EXHIBIT 99.1
------------
6
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ CAPITAL I INC.
Depositor
▇▇▇▇▇ FARGO BANK, NATIONAL ASSOCIATION
Master Servicer and Securities Administrator
and
DEUTSCHE BANK NATIONAL TRUST COMPANY
Trustee
___________________________
POOLING AND SERVICING AGREEMENT
Dated as of September 1, 2004
___________________________
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ MORTGAGE LOAN TRUST 2004-8AR
MORTGAGE PASS-THROUGH CERTIFICATES, SERIES 2004-8AR
TABLE OF CONTENTS
Page
----
ARTICLE I DEFINITIONS.............................................................................................3
Section 1.01 Definitions.....................................................................................3
ARTICLE II DECLARATION OF TRUST; ISSUANCE OF CERTIFICATES........................................................41
Section 2.01 Creation and Declaration of Trust Fund; Conveyance of Mortgage Loans...........................41
Section 2.02 Acceptance of Trust Fund by Trustee; Review of Documentation for Trust Fund....................44
Section 2.03 Representations and Warranties of the Depositor................................................45
Section 2.04 Representations and Warranties of the Depositor and the Seller as to the Mortgage Loans........47
Section 2.05 Representations and Warranties of the Seller; Discovery of Breach; Repurchase or
Substitution of Mortgage Loans.................................................................47
Section 2.06 Grant Clause...................................................................................51
ARTICLE III THE CERTIFICATES.....................................................................................52
Section 3.01 The Certificates...............................................................................52
Section 3.02 Registration...................................................................................52
Section 3.03 Transfer and Exchange of Certificates..........................................................53
Section 3.04 Cancellation of Certificates...................................................................56
Section 3.05 Replacement of Certificates....................................................................56
Section 3.06 Persons Deemed Owners..........................................................................57
Section 3.07 Temporary Certificates.........................................................................57
Section 3.08 Appointment of Paying Agent....................................................................57
Section 3.09 Book-Entry Certificates........................................................................58
ARTICLE IV ADMINISTRATION OF THE TRUST FUND......................................................................59
Section 4.01 Custodial Accounts; Distribution Account.......................................................59
Section 4.02 Permitted Withdrawals from the Custodial Accounts and the Distribution Account.................61
Section 4.03 [Reserved].....................................................................................62
Section 4.04 [Reserved].....................................................................................62
Section 4.05 Reports to Trustee and Certificateholders......................................................62
ARTICLE V DISTRIBUTIONS TO HOLDERS OF CERTIFICATES...............................................................64
Section 5.01 Distributions Generally........................................................................64
Section 5.02 Priorities of Distribution.....................................................................65
Section 5.03 [Reserved].....................................................................................72
Section 5.04 Allocation of Losses...........................................................................72
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Section 5.05 Advances by the Master Servicer................................................................76
Section 5.06 Compensating Interest Payments.................................................................76
Section 5.07 [Reserved].....................................................................................76
Section 5.08 Cross-Collateralization; Adjustments to Available Funds........................................76
Section 5.09 Determination of Pass-Through Rates for LIBOR Certificates.....................................77
ARTICLE VI CONCERNING THE TRUSTEE AND THE SECURITIES ADMINISTRATOR; EVENTS OF DEFAULT............................80
Section 6.01 Duties of Trustee and the Securities Administrator.............................................80
Section 6.02 Certain Matters Affecting the Trustee and the Securities Administrator.........................83
Section 6.03 Trustee and Securities Administrator Not Liable for Certificates...............................84
Section 6.04 Trustee and the Securities Administrator May Own Certificates..................................85
Section 6.05 Eligibility Requirements for Trustee...........................................................85
Section 6.06 Resignation and Removal of Trustee and the Securities Administrator............................85
Section 6.07 Successor Trustee and Successor Securities Administrator.......................................86
Section 6.08 Merger or Consolidation of Trustee or the Securities Administrator.............................87
Section 6.09 Appointment of Co-Trustee, Separate Trustee or Custodian.......................................87
Section 6.10 Authenticating Agents..........................................................................89
Section 6.11 Indemnification of the Trustee and the Securities Administrator................................90
Section 6.12 Fees and Expenses of Securities Administrator and the Trustee..................................90
Section 6.13 Collection of Monies...........................................................................91
Section 6.14 Events of Default; Trustee To Act; Appointment of Successor....................................91
Section 6.15 Additional Remedies of Trustee Upon Event of Default...........................................94
Section 6.16 Waiver of Defaults.............................................................................95
Section 6.17 Notification to Holders........................................................................95
Section 6.18 Directions by Certificateholders and Duties of Trustee During Event of Default.................95
Section 6.19 Action Upon Certain Failures of the Master Servicer and Upon Event of Default..................96
Section 6.20 Preparation of Tax Returns and Other Reports...................................................96
ARTICLE VII PURCHASE OF MORTGAGE LOANS AND TERMINATION OF THE TRUST FUND.........................................98
Section 7.01 Purchase of Mortgage Loans; Termination of Trust Fund Upon Purchase or Liquidation of
All Mortgage Loans.............................................................................98
Section 7.02 Procedure Upon Redemption Termination of Trust Fund............................................99
Section 7.03 Additional Trust Fund Termination Requirements................................................100
ARTICLE VIII RIGHTS OF CERTIFICATEHOLDERS.......................................................................101
Section 8.01 Limitation on Rights of Holders...............................................................101
Section 8.02 Access to List of Holders.....................................................................102
Section 8.03 Acts of Holders of Certificates...............................................................102
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ARTICLE IX ADMINISTRATION AND SERVICING OF MORTGAGE LOANS BY THE MASTER SERVICER................................103
Section 9.01 Duties of the Master Servicer; Enforcement of Servicers' and Master Servicer's Obligations....103
Section 9.02 Assumption of Master Servicing by Trustee.....................................................105
Section 9.03 Representations and Warranties of the Master Servicer.........................................106
Section 9.04 Compensation to the Master Servicer...........................................................108
Section 9.05 Merger or Consolidation.......................................................................108
Section 9.06 Resignation of Master Servicer................................................................108
Section 9.07 Assignment or Delegation of Duties by the Master Servicer.....................................109
Section 9.08 Limitation on Liability of the Master Servicer and Others.....................................109
Section 9.09 Indemnification; Third-Party Claims...........................................................110
ARTICLE X REMIC ADMINISTRATION..................................................................................110
Section 10.01 REMIC Administration..........................................................................110
Section 10.02 Prohibited Transactions and Activities........................................................113
Section 10.03 Indemnification with Respect to Prohibited Transactions or Loss of REMIC Status...............113
Section 10.04 REO Property..................................................................................114
Section 10.05 Fidelity......................................................................................114
ARTICLE XI MISCELLANEOUS PROVISIONS.............................................................................115
Section 11.01 Binding Nature of Agreement; Assignment.......................................................115
Section 11.02 Entire Agreement..............................................................................115
Section 11.03 Amendment.....................................................................................115
Section 11.04 Voting Rights.................................................................................116
Section 11.05 Provision of Information......................................................................116
Section 11.06 Governing Law.................................................................................117
Section 11.07 Notices. 117
Section 11.08 Severability of Provisions....................................................................117
Section 11.09 Indulgences; No Waivers.......................................................................117
Section 11.10 Headings Not To Affect Interpretation.........................................................118
Section 11.11 Benefits of Agreement.........................................................................118
Section 11.12 Special Notices to the Rating Agencies........................................................118
Section 11.13 Conflicts.....................................................................................119
Section 11.14 Counterparts..................................................................................119
Section 11.15 No Petitions..................................................................................119
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ATTACHMENTS
Exhibit A Forms of Certificates
Exhibit B Form of Residual Certificate Transfer Affidavit (Transferee)
Exhibit C Form of Residual Certificate Transfer Affidavit (Transferor)
Exhibit D [Reserved]
Exhibit E List of Purchase and Servicing Agreements
Exhibit F List of Custodial Agreements
Exhibit G Assignment and Notice of Transfer with respect to each
Additional Collateral Mortgage Loan
Exhibit H Form of Rule 144A Transfer Certificate
Exhibit I Form of Purchaser's Letter for Institutional Accredited Investors
Exhibit J Form of ERISA Transfer Affidavit
Exhibit K Form of Letter of Representations with the Depository Trust Company
Exhibit L Form of Trustee Certification
Exhibit M [Reserved]
Schedule A Mortgage Loan Schedule
Schedule B Principal Balances Schedule
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This POOLING AND SERVICING AGREEMENT, dated as of September 1, 2004
(the "Agreement"), by and among ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ CAPITAL I INC., a Delaware
corporation, as depositor (the "Depositor"), DEUTSCHE BANK NATIONAL TRUST
COMPANY, a national banking association, as trustee (the "Trustee"), ▇▇▇▇▇
FARGO BANK, NATIONAL ASSOCIATION, in its dual capacities as master servicer
(the "Master Servicer") and securities administrator (the "Securities
Administrator") and acknowledged by ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ MORTGAGE CAPITAL INC., a
New York corporation, as seller (the "Seller"), for purposes of Section 2.05.
