage Loan Seller; 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 Mortgage
Loan Seller or its properties or the charter or by-laws of the Mortgage Loan
Seller, except those conflicts, breaches or defaults which would not reasonably
be expected to have a material adverse effect on the Mortgage Loan Seller's
ability to enter into this Agreement and to consummate the transactions
contemplated hereby;
Section 12.4. the execution, delivery and performance by the
Mortgage Loan Seller 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 and, in connection with the recordation of the
Mortgages, powers of attorney or assignments of Mortgages not yet completed;
Section 12.5. this Agreement has been duly executed and
delivered by the Mortgage Loan Seller and, assuming due authorization, execution
and delivery by the Purchaser, constitutes a valid and binding obligation of the
Mortgage Loan Seller 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);
Section 12.6. there are no actions, suits or proceedings
pending or, to the knowledge of the Mortgage Loan Seller, threatened against the
Mortgage Loan Seller, 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 Mortgage Loan Seller will be determined adversely to the Mortgage Loan
Seller and will if determined adversely to the Mortgage Loan Seller materially
and adversely affect the Mortgage Loan Seller's ability to perform its
obligations under this Agreement; and the Mortgage Loan Seller 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
Section 12.7. the Mortgage Loan Seller's Information (as
defined in Section 13(a) hereof) does not include any untrue statement of a
material fact or omit to state a material fact necessary in order to make the
statements made, in light of the circumstances under which they were made, not
misleading.
ARTICLE XIII. REPRESENTATIONS AND WARRANTIES CONCERNING THE
PURCHASER. AS OF THE DATE HEREOF AND AS OF THE CLOSING DATE, THE PURCHASER
REPRESENTS AND WARRANTS TO THE MORTGAGE LOAN SELLER AS FOLLOWS:
Section 13.1. the Purchaser (i) is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Delaware and (ii) 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 Purchaser's business as presently conducted or on
the Purchaser's ability to enter into this Agreement and to consummate the
transactions contemplated hereby;
Section 13.2. the Purchaser 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;
Section 13.3. the execution and delivery by the Purchaser of
this Agreement have been duly authorized by all necessary corporate action on
the part of the Purchaser; 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
Purchaser or its properties or the articles of incorporation or by-laws of the
Purchaser, except those conflicts, breaches or defaults which would not
reasonably be expected to have a material adverse effect on the Purchaser's
ability to enter into this Agreement and to consummate the transactions
contemplated hereby;
Section 13.4. the execution, delivery and performance by the
Purchaser 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;
Section 13.5. this Agreement has been duly executed and
delivered by the Purchaser and, assuming due authorization, execution and
delivery by the Mortgage Loan Seller, constitutes a valid and binding obligation
of the Purchaser 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);
Section 13.6. there are no actions, suits or proceedings
pending or, to the knowledge of the Purchaser, threatened against the Purchaser,
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 Purchaser
will be determined adversely to the Purchaser and will if determined adversely
to the Purchaser materially and adversely affect the Purchaser's ability to
perform its obligations under this Agreement; and the Purchaser 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
Section 13.7. the Purchaser's Information (as defined in
Section 13(b) hereof) does not include any untrue statement of a material fact
or omit to state a material fact necessary in order to make the statements made,
in light of the circumstances under which they were made, not misleading.
ARTICLE XIV. CONDITIONS TO CLOSING.
Section 14.1. The obligations of the Purchaser under this
Agreement will be subject to the satisfaction, on or prior to the Closing Date,
of the following conditions:
(a) Each of the obligations of the Mortgage Loan Seller
required to be performed at or prior to the Closing Date pursuant to
the terms of this Agreement shall have been duly performed and complied
with in all material respects; all of the representations and
warranties of the Mortgage Loan Seller under this Agreement shall be
true and correct as of the date or dates specified in all material
respects; and no event shall have occurred which, with notice or the
passage of time, would constitute a default under this Agreement, or
the Pooling and Servicing Agreement; and the Purchaser shall have
received certificates to that effect signed by authorized officers of
the Mortgage Loan Seller.
(b) The Purchaser shall have received all of the following
closing documents, in such forms as are agreed upon and reasonably
acceptable to the Purchaser, duly executed by all signatories (other
than the Purchaser) as required pursuant to the respective terms
thereof:
(a) If required pursuant to Section 3 hereof, the
Amendment dated as of the Closing Date and any documents
referred to therein;
(b) If required pursuant to Section 3 hereof, the
Final Mortgage Loan Schedule containing the information set
forth on Exhibit 2 hereto, one copy to be attached to each
counterpart of the Amendment;
(c) The Pooling and Servicing Agreement, in form and
substance reasonably satisfactory to the Trustee and the
Purchaser, and all documents required thereby duly executed by
all signatories;
(d) A certificate of an officer of the Mortgage Loan
Seller dated as of the Closing Date, in a form reasonably
acceptable to the Purchaser, and attached thereto the
resolutions of the Mortgage Loan Seller authorizing the
transactions contemplated by this Agreement, together with
copies of the charter and by-laws of the Mortgage Loan Seller;
(e) One or more opinions of counsel from the Mortgage
Loan Seller's counsel otherwise in form and substance
reasonably satisfactory to the Purchaser, the Trustee and each
Rating Agency;
(f) A letter from each of the Rating Agencies giving
each Class of Certificates set forth on Schedule A the rating
set forth on Schedule A; and
(g) Such other documents, certificates (including
additional representations and warranties) and opinions as may
be reasonably necessary to secure the intended ratings from
each Rating Agency for the Certificates.
(c) The Certificates to be sold to Bear ▇▇▇▇▇▇▇ pursuant to
the Underwriting Agreement and the Purchase Agreement shall have been
issued and sold to Bear ▇▇▇▇▇▇▇.
