EXECUTION COPY
STRUCTURED ASSET MORTGAGE INVESTMENTS II INC.,
DEPOSITOR
JPMORGAN CHASE BANK,
TRUSTEE
▇▇▇▇▇ FARGO BANK, NATIONAL ASSOCIATION,
MASTER SERVICER AND SECURITIES ADMINISTRATOR
and
EMC MORTGAGE CORPORATION,
SELLER
------------------------------------------------------------------------
POOLING AND SERVICING AGREEMENT
Dated as of June 1, 2004
------------------------------------------------------------------------
Structured Asset Mortgage Investments II Inc.
Bear ▇▇▇▇▇▇▇ ALT-A Trust 2004-6, Mortgage Pass-Through Certificates
Series 2004-6
ARTICLE I
Definitions
ARTICLE II
Conveyance of Mortgage Loans; Original Issuance of Certificates
Section 2.01 Conveyance of Mortgage Loans to Trustee......................46
Section 2.02 Acceptance of Mortgage Loans by Trustee......................48
Section 2.03 Assignment of Interest in the Mortgage Loan Purchase Agreement50
Section 2.04 Substitution of Mortgage Loans...............................51
Section 2.05 Issuance of Certificates.....................................52
Section 2.06 Representations and Warranties Concerning the Depositor......53
ARTICLE III
Administration and Servicing of Mortgage Loans
Section 3.01 Master Servicer..............................................55
Section 3.02 REMIC-Related Covenants......................................56
Section 3.03 Monitoring of Servicers......................................56
Section 3.04 Fidelity Bond................................................57
Section 3.05 Power to Act; Procedures.....................................57
Section 3.06 Due-on-Sale Clauses; Assumption Agreements...................58
Section 3.07 Release of Mortgage Files....................................58
Section 3.08 Documents, Records and Funds in Possession of Master Servicer To Be
Held for Trustee.............................................59
Section 3.09 Standard Hazard Insurance and Flood Insurance Policies.......60
Section 3.10 Presentment of Claims and Collection of Proceeds.............60
Section 3.11 Maintenance of the Primary Mortgage Insurance Policies.......61
Section 3.12 Trustee to Retain Possession of Certain Insurance Policies and
Documents....................................................61
Section 3.13 Realization Upon Defaulted Mortgage Loans....................62
Section 3.14 Compensation for the Master Servicer.........................62
Section 3.15 REO Property.................................................62
Section 3.16 Annual Officer's Certificate as to Compliance................63
Section 3.17 Annual Independent Accountant's Servicing Report.............63
Section 3.18 Reports Filed with Securities and Exchange Commission........64
Section 3.19 EMC..........................................................65
Section 3.20 UCC..........................................................65
Section 3.21 Optional Purchase of Defaulted Mortgage Loans................65
Section 3.22 Convertible Mortgage Loans...................................65
ARTICLE IV
Accounts
Section 4.01 Protected Accounts...........................................66
Section 4.02 Master Servicer Collection Account...........................67
Section 4.03 Permitted Withdrawals and Transfers from the Master Servicer
Collection Account...........................................68
Section 4.04 Distribution Account.........................................69
Section 4.05 Permitted Withdrawals and Transfers from the Distribution Account 69
Section 4.06 Reserve Fund.................................................71
Section 4.07 Class XP Reserve Account.....................................72
ARTICLE V
Certificates
Section 5.01 Certificates.................................................73
Section 5.02 Registration of Transfer and Exchange of Certificates........80
Section 5.03 Mutilated, Destroyed, Lost or Stolen Certificates............84
Section 5.04 Persons Deemed Owners........................................84
Section 5.05 Transfer Restrictions on Residual Certificates...............84
Section 5.06 Restrictions on Transferability of Certificates..............85
Section 5.07 ERISA Restrictions...........................................86
Section 5.08 Rule 144A Information........................................87
ARTICLE VI
Payments to Certificateholders
Section 6.01 Distributions on the Certificates............................88
Section 6.02 Allocation of Losses.........................................92
Section 6.03 Payments.....................................................92
Section 6.04 Statements to Certificateholders.............................92
Section 6.05 Monthly Advances.............................................95
Section 6.06 Compensating Interest Payments...............................95
ARTICLE VII
The Master Servicer
Section 7.01 Liabilities of the Master Servicer...........................96
Section 7.02 Merger or Consolidation of the Master Servicer...............96
Section 7.03 Indemnification of the Trustee, the Master Servicer and the Securities
Administrator................................................96
Section 7.04 Limitations on Liability of the Master Servicer and Others...97
Section 7.05 Master Servicer Not to Resign................................98
Section 7.06 Successor Master Servicer....................................98
Section 7.07 Sale and Assignment of Master Servicing......................98
ARTICLE VIII
Default
Section 8.01 Events of Default...........................................100
Section 8.02 Trustee to Act; Appointment of Successor....................102
Section 8.03 Notification to Certificateholders..........................102
Section 8.04 Waiver of Defaults..........................................103
Section 8.05 List of Certificateholders..................................103
ARTICLE IX
Concerning the Trustee and the Securities Administrator
Section 9.01 Duties of Trustee...........................................104
Section 9.02 Certain Matters Affecting the Trustee and the Securities Administrator
106
Section 9.03 Trustee and Securities Administrator Not Liable for Certificates or
Mortgage Loans..............................................107
Section 9.04 Trustee and Securities Administrator May Own Certificates...108
Section 9.05 Trustee's and Securities Administrator's Fees and Expenses..108
Section 9.06 Eligibility Requirements for Trustee and Securities Administrator
109
Section 9.07 Insurance...................................................109
Section 9.08 Resignation and Removal of the Trustee and Securities Administrator
109
Section 9.09 Successor Trustee and Successor Securities Administrator....110
Section 9.10 Merger or Consolidation of Trustee or Securities Administrator111
Section 9.11 Appointment of Co-Trustee or Separate Trustee...............111
Section 9.12 Federal Information Returns and Reports to Certificateholders; REMIC
Administration..............................................112
ARTICLE X
Termination
▇▇▇▇▇▇▇ ▇▇.▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ by EMC or its Designee or Liquidation of
the Mortgage Loans..........................................115
Section 10.02 Additional Termination Requirements.........................117
ARTICLE XI
Miscellaneous Provisions
Section 11.01 Intent of Parties...........................................119
Section 11.02 Amendment...................................................119
Section 11.03 Recordation of Agreement....................................120
Section 11.04 Limitation on Rights of Certificateholders..................120
Section 11.05 Acts of Certificateholders..................................121
Section 11.06 Governing Law...............................................122
Section 11.07 Notices.....................................................122
Section 11.08 Severability of Provisions..................................123
Section 11.09 Successors and Assigns......................................123
Section 11.10 Article and Section Headings................................123
Section 11.11 Counterparts................................................123
Section 11.12 Notice to Rating Agencies...................................123
v
APPENDIX
Appendix 1 - Calculation of Class Y Principal Reduction Amount
EXHIBITS
Exhibit A-1 - Form of Class I-A Certificates
Exhibit A-2 - Form of Class II-A Certificates
Exhibit A-3 - Form of Class III-A Certificates
Exhibit A-4 - Form of Class M Certificates
Exhibit A-5 - Form of Class B Certificates
Exhibit A-6 - Form of Class R Certificates
Exhibit A-7 - Form of Class B-IO Certificates
Exhibit A-8 - Form of Class XP Certificates
Exhibit B - Mortgage Loan Schedule
Exhibit C - Reserved
Exhibit D - Request for Release of Documents
Exhibit E - Form of Affidavit pursuant to Section 860E(e)(4)
Exhibit F-1 - Form of Investment Letter
Exhibit F-2 - Form of Rule 144A and Related Matters Certificate
Exhibit F-3 - Form of Transferor Representation Letter
Exhibit G - Form of Custodial Agreement
Exhibit H-1 - Bank of America Servicing Agreements
Exhibit H-2 - Cendant Servicing Agreement
Exhibit H-3 - Chevy Chase Servicing Agreements
Exhibit H-4 - Countrywide Servicing Agreements
Exhibit H-5 - EMC Servicing Agreement
Exhibit H-6 - EverHome Servicing Agreement
Exhibit ▇-▇ - ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇-▇ - ▇▇▇▇▇▇▇▇▇▇ Servicing Agreement
Exhibit H-9 - Mellon Trust Servicing Agreement
Exhibit H-10 - National City Servicing Agreement
Exhibit ▇-▇▇ - ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇-▇▇ - ▇▇▇▇ Servicing Agreement
Exhibit H-13 - ▇▇▇▇▇ Fargo Servicing Agreement
Exhibit I - Assignment Agreements
Exhibit J - Mortgage Loan Purchase Agreement
Exhibit K - Form of Trustee Limited Power of Attorney
POOLING AND SERVICING AGREEMENT
Pooling and Servicing Agreement dated as of June 1, 2004, among Structured Asset
Mortgage Investments II Inc., a Delaware corporation, as seller (the "Depositor"), JPMorgan
Chase Bank, a New York banking corporation, not in its individual capacity but solely as
trustee (the "Trustee"), ▇▇▇▇▇ Fargo Bank, National Association, as master servicer (in
such capacity, the "Master Servicer") and as securities administrator (in such capacity,
the "Securities Administrator") and EMC Mortgage Corporation ("EMC").
PRELIMINARY STATEMENT
On or prior to the Closing Date, the Depositor acquired the Mortgage Loans from EMC.
On the Closing Date, the Depositor will sell the Mortgage Loans and certain other property
to the Trust Fund and receive in consideration therefor, Certificates evidencing the entire
beneficial ownership interest in the Trust Fund.
The Trustee on behalf of the Trust shall make an election for the assets constituting
REMIC I to be treated for federal income tax purposes as a REMIC. On the Startup Day, the
REMIC I Regular Interests will be designated "regular interests" in such REMIC and the
Class R-I Certificate will be designated the sole class of "residual interests" in such
REMIC.
The Trustee on behalf of the Trust shall make an election for the REMIC I Regular
Interests, which constitute REMIC II to be treated for federal income tax purposes as a
REMIC. On the Startup Day, the REMIC II Regular Interests will be designated "regular
interests" in such REMIC and the Class R-II Certificate will be designated the "residual
interests" in such REMIC.
The Trustee on behalf of the Trust shall make an election for the REMIC II Regular
Interests, which constitute REMIC III to be treated for federal income tax purposes as a
REMIC. On the Startup Day, the REMIC III Regular Interests will be designated "regular
interests" in such REMIC and the Class R-III Certificate will be designated the "residual
interests" in such REMIC.
The Mortgage Loans will have an Outstanding Principal Balance as of the Cut-off Date,
after deducting all Scheduled Principal due on or before the Cut-off Date, of $860,560,954.
The initial principal amount of the Certificates will not exceed such Outstanding Principal
Balance.
In consideration of the mutual agreements herein contained, the Depositor, the Master
Servicer, the Securities Administrator, EMC and the Trustee agree as follows:
ARTICLE I
Definitions
Whenever used in this Agreement, the following words and phrases, unless otherwise
expressly provided or unless the context otherwise requires, shall have the meanings
specified in this Article.
Accepted Master Servicing Practices: With respect to any Mortgage Loan, as
applicable, either (x) those customary mortgage servicing practices of prudent mortgage
servicing institutions that master service mortgage loans of the same type and quality as
such Mortgage Loan in the jurisdiction where the related Mortgaged Property is located, to
the extent applicable to the Trustee or the Master Servicer (except in its capacity as
successor to a Servicer), or (y) as provided in the applicable Servicing Agreement, to the
extent applicable to any Servicer, but in no event below the standard set forth in clause
(x).
Account: The Master Servicer Collection Account, the Distribution Account, the
Protected Account or the Class XP Reserve Account, as the context may require.
Additional Collateral: As defined in the Additional Collateral Assignment and
Servicing Agreement, dated April 26, 2001, between EMC and Cendant.
Affiliate: As to any Person, any other Person controlling, controlled by or under
common control with such Person. "Control" means the power to direct the management and
policies of a Person, directly or indirectly, whether through ownership of voting
securities, by contract or otherwise. "Controlled" and "Controlling" have meanings
correlative to the foregoing. The Trustee may conclusively presume that a Person is not an
Affiliate of another Person unless a Responsible Officer of the Trustee has actual
knowledge to the contrary.
Aggregate Expense Rate: With respect to any Mortgage Loan, the sum of the Servicing
Fee Rate and the Lender-Paid PMI Rate (if applicable).
Agreement: This Pooling and Servicing Agreement and all amendments hereof and
supplements hereto.
Applicable Credit Rating: For any long-term deposit or security, a credit rating of
AAA in the case of S&P or Aaa in the case of Moody's (or with respect to investments in
money market funds, a credit rating of "AAAm" or "AAAm-G" in the case of S&P and the
highest rating given by Moody's for money market funds in the case of Moody's). For any
short-term deposit or security, or a rating of A-l+ in the case of S&P or Prime-1 in the
case of Moody's.
Applicable State Law: For purposes of Section 9.12(d), the Applicable State Law shall
be (a) the law of the State of New York and (b) such other state law whose applicability
shall have been brought to the attention of the Securities Administrator and the Trustee by
either (i) an Opinion of Counsel reasonably acceptable to the Securities Administrator and
the Trustee delivered to it by the Master Servicer or the Depositor, or (ii) written notice
from the appropriate taxing authority as to the applicability of such state law.
Applied Realized Loss Amount: With respect to any Distribution Date and a Class of
Certificates (other than the Class B-IO Certificates and the Residual Certificates), the
sum of the Realized Losses with respect to the Mortgage Loans, which are to be applied in
reduction of the Certificate Principal Balance of such Class of Certificates pursuant to
this Agreement in an amount equal to the amount, if any, by which, (i) the aggregate
Certificate Principal Balance of all of the Certificates (after all distributions of
principal on such Distribution Date) exceeds (ii) the aggregate Stated Principal Balance of
all of the Mortgage Loans as of the last day of the related Due Period. The Applied
Realized Loss Amount shall be allocated to first to the Class B-2 Certificates, the Class
B-1 Certificates, the Class M-2 Certificates and the Class M-1 Certificates, in that order
(so long as their respective Certificate Principal Balances have not been reduced to zero),
and thereafter Realized Losses with respect to the Group I Mortgage Loans shall be
allocated to the Class I-A Certificates, Realized Losses with respect to the Group II
Mortgage Loans shall be allocated to the Class II-A Certificates, pro rata, in accordance
with their respective Certificate Principal Balances, and Realized Losses with respect
to Group III Mortgage Loans shall be allocated to the Class III-A Certificates. If on any
Distribution Date less than all Realized Losses are allocated to the Senior Certificates,
the portion of Realized Losses remaining to be allocated to Senior Certificates shall be
allocated pro rata to the Class I-A Certificates, Class II-A Certificates and Class III-A
Certificates in accordance with the amount of Realized Losses incurred in the respective
Loan Groups during the related Due Period and such amount allocated to the Class II-A
Certificates will be allocated among the Class II-A Certificates, on a pro rata basis, based
on their respective Certificate Principal Balances.
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: July 25, 2034, or if such day is not a Business Day,
the next succeeding Business Day.
Available Funds: With respect to each Distribution Date, the aggregate of Principal
Funds and Interest Funds for such Distribution Date.
Bank of America: Bank of America, N.A., and any successor in interest thereto.
Bank of America Servicing Agreements: The Mortgage Loan Sale and Servicing Agreement
dated as of September 1, 2001, and the Mortgage Loan Sale and Servicing Agreement dated as
of October 1, 2001, each between EMC and Bank of America, and each as attached hereto as
Exhibit H-1.
Bankruptcy Code: The United States Bankruptcy Code, as amended as codified in 11
U.S.C. §§ 101-1330.
Basis Risk Shortfall: With respect to any Distribution Date and each Class of Offered
Certificates, the excess, if any, of (a) the amount of Current Interest that such Class
would have been entitled to receive on such Distribution Date had the applicable
Pass-Though Rate been calculated at a per annum rate equal to (A) in the case of the Class
I-A certificates, the Class III-A certificates and the Offered Subordinate Certificates,
the lesser of (i) One-Month LIBOR plus the related Margin and (ii) 11.50% and (B) in the
case of the Class II-A certificates, One-Month LIBOR plus the related Margin, in each case,
over (b) the amount of Current Interest on such Class of Offered Certificates calculated
using a Pass-Though Rate equal to the applicable Net Rate Cap for such Distribution Date.
Basis Risk Shortfall Carry Forward Amount: With respect to any Distribution Date and
each Class of Offered Certificates, Basis Risk Shortfalls for all previous Distribution
Dates not previously paid from any source including the Excess Cashflow and payments under
the Cap Contracts, together with interest thereon at a rate equal to the related
Pass-Through Rate for such Class of Offered Certificates for such Distribution Date.
Book-Entry Certificates: Initially, all Classes of Certificates other than the Class
B-IO, Class XP and the Residual Certificates.
Business Day: Any day other than (i) a Saturday or a Sunday, or (ii) a day on which
the New York Stock Exchange or Federal Reserve is closed or on which banking institutions
in the jurisdiction in which the Trustee, the Master Servicer, Custodian, any Servicer or
the Securities Administrator are authorized or obligated by law or executive order to be
closed.
Calendar Quarter: January 1 through March 31, April 1 through June 30, July 1 through
September 30, or October 1 through December 31, as applicable.
Cap Contract: With respect to any of the Class I-A, Class III-A, Class M-1, Class
M-2, Class B-1 or Class B-2 Certificates, the respective cap contracts, dated June 30,
2004, between the Trustee, on behalf of the Class I-A, Class III-A, Class M-1, Class M-2,
Class B-1 or Class B-2 Certificateholders, as the case may be, and Bear ▇▇▇▇▇▇▇ Financial
Products Inc.
Cap Contract Payment Amount: With respect to any Distribution Date and a Cap
Contract, the amounts received from such Cap Contract, if any, on such Distribution Date.
Cendant: Cendant Mortgage Corporation, and any successor in interest thereto.
Cendant Servicing Agreements: The Mortgage Loan Flow Purchase, Sale & Servicing
Agreement, dated as of April 26, 2001, among Cendant, ▇▇▇▇▇▇'▇ Gate Residential Mortgage
Trust and EMC, and the Additional Collateral Assignment and Servicing Agreement, dated as
of April 26, 2001, between Cendant and EMC, each as attached hereto as Exhibit H-2.
Certificate: Any mortgage pass-through certificate evidencing a beneficial ownership
interest in the Trust Fund signed and countersigned by the Trustee in substantially the
forms annexed hereto as Exhibits ▇-▇, ▇-▇, ▇-▇, ▇-▇, ▇-▇, ▇-▇, A-7 and A-8, with the blanks
therein appropriately completed.
Certificate Group: With respect to (i) Loan Group I, the Class I-A Certificates,
(ii) Loan Group II, the Class II-A-1, Class II-A-2 and Class II-A-3 Certificates and (iii)
Loan Group III, the Class III-A Certificates.
Certificate Owner: Any Person who is the beneficial owner of a Certificate registered
in the name of the Depository or its nominee.
Certificate Principal Balance: With respect to any Certificate (other than Class B-IO
Certificates or Class R Certificates) as of any Distribution Date, the initial principal
amount of such Certificate plus, with respect to (i) the Class II-A Certificates and the
Subordinate Certificates, the amount of any Deferred Interest allocated thereto on the
related Distribution Date and on all previous Distribution Dates and (ii) Subordinate
Certificates, any Subsequent Recoveries added to the Certificate Principal Amount of such
Certificates pursuant to Section 6.02(b) hereof, minus the sum of (i) all amounts
distributed on previous Distribution Dates on such Certificate with respect to principal
and (ii) any Applied Realized Loss Amounts allocated to such Certificate on previous
Distribution Dates. With respect to any such Class of Certificates, the Certificate
Principal Balance thereof will equal the sum of the Certificate Principal Balances of all
Certificates in such Class.
Certificate Register: The register maintained pursuant to Section 5.02.
Certificateholder: A Holder of a Certificate.
Chevy Chase: Chevy Chase Bank, F.S.B., and any successor in interest thereto.
Chevy Chase Servicing Agreements: The Purchase, Warranties and Servicing Agreement,
dated as of March 1, 2001, and the Purchase, Warranties and Servicing Agreement, dated as
of July 1, 2001, each between EMC and Chevy Chase, and each as attached hereto as Exhibit
H-3.
Class: With respect to the Certificates, ▇-▇, ▇▇-▇-▇, ▇▇-▇-▇, ▇▇-▇-▇, ▇▇▇-▇, ▇-▇,
R-II, R-III, ▇-▇, ▇-▇, ▇-▇, ▇-▇, XP and B-IO.
Class II-A Certificates: The Class II-A-1, Class II-A-2 and Class II-A-3 Certificates.
Class I-A Principal Distribution Amount: The product of the Class A Principal
Distribution Amount and a fraction, the numerator of which is the Principal Funds for Loan
Group I for such Distribution Date and the denominator of which is the Principal Funds for
all Loan Groups for such Distribution Date.
Class II-A Principal Distribution Amount: The product of the Class A Principal
Distribution Amount and a fraction, the numerator of which is the Principal Funds for Loan
Group II for such Distribution Date and the denominator of which is the Principal Funds for
all Loan Groups for such Distribution Date.
Class III-A Principal Distribution Amount: The product of the Class A Principal
Distribution Amount and a fraction, the numerator of which is the Principal Funds for Loan
Group III for such Distribution Date and the denominator of which is the Principal Funds
for all Loan Groups for such Distribution Date.
Class A Certificates: The Class I-A, Class II-A and Class III-A Certificates.
Class A Principal Distribution Amount: For any Distribution Date, an amount equal to
the excess, if any, of (i) the aggregate Certificate Principal Balance of the Class A
Certificates immediately prior to such Distribution Date over (ii) the excess of (a) the
aggregate Stated Principal Balance of the Mortgage Loans as of the last day of the related
Due Period over (b) the product of (1) the aggregate Stated Principal Balance of the
Mortgage Loans as of the last day of the related Due Period and (2) the sum of (x) 11.20%
and (y) the Current Specified Overcollateralization Percentage for such Distribution Date.
Class B Certificates: The Class B-1 and Class B-2 Certificates.
Class B-IO Advances: As defined in Section 6.01(b).
Class B-IO Certificates: The Class B-IO-P and Class B-IO-I Certificates.
Class B-IO Distribution Amount: With respect to any Distribution Date, the Current
Interest for the Class B-IO Certificate for such Distribution Date; (which should be deemed
distributable to the REMIC III Regular Interest B-IO-I); provided, however, that
on and after the Distribution Date on which the aggregate Certificate Principal Balance of
Class I-A, Class II-A-1, Class II-A-2, Class II-A-3, Class III-A, Class M-1, Class M-2,
Class B-1 or Class B-2 Certificates has been reduced to zero, the Class B-IO Distribution
Amount shall include the Overcollateralization Amount (which should be deemed distributable,
first, to the REMIC III Regular Interest B-IO-I in respect of accrued and unpaid interest
thereon until such accrued and unpaid interest shall have been reduced to zero and,
thereafter, to the REMIC III Regular Interest B-IO-P in respect of the principal balance
thereof).
Class B-IO Pass-Through Rate: The Class B-IO Certificates will bear interest at a per
annum rate equal to the percentage equivalent of a fraction, the numerator of which is the
sum of the amounts calculated pursuant to clauses (i) through (xii) below, and the
denominator of which is the aggregate Uncertificated Principal Balance of the REMIC II
Regular Interests. For purposes of calculating the Pass-Through Rate for the Class B-IO
Certificates, the numerator is equal to the sum of the following components:
(i) the Uncertificated Pass-Through Rate for REMIC II Regular Interest LT1 minus the
related Marker Rate, applied to a notional amount equal to the Uncertificated
Principal Balance of REMIC II Regular Interest LT1;
(ii) the Uncertificated Pass-Through Rate for REMIC II Regular Interest LT2 minus the
related Marker Rate, applied to a notional amount equal to the Uncertificated
Principal Balance of REMIC II Regular Interest LT2;
(iii) the Uncertificated Pass-Through Rate for REMIC II Regular Interest LT4 minus twice
the related Marker Rate, applied to a notional amount equal to the Uncertificated
Principal Balance of REMIC II Regular Interest LT4.
(iv) the Uncertificated Pass-Through Rate for REMIC II Regular Interest LT5 minus the
related Marker Rate, applied to a notional amount equal to the Uncertificated
Principal Balance of REMIC II Regular Interest LT5;
(v) the Uncertificated Pass-Through Rate for REMIC II Regular Interest LT6 minus the
related Marker Rate, applied to a notional amount equal to the Uncertificated
Principal Balance of REMIC II Regular Interest LT6;
(vi) the Uncertificated Pass-Through Rate for REMIC II Regular Interest LT8 minus twice
the related Marker Rate, applied to a notional amount equal to the Uncertificated
Principal Balance of REMIC II Regular Interest LT8;
(vii) the Uncertificated Pass-Through Rate for REMIC II Regular Interest LT9 minus the
related Marker Rate, applied to a notional amount equal to the Uncertificated
Principal Balance of REMIC II Regular Interest LT9;
(viii) the Uncertificated Pass-Through Rate for REMIC II Regular Interest LT10 minus
the related Marker Rate, applied to a notional amount equal to the Uncertificated
Principal Balance of REMIC II Regular Interest LT10;
(ix) the Uncertificated Pass-Through Rate for REMIC II Regular Interest LT12 minus twice
the related Marker Rate, applied to a notional amount equal to the Uncertificated
Principal Balance of REMIC II Regular Interest LT12;
(x) the Uncertificated Pass-Through Rate for REMIC II Regular Interest LT-Y1 minus the
related Marker Rate, applied to a notional amount equal to the Uncertificated
Principal Balance of REMIC II Regular Interest LT-Y1;
(xi) the Uncertificated Pass-Through Rate for REMIC II Regular Interest LT-Y2 minus the
related Marker Rate, applied to a notional amount equal to the Uncertificated
Principal Balance of REMIC II Regular Interest LT-Y2; and
(xii) the Uncertificated Pass-Through Rate for REMIC II Regular Interest LT-Y3 minus the
related Marker Rate, applied to a notional amount equal to the Uncertificated
Principal Balance of REMIC II Regular Interest LT-Y3.
Class B-1 Principal Distribution Amount: For any Distribution Date, an amount equal
to the excess, if any, of (i) the Certificate Principal Balance of the Class B-1
Certificates immediately prior to such Distribution Date over (ii) the excess of (a) the
aggregate Stated Principal Balance of the Mortgage Loans as of the last day of the related
Due Period over (b) the sum of (1) the aggregate Certificate Principal Balance of the Class
A Certificates (after taking into account the payment of the Class A Principal Distribution
Amount on such Distribution Date), (2) the Certificate Principal Balance of the Class M-1
Certificates (after taking into account the payment of the Class M-1 Principal Distribution
Amount on such Distribution Date), (3) the Certificate Principal Balance of the Class M-2
Certificates (after taking into account the payment of the Class M-2 Principal Distribution
Amount on such Distribution Date) and (4) the product of (x) the aggregate Stated Principal
Balance of the Mortgage Loans as of the last day of the related Due Period and (y) the sum
of 1.60% and the Current Specified Overcollateralization Percentage for such Distribution
Date.
Class B-2 Principal Distribution Amount: For any Distribution Date, an amount equal
to the excess, if any, of (i) the Certificate Principal Balance of the Class B-2
Certificates immediately prior to such Distribution Date over (ii) the excess of (a) the
aggregate Stated Principal Balance of the Mortgage Loans as of the last day of the related
Due Period over (b) the sum of (1) the aggregate Certificate Principal Balance of the Class
A Certificates (after taking into account the payment of the Class A Principal Distribution
Amount on such Distribution Date), (2) the Certificate Principal Balance of the Class M-1
Certificates (after taking into account the payment of the Class M-1 Principal Distribution
Amount on such Distribution Date), (3) the Certificate Principal Balance of the Class M-2
Certificates (after taking into account the payment of the Class M-2 Principal Distribution
Amount on such Distribution Date), (4) the Certificate Principal Balance of the Class B-1
Certificates (after taking into account the payment of the Class B-1 Principal Distribution
Amount on such Distribution Date) and (5) the product of (x) the aggregate Stated Principal
Balance of the Mortgage Loans as of the last day of the related Due Period and (y) the
Current Specified Overcollateralization Percentage for such Distribution Date.
Class M Certificates: The Class M-1 and Class M-2 Certificates.
Class M-1 Principal Distribution Amount: For any Distribution Date, an amount equal
to the excess, if any, of (i) the Certificate Principal Balance of the Class M-1
Certificates immediately prior to such Distribution Date over (ii) the excess of (a) the
aggregate Stated Principal Balance of the Mortgage Loans as of the last day of the related
Due Period over (b) the sum of (1) the aggregate Certificate Principal Balance of the Class
A Certificates (after taking into account the payment of the Class A Principal Distribution
Amount on such Distribution Date) and (2) the product of (x) the aggregate Stated Principal
Balance of the Mortgage Loans as of the last day of the related Due Period and (y) the sum
of (I) 6.80% and (II) the Current Specified Overcollateralization Percentage for such
Distribution Date.
Class M-2 Principal Distribution Amount: For any Distribution Date, an amount equal
to the excess, if any, of (i) the Certificate Principal Balance of the Class M-2
Certificates immediately prior to such Distribution Date over (ii) the excess of (a) the
aggregate Stated Principal Balance of the Mortgage Loans as of the last day of the related
Due Period over (b) the sum of (1) the aggregate Certificate Principal Balance of the Class
A Certificates (after taking into account the payment of the Class A Principal Distribution
Amount on such Distribution Date), (2) the Certificate Principal Balance of the Class M-1
Certificates (after taking into account the payment of the Class M-1 Principal Distribution
Amount on such Distribution Date) and (3) the product of (x) the aggregate Stated Principal
Balance of the Mortgage Loans as of the last day of the related Due Period and (y) the sum
of (I) 3.20% and (II) the Current Specified Overcollateralization Percentage for such
Distribution Date.
Class R Certificates: The Class R-I, R-II and R-III Certificates.
Class R-I Certificate: Any one of the Class R-I Certificates executed by the Trustee
and authenticated by the Certificate Registrar substantially in the form annexed hereto as
Exhibit A-6 and evidencing an interest designated as a "residual interest" in REMIC I for
purposes of the REMIC Provisions.
Class R-II Certificate: Any one of the Class R-II Certificates executed by the
Trustee and authenticated by the Certificate Registrar substantially in the form annexed
hereto as Exhibit A-6 and evidencing an interest designated as a "residual interest" in
REMIC II for purposes of the REMIC Provisions.
Class R-III Certificate: Any one of the Class R-III Certificates executed by the
Trustee and authenticated by the Certificate Registrar substantially in the form annexed
hereto as Exhibit A-6 and evidencing an interest designated as a "residual interest" in
REMIC III for purposes of the REMIC Provisions.
Class XP Reserve Account: The account established and maintained by the Master
Servicer pursuant to Section 4.07 hereof.
Closing Date: June 30, 2004.
Code: The Internal Revenue Code of 1986, as amended.
Compensating Interest Payment: As defined in Section 6.06.
Convertible Mortgage Loan: A Mortgage Loan that provides an option to the related
mortgagor to convert the adjustable interest rate on such Mortgage Loan to a fixed interest
rate.
Corporate Trust Office: The designated office of the Trustee where at any particular
time its corporate trust business with respect to this Agreement shall be administered,
which office at the date of the execution of this Agreement is located at ▇ ▇▇▇ ▇▇▇▇ ▇▇▇▇▇,
▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention: Institutional Trust Services/Global Debt,
Structured Asset Mortgage Investments II Inc., Bear ▇▇▇▇▇▇▇ ALT-A Trust 2004-6, or at such
other address as the Trustee may designate from time to time.
Corresponding Certificate: With respect to:
(i) REMIC III Regular Interest I-A, the Class I-A Certificates,
(ii) REMIC III Regular Interest II-A-1, the Class II-A-1 Certificates,
(iii) REMIC III Regular Interest II-A-2, the Class II-A-2 Certificates,
(iv) REMIC III Regular Interest II-A-3, the Class II-A-3 Certificates,
(v) REMIC III Regular Interest III-A, the Class III-A Certificates,
(vi) REMIC III Regular Interest M1, the Class M-1 Certificates,
(vii) REMIC III Regular Interest M2, the Class M-2 Certificates,
(viii)REMIC III Regular Interest B, the Class B Certificates,
(ix) REMIC III Regular Interest XP, the Class XP Certificates, and
(x) REMIC III Regular Interest B-IO-I and REMIC III Regular Interest B-IO-P, the
Class B-IO Certificates.
Countrywide: Countrywide Home Loans, Inc., and its successor in interest.
Countrywide Servicing Agreement: The Sale and Servicing Agreement, dated as of
October 30, 2002, as amended, between EMC and Countrywide, as attached hereto as Exhibit
H-4.
Current Interest: As of any Distribution Date, with respect to each Class of
Certificates (other than the Class XP Certificates and the Class R Certificates), (i) the
interest accrued on the Certificate Principal Balance or Notional Amount, as applicable,
during the related Interest Accrual Period at the applicable Pass-Through Rate plus any
amount previously distributed with respect to interest for such Certificate that has been
recovered as a voidable preference by a trustee in bankruptcy minus (ii) the sum of (a) any
Prepayment Interest Shortfall for such Distribution Date, to the extent not covered by
Compensating Interest Payments, (b) any Deferred Interest added to the Certificate
Principal Balance of such Class pursuant to Section 6.01(a) First and (c) any shortfalls
resulting from the application of the Relief Act during the related Due Period; provided,
however, that for purposes of calculating Current Interest for any such Class, amounts
specified in clauses (ii)(a) and (ii)(c) hereof for any such Distribution Date shall be
allocated first to the Class B-IO Certificates and the Residual Certificates in reduction
of amounts otherwise distributable to such Certificates on such Distribution Date and then
any excess shall be allocated to each other Class of Certificates pro rata based on the
respective amounts of interest accrued pursuant to clause (i) hereof for each such Class on
such Distribution Date.
Current Specified Overcollateralization Percentage: For any Class of Offered
Certificates and any Distribution Date, the percentage equivalent of a fraction, the
numerator of which is the Overcollateralization Target Amount, and the denominator of which
is the aggregate Stated Principal Balance of the Mortgage Loans as of the last day of the
related Due Period.
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, National Association, and any successor custodian
appointed pursuant to the provisions hereof and of the Custodial Agreement.
Cut-off Date: June 1, 2004.
Cut-off Date Balance: $860,560,954.
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.
Deferred Interest: With respect to a Negative Amortization Loan, the amount of
interest which is deferred and added to the Outstanding Principal Balance of such Mortgage
Loan.
Deficient Valuation: With respect to any Mortgage Loan, a valuation of the Mortgaged
Property by a court of competent jurisdiction in an amount less than the then outstanding
indebtedness under the Mortgage Loan, which valuation results from a proceeding initiated
under the Bankruptcy Code or any other similar state law or other proceeding.
Delinquent: A Mortgage Loan is "Delinquent" if any payment due thereon is not made
pursuant to the terms of such Mortgage Loan by the close of business on the day such
payment is scheduled to be due. A Mortgage Loan is "30 days delinquent" if such payment has
not been received by the close of business on the last day of the month immediately
succeeding the month in which such payment was due. For example, a Mortgage Loan with a
payment due on December 1 that remained unpaid as of the close of business on January 31
would then be considered to be 30 to 59 days delinquent. Similarly for "60 days
delinquent," "90 days delinquent" and so on.
Depositor: Structured Asset Mortgage Investments II Inc., a Delaware corporation, and
any successor thereto.
Depository: The Depository Trust Company, the nominee of which is Cede & Co., and any
successor thereto.
Depository Agreement: The meaning specified in Section 5.01(a) hereof.
Depository Participant: A broker, dealer, bank or other financial institution or
other Person for whom from time to time the Depository effects book-entry transfers and
pledges of securities deposited with the Depository.
Designated Depository Institution: A depository institution (commercial bank, federal
savings bank mutual savings bank or savings and loan association) or trust company (which
may include the Trustee), the deposits of which are fully insured by the FDIC to the extent
provided by law.
Determination Date: With respect to each Mortgage Loan, the Determination Date as
defined in the related Servicing Agreement.
Disqualified Organization: Any of the following: (i) the United States, any State or
political subdivision thereof, any possession of the United States, or any agency or
instrumentality of any of the foregoing (other than an instrumentality which is a
corporation if all of its activities are subject to tax and, except for the ▇▇▇▇▇▇▇ Mac or
any successor thereto, a majority of its board of directors is not selected by such
governmental unit), (ii) any foreign government, any international organization, or any
agency or instrumentality of any of the foregoing, (iii) any organization (other than
certain farmers' cooperatives described in Section 521 of the Code) which is exempt from
the tax imposed by Chapter 1 of the Code (including the tax imposed by Section 511 of the
Code on unrelated business taxable income), (iv) rural electric and telephone cooperatives
described in Section 1381(a)(2)(C) of the Code or (v) any other Person so designated by the
Trustee based upon an Opinion of Counsel that the holding of an ownership interest in a
Residual Certificate by such Person may cause any 2004-6 REMIC contained in the Trust or
any Person having an ownership interest in the Residual Certificate (other than such
Person) to incur a liability for any federal tax imposed under the Code that would not
otherwise be imposed but for the transfer of an ownership interest in a Residual
Certificate to such Person. The terms "United States," "State" and "international
organization" shall have the meanings set forth in Section 7701 of the Code or successor
provisions.
Distribution Account: The trust account or accounts created and maintained pursuant
to Section 4.04 hereof, which shall be denominated "JPMorgan Chase Bank, as Trustee f/b/o
holders of Structured Asset Mortgage Investments II Inc., Bear ▇▇▇▇▇▇▇ ALT-A Trust 2004-6,
Mortgage Pass-Through Certificates, Series 2004-6 - Distribution Account."
Distribution Account Deposit Date: The Business Day prior to each Distribution Date.
Distribution Date: The 25th day of any month, beginning in the month immediately
following the month of the Closing Date, or, if such 25th day is not a Business Day, the
Business Day immediately following.
DTC Custodian: JPMorgan Chase Bank, and its successors in interest as custodian for
the Depository.
Due Date: With respect to each Mortgage Loan, the date in each month on which its
Scheduled Payment is due if such due date is the first day of a month and otherwise is
deemed to be the first day of the following month or such other date specified in the
related Servicing Agreement.
Due Period: With respect to any Distribution Date and each Mortgage Loan, the period
commencing on the second day of the month preceding the month in which the Distribution
Date occurs and ending at the close of business on the first day of the month in which the
Distribution Date occurs.
Eligible Account: Any of (i) a segregated account maintained with a federal or state
chartered depository institution (A) the short-term obligations of which are rated A-1 or
better by Standard & Poor's and P-1 by Moody's at the time of any deposit therein or (B)
insured by the FDIC (to the limits established by such Corporation), the uninsured deposits
in which account are otherwise secured such that, as evidenced by an Opinion of Counsel
(obtained by the Person requesting that the account be held pursuant to this clause (ii))
delivered to the Trustee prior to the establishment of such account, the Certificateholders
will have a claim with respect to the funds in such account and a perfected first priority
security interest against any collateral (which shall be limited to Permitted Investments,
each of which shall mature not later than the Business Day immediately preceding the
Distribution Date next following the date of investment in such collateral or the
Distribution Date if such Permitted Investment is an obligation of the institution that
maintains the Distribution Account) securing such funds that is superior to claims of any
other depositors or general creditors of the depository institution with which such account
is maintained, (ii) a segregated trust account or accounts maintained with a federal or
state chartered depository institution or trust company with trust powers acting in its
fiduciary capacity or (iii) a segregated account or accounts of a depository institution
acceptable to the Rating Agencies (as evidenced in writing by the Rating Agencies that use
of any such account as the Distribution Account will not have an adverse effect on the
then-current ratings assigned to the Classes of the Certificates then rated by the Rating
Agencies). Eligible Accounts may bear interest.
EMC: EMC Mortgage Corporation, and any successor thereto.
EMC Servicing Agreement: The Servicing Agreement, dated as of June 1, 2004, between
Structured Asset Mortgage Investments II Inc. and EMC, as attached hereto as Exhibit H-5.
ERISA: The Employee Retirement Income Security Act of 1974, as amended.
Event of Default: An event of default described in Section 8.01.
EverHome: EverHome Mortgage Company (formerly known as Alliance Mortgage Company),
and any successor thereto.
EverHome Servicing Agreement: The Servicing Agreement, dated as of June 1, 2003,
between EverHome and EMC, attached hereto as Exhibit H-6.
Excess Cashflow: With respect to any Distribution Date, the Remaining Excess Spread
for such Distribution Date; provided, however, that the Excess Cashflow shall include
Principal Funds on and after the Distribution Date on which the aggregate Certificate
Principal Balance of the Class A, Class M-1, Class M-2, Class B-1 and Class B-2
Certificates has been reduced to zero (other than Principal Funds otherwise distributed to
the Holders of Class A, Class M-1, Class M-2, Class B-1 and Class B-2 Certificates on such
Distribution Date).
Excess Liquidation Proceeds: To the extent that such amount is not required by law to
be paid to the related Mortgagor, the amount, if any, by which Liquidation Proceeds with
respect to a Liquidated Mortgage Loan exceed the sum of (i) the Outstanding Principal
Balance of such Mortgage Loan and accrued but unpaid interest at the related Mortgage
Interest Rate through the last day of the month in which the related Liquidation Date
occurs, plus (ii) related Liquidation Expenses.
Excess Spread: With respect to any Distribution Date, the excess, if any, of (i) the
Interest Funds for such Distribution Date over (ii) the sum of the Current Interest on the
Offered Certificates and Interest Carry Forward Amounts on the Class A Certificates, in
each case for such Distribution Date.
Extra Principal Distribution Amount: With respect to any Distribution Date, the
lesser of (i) the excess, if any, of the Overcollateralization Target Amount for such
Distribution Date over the Overcollateralization Amount for such Distribution Date and (ii)
the Excess Spread for such Distribution Date.
▇▇▇▇▇▇ ▇▇▇: Federal National Mortgage Association, and any successor thereto.
FDIC: Federal Deposit Insurance Corporation, and any successor thereto.
Final Certification: The certification substantially in the form of Exhibit Three to
the Custodial Agreement.
Fitch: Fitch Ratings, and any successor thereto.
Fractional Undivided Interest: With respect to any Class of Certificates, the
fractional undivided interest evidenced by any Certificate of such Class the numerator of
which is the Certificate Principal Balance of such Certificate and the denominator of which
is the Certificate Principal Balance of such Class. With respect to the Certificates in the
aggregate, the fractional undivided interest evidenced by (i) each Residual Certificate
will be deemed to equal 0.3333% multiplied by the percentage interest of such Residual
Certificate, (ii) the Class B-IO Certificates will be deemed to equal 1.00% and (iii) a
Certificate of any other Class will be deemed to equal 98% multiplied by a fraction, the
numerator of which is the Certificate Principal Balance of such Certificate and the
denominator of which is the aggregate Certificate Principal Balance of all the Certificates
other than the Class B-IO Certificates.
▇▇▇▇▇▇▇ Mac: ▇▇▇▇▇▇▇ Mac, formerly the Federal Home Loan Mortgage Corporation, and
any successor thereto.
Global Certificate: Any Private Certificate registered in the name of the Depository
or its nominee, beneficial interests in which are reflected on the books of the Depository
or on the books of a Person maintaining an account with such Depository (directly or as an
indirect participant in accordance with the rules of such depository).
GMAC: GMAC Mortgage Corporation, and any successor thereto.
GMAC Servicing Agreement: The Servicing Agreement, dated as of May 1, 2001, as
amended by Amendment No. 1, dated as of October 1, 2001 and Amendment No. 2, dated as of
July 31, 2002, between EMC and GMAC, as attached hereto as Exhibit H-7.
GreenPoint: GreenPoint Mortgage Funding, Inc., and any successor thereto.
GreenPoint Servicing Agreement: The Purchase, Warranties and Servicing Agreement,
dated as of September 1, 2003, between GreenPoint and EMC attached hereto as Exhibit H-8.
Gross Margin: As to each Mortgage Loan, the fixed percentage set forth in the related
Mortgage Note and indicated on the Mortgage Loan Schedule which percentage is added to the
related Index on each Interest Adjustment Date to determine (subject to rounding, the
minimum and maximum Mortgage Interest Rate and the Periodic Rate Cap) the Mortgage Interest
Rate until the next Interest Adjustment Date.
Group I Net WAC Rate: The weighted average of the Net Rates on the Mortgage Loans in
Loan Group I, weighted on the basis of the Stated Principal Balances thereof as of the
beginning of the related Due Period, adjusted to an effective rate reflecting the accrual
of interest on an actual/360 basis.
Group I Principal Distribution Amount: The product of the Principal Distribution
Amount and a fraction, the numerator of which is the Principal Funds for Loan Group I for
such Distribution Date and the denominator of which is the Principal Funds for all Loan
Groups for such Distribution Date.
Group II Net WAC Rate: The weighted average of the Net Rates on the Mortgage Loans in
Loan Group II, weighted on the basis of the Stated Principal Balances thereof as of the
beginning of the related Due Period, adjusted to an effective rate reflecting the accrual
of interest on an actual/360 basis.
Group II Principal Distribution Amount: The product of the Principal Distribution
Amount and a fraction, the numerator of which is the Principal Funds for Loan Group II for
such Distribution Date and the denominator of which is the Principal Funds for all Loan
Groups for such Distribution Date.
Group II Senior Percentage: The aggregate Certificate Balance of the Class II-A
Certificates divided by the aggregate Stated Principal Balance of the Mortgage Loans in
Loan Group II.
Group III Net WAC Rate: The weighted average of the Net Rates on the Mortgage Loans
in Loan Group III, weighted on the basis of the Stated Principal Balances thereof as of the
beginning of the related Due Period, adjusted to an effective rate reflecting the accrual
of interest on an actual/360 basis.
Group III Principal Distribution Amount: The product of the Principal Distribution
Amount and a fraction, the numerator of which is the Principal Funds for Loan Group III for
such Distribution Date and the denominator of which is the Principal Funds for all Loan
Groups for such Distribution Date.
Holder: The Person in whose name a Certificate is registered in the Certificate
Register, except that, subject to Sections 11.02(b) and 11.05(e), solely for the purpose of
giving any consent pursuant to this Agreement, any Certificate registered in the name of
the Depositor or the Trustee or any Affiliate thereof shall be deemed not to be outstanding
and the Fractional Undivided Interest evidenced thereby shall not be taken into account in
determining whether the requisite percentage of Fractional Undivided Interests necessary to
effect any such consent has been obtained.
Indemnified Persons: The Trustee, the Master Servicer, the Custodian and the
Securities Administrator, and their officers, directors, agents and employees and, with
respect to the Trustee, any separate co-trustee and its officers, directors, agents and
employees.