WITNESSETH THAT
In consideration of the mutual agreements herein contained, the
parties hereto agree as follows:
PRELIMINARY STATEMENT
The Depositor is the owner of the Trust Fund that is hereby conveyed
to the Trustee in return for the Certificates. As provided herein, the Trustee
will make multiple elections to treat segregated pools of assets subject to
this Agreement for federal income tax purposes as the following four separate
real estate mortgage investment conduits (each, a "REMIC"): Subsidiary REMIC
1, Subsidiary REMIC 2, the Middle REMIC and the Master REMIC. Subsidiary REMIC
1 will consist of Loan Group 1 and Loan Group 2, excluding any rights of the
Trust Fund in respect of the Additional Collateral. Subsidiary REMIC 2 will
consist of Loan Group 3 and Loan Group 4, excluding any rights of the Trust
Fund in respect of the Additional Collateral. Each Subsidiary REMIC will issue
uncertificated REMIC regular interests (the "Subsidiary REMIC Regular
Interests"). The Subsidiary REMIC Regular Interests will represent the
"regular interests" in each Subsidiary REMIC. The Class R-1A Interest will
represent the single Class of "residual interest" in Subsidiary REMIC 1 and
the Class R-1B Interest will represent the single Class of "residual interest"
in Subsidiary REMIC 2.
The Trustee will hold the Subsidiary REMIC Regular Interests for the
benefit of the Middle REMIC. The Middle REMIC will consist of the Subsidiary
REMIC Interests and will issue uncertificated REMIC regular interests, which
will constitute the regular interests in the Middle REMIC (the "Middle REMIC
Regular Interests") and the Class R-2 Interest, which will represent the
single Class of "residual interest" in the Middle REMIC.
The Trustee will hold the Middle REMIC Regular Interests for the
benefit of the Master REMIC. The Master REMIC will consist of the Middle REMIC
Interests and will be evidenced by the Certificates, which (other than the
Class A-R Certificates) will constitute the regular interests in the Master
REMIC (the "Regular Certificates") and the Class R-3 Interest, which will
represent the single Class of "residual interest" in the Master REMIC. The
Class A-R Certificates will represent the beneficial ownership of each of the
Class R-1A, Class R-1B, Class R-2 and Class R-3 Interests. The "latest
possible maturity date" for federal income tax purposes of all regular and
residual interests created hereunder will be the Latest Possible Maturity
Date.
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Subsidiary REMIC 1
------------------
The Subsidiary REMIC 1 Interests, each of which (except for the
Class R-1A Interests) is hereby designated as a REMIC regular interest for
federal income tax purposes, will have the principal balances, Pass-Through
Rates and Corresponding Loan Groups as set forth in the following table:
Pass-Through Corresponding
Subsidiary REMIC Interests Initial Balance Rate Loan Group
-------------------------- --------------- ----------------- --------------
A-1 (0.9% of Subordinated Portion Group 1).. (1) (2) 1
B-1 (0.1% of Subordinated Portion Group 1). (1) (2) 1
C-1 (Excess of Group 1).................... (1) (2) 1
A-2 (0.9% of Subordinated Portion Group 2).. (1) (2) 2
B-2 (0.1% of Subordinated Portion Group 2). (1) (2) 2
C-2 (Excess of Group 2).................... (1) (2) 2
Class SR-$100............................... $100 (3) N/A
Class SR-P1 $50 (4) N/A
R-1......................................... $0 N/A N/A
_______________
(1) Each Class A Interest will have a principal balance initially equal to 0.9% of the Subordinated Portion of its
Corresponding Loan Group. Each Class B Interest will have a principal balance initially equal to 0.1% of the
Subordinated Portion of its Corresponding Loan Group. The initial principal balance of each Class C Interest
will equal the excess of the principal balance of its Corresponding Loan Group over the initial aggregate
principal balances of the Class A and Class B Interests corresponding to such Loan Group.
(2) The Weighted Average Net Mortgage Rate in respect of the Corresponding Loan Group.
(3) For each Distribution Date, the Pass Through Rate in respect of the Class A-R Certificates.
(4) The Class SR-P1 Interest will not be entitled to any interest, but will be entitled to 100% of any prepayment
premiums paid on the Group 1 and Group 2 Mortgage Loans.
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Subsidiary REMIC 2
The Subsidiary REMIC 2 Interests, each of which (except for the
Class R-1B Interests) is hereby designated as a REMIC regular interest for
federal income tax purposes, will have the principal balances, Pass-Through
Rates and Corresponding Loan Groups as set forth in the following table:
A-3 (0.9% of Subordinated Portion Group 3).. (1) (2) 3
B-3 (0.1% of Subordinated Portion Group 3). (1) (2) 3
C-3 (Excess of Group 3).................... (1) (2) 3
A-4 (0.9% of Subordinated Portion Group 4).. (1) (2) 4
B-4 (0.1% of Subordinated Portion Group 4). (1) (2) 4
C-4 (Excess of Group 4).................... (1) (2) 4
Class SR-P2 $50 (3) N/A
R-1B........................................ $0 N/A N/A
_______________
(1) Each Class A Interest will have a principal balance initially equal to
0.9% of the Subordinated Portion of its Corresponding Loan Group. Each
Class B Interest will have a principal balance initially equal to 0.1% of
the Subordinated Portion of its Corresponding Loan Group. The initial
principal balance of each Class C Interest will equal the excess of the
principal balance of its Corresponding Loan Group over the initial
aggregate principal balances of the Class A and Class B Interests
corresponding to such Loan Group.
(2) The Weighted Average Net Mortgage Rate in respect of the Corresponding
Loan Group.
(3) The Class SR-P2 Interest will not be entitled to any interest, but will
be entitled to 100% of any prepayment premiums paid on the Group 3 and
Group 4 Mortgage Loans.
On any Distribution Date:
(1) If no Cross-Over Situation exists with respect to any Class of
Interests, then Principal Reductions arising with respect to each Loan Group
will be allocated first to cause the Loan Group's corresponding Class A and
Class B Interests to equal, respectively, 0.9% and 0.1% of the Subordinated
Portion as of such Distribution Date, and second to the Loan Group's
corresponding Class C Interest;
(2) If a Cross-Over Situation exists then:
(a) if the Calculation Rate in respect of the outstanding Class A1, Class
A2, Class B1 and Class B2 Interests is less than the Pass Through Rate in
respect of the Aggregate Group I Subordinate Certificates, Principal
Relocation Payments will be made proportionately to the
vii
outstanding Class A1 and Class A2 Interests prior to any other Principal
Distributions from each such Loan Group; and
(b) if the Calculation Rate in respect of the outstanding Class A1, Class
A2, Class B1 and Class B2 Interests is greater than the Pass Through Rate in
respect of the Aggregate Group I Subordinate Certificates, Principal
Relocation Payments will be made proportionately to the outstanding Class B1
and Class B2 Interests prior to any other Principal Distributions from each
such Loan Group.
In each case, Principal Relocation Payments will be made so as to cause
the Calculation Rate in respect of the outstanding Class A1, Class A2, Class
B1 and Class B2 Interests to equal the Pass Through Rate in respect of the
Aggregate Group I Subordinate Certificates. With respect to each Loan Group,
if (and to the extent that) the sum of (a) the principal payments comprising
the Principal Remittance Amount received during the Due Period and (b) the
Realized Losses, are insufficient to make the necessary reductions of
principal on the Class A1, Class A2, Class B1 and Class B2 Interests, then
interest will be added to the Loan Group's other Interests that are not
receiving Principal Relocation Payments, in proportion to their principal
balances.
(c) The outstanding aggregate Class A1, Class A2, Class B1 and Class B2
Interests will not be reduced below 1 percent of the excess of (i) the
aggregate outstanding Principal Balances of the Mortgage Loans in Loan Group 1
and Loan Group 2 as of the end of any Due Period over (ii) the Certificate
Balance of the related Senior Certificates as of the related Distribution Date
(after taking into account distributions of principal on such Distribution
Date).
If (and to the extent that) the limitation in paragraph (c) prevents the
distribution of principal to any of the Class A1, Class A2, Class B1 and Class
B2 Interests, and if the Loan Group's Class C Interest has already been
reduced to zero, then the excess principal from that Loan Group will be paid
to the Class C Interests of any other Loan Group whose aggregate corresponding
Class A1, Class A2, Class B1 and Class B2 Interests are less than one percent
of their corresponding Subordinated Portion. If any Loan Group corresponding
to a Class C Interest that receives such payment has a Weighted Average Net
Mortgage Rate below the Weighted Average Net Mortgage Rate of the Loan Group
making such payment, then the payment will be treated by Subsidiary REMIC 1 as
a Realized Loss. Conversely, if the Loan Group of the Class C Interest or
Interests that receive such payment has a Weighted Average Net Mortgage Rate
above the Weighted Average Net Mortgage Rate of the Loan Group making the
payment, then the payment will be treated by Subsidiary REMIC 1 as a
reimbursement for prior Realized Losses.