(d) The Mortgage Loan Seller shall have furnished to the
Purchaser such other certificates of its officers or others and such
other documents and opinions of counsel to evidence fulfillment of the
conditions set forth in this Agreement and the transactions
contemplated hereby as the Purchaser and its counsel may reasonably
request.
Section 14.2. The obligations of the Mortgage Loan Seller
under this Agreement shall be subject to the satisfaction, on or prior to the
Closing Date, of the following conditions:
(a) The obligations of the Purchaser required to be performed
by it on or prior to the Closing Date pursuant to the terms of this
Agreement shall have been duly performed and complied with in all
material respects, and all of the representations and warranties of the
Purchaser under this Agreement shall be true and correct in all
material respects as of the date hereof and as of the Closing Date, and
no event shall have occurred which would constitute a breach by it of
the terms of this Agreement, and the Mortgage Loan Seller shall have
received a certificate to that effect signed by an authorized officer
of the Purchaser.
(b) The Mortgage Loan Seller shall have received copies of all
of the following closing documents, in such forms as are agreed upon
and reasonably acceptable to the Mortgage Loan Seller, duly executed by
all signatories other than the Mortgage Loan Seller as required
pursuant to the respective terms thereof:
(a) If required pursuant to Section 3 hereof, the
Amendment dated as of the Closing Date and any documents
referred to therein;
(b) The Pooling and Servicing Agreement, in form and
substance reasonably satisfactory to the Mortgage Loan Seller,
and all documents required thereby duly executed by all
signatories;
(c) A certificate of an officer of the Purchaser
dated as of the Closing Date, in a form reasonably acceptable
to the Mortgage Loan Seller, and attached thereto the
resolutions of the Purchaser authorizing the transactions
contemplated by this Agreement and the Pooling and Servicing
Agreement, together with copies of the Purchaser's articles of
incorporation, and evidence as to the good standing of the
Purchaser dated as of a recent date;
(d) One or more opinions of counsel from the
Purchaser's counsel in form and substance reasonably
satisfactory to the Mortgage Loan Seller;
(e) Such other documents, certificates (including
additional representations and warranties) and opinions as may
be reasonably necessary to secure the intended rating from
each Rating Agency for the Certificates;
ARTICLE XV. FEES AND EXPENSES. SUBJECT TO SECTION 16 HEREOF,
THE MORTGAGE LOAN SELLER SHALL PAY ON THE CLOSING DATE OR SUCH LATER DATE AS MAY
BE AGREED TO BY THE PURCHASER (I) THE FEES AND EXPENSES OF THE MORTGAGE LOAN
SELLER'S ATTORNEYS AND THE REASONABLE FEES AND EXPENSES OF THE PURCHASER'S
ATTORNEYS, (II) THE FEES AND EXPENSES OF DELOITTE & TOUCHE LLP, (III) THE FEE
FOR THE USE OF PURCHASER'S REGISTRATION STATEMENT BASED ON THE AGGREGATE
ORIGINAL PRINCIPAL AMOUNT OF THE CERTIFICATES AND THE FILING FEE OF THE
COMMISSION AS IN EFFECT ON THE DATE ON WHICH THE REGISTRATION STATEMENT WAS
DECLARED EFFECTIVE, (IV) THE FEES AND EXPENSES INCLUDING COUNSEL'S FEES AND
EXPENSES IN CONNECTION WITH ANY "BLUE SKY" AND LEGAL INVESTMENT MATTERS, (V) THE
FEES AND EXPENSES OF THE TRUSTEE WHICH SHALL INCLUDE WITHOUT LIMITATION THE FEES
AND EXPENSES OF THE TRUSTEE (AND THE FEES AND DISBURSEMENTS OF ITS COUNSEL) WITH
RESPECT TO (A) LEGAL AND DOCUMENT REVIEW OF THIS AGREEMENT, THE POOLING AND
SERVICING AGREEMENT, THE CERTIFICATES AND RELATED AGREEMENTS, (B) ATTENDANCE AT
THE CLOSING AND (C) REVIEW OF THE MORTGAGE LOANS TO BE PERFORMED BY THE
CUSTODIAN, (VI) THE EXPENSES FOR PRINTING OR OTHERWISE REPRODUCING THE
CERTIFICATES, THE PROSPECTUS AND THE PROSPECTUS SUPPLEMENT, (VII) THE FEES AND
EXPENSES OF EACH RATING AGENCY (BOTH INITIAL AND ONGOING), (VIII) THE FEES AND
EXPENSES RELATING TO THE PREPARATION AND RECORDATION OF MORTGAGE ASSIGNMENTS
(INCLUDING INTERVENING ASSIGNMENTS, IF ANY AND IF AVAILABLE, TO EVIDENCE A
COMPLETE CHAIN OF TITLE FROM THE ORIGINATOR TO THE TRUSTEE) FROM THE MORTGAGE
LOAN SELLER TO THE TRUSTEE OR THE EXPENSES RELATING TO THE OPINION OF COUNSEL
REFERRED TO IN SECTION 6(A) HEREOF, AS THE CASE MAY BE, AND (IX) MORTGAGE FILE
DUE DILIGENCE EXPENSES AND OTHER OUT-OF-POCKET EXPENSES INCURRED BY THE
PURCHASER IN CONNECTION WITH THE PURCHASE OF THE MORTGAGE LOANS AND BY BEAR
▇▇▇▇▇▇▇ IN CONNECTION WITH THE SALE OF THE CERTIFICATES. THE MORTGAGE LOAN
SELLER ADDITIONALLY AGREES TO PAY DIRECTLY TO ANY THIRD PARTY ON A TIMELY BASIS
THE FEES PROVIDED FOR ABOVE WHICH ARE CHARGED BY SUCH THIRD PARTY AND WHICH ARE
BILLED PERIODICALLY.
ARTICLE XVI. ACCOUNTANTS' LETTERS.