Independent: When used with respect to any specified Person, this term means that
such Person (a) is in fact independent of the Depositor or the Master Servicer and of any
Affiliate of the Depositor or the Master Servicer, (b) does not have any direct financial
interest or any material indirect financial interest in the Depositor or the Master
Servicer or any Affiliate of the Depositor or the Master Servicer and (c) is not connected
with the Depositor or the Master Servicer or any Affiliate as an officer, employee,
promoter, underwriter, trustee, partner, director or person performing similar functions.
Index: The index, if any, specified in a Mortgage Note by reference to which the
related Mortgage Interest Rate will be adjusted from time to time.
Individual Certificate: Any Private Certificate registered in the name of the Holder
other than the Depository or its nominee.
Initial Certification: The certification substantially in the form of Exhibit One to
the Custodial Agreement.
Initial Mortgage Loan: A Mortgage Loan transferred and assigned to the Trustee on the
Closing Date pursuant to Section 2.01 and held as a part of the Trust, as identified in the
applicable Mortgage Loan Schedule.
Institutional Accredited Investor: Any Person meeting the requirements of Rule
501(a)(l), (2), (3) or (7) of Regulation D under the Securities Act or any entity all of
the equity holders in which come within such paragraphs.
Insurance Policy: With respect to any Mortgage Loan, any standard hazard insurance
policy, flood insurance policy or title insurance policy.
Insurance Proceeds: Amounts paid by the insurer under any Insurance Policy covering
any Mortgage Loan or Mortgaged Property other than amounts required to be paid over to the
Mortgagor pursuant to law or the related Mortgage Note or Security Instrument and other
than amounts used to repair or restore the Mortgaged Property or proceeds that represent
reimbursement of the related Servicer's costs and expenses incurred in connection with
presenting claims under the related Insurance Policy.
Interest Accrual Period: With respect to each Class of Certificates (other than the
Class XP Certificates and Residual Certificates), the period from and including the
preceding Distribution Date (or, in the case of the first Distribution Date, from the
Closing Date) to and including the day prior to the current Distribution Date.
Interest Adjustment Date: With respect to a Mortgage Loan, the date, if any,
specified in the related Mortgage Note on which the Mortgage Interest Rate is subject to
adjustment.
Interest Carryforward Amount: As of any Distribution Date and with respect to each
Class of Certificates (other than the Class XP Certificates, Class B-IO Certificates and
Residual Certificates), the sum of (i) the excess of (a) the Current Interest for such
Class with respect to prior Distribution Dates over (b) the amount actually distributed
to such Class of Certificates with respect to interest on or after such prior Distribution
Dates and (ii) interest thereon (to the extent permitted by applicable law) at the applicable
Pass-Through Rate for such Class for the related Interest Accrual Period including the
Interest Accrual Period relating to such Distribution Date.
Interest Funds: For any Distribution Date and a Loan Group (i) the sum, without
duplication, of (a) all scheduled interest collected in respect to the related Mortgage
Loans during the related Due Period less the related Servicing Fee, (b) all Monthly
Advances relating to interest with respect to the related Mortgage Loans made on or prior
to the related Distribution Account Deposit Date, (c) all Compensating Interest Payments
with respect to the related Mortgage Loans and required to be remitted by the Master
Servicer pursuant to this Agreement or the related Servicer pursuant to the related
Servicing Agreement with respect to such Distribution Date, (d) Liquidation Proceeds with
respect to the related Mortgage Loans collected during the related Prepayment Period (or,
in the case of Subsequent Recoveries, during the related Due Period), to the extent such
Liquidation Proceeds relate to interest, (e) all amounts relating to interest with respect
to each related Mortgage Loan purchased by EMC pursuant to Sections 2.02 and 2.03 or by the
Depositor pursuant to Section 3.21 during the related Due Period and (f) all amounts in
respect of interest paid by EMC pursuant to Section 10.01 in respect to the related Loan
Group, in each case to the extent remitted by EMC or the related Servicer, as applicable,
to the Distribution Account pursuant to this Agreement or the related Servicing Agreement
minus (ii) all amounts relating to interest required to be reimbursed pursuant to Sections
4.01, 4.03 and 4.05 or as otherwise set forth in this Agreement and allocated to the
related Loan Group.
Interim Certification: The certification substantially in the form of Exhibit Two to
the Custodial Agreement.
Investment Letter: The letter to be furnished by each Institutional Accredited
Investor which purchases any of the Private Certificates in connection with such purchase,
substantially in the form set forth as Exhibit F-1 hereto.
Lender-Paid PMI Rate: With respect to each Mortgage Loan covered by a lender-paid
primary mortgage insurance policy, the amount payable to the related insurer, as stated in
the Mortgage Loan Schedule.
LIBOR Business Day: Any day other than a Saturday or a Sunday or a day on which
banking institutions in the city of London, England are required or authorized by law to be
closed.
LIBOR Determination Date: With respect to each Class of Offered Certificates and for
the first Interest Accrual Period, June 23, 2004. With respect to each Class of Offered
Certificates and any Interest Accrual Period thereafter, the second LIBOR Business Day
preceding the commencement of such Interest Accrual Period.
Liquidated Mortgage Loan: Any defaulted Mortgage Loan as to which the Servicer or the
Master Servicer has determined that all amounts it expects to recover from or on account of
such Mortgage Loan have been recovered.
Liquidation Date: With respect to any Liquidated Mortgage Loan, the date on which the
Servicer or the Master Servicer has certified that such Mortgage Loan has become a
Liquidated Mortgage Loan.
Liquidation Expenses: With respect to a Mortgage Loan in liquidation, unreimbursed
expenses paid or incurred by or for the account of the Servicer, such expenses including
(a) property protection expenses, (b) property sales expenses, (c) foreclosure and sale
costs, including court costs and reasonable attorneys' fees, and (d) similar expenses
reasonably paid or incurred in connection with liquidation.
Liquidation Proceeds: Cash received in connection with the liquidation of a defaulted
Mortgage Loan, whether through trustee's sale, foreclosure sale, Insurance Proceeds,
condemnation proceeds or otherwise, and Subsequent Recoveries.
Loan-to-Value Ratio: With respect to any Mortgage Loan, the fraction, expressed as a
percentage, the numerator of which is the original principal balance of the related
Mortgage Loan and the denominator of which is the Original Value of the related Mortgaged
Property.
Loan Group: Loan Group I, Loan Group II or Loan Group III, as applicable.
Loan Group I: The group of Mortgage Loans designated as belonging to Loan Group I on
the Mortgage Loan Schedule.
Loan Group II: The group of Mortgage Loans designated as belonging to Loan Group II
on the Mortgage Loan Schedule.
Loan Group III: The group of Mortgage Loans designated as belonging to Loan Group III
on the Mortgage Loan Schedule.
Lost Notes: The original Mortgage Notes that have been lost, as indicated on the
Mortgage Loan Schedule.
Margin: With respect to any Distribution Date on or prior to the first possible
Optional Termination Date and (i) the Class I-A Certificates, 0.32% per annum, (ii) the
Class II-A-1 Certificates, 0.27% per annum, (iii) the Class II-A-2 Certificates, 0.25% per
annum, (iv) the Class II-A-3 Certificates, 0.50% per annum, (v) the Class III-A
Certificates, 0.31% per annum, (vi) the Class M-1 Certificates, 0.55% per annum, (vii) the
Class M-2 Certificates, 1.15% per annum, (viii) the Class B-1 Certificates, 1.90% per
annum, and (ix) the Class B-2 Certificates, 1.90% per annum; and with respect to any
Distribution Date after the first possible Optional Termination Date and (i) the Class I-A
Certificates, 0.64% per annum, (ii) the Class II-A-1 Certificates, 0.54% per annum, (iii)
the Class II-A-2 Certificates, 0.50% per annum, (iv) the Class II-A-3 Certificates, 1.00%
per annum, (v) the Class III-A Certificates, 0.62% per annum, (vi) the Class M-1
Certificates, 0.825% per annum, (vii) the Class M-2 Certificates, 1.725% per annum, (viii)
the Class B-1 Certificates, 2.85% per annum, and (ix) the Class B-2 Certificates, 2.85%
per annum.
Marker Rate: With respect to the Class B-I0 Certificates or the REMIC III Regular
Interest B-IO-I and any Distribution Date, in relation to the REMIC II Regular Interests
LT1, LT2, LT3, LT4 and LT-Y1, a per annum rate equal to two (2) times the weighted
average of the Uncertificated REMIC II Pass-Through Rates for REMIC II Regular Interest
LT2 and REMIC II Regular Interest LT3. With respect to the Class B-IO Certificates or the
REMIC III Regular Interest B-IO-I and any Distribution Date, in relation to the REMIC II
Regular Interests LT5, LT6, LT7, LT8 and LT-Y2, a per annum rate equal to two (2) times
the weighted average of the Uncertificated REMIC II Pass-Through Rates for REMIC II Regular
Interest LT6 and REMIC II Regular Interest LT7. With respect to the Class B-IO
Certificates or the REMIC III Regular Interest B-IO-I and any Distribution Date,
in relation to the REMIC II Regular Interests LT9, LT10, LT11, LT12 and LT-Y3, a per annum
rate equal to two (2) times the weighted average of the Uncertificated REMIC II Pass-Through
Rates for REMIC II Regular Interest LT10 and REMIC II Regular Interest LT11.
Master Servicer: As of the Closing Date, ▇▇▇▇▇ Fargo Bank, National Association and,
thereafter, its respective successors in interest who meet the qualifications of the
Servicing Agreements and this Agreement.
Master Servicer Certification: A written certification covering servicing of the
Mortgage Loans by all Servicers and signed by an officer of the Master Servicer that
complies with (i) the ▇▇▇▇▇▇▇▇-▇▇▇▇▇ 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 "JPMorgan Chase Bank, as
Trustee f/b/o holders of Structured Asset Mortgage Investments II Inc., Bear ▇▇▇▇▇▇▇ ALT-A
Trust 2004-6, Mortgage Pass-Through Certificates, Series 2004-6 - Master Servicer
Collection Account," and which shall be an Eligible Account.
Master Servicing Compensation: The meaning specified in Section 3.14.
Material Defect: The meaning specified in Section 2.02(b).
Maximum Lifetime Mortgage Rate: The maximum level to which a Mortgage Interest Rate
can adjust in accordance with its terms, regardless of changes in the applicable Index.
Mellon Trust: Mellon Trust of New England, National Association (formerly known as
Boston Safe Deposit and Trust Company).
Mellon Trust Servicing Agreement: The Mortgage Loan Sale, Warranties and Servicing
Agreement, dated as of February 1, 1999, by and between Mellon Trust and EMC, as an
affiliate to Bear ▇▇▇▇▇▇▇ Mortgage Capital Corporation, attached hereto as Exhibit 9.
MERS: Mortgage Electronic Registration Systems, Inc., a corporation organized and
existing under the laws of the State of Delaware, and any successor thereto.
MERS System: The system of recording transfers of Mortgage Loans electronically
maintained by MERS.
MIN: The Mortgage Identification Number for Mortgage Loans registered with MERS on
the MERS System.
Minimum Lifetime Mortgage Rate: The minimum level to which a Mortgage Interest Rate
can adjust in accordance with its terms, regardless of changes in the applicable Index.
MOM Loan: With respect to any Mortgage Loan, MERS acting as the mortgagee of such
Mortgage Loan, solely as nominee for the originator of such Mortgage Loan and its
successors and assigns, at the origination thereof.
Monthly Advance: An advance of principal or interest required to be made by the
applicable Servicer pursuant to the related Servicing Agreement or the Master Servicer
pursuant to Section 6.05.
Monthly Delinquency Percentage: With respect to a Due Period, the percentage
equivalent of a fraction, the numerator of which is the aggregate Stated Principal Balance
of the Mortgage Loans that are 60 days or more Delinquent or are in bankruptcy or
foreclosure or are REO Properties as of the close of business on the last day of such Due
Period and the denominator of which is the aggregate Stated Principal Balance of Mortgage
Loans as of the close of business on the last day of such Due Period.
Moody's: ▇▇▇▇▇'▇ Investors Service, Inc., and any successor in interest.
Mortgage File: The mortgage documents listed in Section 2.01(b) pertaining to a
particular Mortgage Loan and any additional documents required to be added to the Mortgage
File pursuant to this Agreement.
Mortgage Interest Rate: The annual rate at which interest accrues from time to time
on any Mortgage Loan pursuant to the related Mortgage Note, which rate is equal to the
"Mortgage Interest Rate" set forth with respect thereto on the Mortgage Loan Schedule.
Mortgage Loan: A mortgage loan transferred and assigned to the Trustee pursuant to
Section 2.01 or Section 2.04 and held as a part of the Trust Fund, as identified in the
Mortgage Loan Schedule (which shall include, without limitation with respect to each
Mortgage Loan, each related Mortgage Note, Mortgage and Mortgage File and all rights
appertaining thereto), including a mortgage loan the property securing which has become an
REO Property.
Mortgage Loan Purchase Agreement: The Mortgage Loan Purchase Agreement dated as of
June 30, 2004, between EMC, as seller, and Structured Asset Mortgage Investments II Inc.,
as purchaser, and all amendments thereof and supplements thereto, attached as Exhibit J.
Mortgage Loan Schedule: The schedule attached hereto as Exhibit B with respect to the
Initial Mortgage Loans and divided into Loan Groups, as amended from time to time to
reflect the repurchase or substitution of Mortgage Loans pursuant to this Agreement or the
Mortgage Loan Purchase Agreement, as the case may be.
Mortgage Note: The originally executed note or other evidence of the indebtedness of
a Mortgagor under the related Mortgage Loan.
Mortgaged Property: Land and improvements securing the indebtedness of a Mortgagor
under the related Mortgage Loan or, in the case of REO Property, such REO Property.
Mortgagor: The obligor on a Mortgage Note.
National City: National City Mortgage Co. and its successor in interest.
National City Servicing Agreement: The Purchase, Warranties and Servicing Agreement,
dated as of October 1, 2001, between EMC and National City, attached hereto as Exhibit H-10.
Negative Amortization Loan: A Mortgage Loan in which the Outstanding Principal
Balance is subject to a negative amortization feature.
Net Interest Shortfall: With respect to any Distribution Date, the Prepayment
Interest Shortfall, if any, for such Distribution Date net of Compensating Interest
Payments made with respect to such Distribution Date.
Net Liquidation Proceeds: As to any Liquidated Mortgage Loan, Liquidation Proceeds
net of (i) Liquidation Expenses which are payable therefrom by the Master Servicer or the
Servicer in accordance with the related Servicing Agreement or this Agreement and (ii)
unreimbursed advances by the Master Servicer or the Servicer and Monthly Advances.
Net Rate: With respect to each Mortgage Loan, the Mortgage Interest Rate in effect
from time to time less the Aggregate Expense Rate (expressed as a per annum rate).
Net Rate Cap: For any Distribution Date and (i) each of the Class I-A, Class II-A and
the Class III-A Certificates, the weighted average of the Net Rates of the Mortgage Loans
in the related Loan Group as of the beginning of the related Due Period, weighted on the
basis of the Stated Principal Balances thereof, as adjusted to an effective rate reflecting
the accrual of interest on the basis of a 360-day year and the actual number of days
elapsed in the related Interest Accrual Period and (ii) each of the Class M Certificates
and the Class B Certificates, the weighted average of the Net Rates on the Mortgage Loans
in each Loan Group, weighted in proportion to the results of subtracting from the aggregate
Stated Principal Balance of each Loan Group, the Certificate Principal Balance of the
related classes of Senior Certificates, as adjusted to an effective rate reflecting the
accrual of interest on the basis of a 360-day year and the actual number of days elapsed in
the related Interest Accrual Period. For federal income tax purposes, the Net Rate Cap (a)
with respect to the Class I-A Certificates, is equal to the Uncertificated REMIC II
Pass-Through Rate for the REMIC II Regular Interests LT1, LT2 and LT-Y1 (b) with respect to
the Class II-A Certificates, is equal to the Uncertificated Pass-Through Rate for the REMIC
II Regular Interests LT5, LT6 and LT-Y2 (c) with respect to the Class III-A Certificates,
is equal to the Uncertified Pass-Through Rate for the REMIC II Regular Interests LT9, LT10
and LT-Y3 (d) with respect to the Class M Certificates and Class B Certificates is the
weighted average of the Uncertificated REMIC II Pass-Through Rates on the ▇▇-▇▇, ▇▇-▇▇ and
LT-Y3 REMIC II Regular Interests, weighted on the basis of their respective Uncertificated
Principal Balances.
Nonrecoverable Advance: Any advance or Monthly Advance (i) which was previously made
or is proposed to be made by the Master Servicer, the Trustee (as successor Master
Servicer) or the applicable Servicer and (ii) which, in the good faith judgment of the
Master Servicer, the Trustee or the applicable Servicer, will not or, in the case of a
proposed advance or Monthly Advance, would not, be ultimately recoverable by the Master
Servicer, the Trustee (as successor Master Servicer) or the applicable Servicer from
Liquidation Proceeds, Insurance Proceeds or future payments on the Mortgage Loan for which
such advance or Monthly Advance was made.
Notional Amount: The Notional Amount of the Class B-IO Certificates immediately prior
to any Distribution Date is equal to the aggregate of the Uncertificated Principal Balances
of the REMIC II Regular Interests.
Offered Certificate: Any Senior Certificate or Offered Subordinate Certificate.
Offered Subordinate Certificate: Any of the Class M-1, Class M-2, Class B-1 or Class
B-2 Certificates.
Officer's Certificate: A certificate signed by the Chairman of the Board, the Vice
Chairman of the Board, the President or a Vice President or Assistant Vice President or
other authorized officer of the Master Servicer or the Depositor, as applicable, and
delivered to the Trustee, as required by this Agreement.
One-Month LIBOR: With respect to any Interest Accrual Period, the rate determined by
the Securities Administrator on the related LIBOR Determination Date on the basis of the
rate for U.S. dollar deposits for one month that appears on Telerate Screen Page 3750 as of
11:00 a.m. (London time) on such LIBOR Determination Date; provided that the parties hereto
acknowledge that One-Month LIBOR for the first Interest Accrual Period shall equal 1.34%
per annum. If such rate does not appear on such page (or such other page as may replace
that page on that service, or if such service is no longer offered, such other service for
displaying One-Month LIBOR or comparable rates as may be reasonably selected by the
Securities Administrator), One-Month LIBOR for the applicable Interest Accrual Period will
be the Reference Bank Rate. If no such quotations can be obtained by the Securities
Administrator and no Reference Bank Rate is available, One-Month LIBOR will be One-Month
LIBOR applicable to the preceding Interest Accrual Period.
Opinion of Counsel: A written opinion of counsel who is or are acceptable to the
Trustee and who, unless required to be Independent (an "Opinion of Independent Counsel"),
may be internal counsel for EMC, the Master Servicer or the Depositor.
Optional Termination Date: The Distribution Date on which the aggregate Stated
Principal Balance of all of the Mortgage Loans is equal to or less than 20% of the
aggregate Stated Principal Balance of all of the Mortgage Loans as of the Cut-off Date.
Original Subordinate Principal Balance: The sum of the aggregate Certificate
Principal Balances of each Class of Subordinate Certificates as of the Closing Date.
Original Value: The lesser of (i) the Appraised Value or (ii) the sales price of a
Mortgaged Property at the time of origination of a Mortgage Loan, except in instances where
either clauses (i) or (ii) is unavailable, the other may be used to determine the Original
Value, or if both clauses (i) and (ii) are unavailable, Original Value may be determined
from other sources reasonably acceptable to the Depositor.
Outstanding Mortgage Loan: With respect to any Due Date, a Mortgage Loan which, prior
to such Due Date, was not the subject of a Principal Prepayment in full, did not become a
Liquidated Mortgage Loan and was not purchased or replaced.
Outstanding Principal Balance: As of the time of any determination, the principal
balance of a Mortgage Loan remaining to be paid by the Mortgagor, or, in the case of an REO
Property, the principal balance of the related Mortgage Loan remaining to be paid by the
Mortgagor at the time such property was acquired by the Trust Fund less any Net Liquidation
Proceeds with respect thereto to the extent applied to principal.
Overcollateralization Amount: With respect to any Distribution Date, the excess, if
any, of (a) the aggregate Stated Principal Balance of the Mortgage Loans as of the last day
of the related Due Period over (b) the aggregate Certificate Principal Balance of the
Offered Certificates on such Distribution Date (after taking into account the payment of
principal other than any Extra Principal Distribution Amount on such Certificates).
Overcollateralization Target Amount: $3,011,963.34.
Pass-Through Rate: As to each Class of Certificates, the REMIC I Regular Interests
and the REMIC II Regular Interests, the rate of interest determined as provided with
respect thereto in Section 5.01(c).
Periodic Rate Cap: With respect to each Mortgage Loan, the maximum adjustment that
can be made to the Mortgage Interest Rate on each Interest Adjustment Date in accordance
with its terms, regardless of changes in the applicable Index.
Permitted Investments: Any one or more of the following obligations or securities
held in the name of the Trustee for the benefit of the Certificateholders:
(1) direct obligations of, and obligations the timely payment of which are
fully guaranteed by the United States of America or any agency or instrumentality of
the United States of America the obligations of which are backed by the full faith
and credit of the United States of America;
(2) (a) demand or time deposits, federal funds or bankers' acceptances issued
by any depository institution or trust company incorporated under the laws of the
United States of America or any state thereof (including the Trustee or the Master
Servicer or its Affiliates acting in its commercial banking capacity) and subject to
supervision and examination by federal and/or state banking authorities, provided
that the commercial paper and/or the short-term debt rating and/or the long-term
unsecured debt obligations of such depository institution or trust company at the
time of such investment or contractual commitment providing for such investment have
the Applicable Credit Rating or better from each Rating Agency and (b) any other
demand or time deposit or certificate of deposit that is fully insured by the Federal
Deposit Insurance Corporation;
(3) repurchase obligations with respect to (a) any security described in
clause (i) above or (b) any other security issued or guaranteed by an agency or
instrumentality of the United States of America, the obligations of which are backed
by the full faith and credit of the United States of America, in either case entered
into with a depository institution or trust company (acting as principal) described
in clause (ii)(a) above where the Trustee holds the security therefor;
(4) securities bearing interest or sold at a discount issued by any
corporation (including the Trustee or the Master Servicer or its Affiliates)
incorporated under the laws of the United States of America or any state thereof that
have the Applicable Credit Rating or better from each Rating Agency at the time of
such investment or contractual commitment providing for such investment; provided,
however, that securities issued by any particular corporation will not be Permitted
Investments to the extent that investments therein will cause the then outstanding
principal amount of securities issued by such corporation and held as part of the
Trust to exceed 10% of the aggregate Outstanding Principal Balances of all the
Mortgage Loans and Permitted Investments held as part of the Trust;
(5) commercial paper (including both non-interest-bearing discount
obligations and interest-bearing obligations payable on demand or on a specified date
not more than one year after the date of issuance thereof) having the Applicable
Credit Rating or better from each Rating Agency at the time of such investment;
(6) a Reinvestment Agreement issued by any bank, insurance company or other
corporation or entity;
(7) any other demand, money market or time deposit, obligation, security or
investment as may be acceptable to each Rating Agency as evidenced in writing by each
Rating Agency to the Trustee; and
(8) any money market or common trust fund having the Applicable Credit Rating
or better from each Rating Agency, including any such fund for which the Trustee or
the Master Servicer or any affiliate of the Trustee or the Master Servicer acts as a
manager or an advisor;
provided, however, that no instrument or security shall be a Permitted Investment if such
instrument or security evidences a right to receive only interest payments with respect to
the obligations underlying such instrument or if such security provides for payment of both
principal and interest with a yield to maturity in excess of 120% of the yield to maturity
at par or if such instrument or security is purchased at a price greater than par.
Permitted Transferee: Any Person other than a Disqualified Organization or an
"electing large partnership" (as defined by Section 775 of the Code).
Person: Any individual, corporation, partnership, joint venture, association, limited
liability company, joint-stock company, trust, unincorporated organization or government or
any agency or political subdivision thereof.
Physical Certificates: The Residual Certificates and the Private Certificates.
Plan: The meaning specified in Section 5.07(a).
Prepayment Charge: With respect to any Mortgage Loan, the charges or premiums, if
any, due in connection with a full or partial prepayment of such Mortgage Loan in
accordance with the terms thereof.
Prepayment Charge Loan: Any Mortgage Loan for which a Prepayment Charge may be
assessed and to which such Prepayment Charge the Class XP Certificates are entitled, as
indicated on the Mortgage Loan Schedule.
Prepayment Interest Shortfall: With respect to any Distribution Date, for each
Mortgage Loan that was the subject of a partial Principal Prepayment, a Principal
Prepayment in full, or that became a Liquidated Loan during the related Prepayment Period,
(other than a Principal Prepayment in full resulting from the purchase of a Mortgage Loan
pursuant to Section 2.02, 2.03, 3.21 or 10.01 hereof), the amount, if any, by which (i) one
month's interest at the applicable Net Rate on the Stated Principal Balance of such
Mortgage Loan immediately prior to such prepayment (or liquidation) or in the case of a
partial Principal Prepayment on the amount of such prepayment (or liquidation proceeds)
exceeds (ii) the amount of interest paid or collected in connection with such Principal
Prepayment or such liquidation proceeds less the sum of (a) any Prepayment Charges and (b)
the related Servicing Fee.
Prepayment Period: With respect to a Distribution Date is the immediately preceding
calendar month in the case of the Mortgage Loans for which EMC is the Servicer and in the
case of the Mortgage Loans for which EMC is not the Servicer such period as is provided in
the related Servicing Agreement with respect to the related Servicer.
Primary Mortgage Insurance Policy: A policy underwriting primary mortgage insurance.
Principal Distribution Amount: With respect to each Distribution Date, an amount
equal to sum of (i) the sum of the Principal Funds for all Loan Groups for such
Distribution Date and (ii) any Extra Principal Distribution Amount for such Distribution
Date.
Principal Funds: With respect to any Distribution Date and each Loan Group, (i) the
sum, without duplication, of (a) all scheduled principal collected on the Mortgage Loans in
the related Loan Group during the related Due Period, (b) all Monthly Advances relating to
principal made on the Mortgage Loans in the related Loan Group on or before the
Distribution Account Deposit Date, (c) Principal Prepayments on the Mortgage Loans in the
related Loan Group, exclusive of prepayment charges or penalties, collected during the
related Prepayment Period, (d) the Stated Principal Balance of each Mortgage Loan in the
related Loan Group that was purchased by the Seller pursuant to Section 2.02, 2.03 or 3.21
during the related Due Period, (e) the aggregate of all Substitution Adjustment Amounts in
connection with the substitution of Mortgage Loans in the related Loan Group pursuant to
Section 2.04 during the related Due Period, (f) amounts in respect of principal paid by EMC
pursuant to Section 10.01 and (g) all Liquidation Proceeds collected during the related
Prepayment Period (or, in the case of Subsequent Recoveries, during the related Due Period)
on Mortgage Loans in the related Loan Group, to the extent such Liquidation Proceeds relate
to principal, in each case to the extent remitted by EMC or the related Servicer to the
Distribution Account pursuant to this Agreement or the related Servicing Agreement minus
(ii) all amounts required to be reimbursed pursuant to Sections 4.01, 4.03 and 4.05 or as
otherwise set forth in this Agreement.
Principal Prepayment: Any payment (whether partial or full) or other recovery of
principal on a Mortgage Loan which is received in advance of its scheduled Due Date to the
extent that it is not accompanied by an amount as to interest representing scheduled
interest due on any date or dates in any month or months subsequent to the month of
prepayment, including Insurance Proceeds and the Repurchase Proceeds, but excluding the
principal portion of Net Liquidation Proceeds.
Private Certificate: Any Class XP Certificate, Class B-IO Certificate or Class R
Certificate.
Prospectus: The prospectus, dated May 14, 2004, as supplemented by the prospectus
supplement dated June 29, 2004, relating to the offering of the Certificates.
Protected Account: An account established and maintained for the benefit of
Certificateholders by each Servicer with respect to the related Mortgage Loans and with
respect to REO Property pursuant to the respective Servicing Agreements.
QIB: A Qualified Institutional Buyer as defined in Rule 144A promulgated under the
Securities Act.
Qualified Insurer: Any insurance company duly qualified as such under the laws of the
state or states in which the related Mortgaged Property or Mortgaged Properties is or are
located, duly authorized and licensed in such state or states to transact the type of
insurance business in which it is engaged and approved as an insurer by the Master
Servicer, so long as the claims paying ability of which is acceptable to the Rating
Agencies for pass-through certificates having the same rating as the Certificates rated by
the Rating Agencies as of the Closing Date.
Rating Agencies: S&P and Moody's.
Realized Loss: Any (i) Bankruptcy Loss or (ii) as to any Liquidated Mortgage Loan,
(x) the Outstanding Principal Balance of such Liquidated Mortgage Loan plus accrued and
unpaid interest thereon at the Mortgage Interest Rate through the last day of the month of
such liquidation, less (y) the related Net Liquidation Proceeds with respect to such
Mortgage Loan and the related Mortgaged Property; provided, however, that in the event the
Master Servicer receives Subsequent Recoveries with respect to any Mortgage Loan, the
amount of the Realized Loss with respect to that Mortgage Loan will be reduced to the
extent such Subsequent Recoveries are applied to reduce the Certificate Principal Balance
of any Class of Certificates on any Distribution Date.
Record Date: For each Class of Certificates, the Business Day preceding the
applicable Distribution Date so long as such Class of Certificates remains in book-entry
form; and otherwise, the close of business on the last Business Day of the month
immediately preceding the month of such Distribution Date.
Reference Bank: A leading bank selected by the Securities Administrator that is
engaged in transactions in Eurodollar deposits in the international Eurocurrency market.
Reference Bank Rate: With respect to any Interest Accrual Period, the arithmetic
mean, rounded upwards, if necessary, to the nearest whole multiple of 0.03125%, of the
offered rates for United States dollar deposits for one month that are quoted by the
Reference Banks as of 11:00 a.m., New York City time, on the related interest determination
date to prime banks in the London interbank market for a period of one month in amounts
approximately equal to the aggregate Certificate Principal Balance of all Classes of
Offered Certificates for such Interest Accrual Period, provided that at least two such
Reference Banks provide such rate. If fewer than two offered rates appear, the Reference
Bank Rate will be the arithmetic mean, rounded upwards, if necessary, to the nearest whole
multiple of 0.03125%, of the rates quoted by one or more major banks in New York City,
selected by the securities administrator, as of 11:00 a.m., New York City time, on such
date for loans in U.S. dollars to leading European banks for a period of one month in
amounts approximately equal to the aggregate Certificate Principal Balance of all Classes
of Offered Certificates.
Reinvestment Agreements: One or more reinvestment agreements, acceptable to the
Rating Agencies, from a bank, insurance company or other corporation or entity (including
the Trustee).
Relief Act: The Servicemembers' Civil Relief Act, or similar state laws.
Relief Act Mortgage Loan: Any Mortgage Loan as to which the Scheduled Payment thereof
has been reduced due to the application of the Relief Act.
Remaining Excess Spread: With respect to any Distribution Date, the excess of the
related Excess Spread over the related Extra Principal Distribution Amount.
REMIC: A real estate mortgage investment conduit, as defined in the Code.
REMIC I: That group of assets contained in the Trust Fund designated as a REMIC
consisting of (i) the Mortgage Loans, (ii) amounts on deposit in the Master Servicer
Collection Account related to the Mortgage Loans, (iii) any REO Property relating to the
Mortgage Loans, (iv) the rights of the Trust with respect the Mortgage Loans under any
related Servicing Agreement, (v) the rights of the Trust with respect the Mortgage Loans
under any related Assignment Agreement or insurance policy and (vi) any proceeds of the
foregoing, but not including the Cap Contract or any proceeds thereof.
REMIC I Interests: The REMIC I Regular Interests and the Class R-I Certificates.
REMIC I Realized Loss: Realized Losses on Group I Loans, Group II and Loan Group III
Loans shall be allocated to the REMIC I Regular Interests as follows: (1) The interest
portion of Realized Losses on Group I Loans, if any, shall be allocated among the REMIC I
Y-1 and REMIC I Z-1 Regular Interests pro rata according to the amount of interest accrued
but unpaid thereon, in reduction thereof; (2) the interest portion of Realized Losses on
Group II Loans, if any, shall be allocated among the REMIC I Y-2 and REMIC I Z-2 Regular
Interests pro rata according to the amount of interest accrued but unpaid thereon, in
reduction thereof and (3) the interest portion of Realized Losses on Group II Loans, if
any, shall be allocated among the REMIC I Y-3 and REMIC I Z-3 Regular Interests pro rata
according to the amount of interest accrued but unpaid thereon, in reduction thereof. Any
interest portion of such Realized Losses in excess of the amount allocated pursuant to the
preceding sentence shall be treated as a principal portion of Realized Losses not
attributable to any specific Mortgage Loan in such Loan Group and allocated pursuant to the
succeeding sentences. The principal portion of Realized Losses with respect to Loan Group I
and Loan Group II shall be allocated to the REMIC I Regular Interests as follows: (1) The
principal portion of Realized Losses on Group I Loans shall be allocated, first, to the
REMIC I Y-1 Regular Interest to the extent of the REMIC I Y-1 Principal Reduction Amount in
reduction of the Uncertificated Principal Balance of such REMIC I Regular Interest and,
second, the remainder, if any, of such principal portion of such Realized Losses shall be
allocated to the REMIC I Z-1 Regular Interest in reduction of the Uncertificated Principal
Balance thereof; (2) the principal portion of Realized Losses on Group II Loans shall be
allocated, first, to the REMIC I Y-2 Regular Interest to the extent of the REMIC I Y-2
Principal Reduction Amount in reduction of the Uncertificated Principal Balance of such
Regular Interest and, second, the remainder, if any, of such principal portion of such
Realized Losses shall be allocated to the REMIC I Z-2 Regular Interest in reduction of the
Uncertificated Principal Balance thereof and (3) the principal portion of Realized Losses
on Group III Loans shall be allocated, first, to the REMIC I Y-3 Regular Interest to the
extent of the REMIC I Y-3 Principal Reduction Amount in reduction of the Uncertificated
Principal Balance of such Regular Interest and, second, the remainder, if any, of such
principal portion of such Realized Losses shall be allocated to the REMIC I Z-3 Regular
Interest in reduction of the Uncertificated Principal Balance thereof.
REMIC I Regular Interests: REMIC I Y-1 Regular Interest, REMIC I Y-2 Regular
Interest, REMIC I Z-3 Regular Interest, REMIC I Z-1 Regular Interest, REMIC I Z-2 Regular
Interest and REMIC I Z-3 Regular Interest.
REMIC I Y Principal Reduction Amounts: For any Distribution Date, the amounts by
which the Uncertificated Principal Balances of the Class Y-1, Class Y-2 and Class Y-3
Regular Interests, respectively, will be reduced on such Distribution Date by the
allocation of Realized Losses and the distribution of principal, determined as described in
Appendix 1.
REMIC I Y Regular Interests: The REMIC I Y-1 Regular Interest, REMIC I Y-2 Regular
Interest and REMIC I Y-3 Regular Interest.
REMIC II Y-1 Principal Distribution Amount: For any Distribution Date, the excess,
if any, of the REMIC II Y-1 Principal Reduction Amount for such Distribution Date over the
principal portion of Realized Losses allocated to the REMIC II Y-1 Regular Interest on such
Distribution Date.
REMIC I Y-1 Regular Interest: One of the separate non-certificated beneficial
ownership interests in REMIC I issued hereunder and designated as a "regular interest" in
REMIC I. REMIC I Y-1 Regular Interest shall accrue interest at the related Uncertificated
REMIC I Pass-Through Rate in effect from time to time, and shall be entitled to
distributions of principal, subject to the terms and conditions hereof, in an aggregate
amount equal to its initial Uncertificated Principal Balance as set forth in Section
5.01(c).
REMIC I Y-2 Principal Distribution Amount: For any Distribution Date, the excess, if
any, of the REMIC I Y-2 Principal Reduction Amount for such Distribution Date over the
principal portion of Realized Losses allocated to the REMIC I Y-2 Regular Interest on such
Distribution Date.
REMIC I Y-2 Regular Interest: One of the separate non-certificated beneficial
ownership interests in REMIC I issued hereunder and designated as a "regular interest" in
REMIC I. REMIC I Y-2 Regular Interest shall accrue interest at the related Uncertificated
REMIC I Pass-Through Rate in effect from time to time, and shall be entitled to
distributions of principal, subject to the terms and conditions hereof, in an aggregate
amount equal to its initial Uncertificated Principal Balance as set forth in Section
5.01(c).
REMIC I Y-3 Principal Distribution Amount: For any Distribution Date, the excess, if
any, of the REMIC I Y-3 Principal Reduction Amount for such Distribution Date over the
principal portion of Realized Losses allocated to the REMIC I Y-3 Regular Interest on such
Distribution Date.
REMIC I Y-3 Regular Interest: One of the separate non-certificated beneficial
ownership interests in REMIC I issued hereunder and designated as a "regular interest" in
REMIC I. REMIC I Y-3 Regular Interest shall accrue interest at the related Uncertificated
REMIC I Pass-Through Rate in effect from time to time, and shall be entitled to
distributions of principal, subject to the terms and conditions hereof, in an aggregate
amount equal to its initial Uncertificated Principal Balance as set forth in Section
5.01(c).
REMIC I Z Principal Reduction Amounts: For any Distribution Date, the amounts by
which the Uncertificated Principal Balances of the REMIC I Z-1, REMIC I Z-2 Regular
Interests and REMIC I Z-3 Regular Interests, respectively, will be reduced on such
Distribution Date by the allocation of Realized Losses and the distribution of principal,
which shall be in each case the excess of (A) the sum of (x) the excess of the REMIC I
Available Distribution Amount for the related Loan Group (i.e. the "related Loan Group" for
the REMIC I Z-1 Regular Interest is Loan Group I, the "related Loan Group" for the REMIC I
Z-2 Regular Interest is Loan Group II and the "related Loan Group" for the REMIC I Z-3
Regular Interest is Loan Group III) over the sum of the amounts thereof distributable (i)
in respect of interest on such REMIC I Z Regular Interest and the related REMIC I Y Regular
Interest and (iv) to such REMIC I Z Regular Interest and the related REMIC I Y Regular
Interest pursuant to clause (d)(i) of the definition of "REMIC I Distribution Amount" and
(y) the amount of Realized Losses allocable to principal for the related Loan Group over
(B) the REMIC I Y Principal Reduction Amount for the related Loan Group.
REMIC I Z Regular Interests: The REMIC II Z-1 Regular Interest and REMIC I Z-2
Regular Interest.
REMIC I Z-1 Principal Distribution Amount: For any Distribution Date, the excess, if
any, of the REMIC I Z-1 Principal Reduction Amount for such Distribution Date over the
principal portion of Realized Losses allocated to the REMIC I Z-1 Regular Interest on such
Distribution Date.
REMIC I Z-1 Regular Interest: One of the separate non-certificated beneficial
ownership interests in REMIC I issued hereunder and designated as a "regular interest" in
REMIC I. REMIC I Z-1 Regular Interest shall accrue interest at the related Uncertificated
REMIC I Pass-Through Rate in effect from time to time, and shall be entitled to
distributions of principal, subject to the terms and conditions hereof, in an aggregate
amount equal to its initial Uncertificated Principal Balance as set forth in Section
5.01(c).
REMIC I Z-2 Principal Distribution Amount: For any Distribution Date, the excess, if
any, of the REMIC I Z-2 Principal Reduction Amount for such Distribution Date over the
principal portion of Realized Losses allocated to the REMIC I Z-2 Regular Interest on such
Distribution Date.
REMIC I Z-2 Regular Interest: One of the separate non-certificated beneficial
ownership interests in REMIC I issued hereunder and designated as a "regular interest" in
REMIC I. REMIC I Z-2 Regular Interest shall accrue interest at the related Uncertificated
REMIC I Pass-Through Rate in effect from time to time, and shall be entitled to
distributions of principal, subject to the terms and conditions hereof, in an aggregate
amount equal to its initial Uncertificated Principal Balance as set forth in Section
5.01(c).
REMIC I Available Distribution Amount: For each Loan Group for any Distribution
Date, the sum of the Principal Funds and Interest Funds for such Loan Group
REMIC I Distribution Amount: For any Distribution Date, the REMIC I Available
Distribution Amount shall be distributed to the REMIC I Regular Interests and the Class R-1
Residual Interest in the following amounts and priority:
(a) To the extent of the REMIC I Available Distribution Amount for Loan Group I:
(i) first, to REMIC I Y-1 and REMIC I Z-1 Regular Interests, concurrently,
the Uncertificated Accrued Interest for such Regular Interests remaining unpaid from
previous Distribution Dates, pro rata according to their respective shares of such
unpaid amounts;
(ii) second, to the REMIC I Y-1 and REMIC I Z-1 Regular Interests,
concurrently, the Uncertificated Accrued Interest for such Classes for the current
Distribution Date, pro rata according to their respective Uncertificated Accrued
Interest;
(iii) fourth, to the REMIC I Y-1 and REMIC I Z-1 Regular Interests, the REMIC I
Y-1 Principal Distribution Amount and the REMIC I Z-1 Principal Distribution Amount,
respectively.
(b) To the extent of the REMIC I Available Distribution Amount for Loan Group II:
(i) first, to the REMIC I Y-2 and REMIC I Z-2 Regular Interests,
concurrently, the Uncertificated Accrued Interest for such Classes remaining unpaid
from previous Distribution Dates, pro rata according to their respective shares of
such unpaid amounts;
(ii) second, to the REMIC I Y-2 and REMIC I Z-2 Regular Interests,
concurrently, the Uncertificated Accrued Interest for such Classes for the current
Distribution Date, pro rata according to their respective Uncertificated Accrued
Interest; and
(iii) third, to the REMIC I Y-2 and REMIC I Z-2 Regular Interests, the REMIC I
Y-2 Principal Distribution Amount and the REMIC I Z-2 Principal Distribution Amount,
respectively.
(c) To the extent of the REMIC I Available Distribution Amount for Loan Group III:
(i) first, to the REMIC I Y-3 and REMIC I Z-3 Regular Interests,
concurrently, the Uncertificated Accrued Interest for such Classes remaining unpaid
from previous Distribution Dates, pro rata according to their respective shares of
such unpaid amounts;
(ii) second, to the REMIC I Y-3 and REMIC I Z-3 Regular Interests,
concurrently, the Uncertificated Accrued Interest for such Classes for the current
Distribution Date, pro rata according to their respective Uncertificated Accrued
Interest; and
(iii) third, to the REMIC I Y-3 and REMIC I Z-3 Regular Interests, the REMIC I
Y-3 Principal Distribution Amount and the REMIC I Z-3 Principal Distribution Amount,
respectively.
(d) To the extent of the REMIC I Available Distribution Amounts for Group I, Group
II and Group III for such Distribution Date remaining after payment of the amounts pursuant
to paragraphs (a) and (b) of this definition of "REMIC I Distribution Amount":
(i) first, to each Class of REMIC I Y and REMIC I Z Regular Interests, pro
rata according to the amount of unreimbursed Realized Losses allocable to principal
previously allocated to each such Regular Interest, the aggregate amount of any
distributions to the Certificates as reimbursement of such Realized Losses on such
Distribution Date pursuant to clauses Third through Fifth in Section 6.01(a);
provided, however, that any amounts distributed pursuant to this paragraph (d)(i) of
this definition of "REMIC I Distribution Amount" shall not cause a reduction in the
Uncertificated Principal Balances of any of the REMIC I Y and REMIC I Z Regular
Interests; and
(ii) second, to the Class R-I Certificates, any remaining amount.
REMIC II: That group of assets contained in the Trust Fund designated as a REMIC
consisting of the REMIC I Regular Interests.
REMIC II Interests: The REMIC II Regular Interests and the Class R-II Certificates.
REMIC II Available Distribution Amount: For each Loan Group and a Distribution Date,
the sum of the Principal Funds and Interest Funds for such Loan Group.
REMIC II Distribution Amount:
(i) On each Distribution Date, the following amounts, in the following order of priority,
shall be distributed by REMIC II to REMIC III on account of the REMIC II Regular
Interests related to Loan Group I:
(1) to the extent of the REMIC II Available Distribution Amount related to Loan Group I,
to REMIC III as the holder of REMIC II Regular Interests LT1, LT2, LT3,
LT4 and LT-Y1, pro rata, in an amount equal to (A) their Uncertificated
Accrued Interest for such Distribution Date, plus (B) any amounts in
respect thereof remaining unpaid from previous Distribution Dates;
(2) to the extent of prepayment charges received with respect to the Loan Group I Loans,
the amount of prepayment charges distributable to the Class XP
Certificates from amounts collected with respect to Loan Group I Loans to
the REMIC II Regular Interest LT-Y1; and
(3) on each Distribution Date, to REMIC III as the holder of the REMIC II Regular
Interests, in an amount equal to the remainder of the REMIC II Available
Distribution Amount related to Loan Group I after the distributions made
pursuant to clauses (1) and (2) above, allocated as follows (except as
provided below):
(A) in respect of the REMIC II Regular Interests LT2, LT3, LT4
and LT-Y1, their respective Principal Distribution Amounts;
(B) in respect of the REMIC II Regular Interest LT1 any remainder
until the Uncertificated Principal Balance thereof is reduced to zero;
(C) any remainder in respect of the REMIC II Regular Interests
LT2, LT3 and LT4, pro rata according to their respective Uncertificated
Principal Balances as reduced by the distributions deemed made pursuant
to (A) above, until their respective Uncertificated Principal Balances
are reduced to zero; and
(D) any remaining amounts of the REMIC II Available Distribution
Amount related to Loan Group I to the Holders of the Class R-II
Certificates.
(ii) On each Distribution Date, the following amounts, in the following order of priority,
shall be distributed by REMIC II to REMIC III on account of the REMIC II Regular
Interests related to Loan Group II:
(1) to the extent of the REMIC II Available Distribution Amount related to Loan Group II,
to REMIC III as the holder of REMIC II Regular Interests LT5, LT6, LT7,
LT8 and LT-Y2, pro rata, in an amount equal to (A) their Uncertificated
Accrued Interest for such Distribution Date, plus (B) any amounts in
respect thereof remaining unpaid from previous Distribution Dates;
(2) to the extent of prepayment charges received with respect to the Loan Group II Loans,
the amount of prepayment charges distributable to the Class XP
Certificates from amounts collected with respect to Loan Group II Loans
to the REMIC II Regular Interest LT-Y2; and
(3) on each Distribution Date, to REMIC III as the holder of the REMIC II Regular
Interests, in an amount equal to the remainder of the REMIC II Available
Distribution Amount related to Loan Group II after the distributions made
pursuant to clauses (1) and (2) above, allocated as follows (except as
provided below):
(A) in respect of the REMIC II Regular Interests LT6, LT7, LT8
and LT-Y2, their respective Principal Distribution Amounts;
(B) in respect of the REMIC II Regular Interest LT5 any remainder
until the Uncertificated Principal Balance thereof is reduced to zero;
(C) any remainder in respect of the REMIC II Regular Interests
LT6, LT7 and LT8, pro rata according to their respective Uncertificated
Principal Balances as reduced by the distributions deemed made pursuant
to (A) above, until their respective Uncertificated Principal Balances
are reduced to zero; and
(D) any remaining amounts of the Group II REMIC II Available
Distribution Amount related to Loan Group II to the Holders of the Class
R-II Certificates.