(d) if the Calculation Rate in respect of the outstanding Class A3, Class
A4, Class B3 and Class B4 Interests is less than the Pass Through Rate in
respect of the Aggregate Group II Subordinate Certificates, Principal
Relocation Payments will be made proportionately to the outstanding Class A3
and Class A4 Interests prior to any other Principal Distributions from each
such Loan Group; and
(e) if the Calculation Rate in respect of the outstanding Class A3, Class
A4, Class B3 and Class B4 Interests is greater than the Pass Through Rate in
respect of the Aggregate Group II
viii
Subordinate Certificates, Principal Relocation Payments will be made
proportionately to the outstanding Class B3 and Class B4 Interests prior to
any other Principal Distributions from each such Loan Group.
In each case, Principal Relocation Payments will be made so as to cause
the Calculation Rate in respect of the outstanding Class A3, Class A4, Class
B3 and Class B4 Interests to equal the Pass Through Rate in respect of the
Aggregate Group II Subordinate Certificates. With respect to each Loan Group,
if (and to the extent that) the sum of (a) the principal payments comprising
the Principal Remittance Amount received during the Due Period and (b) the
Realized Losses, are insufficient to make the necessary reductions of
principal on the Class A3, Class A4, Class B3 and Class B4 Interests, then
interest will be added to the Loan Group's other Interests that are not
receiving Principal Relocation Payments, in proportion to their principal
balances.
(f) The outstanding aggregate Class A3, Class A4, Class B3 and Class B4
Interests will not be reduced below 1 percent of the excess of (i) the
aggregate outstanding Principal Balances of the Mortgage Loans in Loan Group 3
and Loan Group 4 as of the end of any Due Period over (ii) the Certificate
Balance of the related Senior Certificates as of the related Distribution Date
(after taking into account distributions of principal on such Distribution
Date).
If (and to the extent that) the limitation in paragraph (c) prevents the
distribution of principal to any of the Class A3, Class A4, Class B3 and Class
B4 Interests, and if the Loan Group's Class C Interest has already been
reduced to zero, then the excess principal from that Loan Group will be paid
to the Class C Interests of any other Loan Group whose aggregate corresponding
Class A3, Class A4, Class B3 and Class B4 Interests are less than one percent
of their corresponding Subordinated Portion. If any Loan Group corresponding
to a Class C Interest that receives such payment has a Weighted Average Net
Mortgage Rate below the Weighted Average Net Mortgage Rate of the Loan Group
making such payment, then the payment will be treated by Subsidiary REMIC 2 as
a Realized Loss. Conversely, if the Loan Group of the Class C Interest or
Interests that receive such payment has a Weighted Average Net Mortgage Rate
above the Weighted Average Net Mortgage Rate of the Loan Group making the
payment, then the payment will be treated by Subsidiary REMIC 2 as a
reimbursement for prior Realized Losses.
The Middle REMIC
----------------
The Middle REMIC Interests, each of which (except for the Class R-2
Interests) is hereby designated as a REMIC regular interest for federal income
tax purposes, will have the principal balances, Pass-Through Rates and
Corresponding Loan Groups as set forth in the following table:
======================== ============================ ================== ============================= ===================
Pass-Through
Rate
Class Initial Class Principal ----------------- Allocation of
Designation Balance (1) (per annum) Allocation of Interest Principal
------------------------ ---------------------------- ------------------ ----------------------------- -------------------
Class MR-1-A $48,108,000.00 (2) Class 1-A, Class 1-X Class 1-A
------------------------ ---------------------------- ------------------ ----------------------------- -------------------
Class MR-2-A $65,772,000.00 (3) Class 2-A, Class 2-X Class 2-A
------------------------ ---------------------------- ------------------ ----------------------------- -------------------
Class MR-3-A $125,240,000.00 (4) Class 3-A Class 3-A
------------------------ ---------------------------- ------------------ ----------------------------- -------------------
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------------------------ ---------------------------- ------------------ ----------------------------- -------------------
Class MR-4-A-1 $215,974,000.00 (5) Class 4-A-1 Class 4-A-1
------------------------ ---------------------------- ------------------ ----------------------------- -------------------
Class MR-4-A-2 $40,000,000.00 (5) Class 4-A-2 Class 4-A-2
------------------------ ---------------------------- ------------------ ----------------------------- -------------------
Class MR-4-A-3 $20,500,000.00 (5) Class 4-A-3 Class 4-A-3
------------------------ ---------------------------- ------------------ ----------------------------- -------------------
Class MR-4-A-4 $11,000,000.00 (5) Class 4-A-4 Class 4-A-4
------------------------ ---------------------------- ------------------ ----------------------------- -------------------
Class MR-4-A-5 $3,830,000.00 (5) Class 4-A-5 Class 4-A-5
------------------------ ---------------------------- ------------------ ----------------------------- -------------------
Class MR-$100 $100.00 (2) Class A-R(8) Class A-R(8)
------------------------ ---------------------------- ------------------ ----------------------------- -------------------
Class MR-SB-1 $4,333,000.00 (6) Class S-B-1 Class S-B-1
------------------------ ---------------------------- ------------------ ----------------------------- -------------------
Class MR-SB-2 $1,857,000.00 (6) Class S-B-2 Class S-B-2
------------------------ ---------------------------- ------------------ ----------------------------- -------------------
Class MR-SB-3 $1,237,000.00 (6) Class S-B-3 Class S-B-3
------------------------ ---------------------------- ------------------ ----------------------------- -------------------
Class MR-SB-4 $1,053,000.00 (6) Class S-B-4 Class S-B-4
------------------------ ---------------------------- ------------------ ----------------------------- -------------------
Class MR-SB-5 $804,000.00 (6) Class S-B-5 Class S-B-5
------------------------ ---------------------------- ------------------ ----------------------------- -------------------
Class MR-SB-6 $619,568.78 (6) Class S-B-6 Class S-B-6
------------------------ ---------------------------- ------------------ ----------------------------- -------------------
Class MR-B-1 $12,622,000.00 (7) Class B-1 Class B-1
------------------------ ---------------------------- ------------------ ----------------------------- -------------------
Class MR-B-2 $4,872,000.00 (7) Class B-2 Class B-2
------------------------ ---------------------------- ------------------ ----------------------------- -------------------
Class MR-B-3 $2,657,000.00 (7) Class B-3 Class B-3
------------------------ ---------------------------- ------------------ ----------------------------- -------------------
Class MR-B-4 $2,879,000.00 (7) Class B-4 Class B-4
------------------------ ---------------------------- ------------------ ----------------------------- -------------------
Class MR-B-5 $1,993,000.00 (7) Class B-5 Class B-5
------------------------ ---------------------------- ------------------ ----------------------------- -------------------
Class MR-B-6 $1,329,493.19 (7) Class B-6 Class B-6
------------------------ ---------------------------- ------------------ ----------------------------- -------------------
Class MR-P $100.00 (8) Class P Class P
------------------------ ---------------------------- ------------------ ----------------------------- -------------------
======================== ============================ ================== ============================= ===================
__________________________________________
(1) On each Distribution Date, following the allocation of scheduled
principal, prepayments of principal and Realized Losses, each Class will
have the principal balance in respect of its corresponding Class
designated under the column titled "Allocation of Principal".
(2) A per annum rate equal to the Weighted Average Net Mortgage Rate on the
Group 1 Mortgage Loans.
(3) A per annum rate equal to the Weighted Average Net Mortgage Rate on the
Group 2 Mortgage Loans.
(4) A per annum rate equal to the Weighted Average Net Mortgage Rate on the
Group 3 Mortgage Loans.
(5) A per annum rate equal to the Weighted Average Net Mortgage Rate on the
Group 4 Mortgage Loans.
(6) The Calculation Rate in respect of the Class A1, A2, B1 and B2 Interests.
(7) The Calculation Rate in respect of the Class A3, A4, B3 and B4 Interests.
(8) The Class MR-P Interest will not be entitled to any interest, but will be
entitled to 100% of the Class SR-P1 Interest and Class SR-P2 Interest
cash flow.