Section 16.1. Deloitte & Touche LLP will review the
characteristics of a sample of the Mortgage Loans described in the Final
Mortgage Loan Schedule and will compare those characteristics to the description
of the Mortgage Loans contained in the Prospectus Supplement under the captions
"Summary of Prospectus Supplement--The Mortgage Loans" and "The Mortgage Pool"
and in Schedule A thereto. The Mortgage Loan Seller will cooperate with the
Purchaser in making available all information and taking all steps reasonably
necessary to permit such accountants to complete the review and to deliver the
letters required of them under the Underwriting Agreement. Deloitte & Touche LLP
will also confirm certain calculations as set forth under the caption "Yield On
The Certificates" in the Prospectus Supplement.
Section 16.2. To the extent statistical information with
respect to the Master Servicer's or a Servicer's servicing portfolio is included
in the Prospectus Supplement under the caption "The Master Servicer and the
Servicers," a letter from the certified public accountant for the Master
Servicer and such Servicer or Servicers will be delivered to the Purchaser dated
the date of the Prospectus Supplement, in the form previously agreed to by the
Mortgage Loan Seller and the Purchaser, with respect to such statistical
information.
ARTICLE XVII. INDEMNIFICATION.
Section 17.1. The Mortgage Loan Seller shall indemnify and
hold harmless the Purchaser and its directors, officers and controlling persons
(as defined in Section 15 of the Securities Act) from and against any loss,
claim, damage or liability or action in respect thereof, to which they or any of
them may become subject, under the Securities Act or otherwise, insofar as such
loss, claim, damage, liability or action arises out of, or is based upon (i) any
untrue statement of a material fact contained in the MORTGAGE LOAN SELLER'S
INFORMATION as identified in EXHIBIT 3, the omission to state in the Prospectus
Supplement or Prospectus (or any amendment thereof or supplement thereto
approved by the Mortgage Loan Seller and in which additional Mortgage Loan
Seller's Information is identified), in reliance upon and in conformity with
Mortgage Loan Seller's Information a material fact required to be stated therein
or necessary to make the statements therein in light of the circumstances in
which they were made, not misleading, (ii) any representation or warranty
assigned or made by the Mortgage Loan Seller in Section 7 or Section 8 hereof
being, or alleged to be, untrue or incorrect, or (iii) any failure by the
Mortgage Loan Seller to perform its obligations under this Agreement; and the
Mortgage Loan Seller shall reimburse the Purchaser and each other indemnified
party for any legal and other expenses reasonably incurred by them in connection
with investigating or defending or preparing to defend against any such loss,
claim, damage, liability or action.
The foregoing indemnity agreement is in addition to any liability which
the Mortgage Loan Seller otherwise may have to the Purchaser or any other such
indemnified party.
Section 17.2. The Purchaser shall indemnify and hold harmless
the Mortgage Loan Seller and its respective directors, officers and controlling
persons (as defined in Section 15 of the Securities Act) from and against any
loss, claim, damage or liability or action in respect thereof, to which they or
any of them may become subject, under the Securities Act or otherwise, insofar
as such loss, claim, damage, liability or action arises out of, or is based upon
(i) any untrue statement of a material fact contained in the PURCHASER'S
INFORMATION as identified in EXHIBIT 4, the omission to state in the Prospectus
Supplement or Prospectus (or any amendment thereof or supplement thereto
approved by the Purchaser and in which additional Purchaser's Information is
identified), in reliance upon and in conformity with the Purchaser's
Information, a material fact required to be stated therein or necessary to make
the statements therein in light of the circumstances in which they were made,
not misleading, (ii) any representation or warranty made by the Purchaser in
Section 9 hereof being, or alleged to be, untrue or incorrect, or (iii) any
failure by the Purchaser to perform its obligations under this Agreement; and
the Purchaser shall reimburse the Mortgage Loan Seller, and each other
indemnified party for any legal and other expenses reasonably incurred by them
in connection with investigating or defending or preparing to defend any such
loss, claim, damage, liability or action. The foregoing indemnity agreement is
in addition to any liability which the Purchaser otherwise may have to the
Mortgage Loan Seller, or any other such indemnified party,
Section 17.3. Promptly after receipt by an indemnified party
under subsection (a) or (b) above of notice of the commencement of any action,
such indemnified party shall, if a claim in respect thereof is to be made
against the indemnifying party under such subsection, notify each party against
whom indemnification is to be sought in writing of the commencement thereof (but
the failure so to notify an indemnifying party shall not relieve it from any
liability which it may have under this Section 13 except to the extent that it
has been prejudiced in any material respect by such failure or from any
liability which it may have otherwise). In case any such action is brought
against any indemnified party, and it notifies an indemnifying party of the
commencement thereof, the indemnifying party will be entitled to participate
therein and, to the extent it may elect by written notice delivered to the
indemnified party promptly (but, in any event, within 30 days) after receiving
the aforesaid notice from such indemnified party, to assume the defense thereof
with counsel reasonably satisfactory to such indemnified party. Notwithstanding
the foregoing, the indemnified party or parties shall have the right to employ
its or their own counsel in any such case, but the fees and expenses of such
counsel shall be at the expense of such indemnified party or parties unless (i)
the employment of such counsel shall have been authorized in writing by one of
the indemnifying parties in connection with the defense of such action, (ii) the
indemnifying parties shall not have employed counsel to have charge of the
defense of such action within a reasonable time after notice of commencement of
the action, or (iii) such indemnified party or parties shall have reasonably
concluded that there is a conflict of interest between itself or themselves and
the indemnifying party in the conduct of the defense of any claim or that the
interests of the indemnified party or parties are not substantially co-extensive
with those of the indemnifying party (in which case the indemnifying parties
shall not have the right to direct the defense of such action on behalf of the
indemnified party or parties), in any of which events such fees and expenses
shall be borne by the indemnifying parties (PROVIDED, HOWEVER, that the
indemnifying party shall be liable only for the fees and expenses of one counsel
in addition to one local counsel in the jurisdiction involved. Anything in this
subsection to the contrary notwithstanding, an indemnifying party shall not be
liable for any settlement or any claim or action effected without its written
consent; PROVIDED, HOWEVER, that such consent was not unreasonably withheld.