(iii) On each Distribution Date, the following amounts, in the following order of priority,
shall be distributed by REMIC II to REMIC III on account of the REMIC II Regular
Interests related to Loan Group III:
(1) to the extent of the REMIC II Available Distribution Amount related to Loan Group II,
to REMIC III as the holder of REMIC II Regular Interests LT8, LT10, LT11,
LT12 and LT-Y3, pro rata, in an amount equal to (A) their Uncertificated
Accrued Interest for such Distribution Date, plus (B) any amounts in
respect thereof remaining unpaid from previous Distribution Dates;
(2) to the extent of prepayment charges received with respect to the Loan Group III
Loans, the amount of prepayment charges distributable to the Class XP
Certificates from amounts collected with respect to Loan Group III Loans
to the REMIC II Regular Interest LT-Y3; and
(3) on each Distribution Date, to REMIC III as the holder of the REMIC II Regular
Interests, in an amount equal to the remainder of the REMIC II Available
Distribution Amount related to Loan Group III after the distributions
made pursuant to clauses (1) and (2) above, allocated as follows (except
as provided below):
(A) in respect of the REMIC II Regular Interests LT10, LT11, LT12
and LT-Y3, their respective Principal Distribution Amounts;
(B) in respect of the REMIC II Regular Interest LT9 any remainder
until the Uncertificated Principal Balance thereof is reduced to zero;
(C) any remainder in respect of the REMIC II Regular Interests
LT10, LT11 and LT12, pro rata according to their respective
Uncertificated Principal Balances as reduced by the distributions deemed
made pursuant to (A) above, until their respective Uncertificated
Principal Balances are reduced to zero; and
(D) any remaining amounts of the Group III REMIC II Available
Distribution Amount related to Loan Group III to the Holders of the Class
R-III Certificates.
REMIC II Principal Reduction Amounts: For any Distribution Date, the amounts by
which the principal balances of the REMIC II Regular Interests LT1, LT2, LT3, LT4, LT5,
LT6, LT7, LT8, LT9, LT10, LT11, ▇▇▇▇, ▇▇-▇▇, LT-Y2 and LT-Y3, respectively, will be reduced
on such Distribution Date by the allocation of Realized Losses and the distribution of
principal, determined as follows:
For purposes of the succeeding formulas the following symbols shall have the meanings
set forth below:
Y1 = the aggregate principal balance of the REMIC II Regular Interests LT1 and LT-Y1
after distributions on the prior Distribution Date.
Y2 = the principal balance of the REMIC II Regular Interest LT2 after distributions
on the prior Distribution Date.
Y3 = the principal balance of the REMIC II Regular Interest LT3 after distributions
on the prior Distribution Date.
Y4 = the principal balance of the REMIC II Regular Interest LT4 after distributions
on the prior Distribution Date (note: Y3 = Y4).
ΔY1 = the combined REMIC II Regular Interest LT1 and LT-Y1 Principal Reduction
Amount. Such amount shall be allocated first to LT-Y1 up to the Class Y1 Principal
Reduction Amound and thereafter the remainder shall be allocated to LT1.
ΔY2 = the REMIC I Regular Interest LT2 Principal Reduction Amount.
ΔY3 = the REMIC I Regular Interest LT3 Principal Reduction Amount.
ΔY4 = the REMIC I Regular Interest LT4 Principal Reduction Amount.
P0 = the aggregate principal balance of the REMIC I Regular Interests LT1, LT2, LT3,
LT4 and LT-Y1 after distributions and the allocation of Realized Losses on the prior
Distribution Date.
P1 = the aggregate principal balance of the REMIC I Regular Interests LT1, LT2, LT3,
LT4 and LT-Y1 after distributions and the allocation of Realized Losses to be made on such
Distribution Date.
ΔP = P0 - P1 = the aggregate of the REMIC I Regular Interests LT1, LT2, LT3, LT4 and
LT-Y1 Principal Reduction Amounts, which
= the aggregate of the principal portions of Realized Losses to be
allocated, and the principal distributions to be made with respect to the Group I Mortgage
Loans on such Distribution Date (including principal distributed in respect of accrued and
unpaid interest on the Class B-IO Certificates for prior Distribution Dates).
R0 = the Group I Net WAC Rate (stated as a monthly rate) after giving effect to
amounts distributed and Realized Losses allocated on the prior Distribution Date.
R1 = the Group I Net WAC Rate (stated as a monthly rate) after giving effect to
amounts to be distributed and Realized Losses to be allocated on such Distribution Date.
α = (Y2 + Y3)/P0. The initial value of α on the Closing Date for use on the first
Distribution Date shall be 0.0001.
γ0 = the lesser of (A) the sum for all Classes of Class I-A Certficates, other than
the Class B-IO Certificates, of the product for each Class of (i) the monthly interest rate
(as limited by the Group I Net WAC Rate, if applicable) for such Class applicable for
distributions to be made on such Distribution Date and (ii) the aggregate Certificate
Principal Balance for such Class after distributions and the allocation of Realized Losses
on the prior Distribution Date and (B) R0*P0.
γ1 = the lesser of (A) the sum for all Classes of Class I-A Certficates, other than
the Class B-IO Certificates, of the product for each Class of (i) the monthly interest rate
(as limited by the Group I Net WAC Rate, if applicable) for such Class applicable for
distributions to be made on the next succeeding Distribution Date and (ii) the aggregate
Certificate Principal Balance for such Class after distributions and the allocation of
Realized Losses to be made on such Distribution Date and (B) R1*P1.
Then, based on the foregoing definitions:
ΔY1 = ΔP - ΔY2 - ΔY3 - ΔY4;
ΔY2 = (α/2){( γ0R1 - γ1R0)/R0R1};
ΔY3 = αΔP - ΔY2; and
ΔY4 = ΔY3.
if both ΔY2 and ΔY3, as so determined, are non-negative numbers. Otherwise:
(1) If ΔY2, as so determined, is negative, then
ΔY2 = 0;
ΔY3 = α{γ1R0P0 - γ0R1P1}/{γ1R0};
ΔY4 = ΔY3; and
ΔY1 = ΔP - ΔY2 - ΔY3 - ΔY4.
(2) If ΔY3, as so determined, is negative, then
ΔY3 = 0;
ΔY2 = α{γ1R0P0 - γ0R1P1}/{2R1R0P1 - γ1R0};
ΔY4 = ΔY3; and
ΔY1 = ΔP - ΔY2 - ΔY3 - ΔY4.
For purposes of the succeeding formulas the following symbols shall have the meanings
set forth below:
Y5 = the aggregate principal balance of the REMIC II Regular Interests LT5 and LT-Y2
after distributions on the prior Distribution Date.
Y6 = the principal balance of the REMIC II Regular Interest LT6 after distributions
on the prior Distribution Date.
Y7 = the principal balance of the REMIC II Regular Interest LT7 after distributions
on the prior Distribution Date.
Y8 = the principal balance of the REMIC II Regular Interest LT8 after distributions
on the prior Distribution Date (note: Y7 = Y8).
ΔY5 = the aggregate of the REMIC II Regular Interest LT5 and LT-Y-2 Principal
Reduction Amounts. Such amount shall be allocated first to LT-Y2 up to the Class Y2
Principal Reduction Amound and thereafter the remainder shall be allocated to LT5.
ΔY6 = the REMIC II Regular Interest LT6 Principal Reduction Amount.
ΔY7 = the REMIC II Regular Interest LT7 Principal Reduction Amount.
ΔY8 = the REMIC II Regular Interest LT8 Principal Reduction Amount.
Q0 = the aggregate principal balance of the REMIC II Regular Interests LT5, LT6,
LT7, LT8 and LT-Y-2 after distributions and the allocation of Realized Losses on the prior
Distribution Date.
Q1 = the aggregate principal balance of the REMIC II Regular Interests LT5, LT6,
LT7, LT8 and LT-Y2 after distributions and the allocation of Realized Losses to be made on
such Distribution Date.
ΔQ = Q0 - Q1 = the aggregate of the REMIC II Regular Interests LT5, LT6, LT7, LT8
and LT-Y2 Principal Reduction Amounts, which
= the aggregate of the principal portions of Realized Losses to be
allocated, and the principal distributions to be made with respect to the Group II
Mortgage Loans on such Distribution Date (including principal distributed in respect of
accrued and unpaid interest on the Class B-IO Certificates for prior Distribution Dates).
S0 = the Group II Net WAC Rate (stated as a monthly rate) after giving effect to
amounts distributed and Realized Losses allocated on the prior Distribution Date.
S1 = the Group II Net WAC Rate (stated as a monthly rate) after giving effect to
amounts to be distributed and Realized Losses to be allocated on such Distribution Date.
β = (Y6 + Y7)/Q0. The initial value of β on the Closing Date for use on the first
Distribution Date shall be 0.0001.
Γ0 = the lesser of (A) the sum for all Classes of Class II-A Certficates other than
the Class B-IO Certificates of the product for each Class of (i) the monthly interest rate
(as limited by the Group II Net WAC Rate, if applicable) for such Class applicable for
distributions to be made on such Distribution Date and (ii) the aggregate Certificate
Principal Balance for such Class after distributions and the allocation of Realized Losses
on the prior Distribution Date and (B) S0*Q0.
Γ1 = the lesser of (A) the sum for all Classes of Class II-A Certficates other than
the Class SB-II Certificates of the product for each Class of (i) the monthly interest rate
(as limited by the Group II Net WAC Rate, if applicable) for such Class applicable for
distributions to be made on the next succeeding Distribution Date and (ii) the aggregate
Certificate Principal Balance for such Class after distributions and the allocation of
Realized Losses to be made on such Distribution Date and (B) S1*Q1.
Then, based on the foregoing definitions:
ΔY5 = ΔQ - ΔY6 - ΔY7 - ΔY8;
ΔY6 = (β/2){(Γ0S1 - Γ1S0)/S0S1};
ΔY7 = βΔQ - ΔY6; and
ΔY8 = ΔY7.
if both ΔY6 and ΔY7, as so determined, are non-negative numbers. Otherwise:
(1) If ΔY6, as so determined, is negative, then
ΔY6 = 0;
ΔY7 = β{Γ1S0Q0 - Γ0S1Q1}/{Γ1S0};
ΔY8 = ΔY7; and
ΔY5 = ΔQ - ΔY6 - ΔY7 - ΔY8.
(2) If ΔY7, as so determined, is negative, then
ΔY7 = 0;
ΔY6 = β{Γ1S0Q0 - Γ0S1Q1}/{2S1S0Q1 - Γ1S0};
ΔY8 = ΔY7; and
ΔY5 = ΔQ - ΔY6 - ΔY7 - ΔY8.
For purposes of the succeeding formulas the following symbols shall have the meanings
set forth below:
Y9 = the aggregate principal balance of the REMIC II Regular Interests LT9 and LT-Y3
after distributions on the prior Distribution Date.
Y10 = the principal balance of the REMIC II Regular Interest LT10 after distributions
on the prior Distribution Date.
Y11 = the principal balance of the REMIC II Regular Interest LT11 after distributions
on the prior Distribution Date.
Y12 = the principal balance of the REMIC II Regular Interest LT12 after distributions
on the prior Distribution Date (note: Y11 = Y12).
ΔY9 = the aggregate of the REMIC II Regular Interest LT9 and LT-Y3 Principal
Reduction Amounts. Such amount shall be allocated first to LT-Y3 up to the Class Y3
Principal Reduction Amound and thereafter the remainder shall be allocated to LT9.
ΔY10 = the REMIC II Regular Interest LT10 Principal Reduction Amount.
ΔY11 = the REMIC II Regular Interest LT11 Principal Reduction Amount.
ΔY12 = the REMIC II Regular Interest LT12 Principal Reduction Amount.
N0 = the aggregate principal balance of the REMIC II Regular Interests LT9, LT10,
LT11, LT12 and LT-Y3 after distributions and the allocation of Realized Losses on the prior
Distribution Date.
N1 = the aggregate principal balance of the REMIC II Regular Interests LT9, LT10,
LT11, LT12 and LT-Y3 after distributions and the allocation of Realized Losses to be made
on such Distribution Date.
ΔN = N0 - N1 = the aggregate of the REMIC II Regular Interests LT9, LT10, LT11, LT12
and LT-Y3 Principal Reduction Amounts.
= the aggregate of the principal portions of Realized Losses to be
allocated and the principal distributions to be made, with respect to the Group III
Mortgage Loans on such Distribution Date (including principal distributed in respect of
accrued and unpaid interest on the Class B-IO Certificates for prior Distribution Dates).
T0 = the Group III Net WAC Rate (stated as a monthly rate) after giving effect to
amounts distributed and Realized Losses allocated on the prior Distribution Date.
T1 = the Group III Net WAC Rate (stated as a monthly rate) after giving effect to
amounts to be distributed and Realized Losses to be allocated on such Distribution Date.
(epsilon) = (Y10 + Y11)/N0. The initial value of (epsilon) on the Closing Date for
use on the first Distribution Date shall be 0.0001.
(PSI)0 = the lesser of (A) the sum for all Classes of Class III-A Certficates
other than the Class B-IO Certificates of the product for each Class of (i) the monthly
interest rate (as limited by the Group III Net WAC Rate, if applicable) for such Class
applicable for distributions to be made on such Distribution Date and (ii) the aggregate
Certificate Principal Balance for such Class after distributions and the allocation of
Realized Losses on the prior Distribution Date and (B) T0*N0.
(PSI)1 = the lesser of (A) the sum for all Classes of Class III-A Certficates
other than the Class B-IO Certificates of the product for each Class of (i) the monthly
interest rate (as limited by the Group III Net WAC Rate, if applicable) for such Class
applicable for distributions to be made on the next succeeding Distribution Date and (ii)
the aggregate Certificate Principal Balance for such Class after distributions and the
allocation of Realized Losses to be made on such Distribution Date and (B) T1*N1.
Then, based on the foregoing definitions:
ΔY9 = ΔN - ΔY10 - ΔY11 - ΔY12;
ΔY10 = ((epsilon)/2){((PSI)0T1 - (PSI)1T0)/T0T1};
ΔY11 = (epsilon)ΔN - ΔY10; and
ΔY12 = ΔY11.
if both ΔY10 and ΔY11, as so determined, are non-negative numbers. Otherwise:
(1) If ΔY10, as so determined, is negative, then
ΔY10 = 0;
ΔY11 = (epsilon){(PSI)1T0N0 - (PSI)0T1N1}/{(PSI)1T0};
ΔY12 = ΔY11; and
ΔY9 = ΔN - ΔY10 - ΔY11 - ΔY12.
(2) If ΔY11, as so determined, is negative, then
ΔY11 = 0;
ΔY10 = (epsilon){(PSI)1T0N0 - (PSI)0T1N1}/{2T1T0N1 - (PSI)1T0};
ΔY12 = ΔY11; and
ΔY9 = ΔN - ΔY10 - ΔY11 - ΔY12.
REMIC II Realized Loss: Realized Losses on Group I Loans, Group II Loans and Group
III Loans shall be allocated to the REMIC II Regular Interests as follows: (1) The interest
portion of Realized Losses on Group I Loans, if any, shall be allocated among the LT1, LT2,
LT4 and LT-Y1 REMIC II Regular Interests pro rata according to the amount of interest
accrued but unpaid thereon, in reduction thereof; (2) the interest portion of Realized
Losses on Group II Loans, if any, shall be allocated among the LT5, LT6, LT8 and LT-Y2
REMIC II Regular Interests pro rata according to the amount of interest accrued but unpaid
thereon, in reduction thereof and (3) the interest portion of Realized Losses on Group III
Loans, if any, shall be allocated among the ▇▇▇, ▇▇▇▇, ▇▇▇▇ and LT-Y3 REMIC II Regular
Interests pro rata according to the amount of interest accrued but unpaid thereon, in
reduction thereof. Any interest portion of such Realized Losses in excess of the amount
allocated pursuant to the preceding sentence shall be treated as a principal portion of
Realized Losses not attributable to any specific Mortgage Loan in such Loan Group and
allocated pursuant to the succeeding sentences. The principal portion of Realized Losses
with respect to Loan Group I, Loan Group II and Loan Group III shall be allocated to the
REMIC II Regular Interests as follows: (1) The principal portion of Realized Losses on
Group I Loans shall be allocated, first, to the LT-Y1 REMIC II Regular Interest to the
extent that such losses were allocated to the Y-1 REMIC I Regular Interest in reduction of
the Uncertificated Principal Balance thereof, second, to the LT2, LT3 and LT4 REMIC II
Regular Interests pro-rata according to their respective REMIC II Principal Reduction
Amounts to the extent thereof in reduction of the Uncertificated Principal Balance of such
REMIC II Regular Interests and, third, the remainder, if any, of such principal portion of
such Realized Losses shall be allocated to the LT1 REMIC II Regular Interest in reduction
of the Uncertificated Principal Balance thereof; (2) the principal portion of Realized
Losses on Group II Loans shall be allocated, first, to the LT-Y2 REMIC II Regular Interest
to the extent that such losses were allocated to the Y-2 REMIC I Regular Interest in
reduction of the Uncertificated Principal Balance thereof, second, to the LT6, LT7 and LT8
REMIC II Regular Interests pro-rata according to their respective REMIC II Principal
Reduction Amounts to the extent thereof in reduction of the Uncertificated Principal
Balance of such REMIC II Regular Interests and, third, the remainder, if any, of such
principal portion of such Realized Losses shall be allocated to the LT5 REMIC II Regular
Interest in reduction of the Uncertificated Principal Balance thereof; and (3) the
principal portion of Realized Losses on Group III Loans shall be allocated, first, to the
LT-Y3 REMIC II Regular Interest to the extent that such losses were allocated to the Y-3
REMIC I Regular Interest in reduction of the Uncertificated Principal Balance thereof,
second, to the LT10, LT11 and LT12 REMIC II Regular Interests pro-rata according to their
respective REMIC II Principal Reduction Amounts to the extent thereof in reduction of the
Uncertificated Principal Balance of such REMIC II Regular Interests and, third, the
remainder, if any, of such principal portion of such Realized Losses shall be allocated to
the LT9 REMIC II Regular Interest in reduction of the Uncertificated Principal Balance
thereof
REMIC II Regular Interests: REMIC II Regular Interest LT1, REMIC II Regular Interest
LT2, REMIC II Regular Interest LT3, REMIC II Regular Interest LT4, REMIC II Regular
Interest LT5, REMIC II Regular Interest LT6, REMIC II Regular Interest LT7, REMIC II
Regular Interest LT8, REMIC II Regular Interest LT9, REMIC II Regular Interest LT10,
REMIC II Regular Interest LT11, REMIC II Regular Interest LT12, REMIC II Regular Interest
LT-Y1 , REMIC II Regular Interest LT-Y2 and REMIC II Regular Interest LT-Y3.
REMIC II Regular Interest LT1: A regular interest in REMIC II that is held as an
asset of REMIC IIII, that has an initial principal balance equal to the related
Uncertificated Principal Balance, that bears interest at the related Uncertificated
REMIC II Pass-Through Rate, and that has such other terms as are described herein.
REMIC II Regular Interest LT1 Principal Distribution Amount: For any Distribution
Date, the excess, if any, of the REMIC II Regular Interest LT1 Principal Reduction Amount
for such Distribution Date over the Realized Losses allocated to the REMIC II Regular
Interest LT1 on such Distribution Date.
REMIC II Regular Interest LT2: A regular interest in REMIC II that is held as an
asset of REMIC IIII, that has an initial principal balance equal to the related
Uncertificated Principal Balance, that bears interest at the related Uncertificated
REMIC II Pass-Through Rate, and that has such other terms as are described herein.
REMIC II Regular Interest LT2 Principal Distribution Amount: For any Distribution
Date, the excess, if any, of the REMIC II Regular Interest LT2 Principal Reduction Amount
for such Distribution Date over the Realized Losses allocated to the REMIC II Regular
Interest LT2 on such Distribution Date.
REMIC II Regular Interest LT3: A regular interest in REMIC II that is held as an
asset of REMIC III, that has an initial principal balance equal to the related
Uncertificated Principal Balance, that bears interest at the related Uncertificated
REMIC II Pass-Through Rate, and that has such other terms as are described herein.
REMIC II Regular Interest LT3 Principal Distribution Amount: For any Distribution
Date, the excess, if any, of the REMIC II Regular Interest LT3 Principal Reduction Amount
for such Distribution Date over the Realized Losses allocated to the REMIC II Regular
Interest LT3 on such Distribution Date.
REMIC II Regular Interest LT4: A regular interest in REMIC II that is held as an
asset of REMIC III, that has an initial principal balance equal to the related
Uncertificated Principal Balance, that bears interest at the related Uncertificated
REMIC II Pass-Through Rate, and that has such other terms as are described herein.
REMIC II Regular Interest LT4 Principal Distribution Amount: For any Distribution
Date, the excess, if any, of the REMIC II Regular Interest LT4 Principal Reduction Amount
for such Distribution Date over the Realized Losses allocated to the REMIC II Regular
Interest LT4 on such Distribution Date.
REMIC II Regular Interest LT5: A regular interest in REMIC II that is held as an
asset of REMIC III, that has an initial principal balance equal to the related
Uncertificated Principal Balance, that bears interest at the related Uncertificated
REMIC II Pass-Through Rate, and that has such other terms as are described herein.
REMIC II Regular Interest LT5 Principal Distribution Amount: For any Distribution
Date, the excess, if any, of the REMIC II Regular Interest LT5 Principal Reduction Amount
for such Distribution Date over the Realized Losses allocated to the REMIC II Regular
Interest LT5 on such Distribution Date.
REMIC II Regular Interest LT6: A regular interest in REMIC II that is held as an
asset of REMIC III, that has an initial principal balance equal to the related
Uncertificated Principal Balance, that bears interest at the related Uncertificated
REMIC II Pass-Through Rate, and that has such other terms as are described herein.
REMIC II Regular Interest LT6 Principal Distribution Amount: For any Distribution
Date, the excess, if any, of the REMIC II Regular Interest LT6 Principal Reduction Amount
for such Distribution Date over the Realized Losses allocated to the REMIC II Regular
Interest LT6 on such Distribution Date.
REMIC II Regular Interest LT7: A regular interest in REMIC II that is held as an
asset of REMIC III, that has an initial principal balance equal to the related
Uncertificated Principal Balance, that bears interest at the related Uncertificated
REMIC II Pass-Through Rate, and that has such other terms as are described herein.
REMIC II Regular Interest LT7 Principal Distribution Amount: For any Distribution
Date, the excess, if any, of the REMIC II Regular Interest LT7 Principal Reduction Amount
for such Distribution Date over the Realized Losses allocated to the REMIC II Regular
Interest LT7 on such Distribution Date.
REMIC II Regular Interest LT8: A regular interest in REMIC II that is held as an
asset of REMIC III, that has an initial principal balance equal to the related
Uncertificated Principal Balance, that bears interest at the related Uncertificated
REMIC II Pass-Through Rate, and that has such other terms as are described herein.
REMIC II Regular Interest LT8 Principal Distribution Amount: For any Distribution
Date, the excess, if any, of the REMIC II Regular Interest LT8 Principal Reduction Amount
for such Distribution Date over the Realized Losses allocated to the REMIC II Regular
Interest LT8 on such Distribution Date.
REMIC II Regular Interest LT9: A regular interest in REMIC II that is held as an
asset of REMIC III, that has an initial principal balance equal to the related
Uncertificated Principal Balance, that bears interest at the related Uncertificated
REMIC II Pass-Through Rate, and that has such other terms as are described herein.
REMIC II Regular Interest LT9 Principal Distribution Amount: For any Distribution
Date, the excess, if any, of the REMIC II Regular Interest LT9 Principal Reduction Amount
for such Distribution Date over the Realized Losses allocated to the REMIC II Regular
Interest LT9 on such Distribution Date.
REMIC II Regular Interest LT10: A regular interest in REMIC II that is held as an
asset of REMIC III, that has an initial principal balance equal to the related
Uncertificated Principal Balance, that bears interest at the related Uncertificated
REMIC II Pass-Through Rate, and that has such other terms as are described herein.
REMIC II Regular Interest LT10 Principal Distribution Amount: For any Distribution
Date, the excess, if any, of the REMIC II Regular Interest LT10 Principal Reduction Amount
for such Distribution Date over the Realized Losses allocated to the REMIC II Regular
Interest LT10 on such Distribution Date.
REMIC II Regular Interest LT11: A regular interest in REMIC II that is held as an
asset of REMIC III, that has an initial principal balance equal to the related
Uncertificated Principal Balance, that bears interest at the related Uncertificated
REMIC II Pass-Through Rate, and that has such other terms as are described herein.
REMIC II Regular Interest LT11 Principal Distribution Amount: For any Distribution
Date, the excess, if any, of the REMIC II Regular Interest LT11 Principal Reduction Amount
for such Distribution Date over the Realized Losses allocated to the REMIC II Regular
Interest LT11 on such Distribution Date.
REMIC II Regular Interest LT12: A regular interest in REMIC II that is held as an
asset of REMIC III, that has an initial principal balance equal to the related
Uncertificated Principal Balance, that bears interest at the related Uncertificated
REMIC II Pass-Through Rate, and that has such other terms as are described herein.
REMIC II Regular Interest LT12 Principal Distribution Amount: For any Distribution
Date, the excess, if any, of the REMIC II Regular Interest LT12 Principal Reduction Amount
for such Distribution Date over the Realized Losses allocated to the REMIC II Regular
Interest LT12 on such Distribution Date.
REMIC II Regular Interest LT-Y1: A regular interest in REMIC II that is held as an
asset of REMIC III, that has an initial principal balance equal to the related
Uncertificated Principal Balance, that bears interest at the related Uncertificated
REMIC II Pass-Through Rate, and that has such other terms as are described herein.
REMIC II Regular Interest LT-Y1 Principal Distribution Amount: For any Distribution
Date, the excess, if any, of the REMIC II Regular Interest LT-Y1 Principal Reduction Amount
for such Distribution Date over the Realized Losses allocated to the REMIC II Regular
Interest LT-Y1 on such Distribution Date.
REMIC II Regular Interest LT-Y2: A regular interest in REMIC II that is held as an
asset of REMIC III, that has an initial principal balance equal to the related
Uncertificated Principal Balance, that bears interest at the related Uncertificated
REMIC II Pass-Through Rate, and that has such other terms as are described herein.
REMIC II Regular Interest LT-Y2 Principal Distribution Amount: For any Distribution
Date, the excess, if any, of the REMIC II Regular Interest LT-Y2 Principal Reduction Amount
for such Distribution Date over the Realized Losses allocated to the REMIC II Regular
Interest LT-Y2 on such Distribution Date.
REMIC II Regular Interest LT-Y3: A regular interest in REMIC II that is held as an
asset of REMIC III, that has an initial principal balance equal to the related
Uncertificated Principal Balance, that bears interest at the related Uncertificated
REMIC II Pass-Through Rate, and that has such other terms as are described herein.
REMIC II Regular Interest LT-Y3 Principal Distribution Amount: For any Distribution
Date, the excess, if any, of the REMIC II Regular Interest LT-Y3 Principal Reduction Amount
for such Distribution Date over the Realized Losses allocated to the REMIC II Regular
Interest LT-Y3 on such Distribution Date.
REMIC III: That group of assets contained in the Trust Fund designated as a REMIC
consisting of the REMIC II Regular Interests.
REMIC III Regular Certificates: As defined in Section 5.01(c).
REMIC III Realized Losses: Realized Losses allocated to and in reduction of the
Overcollateralization shall be deemed to first reduce the principal balance of the REMIC III
Regular Interest B-IO-P until such balance shall have been reduced to zero and thereafter to
reduce the accrued and unpaid interest on the REMIC III Regular Interest B-IO-I. Realized
Losses allocated to the Certificates in reduction of the interest or principal attributes
thereof shall be deemed allocated to the corresponding REMIC III Regular Interests in
reduction of the corresponding attributes thereof.
REMIC Opinion: An Opinion of Independent Counsel, to the effect that the proposed
action described therein would not, under the REMIC Provisions, (i) cause any 2004-6 REMIC
to fail to qualify as a REMIC while any regular interest in such 2004-6 REMIC is
outstanding, (ii) result in a tax on prohibited transactions with respect to any 2004-6
REMIC or (iii) constitute a taxable contribution to any 2004-6 REMIC after the Startup Day.
REMIC Provisions: The provisions of the federal income tax law relating to REMICs,
which appear at Sections 860A through 860G of the Code, and related provisions and
regulations promulgated thereunder, as the foregoing may be in effect from time to time.
REO Property: A Mortgaged Property acquired in the name of the Trustee, for the
benefit of Certificateholders, by foreclosure or deed-in-lieu of foreclosure in connection
with a defaulted Mortgage Loan.
Repurchase Price: With respect to any Mortgage Loan (or any property acquired with
respect thereto) required to be repurchased by the Seller pursuant to the Mortgage Loan
Purchase Agreement or Article II of this Agreement, an amount equal to the excess of (i)
the sum of (a) 100% of the Outstanding Principal Balance of such Mortgage Loan as of the
date of repurchase (or if the related Mortgaged Property was acquired with respect thereto,
100% of the Outstanding Principal Balance at the date of the acquisition), (b) accrued but
unpaid interest on the Outstanding Principal Balance at the related Mortgage Interest Rate,
through and including the last day of the month of repurchase and (c) any costs and damages
(if any) incurred by the Trust in connection with any violation of such Mortgage Loan of
any predatory or abusive lending laws over (ii) any portion of the Master Servicing
Compensation, Monthly Advances and advances payable to the purchaser of the Mortgage Loan.
Repurchase Proceeds: the Repurchase Price in connection with any repurchase of a
Mortgage Loan by the Seller and any cash deposit in connection with the substitution of a
Mortgage Loan.
Request for Release: A request for release in the form attached hereto as Exhibit D.
Required Insurance Policy: With respect to any Mortgage Loan, any insurance policy
which is required to be maintained from time to time under this Agreement with respect to
such Mortgage Loan.
Reserve Fund: The separate trust account created and maintained by the Trustee
pursuant to Section 4.06 hereof.
Residual Certificates: Any of the Class R Certificates.
Responsible Officer: Any officer assigned to the Corporate Trust Office (or any
successor thereto), including any Vice President, Assistant Vice President, Trust Officer,
any Assistant Secretary, any trust officer or any other officer of the Trustee customarily
performing functions similar to those performed by any of the above designated officers and
having direct responsibility for the administration of this Agreement, and any other
officer of the Trustee to whom a matter arising hereunder may be referred.
Rolling Three-Month Delinquency Average: With respect to a Distribution Date, the
average of the Monthly Delinquency Percentages for the three Due Periods immediately
preceding such Distribution Date.
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 any
successor thereto.
Scheduled Payment: With respect to any Mortgage Loan and any Due Period, the
scheduled payment or payments of principal and interest due during such Due Period on such
Mortgage Loan which either is payable by a Mortgagor in such Due Period under the related
Mortgage Note or, in the case of REO Property, would otherwise have been payable under the
related Mortgage Note.
Scheduled Principal: The principal portion of any Scheduled Payment.
Securities Act: The Securities Act of 1933, as amended.
Securities Administrator: ▇▇▇▇▇ Fargo Bank, National Association, and any successor
thereto, or any successor securities administrator appointed as herein provided.
Securities Legend: "THIS CERTIFICATE HAS NOT BEEN AND WILL NOT BE REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR UNDER ANY STATE
SECURITIES LAWS. THE HOLDER HEREOF, BY PURCHASING THIS CERTIFICATE, AGREES THAT THIS
CERTIFICATE MAY BE REOFFERED, RESOLD, PLEDGED OR OTHERWISE TRANSFERRED ONLY IN COMPLIANCE
WITH THE SECURITIES ACT AND OTHER APPLICABLE LAWS AND ONLY (1) PURSUANT TO RULE 144A UNDER
THE SECURITIES ACT ("RULE 144A") TO A PERSON THAT THE HOLDER REASONABLY BELIEVES IS A
QUALIFIED INSTITUTIONAL BUYER WITHIN THE MEANING OF RULE 144A (A "QIB"), PURCHASING FOR ITS
OWN ACCOUNT OR A QIB PURCHASING FOR THE ACCOUNT OF A QIB, WHOM THE HOLDER HAS INFORMED, IN
EACH CASE, THAT THE REOFFER, RESALE, PLEDGE OR OTHER TRANSFER IS BEING MADE IN RELIANCE ON
RULE 144A OR (2) IN CERTIFICATED FORM TO AN "INSTITUTIONAL ACCREDITED INVESTOR" WITHIN THE
MEANING THEREOF IN RULE 501(a)(1), (2), (3) or (7) OF REGULATION D UNDER THE ACT OR ANY
ENTITY IN WHICH ALL OF THE EQUITY OWNERS COME WITHIN SUCH PARAGRAPHS PURCHASING NOT FOR
DISTRIBUTION IN VIOLATION OF THE SECURITIES ACT, SUBJECT TO (A) THE RECEIPT BY THE TRUSTEE
OF A LETTER SUBSTANTIALLY IN THE FORM PROVIDED IN THE AGREEMENT AND (B) THE RECEIPT BY THE
TRUSTEE OF SUCH OTHER EVIDENCE ACCEPTABLE TO THE TRUSTEE THAT SUCH REOFFER, RESALE, PLEDGE
OR TRANSFER IS IN COMPLIANCE WITH THE SECURITIES ACT AND OTHER APPLICABLE LAWS OR IN EACH
CASE IN ACCORDANCE WITH ALL APPLICABLE SECURITIES LAWS OF THE UNITED STATES AND ANY OTHER
APPLICABLE JURISDICTION. THIS CERTIFICATE MAY NOT BE ACQUIRED DIRECTLY OR INDIRECTLY BY, OR
ON BEHALF OF, AN EMPLOYEE BENEFIT PLAN OR OTHER RETIREMENT ARRANGEMENT (A "PLAN") THAT IS
SUBJECT TO TITLE I OF THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED,
AND/OR SECTION 4975 OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE "CODE"), or by a
person using "PLAN assets" of a Plan, UNLESS THE PROPOSED TRANSFEREE PROVIDES THE TRUSTEE
WITH AN OPINION OF COUNSEL FOR THE BENEFIT OF THE TRUSTEE, MASTER SERVICER AND THE
SECURITIES ADMINISTRATOR AND ON WHICH THEY MAY RELY WHICH IS SATISFACTORY TO THE TRUSTEE
THAT THE PURCHASE OF THIS CERTIFICATE IS PERMISSIBLE UNDER APPLICABLE LAW, WILL NOT
CONSTITUTE OR RESULT IN A NON-EXEMPT PROHIBITED TRANSACTION UNDER SECTION 406 OF THE
EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED, OR SECTION 4975 OF THE CODE
AND WILL NOT SUBJECT THE MASTER SERVICER, THE TRUSTEE OR THE SECURITIES ADMINISTRATOR TO
ANY OBLIGATION OR LIABILITY IN ADDITION TO THOSE UNDERTAKEN IN THE AGREEMENT.
Security Instrument: A written instrument creating a valid first lien on a Mortgaged
Property securing a Mortgage Note, which may be any applicable form of mortgage, deed of
trust, deed to secure debt or security deed, including any riders or addenda thereto.
Seller: EMC, as Seller under the Mortgage Loan Purchase Agreement.
Senior Certificates: The Class A Certificates.
Senior Enhancement Percentage: As to each Distribution Date, the percentage
equivalent of a fraction, the numerator of which is the sum of (i) the aggregate of the
Certificate Principal Balance of the Class M-1, Class M-2, Class B-1 and Class B-2
Certificates and (ii) the Overcollateralization Amount, in each case after taking into
account the distribution of the related Principal Distribution Amounts on such Distribution
Date, and the denominator of which is the aggregate Stated Principal Balance of the
Mortgage Loans as of the last day of the related Due Period.
Servicer: With respect to each Mortgage Loan, Bank of America, Cendant, Chevy Chase,
Countrywide, EMC, EverHome, GMAC, GreenPoint, Mellon Trust, National City, Universal, WAMU
or ▇▇▇▇▇ Fargo, and any successor thereto.
Servicer Remittance Date: With respect to each Mortgage Loan, the date set forth in
the related Servicing Agreement.
Servicing Agreements: The Bank of America Servicing Agreements, Cendant Servicing
Agreement, Chevy Chase Servicing Agreements, Countrywide Servicing Agreement, EMC Servicing
Agreement, EverHome Servicing Agreement, GMAC Servicing Agreement, GreenPoint Servicing
Agreement, Mellon Trust Servicing Agreement, National City Servicing Agreement, Universal
Servicing Agreement, WAMU 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 Stated 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 plus any master servicing rate set forth in the Mortgage Loan
Schedule.
Startup Day: June 30, 2004.
Stated Principal Balance: With respect to any Mortgage Loan or related REO Property
and any Distribution Date, the Outstanding Principal Balance thereof as of the Cut-off Date
plus, with respect to the Negative Amortization Mortgage Loans, any Deferred Interest
thereon minus the sum of (i) the principal portion of the Scheduled Payments due with
respect to such Mortgage Loan during each Due Period ending prior to such Distribution Date
(and irrespective of any delinquency in their payment), (ii) all Principal Prepayments with
respect to such Mortgage Loan received prior to or during the related Prepayment Period,
and all Liquidation Proceeds to the extent applied by the related Servicer as recoveries of
principal in accordance with this Agreement or the applicable Servicing Agreement with
respect to such Mortgage Loan, that were received by the related Servicer as of the close
of business on the last day of the Prepayment Period related to such Distribution Date and
(iii) any Realized Losses on such Mortgage Loan incurred prior to or during the related
Prepayment Period. The Stated Principal Balance of a Liquidated Mortgage Loan equals zero.
References herein to the Stated Principal Balance of a Loan Group at any time shall mean
the aggregate Stated Principal Balance of all Mortgage Loans in such Loan Group.
Stepdown Date: The earlier to occur of (i) the Distribution Date on which the
Certificate Principal Balance of the Class A Certificates has been reduced to zero and (ii)
the later to occur of (a) the Distribution Date in July 2007 and (b) the first Distribution
Date on which the sum of the aggregate Certificate Principal Balance of the Class M-1,
Class M-2, Class B-1 and Class B-2 Certificates and the Overcollateralization Amount
divided by the Stated Principal Balance of the Mortgage Loans as of the last day of the
related Due Period is greater than or equal to 11.90%.
Subordinate Balance: For each Loan Group, for any Distribution Date, the excess, if
any, of the aggregate Stated Principal Balance of the Mortgage Loans in such Loan Group
over the aggregate Certificate Principal Balance of the Class A Certificates related to
that Loan Group.
Subordinate Certificates: The Class M-1 Certificates, Class M-2 Certificates, Class
B-1, Class B-2 Certificates, Class XP Certificates, Class B-IO Certificates and Residual
Certificates.
Subordinate Balance Percentage: For each Loan Group, fraction, stated as a
percentage, whose numerator is the Subordinate Balance for such Loan Group and whose
denominator is the sum of the Subordinate Balances for Loan Group I, Loan Group II and Loan
Group III.
Subsequent Recoveries: As of any Distribution Date, amounts received during the
related Due Period by the Master Servicer (net of any related expenses permitted to be
reimbursed pursuant to Section 4.03) or surplus amounts held by the Master Servicer to
cover estimated expenses (including, but not limited to, recoveries in respect of the
representations and warranties made by the Seller pursuant to the Mortgage Loan Purchase
Agreement) in respect of a Liquidated Mortgage Loan or the disposition of an REO Property
prior to the related Prepayment Period that resulted in a Realized Loss, after liquidation
or disposition of such Mortgage Loan.
Substitute Mortgage Loan: A mortgage loan tendered to the Trustee pursuant to the
related Servicing Agreement, the Mortgage Loan Purchase Agreement or Section 2.04 of this
Agreement, as applicable, in each case, (i) which has an Outstanding Principal Balance not
greater nor materially less than the Mortgage Loan for which it is to be substituted; (ii)
which has a Mortgage Interest Rate and Net Rate not less than, and not materially greater
than, such Mortgage Loan; (iii) which has a maturity date not materially earlier or later
than such Mortgage Loan and not later than the latest maturity date of any Mortgage Loan;
(iv) which is of the same property type and occupancy type as such Mortgage Loan; (v) which
has a Loan-to-Value Ratio not greater than the Loan-to-Value Ratio of such Mortgage Loan;
(vi) which is current in payment of principal and interest as of the date of substitution;
(vii) as to which the payment terms do not vary in any material respect from the payment
terms of the Mortgage Loan for which it is to be substituted and (viii) which has a Gross
Margin, Periodic Rate Cap and Maximum Lifetime Mortgage Rate no less than those of such
Mortgage Loan, has the same Index and interval between Interest Adjustment Dates as such
Mortgage Loan, and a Minimum Lifetime Mortgage Rate no lower than that of such Mortgage
Loan.
Substitution Adjustment Amount: The amount, if any, required to be paid by the Seller
to the Trustee for deposit in the Distribution Account pursuant to Section 2.04 in
connection with the substitution of a Mortgage Loan.
Tax Administration and Tax Matters Person: The Securities Administrator and any
successor thereto or assignee thereof shall serve as tax administrator hereunder and as
agent for the Tax Matters Person. The Holder of the largest percentage interest of each
Class of Residual Certificates shall be the Tax Matters Person for the related REMIC, as
more particularly set forth in Section 9.12 hereof.
Termination Purchase Price: The price, calculated as set forth in Section 10.01, to
be paid in connection with the repurchase of the Mortgage Loans pursuant to Section 10.01.
Trigger Event: A Trigger Event exists with respect to a Distribution Date on or after
the Stepdown Date if either (i) the related Rolling Three-Month Delinquency Average exceeds
50% of the related Senior Enhancement Percentage or (ii) the percentage of the cumulative
amount of Realized Losses on the Mortgage Loans as of such date of determination is greater
than the applicable percentage listed below of the aggregate Stated Principal Balances
of the Mortgage Loans as of the Closing Date:
Months Percentage
37 - 48 0.70%
49 - 60 1.10%
61-72 1.45%
73+ 1.70%
Trust Fund or Trust: The corpus of the trust created by this Agreement, consisting of
the Mortgage Loans and the other assets described in Section 2.01(a).
Trustee: JPMorgan Chase Bank, and any successor thereto, or any successor trustee
appointed as herein provided.
2004-6 REMIC: Any of REMIC I, REMIC II and REMIC III.
Uncertificated Accrued Interest: With respect to any Uncertificated Regular Interest
for any Distribution Date, one month's interest at the related Uncertificated Pass-Through
Rate for such Distribution Date, accrued on the Uncertificated Principal Balance or
Uncertificated Notional Amount, as applicable, immediately prior to such Distribution Date.
Uncertificated Accrued Interest for the Uncertificated Regular Interests shall accrue on
the basis of a 360-day year consisting of twelve 30-day months. For purposes of calculating
the amount of Uncertificated Accrued Interest for the REMIC I Regular Interests for any
Distribution Date, any Prepayment Interest Shortfalls and Relief Act Shortfalls (to the
extent not covered by Compensating Interest) (i) relating to the Mortgage Loans in Loan
Group I for any Distribution Date shall be allocated among REMIC I Regular Interests Y-1
and Z-1, (ii) relating to the Mortgage Loans in Loan Group II for any Distribution Date
shall be allocated among REMIC I Regular Interests Y-2 and Z-2 and (iii) relating to the
Mortgage Loans in Loan Group III shall be allocated among the REMIC I Regular Interests Y-3
and Z-3, pro rata, based on, and to the extent of, Uncertificated Accrued Interest, as
calculated without application of this sentence. For purposes of calculating the amount of
Uncertificated Accrued Interest for the REMIC II Regular Interest for any Distribution
Date, any Prepayment Interest Shortfalls and Relief Act Shortfalls (to the extent not
covered by Compensating Interest) (i) relating to the Mortgage Loans in Loan Group I for
any Distribution Date shall be allocated among REMIC II Regular Interests LT1, LT2, LT3,
LT4 and LT-Y1, (ii) relating to the Mortgage Loans in Loan Group II for any Distribution
Date shall be allocated among REMIC II Regular Interests LT5, LT6, LT7, LT8 and LT-Y2 and
(iii) relating to the Mortgage Loans in Loan Group III for any Distribution Date shall be
allocated among REMIC II Regular Interests LT9, LT10, LT11, LT12 and LT-Y3, pro rata, based
on, and to the extent of, Uncertificated Accrued Interest, as calculated without
application of this sentence.
Uncertificated Pass-Through Rate: The Uncertificated REMIC I Pass-Through Rate or the
Uncertificated REMIC II Pass-Through Rate, as the case may be.
Uncertificated Principal Balance: With respect to each REMIC Regular Interest, the
principal amount of such REMIC Regular Interest outstanding as of any date of
determination. As of the Closing Date, the Uncertificated Principal Balance of each REMIC
Regular Interest shall equal the amount set forth in the Section 5.01 as its initial
Uncertificated Principal Balance. On each Distribution Date, the Uncertificated Principal
Balance of each such REMIC Regular Interest shall be reduced by all distributions of
principal made on such REMIC Regular Interest on such Distribution Date pursuant to Section
5.01 and shall be further reduced on such Distribution Date by Realized Losses as provided
by the definitions of REMIC I Realized Losses and REMIC II Realized Losses. The
Uncertificated Principal Balance of each REMIC Regular Interest shall never be less than
zero.
Uncertificated REMIC I Pass-Through Rate: With respect to any Distribution Date and
(i) REMIC I Regular Interest Y-1 and REMIC I Regular Interest Z-1, the weighted average of
the Net Rates of the Mortgage Loans in Loan Group I, (ii) REMIC I Regular Interest Y-2 and
REMIC I Regular Interest Z-2, the weighted average of the Net Rates of the Mortgage Loans
in Loan Group II and (iii) REMIC I Regular Interest Y-3 and REMIC I Regular Interest Z-3,
the weighted average of the Net Rates of the Mortgage Loans in Loan Group III.