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The Master REMIC
----------------
The following table sets forth characteristics of the Master REMIC
Certificates, together with the minimum denominations and integral multiples
in excess thereof in which such Classes shall be issuable (except that one
Certificate of each Class of Certificates may be issued in a different amount
and, in addition, one Residual Certificate representing the Tax Matters Person
Certificate may be issued in a different amount):
======================== ============================ ====================== ====================== ======================
Class Designation Initial Class Principal Pass-Through Minimum Denomination Integral Multiples
Rate
Balance (per annum) in Excess of Minimum
------------------------ ---------------------------- ---------------------- ---------------------- ----------------------
Class 1-A $48,108,000.00 (1) $25,000.00 $1,000.00
------------------------ ---------------------------- ---------------------- ---------------------- ----------------------
Class 1-X (2) 1.20% $100,000.00(3) $1,000.00(3)
------------------------ ---------------------------- ---------------------- ---------------------- ----------------------
Class 2-A $65,772,000.00 (4) $25,000.00 $1,000.00
------------------------ ---------------------------- ---------------------- ---------------------- ----------------------
Class 2-X (5) 0.80% $100,000.00(3) $1,000.00(3)
------------------------ ---------------------------- ---------------------- ---------------------- ----------------------
Class 3-A $125,240,000.00 (6) $25,000.00 $1,000.00
------------------------ ---------------------------- ---------------------- ---------------------- ----------------------
Class 4-A-1 $215,974,000.00 (7) $25,000.00 $1,000.00
------------------------ ---------------------------- ---------------------- ---------------------- ----------------------
Class 4-A-2 $40,000,000.00 (7) $25,000.00 $1,000.00
------------------------ ---------------------------- ---------------------- ---------------------- ----------------------
Class 4-A-3 $20,500,000.00 (7) $25,000.00 $1,000.00
------------------------ ---------------------------- ---------------------- ---------------------- ----------------------
Class 4-A-4 $11,000,000.00 (7) $25,000.00 $1,000.00
------------------------ ---------------------------- ---------------------- ---------------------- ----------------------
Class 4-A-5 $3,830,000.00 (7) $25,000.00 $1,000.00
------------------------ ---------------------------- ---------------------- ---------------------- ----------------------
Class S-B-1 $4,333,000.00 (8) $25,000.00 $1,000.00
------------------------ ---------------------------- ---------------------- ---------------------- ----------------------
Class S-B-2 $1,857,000.00 (8) $25,000.00 $1,000.00
------------------------ ---------------------------- ---------------------- ---------------------- ----------------------
Class S-B-3 $1,237,000.00 (8) $25,000.00 $1,000.00
------------------------ ---------------------------- ---------------------- ---------------------- ----------------------
Class B-1 $12,622,000.00 (9) $25,000.00 $1,000.00
------------------------ ---------------------------- ---------------------- ---------------------- ----------------------
Class B-2 $4,872,000.00 (9) $25,000.00 $1,000.00
------------------------ ---------------------------- ---------------------- ---------------------- ----------------------
Class B-3 $2,657,000.00 (9) $25,000.00 $1,000.00
------------------------ ---------------------------- ---------------------- ---------------------- ----------------------
Class A-R(10) $100.00 (11) (12) (12)
------------------------ ---------------------------- ---------------------- ---------------------- ----------------------
Class S-B-4 $1,053,000.00 (8) $100,000.00 $1,000.00
------------------------ ---------------------------- ---------------------- ---------------------- ----------------------
Class S-B-5 $804,000.00 (8) $100,000.00 $1,000.00
------------------------ ---------------------------- ---------------------- ---------------------- ----------------------
Class S-B-6 $619,568.78 (8) $100,000.00 $1,000.00
------------------------ ---------------------------- ---------------------- ---------------------- ----------------------
Class B-4 $2,879,000.00 (9) $100,000.00 $1,000.00
------------------------ ---------------------------- ---------------------- ---------------------- ----------------------
Class B-5 $1,993,000.00 (9) $100,000.00 $1,000.00
------------------------ ---------------------------- ---------------------- ---------------------- ----------------------
Class B-6 $1,329,493.19 (9) $100,000.00 $1,000.00
------------------------ ---------------------------- ---------------------- ---------------------- ----------------------
Class P(13) $100.00 (14) $100.00 N/A
======================== ============================ ====================== ====================== ======================
__________________________________________
(1) The Pass-Through Rate for the Class 1-A Certificates for any Distribution
Date will be a per annum rate equal to the Weighted Average Net Mortgage
Rate on the Group 1 Mortgage Loans minus 1.20%. The Pass-Through Rate for
the Class 1-A Certificates for the first Distribution Date will be a per
annum rate of 2.184%.
(2) The Class 1-X Certificates will be Notional Amount Certificates, will
have no Class Principal Balance and will bear interest on its Notional
Amount (initially, $48,108,000.00).
(3) Minimum denomination is based on the Notional Amount of such Class.
xi
(4) The Pass-Through Rate for the Class 2-A Certificates for any Distribution
Date will be a per annum rate equal to the Weighted Average Net Mortgage
Rate on the Group 2 Mortgage Loans minus 0.80%. The Pass-Through Rate for
the Class 2-A Certificates for the first Distribution Date will be a per
annum rate of 3.322%.
(5) The Class 2-X Certificates will be Notional Amount Certificates, will
have no Class Principal Balance and will bear interest on its Notional
Amount (initially, $65,772,000.00).
(6) The Pass-Through Rate for the Class 3-A Certificates for any Distribution
Date will be a per annum rate equal to the Weighted Average Net Mortgage
Rate on the Group 3 Mortgage Loans. The Pass-Through Rate for the Class
3-A Certificates for the first Distribution Date will be a per annum rate
of 5.082%.
(7) The Pass-Through Rate for the Class 4-A-1, Class 4-A-2, Class 4-A-3,
Class 4-A-4 and Class 4-A-5 Certificates for any Distribution Date will
be a per annum rate equal to the Weighted Average Net Mortgage Rate on
the Group 4 Mortgage Loans. The Pass-Through Rate for the Class 4-A-1,
Class 4-A-2, Class 4-A-3, Class 4-A-4 and Class 4-A-5 Certificates for
the first Distribution Date will be a per annum rate of 5.470%.
(8) The Pass-Through Rate for each class of Aggregate Group I Subordinated
Certificates for any Distribution Date will be a per annum rate equal to
the sum of: (1) the Weighted Average Net Mortgage Rate on the group 1
mortgage loans multiplied by the excess of the aggregate stated principal
balance of the group 1 mortgage loans as of the due date in the month
preceding the month of that Distribution Date (after giving effect to
prepayments received in the prepayment period related to such prior due
date) over the aggregate of the class principal balances of the group 1
senior certificates immediately prior to that Distribution Date and (2)
the Weighted Average Net Mortgage Rate on the Group 2 Mortgage Loans
multiplied by the excess of the aggregate stated principal balance of the
Group 2 Mortgage Loans as of the due date in the month preceding the
month of that Distribution Date (after giving effect to prepayments
received in the prepayment period related to such prior due date) over
the aggregate of the class principal balances of the group 2 senior
certificates immediately prior to that Distribution Date; divided by the
aggregate of the class principal balances of the Aggregate Group I
Subordinated Certificates immediately prior to that Distribution Date.
The Pass-Through Rate for each class of Aggregate Group I Subordinated
Certificates for the first Distribution Date will be a per annum rate of
3.810%.
(9) The Pass-Through Rate for each class of Aggregate Group II Subordinated
Certificates for any Distribution Date will be a per annum rate equal to
the sum of: (1) the Weighted Average Net Mortgage Rate on the Group 3
Mortgage Loans multiplied by the excess of the aggregate stated principal
balance of the Group 3 Mortgage Loans as of the due date in the month
preceding the month of that Distribution Date (after giving effect to
prepayments received in the prepayment period related to such prior due
date) over the aggregate of the class principal balances of the group 3
senior certificates immediately prior to that Distribution Date and (2)
the Weighted Average Net Mortgage Rate on the Group 4 Mortgage Loans
multiplied by the excess of the aggregate stated principal balance of the
Group 4 Mortgage Loans as of the due date in the month preceding the
month of that Distribution Date (after giving effect to prepayments
received in the prepayment period related to such prior due date) over
the aggregate of the class principal balances of the group 4 senior
certificates immediately prior to that Distribution Date; divided by the
aggregate of the class principal balances of the Aggregate Group II
Subordinated Certificates immediately prior to that Distribution Date.
The Pass-Through Rate for each class of Aggregate Group II Subordinated
Certificates for the first Distribution Date will be a per annum rate of
5.353%.
xii
(10) The Class A-R Certificates represent the sole Class of residual interest
in each REMIC.
(11) The Pass-Through Rate for the Class A-R Certificates for any Distribution
Date will be a per annum rate equal to the Weighted Average Net Mortgage
Rate on the Group 1 Mortgage Loans. The Pass-Through Rate for the Class
A-R Certificates for the first Distribution Date will be a per annum rate
of 3.384%.
(12) The Class A-R Certificate shall be issued as two separate certificates,
one with an initial Certificate Balance of $99.99 and the Tax Matters
Person Certificate with an initial Certificate Balance of $0.01.