Section 17.4. If the indemnification provided for in
paragraphs (a) and (b) of this Section 13 shall for any reason be unavailable to
an indemnified party in respect of any loss, claim, damage or liability, or any
action in respect thereof, referred to in Section 13, then the indemnifying
party shall in lieu of indemnifying the indemnified party contribute to the
amount paid or payable by such indemnified party as a result of such loss,
claim, damage or liability, or action in respect thereof, in such proportion as
shall be appropriate to reflect the relative benefits received by the Mortgage
Loan Seller on the one hand and the Purchaser on the other from the purchase and
sale of the Mortgage Loans, the offering of the Certificates and the other
transactions contemplated hereunder. No person found liable for a fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act)
shall be entitled to contribution from any person who is not also found liable
for such fraudulent misrepresentation.
Section 17.5. The parties hereto agree that reliance by an
indemnified party on any publicly available information or any information or
directions furnished by an indemnifying party shall not constitute negligence,
bad faith or willful misconduct by such indemnified party.
ARTICLE XVIII. NOTICES. ALL DEMANDS, NOTICES AND
COMMUNICATIONS HEREUNDER SHALL BE IN WRITING BUT MAY BE DELIVERED BY FACSIMILE
TRANSMISSION SUBSEQUENTLY CONFIRMED IN WRITING. NOTICES TO THE MORTGAGE LOAN
SELLER SHALL BE DIRECTED TO EMC MORTGAGE CORPORATION, MAC ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇, ▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇ (TELECOPY: (972-444-2880)),
AND NOTICES TO THE PURCHASER SHALL BE DIRECTED TO STRUCTURED ASSET MORTGAGE
INVESTMENTS II INC., ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ (TELECOPY:
(212-272-7206)), ATTENTION: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇; OR TO ANY OTHER ADDRESS AS MAY
HEREAFTER BE FURNISHED BY ONE PARTY TO THE OTHER PARTY BY LIKE NOTICE. ANY SUCH
DEMAND, NOTICE OR COMMUNICATION HEREUNDER SHALL BE DEEMED TO HAVE BEEN RECEIVED
ON THE DATE RECEIVED AT THE PREMISES OF THE ADDRESSEE (AS EVIDENCED, IN THE CASE
OF REGISTERED OR CERTIFIED MAIL, BY THE DATE NOTED ON THE RETURN RECEIPT)
PROVIDED THAT IT IS RECEIVED ON A BUSINESS DAY DURING NORMAL BUSINESS HOURS AND,
IF RECEIVED AFTER NORMAL BUSINESS HOURS, THEN IT SHALL BE DEEMED TO BE RECEIVED
ON THE NEXT BUSINESS DAY.
ARTICLE XIX. TRANSFER OF MORTGAGE LOANS. THE PURCHASER RETAINS
THE RIGHT TO ASSIGN THE MORTGAGE LOANS AND ANY OR ALL OF ITS INTEREST UNDER THIS
AGREEMENT TO THE TRUSTEE WITHOUT THE CONSENT OF THE MORTGAGE LOAN SELLER, AND,
UPON SUCH ASSIGNMENT, THE TRUSTEE SHALL SUCCEED TO THE APPLICABLE RIGHTS AND
OBLIGATIONS OF THE PURCHASER HEREUNDER; PROVIDED, HOWEVER, THE PURCHASER SHALL
REMAIN ENTITLED TO THE BENEFITS SET FORTH IN SECTIONS 11, 13 AND 17 HERETO AND
AS PROVIDED IN SECTION 2(A). NOTWITHSTANDING THE FOREGOING, THE SOLE AND
EXCLUSIVE RIGHT AND REMEDY OF THE TRUSTEE WITH RESPECT TO A BREACH OF
REPRESENTATION OR WARRANTY OF THE MORTGAGE LOAN SELLER SHALL BE THE CURE,
PURCHASE OR SUBSTITUTION OBLIGATIONS OF THE MORTGAGE LOAN SELLER CONTAINED IN
SECTIONS 5 AND 7 HEREOF.
ARTICLE XX. TERMINATION. THIS AGREEMENT MAY BE TERMINATED (A)
BY THE MUTUAL CONSENT OF THE PARTIES HERETO PRIOR TO THE CLOSING DATE, (B) BY
THE PURCHASER, IF THE CONDITIONS TO THE PURCHASER'S OBLIGATION TO CLOSE SET
FORTH UNDER SECTION 10(A) HEREOF ARE NOT FULFILLED AS AND WHEN REQUIRED TO BE
FULFILLED OR (C) BY THE MORTGAGE LOAN SELLER, IF THE CONDITIONS TO THE MORTGAGE
LOAN SELLER'S OBLIGATION TO CLOSE SET FORTH UNDER SECTION 10(B) HEREOF ARE NOT
FULFILLED AS AND WHEN REQUIRED TO BE FULFILLED. IN THE EVENT OF TERMINATION
PURSUANT TO CLAUSE (B), THE MORTGAGE LOAN SELLER SHALL PAY, AND IN THE EVENT OF
TERMINATION PURSUANT TO CLAUSE (C), THE PURCHASER SHALL PAY, ALL REASONABLE
OUT-OF-POCKET EXPENSES INCURRED BY THE OTHER IN CONNECTION WITH THE TRANSACTIONS
CONTEMPLATED BY THIS AGREEMENT. IN THE EVENT OF A TERMINATION PURSUANT TO CLAUSE
(A), EACH PARTY SHALL BE RESPONSIBLE FOR ITS OWN EXPENSES.