Uncertificated REMIC II Pass-Through Rate: With respect to any Distribution Date and
(i) REMIC II Regular Interests LT1, LT2 and LT-Y1, the weighted average of the Net Rates of
the Mortgage Loans in Loan Group I, (ii) REMIC II Regular Interests LT5, LT6 and LT-Y2, the
weighted average of the Net Rates of the Mortgage Loans in Loan Group II, (iii) REMIC III
Regular Interests LT9, LT10 and LT-Y3, the weighted average of the Net Rates of the
Mortgage Loans in Loan Group III, (iv) REMIC II Regular Interests LT3, LT7 and LT11, zero
(0.00%), (v) REMIC II Regular Interest LT4, twice the weighted average of the Net Rates of
the Mortgage Loans in Loan Group I, (vi) REMIC II Regular Interest LT8, twice the weighted
average of the Net Rates of the Mortgage Loans in Loan Group II, and (vii) REMIC II Regular
Interest LT12, twice the weighted average of the Net Rates of the Mortgage Loans in Loan
Group III.
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.
Universal: Universal Master Servicing, and any successor in interest thereto.
Universal Servicing Agreement: The Servicing Agreement, dated as of March 1, 2004,
between Universal and EMC, as attached hereto as Exhibit H-11.
Unpaid Realized Loss Amount: With respect to any Distribution Date and a Class of
Offered Certificates, is the excess of (i) Applied Realized Loss Amounts with respect to
such Class over (ii) the sum of all distributions in reduction of the Applied Realized Loss
Amounts on all previous Distribution Dates. Any amounts distributed to a class of Offered
Certificates in respect of any Unpaid Realized Loss Amount will not be applied to reduce
the Certificate Principal Balance of such Class.
WAMU: Washington Mutual Bank, F.A., and its successor in interest.
WAMU Servicing Agreement: The Servicing Agreement, dated as of April 1, 2001, between
WAMU and EMC, as amended by an amendment thereto, dated December 1, 2002, between the
parties thereto, as attached hereto as Exhibit H-12.
▇▇▇▇▇ Fargo: ▇▇▇▇▇ Fargo Bank, N.A., as successor by merger to ▇▇▇▇▇ Fargo Home
Mortgage, Inc., Inc., and any successor in interest thereto.
▇▇▇▇▇ Fargo Servicing Agreement: The Master Seller's Warranties and Servicing
Agreement, dated as of April 1, 2003, between ▇▇▇▇▇ Fargo and EMC, as amended by the First
Amendment to the Master Seller's Warranties and Servicing Agreement, dated as of May 10,
2004, as attached hereto as Exhibit H-13.
ARTICLE II
Conveyance of Mortgage Loans;
Original Issuance of Certificates
Section 2.01 Conveyance of Mortgage Loans to Trustee. (a)The Depositor concurrently
with the execution and delivery of this Agreement, sells, transfers and assigns to the
Trust without recourse all its right, title and interest in and to (i) the Mortgage Loans
identified in the applicable Mortgage Loan Schedule, including all interest and principal
due with respect to the Initial Mortgage Loans after the Cut-off Date, but excluding any
payments of principal and interest due on or prior to the Cut-off Date; (ii) such assets as
shall from time to time be credited or are required by the terms of this Agreement to be
credited to the Master Servicer Collection Account, (iii) such assets relating to the
Mortgage Loans as from time to time may be held by the Servicers in Protected Accounts, the
Master Servicer in the Master Servicer Collection Account and the Trustee in the
Distribution Account for the benefit of the Trustee on behalf of the Certificateholders,
(iv) any REO Property, (v) the Required Insurance Policies and any amounts paid or payable
by the insurer under any Insurance Policy (to the extent the mortgagee has a claim
thereto), (vi) the Mortgage Loan Purchase Agreement to the extent provided in Section
2.03(a), (vii) the rights with respect to the Servicing Agreements as assigned to the
Trustee on behalf of the Certificateholders by the Assignment Agreements, (viii) such
assets as shall from time to time be credited or are required by the terms of this
Agreement to be credited to the Distribution Account and (ix) any proceeds of the
foregoing. Although it is the intent of the parties to this Agreement that the conveyance
of the Depositor's right, title and interest in and to the Mortgage Loans and other assets
in the Trust Fund pursuant to this Agreement shall constitute a purchase and sale and not a
loan, in the event that such conveyance is deemed to be a loan, it is the intent of the
parties to this Agreement that the Depositor shall be deemed to have granted to the Trustee
a first priority perfected security interest in all of the Depositor's right, title and
interest in, to and under the Mortgage Loans and other assets in the Trust Fund, and that
this Agreement shall constitute a security agreement under applicable law.
(b) In connection with the above transfer and assignment, the Depositor hereby deposits
with the Trustee or the Custodian, as its agent, with respect to each Mortgage Loan:
(i) the original Mortgage Note, endorsed without recourse to the order of the Trustee and
showing an unbroken chain of endorsements from the original payee thereof to the
Person endorsing it to the Trustee, or lost note affidavit together with a copy of
the related Mortgage Note;
(ii) the original Mortgage and, if the related Mortgage Loan is a MOM Loan, noting the
presence of the MIN and language indicating that such Mortgage Loan is a MOM Loan,
which shall have been recorded (or if the original is not available, a copy), with
evidence of such recording indicated thereon (or if clause (X) in the proviso below
applies, shall be in recordable form);
(iii) unless the Mortgage Loan is a MOM Loan, a certified copy of the assignment (which may
be in the form of a blanket assignment if permitted in the jurisdiction in which the
Mortgaged Property is located) to "JPMorgan Chase Bank, as Trustee", with evidence of
recording with respect to each Mortgage Loan in the name of the Trustee thereon (or
if clause (X) in the proviso below applies or for Mortgage Loans with respect to
which the related Mortgaged Property is located in a state other than Maryland,
Tennessee, South Carolina, Mississippi and Florida, or an Opinion of Counsel has been
provided as set forth in this Section 2.01(b), shall be in recordable form);
(iv) all intervening assignments of the Security Instrument, if applicable and only to the
extent available to the Depositor with evidence of recording thereon;
(v) the original or a copy of the policy or certificate of primary mortgage guaranty
insurance, to the extent available, if any;
(vi) the original policy of title insurance or mortgagee's certificate of title insurance
or commitment or binder for title insurance; and
(vii) originals of all modification agreements, if applicable and available;
provided, however, that in lieu of the foregoing, the Depositor may deliver the following
documents, under the circumstances set forth below: (X) in lieu of the original Security
Instrument, assignments to the Trustee or intervening assignments thereof which have been
delivered, are being delivered or will, upon receipt of recording information relating to
the Security Instrument required to be included thereon, be delivered to recording offices
for recording and have not been returned to the Depositor in time to permit their delivery
as specified above, the Depositor may deliver a true copy thereof with a certification by
the Depositor, on the face of such copy, substantially as follows: "Certified to be a true
and correct copy of the original, which has been transmitted for recording"; (Y) in lieu of
the Security Instrument, assignment to the Trustee or intervening assignments thereof, if
the applicable jurisdiction retains the originals of such documents (as evidenced by a
certification from the Depositor to such effect) the Depositor may deliver photocopies of
such documents containing an original certification by the judicial or other governmental
authority of the jurisdiction where such documents were recorded; and (Z) the Depositor
shall not be required to deliver intervening assignments or Mortgage Note endorsements
between the related underlying seller of the Mortgage Loans and EMC, between EMC and the
Depositor, and between the Depositor and the Trustee; and provided, further, however, that
in the case of Mortgage Loans which have been prepaid in full after the Cut-off Date and
prior to the Closing Date, the Depositor, in lieu of delivering the above documents, may
deliver to the Trustee or the Custodian, as its agent, a certification to such effect and
shall deposit all amounts paid in respect of such Mortgage Loans in the Master Servicer
Collection Account on the Closing Date. The Depositor shall deliver such original documents
(including any original documents as to which certified copies had previously been
delivered) to the Trustee or the Custodian, as its agent, promptly after they are received.
The Depositor shall cause, at its expense, the assignment of the Security Instrument to the
Trustee to be recorded not later than 180 days after the Closing Date unless such (a)
recordation is not required by the Rating Agencies or an Opinion of Counsel has been
provided to the Trustee (with a copy to the Custodian) which states that recordation of
such Security Instrument is not required to protect the interests of the Certificateholders
in the related Mortgage Loans or (b) MERS is identified on the Mortgage or on a properly
recorded assignment of the Mortgage as the mortgagee of record solely as nominee for
Depositor and its successor and assigns; provided, however, that each assignment shall be
submitted for recording by the Depositor in the manner described above, at no expense to
the Trust or the Trustee or the Custodian, as its agent, upon the earliest to occur of: (i)
reasonable direction by the Holders of Certificates evidencing Fractional Undivided
Interests aggregating not less than 25% of the Trust, (ii) the occurrence of an Event of
Default, (iii) the occurrence of a bankruptcy, insolvency or foreclosure relating to the
Depositor and (iv) the occurrence of a servicing transfer as described in Section 8.02
hereof. Notwithstanding the foregoing, if the Depositor fails to pay the cost of recording
the assignments, such expense will be paid by the Trustee and the Trustee shall be
reimbursed for such expenses by the Trust in accordance with Section 9.05.
(c) The Depositor hereby assigns to the Trustee its security interest in and to any
Additional Collateral, its right to receive amounts due or to become due in respect of any
Additional Collateral pursuant to the related Servicing Agreement.
Section 2.02 Acceptance of Mortgage Loans by Trustee. (a)The Trustee acknowledges the
sale, transfer and assignment of the Trust to it by the Depositor and receipt of, subject
to further review and the exceptions which may be noted pursuant to the procedures
described below, and declares that it holds, the documents (or certified copies thereof)
delivered to it pursuant to Section 2.01, and declares that it will continue to hold those
documents and any amendments, replacements or supplements thereto and all other assets of
the Trust Fund delivered to it as Trustee in trust for the use and benefit of all present
and future Holders of the Certificates. On the Closing Date, with respect to the Initial
Mortgage Loans, the Custodian, with respect to the Mortgage Loans, shall acknowledge with
respect to each Mortgage Loan by an Initial Certification receipt of the Mortgage File, but
without review of such Mortgage File, except to the extent necessary to confirm that such
Mortgage File contains the related Mortgage Note or lost note affidavit. No later than 90
days after the Closing Date (or with respect to any Substitute Mortgage Loan, within five
Business Days after the receipt by the Trustee or Custodian thereof), the Trustee agrees,
for the benefit of the Certificateholders, to review or cause to be reviewed by the
Custodian on its behalf (under the Custodial Agreement), each Mortgage File delivered to it
and to execute and deliver, or cause to be executed and delivered, to the Depositor and the
Trustee an Interim Certification. In conducting such review, the Trustee or Custodian will
ascertain whether all required documents have been executed and received, and based on the
Mortgage Loan Schedule, whether those documents relate, determined on the basis of the
Mortgagor name, original principal balance and loan number, to the Mortgage Loans it has
received, as identified in the Mortgage Loan Schedule. In performing any such review, the
Trustee or the Custodian, as its agent, may conclusively rely on the purported due
execution and genuineness of any such document and on the purported genuineness of any
signature thereon. If the Trustee or the Custodian, as its agent, finds any document
constituting part of the Mortgage File not to have been executed or received, or to be
unrelated to the Mortgage Loans identified in Exhibit B, or to appear to be defective on
its face, the Trustee or the Custodian, as its agent, shall promptly notify the Seller. In
accordance with the Mortgage Loan Purchase Agreement, the Seller shall correct or cure any
such defect within ninety days from the date of notice from the Trustee or the Custodian,
as its agent, of the defect and if the Seller fails to correct or cure the defect within
such period, and such defect materially and adversely affects the interests of the
Certificateholders in the related Mortgage Loan, the Trustee or the Custodian, as its
agent, shall enforce the Seller's obligation pursuant to the Mortgage Loan Purchase
Agreement within 90 days from the Trustee's or the Custodian's notification, to purchase
such Mortgage Loan at the Repurchase Price; provided that, if such defect would cause the
Mortgage Loan to be other than a "qualified mortgage" as defined in Section 860G(a)(3) of
the Code, any such cure or repurchase must occur within 90 days from the date such breach
was discovered; provided, however, that if such defect relates solely to the inability of
the Seller to deliver the original Security Instrument or intervening assignments thereof,
or a certified copy because the originals of such documents, or a certified copy have not
been returned by the applicable jurisdiction, the Seller shall not be required to purchase
such Mortgage Loan if the Seller delivers such original documents or certified copy
promptly upon receipt, but in no event later than 360 days after the Closing Date. The
foregoing repurchase obligation shall not apply in the event that the Seller cannot deliver
such original or copy of any document submitted for recording to the appropriate recording
office in the applicable jurisdiction because such document has not been returned by such
office; provided that the Seller shall instead deliver a recording receipt of such
recording office or, if such receipt is not available, a certificate confirming that such
documents have been accepted for recording, and delivery to the Trustee or the Custodian,
as its agent, shall be effected by the Seller within thirty days of its receipt of the
original recorded document.
(b) No later than 180 days after the Closing Date (or with respect to any Substitute
Mortgage Loan, within five Business Days after the receipt by the Trustee or the Custodian
thereof), the Trustee or the Custodian, as its agent, will review, for the benefit of the
Certificateholders, the Mortgage Files delivered to it and will execute and deliver or
cause to be executed and delivered to the Depositor and the Trustee a Final Certification.
In conducting such review, the Trustee or the Custodian, as its agent, will ascertain
whether an original of each document required to be recorded has been returned from the
recording office with evidence of recording thereon or a certified copy has been obtained
from the recording office. If the Trustee or the Custodian, as its agent, finds any
document constituting part of the Mortgage File has not been received, or to be unrelated,
determined on the basis of the Mortgagor name, original principal balance and loan number,
to the Initial Mortgage Loans identified in Exhibit B, or to appear defective on its face
(a "Material Defect"), the Trustee or the Custodian, as its agent, shall promptly notify
the Seller (provided, however, that with respect to those documents described in Sections
2.01(b)(iv), (v) and (vii), the Trustee's obligations shall extend only to the documents
actually delivered pursuant to such Sections). In accordance with the Mortgage Loan
Purchase Agreement, the Seller shall correct or cure any such defect within 90 days from
the date of notice from the Trustee or the Custodian, as its agent, of the Material Defect
and if the Seller is unable to cure such defect within such period, and if such defect
materially and adversely affects the interests of the Certificateholders in the related
Mortgage Loan, the Trustee shall enforce the Seller's obligation under the Mortgage Loan
Purchase Agreement to provide a Substitute Mortgage Loan (if within two years of the
Closing Date) or purchase such Mortgage Loan at the Repurchase Price; provided, however,
that if such defect would cause the Mortgage Loan to be other than a "qualified mortgage"
as defined in Section 860G(a)(3) of the Code, any such cure, repurchase or substitution
must occur within 90 days from the date such breach was discovered; provided, further, that
if such defect relates solely to the inability of the Seller to deliver the original
Security Instrument or intervening assignments thereof, or a certified copy, because the
originals of such documents or a certified copy, have not been returned by the applicable
jurisdiction, the Seller shall not be required to purchase such Mortgage Loan, if the
Seller delivers such original documents or certified copy promptly upon receipt, but in no
event later than 360 days after the Closing Date.
(c) In the event that a Mortgage Loan is purchased by the Seller in accordance with
Sections 2.02(a) or (b) above, the Seller shall remit to the Master Servicer the Repurchase
Price for deposit in the Master Servicer Collection Account and the Seller shall provide to
the Trustee written notification detailing the components of the Repurchase Price. Upon
deposit of the Repurchase Price in the Master Servicer Collection Account, the Depositor
shall notify the Trustee and the Trustee or the Custodian, as its agent (upon receipt of a
Request for Release in the form of Exhibit D attached hereto with respect to such Mortgage
Loan), shall release to the Seller the related Mortgage File and the Trustee shall execute
and deliver all instruments of transfer or assignment, without recourse, representation or
warranty, furnished to it by the Seller as are necessary to vest in the Seller title to and
rights under the Mortgage Loan. Such purchase shall be deemed to have occurred on the date
on which the Repurchase Price in available funds is received by the Trustee. The Trustee
shall amend the Mortgage Loan Schedule, which was previously delivered to it by the
Depositor in a form agreed to between the Depositor and the Trustee, to reflect such
repurchase and shall promptly notify the Rating Agencies and the Master Servicer of such
amendment. The obligation of the Seller to repurchase any Mortgage Loan as to which such a
defect in a constituent document exists shall be the sole remedy respecting such defect
available to the Certificateholders or to the Trustee on their behalf.
Section 2.03 Assignment of Interest in the Mortgage Loan Purchase Agreement. (a)The
Depositor hereby assigns to the Trustee, on behalf of the Certificateholders, all of its
right, title and interest in the Mortgage Loan Purchase Agreement, including but not
limited to Depositor's rights and obligations pursuant to the Servicing Agreements (noting
that the Seller has retained the right in the event of breach of the representations,
warranties and covenants, if any, with respect to the related Mortgage Loans of the related
Servicer under the related Servicing Agreement to enforce the provisions thereof and to
seek all or any available remedies). The obligations of the Seller to substitute or
repurchase, as applicable, a Mortgage Loan shall be the Trustee's and the
Certificateholders' sole remedy for any breach thereof. At the request of the Trustee, the
Depositor shall take such actions as may be necessary to enforce the above right, title and
interest on behalf of the Trustee and the Certificateholders or shall execute such further
documents as the Trustee may reasonably require in order to enable the Trustee to carry out
such enforcement.
(b) If the Depositor, the Master Servicer or the Trustee discovers a breach of any of the
representations and warranties set forth in the Mortgage Loan Purchase Agreement, which
breach materially and adversely affects the value of the interests of Certificateholders or
the Trustee in the related Mortgage Loan, the party discovering the breach shall give
prompt written notice of the breach to the other parties. The Seller, within 90 days of its
discovery or receipt of notice that such breach has occurred (whichever occurs earlier),
shall cure the breach in all material respects or, subject to the Mortgage Loan Purchase
Agreement or Section 2.04 of this Agreement, as applicable, shall purchase the Mortgage
Loan or any property acquired with respect thereto from the Trustee; provided, however,
that if there is a breach of any representation set forth in the Mortgage Loan Purchase
Agreement, and the Mortgage Loan or the related property acquired with respect thereto has
been sold, then the Seller shall pay, in lieu of the Repurchase Price, any excess of the
Repurchase Price over the Net Liquidation Proceeds received upon such sale. If the Net
Liquidation Proceeds exceed the Repurchase Price, any excess shall be paid to the Seller to
the extent not required by law to be paid to the borrower. Any such purchase by the Seller
shall be made by providing an amount equal to the Repurchase Price to the Master Servicer
for deposit in the Master Servicer Collection Account and written notification detailing
the components of such Repurchase Price. The Depositor shall notify the Trustee and submit
to the Trustee or the Custodian, as its agent, a Request for Release, and the Trustee shall
release, or the Trustee shall cause the Custodian to release, to the Seller the related
Mortgage File and the Trustee shall execute and deliver all instruments of transfer or
assignment furnished to it by the Seller, without recourse, representation or warranty as
are necessary to vest in the Seller title to and rights under the Mortgage Loan or any
property acquired with respect thereto. Such purchase shall be deemed to have occurred on
the date on which the Repurchase Price in available funds is received by the Trustee. The
Securities Administrator shall amend the Mortgage Loan Schedule to reflect such repurchase
and shall promptly notify the Trustee and the Rating Agencies of such amendment.
Enforcement of the obligation of the Seller to purchase (or substitute a Substitute
Mortgage Loan for) any Mortgage Loan or any property acquired with respect thereto (or pay
the Repurchase Price as set forth in the above proviso) as to which a breach has occurred
and is continuing shall constitute the sole remedy respecting such breach available to the
Certificateholders or the Trustee on their behalf.
Section 2.04 Substitution of Mortgage Loans. Notwithstanding anything to the contrary
in this Agreement, in lieu of purchasing a Mortgage Loan pursuant to the Mortgage Loan
Purchase Agreement or Sections 2.02 or 2.03 of this Agreement, the Seller may, no later
than the date by which such purchase by the Seller would otherwise be required, tender to
the Trustee a Substitute Mortgage Loan accompanied by a certificate of an authorized
officer of the Seller that such Substitute Mortgage Loan conforms to the requirements set
forth in the definition of "Substitute Mortgage Loan" in the Mortgage Loan Purchase
Agreement or this Agreement, as applicable; provided, however, that substitution pursuant
to the Mortgage Loan Purchase Agreement or this Section 2.04, as applicable, in lieu of
purchase shall not be permitted after the termination of the two-year period beginning on
the Startup Day; provided, further, that if the breach would cause the Mortgage Loan to be
other than a "qualified mortgage" as defined in Section 860G(a)(3) of the Code, any such
cure or substitution must occur within 90 days from the date the breach was discovered. The
Trustee or the Custodian, as its agent, shall examine the Mortgage File for any Substitute
Mortgage Loan in the manner set forth in Section 2.02(a) and the Trustee or the Custodian,
as its agent, shall notify the Seller, in writing, within five Business Days after receipt,
whether or not the documents relating to the Substitute Mortgage Loan satisfy the
requirements of the fourth sentence of Section 2.02(a). Within two Business Days after such
notification, the Seller shall provide to the Trustee for deposit in the Distribution
Account the amount, if any, by which the Outstanding Principal Balance as of the next
preceding Due Date of the Mortgage Loan for which substitution is being made, after giving
effect to Scheduled Principal due on such date, exceeds the Outstanding Principal Balance
as of such date of the Substitute Mortgage Loan, after giving effect to Scheduled Principal
due on such date, which amount shall be treated for the purposes of this Agreement as if it
were the payment by the Seller of the Repurchase Price for the purchase of a Mortgage Loan
by the Seller. After such notification to the Seller and, if any such excess exists, upon
receipt of such deposit, the Trustee shall accept such Substitute Mortgage Loan which shall
thereafter be deemed to be a Mortgage Loan hereunder. In the event of such a substitution,
accrued interest on the Substitute Mortgage Loan for the month in which the substitution
occurs and any Principal Prepayments made thereon during such month shall be the property
of the Trust Fund and accrued interest for such month on the Mortgage Loan for which the
substitution is made and any Principal Prepayments made thereon during such month shall be
the property of the Seller. The Scheduled Principal on a Substitute Mortgage Loan due on
the Due Date in the month of substitution shall be the property of the Seller and the
Scheduled Principal on the Mortgage Loan for which the substitution is made due on such Due
Date shall be the property of the Trust Fund. Upon acceptance of the Substitute Mortgage
Loan (and delivery to the Trustee or Custodian of a Request for Release for such Mortgage
Loan), the Trustee shall release to the Seller the related Mortgage File related to any
Mortgage Loan released pursuant to the Mortgage Loan Purchase Agreement or Section 2.04 of
this Agreement, as applicable, and shall execute and deliver all instruments of transfer or
assignment, without recourse, representation or warranty in form as provided to it as are
necessary to vest in the Seller title to and rights under any Mortgage Loan released
pursuant to the Mortgage Loan Purchase Agreement or Section 2.04 of this Agreement, as
applicable. The Seller shall deliver the documents related to the Substitute Mortgage Loan
in accordance with the provisions of the Mortgage Loan Purchase Agreement or Sections
2.01(b) and 2.02(b) of this Agreement, as applicable, with the date of acceptance of the
Substitute Mortgage Loan deemed to be the Closing Date for purposes of the time periods set
forth in such Sections. The representations and warranties set forth in the Mortgage Loan
Purchase Agreement shall be deemed to have been made by the Seller with respect to each
Substitute Mortgage Loan as of the date of acceptance of such Mortgage Loan by the Trustee.
The Master Servicer shall amend the Mortgage Loan Schedule to reflect such substitution and
shall provide a copy of such amended Mortgage Loan Schedule to the Trustee and the Rating
Agencies.
Section 2.05 Issuance of Certificates. The Trustee acknowledges the assignment to it
of the Mortgage Loans and the other assets comprising the Trust Fund and, concurrently
therewith, has signed, and countersigned and delivered to the Depositor, in exchange
therefor, Certificates in such authorized denominations representing such Fractional
Undivided Interests as the Depositor has requested. The Trustee agrees that it will hold
the Mortgage Loans and such other assets as may from time to time be delivered to it
segregated on the books of the Trustee in trust for the benefit of the Certificateholders.
The Depositor, concurrently with the execution and delivery hereof, does hereby
transfer, assign, set over and otherwise convey in trust to the Trustee without recourse
all the right, title and interest of the Depositor in and to the REMIC II Regular Interests
and the other assets of REMIC III for the benefit of the holders of the REMIC III
Certificates. The Trustee acknowledges receipt of the REMIC II Regular Interests (which are
uncertificated) and the other assets of REMIC III and declares that it holds and will hold
the same in trust for the exclusive use and benefit of the holders of the REMIC III
Certificates.
Section 2.06 Representations and Warranties Concerning the Depositor. The Depositor
hereby represents and warrants to the Trustee, the Master Servicer and the Securities
Administrator as follows:
(1) the Depositor (a) is a corporation duly organized, validly existing and in good
standing under the laws of the State of Delaware and (b) is qualified and in
good standing as a foreign corporation to do business in each jurisdiction
where such qualification is necessary, except where the failure so to qualify
would not reasonably be expected to have a material adverse effect on the
Depositor's business as presently conducted or on the Depositor's ability to
enter into this Agreement and to consummate the transactions contemplated
hereby;
(2) the Depositor has full corporate power to own its property, to carry on its business
as presently conducted and to enter into and perform its obligations under this
Agreement;
(3) the execution and delivery by the Depositor of this Agreement have been duly
authorized by all necessary corporate action on the part of the Depositor; and
neither the execution and delivery of this Agreement, nor the consummation of
the transactions herein contemplated, nor compliance with the provisions
hereof, will conflict with or result in a breach of, or constitute a default
under, any of the provisions of any law, governmental rule, regulation,
judgment, decree or order binding on the Depositor or its properties or the
articles of incorporation or by-laws of the Depositor, except those conflicts,
breaches or defaults which would not reasonably be expected to have a material
adverse effect on the Depositor's ability to enter into this Agreement and to
consummate the transactions contemplated hereby;
(4) the execution, delivery and performance by the Depositor of this Agreement and the
consummation of the transactions contemplated hereby do not require the consent
or approval of, the giving of notice to, the registration with, or the taking
of any other action in respect of, any state, federal or other governmental
authority or agency, except those consents, approvals, notices, registrations
or other actions as have already been obtained, given or made;
(5) this Agreement has been duly executed and delivered by the Depositor and, assuming
due authorization, execution and delivery by the other parties hereto,
constitutes a valid and binding obligation of the Depositor enforceable against
it in accordance with its terms (subject to applicable bankruptcy and
insolvency laws and other similar laws affecting the enforcement of the rights
of creditors generally);
(6) there are no actions, suits or proceedings pending or, to the knowledge of the
Depositor, threatened against the Depositor, before or by any court,
administrative agency, arbitrator or governmental body (i) with respect to any
of the transactions contemplated by this Agreement or (ii) with respect to any
other matter which in the judgment of the Depositor will be determined
adversely to the Depositor and will if determined adversely to the Depositor
materially and adversely affect the Depositor's ability to enter into this
Agreement or perform its obligations under this Agreement; and the Depositor is
not in default with respect to any order of any court, administrative agency,
arbitrator or governmental body so as to materially and adversely affect the
transactions contemplated by this Agreement; and
(7) immediately prior to the transfer and assignment to the Trustee, each Mortgage Note
and each Mortgage were not subject to an assignment or pledge, and the
Depositor had good and marketable title to and was the sole owner thereof and
had full right to transfer and sell such Mortgage Loan to the Trustee free and
clear of any encumbrance, equity, lien, pledge, charge, claim or security
interest.
ARTICLE III
Administration and Servicing of Mortgage Loans
Section 3.01 Master Servicer. (a)The Master Servicer shall supervise, monitor and
oversee the obligation of the Servicers to service and administer their respective Mortgage
Loans in accordance with the terms of the applicable Servicing Agreement and shall have
full power and authority to do any and all things which it may deem necessary or desirable
in connection with such master servicing and administration. In performing its obligations
hereunder, the Master Servicer shall act in a manner consistent with Accepted Master
Servicing Practices. Furthermore, the Master Servicer shall oversee and consult with each
Servicer as necessary from time-to-time to carry out the Master Servicer's obligations
hereunder, shall receive, review and evaluate all reports, information and other data
provided to the Master Servicer by each Servicer and shall cause each Servicer to perform
and observe the covenants, obligations and conditions to be performed or observed by such
Servicer under the applicable Servicing Agreement. The Master Servicer shall independently
and separately monitor each Servicer's servicing activities with respect to each related
Mortgage Loan, reconcile the results of such monitoring with such information provided in
the previous sentence on a monthly basis and coordinate corrective adjustments to the
Servicers' and Master Servicer's records, and based on such reconciled and corrected
information, the Master Servicer shall provide such information to the Securities
Administrator as shall be necessary in order for it to prepare the statements specified in
Section 6.04, and prepare any other information and statements required to be forwarded by
the Master Servicer hereunder. The Master Servicer shall reconcile the results of its
Mortgage Loan monitoring with the actual remittances of the Servicers to the Protected
Account pursuant to the applicable Servicing Agreements.
Notwithstanding anything in this Agreement to the contrary, with respect to any
Mortgage Loan secured by any Additional Collateral, the Master Servicer shall have no duty
of obligation to supervise, monitor or oversee the activities of Cendant (or any successor
thereto) under any Cendant Servicing Agreement with respect to any Additional Collateral
(unless the Master Servicer shall have assumed the obligations of Cendant (or any successor
thereto) as successor Servicer under the applicable Cendant Servicing Agreement pursuant to
Section 3.03 of this Agreement, in which event, as successor Servicer, it will service and
administer the Additional Collateral in accordance with the provisions of such Cendant
Servicing Agreement.
(b) The Trustee shall furnish the Servicers and the Master Servicer with any powers of
attorney, in substantially the form attached hereto as Exhibit K, and other documents in
form as provided to it necessary or appropriate to enable the Servicers and the Master
Servicer to service and administer the related Mortgage Loans and REO Property.
(c) The Trustee shall provide access to the records and documentation in possession of
the Trustee regarding the related Mortgage Loans and REO Property and the servicing thereof
to the Certificateholders, the FDIC, and the supervisory agents and examiners of the FDIC,
such access being afforded only upon reasonable prior written request and during normal
business hours at the office of the Trustee; provided, however, that, unless otherwise
required by law, the Trustee shall not be required to provide access to such records and
documentation if the provision thereof would violate the legal right to privacy of any
Mortgagor. The Trustee shall allow representatives of the above entities to photocopy any
of the records and documentation and shall provide equipment for that purpose at a charge
that covers the Trustee's actual costs.
(d) The Trustee shall execute and deliver to the related Servicer and the Master Servicer
any court pleadings, requests for trustee's sale or other documents necessary or desirable
to (i) the foreclosure or trustee's sale with respect to a Mortgaged Property; (ii) any
legal action brought to obtain judgment against any Mortgagor on the Mortgage Note or
Security Instrument; (iii) obtain a deficiency judgment against the Mortgagor; or (iv)
enforce any other rights or remedies provided by the Mortgage Note or Security Instrument
or otherwise available at law or equity.
Section 3.02 REMIC-Related Covenants. For as long as each 2004-6 REMIC shall exist,
the Trustee and the Securities Administrator shall act in accordance herewith to assure
continuing treatment of such 2004-6 REMIC as a REMIC, and the Trustee and the Securities
Administrator shall comply with any directions of the Depositor, the related Servicer or
the Master Servicer to assure such continuing treatment. In particular, the Trustee shall
not (a) sell or permit the sale of all or any portion of the Mortgage Loans or of any
investment of deposits in an Account unless such sale is as a result of a repurchase of the
Mortgage Loans pursuant to this Agreement or the Trustee has received a REMIC Opinion
prepared at the expense of the Trust; and (b) other than with respect to a substitution
pursuant to the Mortgage Loan Purchase Agreement or Section 2.04 or contributions pursuant
to Section 4.08(c) and 4.09(c) of this Agreement, as applicable, accept any contribution to
any 2004-6 REMIC after the Startup Day without receipt of a REMIC Opinion.
Section 3.03 Monitoring of Servicers. (a) The Master Servicer shall be responsible for
reporting to the Trustee and the Depositor the compliance by each Servicer with its duties
under the related Servicing Agreement. In the review of each Servicer's activities, the
Master Servicer may rely upon an officer's certificate of the Servicer with regard to such
Servicer's compliance with the terms of its Servicing Agreement. In the event that the
Master Servicer, in its judgment, determines that a Servicer should be terminated in
accordance with its Servicing Agreement, or that a notice should be sent pursuant to such
Servicing Agreement with respect to the occurrence of an event that, unless cured, would
constitute grounds for such termination, the Master Servicer shall notify the Depositor and
the Trustee thereof and the Master Servicer shall issue such notice or take such other
action as it deems appropriate.
(b) The Master Servicer, for the benefit of the Trustee and the Certificateholders, shall
enforce the obligations of each Servicer under the related Servicing Agreement, and shall,
in the event that a Servicer fails to perform its obligations in accordance with the
related Servicing Agreement, subject to the preceding paragraph, terminate the rights and
obligations of such Servicer thereunder and act as servicer of the related Mortgage Loans
or to cause the Trustee to enter in to a new Servicing Agreement with a successor Servicer
selected by the Master Servicer; provided, however, it is understood and acknowledged by
the parties hereto that there will be a period of transition (not to exceed 90 days) before
the actual servicing functions can be fully transferred to such successor Servicer. Such
enforcement, including, without limitation, the legal prosecution of claims, termination of
Servicing Agreements and the pursuit of other appropriate remedies, shall be in such form
and carried out to such an extent and at such time as the Master Servicer, in its good
faith business judgment, would require were it the owner of the related Mortgage Loans. The
Master Servicer shall pay the costs of such enforcement at its own expense, provided that
the Master Servicer shall not be required to prosecute or defend any legal action except to
the extent that the Master Servicer shall have received reasonable indemnity for its costs
and expenses in pursuing such action.
(c) To the extent that the costs and expenses of the Master Servicer related to any
termination of a Servicer, appointment of a successor Servicer or the transfer and
assumption of servicing by the Master Servicer with respect to any Servicing Agreement
(including, without limitation, (i) all legal costs and expenses and all due diligence
costs and expenses associated with an evaluation of the potential termination of the
Servicer as a result of an event of default by such Servicer and (ii) all costs and
expenses associated with the complete transfer of servicing, including all servicing files
and all servicing data and the completion, correction or manipulation of such servicing
data as may be required by the successor servicer to correct any errors or insufficiencies
in the servicing data or otherwise to enable the successor service to service the Mortgage
Loans in accordance with the related Servicing Agreement) are not fully and timely
reimbursed by the terminated Servicer, the Master Servicer shall be entitled to
reimbursement of such costs and expenses from the Master Servicer Collection Account.
The Master Servicer shall require each Servicer to comply with the remittance
requirements and other obligations set forth in the related Servicing Agreement.
If the Master Servicer acts as Servicer, it will not assume liability for the
representations and warranties of the Servicer, if any, that it replaces.
Section 3.04 Fidelity Bond. The Master Servicer, at its expense, shall maintain in
effect a blanket fidelity bond and an errors and omissions insurance policy, affording
coverage with respect to all directors, officers, employees and other Persons acting on
such Master Servicer's behalf, and covering errors and omissions in the performance of the
Master Servicer's obligations hereunder. The errors and omissions insurance policy and the
fidelity bond shall be in such form and amount generally acceptable for entities serving as
master servicers or trustees.
Section 3.05 Power to Act; Procedures. The Master Servicer shall master service the
Mortgage Loans and shall have full power and authority, subject to the REMIC Provisions and
the provisions of Article X hereof, to do any and all things that it may deem necessary or
desirable in connection with the master servicing and administration of the Mortgage Loans,
including but not limited to the power and authority (i) to execute and deliver, on behalf
of the Certificateholders and the Trustee, customary consents or waivers and other
instruments and documents, (ii) to consent to transfers of any Mortgaged Property and
assumptions of the Mortgage Notes and related Mortgages, (iii) to collect any Insurance
Proceeds and Liquidation Proceeds, and (iv) to effectuate foreclosure or other conversion
of the ownership of the Mortgaged Property securing any Mortgage Loan, in each case, in
accordance with the provisions of this Agreement and the related Servicing Agreement, as
applicable; provided, however, that the Master Servicer shall not (and, consistent with its
responsibilities under Section 3.03, shall not permit any Servicer to) knowingly or
intentionally take any action, or fail to take (or fail to cause to be taken) any action
reasonably within its control and the scope of duties more specifically set forth herein,
that, under the REMIC Provisions, if taken or not taken, as the case may be, would cause
any 2004-6 REMIC to fail to qualify as a REMIC or result in the imposition of a tax upon
the Trust (including but not limited to the tax on prohibited transactions as defined in
Section 860F(a)(2) of the Code and the tax on contributions to a REMIC set forth in Section
860G(d) of the Code) unless the Master Servicer has received an Opinion of Counsel (but not
at the expense of the Master Servicer) to the effect that the contemplated action will not
cause any 2004-6 REMIC to fail to qualify as a REMIC or result in the imposition of a tax
upon any 2004-6 REMIC, as the case may be. 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. Upon becoming aware of the payment in full of
any Mortgage Loan, or the receipt by any Servicer of a notification that payment in full
has been escrowed in a manner customary for such purposes for payment to Certificateholders
on the next Distribution Date, the Servicer will, if required (or if the Servicer does not,
the Master Servicer may) under the applicable Servicing Agreement, promptly furnish to the
Custodian, on behalf of the Trustee, two copies of a certification substantially in the
form of Exhibit D hereto signed by a Servicing Officer or in a mutually agreeable
electronic format which will, in lieu of a signature on its face, originate from a
Servicing Officer (which certification shall include a statement to the effect that all
amounts received in connection with such payment that are required to be deposited in the
Protected Account maintained by the applicable Servicer pursuant to Section 4.01 or by the
applicable Servicer pursuant to its Servicing Agreement have been or will be so deposited)
and shall request that the Custodian, on behalf of the Trustee, deliver to the applicable
Servicer the related Mortgage File. Upon receipt of such certification and request, the
Custodian, on behalf of the Trustee, shall promptly release the related Mortgage File to
the applicable Servicer and the Trustee and Custodian shall have no further responsibility
with regard to such Mortgage File. Upon any such payment in full, each Servicer is
authorized, to give, as agent for the Trustee, as the mortgagee under the Mortgage that
secured the Mortgage Loan, an instrument of satisfaction (or assignment of mortgage without
recourse) regarding the Mortgaged Property subject to the Mortgage, which instrument of
satisfaction or assignment, as the case may be, shall be delivered to the Person or Persons
entitled thereto against receipt therefor of such payment, it being understood and agreed
that no expenses incurred in connection with such instrument of satisfaction or assignment,
as the case may be, shall be chargeable to the Protected Account.
From time to time and as appropriate for the servicing or foreclosure of any Mortgage
Loan and in accordance with the applicable Servicing Agreement, the Trustee shall execute
such documents as shall be prepared and furnished to the Trustee by a Servicer or the
Master Servicer (in form reasonably acceptable to the Trustee) and as are necessary to the
prosecution of any such proceedings. The Custodian, on behalf of the Trustee, shall, upon
the request of a Servicer or the Master Servicer, and delivery to the Custodian, on behalf
of the Trustee, of two copies of a request for release signed by a Servicing Officer
substantially in the form of Exhibit D (or in a mutually agreeable electronic format which
will, in lieu of a signature on its face, originate from a Servicing Officer), release the
related Mortgage File held in its possession or control to the Servicer or the Master
Servicer, as applicable. Such trust receipt shall obligate the Servicer or the Master
Servicer to return the Mortgage File to the Custodian on behalf of the Trustee, when the
need therefor by the Servicer or the Master Servicer no longer exists unless the Mortgage
Loan shall be liquidated, in which case, upon receipt of a certificate of a Servicing
Officer similar to that hereinabove specified, the Mortgage File shall be released by the
Custodian, on behalf of the Trustee, to the Servicer or the Master Servicer.
Section 3.08 Documents, Records and Funds in Possession of Master Servicer To Be Held
for Trustee.
The Master Servicer shall transmit and each Servicer (to the extent required by the
related Servicing Agreement) shall transmit to the Trustee or Custodian such documents and
instruments coming into the possession of the Master Servicer or such Servicer from time to
time as are required by the terms hereof, or in the case of the Servicers, the applicable
Servicing Agreement, to be delivered to the Trustee or Custodian. Any funds received by the
Master Servicer or by a Servicer in respect of any Mortgage Loan or which otherwise are
collected by the Master Servicer or by a Servicer as Liquidation Proceeds or Insurance
Proceeds in respect of any Mortgage Loan shall be held for the benefit of the Trustee and
the Certificateholders subject to the Master Servicer's right to retain or withdraw from
the Master Servicer Collection Account the Master Servicing Compensation and other amounts
provided in this Agreement, and to the right of each Servicer to retain its Servicing Fee
and other amounts as provided in the applicable Servicing Agreement. The Master Servicer
shall, and (to the extent provided in the applicable Servicing Agreement) shall cause each
Servicer to, provide access to information and documentation regarding the Mortgage Loans
to the Trustee, its agents and accountants at any time upon reasonable request and during
normal business hours, and to Certificateholders that are savings and loan associations,
banks or insurance companies, the Office of Thrift Supervision, the FDIC and the
supervisory agents and examiners of such Office and Corporation or examiners of any other
federal or state banking or insurance regulatory authority if so required by applicable
regulations of the Office of Thrift Supervision or other regulatory authority, such access
to be afforded without charge but only upon reasonable request in writing and during normal
business hours at the offices of the Master Servicer designated by it. In fulfilling such a
request the Master Servicer shall not be responsible for determining the sufficiency of
such information.
All Mortgage Files and funds collected or held by, or under the control of, the
Master Servicer, in respect of any Mortgage Loans, whether from the collection of principal
and interest payments or from Liquidation Proceeds or Insurance Proceeds, shall be held by
the Master Servicer for and on behalf of the Trustee and the Certificateholders and shall
be and remain the sole and exclusive property of the Trustee; provided, however, that the
Master Servicer and each Servicer shall be entitled to setoff against, and deduct from, any
such funds any amounts that are properly due and payable to the Master Servicer or such
Servicer under this Agreement or the applicable Servicing Agreement.
Section 3.09 Standard Hazard Insurance and Flood Insurance Policies.
For each Mortgage Loan, the Master Servicer shall enforce any obligation of the
Servicers under the related Servicing Agreements to maintain or cause to be maintained
standard fire and casualty insurance and, where applicable, flood insurance, all in
accordance with the provisions of the related Servicing Agreements. It is understood and
agreed that such insurance shall be with insurers meeting the eligibility requirements set
forth in the applicable Servicing Agreement and that no earthquake or other additional
insurance is to be required of any Mortgagor or to be maintained on property acquired in
respect of a defaulted loan, other than pursuant to such applicable laws and regulations as
shall at any time be in force and as shall require such additional insurance.
Pursuant to Section 4.01 and 4.02, any amounts collected by the Servicers or the
Master Servicer, or by any Servicer, under any insurance policies (other than amounts to be
applied to the restoration or repair of the property subject to the related Mortgage or
released to the Mortgagor in accordance with the applicable Servicing Agreement) shall be
deposited into the Master Servicer Collection Account, subject to withdrawal pursuant to
Section 4.02 and 4.03. Any cost incurred by the Master Servicer or any Servicer in
maintaining any such insurance if the Mortgagor defaults in its obligation to do so shall
be added to the amount owing under the Mortgage Loan where the terms of the Mortgage Loan
so permit; provided, however, that the addition of any such cost shall not be taken into
account for purposes of calculating the distributions to be made to Certificateholders and
shall be recoverable by the Master Servicer or such Servicer pursuant to Section 4.02 and
4.03.
Section 3.10 Presentment of Claims and Collection of Proceeds. The Master Servicer
shall (to the extent provided in the applicable Servicing Agreement) cause the related
Servicer to, prepare and present on behalf of the Trustee and the Certificateholders all
claims under the Insurance Policies and take such actions (including the negotiation,
settlement, compromise or enforcement of the insured's claim) as shall be necessary to
realize recovery under such policies. Any proceeds disbursed to the Master Servicer (or
disbursed to a Servicer and remitted to the Master Servicer) in respect of such policies,
bonds or contracts shall be promptly deposited in the Master Servicer Collection Account
upon receipt, except that any amounts realized that are to be applied to the repair or
restoration of the related Mortgaged Property as a condition precedent to the presentation
of claims on the related Mortgage Loan to the insurer under any applicable Insurance Policy
need not be so deposited (or remitted).
Section 3.11 Maintenance of the Primary Mortgage Insurance Policies.
The Master Servicer shall not take, or permit any Servicer (to the extent such action
is prohibited under the applicable Servicing Agreement) to take, any action that would
result in noncoverage under any applicable Primary Mortgage Insurance Policy of any loss
which, but for the actions of such Master Servicer or Servicer, would have been covered
thereunder. The Master Servicer shall use its best reasonable efforts to cause each
Servicer (to the extent required under the related Servicing Agreement) to keep in force
and effect (to the extent that the Mortgage Loan requires the Mortgagor to maintain such
insurance), primary mortgage insurance applicable to each Mortgage Loan in accordance with
the provisions of this Agreement and the related Servicing Agreement, as applicable. The
Master Servicer shall not, and shall not permit any Servicer (to the extent required under
the related Servicing Agreement) to, cancel or refuse to renew any such Primary Mortgage
Insurance Policy that is in effect at the date of the initial issuance of the Mortgage Note
and is required to be kept in force hereunder except in accordance with the provisions of
this Agreement and the related Servicing Agreement, as applicable.
The Master Servicer agrees to present, or to cause each Servicer (to the extent
required under the related Servicing Agreement) to present, on behalf of the Trustee and
the Certificateholders, claims to the insurer under any Primary Mortgage Insurance Policies
and, in this regard, to take such reasonable action as shall be necessary to permit
recovery under any Primary Mortgage Insurance Policies respecting defaulted Mortgage Loans.
Pursuant to Section 4.01 and 4.02, any amounts collected by the Master Servicer or any
Servicer under any Primary Mortgage Insurance Policies shall be deposited in the Master
Servicer Collection Account, subject to withdrawal pursuant to Section 4.03.
Section 3.12 Trustee to Retain Possession of Certain Insurance Policies and Documents.
The Trustee (or the Custodian, as directed by the Trustee), shall retain possession
and custody of the originals (to the extent available) of any Primary Mortgage Insurance
Policies, or certificate of insurance if applicable, and any certificates of renewal as to
the foregoing as may be issued from time to time as contemplated by this Agreement. Until
all amounts distributable in respect of the Certificates have been distributed in full and
the Master Servicer otherwise has fulfilled its obligations under this Agreement, the
Trustee (or its Custodian, if any, as directed by the Trustee) shall also retain possession
and custody of each Mortgage File in accordance with and subject to the terms and
conditions of this Agreement. The Master Servicer shall promptly deliver or cause to be
delivered to the Trustee (or the Custodian, as directed by the Trustee), upon the execution
or receipt thereof the originals of any Primary Mortgage Insurance Policies, any
certificates of renewal, and such other documents or instruments that constitute portions
of the Mortgage File that come into the possession of the Master Servicer from time to time.