(13) The Class P Certificate will not be entitled to any interest, but will be
entitled to 100% of any prepayment premiums paid on the Mortgage Loans.
For the federal income tax purposes, the Class P Certificate will be
entitled to 100% of the Class MP Regular Interest cash flow.
(14) The Class P Certificates will receive all payments in respect of
prepayment penalties on all of the mortgage loans in each Loan Group and
are not entitled to receive any distributions of interest.
The foregoing provisions in the Preliminary Statement are intended to
cause net interest and principal collections in respect of the Mortgage Loans
to be distributed from each Subsidiary REMIC to the Middle REMIC, from the
Middle REMIC to the Master REMIC and from the Master REMIC to each Class of
Certificates. The Preliminary Statement will be interpreted and applied
consistently with such intent.
For any purpose for which the Pass-Through Rates is calculated, the
interest rate on the Mortgage Loans shall be appropriately adjusted to account
for the difference between the monthly day count convention of the Mortgage
Loans and the monthly day count convention of the regular interests issued by
each of the REMICs. For purposes of calculating the Pass-Through Rates for
each of the interests issued by each REMIC created hereunder such rates shall
be adjusted to equal a monthly day count convention based on a 30 day month
for each Due Period and a 360-day year so that the Mortgage Loans and all
regular interests will be using the same monthly day count convention.
xiii
Set forth below are designations of Classes or Components of Certificates and
other defined terms to the categories used herein:
Accretion Directed Certificates........... None.
Accretion Directed Components............. None.
Accrual Certificates...................... None.
Accrual Components........................ None.
Aggregate Certificate Group............... Aggregate Group I Certificates and Aggregate Group II
Certificates.
Aggregate Group I Certificates............ Aggregate Group I Senior Certificates and Aggregate Group I
Subordinated Certificates.
Aggregate Group I Senior
Certificates.............................. Group 1 Certificates and Group 2 Certificates.
Aggregate Group I Subordinated
Certificates.............................. Class S-B-1, Class S-B-2, Class S-B-3, Class S-B-4, Class S-B-5
and Class S-B-6 Certificates.
Aggregate Group II Certificates........... Aggregate Group II Senior Certificates and Aggregate Group II
Subordinated Certificates.
Aggregate Group II Senior
Certificates.............................. Group 3 Certificates and Group 4 Certificates.
Aggregate Group II Subordinated
Certificates.............................. Class B-1, Class B-2, Class B-3, Class B-4, Class B-5 and Class
B-6 Certificates.
Book-Entry Certificates................... All Classes of Certificates other than the Definitive Certificates.
Combined Certificates..................... None.
Component Certificates.................... None.
Components................................ For purposes of calculating distributions of principal and/or
interest, the Component Certificates, if any, will be comprised of
multiple payment components having the designations, Initial
Component Balances or Notional Amounts, as applicable, and
Pass-Through Rates set forth below:
Initial Component
Designation Principal Balance Pass-Through Rate
----------- ------------------ -----------------
N/A N/A N/A
1
Delay Certificates........................ All interest-bearing Classes of Certificates other than the Non-Delay Certificates, if
any.
ERISA-Restricted Certificates............. The Residual Certificates and Private Certificates; and any Certificate of a Class that
ceases to satisfy the applicable rating requirement under the Underwriter's Exemption.
Floating Rate Certificates................ None.
Group 1 Certificates...................... Group 1 Senior Certificates and the portions of the Aggregate Group I Subordinated
Certificates related to Loan Group 1.
Group 1 Senior Certificates............... Class 1-A, Class 1-X and Class A-R Certificates.
Group 2 Certificates...................... Group 2 Senior Certificates and the portions of the Aggregate Group I Subordinated
Certificates related to Loan Group 2.
Group 2 Senior Certificates............... Class 2-A and Class 2-X Certificates.
Group 3 Certificates...................... Group 3 Senior Certificates and the portions of the Aggregate Group II Subordinated
Certificates related to Loan Group 3.
Group 3 Senior Certificates............... Class 3-A Certificates.
Group 4 Certificates...................... Group 4 Senior Certificates and the portions of the Aggregate Group II Subordinated
Certificates related to Loan Group 4.
Group 4 Senior Certificates............... Class 4-A-1, Class 4-A-2, Class 4-A-3, Class 4-A-4 and Class 4-A-5 Certificates.
Inverse Floating Rate Certificates........ None.
LIBOR Certificates........................ None.
Non-Delay Certificates.................... None.
Notional Amount Certificates.............. Class 1-X and Class 2-X Certificates.
Notional Amount Components................ None.
Offered Certificates...................... All Classes of Certificates other than the Private Certificates.
Definitive Certificates................... Private Certificates and the Residual Certificates.
Planned Principal Classes................. None.
Principal Only Certificates............... None.
Private Certificates...................... Class P, Class S-B-4, Class B-4, Class S-B-5, Class B-5, Class S-B-6 and Class B-6
Certificates.
Rating Agencies........................... S&P and ▇▇▇▇▇'▇.
2
Regular Certificates...................... All Classes of Certificates, other than the Residual Certificates.
Residual Certificates..................... Class A-R Certificates.
Scheduled Principal Classes............... None.
Senior Certificate Group.................. The Group 1 Senior Certificates, the Group 2 Senior Certificates, the Group 3 Senior
Certificates or the Group 4 Senior Certificates, as applicable.
Senior Certificates....................... Group 1 Senior Certificates, the Group 2 Senior Certificates, the Group 3 Senior
Certificates and the Group 4 Senior Certificates.
Subordinated Certificate Group............ Aggregate Group I Subordinated Certificates and Aggregate Group II Subordinated
Certificates.
Subordinated Certificates................. Class S-B-1, Class B-1, Class S-B-2, Class B-2, Class S-B-3, Class B-3, Class S-B-4,
Class B-4, Class S-B-5, Class B-5, Class S-B-6 and Class B-6 Certificates.
Targeted Principal Classes................ None.
Underwriter............................... ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated.
With respect to any of the foregoing designations as to which the
corresponding reference is "None," all defined terms and provisions herein
relating solely to such designations shall be of no force or effect, and any
calculations herein incorporating references to such designations shall be
interpreted without reference to such designations and amounts. Defined terms
and provisions herein relating to statistical rating agencies not designated
above as Rating Agencies shall be of no force or effect.
ARTICLE I
DEFINITIONS
Section 1.01 Definitions.
The following words and phrases, unless the context otherwise requires,
shall have the following meanings:
Accountant: A Person engaged in the practice of accounting who (except
when this Agreement provides that an Accountant must be Independent) may be
employed by or affiliated with the Depositor or an Affiliate of the Depositor.
Acknowledgements: The Assignment, Assumption and Recognition Agreements,
each dated as of September 1, 2004, assigning rights under the Purchase and
Servicing Agreements from the Seller to the Depositor and from the Depositor
to the Trustee, for the benefit of the Certificateholders.
Accretion Directed Certificates: As specified in the Preliminary
Statement.
3
Accretion Direction Rule: Not applicable.
Accrual Amount: With respect to any Class of Accrual Certificates or any
Accrual Component and any Distribution Date, the amount allocable to interest
on such Class of Accrual Certificates or Accrual Component with respect to
such Distribution Date pursuant to Section 5.02(a)(1)(iii), 5.02(a)(2)(iii),
5.02(a)(3)(iii) or 5.02(a)(4)(iii), as applicable.
Accrual Certificates: As specified in the Preliminary Statement.
Accrual Components: As specified in the Preliminary Statement.
Accrual Termination Date: Not applicable.
Act: The Securities Act of 1933, as amended.
Additional Collateral: With respect to any Additional Collateral Mortgage
Loan, the marketable securities and other acceptable collateral pledged as
collateral pursuant to the related pledge agreements.
Additional Collateral Mortgage Loan: Each Mortgage Loan identified as
such in the Mortgage Loan Schedule.
Adjustment Date: A date specified in each Mortgage Note as a date on
which the Mortgage Rate on the related Mortgage Loan will be adjusted.
Advance: With respect to a Mortgage Loan, the payments required to be
made by the Master Servicer or the applicable Servicer with respect to any
Distribution Date pursuant to this Agreement or the applicable Purchase and
Servicing Agreement, as applicable, the amount of any such payment being equal
to the aggregate of the payments of principal and interest (net of the
applicable Servicing Fee and net of any net income in the case of any REO
Property) on the Mortgage Loans that were due on the related Due Date and not
received as of the close of business on the related Determination Date, less
the aggregate amount of any such delinquent payments that the Master Servicer
or the applicable Servicer has determined would constitute Nonrecoverable
Advances if advanced.