ARTICLE XXI. REPRESENTATIONS, WARRANTIES AND AGREEMENTS TO
SURVIVE DELIVERY. ALL REPRESENTATIONS, WARRANTIES AND AGREEMENTS CONTAINED IN
THIS AGREEMENT, OR CONTAINED IN CERTIFICATES OF OFFICERS OF THE MORTGAGE LOAN
SELLER SUBMITTED PURSUANT HERETO, SHALL REMAIN OPERATIVE AND IN FULL FORCE AND
EFFECT AND SHALL SURVIVE DELIVERY OF THE MORTGAGE LOANS TO THE PURCHASER (AND BY
THE PURCHASER TO THE TRUSTEE). SUBSEQUENT TO THE DELIVERY OF THE MORTGAGE LOANS
TO THE PURCHASER, THE MORTGAGE LOAN SELLER'S REPRESENTATIONS AND WARRANTIES
CONTAINED HEREIN WITH RESPECT TO THE MORTGAGE LOANS SHALL BE DEEMED TO RELATE TO
THE MORTGAGE LOANS ACTUALLY DELIVERED TO THE PURCHASER AND INCLUDED IN THE FINAL
MORTGAGE LOAN SCHEDULE AND ANY SUBSTITUTE MORTGAGE LOAN AND NOT TO THOSE
MORTGAGE LOANS DELETED FROM THE PRELIMINARY MORTGAGE LOAN SCHEDULE PURSUANT TO
SECTION 3 HEREOF PRIOR TO THE CLOSING.
ARTICLE XXII. SEVERABILITY. IF ANY PROVISION OF THIS AGREEMENT
SHALL BE PROHIBITED OR INVALID UNDER APPLICABLE LAW, THE AGREEMENT SHALL BE
INEFFECTIVE ONLY TO SUCH EXTENT, WITHOUT INVALIDATING THE REMAINDER OF THIS
AGREEMENT.
ARTICLE XXIII. COUNTERPARTS. THIS AGREEMENT MAY BE EXECUTED IN
COUNTERPARTS, EACH OF WHICH WILL BE AN ORIGINAL, BUT WHICH TOGETHER SHALL
CONSTITUTE ONE AND THE SAME AGREEMENT.
ARTICLE XXIV. AMENDMENT. THIS AGREEMENT CANNOT BE AMENDED OR
MODIFIED IN ANY MANNER WITHOUT THE PRIOR WRITTEN CONSENT OF EACH PARTY.
SECTION 21. GOVERNING LAW. THIS AGREEMENT SHALL BE DEEMED TO
HAVE BEEN MADE AND PERFORMED IN THE STATE OF NEW YORK AND SHALL BE INTERPRETED
IN ACCORDANCE WITH THE LAWS OF SUCH STATE, WITHOUT REGARD TO THE CONFLICT OF
LAWS PRINCIPLES OF SUCH STATE.
FURTHER ASSURANCES. EACH OF THE PARTIES AGREES TO EXECUTE AND
DELIVER SUCH INSTRUMENTS AND TAKE SUCH ACTIONS AS ANOTHER PARTY MAY, FROM TIME
TO TIME, REASONABLY REQUEST IN ORDER TO EFFECTUATE THE PURPOSE AND TO CARRY OUT
THE TERMS OF THIS AGREEMENT INCLUDING ANY AMENDMENTS HERETO WHICH MAY BE
REQUIRED BY EITHER RATING AGENCY.
ARTICLE XXV. SUCCESSORS AND ASSIGNS.
This Agreement shall bind and inure to the benefit of and be
enforceable by the Mortgage Loan Seller and the Purchaser and their permitted
successors and assigns and, to the extent specified in Section 13 hereof, Bear
▇▇▇▇▇▇▇, and their directors, officers and controlling persons (within the
meaning of federal securities laws). The Mortgage Loan Seller acknowledges and
agrees that the Purchaser may assign its rights under this Agreement (including,
without limitation, with respect to the Mortgage Loan Seller's representations
and warranties respecting the Mortgage Loans) to the Trustee. Any person into
which the Mortgage Loan Seller may be merged or consolidated (or any person
resulting from any merger or consolidation involving the Mortgage Loan Seller),
any person resulting from a change in form of the Mortgage Loan Seller or any
person succeeding to the business of the Mortgage Loan Seller, shall be
considered the "successor" of the Mortgage Loan Seller hereunder and shall be
considered a party hereto without the execution or filing of any paper or any
further act or consent on the part of any party hereto. Except as provided in
the two preceding sentences and in Section 15 hereto this Agreement cannot be
assigned, pledged or hypothecated by either party hereto without the written
consent of the other parties to this Agreement and any such assignment or
purported assignment shall be deemed null and void.
ARTICLE XXVI. THE MORTGAGE LOAN SELLER AND THE PURCHASER. THE
MORTGAGE LOAN SELLER AND THE PURCHASER WILL KEEP IN FULL EFFECT ALL RIGHTS AS
ARE NECESSARY TO PERFORM THEIR RESPECTIVE OBLIGATIONS UNDER THIS AGREEMENT. -
ARTICLE XXVII. ENTIRE AGREEMENT. THIS AGREEMENT CONTAINS THE
ENTIRE AGREEMENT AND UNDERSTANDING BETWEEN THE PARTIES WITH RESPECT TO THE
SUBJECT MATTER HEREOF, AND SUPERSEDES ALL PRIOR AND CONTEMPORANEOUS AGREEMENTS,
UNDERSTANDINGS, INDUCEMENTS AND CONDITIONS, EXPRESS OR IMPLIED, ORAL OR WRITTEN,
OF ANY NATURE WHATSOEVER WITH RESPECT TO THE SUBJECT MATTER HEREOF.
ARTICLE XXVIII. NO PARTNERSHIP. NOTHING HEREIN CONTAINED SHALL
BE DEEMED OR CONSTRUED TO CREATE A PARTNERSHIP OR JOINT VENTURE BETWEEN THE
PARTIES HERETO.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
IN WITNESS WHEREOF, the parties hereto have caused their names to be
signed hereto by their respective duly authorized officers as of the date first
above written.