Section 3.13 Realization Upon Defaulted Mortgage Loans. The Master Servicer shall
cause each Servicer (to the extent required under the related Servicing Agreement) to
foreclose upon, repossess or otherwise comparably convert the ownership of Mortgaged
Properties securing such of the Mortgage Loans as come into and continue in default and as
to which no satisfactory arrangements can be made for collection of delinquent payments,
all in accordance with the applicable Servicing Agreement.
Section 3.14 Compensation for the Master Servicer.
The Master Servicer will be entitled to all income and gain realized from any
investment of funds in the Master Servicer Collection Account and the Distribution Account,
pursuant to Article IV, for the performance of its activities hereunder. Servicing
compensation in the form of assumption fees, if any, late payment charges, as collected, if
any, or otherwise (but not including any prepayment premium or penalty) shall be retained
by the applicable Servicer and shall not be deposited in the Protected Account. The Master
Servicer will be entitled to retain, as additional compensation, any interest remitted by a
Servicer in connection with a Principal Prepayment in full or otherwise in excess of
amounts required to be remitted to the Distribution Account (such amounts together with the
amounts specified in the first sentence of this Section 3.14, the "Master Servicing
Compensation"). The Master Servicer shall be required to pay all expenses incurred by it in
connection with its activities hereunder and shall not be entitled to reimbursement
therefor except as provided in this Agreement.
Section 3.15 REO Property.
In the event the Trust Fund acquires ownership of any REO Property in respect of any
related Mortgage Loan, the deed or certificate of sale shall be issued to the Trustee, or
to its nominee, on behalf of the related Certificateholders. The Master Servicer shall, to
the extent provided in the applicable Servicing Agreement, cause the applicable Servicer to
sell, any REO Property as expeditiously as possible and in accordance with the provisions
of this Agreement and the related Servicing Agreement, as applicable. Pursuant to its
efforts to sell such REO Property, the Master Servicer shall cause the applicable Servicer
to protect and conserve, such REO Property in the manner and to the extent required by the
applicable Servicing Agreement, in accordance with the REMIC Provisions and in a manner
that does not result in a tax on "net income from foreclosure property" (unless such result
would maximize the Trust Fund's after-tax return on such property) or cause such REO
Property to fail to qualify as "foreclosure property" within the meaning of Section
860G(a)(8) of the Code.
The Master Servicer shall, to the extent required by the related Servicing Agreement,
cause the applicable Servicer to deposit all funds collected and received in connection
with the operation of any REO Property in the Protected Account.
The Master Servicer and the applicable Servicer, upon the final disposition of any
REO Property, shall be entitled to reimbursement for any related unreimbursed Monthly
Advances and other unreimbursed advances as well as any unpaid Servicing Fees from
Liquidation Proceeds received in connection with the final disposition of such REO
Property; provided, that any such unreimbursed Monthly Advances as well as any unpaid
Servicing Fees may be reimbursed or paid, as the case may be, prior to final disposition,
out of any net rental income or other net amounts derived from such REO Property.
To the extent provided in the related Servicing Agreement, the Liquidation Proceeds
from the final disposition of the REO Property, net of any payment to the Master Servicer
and the applicable Servicer as provided above shall be deposited in the Protected Account
on or prior to the Determination Date in the month following receipt thereof and be
remitted by wire transfer in immediately available funds to the Master Servicer for deposit
into the related Master Servicer Collection Account on the next succeeding Servicer
Remittance Date.
Section 3.16 Annual Officer's Certificate as to Compliance.
The Master Servicer shall deliver to the Trustee and the Rating Agencies on or before
March 1 of each year, commencing on March 1, 2005, an Officer's Certificate, certifying
that with respect to the period ending December 31 of the prior year: (i) such Servicing
Officer has reviewed the activities of such Master Servicer during the preceding calendar
year or portion thereof and its performance under this Agreement, (ii) to the best of such
Servicing Officer's knowledge, based on such review, such Master Servicer has performed and
fulfilled its duties, responsibilities and obligations under this Agreement in all material
respects throughout such year, or, if there has been a default in the fulfillment of any
such duties, responsibilities or obligations, specifying each such default known to such
Servicing Officer and the nature and status thereof, (iii) nothing has come to the
attention of such Servicing Officer to lead such Servicing Officer to believe that any
Servicer has failed to perform any of its duties, responsibilities and obligations under
its Servicing Agreement in all material respects throughout such year, or, if there has
been a material default in the performance or fulfillment of any such duties,
responsibilities or obligations, specifying each such default known to such Servicing
Officer and the nature and status thereof.
Copies of such statements shall be provided to any Certificateholder upon request, by
the Master Servicer or by the Trustee at the Master Servicer's expense if the Master
Servicer failed to provide such copies (unless (i) the Master Servicer shall have failed to
provide the Trustee with such statement or (ii) the Trustee shall be unaware of the Master
Servicer's failure to provide such statement).
Section 3.17 Annual Independent Accountant's Servicing Report. If the Master Servicer
has, during the course of any fiscal year, directly serviced any of the Mortgage Loans,
then the Master Servicer at its expense shall cause a nationally recognized firm of
independent certified public accountants to furnish a statement to the Trustee, the Rating
Agencies and the Depositor on or before March 1 of each year, commencing on March 1, 2005
to the effect that, with respect to the most recently ended fiscal year, such firm has
examined certain records and documents relating to the Master Servicer's performance of its
servicing obligations under this Agreement and pooling and servicing and trust agreements
in material respects similar to this Agreement and to each other and that, on the basis of
such examination conducted substantially in compliance with the audit program for mortgages
serviced for ▇▇▇▇▇▇▇ 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 with a copy of the statement to the Trustee who
shall make available a copy of the monthly statement to the Certificateholders for such
Distribution Date as an exhibit thereto. Prior to January 30 in each year, the Securities
Administrator shall, in accordance with industry standards and only if instructed by the
Depositor, file a Form 15 Suspension Notice with respect to the Trust Fund, if applicable.
Prior to (i) March 15, 2005 and (ii) unless and until a Form 15 Suspension Notice shall
have been filed, prior to March 15 of each year thereafter, the Master Servicer shall
provide the Securities Administrator with a Master Servicer Certification, together with a
copy of the annual independent accountant's servicing report and annual statement of
compliance of each Servicer, in each case, required to be delivered pursuant to the related
Servicing Agreement, and, if applicable, the annual independent accountant's servicing
report and annual statement of compliance to be delivered by the Master Servicer pursuant
to Sections 3.16 and 3.17. Prior to (i) March 31, 2005, or such earlier filing date as may
be required by the Commission, and (ii) unless and until a Form 15 Suspension Notice shall
have been filed, March 31 of each year thereafter, or such earlier filing date as may be
required by the Commission, the Securities Administrator shall prepare and file a Form 10-K,
in substance conforming to industry standards, with respect to the Trust. Such Form 10-K
shall include the Master Servicer Certification and other documentation provided by the Master
Servicer pursuant to the second preceding sentence. The Depositor hereby grants to the
Securities Administrator a limited power of attorney to execute and file each such document
on behalf of the Depositor. Such power of attorney shall continue until either the earlier
of (i) receipt by the Securities Administrator from the Depositor of written termination of
such power of attorney and (ii) the termination of the Trust Fund. The Depositor agrees to
promptly furnish to the Securities Administrator, from time to time upon request, such
further information, reports and financial statements within its control related to this
Agreement and the Mortgage Loans as the Securities Administrator reasonably deems
appropriate to prepare and file all necessary reports with the Commission. The Securities
Administrator shall have no responsibility to file any items other than those specified in
this Section 3.18; provided, however, the Securities Administrator will cooperate with the
Depositor in connection with any additional filings with respect to the Trust Fund as the
Depositor deems necessary under the Securities Exchange Act of 1934, as amended (the
"Exchange Act"). Fees and expenses incurred by the Securities Administrator in connection
with this Section 3.18 shall not be reimbursable from the Trust Fund.
Section 3.19 EMC. On the Closing Date, EMC will receive from the Depositor a payment
of $5,000.
Section 3.20 UCC. The Depositor shall inform the Trustee in writing of any Uniform
Commercial Code financing statements that were filed on the Closing Date in connection with
the Trust with stamped recorded copies of such financing statements to be delivered to the
Trustee promptly upon receipt by the Depositor. The Trustee agrees to monitor and notify
the Depositor if any continuation statements for such Uniform Commercial Code financing
statements need to be filed. If directed by the Depositor in writing, the Trustee will file
any such continuation statements solely at the expense of the Depositor. The Depositor
shall file any financing statements or amendments thereto required by any change in the
Uniform Commercial Code..
Section 3.21 Optional Purchase of Defaulted Mortgage Loans.
With respect to any Mortgage Loan which as of the first day of a Calendar Quarter is
delinquent in payment by 90 days or more or is an REO Property, EMC shall have the right to
purchase such Mortgage Loan from the Trust at a price equal to the Repurchase Price;
provided however (i) that such Mortgage Loan is still 90 days or more delinquent or is an
REO Property as of the date of such purchase and (ii) this purchase option, if not
theretofore exercised, shall terminate on the date prior to the last day of the related
Calendar Quarter. This purchase option, if not exercised, shall not be thereafter
reinstated unless the delinquency is cured and the Mortgage Loan thereafter again becomes
90 days or more delinquent or becomes an REO Property, in which case the option shall again
become exercisable as of the first day of the related Calendar Quarter.
If at any time EMC remits to the Master Servicer a payment for deposit in the Master
Servicer Collection Account covering the amount of the Repurchase Price for such a Mortgage
Loan, and EMC provides to the Trustee a certification signed by a Servicing Officer stating
that the amount of such payment has been deposited in the Master Servicer Collection
Account, then the Trustee shall execute the assignment of such Mortgage Loan to EMC at the
request of EMC without recourse, representation or warranty and EMC shall succeed to all of
the Trustee's right, title and interest in and to such Mortgage Loan, and all security and
documents relative thereto. Such assignment shall be an assignment outright and not for
security. EMC will thereupon own such Mortgage, and all such security and documents, free
of any further obligation to the Trustee or the Certificateholders with respect thereto.
Section 3.22 Convertible Mortgage Loans. Upon its receipt of written notice from the
Servicer that a mortgagor in respect of a Convertible Mortgage Loan has exercised its
option to convert the adjustable interest rate on such Mortgage Loan to a fixed interest
rate, the Master Servicer shall cause the Servicer to perform its obligation (if any) under
the Servicing Agreement to purchase at the Repurchase Price such Convertible Mortgage Loan.
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 Servicer 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 Servicer, as are necessary to vest in
the Servicer title to and rights under such Mortgage Loan.
ARTICLE IV
Accounts
Section 4.01 Protected Accounts. (a)The Master Servicer shall enforce the obligation
of each Servicer to establish and maintain a Protected Account in accordance with the
applicable Servicing Agreement, with records to be kept with respect thereto on a Mortgage
Loan by Mortgage Loan basis, into which accounts shall be deposited within 48 hours (or as
of such other time specified in the related Servicing Agreement) of receipt all collections
of principal and interest on any Mortgage Loan and with respect to any REO Property
received by a Servicer, including Principal Prepayments, Insurance Proceeds, Liquidation
Proceeds, and advances made from the Servicer's own funds (less servicing compensation as
permitted by the applicable Servicing Agreement in the case of any Servicer) and all other
amounts to be deposited in the Protected Account. The Servicer is hereby authorized to make
withdrawals from and deposits to the related Protected Account for purposes required or
permitted by this Agreement. To the extent provided in the related Servicing Agreement, the
Protected Account shall be held in a Designated Depository Institution and segregated on
the books of such institution in the name of the Trustee for the benefit of
Certificateholders.
(b) To the extent provided in the related Servicing Agreement, amounts on deposit in a
Protected Account may be invested in Permitted Investments in the name of the Trustee for
the benefit of Certificateholders and, except as provided in the preceding paragraph, not
commingled with any other funds, such Permitted Investments to mature, or to be subject to
redemption or withdrawal, no later than the date on which such funds are required to be
withdrawn for deposit in the Master Servicer Collection Account, and shall be held until
required for such deposit. The income earned from Permitted Investments made pursuant to
this Section 4.01 shall be paid to the related Servicer under the applicable Servicing
Agreement, and the risk of loss of moneys required to be distributed to the
Certificateholders resulting from such investments shall be borne by and be the risk of the
related Servicer. The related Servicer (to the extent provided in the Servicing Agreement)
shall deposit the amount of any such loss in the Protected Account within two Business Days
of receipt of notification of such loss but not later than the second Business Day prior to
the Distribution Date on which the moneys so invested are required to be distributed to the
Certificateholders.
(c) To the extent provided in the related Servicing Agreement and subject to this Article
IV, on or before each Servicer Remittance Date, the related Servicer shall withdraw or
shall cause to be withdrawn from the Protected Accounts and shall immediately deposit or
cause to be deposited in the Master Servicer Collection Account amounts representing the
following collections and payments (other than with respect to principal of or interest on
the Initial Mortgage Loans due on or before the Cut-off Date) with respect to each Loan
Group:
(i) Scheduled Payments on the Mortgage Loans received or any related portion thereof
advanced by the Servicers pursuant to the Servicing Agreements which were due during
or before the related Due Period, net of the amount thereof comprising the Servicing
Fees;
(ii) Full Principal Prepayments and any Liquidation Proceeds received by the Servicers
with respect to such Mortgage Loans in the related Prepayment Period, with interest
to the date of prepayment or liquidation, net of the amount thereof comprising the
Servicing Fees;
(iii) Partial Principal Prepayments received by the Servicers for such Mortgage Loans in
the related Prepayment Period; and
(iv) Any amount to be used as an Monthly Advance.
(d) Withdrawals may be made from an Account only to (i) make remittances as provided in
Section 4.01(c), 4.02 and 4.03, (ii) reimburse the Master Servicer or a Servicer for
Monthly Advances which have been recovered by subsequent collection from the related
Mortgagor; (iii) remove amounts deposited in error; to remove fees, charges or other such
amounts deposited on a temporary basis; or (iv) clear and terminate such account at the
termination of this Agreement in accordance with Section 10.01. As provided in Sections
4.01(c) and 4.02(b) certain amounts otherwise due to the Servicers may be retained by them
and need not be deposited in the Master Servicer Collection Account.
Section 4.02 Master Servicer Collection Account. (a)The Master Servicer shall
establish and maintain in the name of the Trustee, for the benefit of the
Certificateholders, the Master Servicer Collection Account as a segregated trust account or
accounts. The Master Servicer Collection Account shall be an Eligible Account. The Master
Servicer will deposit in the Master Servicer Collection Account as identified by the Master
Servicer and as received by the Master Servicer, the following amounts:
(i) Any amounts withdrawn from a Protected Account;
(ii) Any Monthly Advance and any Compensating Interest Payments;
(iii) Any Insurance Proceeds or Net Liquidation Proceeds received by or on behalf of the
Master Servicer or which were not deposited in a Protected Account;
(iv) The Repurchase Price with respect to any Mortgage Loans purchased by the Seller
pursuant to Section 2.02 or 2.03, any amounts which are to be treated pursuant to
Section 2.04 of this Agreement as the payment of such a Repurchase Price, the
Repurchase Price with respect to any Mortgage Loans purchased by EMC pursuant to
Section 3.21, and all proceeds of any Mortgage Loans or property acquired with
respect thereto repurchased by EMC or its designee pursuant to Section 10.01;
(v) Any amounts required to be deposited with respect to losses on investments of
deposits in an Account; and
(vi) Any other amounts received by or on behalf of the Master Servicer and required to be
deposited in the Master Servicer Collection Account pursuant to this Agreement.
(b) All amounts deposited to the Master Servicer Collection Account shall be held by the
Master Servicer in the name of the Trustee in trust for the benefit of the
Certificateholders in accordance with the terms and provisions of this Agreement. The
requirements for crediting the Master Servicer Collection Account or the Distribution
Account shall be exclusive, it being understood and agreed that, without limiting the
generality of the foregoing, payments in the nature of (i) prepayment or late payment
charges or assumption, tax service, statement account or payoff, substitution,
satisfaction, release and other like fees and charges and (ii) the items enumerated in
Sections 4.05(a)(i) through (iv) and (vi) through (xii) with respect to the Securities
Administrator and the Master Servicer, need not be credited by the Master Servicer or the
related Servicer to the Distribution Account or the Master Servicer Collection Account, as
applicable. In the event that the Master Servicer shall deposit or cause to be deposited to
the Distribution Account any amount not required to be credited thereto, the Trustee, upon
receipt of a written request therefor signed by a Servicing Officer of the Master Servicer,
shall promptly transfer such amount to the Master Servicer, any provision herein to the
contrary notwithstanding.
The amount at any time credited to the Master Servicer Collection Account shall be
invested, in the name of the Trustee, or its nominee, for the benefit of the
Certificateholders, in Permitted Investments as directed by Master Servicer. All Permitted
Investments shall mature or be subject to redemption or withdrawal on or before, and shall
be held until, the next succeeding Distribution Account Deposit Date. Any and all
investment earnings on amounts on deposit in the Master Servicer Collection Account from
time to time shall be for the account of the Master Servicer. The Master Servicer from time
to time shall be permitted to withdraw or receive distribution of any and all investment
earnings from the Master Servicer Collection Account. The risk of loss of moneys required
to be distributed to the Certificateholders resulting from such investments shall be borne
by and be the risk of the Master Servicer. The Master Servicer shall deposit the amount of
any such loss in the Master Servicer Collection Account within two Business Days of receipt
of notification of such loss but not later than the second Business Day prior to the
Distribution Date on which the moneys so invested are required to be distributed to the
Certificateholders.
Section 4.03 Permitted Withdrawals and Transfers from the Master Servicer Collection
Account. (a)The Master Servicer will, from time to time on demand of a Servicer or the
Securities Administrator, make or cause to be made such withdrawals or transfers from the
Master Servicer Collection Account as the Master Servicer has designated for such transfer
or withdrawal pursuant to this Agreement and the related Servicing Agreement. The Master
Servicer may clear and terminate the Master Servicer Collection Account pursuant to Section
10.01 and remove amounts from time to time deposited in error.
On an ongoing basis, the Master Servicer shall withdraw from the Master Servicer
Collection Account (i) any expenses recoverable by the Trustee, the Master Servicer, the
Securities Administrator or the Custodian pursuant to Sections 3.03, 7.04 and 9.05 and (ii)
any amounts payable to the Master Servicer as set forth in Section 3.14.
In addition, on or before each Distribution Account Deposit Date, the Master Servicer
shall deposit in the Distribution Account (or remit to the Trustee for deposit therein) any
Monthly Advances required to be made by the Master Servicer with respect to the Mortgage
Loans.
No later than 3:00 p.m. New York time on each Distribution Account Deposit Date, the
Master Servicer will transfer all Available Funds on deposit in the Master Servicer
Collection Account with respect to the related Distribution Date to the Trustee for deposit
in the Distribution Account.
Section 4.04 Distribution Account. (a)The Trustee shall establish and maintain in the
name of the Trustee, for the benefit of the Certificateholders, the Distribution Account as
a segregated trust account or accounts.
(b) All amounts deposited to the Distribution Account shall be held by the Trustee in the
name of the Trustee in trust for the benefit of the Certificateholders in accordance with
the terms and provisions of this Agreement.
(c) The Distribution Account shall constitute a trust account of the Trust Fund
segregated on the books of the Trustee and held by the Trustee in trust in its Corporate
Trust Office, and the Distribution Account and the funds deposited therein shall not be
subject to, and shall be protected from, all claims, liens, and encumbrances of any
creditors or depositors of the Trustee or the Master Servicer (whether made directly, or
indirectly through a liquidator or receiver of the Trustee or the Master Servicer). The
Distribution Account shall be an Eligible Account. The amount at any time credited to the
Distribution Account shall be (i) held in cash or fully insured by the FDIC to the maximum
coverage provided thereby or (ii) invested in the name of the Trustee, in such Permitted
Investments selected by the Master Servicer or deposited in demand deposits with such
depository institutions as selected by the Master Servicer, provided that time deposits of
such depository institutions would be a Permitted Investment. All Permitted Investments
shall mature or be subject to redemption or withdrawal on or before, and shall be held
until, the next succeeding Distribution Date if the obligor for such Permitted Investment
is the Trustee or, if such obligor is any other Person, the Business Day preceding such
Distribution Date. All investment earnings on amounts on deposit in the Distribution
Account or benefit from funds uninvested therein from time to time shall be for the account
of the Master Servicer. The Master Servicer shall be permitted to withdraw or receive
distribution of any and all investment earnings from the Distribution Account on each
Distribution Date. If there is any loss on a Permitted Investment or demand deposit, the
Master Servicer shall remit the amount of the loss to the Trustee who shall deposit such
amount in the Distribution Account. With respect to the Distribution Account and the funds
deposited therein, the Master Servicer shall take such action as may be necessary to ensure
that the Certificateholders shall be entitled to the priorities afforded to such a trust
account (in addition to a claim against the estate of the Trustee) as provided by 12 U.S.C.
92a(e), and applicable regulations pursuant thereto, if applicable, or any applicable
comparable state statute applicable to state chartered banking corporations.
Section 4.05 Permitted Withdrawals and Transfers from the Distribution Account. (a)The
Trustee will, from time to time on demand of the Master Servicer or the Securities
Administrator, make or cause to be made such withdrawals or transfers from the Distribution
Account as the Master Servicer has designated for such transfer or withdrawal pursuant to
this Agreement and the Servicing Agreements or as the Securities Administrator has
instructed hereunder for the following purposes (limited in the case of amounts due the
Master Servicer to those not withdrawn from the Master Servicer Collection Account in
accordance with the terms of this Agreement):
(i) to reimburse the Master Servicer or any Servicer for any Monthly Advance of its own
funds, the right of the Master Servicer or a Servicer to reimbursement pursuant to
this subclause (i) being limited to amounts received on a particular Mortgage Loan
(including, for this purpose, the Repurchase Price therefor, Insurance Proceeds and
Liquidation Proceeds) which represent late payments or recoveries of the principal of
or interest on such Mortgage Loan with respect to which such Monthly Advance was made;
(ii) to reimburse the Master Servicer or any Servicer from Insurance Proceeds or
Liquidation Proceeds relating to a particular Mortgage Loan for amounts expended by
the Master Servicer or such Servicer in good faith in connection with the restoration
of the related Mortgaged Property which was damaged by an Uninsured Cause or in
connection with the liquidation of such Mortgage Loan;
(iii) to reimburse the Master Servicer or any Servicer from Insurance Proceeds relating to
a particular Mortgage Loan for insured expenses incurred with respect to such
Mortgage Loan and to reimburse the Master Servicer or such Servicer from Liquidation
Proceeds from a particular Mortgage Loan for Liquidation Expenses incurred with
respect to such Mortgage Loan; provided that the Master Servicer shall not be
entitled to reimbursement for Liquidation Expenses with respect to a Mortgage Loan to
the extent that (i) any amounts with respect to such Mortgage Loan were paid as
Excess Liquidation Proceeds pursuant to clause (xi) of this Section 4.03(a) to the
Master Servicer and (ii) such Liquidation Expenses were not included in the
computation of such Excess Liquidation Proceeds;
(iv) to pay the Master Servicer or any Servicer, as appropriate, from Liquidation Proceeds
or Insurance Proceeds received in connection with the liquidation of any Mortgage
Loan, the amount which it or such Servicer would have been entitled to receive under
clause (ix) of this Section 4.03(a) as servicing compensation on account of each
defaulted scheduled payment on such Mortgage Loan if paid in a timely manner by the
related Mortgagor;
(v) to pay the Master Servicer or any Servicer from the Repurchase Price for any Mortgage
Loan, the amount which it or such Servicer would have been entitled to receive under
clause (ix) of this Section 4.03(a) as servicing compensation;
(vi) to reimburse the Master Servicer or any Servicer for advances of funds (other than
Monthly Advances) made with respect to the Mortgage Loans, and the right to
reimbursement pursuant to this clause being limited to amounts received on the
related Mortgage Loan (including, for this purpose, the Repurchase Price therefor,
Insurance Proceeds and Liquidation Proceeds) which represent late recoveries of the
payments for which such advances were made;
(vii) to reimburse the Master Servicer or any Servicer for any Monthly Advance or advance,
after a Realized Loss has been allocated with respect to the related Mortgage Loan if
the Monthly Advance or advance has not been reimbursed pursuant to clauses (i) and
(vi) of this Section 4.03(a);
(viii) to pay the Master Servicer as set forth in Section 3.14;
(ix) to reimburse the Master Servicer for expenses, costs and liabilities incurred by and
reimbursable to it pursuant to Sections 3.03, 7.04(c) and (d);
(x) to pay to the Master Servicer, as additional servicing compensation, any Excess
Liquidation Proceeds to the extent not retained by the related Servicer;
(xi) to reimburse or pay any Servicer any such amounts as are due thereto under the
applicable Servicing Agreement and have not been retained by or paid to the Servicer,
to the extent provided in the related Servicing Agreement;
(xii) to reimburse the Trustee, the Securities Administrator or the Custodian for expenses,
costs and liabilities incurred by or reimbursable to it pursuant to this Agreement;
(xiii) to remove amounts deposited in error; and
(xiv) to clear and terminate the Distribution Account pursuant to Section 10.01.
(b) The Master Servicer shall keep and maintain separate accounting, on a Mortgage Loan
by Mortgage Loan basis, for the purpose of accounting for any reimbursement from the
Distribution Account pursuant to clauses (i) through (vi) and (viii) or with respect to any
such amounts which would have been covered by such clauses had the amounts not been
retained by the Master Servicer without being deposited in the Distribution Account under
Section 4.02(b). Reimbursements made pursuant to clauses (ix), (xi) and (xii) will
allocated between the Loan Groups pro rata based on the aggregate Stated Principal Balances
of the Mortgage Loans in each Loan Group.
(c) On each Distribution Date, the Trustee shall distribute the Interest Funds and
Principal Funds to the extent on deposit in the Distribution Account to the Holders of the
Certificates in accordance with distribution instructions provided to it by the Securities
Administrator no later than two Business Days prior to such Distribution Date and
determined by the Securities Administrator in accordance with Section 6.01.
Section 4.06 Reserve Fund. (a)On or before the Closing Date, the Trustee shall
establish a Reserve Fund on behalf of the Holders of the Offered Certificates. The Reserve
Fund must be an Eligible Account. The Reserve Fund shall be entitled "Reserve Fund,
JPMorgan Chase Bank as Trustee for the benefit of holders of Structured Asset Mortgage
Investments II Inc., Bear ▇▇▇▇▇▇▇ ALT-A Trust 2004-6, Mortgage Pass-Through Certificates,
Series 2004-6, Class I-A, Class III-A, Class M-1, Class M-2, Class B-1 and Class B-2". The
Trustee shall demand payment of all money payable by Bear ▇▇▇▇▇▇▇ Financial Products Inc.
(the "Counterparty") under the Cap Contracts. The Trustee shall deposit in the Reserve Fund
all payments received by it from the Counterparty pursuant to the Cap Contracts and, prior
to distribution of such amounts pursuant to Section 6.01(a), all payments described under
the sixth and seventh clause of Section 6.01(a). On each Distribution Date, the Trustee
shall remit amounts received by it from the Counterparty to the Holders of the applicable
Offered Certificates in the manner provided in Section 6.01(b).
(b) The Reserve Fund is an "outside reserve fund" within the meaning of Treasury
Regulation '1.860G-2(h) and shall be an asset of the Trust Fund but not an asset of any
2004-6 REMIC. The Trustee on behalf of the Trust shall be the nominal owner of the Reserve
Fund. The Class B-IO Certificateholder shall be the beneficial owner of the Reserve Fund,
subject to the power of the Trustee to distribute amounts under Section 6.01(b) and the
sixth and seventh clause of Section 6.01(a). For federal income tax purposes, amounts
distributed to Certificateholders pursuant to the sixth and seventh clause of Section
6.01(a) will be treated as first distributed to the Class B-IO Certificates and then paid
from the Class B-IO Certificateholders to the applicable holders of the Offered
Certificates. Amounts in the Reserve Fund shall, at the direction of the Class B-IO
Certificateholder, be held either uninvested in a trust or deposit account of the Trustee
with no liability for interest or other compensation thereon or invested in Permitted
Investments that mature no later than the Business Day prior to the next succeeding
Distribution Date. The Trustee shall distribute all net income and gain from such
investments in the Reserve Fund to the Class B-IO Certificateholder, not as a distribution
in respect of any interest in any 2004-6 REMIC, on each Distribution Date. All amounts
earned on amounts on deposit in the Reserve Fund shall be taxable to the Class B-IO
Certificateholder. Any losses on such investments shall be deposited in the Reserve Fund by
the Class B-IO Certificateholder out of its own funds immediately as realized.
Section 4.07 Class XP Reserve Account. (a)The Master Servicer shall establish and
maintain with itself a separate, segregated trust account, which shall be an Eligible
Account, titled "Reserve Account, ▇▇▇▇▇ Fargo Bank, National Association, as Master
Servicer f/b/o Bear ▇▇▇▇▇▇▇ ALT-A Trust 2004-6, Mortgage Pass-Through Certificates, Series
2004-6, Class XP". On the Closing Date, the Depositor shall deposit $100 into the Class XP
Reserve Account. Funds on deposit in the Class XP Reserve Account shall be held in trust by
the Master Servicer for the holder of the Class XP Certificate.
(b) The amount on deposit in the Class XP Reserve Account shall be held uninvested. On
the earlier of (x) the Business Day prior to the Distribution Date on which all the assets
of the Trust Fund are repurchased as described in Section 10.01(a) and (y) the Business Day
prior to the Distribution Date immediately following the Prepayment Period during which the
last Prepayment Charge on the Mortgage Loans is payable by the related Mortgagor, which
Prepayment Period is the month of May 2010, the Master Servicer shall withdraw the amount
on deposit in the Class XP Reserve Account and remit such amount to the Trustee and provide
instruction to the Trustee to pay such amount to the Class XP Certificate in reduction of
the Certificate Principal Balance thereof.
ARTICLE V
Certificates
Section 5.01 Certificates. (a)The Depository, the Depositor and the Trustee have
entered into a Depository Agreement dated as of the Closing Date (the "Depository
Agreement"). Except for the Residual Certificates, the Private Certificates and the
Individual Certificates and as provided in Section 5.01(b), the Certificates shall at all
times remain registered in the name of the Depository or its nominee and at all times: (i)
registration of such Certificates may not be transferred by the Trustee except to a
successor to the Depository; (ii) ownership and transfers of registration of such
Certificates on the books of the Depository shall be governed by applicable rules
established by the Depository; (iii) the Depository may collect its usual and customary
fees, charges and expenses from its Depository Participants; (iv) the Trustee shall deal
with the Depository as representative of such Certificate Owners of the respective Class of
Certificates for purposes of exercising the rights of Certificateholders under this
Agreement, and requests and directions for and votes of such representative shall not be
deemed to be inconsistent if they are made with respect to different Certificate Owners;
and (v) the Trustee may rely and shall be fully protected in relying upon information
furnished by the Depository with respect to its Depository Participants.
The Residual Certificates and the Private Certificates are initially Physical
Certificates. If at any time the Holders of all of the Certificates of one or more such
Classes request that the Trustee cause such Class to become Global Certificates, the
Trustee and the Depositor will take such action as may be reasonably required to cause the
Depository to accept such Class or Classes for trading if it may legally be so traded.
All transfers by Certificate Owners of such respective Classes of Book-Entry
Certificates and any Global Certificates shall be made in accordance with the procedures
established by the Depository Participant or brokerage firm representing such Certificate
Owners. Each Depository Participant shall only transfer Book-Entry Certificates of
Certificate Owners it represents or of brokerage firms for which it acts as agent in
accordance with the Depository's normal procedures.
(b) If (i)(A) the Depositor advises the Trustee in writing that the Depository is no
longer willing or able to properly discharge its responsibilities as Depository and (B) the
Depositor is unable to locate a qualified successor within 30 days or (ii) the Depositor at
its option advises the Trustee in writing that it elects to terminate the book-entry system
through the Depository, the Trustee shall request that the Depository notify all
Certificate Owners of the occurrence of any such event and of the availability of
definitive, fully registered Certificates to Certificate Owners requesting the same. Upon
surrender to the Trustee of the Certificates by the Depository, accompanied by registration
instructions from the Depository for registration, the Trustee shall issue the definitive
Certificates.
In addition, if an Event of Default has occurred and is continuing, each Certificate
Owner materially adversely affected thereby may at its option request a definitive
Certificate evidencing such Certificate Owner's interest in the related Class of
Certificates. In order to make such request, such Certificate Owner shall, subject to the
rules and procedures of the Depository, provide the Depository or the related Depository
Participant with directions for the Trustee to exchange or cause the exchange of the
Certificate Owner's interest in such Class of Certificates for an equivalent interest in
fully registered definitive form. Upon receipt by the Trustee of instructions from the
Depository directing the Trustee to effect such exchange (such instructions to contain
information regarding the Class of Certificates and the Current Principal Balance being
exchanged, the Depository Participant account to be debited with the decrease, the
registered holder of and delivery instructions for the definitive Certificate, and any
other information reasonably required by the Trustee), (i) the Trustee shall instruct the
Depository to reduce the related Depository Participant's account by the aggregate Current
Principal Balance of the definitive Certificate, (ii) the Trustee shall execute and
deliver, in accordance with the registration and delivery instructions provided by the
Depository, a Definitive Certificate evidencing such Certificate Owner's interest in such
Class of Certificates and (iii) the Trustee shall execute a new Book-Entry Certificate
reflecting the reduction in the aggregate Current Principal Balance of such Class of
Certificates by the amount of the definitive Certificates.
Neither the Depositor nor the Trustee shall be liable for any delay in the delivery
of any instructions required pursuant to this Section 5.01(b) and may conclusively rely on,
and shall be protected in relying on, such instructions.
(c) REMIC II will be evidenced by (x) the REMIC II Regular Interests (designated below),
which will be uncertificated and non-transferable and are hereby designated as the "regular
interests" in REMIC II and (y) the Class R-II Certificates, which are hereby designated as
the single class of "residual interests" in REMIC II. On each Distribution Date, the
Trustee shall cause the REMIC II Distribution Amount to be distributed by REMIC II to REMIC
III on account of the REMIC II Regular Interests or withdrawn from the Distribution Account
and distributed to the holders of the Class R-II Certificates, as the case may be, in the
amounts and with the priorities set forth in the definition of REMIC II Distribution Amount.
The REMIC II Regular Interests and the Class R-II Certificates will have the
following designations and pass-through rates:
Initial
Uncertificated REMIC Uncertificated Latest Possible
Designation II Pass Through Rate Principal Balance Maturity Date(3)
LT1 Variable(1) $404,464,752.16 July 25, 2034
LT2 Variable(1) $5,737.22 July 25, 2034
LT3 0.00% $34,737.01 July 25, 2034
LT4 Variable(1) $34,737.01 July 25, 2034
LT5 Variable(1) $62,609,086.79 July 25, 2034
LT6 Variable(1) $723.35 July 25, 2034
LT7 0.00% $5,541.87 July 25, 2034
LT8 Variable(1) $5,541.87 July 25, 2034
LT9 Variable(1) $392,896,578.42 July 25, 2034
LT10 Variable(1) $5,352.98 July 25, 2034
LT11 0.00% $33,963.66 July 25, 2034
LT12 Variable(1) $33,963.66 July 25, 2034
LT-Y1(2) Variable(1) $202,349.60 July 25, 2034
LT-Y2(2) Variable(1) $31,326.11 July 25, 2034
LT-Y3(2) Variable(1) $196,562.27 July 25, 2034
R-II 0.00% $0.00 July 25, 2034
--------------
(1) Calculated as provided in the definition of Uncertificated REMIC II Pass-Through Rate.
(2) LT-Y1 will have the same interest rate, principal balance, Principal Reduction Amount
and allocation of Realized Losses as the REMIC I Regular Interest Y-1. LT-Y2 will
have the same interest rate, principal balance, Principal Reduction Amount and
allocation of Realized Losses as the REMIC I Regular Interest Y-2. LT-Y3 will
have the same interest rate, principal balance, Principal Reduction Amount and
allocation of Realized Losses as the REMIC I Regular Interest Y-3. LT-Y1, LT-Y2
and LT-Y3 shall be entitled to receive any prepayment penalties received by the
Master Servicer with respect to the Mortgage Loans in the related Loan Group and
ultimately payable to the Class XP Certificates.
(3) Solely for purposes of Section 1.860G 1(a)(4)(iii) of the Treasury regulations, the
Distribution Date in the month following the maturity date for the Mortgage Loan
with the latest maturity date has been designated as the "latest possible maturity
date" for each REMIC II Regular Interest.
REMIC I will be evidenced by (x) the REMIC I Regular Interests (designated below),
which will be uncertificated and non-transferable and are hereby designated as the "regular
interests" in REMIC I and (y) the Class R-I Certificates, which is hereby designated as the
single class of "residual interests" in REMIC I. On each Distribution Date, the Trustee
shall cause the REMIC I Distribution Amount to be distributed by REMIC I to REMIC II on
account of the REMIC I Regular Interests or withdrawn from the Distribution Account and
distributed to the holders of the Class R-I Certificates, as the case may be , in the
amounts and with the priorities set forth in the definition of REMIC I Distribution Amount.
The REMIC I Regular Interests and the Class R-I Certificates will have the following
designations and pass-through rates:
Initial
Uncertificated REMIC I Uncertificated Assumed Final
Designation Pass Through Rate Principal Balance Maturity Date(1)
Y-1 Variable(2) $202,349.60 July 25, 2034
Y-2 Variable(2) $31,326.11 July 25, 2034
Y-3 Variable(2) $196,562.27 July 25, 2034
Z-1 Variable(2) $404,539,963.40 July 25, 2034
Z-2 Variable(2) $62,620,893.89 July 25, 2034
Z-3 Variable(2) $392,969,858.73 July 25, 2034
R-I 0% $0.00 July 25, 2034
--------------
(1) Solely for purposes of Section 1.860G 1(a)(4)(iii) of the Treasury regulations, the
Distribution Date in the month following the maturity date for the Mortgage Loan with
the latest maturity date has been designated as the "latest possible maturity date" for
each REMIC I Regular Interest.
(2) Calculated in accordance with the definition of "Uncertificated REMIC I Pass Through
Rate" herein. Y-1 shall also be entitled to receive any prepayment penalties received
by the Master Servicer with respect to the Mortgage Loans in Loan Group I and ultimately
payable to the Class XP Certificates. Y-2 shall be entitled to receive any prepayment
penalties received by the Master Servicer with respect to the Mortgage Loans in Loan
Group II and ultimately payable to the Class XP Certificates. Y-3 shall be entitled to
receive any prepayment penalties received by the Master Servicer with respect to the
Mortgage Loans in Loan Group III and ultimately payable to the Class XP Certificates.
REMIC III will be evidenced by (x) the Certificates (other than the Class R
Certificates) (the "REMIC III Regular Certificates") exclusive of the rights, if any, of
such Certificates to payments of Basis Risk Carryforward Amounts or payments from the Cap
Contract, which are hereby designated as the "regular interests" in REMIC III and have the
principal balances and accrue interest at the Pass-Through Rates equal to those set forth
in this Section 5.01(c) and (y) the Class R-III Certificate, which is hereby designated as
the single "residual interest" in REMIC III.
The Classes of the Certificates shall have the following designations, initial
principal amounts and Pass-Through Rates:
Designation Initial Principal Amount Pass Through Rate
I-A $380,660,000 (1)
II-A-1 $19,640,000 (2)
II-A-2 $31,427,000 (3)
II-A-3 $7,857,000 (4)
III-A $369,773,000 (5)
M-1 $18,932,000 (6)
M-2 $15,491,000 (7)
B-1 $6,884,000 (8)
B-2 $6,884,000 (9)
XP $100 (10)
B-IO $3,012,954 (11)
R-I $0 (12)
R-II $0 (12)
R-III $0 (12)
--------------
(1) The Class I-A Certificates will bear interest at a rate equal to the least of
(i) One-Month LIBOR plus the related Margin, (ii) 11.50% and (iii) the related Net Rate
Cap. The pass-through rate with respect to the first Interest Accrual Period is 1.42% per
annum.
(2) The Class II-A-1 Certificates will bear interest at a rate equal to the lesser
of (i) One-Month LIBOR plus the related Margin and (ii) the related Net Rate Cap. The
pass-through rate with respect to the first Interest Accrual Period is 1.37% per annum.
(3) The Class II-A-2 Certificates will bear interest at a rate equal to the lesser
of (i) One-Month LIBOR plus the related Margin and (ii) the related Net Rate Cap. The
pass-through rate with respect to the first Interest Accrual Period is 1.35% per annum.
(4) The Class II-A-3 Certificates will bear interest at a rate equal to the lesser
of (i) One-Month LIBOR plus the related Margin and (ii) the related Net Rate Cap. The
pass-through rate with respect to the first Interest Accrual Period is 1.60% per annum.
(5) The Class III-A Certificates will bear interest at a rate equal to the least of
(i) One-Month LIBOR plus the related Margin, (ii) 11.50% and (iii) the related Net Rate
Cap. The pass-through rate with respect to the first Interest Accrual Period is 1.41% per
annum.
(6) The Class M-1 Certificates will bear interest at a rate equal to the least of
(i) One-Month LIBOR plus the related Margin, (ii) 11.50% and (iii) the related Net Rate
Cap. The pass-through rate with respect to the first Interest Accrual Period is 1.65% per
annum.
(7) The Class M-2 Certificates will bear interest at a rate equal to the least of
(i) One-Month LIBOR plus the related Margin, (ii) 11.50% and (iii) the related Net Rate
Cap. The pass-through rate with respect to the first Interest Accrual Period is 2.25% per
annum.
(8) The Class B-1 Certificates will bear interest at a rate equal to the least of
(i) One-Month LIBOR plus the related Margin, (ii) 11.50% and (iii) the related Net Rate
Cap. The pass-through rate with respect to the first Interest Accrual Period is 3.00% per
annum.
(9) The Class B-2 Certificates will bear interest at a rate equal to the least of
(i) One-Month LIBOR plus the related Margin, (ii) 11.50% and (iii) the related Net Rate
Cap. The pass-through rate with respect to the first Interest Accrual Period is 3.00% per
annum.
(10) The Class XP Certificates will not bear any interest. It will be entitled to
receive prepayment penalties collected with respect to the Mortgage Loans.
(11) The Class B-IO Certificates will bear interest at a per annum rate equal to the
Class B-IO Pass-Through Rate on its Notional Amount. The Class B-IO Certificates will be
comprised of two REMIC III regular interests, a principal only regular interest designated
B-IO-P and an interest only regular interest designated B-IO-I, which will be entitled to
distributions as set forth herein.
(12) The Class R-I, Class R-II and Class R-III Certificates will not bear any
interest.
(d) Solely for purposes of Section 1.860G-1(a)(4)(iii) of the Treasury regulations, the
Distribution Date immediately following the maturity date for the Mortgage Loan with the
latest maturity date in the Trust Fund has been designated as the "latest possible maturity
date" for the REMIC III Regular Interests and the Certificates.
(e) With respect to each Distribution Date, each Class of Certificates shall accrue
interest during the related Interest Accrual Period. With respect to each Distribution Date
and (i) each such Class of Certificates (other than the Class B-IO Certificates), interest
shall be calculated, on the basis of a 360-day year and the actual number of days elapsed
in the related Interest Accrual Period, based upon the respective Pass-Through Rate set
forth, or determined as provided, above and the Certificate Principal Balance of such Class
applicable to such Distribution Date. With respect to each Distribution Date and the Class
B-IO Certificates, interest shall be calculated, on the basis of a 360-day year consisting
of twelve 30-day months, based upon the respective Pass-Through Rate set forth, or
determined as provided, above and the Notional Amount of such Class applicable to such
Distribution Date.
(f) The Certificates shall be substantially in the forms set forth in Exhibits ▇-▇, ▇-▇,
▇-▇, ▇-▇, ▇-▇, ▇-▇, A-7 and A-8. On original issuance, the Trustee shall sign, countersign
and shall deliver them at the direction of the Depositor. Pending the preparation of
definitive Certificates of any Class, the Trustee may sign and countersign temporary
Certificates that are printed, lithographed or typewritten, in authorized denominations for
Certificates of such Class, substantially of the tenor of the definitive Certificates in
lieu of which they are issued and with such appropriate insertions, omissions,
substitutions and other variations as the officers or authorized signatories executing such
Certificates may determine, as evidenced by their execution of such Certificates. If
temporary Certificates are issued, the Depositor will cause definitive Certificates to be
prepared without unreasonable delay. After the preparation of definitive Certificates, the
temporary Certificates shall be exchangeable for definitive Certificates upon surrender of
the temporary Certificates at the office of the Trustee, without charge to the Holder. Upon
surrender for cancellation of any one or more temporary Certificates, the Trustee shall
sign and countersign and deliver in exchange therefor a like aggregate principal amount, in
authorized denominations for such Class, of definitive Certificates of the same Class.
Until so exchanged, such temporary Certificates shall in all respects be entitled to the
same benefits as definitive Certificates.
(g) Each Class of Book-Entry Certificates will be registered as a single Certificate of
such Class held by a nominee of the Depository or the DTC Custodian, and beneficial
interests will be held by investors through the book-entry facilities of the Depository in
minimum denominations of (i) in the case of the Senior Certificates (other than the
Residual Certificates), $25,000 and in each case increments of $1,000 in excess thereof,
and (ii) in the case of the Subordinate Certificates, $25,000 and increments of $1,000 in
excess thereof, except that one Certificate of each such Class may be issued in a different
amount so that the sum of the denominations of all outstanding Certificates of such Class
shall equal the Certificate Principal Balance of such Class on the Closing Date. On the
Closing Date, the Trustee shall execute and countersign Physical Certificates all in an
aggregate principal amount that shall equal the Certificate Principal Balance of such Class
on the Closing Date. The Residual Certificates shall each be issued in certificated
fully-registered form. Each Class of Global Certificates, if any, shall be issued in fully
registered form in minimum dollar denominations of $50,000 and integral multiples of $1.00
in excess thereof, except that one Certificate of each Class may be in a different
denomination so that the sum of the denominations of all outstanding Certificates of such
Class shall equal the Certificate Principal Balance of such Class on the Closing Date. On
the Closing Date, the Trustee shall execute and countersign (i) in the case of each Class
of Offered Certificates, the Certificate in the entire Certificate Principal Balance of the
respective Class and (ii) in the case of each Class of Private Certificates, Individual
Certificates all in an aggregate principal amount that shall equal the Certificate
Principal Balance of each such respective Class on the Closing Date. The Certificates
referred to in clause (i) and if at any time there are to be Global Certificates, the
Global Certificates shall be delivered by the Depositor to the Depository or pursuant to
the Depository's instructions, shall be delivered by the Depositor on behalf of the
Depository to and deposited with the DTC Custodian. The Trustee shall sign the Certificates
by facsimile or manual signature and countersign them by manual signature on behalf of the
Trustee by one or more authorized signatories, each of whom shall be Responsible Officers
of the Trustee or its agent. A Certificate bearing the manual and facsimile signatures of
individuals who were the authorized signatories of the Trustee or its agent at the time of
issuance shall bind the Trustee, notwithstanding that such individuals or any of them have
ceased to hold such positions prior to the delivery of such Certificate.