Adverse REMIC Event: Either (i) loss of status as a REMIC, within the
meaning of Section 860D of the Code, for any group of assets identified as a
REMIC in the Preliminary Statement to this Agreement, or (ii) imposition of
any tax, including the tax imposed under Section 860F(a)(1) on prohibited
transactions, and the tax imposed under Section 860G(d) on certain
contributions to a REMIC, on any REMIC created hereunder to the extent such
tax would be payable from assets held as part of the Trust Fund.
Affiliate: With respect to any specified Person, any other Person
controlling or controlled by or under common control with such specified
Person. For the purposes of this definition, "control" when used with respect
to any specified Person means the power to direct the management and policies
of such Person, directly or indirectly, whether through the ownership of
voting securities, by contract or otherwise; and the terms "controlling" and
"controlled" have meanings correlative to the foregoing.
4
Aggregate Certificate Group: The Aggregate Group I Certificates or
Aggregate Group II Certificates as the context requires.
Aggregate Expense Rate: With respect to any Mortgage Loan, the applicable
Servicing Fee Rate and, with respect to any LPMI Mortgage Loan, the interest
premium charged by the mortgagee to obtain or maintain any Primary Insurance
Policy.
Aggregate Group I Certificates: As specified in the Preliminary
Statement.
Aggregate Group I Senior Certificates: As specified in the Preliminary
Statement.
Aggregate Group I Subordinated Certificates: As specified in the
Preliminary Statement.
Aggregate Group I Weighted Average Rate: For the Interest Accrual Period
related to each Distribution Date, a per annum rate equal to the sum of the
following for each of Loan Group 1 and Loan Group 2: the product of (x) the
Weighted Average Net Mortgage Rate of the Mortgage Loans in the related Loan
Group and (y) a fraction, the numerator of which is the related Subordinated
Portion immediately prior to that Distribution Date; and the denominator of
which is the aggregate Class Principal Balance of the Aggregate Group I
Subordinated Certificates immediately prior to that Distribution Date.
Aggregate Group II Certificates: As specified in the Preliminary
Statement.
Aggregate Group II Senior Certificates: As specified in the Preliminary
Statement.
Aggregate Group II Subordinated Certificates: As specified in the
Preliminary Statement.
Aggregate Group II Weighted Average Rate: For the Interest Accrual Period
related to each Distribution Date, a per annum rate equal to the sum of the
following for each of Loan Group 3 and Loan Group 4: the product of (x) the
Weighted Average Net Mortgage Rate of the Mortgage Loans in the related Loan
Group and (y) a fraction, the numerator of which is the related Subordinated
Portion immediately prior to that Distribution Date, and the denominator of
which is the aggregate Class Principal Balance of the Aggregate Group II
Subordinated Certificates, in each case immediately prior to that Distribution
Date.
Aggregate Loan Group: Aggregate Loan Group I or Aggregate Loan Group II,
as the context requires.
Aggregate Loan Group I: Collectively, Loan Group 1 and Loan Group 2.
Aggregate Loan Group II: Collectively, Loan Group 3 and Loan Group 4.
Aggregate Planned Balance: With respect to any group of Planned Principal
Classes or Components and any Distribution Date, the amount set forth for such
group for such Distribution Date in Schedule B hereto.
5
Aggregate Subordinated Percentage: As to any Distribution Date and each
Aggregate Loan Group, the fraction, expressed as a percentage, the numerator
of which is equal to the aggregate Class Principal Balance of the Subordinated
Certificates in the related Aggregate Certificate Group immediately prior to
such Distribution Date and the denominator of which is the aggregate Stated
Principal Balance of all the Mortgage Loans as of the Due Date in the month
preceding the month of such Distribution Date.
Aggregate Targeted Balance: With respect to any group of Targeted
Principal Classes or Components and any Distribution Date, the amount set
forth for such group for such Distribution Date in Schedule B hereto.
Aggregate Voting Interests: The aggregate of the Voting Interests of all
the Certificates under this Agreement.
Agreement: This Pooling and Servicing Agreement and all amendments or
supplements hereto.
Allocable Share: As to any Distribution Date, any Mortgage Loan in a Loan
Group and any Class or Component of Certificates related to that Loan Group,
the ratio that the amount calculated with respect to such Distribution Date
(A) with respect to the Senior Certificates of the related Senior Certificate
Group, pursuant to clause (i) of the definition of Class Optimal Interest
Distribution Amount (without giving effect to any reduction of such amount
pursuant to Section 5.02(d)) and (B) with respect to the Aggregate Group I
Subordinated Certificates or Aggregate Group II Subordinated Certificates, as
applicable, pursuant to the definition of Assumed Interest Amount or after a
related Senior Termination Date, pursuant to clause (i) of the definition of
Class Optimal Interest Distribution Amount (without giving effect to any
reduction of such amount pursuant to Section 5.02(d)) bears to the amount
calculated with respect to such Distribution Date for each Class of
Certificates pursuant to clause (i) of the definition of Class Optimal
Interest Distribution Amount (without giving effect to any reduction of such
amount pursuant to Section 5.02(d)) or the definition of Assumed Interest
Amount for such Loan Group and Class, as applicable).
Amount Held for Future Distribution: As to any Distribution Date and
Mortgage Loans in a Loan Group, the aggregate amount held in the Custodial
Accounts at the close of business on the related Determination Date on account
of (i) Principal Prepayments received after the related Prepayment Period and
Liquidation Proceeds and Subsequent Recoveries received in the month of such
Distribution Date relating to such Loan Group and (ii) all Scheduled Payments
due after the related Due Date relating to such Loan Group.
Applicable Credit Support Percentage: As defined in Section 5.02(e).
Appraised Value: With respect to any Mortgage Loan, the Appraised Value
of the related Mortgaged Property shall be: (i) with respect to a Mortgage
Loan other than a Refinancing Mortgage Loan, the lesser of (a) the value of
the Mortgaged Property based upon the appraisal made at the time of the
origination of such Mortgage Loan and (b) the sales price of the Mortgaged
Property at the time of the origination of such Mortgage Loan; and (ii) with
6
respect to a Refinancing Mortgage Loan, the value of the Mortgaged Property
based upon the appraisal made at the time of the origination of such
Refinancing Mortgage Loan.
Assignment of Mortgage: An assignment of the Mortgage, notice of transfer
or equivalent instrument, in recordable form, sufficient under the laws of the
jurisdiction wherein the related Mortgaged Property is located to reflect the
sale of the Mortgage to the Trustee, which assignment, notice of transfer or
equivalent instrument may be in the form of one or more blanket assignments
covering the Mortgage Loans secured by Mortgaged Properties located in the
same jurisdiction, if permitted by law; provided, however, that the Trustee
shall not be responsible for determining whether any such assignment is in
recordable form or sufficient under the laws of the applicable jurisdiction to
reflect the sale of the Mortgage to the Trustee.
Assignment of Proprietary Lease: With respect to a Cooperative Loan, an
assignment of the Proprietary Lease sufficient under the laws of the
jurisdiction wherein the related Cooperative Unit is located to reflect the
assignment of such Proprietary Lease; provided, however, that the Trustee
shall not be responsible for determining whether such assignment is sufficient
to reflect the assignment of the Proprietary Lease.
Assignment of Recognition Agreement: With respect to a Cooperative Loan,
an assignment of the Recognition Agreement sufficient under the laws of the
jurisdiction wherein the related Cooperative Unit is located to reflect the
assignment of such Recognition Agreement; provided, however, that the Trustee
shall not be responsible for determining whether such assignment is sufficient
to reflect the assignment of the Recognition Agreement.
Assumed Interest Amount: With respect to any Distribution Date and Class
of Subordinated Certificates, one month's interest accrued during the related
Interest Accrual Period at the Pass-Through Rate for such Class on the
applicable Subordinated Portion immediately prior to that Distribution Date.
Authenticating Agent: Any authenticating agent appointed pursuant to
Section 6.10 until any successor authenticating agent for the Certificates is
named, and thereafter "Authenticating Agent" shall mean any such successor.
The initial Authenticating Agent shall be the Securities Administrator under
this Agreement.
Authorized Officer: Any Person who may execute an Officer's Certificate
on behalf of the Depositor.