EMC MORTGAGE CORPORATION
By:
-------------------------------
Name:
Title:
STRUCTURED ASSET MORTGAGE
INVESTMENTS II INC.
By:
-------------------------------
Name:
Title:
EXHIBIT 1
CONTENTS OF MORTGAGE FILE
With respect to each Mortgage Loan, the Mortgage File shall include
each of the following items, which shall be available for inspection by the
Purchaser or its designee, and which shall be delivered to the Purchaser or its
designee pursuant to the terms of the Agreement.
Section 28.1. with respect to each Mortgage Loan:
(a) The original Mortgage Note, endorsed without recourse to
the order of the Trustee and showing an unbroken chain of endorsements
from the originator thereof to the Person endorsing it to the Trustee,
or a lost note affidavit together with a copy of the related Mortgage
Note;
(b) The original Mortgage and, if the related Mortgage Loan is
a MOM Loan, noting the presence of the MIN and language indicating that
such Mortgage Loan is a MOM Loan, which shall have been recorded (or if
the original is not available, a copy), with evidence of such recording
indicated thereon (or if the original is not available, a copy), with
evidence of such recording indicated thereon (or if 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 Seller in time
to permit their recording as specified in Section 2.01(b) of the
Pooling and Servicing Agreement, shall be in recordable form);
(c) unless the Mortgage Loan is a MOM Loan, a certified copy
of the assignment (which may be in the form of a blanket assignment if
permitted in the jurisdiction in which the Mortgaged Property is
located) to "U.S. Bank National Association, as Trustee", with evidence
of recording with respect to each Mortgage Loan in the name of the
Trustee thereon (or if (A) 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 Seller in time to permit their
delivery as specified in Section 2.01(b) of the Pooling and Servicing
Agreement, the Seller may deliver a true copy thereof with a
certification by the Seller, 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" or (B) the related Mortgaged
Property is located in a state other than Maryland and an Opinion of
Counsel has been provided as set forth in Section 2.01(b) of the
Pooling and Servicing Agreement, shall be in recordable form);
(d) all intervening assignments of the Security Instrument, if
applicable and only to the extent available to the Mortgage Loan Seller
with evidence of recording thereon;
(e) the original or a copy of the policy or certificate of
primary mortgage guaranty insurance, to the extent available, if any;
(f) the original policy of title insurance or mortgagee's
certificate of title insurance or commitment or binder for title
insurance; and
(g) originals of all modification agreements, if applicable
and available.
EXHIBIT 2
MORTGAGE LOAN SCHEDULE INFORMATION
The Preliminary and Final Mortgage Loan Schedules shall set forth the
following information with respect to each Mortgage Loan:
(a) the loan number;
(b) [Reserved];
(c) the city, state and zip code of the Mortgaged Property;
(d) the property type;
(e) the Mortgage Interest Rate;
(f) the Servicing Fee Rate;
(g) the Net Rate;
(h) the original term;
(i) the maturity date;
(j) the stated remaining term to maturity;
(k) the original principal balance;
(1) the first payment date;
(m) the principal and interest payment in effect as of the Cut-off Date;
(n) the unpaid principal balance as of the Cut-off Date;
(o) the Loan-to-Value Ratio at origination;
(p) paid-through date;
(q) the insurer of any Primary Mortgage Insurance Policy;
(r) the Gross Margin, if applicable;
(s) the Maximum Lifetime Mortgage Rate, if applicable;
(t) the Minimum Lifetime Mortgage Rate, if applicable;
(u) the Periodic Rate Cap, if applicable;
(v) the number of days delinquent, if any;
(w) which Mortgage Loans adjust after an initial fixed-rate period of three,
five, seven or ten years;
(x) the Loan Group;
(y) the Prepayment Charge Loans; and
(z) the Servicer.
Such schedule also shall set forth for all of the Mortgage Loans, the total
number of Mortgage Loans, the total of each of the amounts described under (k)
and (n) above, the weighted average by principal balance as of the Cut-off Date
of each of the rates described under (e), (f) and (g) above, and the weighted
average remaining term to maturity by unpaid principal balance as of the Cut-off
Date.
EXHIBIT 3
MORTGAGE LOAN SELLER'S INFORMATION
All information in the Prospectus Supplement described under the
following Sections: "SUMMARY OF PROSPECTUS SUPPLEMENT -- The Mortgage Loans,"
"THE MORTGAGE POOL" and "SCHEDULE A -- CERTAIN CHARACTERISTICS OF THE MORTGAGE
LOANS."
EXHIBIT 4
PURCHASER'S INFORMATION
All information in the Prospectus Supplement and the Prospectus, except
the Mortgage Loan Seller's Information.
EXHIBIT 5
SCHEDULE OF LOST NOTES
Available Upon Request
EXHIBIT 6
APPENDIX E - STANDARD & POOR'S ANTI-PREDATORY LENDING CATEGORIZATION
REVISED FEBRUARY 07, 2005
Standard & Poor's has categorized loans governed by anti-predatory lending laws
in the Jurisdictions listed below into three categories based upon a combination
of factors that include (a) the risk exposure associated with the assignee
liability and (b) the tests and thresholds set forth in those laws. Note that
certain loans classified by the relevant statute as Covered are included in
Standard & Poor's High Cost Loan Category because they included thresholds and
tests that are typical of what is generally considered High Cost by the
industry.
STANDARD & POOR'S HIGH COST LOAN CATEGORIZATION
---------------------------------------------------------------------------------------------------------------------
STATE/JURISDICTION NAME OF ANTI-PREDATORY LENDING CATEGORY UNDER APPLICABLE
LAW/EFFECTIVE DATE ANTI-PREDATORY LENDING LAW
---------------------------------- ------------------------------------------------- --------------------------------
Arkansas Arkansas Home Loan Protection Act, Ark. Code High Cost Home Loan
▇▇▇. ▇▇.▇▇. ▇▇-▇▇-▇▇▇ ET SEQ.