(h) No Certificate shall be entitled to any benefit under this Agreement, or be valid for
any purpose, unless there appears on such Certificate the manually executed
countersignature of the Trustee or its agent, and such countersignature upon any
Certificate shall be conclusive evidence, and the only evidence, that such Certificate has
been duly executed and delivered hereunder. All Certificates issued on the Closing Date
shall be dated the Closing Date. All Certificates issued thereafter shall be dated the date
of their countersignature.
(i) The Closing Date is hereby designated as the "startup" day of each 2004-6 REMIC
within the meaning of Section 860G(a)(9) of the Code.
(j) For federal income tax purposes, each 2004-6 REMIC shall have a tax year that is a
calendar year and shall report income on an accrual basis.
(k) The Trustee on behalf of the Trust shall cause each 2004-6 REMIC to timely elect to
be treated as a REMIC under Section 860D of the Code. Any inconsistencies or ambiguities in
this Agreement or in the administration of any Trust established hereby shall be resolved
in a manner that preserves the validity of such elections.
(l) The following legend shall be placed on the Residual Certificates, whether upon
original issuance or upon issuance of any other Certificate of any such Class in exchange
therefor or upon transfer thereof:
ANY RESALE, TRANSFER OR OTHER DISPOSITION OF THIS CERTIFICATE MAY BE MADE ONLY
IF THE PROPOSED TRANSFEREE PROVIDES A TRANSFER AFFIDAVIT TO THE MASTER SERVICER
AND THE TRUSTEE THAT (1) SUCH TRANSFEREE IS NOT (A) THE UNITED STATES, ANY
STATE OR POLITICAL SUBDIVISION THEREOF, ANY POSSESSION OF THE UNITED STATES, OR
ANY AGENCY OR INSTRUMENTALITY OF ANY OF THE FOREGOING (OTHER THAN AN
INSTRUMENTALITY WHICH IS A CORPORATION IF ALL OF ITS ACTIVITIES ARE SUBJECT TO
TAX AND EXCEPT FOR ▇▇▇▇▇▇▇ MAC, A MAJORITY OF ITS BOARD OF DIRECTORS IS NOT
SELECTED BY SUCH GOVERNMENTAL UNIT), (B) A FOREIGN GOVERNMENT, ANY
INTERNATIONAL ORGANIZATION, OR ANY AGENCY OR INSTRUMENTALITY OF EITHER OF THE
FOREGOING, (C) ANY ORGANIZATION (OTHER THAN CERTAIN FARMERS' COOPERATIVES
DESCRIBED IN SECTION 521 OF THE CODE) WHICH IS EXEMPT FROM THE TAX IMPOSED BY
CHAPTER 1 OF THE CODE UNLESS SUCH ORGANIZATION IS SUBJECT TO THE TAX IMPOSED BY
SECTION 511 OF THE CODE (INCLUDING THE TAX IMPOSED BY SECTION 511 OF THE CODE
ON UNRELATED BUSINESS TAXABLE INCOME), (D) RURAL ELECTRIC AND TELEPHONE
COOPERATIVES DESCRIBED IN SECTION 1381(a)(2)(C) OF THE CODE, (E) AN ELECTING
LARGE PARTNERSHIP UNDER SECTION 775(a) OF THE CODE (ANY SUCH PERSON DESCRIBED
IN THE FOREGOING CLAUSES (A), (B), (C), (D) OR (E) BEING HEREIN REFERRED TO AS
A "DISQUALIFIED ORGANIZATION"), OR (F) AN AGENT OF A DISQUALIFIED ORGANIZATION,
(2) NO PURPOSE OF SUCH TRANSFER IS TO IMPEDE THE ASSESSMENT OR COLLECTION OF
TAX AND (3) SUCH TRANSFEREE SATISFIES CERTAIN ADDITIONAL CONDITIONS RELATING TO
THE FINANCIAL CONDITION OF THE PROPOSED TRANSFEREE. NOTWITHSTANDING THE
REGISTRATION IN THE CERTIFICATE REGISTER OR ANY TRANSFER, SALE OR OTHER
DISPOSITION OF THIS CERTIFICATE TO A DISQUALIFIED ORGANIZATION OR AN AGENT OF A
DISQUALIFIED ORGANIZATION, SUCH REGISTRATION SHALL BE DEEMED TO BE OF NO LEGAL
FORCE OR EFFECT WHATSOEVER AND SUCH PERSON SHALL NOT BE DEEMED TO BE A
CERTIFICATEHOLDER FOR ANY PURPOSE HEREUNDER, INCLUDING, BUT NOT LIMITED TO, THE
RECEIPT OF DISTRIBUTIONS ON THIS CERTIFICATE. EACH HOLDER OF THIS CERTIFICATE
BY ACCEPTANCE OF THIS CERTIFICATE SHALL BE DEEMED TO HAVE CONSENTED TO THE
PROVISIONS OF THIS PARAGRAPH.
Section 5.02 Registration of Transfer and Exchange of Certificates. (a)The Trustee
shall maintain at its Corporate Trust Office a Certificate Register in which, subject to
such reasonable regulations as it may prescribe, the Trustee shall provide for the
registration of Certificates and of transfers and exchanges of Certificates as herein
provided.
(b) Subject to Section 5.01(a) and, in the case of any Global Certificate or Physical
Certificate upon the satisfaction of the conditions set forth below, upon surrender for
registration of transfer of any Certificate at any office or agency of the Trustee
maintained for such purpose, the Trustee shall sign, countersign and shall deliver, in the
name of the designated transferee or transferees, a new Certificate of a like Class and
aggregate Fractional Undivided Interest, but bearing a different number.
(c) By acceptance of an Individual Certificate, whether upon original issuance or
subsequent transfer, each holder of such a Certificate acknowledges the restrictions on the
transfer of such Certificate set forth in the Securities Legend and agrees that it will
transfer such a Certificate only as provided herein. In addition to the provisions of
Section 5.02(h), the following restrictions shall apply with respect to the transfer and
registration of transfer of an Individual Certificate to a transferee that takes delivery
in the form of an Individual Certificate:
(i) The Trustee shall register the transfer of an Individual Certificate if the requested
transfer is being made to a transferee who has provided the Trustee with a Rule 144A
Certificate or comparable evidence as to its QIB status.
(ii) The Trustee shall register the transfer of any Individual Certificate if (x) the
transferor has advised the Trustee in writing that the Certificate is being
transferred to an Institutional Accredited Investor along with facts surrounding the
transfer as set forth in Exhibit F-3 hereto; and (y) prior to the transfer the
transferee furnishes to the Trustee an Investment Letter (and the Trustee shall be
fully protected in so doing), provided that, if based upon an Opinion of Counsel
addressed to the Trustee to the effect that the delivery of (x) and (y) above are not
sufficient to confirm that the proposed transfer is being made pursuant to an
exemption from, or in a transaction not subject to, the registration requirements of
the Securities Act and other applicable laws, the Trustee shall as a condition of the
registration of any such transfer require the transferor to furnish such other
certifications, legal opinions or other information prior to registering the transfer
of an Individual Certificate as shall be set forth in such Opinion of Counsel.
(d) So long as a Global Certificate of such Class is outstanding and is held by or on
behalf of the Depository, transfers of beneficial interests in such Global Certificate, or
transfers by holders of Individual Certificates of such Class to transferees that take
delivery in the form of beneficial interests in the Global Certificate, may be made only in
accordance with Section 5.02(h), the rules of the Depository and the following:
(i) In the case of a beneficial interest in the Global Certificate being transferred to
an Institutional Accredited Investor, such transferee shall be required to take
delivery in the form of an Individual Certificate or Certificates and the Trustee
shall register such transfer only upon compliance with the provisions of Section
5.02(c)(ii).
(ii) In the case of a beneficial interest in a Class of Global Certificates being
transferred to a transferee that takes delivery in the form of an Individual
Certificate or Certificates of such Class, except as set forth in clause (i) above,
the Trustee shall register such transfer only upon compliance with the provisions of
Section 5.02(c)(i).
(iii) In the case of an Individual Certificate of a Class being transferred to a transferee
that takes delivery in the form of a beneficial interest in a Global Certificate of
such Class, the Trustee shall register such transfer if the transferee has provided
the Trustee with a Rule 144A Certificate or comparable evidence as to its QIB status.
(iv) No restrictions shall apply with respect to the transfer or registration of transfer
of a beneficial interest in the Global Certificate of a Class to a transferee that
takes delivery in the form of a beneficial interest in the Global Certificate of such
Class; provided that each such transferee shall be deemed to have made such
representations and warranties contained in the Rule 144A Certificate as are
sufficient to establish that it is a QIB.
(e) Subject to Section 5.02(h), an exchange of a beneficial interest in a Global
Certificate of a Class for an Individual Certificate or Certificates of such Class, an
exchange of an Individual Certificate or Certificates of a Class for a beneficial interest
in the Global Certificate of such Class and an exchange of an Individual Certificate or
Certificates of a Class for another Individual Certificate or Certificates of such Class
(in each case, whether or not such exchange is made in anticipation of subsequent transfer,
and, in the case of the Global Certificate of such Class, so long as such Certificate is
outstanding and is held by or on behalf of the Depository) may be made only in accordance
with Section 5.02(h), the rules of the Depository and the following:
(i) A holder of a beneficial interest in a Global Certificate of a Class may at any time
exchange such beneficial interest for an Individual Certificate or Certificates of
such Class.
(ii) A holder of an Individual Certificate or Certificates of a Class may exchange such
Certificate or Certificates for a beneficial interest in the Global Certificate of
such Class if such holder furnishes to the Trustee a Rule 144A Certificate or
comparable evidence as to its QIB status.
(iii) A holder of an Individual Certificate of a Class may exchange such Certificate for an
equal aggregate principal amount of Individual Certificates of such Class in
different authorized denominations without any certification.
(f) (i) Upon acceptance for exchange or transfer of an Individual Certificate of a
Class for a beneficial interest in a Global Certificate of such Class as provided herein,
the Trustee shall cancel such Individual Certificate and shall (or shall request the
Depository to) endorse on the schedule affixed to the applicable Global Certificate (or on
a continuation of such schedule affixed to the Global Certificate and made a part thereof)
or otherwise make in its books and records an appropriate notation evidencing the date of
such exchange or transfer and an increase in the certificate balance of the Global
Certificate equal to the certificate balance of such Individual Certificate exchanged or
transferred therefor.
(ii) Upon acceptance for exchange or transfer of a beneficial interest in a Global
Certificate of a Class for an Individual Certificate of such Class as provided
herein, the Trustee shall (or shall request the Depository to) endorse on the
schedule affixed to such Global Certificate (or on a continuation of such schedule
affixed to such Global Certificate and made a part thereof) or otherwise make in its
books and records an appropriate notation evidencing the date of such exchange or
transfer and a decrease in the certificate balance of such Global Certificate equal
to the certificate balance of such Individual Certificate issued in exchange therefor
or upon transfer thereof.
(g) The Securities Legend shall be placed on any Individual Certificate issued in
exchange for or upon transfer of another Individual Certificate or of a beneficial interest
in a Global Certificate.
(h) Subject to the restrictions on transfer and exchange set forth in this Section 5.02,
the holder of any Individual Certificate may transfer or exchange the same in whole or in
part (in an initial certificate balance equal to the minimum authorized denomination set
forth in Section 5.01(g) or any integral multiple of $1,000 in excess thereof) by
surrendering such Certificate at the Corporate Trust Office, or at the office of any
transfer agent, together with an executed instrument of assignment and transfer
satisfactory in form and substance to the Trustee in the case of transfer and a written
request for exchange in the case of exchange. The holder of a beneficial interest in a
Global Certificate may, subject to the rules and procedures of the Depository, cause the
Depository (or its nominee) to notify the Trustee in writing of a request for transfer or
exchange of such beneficial interest for an Individual Certificate or Certificates.
Following a proper request for transfer or exchange, the Trustee shall, within five
Business Days of such request made at the Corporate Trust Office, sign, countersign and
deliver at the Corporate Trust Office, to the transferee (in the case of transfer) or
holder (in the case of exchange) or send by first class mail at the risk of the transferee
(in the case of transfer) or holder (in the case of exchange) to such address as the
transferee or holder, as applicable, may request, an Individual Certificate or
Certificates, as the case may require, for a like aggregate Fractional Undivided Interest
and in such authorized denomination or denominations as may be requested. The presentation
for transfer or exchange of any Individual Certificate shall not be valid unless made at
the Corporate Trust Office by the registered holder in person, or by a duly authorized
attorney-in-fact.
(i) At the option of the Certificateholders, Certificates may be exchanged for other
Certificates of authorized denominations of a like Class and aggregate Fractional Undivided
Interest, upon surrender of the Certificates to be exchanged at the Corporate Trust Office;
provided, however, that no Certificate may be exchanged for new Certificates unless the
original Fractional Undivided Interest represented by each such new Certificate (i) is at
least equal to the minimum authorized denomination or (ii) is acceptable to the Depositor
as indicated to the Trustee in writing. Whenever any Certificates are so surrendered for
exchange, the Trustee shall sign and countersign and the Trustee shall deliver the
Certificates which the Certificateholder making the exchange is entitled to receive.
(j) If the Trustee so requires, every Certificate presented or surrendered for transfer
or exchange shall be duly endorsed by, or be accompanied by a written instrument of
transfer, with a signature guarantee, in form satisfactory to the Trustee, duly executed by
the holder thereof or his or her attorney duly authorized in writing.
(k) No service charge shall be made for any transfer or exchange of Certificates, but the
Trustee may require payment of a sum sufficient to cover any tax or governmental charge
that may be imposed in connection with any transfer or exchange of Certificates.
(l) The Trustee shall cancel all Certificates surrendered for transfer or exchange but
shall retain such Certificates in accordance with its standard retention policy or for such
further time as is required by the record retention requirements of the Securities Exchange
Act of 1934, as amended, and thereafter may destroy such Certificates.
Section 5.03 Mutilated, Destroyed, Lost or Stolen Certificates. (a) If (i) any
mutilated Certificate is surrendered to the Trustee, or the Trustee receives evidence to
its satisfaction of the destruction, loss or theft of any Certificate, and (ii) there is
delivered to the Trustee such security or indemnity as it may require to save it harmless,
and (iii) the Trustee has not received notice that such Certificate has been acquired by a
third Person, the Trustee shall sign, countersign and deliver, in exchange for or in lieu
of any such mutilated, destroyed, lost or stolen Certificate, a new Certificate of like
tenor and Fractional Undivided Interest but in each case bearing a different number. The
mutilated, destroyed, lost or stolen Certificate shall thereupon be canceled of record by
the Trustee and shall be of no further effect and evidence no rights.
(b) Upon the issuance of any new Certificate under this Section 5.03, the Trustee may
require the payment of a sum sufficient to cover any tax or other governmental charge that
may be imposed in relation thereto and any other expenses (including the fees and expenses
of the Trustee) connected therewith. Any duplicate Certificate issued pursuant to this
Section 5.03 shall constitute complete and indefeasible evidence of ownership in the Trust
Fund, as if originally issued, whether or not the lost, stolen or destroyed Certificate
shall be found at any time.
Section 5.04 Persons Deemed Owners. Prior to due presentation of a Certificate for
registration of transfer, the Depositor, the Trustee and any agent of the Depositor or the
Trustee may treat the Person in whose name any Certificate is registered as the owner of
such Certificate for the purpose of receiving distributions pursuant to Section 6.01 and
for all other purposes whatsoever. Neither the Depositor, the Trustee nor any agent of the
Depositor or the Trustee shall be affected by notice to the contrary. No Certificate shall
be deemed duly presented for a transfer effective on any Record Date unless the Certificate
to be transferred is presented no later than the close of business on the third Business
Day preceding such Record Date.
Section 5.05 Transfer Restrictions on Residual Certificates. (a)Residual Certificates,
or interests therein, may not be transferred without the prior express written consent of
the Tax Matters Person and the Depositor, which cannot be unreasonably withheld. As a
prerequisite to such consent, the proposed transferee must provide the Tax Matters Person,
the Depositor and the Trustee with an affidavit that the proposed transferee is a Permitted
Transferee (and, unless the Tax Matters Person and the Depositor consent to the transfer to
a person who is not a U.S. Person, an affidavit that it is a U.S. Person) as provided in
Section 5.05(b).
(b) No transfer, sale or other disposition of a Residual Certificate (including a
beneficial interest therein) may be made unless, prior to the transfer, sale or other
disposition of a Residual Certificate, the proposed transferee (including the initial
purchasers thereof) delivers to the Tax Matters Person, the Trustee and the Depositor an
affidavit in the form attached hereto as Exhibit E stating, among other things, that as of
the date of such transfer (i) such transferee is a Permitted Transferee and that (ii) such
transferee is not acquiring such Residual Certificate for the account of any person who is
not a Permitted Transferee. The Tax Matters Person shall not consent to a transfer of a
Residual Certificate if it has actual knowledge that any statement made in the affidavit
issued pursuant to the preceding sentence is not true. Notwithstanding any transfer, sale
or other disposition of a Residual Certificate to any Person who is not a Permitted
Transferee, such transfer, sale or other disposition shall be deemed to be of no legal
force or effect whatsoever and such Person shall not be deemed to be a Holder of a Residual
Certificate for any purpose hereunder, including, but not limited to, the receipt of
distributions thereon. If any purported transfer shall be in violation of the provisions of
this Section 5.05(b), then the prior Holder thereof shall, upon discovery that the transfer
of such Residual Certificate was not in fact permitted by this Section 5.05(b), be restored
to all rights as a Holder thereof retroactive to the date of the purported transfer. None
of the Trustee, the Tax Matters Person or the Depositor shall be under any liability to any
Person for any registration or transfer of a Residual Certificate that is not permitted by
this Section 5.05(b) or for making payments due on such Residual Certificate to the
purported Holder thereof or taking any other action with respect to such purported Holder
under the provisions of this Agreement so long as the written affidavit referred to above
was received with respect to such transfer, and the Tax Matters Person, the Trustee and the
Depositor, as applicable, had no knowledge that it was untrue. The prior Holder shall be
entitled to recover from any purported Holder of a Residual Certificate that was in fact
not a permitted transferee under this Section 5.05(b) at the time it became a Holder all
payments made on such Residual Certificate. Each Holder of a Residual Certificate, by
acceptance thereof, shall be deemed for all purposes to have consented to the provisions of
this Section 5.05(b) and to any amendment of this Agreement deemed necessary (whether as a
result of new legislation or otherwise) by counsel of the Tax Matters Person or the
Depositor to ensure that the Residual Certificates are not transferred to any Person who is
not a Permitted Transferee and that any transfer of such Residual Certificates will not
cause the imposition of a tax upon the Trust or cause any 2004-6 REMIC to fail to qualify
as a REMIC.
(c) Unless the Tax Matters Person shall have consented in writing (which consent may be
withheld in the Tax Matters Person's sole discretion), the Residual Certificates (including
a beneficial interest therein) may not be purchased by or transferred to any person who is
not a United States Person.
(d) By accepting a Residual Certificate, the purchaser thereof agrees to be a Tax Matters
Person if it is the Holder of the largest percentage interest of such Certificate, and
appoints the Securities Administrator to act as its agent with respect to all matters
concerning the tax obligations of the Trust.
Section 5.06 Restrictions on Transferability of Certificates. (a)No offer, sale,
transfer or other disposition (including pledge) of any Certificate shall be made by any
Holder thereof unless registered under the Securities Act, or an exemption from the
registration requirements of the Securities Act and any applicable state securities or
"Blue Sky" laws is available and the prospective transferee (other than the Depositor) of
such Certificate signs and delivers to the Trustee an Investment Letter, if the transferee
is an Institutional Accredited Investor, in the form set forth as Exhibit F-l hereto, or a
Rule 144A Certificate, if the transferee is a QIB, in the form set forth as Exhibit F-2
hereto. Notwithstanding the provisions of the immediately preceding sentence, no
restrictions shall apply with respect to the transfer or registration of transfer of a
beneficial interest in any Certificate that is a Global Certificate of a Class to a
transferee that takes delivery in the form of a beneficial interest in the Global
Certificate of such Class provided that each such transferee shall be deemed to have made
such representations and warranties contained in the Rule 144A Certificate as are
sufficient to establish that it is a QIB. In the case of a proposed transfer of any
Certificate to a transferee other than a QIB, the Trustee may require an Opinion of Counsel
that such transaction is exempt from the registration requirements of the Securities Act.
The cost of such opinion shall not be an expense of the Trustee or the Trust Fund.
(b) The Private Certificates shall each bear a Securities Legend.
Section 5.07 ERISA Restrictions. (a)Subject to the provisions of subsection (b), no
Residual Certificates or Private Certificates may be acquired directly or indirectly by, or
on behalf of, an employee benefit plan or other retirement arrangement (a "Plan") that is
subject to Title I of ERISA and/or Section 4975 of the Code, or by a person using "plan
assets" of a Plan, unless the proposed transferee provides the Trustee with an Opinion of
Counsel for the benefit of the Trustee, the Master Servicer and the Securities
Administrator and on which they may rely which is the satisfactory to the Trustee, which
opinion will not be at the expense of the Trustee, the Master Servicer or the Securities
Administrator, that the purchase of such Certificates by or on behalf of such Plan is
permissible under applicable law, will not constitute or result in a nonexempt prohibited
transaction under ERISA or Section 4975 of the Code and will not subject the Trustee, the
Master Servicer or the Securities Administrator to any obligation in addition to those
undertaken in the Agreement.
(b) Any Person acquiring an interest in a Global Certificate which is a Private
Certificate, by acquisition of such Certificate, shall be deemed to have represented to the
Trustee that it is not acquiring an interest in such Certificate directly or indirectly by,
or on behalf of, or with "plan assets" of, an employee benefit plan or other retirement
arrangement which is subject to Title I of ERISA and/or Section 4975 of the Code.
(c) Each beneficial owner of a Class M-1, Class M-2, Class B-1 or Class B-2 Certificate
or any interest therein shall be deemed to have represented, by virtue of its acquisition
or holding of that certificate or interest therein, that either (i) such Certificate is
rated at least "BBB-" or its equivalent by Fitch, S&P or ▇▇▇▇▇'▇, (ii) such beneficial
owner is not a Plan or investing with "plan assets" of any Plan, or (iii) (1) it is an
insurance company, (2) the source of funds used to acquire or hold the certificate or
interest therein is an "insurance company general account," as such term is defined in
Prohibited Transaction Class Exemption ("PTCE") 95-60, and (3) the conditions in Sections I
and III of PTCE 95-60 have been satisfied.
(d) None of the Trustee, the Master Servicer, or the Securities Administrator will be
required to monitor, determine or inquire as to compliance with the transfer restrictions
with respect to the Global Certificates. Any attempted or purported transfer of any
Certificate in violation of the provisions of Sections (a), (b) or (c) above shall be void
ab initio and such Certificate shall be considered to have been held continuously by the
prior permitted Certificateholder. Any transferor of any Certificate in violation of such
provisions, shall indemnify and hold harmless the Trustee, the Master Servicer and the
Securities Administrator from and against any and all liabilities, claims, costs or
expenses incurred by the Trustee, the Master Servicer or the Securities Administrator as a
result of such attempted or purported transfer. The Trustee shall have no liability for
transfer of any such Global Certificates in or through book-entry facilities of any
Depository or between or among Depository Participants or Certificate Owners made in
violation of the transfer restrictions set forth herein.
Section 5.08 Rule 144A Information. For so long as any Private Certificates are
outstanding, (1) the Depositor will provide or cause to be provided to any holder of such
Private Certificates and any prospective purchaser thereof designated by such a holder,
upon the request of such holder or prospective purchaser, the information required to be
provided to such holder or prospective purchaser by Rule 144A(d)(4) under the Securities
Act; and (2) the Depositor shall update such information from time to time in order to
prevent such information from becoming false and misleading and will take such other
actions as are necessary to ensure that the safe harbor exemption from the registration
requirements of the Securities Act under Rule 144A is and will be available for resales of
such Private Certificates conducted in accordance with Rule 144A.
ARTICLE VI
Payments to Certificateholders
Section 6.01 Distributions on the Certificates. (a)On each Distribution Date, an
amount equal to the Interest Funds and Principal Funds for such Distribution Date shall be
withdrawn by the Trustee from the Distribution Account to the extent of funds on deposit
therein and distributed as directed in accordance with distribution instructions provided
to it by the Securities Administrator for such Distribution Date, in the following order of
priority:
First, Interest Funds will be distributed, in the following manner and order of
priority:
1. From Interest Funds in respect of:
(a) Loan Group I, to the Class I-A Certificates, the Current Interest and
then any Interest Carry Forward Amount for such Class;
(b) Loan Group II, to the Class II-A Certificates, the Current Interest
and then any Interest Carry Forward Amount for each such Class, pro rata, based
on the Current Interest and Interest Carry Forward Amount due each such Class;
(c) Loan Group III, to the Class III-A Certificates, the Current Interest
and then any Interest Carry Forward Amount for such Class;
2. From remaining Interest Funds in respect of:
(a) Loan Group I, to each Class of Class II-A Certificates and the Class
III-A Certificates, the Current Interest and any Interest Carry Forward Amount
for each such Class to the extent not paid in clauses 1(b) and 1(c) above, pro
rata based on the remaining amounts owed to such Classes;
(b) Loan Group II, to the Class I-A Certificates and the Class III-A
Certificates, the Current Interest and any Interest Carry Forward Amount for
each such Class to the extent not paid in clauses 1(a) and 1(c) above, pro rata
based on the remaining amounts owed to such Classes;
(c) Loan Group III, to the Class I-A Certificates and each Class of Class
II-A Certificates, the Current Interest and any Interest Carry Forward Amount
for each such Class to the extent not paid in clauses 1(a) and 1(b) above, pro
rata based on the remaining amounts owed to such Classes;
3. From remaining Interest Funds in respect of all Loan Groups, to the Class
M-1, the Class M-2, Class B-1 and Class B-2 Certificates, sequentially, in that
order, the Current Interest for each such Class;
4. Any Excess Spread, to the extent necessary to cause the
Overcollateralization Amount to equal to the Overcollateralization Target Amount,
will be the Extra Principal Distribution Amount and will be included as part of the
Principal Distribution Amount and distributed in accordance with second (A) and (B)
below; and
5. Any Remaining Excess Spread will be applied as Excess Cashflow pursuant
to clauses Third through Twelfth below.
On any Distribution Date, any shortfalls resulting from the application of the Relief
Act and any Prepayment Interest Shortfalls to the extent not covered by Compensating
Interest Payments will be allocated as set forth in the definition of Current Interest
herein.
On any Distribution Date, the Group II Senior Percentage of any Deferred Interest on
a Group II Loan with respect to the related Due Period will be allocated to the Class II-A
Certificates on a pro rata basis in accordance with their respective Certificate Principal
Balances, and the remainder of such Deferred Interest will be allocated to the Class M-1
Certificates, the Class M-2 Certificates, the Class B-1 Certificates and the Class B-2
Certificates, on a pro rata basis, in accordance with their respective Certificate
Principal Balances.
Second, to pay as principal on the Certificates entitled to payments of principal, in
the following order of priority:
(A) For each Distribution Date (i) prior to the Stepdown Date or (ii) on which a
Trigger Event is in effect, from the Principal Funds and the Extra Principal
Distribution Amount for such Distribution Date:
1. (a) To the Class I-A Certificates, an amount equal to the Group I Principal
Distribution Amount will be distributed until the Certificate Principal Balance
thereof is reduced to zero;
(b) To the Class II-A Certificates, an amount equal to the Group II
Principal Distribution Amount will be distributed pro rata between
(i) the Class II-A-1 Certificates until the Certificate Principal
Balance thereof is reduced to zero; and
(ii) the Class II-A-2 Certificates and the Class III-A-3
Certificates, sequentially, in that order, in each case until the Certificate
Principal Balance of such Class has been reduced to zero; and
(c) To the Class III-A Certificates, an amount equal to the Group III
Principal Distribution Amount will be distributed until the Certificate Principal
Balance thereof is reduced to zero;
2. To the Class M-1 Certificates, any remaining Principal Distribution
Amount until the Certificate Principal Balance thereof is reduced to zero;
3. To the Class M-2 Certificates, any remaining Principal Distribution
Amount until the Certificate Principal Balance thereof is reduced to zero;
4. To the Class B-1 Certificates, any remaining Principal Distribution
Amount until the Certificate Principal Balance thereof is reduced to zero; and
5. To the Class B-2 Certificates, any remaining Principal Distribution
Amount until the Certificate Principal Balance thereof is reduced to zero;
(B) For each Distribution Date on or after the Stepdown Date, so long as a Trigger
Event is not in effect, from the Principal Funds and the Extra Principal Distribution
Amount for such Distribution Date:
1. (a) To the Class I-A Certificates, an amount equal to the Class I-A
Principal Distribution Amount will be distributed, until the Certificate Principal
Balance thereof is reduced to zero;
(b) To the Class II-A Certificates, an amount equal to the Class II-A
Principal Distribution Amount will be distributed pro rata between:
(i) the Class II-A-1 Certificates until the Certificate Principal
Balance thereof is reduced to zero; and
(ii) the Class II-A-2 Certificates and the Class II-A-3
Certificates, sequentially, in that order, in each case until the Certificate
Principal Balance of such Class has been reduced to zero; and
(c) To the Class III-A Certificates, an amount equal to the Class III-A
Principal Distribution Amount, until the Certificate Principal Balance thereof is
reduced to zero;
2. To the Class M-1 Certificates, from any remaining Principal Distribution
Amount, the Class M-1 Principal Distribution Amount, until the Certificate Principal
Balance thereof is reduced to zero;
3. To the Class M-2 Certificates, from any remaining Principal Distribution
Amount, the Class M-2 Principal Distribution Amount, until the Certificate Principal
Balance thereof is reduced to zero;
4. To the Class B-1 Certificates, from any remaining Principal Distribution
Amount, the Class B-1 Principal Distribution Amount, until the Certificate Principal
Balance thereof is reduced to zero; and
5. To the Class B-2 Certificates, from any remaining Principal Distribution
Amount, the Class B-2 Principal Distribution Amount, until the Certificate Principal
Balance thereof is reduced to zero.
Notwithstanding the provisions of clauses Second (A) and (B) above, if on any
Distribution Date the Certificates in a Certificate Group are no longer outstanding, the
portion of the Principal Distribution Amount or the related Class A Principal Distribution
Amount, as applicable, otherwise allocable to such Certificate Group will be allocated
among the other Certificate Groups, pro rata, based on the respective aggregate Certificate
Balances of the Certificate Groups, after giving effect to the distributions described in
clauses Second (A) and (B) above, and will be distributed among the certificates in each
Certificate Group in the manner set forth in clauses Second (A) or (B) above, as
applicable, until the Certificate Principal Balance of each such Class is reduced to zero.
Third, from any remaining Excess Cashflow, the following amounts to the Class A,
Certificates, pro rata among the Classes based on the amount due: (a) any Interest Carry
Forward Amount to the extent not paid pursuant to clause First 1 and 2 above and then (b)
any Unpaid Realized Loss Amount, in each case for such Class for such Distribution Date;
Fourth, from any remaining Excess Cashflow, the following amounts to the Class M-1
Certificates: (a) any Interest Carry Forward Amount and then (b) any Unpaid Realized Loss
Amount, in each case for such Class for such Distribution Date;
Fifth, from any remaining Excess Cashflow, the following amounts to the Class M-2
Certificates: (a) any Interest Carry Forward Amount and then (b) any Unpaid Realized Loss
Amount, in each case for such Class for such Distribution Date;
Sixth, from any remaining Excess Cashflow, the following amounts to the Class B-1
Certificates: (a) any Interest Carry Forward Amount and then (b) any Unpaid Realized Loss
Amount, in each case for such Class for such Distribution Date;
Seventh, from any remaining Excess Cashflow, to the Class B-2 Certificates: (a) any
Interest Carry Forward Amount and then (b) any Unpaid Realized Loss Amount, in each case
for such Class for such Distribution Date;
Eighth, from any remaining Excess Cashflow, to each Class of Class A Certificates,
any Basis Risk Shortfall and any Basis Risk Shortfall Carryforward Amount for each such
Class for such Distribution Date, pro rata based on the Basis Risk Shortfall and Basis Risk
Shortfall Carryforward Amount owed to such Class;
Ninth, from any remaining Excess Cashflow, to the Class M-1, Class M-2, Class B-1 and
Class B-2 Certificates, in that order, any Basis Risk Shortfall and any Basis Risk
Shortfall Carryforward Amount, in each case for such Class for such Distribution Date;
Tenth, from any remaining Excess Cashflow, to the Class B-IO Certificates, the Class
B-IO Distribution Amount;
Eleventh, from any remaining Excess Cashflow, to the Class B-IO Certificates, any
unreimbursed Class B-IO Advanced Amounts; and
Twelfth, any remaining amounts to the Residual Certificates.
All payments of amounts in respect of Basis Risk Shortfall or Basis Risk Shortfall
Carryforward Amount made pursuant to the provisions of this paragraph (a) shall, for
federal income tax purposes, be deemed to have been distributed from REMIC III to the
holder of the Class B-IO Certificates and then paid outside of any 2004-6 REMIC to the
recipients thereof pursuant to an interest rate cap contract. By accepting their
Certificates the holders of the Certificates agree so to treat such payments for purposes
of filing their income tax returns.
(b) On each Distribution Date, the related Cap Contract Payment Amount with respect to
such Payment Date shall be distributed in the following order of priority, in each case to
the extent of amounts available:
(i) first, to the holders of the related Class of Certificates, the payment of any Basis
Risk Shortfall or Basis Risk Shortfall Carry Forward Amount for such Distribution
Date, to the extent not covered by Excess Cashflow for such Distribution Date;
(ii) second, from any remaining amounts, the payment of an amount equal to any Current
Interest and Interest Carry Forward Amount for the related Class of Certificates to
the extent not covered by Interest Funds or Excess Cashflow on such Distribution Date;
(iii) third, from any remaining amounts, available from the Cap Contracts relating to the
Class I-A Certificates and Class III-A Certificates, to the Class M-1, the Class M-2,
the Class B-1 and the Class B-2 Certificates, in that order, to the extent not paid
pursuant to clauses (i) or (ii) above; and
(iv) to the Class B-IO Certificates, any remaining amount.
All Cap Contract Payment Amounts made with respect to Current Interest and Interest
Carry Forward Amounts will be treated, for federal income tax purposes, as reimbursable
advances ("Class B-IO Advances") made from the holder of the Class B-IO Certificates. Such
Class B-IO Advances will be paid back to the holder of the Class B-IO Certificate pursuant
to Section 6.01(a).
(c) On each Distribution Date, all amounts representing Prepayment Charges in respect of
the Prepayment Charge Loans received during the related Prepayment Period will be withdrawn
from the Distribution Account and distributed by the Trustee to the Class XP Certificates
and shall not be available for distribution to the holders of any other Class of
Certificates. The payment of such Prepayment Charges shall not reduce the Certificate
Principal Balance of the Class XP Certificates. In addition, as provided in Section 4.07
hereof, on the Distribution Date immediately following the Prepayment Period in which the
last Prepayment Charge is collectible on the Prepayment Charge Loans, which Prepayment
Period is the month of May 2010, the Trustee shall distribute the amount on deposit in the
Class XP Reserve Account to the Class XP Certificates in reduction of the Certificate
Principal Balance thereof until the Certificate Principal Balance thereof is reduced to
zero.
(d) The expenses and fees of the Trust shall be paid by each of the 2004-6 REMICs, to the
extent that such expenses relate to the assets of each of such respective 2004-6 REMICs,
and all other expenses and fees of the Trust shall be paid pro rata by each of the 2004-6
REMICs.
Section 6.02 Allocation of Losses; Subsequent Recoveries. (a) On or prior to each
Determination Date, the Master Servicer shall determine the amount of any Realized Loss in
respect of each Mortgage Loan that occurred during the immediately preceding calendar
month. Any Realized Losses with respect to the Mortgage Loans shall be applied on each
Distribution Date after the distributions provided for in Section 6.01, in reduction of the
Certificate Principal Balance of the Class or Classes of Certificates to the extent
provided in the definition of Applied Realized Loss Amount.
(b) In addition, in the event that the Master Servicer receives any Subsequent
Recoveries from a Servicer, the Master Servicer shall deposit such funds into the Master
Servicer Collection Account pursuant to Section 4.01(c)(ii). If, after taking into account
such Subsequent Recoveries, the amount of a Realized Loss is reduced, the amount of such
Subsequent Recoveries will be applied to increase the Certificate Principal Balance of the
Class of Subordinate Certificates with the highest payment priority to which Applied
Realized Loss Amounts have been allocated, but not by more than the amount of Applied
Realized Loss Amounts previously allocated to that Class of Subordinate Certificates. The
amount of any remaining Subsequent Recoveries will be applied to sequentially increase the
Certificate Principal Balance of the Subordinate Certificates, beginning with the Class of
Subordinate Certificates with the next highest payment priority, up to the amount of such
Applied Realized Loss Amounts previously allocated to such Class or Classes of
Certificates. Holders of such Certificates will not be entitled to any payments in respect
of Current Interest on the amount of such increases for any Interest Accrual Period
preceding the Distribution Date on which such increase occurs. Any such increases shall be
applied to the Certificate Principal Balance of each Subordinate Certificate of such Class
in accordance with its respective Fractional Undivided Interest.
Section 6.03 Payments. (a)On each Distribution Date, other than the final Distribution
Date, the Trustee shall distribute to each Certificateholder of record on the directly
preceding Record Date the Certificateholder's pro rata share of its Class (based on the
aggregate Fractional Undivided Interest represented by such Holder's Certificates) of all
amounts required to be distributed on such Distribution Date to such Class, based on
information provided to the Securities Administrator by the Master Servicer. The Securities
Administrator shall calculate the amount to be distributed to each Class and, based on such
amounts, the Securities Administrator shall determine the amount to be distributed to each
Certificateholder. All of the Securities Administrator's calculations of payments shall be
based solely on information provided to the Securities Administrator by the Master
Servicer. The Securities Administrator shall not be required to confirm, verify or
recompute any such information but shall be entitled to rely conclusively on such
information.
(b) Payment of the above amounts to each Certificateholder shall be made (i) by check
mailed to each Certificateholder entitled thereto at the address appearing in the
Certificate Register or (ii) upon receipt by the Trustee on or before the fifth Business
Day preceding the Record Date of written instructions from a Certificateholder by wire
transfer to a United States dollar account maintained by the payee at any United States
depository institution with appropriate facilities for receiving such a wire transfer;
provided, however, that the final payment in respect of each Class of Certificates will be
made only upon presentation and surrender of such respective Certificates at the office or
agency of the Trustee specified in the notice to Certificateholders of such final payment.
Section 6.04 Statements to Certificateholders. (a)Concurrently with each distribution
to Certificateholders, the Securities Administrator shall make available to the parties
hereto and each Certificateholder via the Securities Administrator's internet website as
set forth below, the following information, expressed with respect to clauses (i) through
(vii) in the aggregate and as a Fractional Undivided Interest representing an initial
Certificate Principal Balance of $1,000, in the case of the Class B-IO Certificates, a
Notional Amount of $1,000:
(i) the Certificate Principal Balance or Notional Amount of each Class of Certificates
immediately prior to such Distribution Date;
(ii) the amount of the distribution allocable to principal on each applicable Class of
Certificates;
(iii) the aggregate amount of interest accrued at the related Pass-Through Rate with
respect to each Class during the related Interest Accrual Period;
(iv) the Net Interest Shortfall and any other adjustments to interest at the related
Pass-Through Rate necessary to account for any difference between interest accrued
and aggregate interest distributed with respect to each Class of Certificates;
(v) the amount of the distribution allocable to interest on each Class of Certificates;
(vi) the Pass-Through Rates for each Class of Certificates with respect to such
Distribution Date;
(vii) the Certificate Principal Balance of each Class of Certificates after such
Distribution Date;
(viii) the amount of any Monthly Advances, Compensating Interest Payments and
outstanding unreimbursed advances by the Servicer or the Master Servicer included in
such distribution, separately stated for each Loan Group;
(ix) the aggregate amount of any Realized Losses (listed separately for each category of
Realized Loss and for each Loan Group) during the related Prepayment Period and
cumulatively since the Cut-off Date and the amount and source (separately identified)
of any distribution in respect thereof included in such distribution;
(x) with respect to each Mortgage Loan which incurred a Realized Loss during the related
Prepayment Period, (i) the loan number, (ii) the Stated Principal Balance of such
Mortgage Loan as of the Cut-off Date, (ii) the Stated Principal Balance of such
Mortgage Loan 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 in the aggregate regarding any Mortgage Loan
delinquencies as of the end of the related Prepayment Period, including the aggregate
number and aggregate Outstanding Principal Balance of Mortgage Loans (a) delinquent
30 to 59 days on a contractual basis, (b) delinquent 60 to 89 days on a contractual
basis, and (c) delinquent 90 or more days on a contractual basis, in each case as of
the close of business on the last Business Day of the immediately preceding month;
(xiv) for each Loan Group the number of Mortgage Loans in the foreclosure process as of the
end of the related Due Period and the aggregate Outstanding Principal Balance of such
Mortgage Loans;
(xv) for each Loan Group the number and aggregate Outstanding Principal Balance of all
Mortgage Loans as to which the Mortgaged Property was REO Property as of the end of
the related Due Period;
(xvi) the book value (the sum of (A) the Outstanding Principal Balance of the Mortgage
Loan, (B) accrued interest through the date of foreclosure and (C) foreclosure
expenses) of any REO Property in each Loan Group; provided that, in the event that
such information is not available to the Securities Administrator on the Distribution
Date, such information shall be furnished promptly after it becomes available;
(xvii) the amount of Realized Losses allocated to each Class of Certificates since the
prior Distribution Date and in the aggregate for all prior Distribution Dates;
(xviii) the Interest Carry Forward Amount and any Basis Risk Shortfall Carry Forward
Amount for each Class of Certificates;
(xix) the amount of such distribution to Holders of each Class allocable to interest and
the portion thereof, if any, provided by the Cap Contracts;
(xx) the cumulative amount of Applied Realized Loss Amounts to date; and
(xxi) whether a Trigger Event exists.
The information set forth above shall be calculated or reported, as the case may be,
by the Securities Administrator, based solely on, and to the extent of, information
provided to the Securities Administrator by the Master Servicer. The Securities
Administrator may conclusively rely on such information and shall not be required to
confirm, verify or recalculate any such information.
The Securities Administrator may make available each month, to any interested party,
the monthly statement to Certificateholders via the Securities Administrator's website
initially located at "▇▇▇.▇▇▇▇▇▇▇.▇▇▇." 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.
To the extent timely received from the Securities Administrator, the Trustee will
also make monthly statements available each month to Certificateholders via the Trustee's
internet website. The Trustee's internet website will initially be located at
▇▇▇.▇▇▇▇▇▇▇▇.▇▇▇/▇▇▇. Assistance in using the Trustee's website service can be obtained by
calling the Trustee's customer service desk at (▇▇▇) ▇▇▇-▇▇▇▇.
(b) Within a reasonable period of time after the end of the preceding calendar year
beginning in 2005, the Trustee will furnish such report to each Holder of the Certificates
of record at any time during the prior calendar year as to the aggregate of amounts
reported pursuant to subclauses (a)(ii) and (a)(v) above with respect to the Certificates,
plus information with respect to the amount of servicing compensation and such other
customary information as the Securities Administrator may determine and advises the Trustee
to be necessary and/or to be required by the Internal Revenue Service or by a federal or
state law or rules or regulations to enable such Holders to prepare their tax returns for
such calendar year. Such obligations shall be deemed to have been satisfied to the extent
that substantially comparable information shall be provided by the Securities Administrator
or the Trustee pursuant to the requirements of the Code.
Section 6.05 Monthly Advances. If the Scheduled Payment on a Mortgage Loan that was
due on a related Due Date and is Delinquent other than as a result of application of the
Relief Act and for which the related Servicer was required to make an advance pursuant to
the related Servicing Agreement exceeds the amount deposited in the Master Servicer
Collection Account which will be used for an advance with respect to such Mortgage Loan,
the Master Servicer will deposit in the Master Servicer Collection Account not later than
the Distribution Account Deposit Date immediately preceding the related Distribution Date
an amount equal to such deficiency, net of the Servicing Fee for such Mortgage Loan except
to the extent the Master Servicer determines any such advance to be a Nonrecoverable
Advance. Subject to the foregoing, the Master Servicer shall continue to make such advances
through the date that the related Servicer is required to do so under its Servicing
Agreement. If the Master Servicer deems an advance to be a Nonrecoverable Advance, on the
Distribution Account Deposit Date, the Master Servicer shall present an Officer's
Certificate to the Trustee (i) stating that the Master Servicer elects not to make a
Monthly Advance in a stated amount and (ii) detailing the reason it deems the advance to be
a Nonrecoverable Advance.
Section 6.06 Compensating Interest Payments. The Master Servicer shall deposit in the
Master Servicer Collection Account not later than each Distribution Account Deposit Date an
amount equal to the lesser of (i) the sum of the aggregate amounts required to be paid by
the Servicers under the Servicing Agreements with respect to Prepayment Interest Shortfalls
for the related Distribution Date (which, with respect to Mortgage Loans serviced by GMAC,
shall only include Prepayment Interest Shortfalls relating to partial Principal
Prepayments), and not so paid by the related Servicers and (ii) the Master Servicing
Compensation for such Distribution Date (such amount, the "Compensating Interest Payment").
The Master Servicer shall not be entitled to any reimbursement of any Compensating Interest
Payment.
ARTICLE VII
The Master Servicer
Section 7.01 Liabilities of the Master Servicer. The Master Servicer shall be liable
in accordance herewith only to the extent of the obligations specifically imposed upon and
undertaken by it herein.
Section 7.02 Merger or Consolidation of the Master Servicer.
The Master Servicer will keep in full force and effect its existence, rights and
franchises as a corporation under the laws of the state of its incorporation, and will
obtain and preserve its qualification to do business as a foreign corporation in each
jurisdiction in which such qualification is or shall be necessary to protect the validity
and enforceability of this Agreement, the Certificates or any of the Mortgage Loans and to
perform its duties under this Agreement.