Available Funds: As to any Distribution Date and the Mortgage Loans in a
Loan Group, the sum, for that Loan Group, of (a) the aggregate amount held in
the Custodial Accounts at the close of business on the related Determination
Date, including any Subsequent Recoveries, in respect of such Mortgage Loans
net of the Amount Held for Future Distribution and net of amounts permitted to
be withdrawn from the Custodial Accounts pursuant to Section 4.02(a) in
respect of such Mortgage Loans and amounts permitted to be withdrawn from the
Distribution Account pursuant to clauses (i)-(v) inclusive of Section 4.02(b)
in respect of such Mortgage Loans, (b) the amount of all related Advances made
by the Servicers and the Master Servicer and all Compensating Interest
Payments or payments made in respect of Prepayment Interest Shortfalls paid by
the Servicers and the Master Servicer, (c) in connection with Defective
7
Mortgage Loans in such Loan Group, as applicable, the aggregate of the
Purchase Prices and Substitution Adjustment Amounts deposited on the related
Distribution Account Deposit Date and (d) the Transfer Payment Received plus
interest thereon as provided in Section 5.08 for such Loan Group less the
Transfer Payment Made plus interest thereon as provided in Section 5.08 for
such Loan Group; provided, however, that after the third Senior Termination
Date, Available Funds with respect to the Loan Group relating to the remaining
Senior Certificate Group shall include the Available Funds from the other Loan
Groups and on any Distribution Date thereafter, Available Funds shall be
calculated based upon all the Mortgage Loans in the Mortgage Pool, as opposed
to the Mortgage Loans in the related Loan Group, minus (e) all related fees,
charges and other amounts payable or reimbursable to the Master Servicer, the
Securities Administrator or the Trustee under this Agreement or to the
Servicers under the Purchase and Servicing Agreements, or, if any amounts are
not specifically related to the Mortgage Loans in that Loan Group or the
related Certificate Group, then the applicable Loan Group Percentage for such
Loan Group for such Distribution Date of such amounts. The Holders of the
Class P Certificates will be entitled to all Prepayment Penalties received on
the Mortgage Loans and such amounts will not be available for distribution to
the Holders of any other Class of Certificates.
B of A Serviced Mortgage Loan: Each Mortgage Loan originated and serviced
by Bank of America, N.A. and listed on the Mortgage Loan Schedule.
B of A Purchase and Servicing Agreement: The Mortgage Loan Sale Servicing
Agreement listed in Exhibit E hereto between the Seller and Bank of America,
N.A.
Bankruptcy: As to any Person, the making of an assignment for the benefit
of creditors, the filing of a voluntary petition in bankruptcy, adjudication
as a bankrupt or insolvent, the entry of an order for relief in a bankruptcy
or insolvency proceeding, the seeking of reorganization, arrangement,
composition, readjustment, liquidation, dissolution or similar relief, or
seeking, consenting to or acquiescing in the appointment of a trustee,
receiver or liquidator, dissolution, or termination, as the case may be, of
such Person pursuant to the provisions of either the Bankruptcy Code or any
other similar state laws.
Bankruptcy Code: The United States Bankruptcy Code of 1986, as amended.
Bankruptcy Coverage Termination Date: The point in time at which the
Bankruptcy Loss Coverage Amount is reduced to zero.
Bankruptcy Loss: With respect to any Mortgage Loan, a Deficient Valuation
or Debt Service Reduction reported to the Master Servicer by the related
Servicer; provided, however, that a Bankruptcy Loss shall not be deemed a
Bankruptcy Loss hereunder so long as the related Servicer has notified the
Master Servicer in writing that the related Servicer is diligently pursuing
any remedies that may exist in connection with the related Mortgage Loan and
either (A) the related Mortgage Loan is not in default with regard to payments
due thereunder or (B) delinquent payments of principal and interest under the
related Mortgage Loan and any related escrow payments in respect of such
Mortgage Loan are being advanced on a current basis by the Master Servicer or
the related Servicer, in either case without giving effect to any Debt Service
Reduction or Deficient Valuation, as reported by the related Servicer to the
Master Servicer.
8
Bankruptcy Loss Coverage Amount: As of any date of determination, the
Bankruptcy Loss Coverage Amount shall equal the Initial Bankruptcy Coverage
Amount as reduced by (i) the aggregate amount of Bankruptcy Losses allocated
to the Certificates since the Cut-off Date and (ii) any permissible reductions
in the Bankruptcy Loss Coverage Amount as evidenced by a letter of each Rating
Agency to the Trustee and the Securities Administrator to the effect that any
such reduction will not result in a downgrading of the then current ratings
assigned to the Classes of Certificates rated by it.
Book-Entry Certificates: Beneficial interests in Certificates designated
as "Book-Entry Certificates" in this Agreement, ownership and transfers of
which shall be evidenced or made through book entries by a Clearing Agency as
described in Section 3.09; provided, that after the occurrence of a Book-Entry
Termination whereupon book-entry registration and transfer are no longer
permitted and Definitive Certificates are to be issued to Certificate Owners,
such Book-Entry Certificates shall no longer be "Book-Entry Certificates." The
Classes of Certificates that constitute "Book-Entry Certificates" as of the
Closing Date are set forth in the Preliminary Statement.
Book-Entry Termination: The date on which the Clearing Agency is no
longer willing or able to properly discharge its responsibilities with respect
to the Book Entry Certificates, and the Depositor is unable to locate a
qualified successor.
Business Day: Any day other than (i) a Saturday or a Sunday or (ii) a day
on which banking institutions in New York, New York or, if other than New
York, the city in which the Corporate Trust Office of the Trustee is located,
or the States of Illinois, Maryland or Minnesota, are authorized or obligated
by law or executive order to be closed.
Calculation Rate: For each Distribution Date: (a) in the case of the
Class A1, Class A2, Class B1 and Class B2 Interests, the product of (i) 10 and
(ii) the weighted average rate of the outstanding Class A1, Class A2, Class B1
and Class B2 Interests, treating each Class A1 and Class A2 Interest as capped
at zero or reduced by a fixed percentage of 100% of the interest accruing on
such Class; and (b) in the case of the Class A3, Class A4, Class B3 and Class
B4 Interests, the product of (i) 10 and (ii) the weighted average rate of the
outstanding Class A3, Class A4, Class B4 and Class B4 Interests, treating each
Class A3 and Class A4 Interest as capped at zero or reduced by a fixed
percentage of 100% of the interest accruing on such Interest.
Cendant Purchase and Servicing Agreement: The Mortgage Loan Sale
Servicing Agreement listed in Exhibit E hereto between the Seller and Cendant
Mortgage Corporation.
Cendant Serviced Mortgage Loan: Each Mortgage Loan originated and
serviced by Cendant Mortgage Corporation or ▇▇▇▇▇▇'▇ Gate Residential Mortgage
Trust and listed on the Mortgage Loan Schedule.
Certificate: Any one of the certificates signed by the Trustee, or the
Securities Administrator on the Trustee's behalf, and authenticated by the
Securities Administrator as Authenticating Agent in substantially the forms
attached hereto as Exhibit A.
9
Certificate Balance: With respect to any Certificate at any date, the
maximum dollar amount of principal to which the Holder thereof is then
entitled hereunder, such amount being equal to the principal balance or
notional amount, as applicable, as of the Closing Date (A) plus any Subsequent
Recoveries added to the Certificate Balance of such Certificate pursuant to
Section 5.02, (B) minus the sum of (i) all distributions of principal
previously made with respect thereto and (ii) all Realized Losses allocated
thereto and, in the case of any Subordinated Certificates, all other
reductions in Certificate Balance previously allocated thereto pursuant to
Section 5.04 and (C) in the case of any Class of Accrual Certificates,
increased by the Accrual Amount added to the Class Principal Balance of such
Class prior to such date.
Certificate Group: As specified in the Preliminary Statement.
Certificate Owner: With respect to a Book-Entry Certificate, the Person
who is the owner of such Book-Entry Certificate, as reflected on the books of
the Clearing Agency, or on the books of a Person maintaining an account with
such Clearing Agency (directly or as an indirect participant, in accordance
with the rules of such Clearing Agency).
Certificate Register and Certificate Registrar: The register maintained
and the registrar appointed pursuant to Section 3.02. The initial Certificate
Registrar is the Securities Administrator under this Agreement.
Certificateholder: The meaning provided in the definition of "Holder."
Class: All Certificates bearing the same Class designation as set forth
in the Preliminary Statement.
Class Interest Shortfall: As to any Distribution Date and Class, the
amount by which the amount described in clause (i) of the definition of Class
Optimal Interest Distribution Amount for such Class exceeds the amount of
interest actually distributed on such Class on such Distribution Date pursuant
to such clause (i).
Class Optimal Interest Distribution Amount: With respect to any
Distribution Date and interest bearing Class or, with respect to any interest
bearing Component, the sum of (i) one month's interest accrued during the
related Interest Accrual Period at the Pass-Through Rate for such Class on the
related Class Principal Balance, Component Balance, Notional Amount or
Component Notional Amount, as applicable, immediately prior to such
Distribution Date, subject to reduction as provided in Section 5.02(d) and
(ii) any Class Unpaid Interest Amounts for such Class or Component.
Class Principal Balance: With respect to any Class and as to any date of
determination, the aggregate of the Certificate Balances of all Certificates
of such Class as of such date.