Effective July 16, 2003
---------------------------------- ------------------------------------------------- --------------------------------
Cleveland Heights, OH Ordinance No. 72-2003 (PSH), Mun. Code ▇▇.▇▇. Covered Loan
757.01 ET SEQ.
Effective June 2, 2003
---------------------------------- ------------------------------------------------- --------------------------------
Colorado Consumer Equity Protection, Colo. Stat. ▇▇▇. Covered Loan
▇▇.▇▇. 5-3.5-101 ET SEQ.
Effective for covered loans offered or entered
into on or after January 1, 2003. Other
provisions of the Act took effect on June 7,
2002
---------------------------------- ------------------------------------------------- --------------------------------
Connecticut Connecticut Abusive Home Loan Lending Practices High Cost Home Loan
Act, Conn. Gen. Stat. ▇▇.▇▇. 36a-746 ET SEQ.
Effective October 1, 2001
---------------------------------- ------------------------------------------------- --------------------------------
District of Columbia Home Loan Protection Act, D.C. Code ▇▇.▇▇. Covered Loan
26-1151.01 ET SEQ.
Effective for loans closed on or after
January 28, 2003
---------------------------------- ------------------------------------------------- --------------------------------
Florida Fair Lending Act, Fla. Stat. ▇▇▇. ▇▇.▇▇. High Cost Home Loan
494.0078 et SEQ.
Effective October 2, 2002
---------------------------------- ------------------------------------------------- --------------------------------
Georgia (Oct. 1, 2002 - Georgia Fair Lending Act, Ga. Code ▇▇▇. High Cost Home Loan
Mar. 6, 2003) ▇▇.▇▇. 7-6A-1 ET SEQ.
Effective October 1, 2002 - March 6, 2003
---------------------------------- ------------------------------------------------- --------------------------------
Georgia as amended (Mar. 7, ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇, ▇▇. Code ▇▇▇. ▇▇.▇▇. High Cost Home Loan
- current) 7-6A-1 ET SEQ.
Effective for loans closed on or after March 7,
2003
---------------------------------- ------------------------------------------------- --------------------------------
HOEPA Section 32 Home Ownership and Equity Protection Act of High Cost Loan
1994, 15 U.S.C. ss. 1639, 12 C.F.R. ▇▇.▇▇.
226.32 and 226.34
Effective October 1, 1995, amendments October
1, 2002
---------------------------------- ------------------------------------------------- --------------------------------
Illinois High Risk Home Loan Act, Ill. Comp. Stat. tit. High Risk Home Loan
815, ▇▇.▇▇. 137/5 ET SEQ.
Effective January 1, 2004 (prior to this
date, regulations under Residential Mortgage
License Act effective from May 14, 2001)
---------------------------------- ------------------------------------------------- --------------------------------
Indiana Indiana Home Loan Practices Act, Ind. Code ▇▇▇. High Cost Home Loan
▇▇.▇▇. 24-9-1-1 ET SEQ.
Effective for loans originated on or after
January 1, 2005.
---------------------------------- ------------------------------------------------- --------------------------------
Kansas Consumer Credit Code, Kan. Stat. ▇▇▇. ▇▇.▇▇. High Loan to Value Consumer
16a-1-101 ET SEQ. Loan (ID. ss. 16a-3-207) and;
Sections 16a-1-301 and 16a-3-207 became --------------------------------
effective April 14, 1999; Section 16a-3-308a
became effective July 1, 1999 High APR Consumer Loan (ID. ss.
16a-3-308a)
---------------------------------- ------------------------------------------------- --------------------------------
Kentucky 2003 KY H.B. ▇▇▇ - ▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇, ▇▇. High Cost Home Loan
Rev. Stat. ▇▇.▇▇. 360.100 ET SEQ.
Effective June 24, 2003
---------------------------------- ------------------------------------------------- --------------------------------
Maine Truth in Lending, Me. Rev. Stat. tit. 9-A, High Rate High Fee Mortgage
▇▇.▇▇. 8-101 ET SEQ.
Effective September 29, 1995 and as amended
from time to time
---------------------------------- ------------------------------------------------- --------------------------------
Massachusetts Part 40 and Part 32, 209 C.M.R. ▇▇.▇▇. High Cost Home Loan
32.00 ET seq. and 209 C.M.R. ▇▇.▇▇. 40.01
ET SEQ.
Effective March 22, 2001 and amended from time
to time
---------------------------------- ------------------------------------------------- --------------------------------
Massachusetts Predatory Home Loan Practices Act High Cost Home Mortgage Loan
Mass. Gen. Laws ch. 183C, ▇▇.▇▇. 1 ET SEQ.
Effective November 7, 2004
---------------------------------- ------------------------------------------------- --------------------------------
Nevada Assembly ▇▇▇▇ No. 284, Nev. Rev. Stat. ▇▇.▇▇. Home Loan
598D.010 ET SEQ.
Effective October 1, 2003
---------------------------------- ------------------------------------------------- --------------------------------
New Jersey New Jersey Home Ownership Security Act of 2002, High Cost Home Loan
N.J. Rev. Stat. ▇▇.▇▇. 46:10B-22 ET SEQ.
Effective for loans closed on or after November
27, 2003
---------------------------------- ------------------------------------------------- --------------------------------
New Mexico Home Loan Protection Act, N.M. Rev. Stat. ▇▇.▇▇. High Cost Home Loan
58-21A-1 ET SEQ.
Effective as of January 1, 2004; Revised as of
February 26, 2004
---------------------------------- ------------------------------------------------- --------------------------------
New York N.Y. Banking Law Article 6-l High Cost Home Loan
Effective for applications made on or after
April 1, 2003
---------------------------------- ------------------------------------------------- --------------------------------
North Carolina Restrictions and Limitations on High Cost Home High Cost Home Loan
Loans, N.C. Gen. Stat. ▇▇.▇▇. 24-1.1E ET SEQ.