Any Person into which the Master Servicer may be merged or consolidated, or any
corporation resulting from any merger or consolidation to which the Master Servicer shall
be a party, or any Person succeeding to the business of the Master Servicer, shall be the
successor of the Master Servicer hereunder, without the execution or filing of any paper or
further act on the part of any of the parties hereto, anything herein to the contrary
notwithstanding.
Section 7.03 Indemnification of the Trustee, the Master Servicer and the Securities
Administrator. (a)The Master Servicer agrees to indemnify the Indemnified Persons for, and
to hold them harmless against, any loss, liability or expense (including reasonable legal
fees and disbursements of counsel) incurred on their part that may be sustained in
connection with, arising out of, or relating to, any claim or legal action (including any
pending or threatened claim or legal action) relating to this Agreement, the Servicing
Agreements, the Assignment Agreements or the Certificates or the powers of attorney
delivered by the Trustee hereunder (i) related to the Master Servicer's failure to perform
its duties in compliance with this Agreement (except as any such loss, liability or expense
shall be otherwise reimbursable pursuant to this Agreement) or (ii) incurred by reason of
the Master Servicer's willful misfeasance, bad faith or gross negligence in the performance
of duties hereunder or by reason of reckless disregard of obligations and duties hereunder,
provided, in each case, that with respect to any such claim or legal action (or pending or
threatened claim or legal action), the Trustee shall have given the Master Servicer and the
Depositor written notice thereof promptly after the Trustee shall have with respect to such
claim or legal action knowledge thereof. The Trustee's failure to deliver any such notice
shall not affect the Trustee's right to indemnification hereunder, except to the extent the
Master Servicer is materially prejudiced by such failure to give notice. This indemnity
shall survive the resignation or removal of the Trustee, Master Servicer or the Securities
Administrator and the termination of this Agreement.
(b) The Depositor will indemnify any Indemnified Person for any loss, liability or
expense of any Indemnified Person not otherwise covered by the Master Servicer's
indemnification pursuant to Section (a) above.
Section 7.04 Limitations on Liability of the Master Servicer and Others. Subject to
the obligation of the Master Servicer to indemnify the Indemnified Persons pursuant to
Section 7.03:
(a) Neither the Master Servicer nor any of the directors, officers, employees or agents
of the Master Servicer shall be under any liability to the Indemnified Persons, the
Depositor, the Trust Fund or the Certificateholders for taking any action or for refraining
from taking any action in good faith pursuant to this Agreement, or for errors in judgment;
provided, however, that this provision shall not protect the Master Servicer or any such
Person against any breach of warranties or representations made herein or any liability
which would otherwise be imposed by reason of such Person's willful misfeasance, bad faith
or gross negligence in the performance of duties or by reason of reckless disregard of
obligations and duties hereunder.
(b) The Master Servicer and any director, officer, employee or agent of the Master
Servicer may rely in good faith on any document of any kind prima facie properly executed
and submitted by any Person respecting any matters arising hereunder.
(c) The Master Servicer, the Custodian and any director, officer, employee or agent of
the Master Servicer or the Custodian shall be indemnified by the Trust and held harmless
thereby against any loss, liability or expense (including reasonable legal fees and
disbursements of counsel) incurred on their part that may be sustained in connection with,
arising out of, or related to, any claim or legal action (including any pending or
threatened claim or legal action) relating to this Agreement, the Certificates or any
Servicing Agreement (except to the extent that the Master Servicer is indemnified by the
Servicer thereunder), other than (i) any such loss, liability or expense related to the
Master Servicer's failure to perform its duties in compliance with this Agreement (except
as any such loss, liability or expense shall be otherwise reimbursable pursuant to this
Agreement), or to the Custodian's failure to perform its duties under the Custodial
Agreement, respectively, or (ii) any such loss, liability or expense incurred by reason of
the Master Servicer's or the Custodian's willful misfeasance, bad faith or gross negligence
in the performance of duties hereunder or under the Custodial Agreement, as applicable, or
by reason of reckless disregard of obligations and duties hereunder or under the Custodial
Agreement, as applicable.
(d) The Master Servicer shall not be under any obligation to appear in, prosecute or
defend any legal action that is not incidental to its duties under this Agreement and that
in its opinion may involve it in any expense or liability; provided, however, the Master
Servicer may in its discretion, with the consent of the Trustee (which consent shall not be
unreasonably withheld), undertake any such action which it may deem necessary or desirable
with respect to this Agreement and the rights and duties of the parties hereto and the
interests of the Certificateholders hereunder. In such event, the legal expenses and costs
of such action and any liability resulting therefrom shall be expenses, costs and
liabilities of the Trust Fund, and the Master Servicer shall be entitled to be reimbursed
therefor out of the Master Servicer Collection Account as provided by Section 4.03. Nothing
in this Section 7.04(d) shall affect the Master Servicer's obligation to supervise, or to
take such actions as are necessary to ensure, the servicing and administration of the
Mortgage Loans pursuant to Section 3.01(a).
(e) In taking or recommending any course of action pursuant to this Agreement, unless
specifically required to do so pursuant to this Agreement, the Master Servicer shall not be
required to investigate or make recommendations concerning potential liabilities which the
Trust might incur as a result of such course of action by reason of the condition of the
Mortgaged Properties but shall give notice to the Trustee if it has notice of such
potential liabilities.
(f) The Master Servicer shall not be liable for any acts or omissions of any Servicer,
except as otherwise expressly provided herein.
Section 7.05 Master Servicer Not to Resign. Except as provided in Section 7.07, the
Master Servicer shall not resign from the obligations and duties hereby imposed on it
except upon a determination that any such duties hereunder are no longer permissible under
applicable law and such impermissibility cannot be cured. Any such determination permitting
the resignation of the Master Servicer shall be evidenced by an Opinion of Independent
Counsel to such effect delivered to the Trustee. No such resignation by the Master Servicer
shall become effective until EMC or the Trustee or a successor to the Master Servicer
reasonably satisfactory to the Trustee shall have assumed the responsibilities and
obligations of the Master Servicer in accordance with Section 8.02 hereof. The Trustee
shall notify the Rating Agencies of the resignation of the Master Servicer.
Section 7.06 Successor Master Servicer. In connection with the appointment of any
successor master servicer or the assumption of the duties of the Master Servicer, EMC or
the Trustee may make such arrangements for the compensation of such successor master
servicer out of payments on the Mortgage Loans as EMC or the Trustee and such successor
master servicer shall agree. If the successor master servicer does not agree that such
market value is a fair price, such successor master servicer shall obtain two quotations of
market value from third parties actively engaged in the servicing of single-family mortgage
loans. Notwithstanding the foregoing, the compensation payable to a successor master
servicer may not exceed the compensation which the Master Servicer would have been entitled
to retain if the Master Servicer had continued to act as Master Servicer hereunder.
Section 7.07 Sale and Assignment of Master Servicing. The Master Servicer may sell and
assign its rights and delegate its duties and obligations in its entirety as Master
Servicer under this Agreement and EMC may terminate the Master Servicer without cause and
select a new Master Servicer; provided, however, that: (i) the purchaser or transferee
accepting such assignment and delegation (a) shall be a Person which shall be qualified to
service mortgage loans for ▇▇▇▇▇▇ ▇▇▇ 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 EMC, EMC shall pay the terminated
Master Servicer a termination fee equal to 0.25% of the aggregate Stated Principal Balance
of the Mortgage Loans at the time the master servicing of the Mortgage Loans is transferred
to the successor Master Servicer. No such assignment or delegation shall affect any
liability of the Master Servicer arising prior to the effective date thereof.
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 EMC,
may terminate all of the rights and obligations (but not the liabilities) of the Master
Servicer under this Agreement and in and to the Mortgage Loans and/or the REO Property
serviced by the Master Servicer and the proceeds thereof. Upon the receipt by the Master
Servicer of the written notice, all authority and power of the Master Servicer under this
Agreement, whether with respect to the Certificates, the Mortgage Loans, REO Property or
under any other related agreements (but only to the extent that such other agreements
relate to the Mortgage Loans or related REO Property) shall, subject to Section 8.02,
automatically and without further action pass to and be vested in the Trustee pursuant to
this Section 8.01; and, without limitation, the Trustee is hereby authorized and empowered
to execute and deliver, on behalf of the Master Servicer as attorney-in-fact or otherwise,
any and all documents and other instruments and to do or accomplish all other acts or
things necessary or appropriate to effect the purposes of such notice of termination,
whether to complete the transfer and endorsement or assignment of the Mortgage Loans and
related documents, or otherwise. The Master Servicer agrees to cooperate with the Trustee
in effecting the termination of the Master Servicer's rights and obligations hereunder,
including, without limitation, the transfer to the Trustee of (i) the property and amounts
which are then or should be part of the Trust or which thereafter become part of the Trust;
and (ii) originals or copies of all documents of the Master Servicer reasonably requested
by the Trustee to enable it to assume the Master Servicer's duties thereunder. In addition
to any other amounts which are then, or, notwithstanding the termination of its activities
under this Agreement, may become payable to the Master Servicer under this Agreement, the
Master Servicer shall be entitled to receive, out of any amount received on account of a
Mortgage Loan or related REO Property, that portion of such payments which it would have
received as reimbursement under this Agreement if notice of termination had not been given.
The termination of the rights and obligations of the Master Servicer shall not affect any
obligations incurred by the Master Servicer prior to such termination.
Notwithstanding the foregoing, if an Event of Default described in clause (vi) of
this Section 8.01 shall occur, the Trustee shall, by notice in writing to the Master
Servicer, which may be delivered by telecopy, immediately terminate all of the rights and
obligations of the Master Servicer thereafter arising under this Agreement, but without
prejudice to any rights it may have as a Certificateholder or to reimbursement of Monthly
Advances and other advances of its own funds, and the Trustee shall act as provided in
Section 8.02 to carry out the duties of the Master Servicer, including the obligation to
make any Monthly Advance, the nonpayment of which was an Event of Default described in
clause (vi) of this Section 8.01. Any such action taken by the Trustee must be prior to the
distribution on the relevant Distribution Date.
Section 8.02 Trustee to Act; Appointment of Successor. (a)Upon the receipt by the
Master Servicer of a notice of termination pursuant to Section 8.01 or an Opinion of
Independent Counsel pursuant to Section 7.05 to the effect that the Master Servicer is
legally unable to act or to delegate its duties to a Person which is legally able to act,
the Trustee shall automatically become the successor in all respects to the Master Servicer
in its capacity under this Agreement and the transactions set forth or provided for herein
and shall thereafter be subject to all the responsibilities, duties, liabilities and
limitations on liabilities relating thereto placed on the Master Servicer by the terms and
provisions hereof; provided, however, that EMC shall have the right to either (a)
immediately assume the duties of the Master Servicer or (b) select a successor Master
Servicer; provided further, however, that the Trustee shall have no obligation whatsoever
with respect to any liability (other than advances deemed recoverable and not previously
made) incurred by the Master Servicer at or prior to the time of termination. As
compensation therefor, but subject to Section 7.06, the Trustee shall be entitled to
compensation which the Master Servicer would have been entitled to retain if the Master
Servicer had continued to act hereunder, except for those amounts due the Master Servicer
as reimbursement permitted under this Agreement for advances previously made or expenses
previously incurred. Notwithstanding the above, the Trustee may, if it shall be unwilling
so to act, or shall, if it is legally unable so to act, appoint or petition a court of
competent jurisdiction to appoint, any established housing and home finance institution
which is a ▇▇▇▇▇▇ 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 to which the Master Servicer would have been entitled to if the
Master Servicer had continued to act hereunder, and that such successor shall undertake and
assume the obligations of the Trustee to pay compensation to any third Person acting as an
agent or independent contractor in the performance of master servicing responsibilities
hereunder. The Trustee and such successor shall take such action, consistent with this
Agreement, as shall be necessary to effectuate any such succession.
(b) If the Trustee shall succeed to any duties of the Master Servicer respecting the
Mortgage Loans as provided herein, it shall do so in a separate capacity and not in its
capacity as Trustee and, accordingly, the provisions of Article IX shall be inapplicable to
the Trustee in its duties as the successor to the Master Servicer in the servicing of the
Mortgage Loans (although such provisions shall continue to apply to the Trustee in its
capacity as Trustee); the provisions of Article VII, however, shall apply to it in its
capacity as successor master servicer.
Section 8.03 Notification to Certificateholders. Upon any termination or appointment
of a successor to the Master Servicer, the Trustee shall give prompt written notice thereof
to 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 Trustee shall make monthly distributions and the final
distribution to the Certificateholders from funds in the Distribution Account as provided
in Sections 6.01 and 10.01 herein based solely on the report of the Securities
Administrator.
(d) No provision of this Agreement shall be construed to relieve the Trustee or the
Securities Administrator from liability for its own negligent action, its own negligent
failure to act or its own willful misconduct; provided, however, that:
(i) Prior to the occurrence of an Event of Default, and after the curing or waiver of all
such Events of Default which may have occurred, the duties and obligations of the
Trustee and the Securities Administrator shall be determined solely by the express
provisions of this Agreement, neither the Trustee nor the Securities Administrator
shall be liable except for the performance of their respective duties and obligations
as are specifically set forth in this Agreement, no implied covenants or obligations
shall be read into this Agreement against the Trustee or the Securities Administrator
and, in the absence of bad faith on the part of the Trustee or the Securities
Administrator, respectively, the Trustee or the Securities Administrator,
respectively, may conclusively rely, as to the truth of the statements and the
correctness of the opinions expressed therein, upon any certificates or opinions
furnished to the Trustee or the Securities Administrator, respectively, and
conforming to the requirements of this Agreement;
(ii) Neither the Trustee nor the Securities Administrator shall be liable in its
individual capacity for an error of judgment made in good faith by a Responsible
Officer or Responsible Officers of the Trustee or an officer of the Securities
Administrator, respectively, unless it shall be proved that the Trustee or the
Securities Administrator, respectively, was negligent in ascertaining the pertinent
facts;
(iii) Neither the Trustee nor the Securities Administrator shall be liable with respect to
any action taken, suffered or omitted to be taken by it in good faith in accordance
with the directions of the Holders of Certificates evidencing Fractional Undivided
Interests aggregating not less than 25% of the Trust Fund, if such action or
non-action relates to the time, method and place of conducting any proceeding for any
remedy available to the Trustee or the Securities Administrator, respectively, or
exercising any trust or other power conferred upon the Trustee or the Securities
Administrator, respectively, under this Agreement;
(iv) The Trustee shall not be required to take notice or be deemed to have notice or
knowledge of any default or Event of Default unless a Responsible Officer of the
Trustee's Corporate Trust Office shall have actual knowledge thereof. In the absence
of such notice, the Trustee may conclusively assume there is no such default or Event
of Default;
(v) The Trustee shall not in any way be liable by reason of any insufficiency in any
Account held by or in the name of Trustee unless it is determined by a court of
competent jurisdiction that the Trustee's gross negligence or willful misconduct was
the primary cause of such insufficiency (except to the extent that the Trustee is
obligor and has defaulted thereon);
(vi) Anything in this Agreement to the contrary notwithstanding, in no event shall the
Trustee or the Securities Administrator be liable for special, indirect or
consequential loss or damage of any kind whatsoever (including but not limited to
lost profits), even if the Trustee or the Securities Administrator, respectively, has
been advised of the likelihood of such loss or damage and regardless of the form of
action;
(vii) None of the Securities Administrator, the Depositor, the Master Servicer, EMC or the
Trustee shall be responsible for the acts or omissions of the other, it being
understood that this Agreement shall not be construed to render them partners, joint
venturers or agents of one another; and
(viii) Neither the Trustee nor the Securities Administrator shall be required to
expend or risk its own funds or otherwise incur financial liability in the
performance of any of its duties hereunder, or in the exercise of any of its rights
or powers, if there is reasonable ground for believing that the repayment of such
funds or adequate indemnity against such risk or liability is not reasonably assured
to it, and none of the provisions contained in this Agreement shall in any event
require the Trustee or the Securities Administrator to perform, or be responsible for
the manner of performance of, any of the obligations of the Master Servicer under the
Agreement, except during such time, if any, as the Trustee shall be the successor to,
and be vested with the rights, duties, powers and privileges of, the Master Servicer
in accordance with the terms of this Agreement.
(e) All funds received by the Master Servicer and the Trustee and required to be
deposited in the Master Servicer Collection Account or the Distribution Account, as the
case may be, pursuant to this Agreement will be promptly so deposited by the Master
Servicer and the Trustee.
(f) Except for those actions that the Trustee or the Securities Administrator is required
to take hereunder, neither the Trustee nor the Securities Administrator shall have any
obligation or liability to take any action or to refrain from taking any action hereunder
in the absence of written direction as provided hereunder.
Section 9.02 Certain Matters Affecting the Trustee and the Securities Administrator.
Except as otherwise provided in Section 9.01:
(a) The Trustee and the Securities Administrator may rely and shall be protected in
acting or refraining from acting in reliance on any resolution, certificate of a Depositor,
Master Servicer or Servicer, certificate of auditors or any other certificate, statement,
instrument, opinion, report, notice, request, consent, order, appraisal, bond or other
paper or document believed by it to be genuine and to have been signed or presented by the
proper party or parties;
(b) The Trustee and the Securities Administrator may consult with counsel and any advice
of such counsel or any Opinion of Counsel shall be full and complete authorization and
protection with respect to any action taken or suffered or omitted by it hereunder in good
faith and in accordance with such advice or Opinion of Counsel;
(c) Neither the Trustee nor the Securities Administrator shall be under any obligation to
exercise any of the trusts or powers vested in it by this Agreement, other than its
obligation to give notices pursuant to this Agreement, or to institute, conduct or defend
any litigation hereunder or in relation hereto at the request, order or direction of any of
the Certificateholders pursuant to the provisions of this Agreement, unless such
Certificateholders shall have offered to the Trustee reasonable security or indemnity
against the costs, expenses and liabilities which may be incurred therein or thereby.
Nothing contained herein shall, however, relieve the Trustee of the obligation, upon the
occurrence of an Event of Default of which a Responsible Officer of the Trustee has actual
knowledge (which has not been cured or waived), subject to Section 8.02(b), to exercise
such of the rights and powers vested in it by this Agreement, and to use the same degree of
care and skill in their exercise, as a prudent person would exercise under the
circumstances in the conduct of his own affairs;
(d) Prior to the occurrence of an Event of Default hereunder and after the curing or
waiver of all Events of Default which may have occurred, neither the Trustee nor the
Securities Administrator shall be liable in its individual capacity for any action taken,
suffered or omitted by it in good faith and believed by it to be authorized or within the
discretion or rights or powers conferred upon it by this Agreement;
(e) Neither the Trustee nor the Securities Administrator shall be bound to make any
investigation into the facts or matters stated in any resolution, certificate, statement,
instrument, opinion, report, notice, request, consent, order, approval, bond or other paper
or document, unless requested in writing to do so by Holders of Certificates evidencing
Fractional Undivided Interests aggregating not less than 25% of the Trust Fund and provided
that the payment within a reasonable time to the Trustee or the Securities Administrator,
as applicable, of the costs, expenses or liabilities likely to be incurred by it in the
making of such investigation is, in the opinion of the Trustee or the Securities
Administrator, as applicable, reasonably assured to the Trustee or the Securities
Administrator, as applicable, by the security afforded to it by the terms of this
Agreement. The Trustee or the Securities Administrator may require reasonable indemnity
against such expense or liability as a condition to taking any such action. The reasonable
expense of every such examination shall be paid by the Certificateholders requesting the
investigation;
(f) The Trustee and the Securities Administrator may execute any of the trusts or powers
hereunder or perform any duties hereunder either directly or through Affiliates, agents or
attorneys; provided, however, that the Trustee may not appoint any agent to perform its
custodial functions with respect to the Mortgage Files or paying agent functions under this
Agreement without the express written consent of the Master Servicer, which consent will
not be unreasonably withheld. Neither the Trustee nor the Securities Administrator shall be
liable or responsible for the misconduct or negligence of any of the Trustee's or the
Securities Administrator's agents or attorneys or a custodian or paying agent appointed
hereunder by the Trustee or the Securities Administrator with due care and, when required,
with the consent of the Master Servicer;
(g) Should the Trustee or the Securities Administrator deem the nature of any action
required on its part, other than a payment or transfer under Section 4.01(b) or Section
4.02, to be unclear, the Trustee or the Securities Administrator, respectively, may require
prior to such action that it be provided by the Depositor with reasonable further
instructions;
(h) The right of the Trustee or the Securities Administrator to perform any discretionary
act enumerated in this Agreement shall not be construed as a duty, and neither the Trustee
nor the Securities Administrator shall be accountable for other than its negligence or
willful misconduct in the performance of any such act;
(i) Neither the Trustee nor the Securities Administrator shall be required to give any
bond or surety with respect to the execution of the trust created hereby or the powers
granted hereunder, except as provided in Section 9.07; and
(j) Neither the Trustee nor the Securities Administrator shall have any duty to conduct
any affirmative investigation as to the occurrence of any condition requiring the
repurchase of any Mortgage Loan by the Seller pursuant to the Mortgage Loan Purchase
Agreement or this Agreement, as applicable, or the eligibility of any Mortgage Loan for
purposes of this Agreement.
Section 9.03 Trustee and Securities Administrator Not Liable for Certificates or
Mortgage Loans. The recitals contained herein and in the Certificates (other than the
signature and countersignature of the Trustee on the Certificates) shall be taken as the
statements of the Depositor, and neither the Trustee nor the Securities Administrator shall
have any responsibility for their correctness. Neither the Trustee nor the Securities
Administrator makes any representation as to the validity or sufficiency of the
Certificates (other than the signature and countersignature of the Trustee on the
Certificates) or of any Mortgage Loan except as expressly provided in Sections 2.02 and
2.05 hereof; provided, however, that the foregoing shall not relieve the Trustee of the
obligation to review the Mortgage Files pursuant to Sections 2.02 and 2.04. The Trustee's
signature and countersignature (or countersignature of its agent) on the Certificates shall
be solely in its capacity as Trustee and shall not constitute the Certificates an
obligation of the Trustee in any other capacity. Neither the Trustee nor the Securities
Administrator shall be accountable for the use or application by the Depositor of any of
the Certificates or of the proceeds of such Certificates, or for the use or application of
any funds paid to the Depositor with respect to the Mortgage Loans. Subject to the
provisions of Section 2.05, neither the Trustee nor the Securities Administrator shall be
responsible for the legality or validity of this Agreement or any document or instrument
relating to this Agreement, the validity of the execution of this Agreement or of any
supplement hereto or instrument of further assurance, or the validity, priority, perfection
or sufficiency of the security for the Certificates issued hereunder or intended to be
issued hereunder. Neither the Trustee nor the Securities Administrator shall at any time
have any responsibility or liability for or with respect to the legality, validity and
enforceability of any Mortgage or any Mortgage Loan, or the perfection and priority of any
Mortgage or the maintenance of any such perfection and priority, or for or with respect to
the sufficiency of the Trust Fund or its ability to generate the payments to be distributed
to Certificateholders, under this Agreement. Neither the Trustee nor the Securities
Administrator shall have any responsibility for filing any financing or continuation
statement in any public office at any time or to otherwise perfect or maintain the
perfection of any security interest or lien granted to it hereunder or to record this
Agreement other than any continuation statements filed by the Trustee pursuant to Section
3.20.
Section 9.04 Trustee and Securities Administrator May Own Certificates. The Trustee
and the Securities Administrator in its individual capacity or in any capacity other than
as Trustee hereunder may become the owner or pledgee of any Certificates with the same
rights it would have if it were not Trustee or the Securities Administrator, as applicable,
and may otherwise deal with the parties hereto.
Section 9.05 Trustee's and Securities Administrator's Fees and Expenses. The fees and
expenses of the Trustee and the Securities Administrator shall be paid in accordance with a
side letter agreement between the Trustee and the Master Servicer. In addition, the Trustee
and the Securities Administrator will be entitled to recover from the Master Servicer
Collection Account pursuant to Section 4.03 all reasonable out-of-pocket expenses,
disbursements and advances and the expenses of the Trustee and the Securities
Administrator, respectively, in connection with any Event of Default, any breach of this
Agreement or any claim or legal action (including any pending or threatened claim or legal
action) incurred or made by the Trustee or the Securities Administrator, respectively, in
the administration of the trusts hereunder (including the reasonable compensation, expenses
and disbursements of its counsel) except any such expense, disbursement or advance as may
arise from its negligence or intentional misconduct or which is the responsibility of the
Certificateholders. If funds in the Master Servicer Collection Account are insufficient
therefor, the Trustee and the Securities Administrator shall recover such expenses from the
Depositor. Such compensation and reimbursement obligation shall not be limited by any
provision of law in regard to the compensation of a trustee of an express trust.
Section 9.06 Eligibility Requirements for Trustee and Securities Administrator. The
Trustee and any successor Trustee and the Securities Administrator and any successor
Securities Administrator shall during the entire duration of this Agreement be a state bank
or trust company or a national banking association organized and doing business under the
laws of such state or the United States of America, authorized under such laws to exercise
corporate trust powers, having a combined capital and surplus and undivided profits of at
least $40,000,000 or, in the case of a successor Trustee, $50,000,000, subject to
supervision or examination by federal or state authority and, in the case of the Trustee,
rated "BBB" or higher by Fitch with respect to their long-term rating and rated "BBB" or
higher by Standard & Poor's and "Baa2" or higher by Moody's with respect to any outstanding
long-term unsecured unsubordinated debt, and, in the case of a successor Trustee or
successor Securities Administrator other than pursuant to Section 9.10, rated in one of the
two highest long-term debt categories of, or otherwise acceptable to, each of the Rating
Agencies. If the Trustee publishes reports of condition at least annually, pursuant to law
or to the requirements of the aforesaid supervising or examining authority, then for the
purposes of this Section 9.06 the combined capital and surplus of such corporation shall be
deemed to be its total equity capital (combined capital and surplus) as set forth in its
most recent report of condition so published. In case at any time the Trustee or the
Securities Administrator shall cease to be eligible in accordance with the provisions of
this Section 9.06, the Trustee or the Securities Administrator shall resign immediately in
the manner and with the effect specified in Section 9.08.
Section 9.07 Insurance. The Trustee and the Securities Administrator, at their own
expense, shall at all times maintain and keep in full force and effect: (i) fidelity
insurance, (ii) theft of documents insurance and (iii) forgery insurance (which may be
collectively satisfied by a "Financial Institution Bond" and/or a "Bankers' Blanket Bond").
All such insurance shall be in amounts, with standard coverage and subject to deductibles,
as are customary for insurance typically maintained by banks or their affiliates which act
as custodians for investor-owned mortgage pools. A certificate of an officer of the Trustee
or the Securities Administrator as to the Trustee's or the Securities Administrator's,
respectively, compliance with this Section 9.07 shall be furnished to any Certificateholder
upon reasonable written request.
Section 9.08 Resignation and Removal of the Trustee and Securities Administrator.
(a)The Trustee and the Securities Administrator may at any time resign and be discharged
from the Trust hereby created by giving written notice thereof to the Depositor and the
Master Servicer, with a copy to the Rating Agencies. Upon receiving such notice of
resignation, the Depositor shall promptly appoint a successor Trustee or successor
Securities Administrator, as applicable, by written instrument, in triplicate, one copy of
which instrument shall be delivered to each of the resigning Trustee or Securities
Administrator, as applicable, the successor Trustee or Securities Administrator, as
applicable. If no successor Trustee or Securities Administrator shall have been so
appointed and have accepted appointment within 30 days after the giving of such notice of
resignation, the resigning Trustee or Securities Administrator may petition any court of
competent jurisdiction for the appointment of a successor Trustee or Securities
Administrator.
(b) If at any time the Trustee or the Securities Administrator shall cease to be eligible
in accordance with the provisions of Section 9.06 and shall fail to resign after written
request therefor by the Depositor or if at any time the Trustee or the Securities
Administrator shall become incapable of acting, or shall be adjudged a bankrupt or
insolvent, or a receiver of the Trustee or the Securities Administrator, as applicable, or
of its property shall be appointed, or any public officer shall take charge or control of
the Trustee or the Securities Administrator, as applicable, or of its property or affairs
for the purpose of rehabilitation, conservation or liquidation, then the Depositor shall
promptly remove the Trustee, or shall be entitled to remove the Securities Administrator,
as applicable, and appoint a successor Trustee or Securities Administrator, as applicable,
by written instrument, in triplicate, one copy of which instrument shall be delivered to
each of the Trustee or Securities Administrator, as applicable, so removed, the successor
Trustee or Securities Administrator, as applicable.
(c) The Holders of Certificates evidencing Fractional Undivided Interests aggregating not
less than 51% of the Trust Fund may at any time remove the Trustee or the Securities
Administrator and appoint a successor Trustee or Securities Administrator by written
instrument or instruments, in quadruplicate, signed by such Holders or their
attorneys-in-fact duly authorized, one complete set of which instruments shall be delivered
to the Depositor, the Master Servicer, the Securities Administrator (if the Trustee is
removed), the Trustee (if the Securities Administrator is removed), and the Trustee or
Securities Administrator so removed and the successor so appointed. In the event that the
Trustee or Securities Administrator is removed by the Holders of Certificates in accordance
with this Section 9.08(c), the Holders of such Certificates shall be responsible for paying
any compensation payable to a successor Trustee or successor Securities Administrator, in
excess of the amount paid to the predecessor Trustee or predecessor Securities
Administrator, as applicable.
(d) No resignation or removal of the Trustee or the Securities Administrator and
appointment of a successor Trustee or Securities Administrator pursuant to any of the
provisions of this Section 9.08 shall become effective except upon appointment of and
acceptance of such appointment by the successor Trustee or Securities Administrator as
provided in Section 9.09.
Section 9.09 Successor Trustee and Successor Securities Administrator. (a)Any
successor Trustee or Securities Administrator appointed as provided in Section 9.08 shall
execute, acknowledge and deliver to the Depositor and to its predecessor Trustee or
Securities Administrator an instrument accepting such appointment hereunder. The
resignation or removal of the predecessor Trustee or Securities Administrator shall then
become effective and such successor Trustee or Securities Administrator, without any
further act, deed or conveyance, shall become fully vested with all the rights, powers,
duties and obligations of its predecessor hereunder, with like effect as if originally
named as Trustee or Securities Administrator herein. The predecessor Trustee or Securities
Administrator shall after payment of its outstanding fees and expenses promptly deliver to
the successor Trustee or Securities Administrator, as applicable, all assets and records of
the Trust held by it hereunder, and the Depositor and the predecessor Trustee or Securities
Administrator, as applicable, shall execute and deliver such instruments and do such other
things as may reasonably be required for more fully and certainly vesting and confirming in
the successor Trustee or Securities Administrator, as applicable, all such rights, powers,
duties and obligations.
(b) No successor Trustee or Securities Administrator shall accept appointment as provided
in this Section 9.09 unless at the time of such acceptance such successor Trustee or
Securities Administrator shall be eligible under the provisions of Section 9.06.
(c) Upon acceptance of appointment by a successor Trustee or Securities Administrator as
provided in this Section 9.09, the successor Trustee or Securities Administrator shall mail
notice of the succession of such Trustee or Securities Administrator hereunder to all
Certificateholders at their addresses as shown in the Certificate Register and to the
Rating Agencies. EMC shall pay the cost of any mailing by the successor Trustee or
Securities Administrator.
Section 9.10 Merger or Consolidation of Trustee or Securities Administrator. Any state
bank or trust company or national banking association into which the Trustee or the
Securities Administrator may be merged or converted or with which it may be consolidated or
any state bank or trust company or national banking association resulting from any merger,
conversion or consolidation to which the Trustee or the Securities Administrator,
respectively, shall be a party, or any state bank or trust company or national banking
association succeeding to all or substantially all of the corporate trust business of the
Trustee or the Securities Administrator, respectively, shall be the successor of the
Trustee or the Securities Administrator, respectively, hereunder, provided such state bank
or trust company or national banking association shall be eligible under the provisions of
Section 9.06. Such succession shall be valid without the execution or filing of any paper
or any further act on the part of any of the parties hereto, anything herein to the
contrary notwithstanding.
Section 9.11 Appointment of Co-Trustee or Separate Trustee. (a)Notwithstanding any
other provisions hereof, at any time, for the purpose of meeting any legal requirements of
any jurisdiction in which any part of the Trust or property constituting the same may at
the time be located, the Depositor and the Trustee acting jointly shall have the power and
shall execute and deliver all instruments to appoint one or more Persons approved by the
Trustee and the Depositor to act as co-trustee or co-trustees, jointly with the Trustee, or
separate trustee or separate trustees, of all or any part of the Trust, and to vest in such
Person or Persons, in such capacity, such title to the Trust, or any part thereof, and,
subject to the other provisions of this Section 9.11, such powers, duties, obligations,
rights and trusts as the Depositor and the Trustee may consider necessary or desirable.
(b) If the Depositor shall not have joined in such appointment within 15 days after the
receipt by it of a written request so to do, the Trustee shall have the power to make such
appointment without the Depositor.
(c) No co-trustee or separate trustee hereunder shall be required to meet the terms of
eligibility as a successor Trustee under Section 9.06 hereunder and no notice to
Certificateholders of the appointment of co-trustee(s) or separate trustee(s) shall be
required under Section 9.08 hereof.
(d) In the case of any appointment of a co-trustee or separate trustee pursuant to this
Section 9.11, all rights, powers, duties and obligations conferred or imposed upon the
Trustee and required to be conferred on such co-trustee shall be conferred or imposed upon
and exercised or performed by the Trustee and such separate trustee or co-trustee jointly,
except to the extent that under any law of any jurisdiction in which any particular act or
acts are to be performed (whether as Trustee hereunder or as successor to the Master
Servicer hereunder), the Trustee shall be incompetent or unqualified to perform such act or
acts, in which event such rights, powers, duties and obligations (including the holding of
title to the Trust or any portion thereof in any such jurisdiction) shall be exercised and
performed by such separate trustee or co-trustee at the direction of the Trustee.
(e) Any notice, request or other writing given to the Trustee shall be deemed to have
been given to each of the then separate trustees and co-trustees, as effectively as if
given to each of them. Every instrument appointing any separate trustee or co-trustee shall
refer to this Agreement and the conditions of this Article IX. Each separate trustee and
co-trustee, upon its acceptance of the trusts conferred, shall be vested with the estates
or property specified in its instrument of appointment, either jointly with the Trustee or
separately, as may be provided therein, subject to all the provisions of this Agreement,
specifically including every provision of this Agreement relating to the conduct of,
affecting the liability of, or affording protection to, the Trustee. Every such instrument
shall be filed with the Trustee.
(f) To the extent not prohibited by law, any separate trustee or co-trustee may, at any
time, request the Trustee, its agent or attorney-in-fact, with full power and authority, to
do any lawful act under or with respect to this Agreement on its behalf and in its name. If
any separate trustee or co-trustee shall die, become incapable of acting, resign or be
removed, all of its estates, properties rights, remedies and trusts shall vest in and be
exercised by the Trustee, to the extent permitted by law, without the appointment of a new
or successor Trustee.
(g) No trustee under this Agreement shall be personally liable by reason of any act or
omission of another trustee under this Agreement. The Depositor and the Trustee acting
jointly may at any time accept the resignation of or remove any separate trustee or
co-trustee.
Section 9.12 Federal Information Returns and Reports to Certificateholders; REMIC
Administration. (a)For federal income tax purposes, the taxable year of each 2004-6 REMIC
shall be a calendar year and the Securities Administrator shall maintain or cause the
maintenance of the books of each such 2004-6 REMIC on the accrual method of accounting.
(b) The Securities Administrator shall prepare and file or cause to be filed with the
Internal Revenue Service, and the Trustee shall sign, Federal tax information returns or
elections required to be made hereunder with respect to each 2004-6 REMIC, the Trust Fund,
if applicable, and the Certificates containing such information and at the times and in the
manner as may be required by the Code or applicable Treasury regulations, and shall furnish
to each Holder of Certificates at any time during the calendar year for which such returns
or reports are made such statements or information at the times and in the manner as may be
required thereby, including, without limitation, reports relating to mortgaged property
that is abandoned or foreclosed, receipt of mortgage interests in kind in a trade or
business, a cancellation of indebtedness, interest, original issue discount and market
discount or premium (using a constant prepayment assumption of 25% CPR with respect to Loan
Group I and 60% CPR with respect to Loan Group II). The Securities Administrator will apply
for an Employee Identification Number from the IRS under Form SS-4 or any other acceptable
method for all tax entities. In connection with the foregoing, the Securities Administrator
shall timely prepare and file, and the Trustee shall sign, IRS Form 8811, which shall
provide the name and address of the person who can be contacted to obtain information
required to be reported to the holders of regular interests in each 2004-6 REMIC (the
"REMIC Reporting Agent"). The Trustee shall make elections to treat each 2004-6 REMIC as a
REMIC (which elections shall apply to the taxable period ending December 31, 2003 and each
calendar year thereafter) in such manner as the Code or applicable Treasury regulations may
prescribe, and as described by the Securities Administrator. The Trustee shall sign all tax
information returns filed pursuant to this Section and any other returns as may be required
by the Code. The Holder of the largest percentage interest in the Class R-I Certificate is
hereby designated as the "Tax Matters Person" (within the meaning of Treas. Reg.
''1.860F-4(d)) for REMIC I, the Holder of the largest percentage interest in the Class R-II
Certificate is hereby designated as the "Tax Matters Person" for REMIC II and the Holder of
the largest percentage interest in the Class R-III Certificate is hereby designated as the
"Tax Matters Person" for REMIC III. The Securities Administrator is hereby designated and
appointed as the agent of each such Tax Matters Person. Any Holder of a Residual
Certificate will by acceptance thereof appoint the Securities Administrator as agent and
attorney-in-fact for the purpose of acting as Tax Matters Person for each 2004-6 REMIC
during such time as the Securities Administrator does not own any such Residual
Certificate. In the event that the Code or applicable Treasury regulations prohibit the
Trustee from signing tax or information returns or other statements, or the Securities
Administrator from acting as agent for the Tax Matters Person, the Trustee and the
Securities Administrator shall take whatever action that in its sole good faith judgment is
necessary for the proper filing of such information returns or for the provision of a tax
matters person, including designation of the Holder of the largest percentage interest in a
Residual Certificate to sign such returns or act as tax matters person. Each Holder of a
Residual Certificate shall be bound by this Section.
(c) The Securities Administrator shall provide upon request and receipt of reasonable
compensation, such information as required in Section 860D(a)(6)(B) of the Code to the
Internal Revenue Service, to any Person purporting to transfer a Residual Certificate to a
Person other than a transferee permitted by Section 5.05(b), and to any regulated
investment company, real estate investment trust, common trust fund, partnership, trust,
estate, organization described in Section 1381 of the Code, or nominee holding an interest
in a pass-through entity described in Section 860E(e)(6) of the Code, any record holder of
which is not a transferee permitted by Section 5.05(b) (or which is deemed by statute to be
an entity with a disqualified member).
(d) The Securities Administrator shall prepare and file or cause to be filed, and the
Trustee shall sign, any state income tax returns required under Applicable State Law with
respect to each REMIC or the Trust Fund.
(e) Notwithstanding any other provision of this Agreement, the Trustee and the Securities
Administrator shall comply with all federal withholding requirements respecting payments to
Certificateholders of interest or original issue discount on the Mortgage Loans, that the
Trustee or the Securities Administrator reasonably believes are applicable under the Code.
The consent of Certificateholders shall not be required for such withholding. In the event
the Trustee or the Securities Administrator withholds any amount from interest or original
issue discount payments or advances thereof to any Certificateholder pursuant to federal
withholding requirements, the Trustee or the Securities Administrator shall, together with
its monthly report to such Certificateholders, indicate such amount withheld.
(f) The Trustee and the Securities Administrator agree to indemnify the Trust Fund and
the Depositor for any taxes and costs including, without limitation, any reasonable
attorneys fees imposed on or incurred by the Trust Fund, the Depositor or the Master
Servicer, as a result of a breach of the Trustee's covenants and the Securities
Administrator's covenants, respectively, set forth in this Section 9.12; provided, however,
such liability and obligation to indemnify in this paragraph shall not be joint and several
and neither the Trustee nor the Securities Administrator shall be liable or be obligated to
indemnify the Trust Fund for the failure by the other to perform any duty under this
Agreement or the breach by the other of any covenant in this Agreement.
ARTICLE X
Termination
▇▇▇▇▇▇▇ ▇▇.▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ by EMC or its Designee or Liquidation of the
Mortgage Loans.
(a) Subject to Section 10.02, the respective obligations and responsibilities of the
Depositor, the Trustee, the Master Servicer and the Securities Administrator created
hereby, other than the obligation of the Trustee to make payments to Certificateholders as
hereinafter set forth shall terminate upon:
(i) the repurchase by or at the direction of EMC or its designee of all Mortgage Loans
and all related REO Property remaining in the Trust at a price (the "Termination
Purchase Price") equal to the sum of (a) 100% of the Outstanding Principal Balance of
each Mortgage Loan (other than a Mortgage Loan related to REO Property) as of the
date of repurchase, net of the principal portion of any unreimbursed Monthly Advances
made by the purchaser, together with interest at the applicable Mortgage Interest
Rate accrued but unpaid to, but not including, the first day of the month of
repurchase, (b) the appraised value of any related REO Property, less the good faith
estimate of the Depositor of liquidation expenses to be incurred in connection with
its disposal thereof (but not more than the Outstanding Principal Balance of the
related Mortgage Loan, together with interest at the applicable Mortgage Interest
Rate accrued on that balance but unpaid to, but not including, the first day of the
month of repurchase), such appraisal to be calculated by an appraiser mutually agreed
upon by the Depositor and the Trustee at the expense of EMC, (c) unreimbursed out-of
pocket costs of the Master Servicer, including unreimbursed servicing advances and
the principal portion of any unreimbursed Monthly Advances, made on the Mortgage
Loans prior to the exercise of such repurchase right and (d) any unreimbursed costs
and expenses of the Trustee and the Securities Administrator payable pursuant to
Section 9.05;
(ii) the later of the making of the final payment or other liquidation, or any advance
with respect thereto, of the last Mortgage Loan remaining in the Trust Fund or the
disposition of all property acquired with respect to any Mortgage Loan; provided,
however, that in the event that an advance has been made, but not yet recovered, at
the time of such termination, the Person having made such advance shall be entitled
to receive, notwithstanding such termination, any payments received subsequent
thereto with respect to which such advance was made; or
(iii) the payment to Certificateholders of all amounts required to be paid to them pursuant
to this Agreement.
(b) In no event, however, shall the Trust created hereby continue beyond the expiration
of 21 years from the death of the last survivor of the descendants of ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇,
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 EMC or its designee to repurchase all the assets of the Trust Fund
described in Section 10.01(a)(i) above shall be exercisable only if (i) the aggregate
Stated Principal Balance of the Mortgage Loans at the time of any such repurchase is less
than 20% of the sum of the Cut-off Date Balance or (ii) the Depositor, based upon an
Opinion of Counsel, has determined that the REMIC status of any 2004-6 REMIC has been lost
or that a substantial risk exists that such REMIC status will be lost for the then-current
taxable year. At any time thereafter, in the case of (i) or (ii) above, the Depositor may
elect to terminate any 2004-6 REMIC at any time, and upon such election, the Depositor or
its designee, shall purchase in accordance with Section 10.01(a)(i) above all the assets of
the Trust Fund.
(d) The Trustee shall give notice of any termination to the Certificateholders, with a
copy to the Master Servicer, the Securities Administrator and the Rating Agencies, upon
which the Certificateholders shall surrender their Certificates to the Trustee for payment
of the final distribution and cancellation. Such notice shall be given by letter, mailed
not earlier than the l5th day and not later than the 25th day of the month next preceding
the month of such final distribution, and shall specify (i) the Distribution Date upon
which final payment of the Certificates will be made upon presentation and surrender of the
Certificates at the office of the Trustee therein designated, (ii) the amount of any such
final payment and (iii) that the Record Date otherwise applicable to such Distribution Date
is not applicable, payments being made only upon presentation and surrender of the
Certificates at the office of the Trustee therein specified.
(e) If the option of EMC to repurchase or cause the repurchase of all assets of the Trust
Fund described in Section 10.01(a)(i) above is exercised, EMC and/or its designee shall
deliver to the Trustee for deposit in the Distribution Account, by the Business Day prior
to the applicable Distribution Date, an amount equal to the Termination Purchase Price.
Upon presentation and surrender of the Certificates by the Certificateholders, the Trustee
shall distribute to the Certificateholders an amount determined as follows: with respect to
each Certificate (other than the Class R Certificates), the outstanding Certificate
Principal Balance, plus with respect to each Certificate (other than the Class R
Certificates), one month's interest thereon at the applicable Pass-Through Rate; and with
respect to the Class R Certificates, the percentage interest evidenced thereby multiplied
by the difference, if any, between the above described repurchase price and the aggregate
amount to be distributed to the Holders of the Certificates (other than the Class R
Certificates). If the proceeds with respect to the Mortgage Loans are not sufficient to pay
all of the Senior Certificates in full, any such deficiency will be allocated first, to the
Subordinate Certificates, in inverse order of their numerical designation, and then to the
Senior Certificates. Upon deposit of the required repurchase price and following such final
Distribution Date, the Trustee shall release promptly to EMC and/or its designee the
Mortgage Files for the remaining applicable Mortgage Loans, and the Accounts with respect
thereto shall terminate, subject to the Trustee's obligation to hold any amounts payable to
Certificateholders in trust without interest pending final distributions pursuant to
Section 10.01(g). Any other amounts remaining in the Accounts will belong to EMC.
(f) In the event that this Agreement is terminated by reason of the payment or
liquidation of all Mortgage Loans or the disposition of all property acquired with respect
to all Mortgage Loans under Section 10.01(a)(ii) above, the Master Servicer shall deliver
to the Trustee for deposit in the Distribution Account all distributable amounts remaining
in the Master Servicer Collection Account. Upon the presentation and surrender of the
Certificates, the Trustee shall distribute to the remaining Certificateholders, pursuant to
the written direction of the Securities Administrator and in accordance with their
respective interests, all distributable amounts remaining in the Distribution Account. Upon
deposit by the Master Servicer of such distributable amounts, and following such final
Distribution Date, the Trustee shall release promptly to EMC or its designee the Mortgage
Files for the remaining Mortgage Loans, and the Master Servicer Collection Account and the
Distribution Account shall terminate, subject to the Trustee's obligation to hold any
amounts payable to the Certificateholders in trust without interest pending final
distributions pursuant to this Section 10.01(f).
(g) If not all of the Certificateholders shall surrender their Certificates for
cancellation within six months after the time specified in the above-mentioned written
notice, the Trustee shall give a second written notice to the remaining Certificateholders
to surrender their Certificates for cancellation and receive the final distribution with
respect thereto. If within six months after the second notice, not all the Certificates
shall have been surrendered for cancellation, the Trustee may take appropriate steps, or
appoint any agent to take appropriate steps, to contact the remaining Certificateholders
concerning surrender of their Certificates, and the cost thereof shall be paid out of the
funds and other assets which remain subject to this Agreement.
Section 10.02 Additional Termination Requirements. (a)If the option of EMC to
repurchase all the Mortgage Loans under Section 10.01(a)(i) above is exercised, the Trust
Fund and each 2004-6 REMIC shall be terminated in accordance with the following additional
requirements, unless the Trustee has been furnished with an Opinion of Counsel addressed to
the Trustee to the effect that the failure of the Trust to comply with the requirements of
this Section 10.02 will not (i) result in the imposition of taxes on "prohibited
transactions" as defined in Section 860F of the Code on each 2004-6 REMIC or (ii) cause any
2004-6 REMIC to fail to qualify as a 2004-6 REMIC at any time that any Regular Certificates
are outstanding:
(i) within 90 days prior to the final Distribution Date, at the written direction of EMC,
the Trustee, as agent for the respective Tax Matters Persons, shall adopt a plan of
complete liquidation of each 2004-6 REMIC the case of a termination under Section
10.01(a)(i). Such plan, which shall be provided to the Trustee by EMC, shall meet the
requirements of a "qualified liquidation" under Section 860F of the Code and any
regulations thereunder.
(ii) EMC shall notify the Trustee at the commencement of such 90-day liquidation period
and, at or prior to the time of making of the final payment on the Certificates, the
Trustee shall sell or otherwise dispose of all of the remaining assets of the Trust
Fund in accordance with the terms hereof; and
(iii) at or after the time of adoption of such a plan of complete liquidation of any 2004-6
REMIC and at or prior to the final Distribution Date, the Trustee shall sell for cash
all of the assets of the Trust to or at the direction of EMC, and each 2004-6 REMIC,
shall terminate at such time.
(b) By their acceptance of the Residual Certificates, the Holders thereof hereby (i)
agree to adopt such a plan of complete liquidation of the related 2004-6 REMIC upon the
written request of EMC, and to take such action in connection therewith as may be
reasonably requested by the Depositor and (ii) appoint EMC as their attorney-in-fact, with
full power of substitution, for purposes of adopting such a plan of complete liquidation.
The Trustee shall adopt such plan of liquidation by filing the appropriate statement on the
final tax return of each 2004-6 REMIC. Upon complete liquidation or final distribution of
all of the assets of the Trust Fund, the Trust Fund and each 2004-6 REMIC shall terminate.
ARTICLE XI
Miscellaneous Provisions
Section 11.01 Intent of Parties. The parties intend that each 2004-6 REMIC shall be
treated as a REMIC for federal income tax purposes and that the provisions of this
Agreement should be construed in furtherance of this intent. Notwithstanding any other
express or implied agreement to the contrary, the Depositor, the Master Servicer, the
Securities Administrator, EMC, the Trustee, each recipient of the related Prospectus
Supplement and, by its acceptance thereof, each holder of a Certificate, agrees and
acknowledges that each party hereto has agreed that each of them and their employees,
representatives and other agents may disclose, immediately upon commencement of
discussions, to any and all persons the tax treatment and tax structure of the Certificates
and the 2004-6 REMICs, the transactions described herein and all materials of any kind
(including opinions and other tax analyses) that are provided to any of them relating to
such tax treatment and tax structure except where confidentiality is reasonably necessary
to comply with the securities laws of any applicable jurisdiction. For purposes of this
paragraph, the terms "tax treatment" and "tax structure" have the meanings set forth in
Treasury Regulation Sections 1.6011-4(c), 301.6111-2(c) and 301.6112-1(d).
Section 11.02 Amendment. (a) This Agreement may be amended from time to time by the
Company, the Depositor, the Master Servicer, the Securities Administrator and the Trustee,
without notice to or the consent of any of the Certificateholders, to (i) cure any
ambiguity, (ii) correct or supplement any provisions herein that may be defective or
inconsistent with any other provisions herein, (iii) conform any provisions herein to the
provisions in the Prospectus, (iv) comply with any changes in the Code or (v) make any
other provisions with respect to matters or questions arising under this Agreement which
shall not be inconsistent with the provisions of this Agreement; provided, however, that
with respect to clauses (iv) and (v) of this Section 11.02(a), such action shall not, as
evidenced by an Opinion of Independent Counsel, addressed to the Trustee, adversely affect
in any material respect the interests of any Certificateholder.
(b) This Agreement may also be amended from time to time by the Company, the Master
Servicer, the Depositor, the Securities Administrator and the Trustee, with the consent of
the Holders of Certificates evidencing Fractional Undivided Interests aggregating not less
than 51% of the Trust Fund or of the applicable Class or Classes, if such amendment affects
only such Class or Classes, for the purpose of adding any provisions to or changing in any
manner or eliminating any of the provisions of this Agreement or of modifying in any manner
the rights of the Certificateholders; provided, however, that no such amendment shall
(i) reduce in any manner the amount of, or delay the timing of, payments received on
Mortgage Loans which are required to be distributed on any Certificate without the consent
of the Holder of such Certificate, (ii) reduce the aforesaid percentage of Certificates the
Holders of which are required to consent to any such amendment, without the consent of the
Holders of all Certificates then outstanding, or (iii) cause any 2004-6 REMIC to fail to
qualify as a REMIC for federal income tax purposes, as evidenced by an Opinion of
Independent Counsel addressed to the Trustee which shall be provided to the Trustee other
than at the Trustee's expense. Notwithstanding any other provision of this Agreement, for
purposes of the giving or withholding of consents pursuant to this Section 11.02(b),
Certificates registered in the name of or held for the benefit of the Depositor, the
Securities Administrator, the Master Servicer, or the Trustee or any Affiliate thereof
shall be entitled to vote their Fractional Undivided Interests with respect to matters
affecting such Certificates.
(c) Promptly after the execution of any such amendment, the Trustee shall furnish a copy
of such amendment or written notification of the substance of such amendment to each
Certificateholder, with a copy to the Rating Agencies.
(d) In the case of an amendment under Section 11.02(b) above, it shall not be necessary
for the Certificateholders to approve the particular form of such an amendment. Rather, it
shall be sufficient if the Certificateholders approve the substance of the amendment. The
manner of obtaining such consents and of evidencing the authorization of the execution
thereof by Certificateholders shall be subject to such reasonable regulations as the
Trustee may prescribe.
(e) Prior to the execution of any amendment to this Agreement, the Trustee shall be
entitled to receive and rely upon an Opinion of Counsel addressed to the Trustee stating
that the execution of such amendment is authorized or permitted by this Agreement. The
Trustee and the Securities Administrator may, but shall not be obligated to, enter into any
such amendment which affects the Trustee's or the Securities Administrator's own respective
rights, duties or immunities under this Agreement.
Section 11.03 Recordation of Agreement. To the extent permitted by applicable law, this
Agreement is subject to recordation in all appropriate public offices for real property
records in all the counties or other comparable jurisdictions in which any or all of the
Mortgaged Properties are situated, and in any other appropriate public recording office or
elsewhere. The Depositor shall effect such recordation, at the expense of the Trust upon
the request in writing of a Certificateholder, but only if such direction is accompanied by
an Opinion of Counsel (provided at the expense of the Certificateholder requesting
recordation) to the effect that such recordation would materially and beneficially affect
the interests of the Certificateholders or is required by law.
Section 11.04 Limitation on Rights of Certificateholders. (a)The death or incapacity of
any Certificateholder shall not terminate this Agreement or the Trust, nor entitle such
Certificateholder's legal representatives or heirs to claim an accounting or to take any
action or proceeding in any court for a partition or winding up of the Trust, nor otherwise
affect the rights, obligations and liabilities of the parties hereto or any of them.
(b) Except as expressly provided in this Agreement, no Certificateholders shall have any
right to vote or in any manner otherwise control the operation and management of the Trust,
or the obligations of the parties hereto, nor shall anything herein set forth, or contained
in the terms of the Certificates, be construed so as to establish the Certificateholders
from time to time as partners or members of an association; nor shall any
Certificateholders be under any liability to any third Person by reason of any action taken
by the parties to this Agreement pursuant to any provision hereof.
(c) No Certificateholder shall have any right by virtue of any provision of this
Agreement to institute any suit, action or proceeding in equity or at law upon, under or
with respect to this Agreement against the Depositor, the Master Servicer, the Securities
Administrator or any successor to any such parties unless (i) such Certificateholder
previously shall have given to the Trustee a written notice of a continuing default, as
herein provided, (ii) the Holders of Certificates evidencing Fractional Undivided Interests
aggregating not less than 51% of the Trust Fund shall have made written request upon the
Trustee to institute such action, suit or proceeding in its own name as Trustee hereunder
and shall have offered to the Trustee such reasonable indemnity as it may require against
the costs and expenses and liabilities to be incurred therein or thereby, and (iii) the
Trustee, for 60 days after its receipt of such notice, request and offer of indemnity,
shall have neglected or refused to institute any such action, suit or proceeding.
(d) No one or more Certificateholders shall have any right by virtue of any provision of
this Agreement to affect the rights of any other Certificateholders or to obtain or seek to
obtain priority or preference over any other such Certificateholder, or to enforce any
right under this Agreement, except in the manner herein provided and for the equal, ratable
and common benefit of all Certificateholders. For the protection and enforcement of the
provisions of this Section 11.04, each and every Certificateholder and the Trustee shall be
entitled to such relief as can be given either at law or in equity.
Section 11.05 Acts of Certificateholders. (a)Any request, demand, authorization,
direction, notice, consent, waiver or other action provided by this Agreement to be given
or taken by Certificateholders may be embodied in and evidenced by one or more instruments
of substantially similar tenor signed by such Certificateholders in person or by an agent
duly appointed in writing. Except as herein otherwise expressly provided, such action shall
become effective when such instrument or instruments are delivered to the Trustee and,
where it is expressly required, to the Depositor. Proof of execution of any such instrument
or of a writing appointing any such agent shall be sufficient for any purpose of this
Agreement and conclusive in favor of the Trustee and the Depositor, if made in the manner
provided in this Section 11.05.
(b) The fact and date of the execution by any Person of any such instrument or writing
may be proved by the affidavit of a witness of such execution or by a certificate of a
notary public or other officer authorized by law to take acknowledgments of deeds,
certifying that the individual signing such instrument or writing acknowledged to him the
execution thereof. Where such execution is by a signer acting in a capacity other than his
or her individual capacity, such certificate or affidavit shall also constitute sufficient
proof of his or her authority. The fact and date of the execution of any such instrument or
writing, or the authority of the individual executing the same, may also be proved in any
other manner which the Trustee deems sufficient.
(c) The ownership of Certificates (notwithstanding any notation of ownership or other
writing on such Certificates, except an endorsement in accordance with Section 5.02 made on
a Certificate presented in accordance with Section 5.04) shall be proved by the Certificate
Register, and neither the Trustee, the Securities Administrator, the Depositor, the Master
Servicer nor any successor to any such parties shall be affected by any notice to the
contrary.
(d) Any request, demand, authorization, direction, notice, consent, waiver or other
action of the holder of any Certificate shall bind every future holder of the same
Certificate and the holder of every Certificate issued upon the registration of transfer or
exchange thereof, if applicable, or in lieu thereof with respect to anything done, omitted
or suffered to be done by the Trustee, the Securities Administrator, the Depositor, the
Master Servicer or any successor to any such party in reliance thereon, whether or not
notation of such action is made upon such Certificates.
(e) In determining whether the Holders of the requisite percentage of Certificates
evidencing Fractional Undivided Interests have given any request, demand, authorization,
direction, notice, consent or waiver hereunder, Certificates owned by the Trustee, the
Securities Administrator, the Depositor, the Master Servicer or any Affiliate thereof shall
be disregarded, except as otherwise provided in Section 11.02(b) and except that, in
determining whether the Trustee shall be protected in relying upon any such request,
demand, authorization, direction, notice, consent or waiver, only Certificates which the
Trustee knows to be so owned shall be so disregarded. Certificates which have been pledged
in good faith to the Trustee, the Securities Administrator, the Depositor, the Master
Servicer or any Affiliate thereof may be regarded as outstanding if the pledgor establishes
to the satisfaction of the Trustee the pledgor's right to act with respect to such
Certificates and that the pledgor is not an Affiliate of the Trustee, the Securities
Administrator, the Depositor or the Master Servicer, as the case may be.
Section 11.06 Governing Law. THIS AGREEMENT AND THE CERTIFICATES SHALL BE CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT REFERENCE TO ITS CONFLICT OF LAWS
RULES (OTHER THAN SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAW, WHICH THE PARTIES HERETO
EXPRESSLY RELY UPON IN THE CHOICE OF SUCH LAW AS THE GOVERNING LAW HEREUNDER) AND THE
OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE
WITH SUCH LAWS.
Section 11.07 Notices. All demands and notices hereunder shall be in writing and shall
be deemed given when delivered at (including delivery by facsimile) or mailed by registered
mail, return receipt requested, postage prepaid, or by recognized overnight courier, to (i)
in the case of the Depositor, ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, 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 EMC, ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇
▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention: Vice President-Servicing, telecopier number: (212)
272-5591, 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, National Association, ▇.▇. ▇▇▇ ▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ (or, in the
case of overnight deliveries, ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇)
(Attention: ▇▇▇▇▇▇ ▇▇▇▇-▇), ▇▇▇▇▇▇▇▇▇ no.: (▇▇▇) ▇▇▇-▇▇▇▇, or such other address as may
hereafter be furnished to the other parties hereto in writing; or (v) in the case of the
Rating Agencies, ▇▇▇▇▇'▇ Investors Service, Inc., ▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇
▇▇▇▇▇, and Standard & Poor's, a division of The ▇▇▇▇▇▇-▇▇▇▇ Companies, Inc., ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇▇▇. Any notice delivered to the Depositor, the Master
Servicer, the Securities Administrator or the Trustee under this Agreement shall be
effective only upon receipt. Any notice required or permitted to be mailed to a
Certificateholder, unless otherwise provided herein, shall be given by first-class mail,
postage prepaid, at the address of such Certificateholder as shown in the Certificate
Register. Any notice so mailed within the time prescribed in this Agreement shall be
conclusively presumed to have been duly given when mailed, whether or not the
Certificateholder receives such notice.
Section 11.08 Severability of Provisions. If any one or more of the covenants,
agreements, provisions or terms of this Agreement shall be for any reason whatsoever held
invalid, then such covenants, agreements, provisions or terms shall be deemed severed from
the remaining covenants, agreements, provisions or terms of this Agreement and shall in no
way affect the validity or enforceability of the other provisions of this Agreement or of
the Certificates or the rights of the holders thereof.
Section 11.09 Successors and Assigns. The provisions of this Agreement shall be binding
upon and inure to the benefit of the respective successors and assigns of the parties
hereto.
Section 11.10 Article and Section Headings. The article and section headings herein are
for convenience of reference only, and shall not limit or otherwise affect the meaning
hereof.
Section 11.11 Counterparts. This Agreement may be executed in two or more counterparts
each of which when so executed and delivered shall be an original but all of which together
shall constitute one and the same instrument.
Section 11.12 Notice to Rating Agencies. The article and section headings herein are
for convenience of reference only, and shall not limited or otherwise affect the meaning
hereof. The Trustee shall promptly provide notice to each Rating Agency with respect to
each of the following of which a Responsible Officer of the Trustee has actual knowledge:
1. Any material change or amendment to this Agreement or the Servicing Agreements;
2. The occurrence of any Event of Default that has not been cured;
3. The resignation or termination of the Master Servicer, the Trustee or the
Securities Administrator;
4. The repurchase or substitution of Mortgage Loans;
5. The final payment to Certificateholders; and
6. Any change in the location of the Master Servicer Collection Account or the
Distribution Account.
IN WITNESS WHEREOF, the Depositor, the Trustee, EMC, the Master Servicer and the
Securities Administrator have caused their names to be signed hereto by their respective
officers thereunto duly authorized as of the day and year first above written.
STRUCTURED ASSET MORTGAGE
INVESTMENTS II INC., as Depositor
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
Title: Vice President
JPMORGAN CHASE BANK, as Trustee
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Trust Officer
▇▇▇▇▇ FARGO BANK, NATIONAL ASSOCIATION, as Master
Servicer
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇
Title:Assistant Vice President
▇▇▇▇▇ FARGO BANK, NATIONAL ASSOCIATION, as
Securities Administrator
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇
Title:Assistant 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:Executive Vice President
STATE OF NEW YORK )
) ss.:
COUNTY OF NEW YORK )
On the 30th day of June, 2004 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]
/s/ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
STATE OF NEW YORK )
) ss.:
COUNTY OF NEW YORK )
On the 30th day of June, 2004 before me, a notary public in and for said State,
personally appeared ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, known to me to be a Trust Officer of JPMorgan Chase
Bank, the corporation that executed the within instrument, and also known to me to be the
person who executed it on behalf of said corporation, and acknowledged to me that such
corporation executed the within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official seal the day
and year in this certificate first above written.
Notary Public
[Notarial Seal]
/s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
STATE OF MARYLAND )
) ss.:
COUNTY OF ▇▇▇▇▇▇ )
On the 30th day of June, 2004 before me, a notary public in and for said State,
personally appeared ▇▇▇▇▇▇ ▇▇▇▇▇▇, known to me to be an Assistant Vice President of ▇▇▇▇▇
Fargo Bank, National Association, the corporation that executed the within instrument, and
also known to me to be the person who executed it on behalf of said corporation, and
acknowledged to me that such corporation executed the within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official seal the day
and year in this certificate first above written.
Notary Public
[Notarial Seal]
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
STATE OF MARYLAND )
) ss.:
COUNTY OF ▇▇▇▇▇▇ )
On the 30th day of June, 2004 before me, a notary public in and for said State,
personally appeared ▇▇▇▇▇▇ ▇▇▇▇▇▇, known to me to be an Assistant Vice President of ▇▇▇▇▇
Fargo Bank, National Association, the corporation that executed the within instrument, and
also known to me to be the person who executed it on behalf of said corporation, and
acknowledged to me that such corporation executed the within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official seal the day
and year in this certificate first above written.
Notary Public
[Notarial Seal]
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
STATE OF TEXAS )
) ss.:
COUNTY OF DALLAS )
On the 30th day of June, 2004 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]
/s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Appendix 1
CALCULATION OF REMIC I Y PRINCIPAL REDUCTION AMOUNTS
Class Y Principal Reduction Amounts: For any Distribution Date the amounts by which
the principal balances of the REMIC I Y-1, Y-2 and Y-3 Regular Interests respectively will
be reduced on such distribution date by the allocation of Realized Losses and the
distribution of principal, determined as follows:
First for each of Group I, Group II and Group III determine the weighted average
pass-through rate for that Group for distributions of interest that will be made on the
next succeeding Distribution Date (the "Group Interest Rate"). The Principal Reduction
Amount for each of the Class Y Certificates will be determined pursuant to the "Generic
solution for the Class Y Principal Reduction Amounts" set forth below (the "Generic
Solution") by making identifications among the actual Groups and their related Class Y and
Class Z Certificates and weighted average pass-through rates and the Groups named in the
Generic Solution and their related Class Y and Class Z Certificates as follows:
A. Determine which Group has the lowest Group Interest Rate. That Group will be
identified with Group AA and the REMIC I Y Regular Interest and REMIC I Z Regular
Interest related to that Group will be respectively identified with the Class YAA and
Class ZAA Certificates. The Group Interest Rate for that Group will be identified with
J%. If two or more Groups have the lowest Group Interest Rate pick one for this purpose,
subject to the restriction that each Group may be picked only once in the course of any
such selections pursuant to paragraphs A through C of this definition.
B. Determine which Group has the second lowest Group Interest Rate. That Group will be
identified with Group BB and the REMIC I Y Regular Interest and REMIC I Z Regular Interest
related to that Group will be respectively identified with the Class BB and Class ZBB
Certificates. The Group Interest Rate for that Group will be identified with K%. If two
or more Groups have the second lowest Group Interest Rate pick one for this purpose,
subject to the restriction that each Group may be picked only once in the course of any
such selections pursuant to paragraphs A through C of this definition.
C. Determine which Group has the third lowest Group Interest Rate. That Group will be
identified with Group CC and the REMIC I Y Regular Interest and REMIC I Z Regular Interest
related to that Group will be respectively identified with the Class YCC and Class ZCC
Certificates. The Group Interest Rate for that Group will be identified with L%. If two
or more Groups have the third lowest Group Interest Rate pick one for this purpose, subject
to the restriction that each Group may be picked only once in the course of any such
selections pursuant to paragraphs A through C or this definition.
Generic Solution for Class Y Principal Reduction Amounts: For any Distribution Date,
the amounts by which the principal balances of the Class YAA, Class YBB and Class YCC
Regular Interests respectively will be reduced on such Distribution Date by the allocation
of Realized Losses and the distribution of principal, determined as follows:
For purposes of the succeeding formulas the following symbols shall have the meanings set
forth below:
PJB = the Group AA Subordinate Balance after the allocation of Realized Losses and
distributions of principal on such Distribution Date.
PLB = the Group CC Subordinate Balance after the allocation of Realized Losses and
distributions of principal on such Distribution Date.
PKB = the Group BB Subordinate Balance after the allocation of Realized Losses and
distributions of principal on such Distribution Date.
R = the Class CB Certificate Interest Rate = (J%PJB + L%PLB + K%PKB)/(PJB + PLB + PKB)
R1 = the weighted average of the Pass-Through Rates for the Group AA and Group BB Loans
= (J% (Pj - ΔPj) + K% (Pk - ΔPk))/(Pj - ΔPj + Pk - ΔPk)
R2 = the weighted average of the Pass-Through Rates for the Group CC and Group BB Loans
= (L% (Pl - ΔPl) + K% (Pk - ΔPk))/(Pl - ΔPl + Pk - ΔPk)
r1 = the weighted average of the Class YAA and Class YBB Certificate Interest Rates
= (J% Yj + K% Yk)/(Yj + Yk)
r2 = the weighted average of the Class YCC and Class YBB Certificate Interest Rates
= (L% Yl + K% Yk)/(Yl + Yk)
Yj = the Class YAA Principal Balance after distributions on the prior Distribution Date.
Yl = the Class YCC Principal Balance after distributions on the prior Distribution Date.
Yk = the Class YBB Principal Balance after distributions on the prior Distribution Date.
ΔYj = the Class YAA Principal Reduction Amount.
ΔYl = the Class YCC Principal Reduction Amount.
ΔYk = the Class YBB Principal Reduction Amount.
Zj = the Class ZAA Principal Balance after distributions on the prior Distribution Date.
Zl = the Class ZCC Principal Balance after distributions on the prior Distribution Date.
Zk = the Class ZBB Principal Balance after distributions on the prior Distribution Date.
ΔZj = the Class ZAA Principal Reduction Amount.
ΔZl = the Class ZCC Principal Reduction Amount.
ΔZk = the Class ZBB Principal Reduction Amount.
Pj = the aggregate of the Class YAA and Class ZAA Principal Balances after distributions
on the prior Distribution Date, which is equal to the aggregate principal balance of
the Group AA Loans [reduced by the Class AA-P-M [and Class R-1] Principal Balanc[e]].
= Yj + Zj
Pl = the aggregate of the Class YCC and Class ZCC Principal Balances after distributions
on the prior Distribution Date, which is equal to the aggregate principal balance of
the Group CC Loans [reduced by the Class CC-P-M [and Class R-1] Principal Balance[s]].
= Yl + Zl =
Pk = the aggregate of the Class YBB and Class ZBB Principal Balances after distributions
on the prior Distribution Date, which is equal to the aggregate principal balance of
the Group BB Loans [reduced by the Class BB-P-M [and Class R-1] Principal Balance[s]].
= Yk + Zk
ΔPj = the aggregate principal reduction resulting on such Distribution Date on the
Group AA Loans as a result of principal distributions (exclusive of any distributions
made pursuant to clauses (a)(iv), (b)(v) or (c)(iv) of the definition of the REMIC I
Distribution Amount) to be made and Realized Losses to be allocated on such
Distribution Date[, reduced by the portion , if any, of such reduction allocable to
the Class AA-P-M Regular Interest [or the Class R-1 Certificate]], which is equal to
the aggregate of the Class YAA and Class ZAA Principal Reduction Amounts.
= ΔYj + ΔZj
ΔPl= the aggregate principal reduction resulting on such Distribution Date on the
Group CC Loans as a result of principal distributions (exclusive of any distributions
made pursuant to clauses (d)(i) of the definition of the REMIC I Distribution Amount)
to be made and Realized Losses to be allocated on such Distribution Date[, reduced by
the portion , if any, of such reduction allocable to the Class CC-P-M Regular
Interest [or the Class R-1 Certificate]], which is equal to the aggregate of the
Class YCC and Class ZCC Principal Reduction Amounts.
= ΔYl + ΔZl
ΔPk = the aggregate principal reduction resulting on such Distribution Date on the
Group BB Loans as a result of principal distributions (exclusive of any distributions
made pursuant to clause (d)(i) of the definition of the REMIC I Distribution Amount)
to be made and Realized Losses to be allocated on such Distribution Date[, reduced by
the portion , if any, of such reduction allocable to the Class BB-P-M Regular
Interest [or the Class R-1 Certificate]], which is equal to the aggregate of the
Class YBB and Class ZBB Principal Reduction Amounts.
= ΔYk + ΔZk
α; = .0005
γ1 = (R - R1)/(L% - R). If R=>K%, γ1 is a non-negative number unless its
denominator is zero, in which event it is undefined.
γ2 = (R - J%)/( R2 - R). If R<K%, γ2 is a non-negative number.
If γ1 is undefined, ΔYj = Yj, ΔYl = (Yl/Pl)ΔPl, and ΔYk = Yk.
If γ2 is zero, ΔYl = Yl, ΔYj = (Yj/Pj)ΔPj, and ΔYk = Yk.
In the remaining situations, ΔYj, ΔYl and ΔYk shall be defined as follows:
I. If R=>K% and r1=> R1, make the following additional definitions:
ΔYk = ((J% - R1)/(K% - R1))Yj + Yk
ΔYk is a number between Yk and 0 such that (J%Yj + K%( Yk.- ΔYk))/(Yj + Yk.-
ΔYk) = R1.
Y4 = Yj + Yk.- ΔYk
P4 = Pj + Pk.
ΔY4 = ΔYj + ΔYk.- ΔYk
1. If Yl - α(Pl - ΔPl) => 0, Y4- α(P4 - ΔP4) => 0, and
γ1(P4 - ΔP4) < (Pl - ΔPl),
ΔYl = Yl - αγ1(P4 - ΔP4) and
ΔY4 = Y4 - α(P4 - ΔP4).
2. If Yl - α(Pl - ΔPl) => 0, Y4 - α(P4 - ΔP4) => 0, and
γ1(P4 - ΔP4) => (Pl - ΔPl), ΔYl = Yl - α(Pl - ΔPl)
and ΔY4 = Y4 - (α/γ1)(Pl - ΔPl).
3. If Yl - α(Pl - ΔPl) < 0, Y4 - α(P4 - ΔP4) => 0, and
Y4 - α(P4 - ΔP4) => Y4 - (Yl/γ1),
ΔYl = Yl - αγ1(P4 - ΔP4) and
ΔY4 = Y4 - α(P4 - ΔP4).
4. If Yl - α(Pl - ΔPl) < 0, Y4 - (Yl/γ1) => 0, and
Y4 - α(P4 - ΔP4) <= Y4 - (Yl/γ1), ΔYl = 0 and
ΔY4 = Y4 - (Yl/γ1).
5. If Y4 - α(P4 - ΔP4) < 0, Y4 - (Yl/γ1) < 0, and
Yl - α(Pl - ΔPl) <= Yl - (γ1Y4), ΔYl = Yl - (γ1Y4) and
ΔY4 = 0.
6. If Y4 - α(P4 - ΔP4) < 0, Yl - α(Pl - ΔPl) => 0, and
Yl - α(Pl - ΔPl) => Yl - (γ1Y4),
ΔYl = Yl - α(Pl - ΔPl) and
ΔY4 = Y4 - (α/γ1)(Pl - ΔPl).
ΔYj = [Yj/(Yj + Yk - ΔYk)]ΔY4
ΔYk = ΔYk + [(Yk - ΔYk)/(Yj + Yk - ΔYk)]ΔY4
The purpose of the foregoing definitional provisions together with the related provisions
allocating Realized Losses and defining the Class Y and Class Z Principal Distribution
Amounts is to accomplish the following goals in the following order of priority:
1. Making the ratio of (Yl - ΔYl ) to (Y4 - ΔY4 ) equal to γ1 after taking account
of the allocation Realized Losses and the distributions that will be made through the
end of the Distribution Date to which such provisions relate and assuring that the
Principal Reduction Amount for each of the Class YAA, Class YCC, Class YBB, Class ZAA
Class ZCC and Class ZBB Regular Interests is greater than or equal to zero for such
Distribution Date;
2. Making the Class YAA Principal Balance less than or equal to 0.0005 of the sum of the
Class YAA and Class ZAA Principal Balances, the Class YCC Principal Balance less than
or equal to 0.0005 of the sum of the Class YCC and Class ZCC Principal Balances and
the Class YBB Principal Balance less than or equal to 0.0005 of the sum of the Class
YBB and Class ZBB Principal Balances in each case after giving effect to allocations
of Realized Losses and distributions to be made through the end of the Distribution
Date to which such provisions relate; and
3. Making the larger of (a) the fraction whose numerator is (Yl - ΔYl ) and whose
denominator is the sum of (Yl - ΔYl) and (Zl - ΔZl) and (b) the fraction whose
numerator is (Y4 - ΔY4) and whose denominator is the sum of (Y4 - ΔY4), (Zj - ΔZj)
and (Zk - ΔZk) as large as possible while remaining less than or equal to 0.0005.
In the event of a failure of the foregoing portion of the definition of ClassY Principal
Reduction Amount to accomplish both of goals 1 and 2 above, the amounts thereof should be
adjusted to so as to accomplish such goals within the requirement that each Class Y
Principal Reduction Amount must be less than or equal to the sum of (a) the Principal
Realized Losses to be allocated on the related Distribution Date for the related Pool
remaining after the allocation of such Realized Losses to the related Class P-M
Certificates and (b) the remainder of the Available Distribution Amount for the related
Pool or after reduction thereof by the distributions to be made on such Distribution Date
(i) to the related Class P-M Certificates, (ii) to the related Class X-M Certificates and
(iii) in respect of interest on the related Class Y and Class Z Certificates, or, if both
of such goals cannot be accomplished within such requirement, such adjustment as is
necessary shall be made to accomplish goal 1 within such requirement. In the event of any
conflict among the provisions of the definition of the Class Y Principal Reduction Amounts,
such conflict shall be resolved on the basis of the goals and their priorities set forth
above within the requirement set forth in the preceding sentence. If the formula
allocation of ΔY4 between ΔYj and ΔYk cannot be achieved because either ΔYj as so defined
is greater than ΔPj or ΔYk as so defined is greater than ΔPk, such an allocation shall be
made as close as possible to the formula allocation within the requirement that ΔYj < ΔPj
and ΔYk < ΔPk.
II. If R=>K% and r1<R1, make the following additional definitions:
ΔYj = Yj + ((R1 - K%)/(R1 - J%))Yk
ΔYj is a number between Yj and 0 such that (J%(Yj - ΔYj) + K%Yk)/(Yj -
ΔYj + Yk.) = R1.
Y5 = Yj - ΔYj + Yk.
P5 = Pj + Pk.
ΔY5 = ΔYj - ΔYj + ΔYk.
1. If Yl - α(Pl - ΔPl) => 0, Y5- α(P5 - ΔP5) => 0, and
γ1(P5 - ΔP5) < (Pl - ΔPl),
ΔYl = Yl - αγ1(P5 - ΔP5) and
ΔY5 = Y5 - α(P5 - ΔP5).
2. If Yl - α(Pl - ΔPl) => 0, Y5 - α(P5 - ΔP5) => 0, and
γ1(P5 - ΔP5) => (Pl - ΔPl), ΔYl = Yl - α(Pl - ΔPl)
and ΔY5 = Y5 - (α/γ1)(Pl - ΔPl).
3. If Yl - α(Pl - ΔPl) < 0, Y5 - α(P5 - ΔP5) => 0, and
Y5 - α(P5 - ΔP5) => Y5 - (Yl/γ1),
ΔYl = Yl - αγ1(P5 - ΔP5) and
ΔY5 = Y5 - α(P5 - ΔP5).
4. If Yl - α(Pl - ΔPl) < 0, Y5 - (Yl/γ1) => 0, and
Y5 - α(P5 - ΔP5) <= Y5 - (Yl/γ1), ΔYl = 0 and
ΔY5 = Y5 - (Yl/γ1).
5. If Y5 - α(P5 - ΔP5) < 0, Y5 - (Yl/γ1) < 0, and
Yl - α(Pl - ΔPl) <= Yl - (γ1Y5), ΔYl = Yl - (γ1Y5) and
ΔY5 = 0.
6. If Y5 - α(P5 - ΔP5) < 0, Yl - α(Pl - ΔPl) => 0, and
Yl - α(Pl - ΔPl) => Yl - (γ1Y5),
ΔYl = Yl - α(Pl - ΔPl) and
ΔY5 = Y5 - (α/γ1)(Pl - ΔPl).
ΔYj = ΔYj + [(Yj - ΔYj)/(Yj - ΔYj + Yk)]ΔY5
ΔYk = [Yk/(Yj - ΔYj + Yk)]ΔY5
The purpose of the foregoing definitional provisions together with the related provisions
allocating Realized Losses and defining the Class Y and Class Z Principal Distribution
Amounts is to accomplish the following goals in the following order of priority:
1. Making the ratio of (Yl - ΔYl) to (Y5 - ΔY5) equal to γ1 after taking account
of the allocation Realized Losses and the distributions that will be made through end
of the Distribution Date to which such provisions relate and assuring that the
Principal Reduction Amount for each of the Class YAA, Class YCC, Class YBB, Class ZAA
Class ZCC and Class ZBB Regular Interests is greater than or equal to zero for such
Distribution Date;
2. Making the Class YAA Principal Balance less than or equal to 0.0005 of the sum of the
Class YAA and Class ZAA Principal Balances, the Class YCC Principal Balance less than
or equal to 0.0005 of the sum of the Class YCC and Class ZCC Principal Balances and
the Class YBB Principal Balance less than or equal to 0.0005 of the sum of the Class
YBB and Class ZBB Principal Balances in each case after giving effect to allocations
of Realized Losses and distributions to be made through the end of the Distribution
Date to which such provisions relate; and
3. Making the larger of (a) the fraction whose numerator is (Yl - ΔYl) and whose
denominator is the sum of (Yl - ΔYl) and (Zl - ΔZl) and (b) the fraction whose
numerator is (Y5 - ΔY5) and whose denominator is the sum of (Y5 - ΔY5), (Zj - ΔZj)
and (Zk - ΔZk) as large as possible while remaining less than or equal to 0.0005.
In the event of a failure of the foregoing portion of the definition of ClassY Principal
Reduction Amount to accomplish both of goals 1 and 2 above, the amounts thereof should be
adjusted to so as to accomplish such goals within the requirement that each Class Y
Principal Reduction Amount must be less than or equal to the sum of (a) the Principal
Realized Losses to be allocated on the related Distribution Date for the related Pool
remaining after the allocation of such Realized Losses to the related Class P-M
Certificates and (b) the remainder of the Available Distribution Amount for the related
Pool or after reduction thereof by the distributions to be made on such Distribution Date
(i) to the related Class P-M Certificates, (ii) to the related Class X-M Certificates and
(iii) in respect of interest on the related Class Y and Class Z Certificates, or, if both
of such goals cannot be accomplished within such requirement, such adjustment as is
necessary shall be made to accomplish goal 1 within such requirement. In the event of any
conflict among the provisions of the definition of the Class Y Principal Reduction Amounts,
such conflict shall be resolved on the basis of the goals and their priorities set forth
above within the requirement set forth in the preceding sentence. If the formula
allocation of ΔY5 between ΔYj and ΔYk cannot be achieved because either ΔYj as so defined
is greater than ΔPj or ΔYk as so defined is greater than ΔPk, such an allocation shall
be made as close as possible to the formula allocation within the requirement that ΔYj <
ΔPj and ΔYk < ΔPk.
III. If R<=K% and r2=> R2, make the following additional definitions:
ΔYl = ((K% - R2)/(L% - R2))Yk + Yl
ΔYl is a number between Yl and 0 such that (K%Yk + L%( Yl.- ΔYl))/(Yk + Yl.-
ΔYl) = R2.
Make the following additional definitions:
Y6 = Yl - ΔYl + Yk.
P6 = Pl + Pk.
ΔY6 = ΔYl - ΔYl + ΔYk.
1. If Y6 - α(P6 - ΔP6) => 0, Yj- α(Pj - ΔPj) => 0, and
γ2(Pj - ΔPj) < (P6 - ΔP6),
ΔY6 = Y6 - αγ2(Pj - ΔPj) and
ΔYj = Yj - α(Pj - ΔPj).
2. If Y6 - α(P6 - ΔP6) => 0, Yj - α(Pj - ΔPj) => 0, and
γ2(Pj - ΔPj) => (P6 - ΔP6), ΔY6 = Y6 - α(P6 - ΔP6)
and ΔYj = Yj - (α/γ2)(P6 - ΔP6).
3. If Y6 - α(P6 - ΔP6) < 0, Yj - α(Pj - ΔPj) => 0, and
Yj - α(Pj - ΔPj) => Yj - (Y6/γ2),
ΔY6 = Y6 - αγ2(Pj - ΔPj) and
ΔYj = Yj - α(Pj - ΔPj).
4. If Y6 - α(P6 - ΔP6) < 0, Yj - (Y6/γ2) => 0, and
Yj - α(Pj - ΔPj) <= Yj - (Y6/γ2), ΔY6 = 0 and
ΔYj = Yj - (Y6/γ2).
5. If Yj - α(Pj - ΔPj) < 0, Yj - (Y6/γ2) < 0, and
Y6 - α(P6 - ΔP6) <= Y6 - (γ2Yj), ΔY6 = Y6 - (γ2Yj) and
ΔYj = 0.
6. If Yj - α(Pj - ΔPj) < 0, Y6 - α(P6 - ΔP6) => 0, and
Y6 - α(P6 - ΔP6) => Y6 - (γ2Yj),
ΔY6 = Y6 - α(P6 - ΔP6) and
ΔYj = Yj - (α/γ2)(P6 - ΔP6).
ΔYl = ΔYl + [(Yl - ΔYl)/(Yl - ΔYl + Yk)]ΔY6
ΔYk = [Yk/(Yl - ΔYl + Yk)]ΔY6
The purpose of the foregoing definitional provisions together with the related provisions
allocating Realized Losses and defining the Class Y and Class Z Principal Distribution
Amounts is to accomplish the following goals in the following order of priority:
1. Making the ratio of (Yj - ΔYj) to (Y6 - ΔY6) equal to γ2 after taking account
of the allocation Realized Losses and the distributions that will be made through end
of the Distribution Date to which such provisions relate and assuring that the
Principal Reduction Amount for each of the Class YAA, Class YCC, Class YBB, Class ZAA
Class ZCC and Class ZBB Regular Interests is greater than or equal to zero for such
Distribution Date;
2. Making the Class YAA Principal Balance less than or equal to 0.0005 of the sum of the
Class YAA and Class ZAA Principal Balances, the Class YCC Principal Balance less than
or equal to 0.0005 of the sum of the Class YCC and Class ZCC Principal Balances and
the Class YBB Principal Balance less than or equal to 0.0005 of the sum of the Class
YBB and Class ZBB Principal Balances in each case after giving effect to allocations
of Realized Losses and distributions to be made through the end of the Distribution
Date to which such provisions relate; and
3. Making the larger of (a) the fraction whose numerator is (Yj - ΔYj) and whose
denominator is the sum of (Yj - ΔYj) and (Zh - ΔZj) and (b) the fraction
whose numerator is (Y6 - ΔY6) and whose denominator is the sum of (Y6 - ΔY6), (Zl -
ΔZl) and (Zk - ΔZk) as large as possible while remaining less than or equal to
0.0005.
In the event of a failure of the foregoing portion of the definition of ClassY Principal
Reduction Amount to accomplish both of goals 1 and 2 above, the amounts thereof should be
adjusted to so as to accomplish such goals within the requirement that each Class Y
Principal Reduction Amount must be less than or equal to the sum of (a) the Principal
Realized Losses to be allocated on the related Distribution Date for the related Pool
remaining after the allocation of such Realized Losses to the related Class P-M
Certificates and (b) the remainder of the Available Distribution Amount for the related
Pool or after reduction thereof by the distributions to be made on such Distribution Date
(i) to the related Class P-M Certificates, (ii) to the related Class X-M Certificates and
(iii) in respect of interest on the related Class Y and Class Z Certificates, or, if both
of such goals cannot be accomplished within such requirement, such adjustment as is
necessary shall be made to accomplish goal 1 within such requirement. In the event of any
conflict among the provisions of the definition of the Class Y Principal Reduction Amounts,
such conflict shall be resolved on the basis of the goals and their priorities set forth
above within the requirement set forth in the preceding sentence. If the formula
allocation of ΔY6 between ΔYl and ΔYk cannot be achieved because either ΔYl as so
defined is greater than ΔPl or ΔYk as so defined is greater than ΔPk, such an allocation
shall be made as close as possible to the formula allocation within the requirement that
ΔYl < ΔPl and ΔYk < ΔPk.
IV. If R<K% and r2<R2, make the following additional definitions:
ΔYk = Yk + ((R2 - L%)/(R2 - K%))Yl
ΔYk is a number between Yk and 0 such that (K%(Yk - ΔYk) + L%Yl)/(Yk -
ΔYk + Yl.) = R2.
Y7 = Yk - ΔYk + Yl.
P7 = Pk + Pl.
ΔY7 = ΔYk - ΔYk + ΔYl.
1. If Y7 - α(P7 - ΔP7) => 0, Yj- α(Pj - ΔPj) => 0, and
γ2(Pj - ΔPj) < (P7 - ΔP7),
ΔY7 = Y7 - αγ2(Pj - ΔPj) and
ΔYj = Yj - α(Pj - ΔPj).
2. If Y7 - α(P7 - ΔP7) => 0, Yj - α(Pj - ΔPj) => 0, and
γ2(Pj - ΔPj) => (P7 - ΔP7), ΔY7 = Y7 - α(P7 - ΔP7)
and ΔYj = Yj - (α/γ2)(P7 - ΔP7).
3. If Y7 - α(P7 - ΔP7) < 0, Yj - α(Pj - ΔPj) => 0, and
Yj - α(Pj - ΔPj) => Yj - (Y7/γ2),
ΔY7 = Y7 - αγ2(Pj - ΔPj) and
ΔYj = Yj - α(Pj - ΔPj).
4. If Y7 - α(P7 - ΔP7) < 0, Yj - (Y7/γ2) => 0, and
Yj - α(Pj - ΔPj) <= Yj - (Y7/γ2), ΔY7 = 0 and
ΔYj = Yj - (Y7/ γ2).
5. If Yj - α(Pj - ΔPj) < 0, Yj - (Y7/γ2) < 0, and
Y7 - α(P7 - ΔP7) <= Y7 - (γ2Yj), ΔY7 = Y7 - (γ2Yj) and
ΔYj = 0.
6. If Yj - α(Pj - ΔPj) < 0, Y7 - α(P7 - ΔP7) => 0, and
Y7 - α(P7 - ΔP7) => Y7 - (γ2Yj),
ΔY7 = Y7 - α(P7 - ΔP7) and
ΔYj = Yj - (α/γ2)(P7 - ΔP7).
ΔYl = [(Yl/(Yl + Yk - ΔYk)]ΔY7
ΔYk = ΔYk + [(Yk - ΔYk)/(Yl + Yk - ΔYk)]ΔY7
The purpose of the foregoing definitional provisions together with the related provisions
allocating Realized Losses and defining the Class Y and Class Z Principal Distribution
Amounts is to accomplish the following goals in the following order of priority:
1. Making the ratio of (Yj - ΔYj) to (Y7 - ΔY7) equal to γ2 after taking account
of the allocation Realized Losses and the distributions that will be made through end
of the Distribution Date to which such provisions relate and assuring that the
Principal Reduction Amount for each of the Class YAA, Class YCC, Class YBB, Class ZAA
Class ZCC and Class ZBB Regular Interests is greater than or equal to zero for such
Distribution Date;
2. Making the Class YAA Principal Balance less than or equal to 0.0005 of the sum of the
Class YAA and Class ZAA Principal Balances, the Class YCC Principal Balance less than
or equal to 0.0005 of the sum of the Class YCC and Class ZCC Principal Balances and
the Class YBB Principal Balance less than or equal to 0.0005 of the sum of the Class
YBB and Class ZBB Principal Balances in each case after giving effect to allocations
of Realized Losses and distributions to be made through the end of the Distribution
Date to which such provisions relate; and
3. Making the larger of (a) the fraction whose numerator is (Yj - ΔYj) and whose
denominator is the sum of (Yj - ΔYj) and (Zj - ΔZj) and (b) the fraction whose
numerator is (Y7 - ΔY7) and whose denominator is the sum of (Y7 - ΔY7), (Zl - ΔZl)
and (Zk - ΔZk) as large as possible while remaining less than or equal to 0.0005.
In the event of a failure of the foregoing portion of the definition of ClassY Principal
Reduction Amount to accomplish both of goals 1 and 2 above, the amounts thereof should be
adjusted to so as to accomplish such goals within the requirement that each Class Y
Principal Reduction Amount must be less than or equal to the sum of (a) the Principal
Realized Losses to be allocated on the related Distribution Date for the related Pool
remaining after the allocation of such Realized Losses to the related Class P-M
Certificates and (b) the remainder of the Available Distribution Amount for the related
Pool or after reduction thereof by the distributions to be made on such Distribution Date
(i) to the related Class P-M Certificates, (ii) to the related Class X-M Certificates and
(iii) in respect of interest on the related Class Y and Class Z Certificates, or, if both
of such goals cannot be accomplished within such requirement, such adjustment as is
necessary shall be made to accomplish goal 1 within such requirement. In the event of any
conflict among the provisions of the definition of the Class Y Principal Reduction Amounts,
such conflict shall be resolved on the basis of the goals and their priorities set forth
above within the requirement set forth in the preceding sentence. If the formula
allocation of ΔY7 between ΔYl and ΔYk cannot be achieved because either ΔYl as so defined
is greater than ΔPl or ΔYk as so defined is greater than ΔPk, such an
allocation shall be made as close as possible to the formula allocation within the
requirement that ΔYl < ΔPl and ΔYk < ΔPk.