Effective July 1, 2000; amended October 1,
2003 (adding open-end lines of credit)
---------------------------------- ------------------------------------------------- --------------------------------
Ohio H.B. 386 (codified in various sections of the Covered Loan
Ohio Code), Ohio Rev. Code ▇▇▇. ▇▇.▇▇.
1349.25 ET SEQ.
Effective May 24, 2002
---------------------------------- ------------------------------------------------- --------------------------------
Oklahoma Consumer Credit Code (codified in various Subsection 10 Mortgage
sections of Title 14A)
Effective July 1, 2000; amended effective
January 1, 2004
---------------------------------- ------------------------------------------------- --------------------------------
South Carolina South Carolina High Cost and Consumer Home High Cost Home Loan
Loans Act, S.C. Code ▇▇▇. ▇▇.▇▇. 37-23-10 ET SEQ.
Effective for loans taken on or after January
1, 2004
---------------------------------- ------------------------------------------------- --------------------------------
West Virginia West Virginia Residential Mortgage Lender, West Virginia Mortgage Loan
Broker and Servicer Act, W. Va. Code Act Loan
▇▇▇. ▇▇.▇▇. 31-17-1 ET SEQ.
Effective June 5, 2002
---------------------------------- ------------------------------------------------- --------------------------------
STANDARD & POOR'S COVERED LOAN CATEGORIZATION
---------------------------------- ------------------------------------------------- --------------------------------
STATE/JURISDICTION NAME OF ANTI-PREDATORY LENDING CATEGORY UNDER APPLICABLE
LAW/EFFECTIVE DATE ANTI-PREDATORY LENDING LAW
---------------------------------- ------------------------------------------------- --------------------------------
Georgia (Oct. 1, 2002 - Georgia Fair Lending Act, Ga. Code ▇▇▇. ▇▇.▇▇. Covered Loan
Mar. 6, 2003) 7-6A-1 ET SEQ.
Effective October 1, 2002 - March 6, 2003
---------------------------------- ------------------------------------------------- --------------------------------
New Jersey New Jersey Home Ownership Security Act of 2002, Covered Home Loan
N.J. Rev. Stat. ▇▇.▇▇. 46:10B-22 ET SEQ.
Effective November 27, 2003 - July 5, 2004
---------------------------------- ------------------------------------------------- --------------------------------
STANDARD & POOR'S HOME LOAN CATEGORIZATION
---------------------------------- ------------------------------------------------- --------------------------------
STATE/JURISDICTION NAME OF ANTI-PREDATORY LENDING CATEGORY UNDER APPLICABLE
LAW/EFFECTIVE DATE ANTI-PREDATORY LENDING LAW
---------------------------------- ------------------------------------------------- --------------------------------
Georgia (Oct. 1, 2002 - Georgia Fair Lending Act, Ga. Code ▇▇▇. ▇▇.▇▇. Home Loan
Mar. 6, 2003) 7-6A-1 ET SEQ.
Effective October 1, 2002 - March 6, 2003
---------------------------------- ------------------------------------------------- --------------------------------
New Jersey New Jersey Home Ownership Security Act of 2002, Home Loan
N.J. Rev. Stat. ▇▇.▇▇. 46:10B-22 ET SEQ.
Effective for loans closed on or after November
27, 2003
---------------------------------- ------------------------------------------------- --------------------------------
New Mexico Home Loan Protection Act, N.M. Rev. Stat. ▇▇.▇▇. Home Loan
58-21A-1 ET SEQ.
Effective as of January 1, 2004; Revised as of
February 26, 2004
---------------------------------- ------------------------------------------------- --------------------------------
North Carolina Restrictions and Limitations on High Cost Home Consumer Home Loan
Loans, N.C. Gen. Stat. ▇▇.▇▇. 24-1.1E ET SEQ.
Effective July 1, 2000; amended October 1,
2003 (adding open-end lines of credit)
---------------------------------- ------------------------------------------------- --------------------------------
South Carolina South Carolina High Cost and Consumer Home Consumer Home Loan
Loans Act, S.C. Code ▇▇▇. ▇▇.▇▇. 37-23-10
ET SEQ.
Effective for loans taken on or after January
1, 2004
---------------------------------- ------------------------------------------------- --------------------------------
SCHEDULE A
REQUIRED RATINGS FOR EACH CLASS OF CERTIFICATES
PUBLIC CERTIFICATES
Class S&P ▇▇▇▇▇'▇
--------------- ------- -------
Class I-A-1 AAA Aaa
Class II-A-1 AAA Aaa
Class II-A-2 AAA Aaa
Class II-A-3 AAA Aaa
Class II-X-1 AAA Aaa
Class III-A-1 AAA Aaa
Class IV-A-1 AAA Aaa
Class R-I AAA --
Class R-II AAA --
Class R-III AAA --
Class B-1 AA+ Aa1
Class B-2 AA+ Aa2
Class B-3 AA Aa3
Class B-4 AA A1
Class B-5 AA- A2
Class B-6 A+ A3
Class B-7 A Baa1
Class B-8 A- Baa2
Class B-9 BBB --
None of the above ratings has been lowered since the respective dates of such
letters.
PRIVATE CERTIFICATES
Class S&P ▇▇▇▇▇'▇
------------ ------- ---------
Class B-10 BB --
Class ▇-▇▇ ▇ --
▇▇▇▇▇ ▇-▇▇ ▇▇ ▇▇
▇▇▇▇ of the above ratings has been lowered since the respective dates of such
letters.
SCHEDULE B
MORTGAGE LOAN SCHEDULE
[Provided upon request]
EXHIBIT K
MARKET VALUE SWAP
[Provided upon request]
EXHIBIT L
SWAP GUARANTEE
[Provided upon request]