Class Subordination Percentage: With respect to any Distribution Date and
each Class of Aggregate Group I Subordinated Certificates, the quotient
(expressed as a percentage) of (a) the Class Principal Balance of such Class
of Aggregate Group I Subordinated Certificates immediately prior to such
Distribution Date, divided by (b) the aggregate of the Class Principal
Balances of all Classes of Aggregate Group I Certificates (other than the
related Notional Amount Certificates) immediately prior to such Distribution
Date. With respect to any
10
Distribution Date and each Class of Aggregate Group II Subordinated
Certificates, the quotient (expressed as a percentage) of (a) the Class
Principal Balance of such Class of Aggregate Group II Subordinated
Certificates immediately prior to such Distribution Date, divided by (b) the
aggregate of the Class Principal Balances of all Classes of Aggregate Group II
Certificates (other than the related Notional Amount Certificates) immediately
prior to such Distribution Date.
Class Unpaid Interest Amounts: As to any Distribution Date and Class of
interest bearing Certificates, the amount by which the aggregate Class
Interest Shortfalls for such Class on prior Distribution Dates exceeds the
amount distributed on such Class on prior Distribution Dates pursuant to
clause (ii) of the definition of Class Optimal Interest Distribution Amount.
Clearing Agency: An organization registered as a "clearing agency"
pursuant to Section 17A of the Securities Exchange Act of 1934, as amended. As
of the Closing Date, the Clearing Agency shall be The Depository Trust
Company.
Clearing Agency Participant: A broker, dealer, bank, other financial
institution or other Person for whom from time to time a Clearing Agency
effects book-entry transfers and pledges of securities deposited with the
Clearing Agency.
Closing Date: September 30, 2004.
CMMC Serviced Mortgage Loan: Each Mortgage Loan originated and serviced
by Chase Manhattan Mortgage Corporation and listed on the Mortgage Loan
Schedule.
Code: The Internal Revenue Code of 1986, as amended, and as it may be
further amended from time to time, any successor statutes thereto, and
applicable U.S. Department of Treasury regulations issued pursuant thereto in
temporary or final form.
Compensating Interest Payment: As to any Distribution Date, an amount
equal to the lesser of (i) the Prepayment Interest Shortfall on the Mortgage
Loans serviced by such Servicer with respect to such Distribution Date and
(ii) the portion of the applicable Servicing Fee that the related Servicer is
required to remit to the Trust as compensation therefor in accordance with the
terms of the related Purchase and Servicing Agreement.
Component: As specified in the Preliminary Statement.
Component Balance: With respect to any Component and any Distribution
Date, the Initial Component Balance thereof on the Closing Date, (A) plus any
Subsequent Recoveries added to the Component Balance of such Component
pursuant to Section 5.02, (B) minus the sum of all amounts applied in
reduction of the principal balance of such Component and Realized Losses
allocated thereto on previous Distribution Dates.
Component Certificates: As specified in the Preliminary Statement.
Component Notional Amount: Not applicable.
11
Consent: A document executed by the Cooperative Corporation (i)
consenting to the sale of the Cooperative Unit to the Mortgagor and (ii)
certifying that all maintenance charges relating to the Cooperative Unit have
been paid.
Cooperative Corporation: The entity that holds title (fee or an
acceptable leasehold estate) to the real property and improvements
constituting the Cooperative Property and which governs the Cooperative
Property, which Cooperative Corporation must qualify as a Cooperative Housing
Corporation under Section 216 of the Code.
Cooperative Loan: Any Mortgage Loan secured by Cooperative Shares and a
Proprietary Lease.
Cooperative Property: The real property and improvements owned by the
Cooperative Corporation, that includes the allocation of individual dwelling
units to the holders of the shares of the Cooperative Corporation.
Cooperative Shares: Shares issued by a Cooperative Corporation.
Cooperative Unit: With respect to any Cooperative Loan, a specific unit
in a Cooperative Property.
Corporate Trust Office: With respect to the Trustee, the designated
office of the Trustee in the State of California at which at any particular
time its corporate trust business with respect to this Agreement is
administered, which office at the date of the execution of this Agreement is
located at ▇▇▇▇ ▇▇▇▇ ▇▇. ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attn:
Trust Administration-MS0408, and which is the address to which notices to and
correspondence with the Trustee should be directed, or at such other address
as the Trustee may designate from time to time by notice to the
Certificateholders, the Depositor, the Master Servicer and the Securities
Administrator or the principal corporate trust office of any successor
Trustee. With respect to the Certificate Registrar and presentment of
Certificates for registration of transfer, exchange or final payment, ▇▇▇▇▇
Fargo Bank, National Association, ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: Corporate Trust, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Mortgage Loan Trust 2004-8AR, and for all other purposes, ▇.▇. ▇▇▇ ▇▇,
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ (or for overnight deliveries, ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇), Attention: Corporate Trust, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Mortgage Loan Trust 2004-8AR.
Cross-Over Situation: For any Distribution Date and for each Loan Group
(after taking into account principal distributions on such Distribution Date)
with respect to the Class A and Class B Interests, the Class A and Class B
Interests corresponding to any Loan Group are in the aggregate less than 1% of
the Subordinated Portion of the Loan Group to which they correspond.
Custodial Account: Each custodial account (other than an Escrow Account)
established and maintained by a Servicer pursuant to a Purchase and Servicing
Agreement.
Cut-off Date: September 1, 2004.
Cut-off Date Pool Principal Balance: $566,680,161.97.
12
Cut-off Date Principal Balance: As to any Mortgage Loan, the Stated
Principal Balance thereof as of the close of business on the Cut-off Date.
Debt Service Reduction: With respect to any Mortgage Loan, a reduction by
a court of competent jurisdiction in a proceeding under the Bankruptcy Code in
the Scheduled Payment for such Mortgage Loan which became final and
non-appealable, except such a reduction resulting from a Deficient Valuation
or any reduction that results in a permanent forgiveness of principal.
Deceased Holder: Not applicable.
Defective Mortgage Loan: The meaning specified in Section 2.05(a).
Deficient Valuation: With respect to any Mortgage Loan, a valuation of
the related Mortgaged Property by a court of competent jurisdiction in an
amount less than the then outstanding indebtedness under the Mortgage Loan, or
any reduction in the amount of principal to be paid in connection with any
Scheduled Payment that results in a permanent forgiveness of principal, which
valuation or reduction results from an order of such court which is final and
non-appealable in a proceeding under the Bankruptcy Code.
Definitive Certificate: A Certificate of any Class issued in definitive,
fully registered, certificated form. As of the Closing Date the Classes of
Certificates being issued as "Definitive Certificates" are set forth in the
Preliminary Statement.
Delay Certificates: As specified in the Preliminary Statement.
Deleted Mortgage Loan: A Mortgage Loan that is repurchased, or replaced
or to be replaced with a Replacement Mortgage Loan.
Delinquent: Any Mortgage Loan with respect to which the Scheduled Payment
due on a Due Date is not received.
Depositor: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Capital I Inc., a Delaware corporation having
its principal place of business in New York, or its successors in interest.
Determination Date: With respect to each Servicer, the "Determination
Date" set forth in the related Purchase and Servicing Agreement.
Disqualified Organization: A "disqualified organization" as defined in
Section 860E(e)(5) of the Code.
Distribution Account: The separate Eligible Account created and
maintained by the Securities Administrator, on behalf of the Trustee, pursuant
to Section 4.01. Funds in the Distribution Account (exclusive of any earnings
on investments made with funds deposited in the Distribution Account) shall be
held in trust for the Trustee and the Certificateholders for the uses and
purposes set forth in this Agreement.
Distribution Account Deposit Date: With respect to each Servicer, not
later than 1:00 p.m., New York time, on 18th day of each calendar month after
the initial issuance of the
13
Certificates or, if such 18th day is not a Business Day, the immediately
following Business Day, commencing in October 2004.
Distribution Date: The 25th day of each month or, if such 25th day is not
a Business Day, the next succeeding Business Day, commencing in October 2004.
Due Date: With respect to any Mortgage Loan, the date on which a
Scheduled Payment is due under the related Mortgage Note as indicated in the
applicable Purchase and Servicing Agreement.
Due Period: As to any Distribution Date, the period beginning on the
second day of the month preceding the month of such Distribution Date, and
ending on the first day of the month of such Distribution Date.
Eligible Account: Any of (i) an account or accounts maintained with a
federal or state chartered depository institution or trust company the
short-term unsecured debt obligations of which (or, in the case of a
depository institution or trust company that is the principal subsidiary of a
holding company, the debt obligations of such holding company) have the
highest short-term ratings of each Rating Agency at the time any amounts are
held on deposit therein, or (ii) an account or accounts in a depository
institution or trust company in which such accounts are insured by the FDIC or
the SAIF (to the limits established by the FDIC or the SAIF) and the uninsured
deposits in which accounts are otherwise secured such that, as evidenced by an
Opinion of Counsel delivered to the Trustee and to each Rating Agency, the
Certificateholders have a claim with respect to the funds in such account or a
perfected first priority security interest against any collateral (which shall
be limited to Permitted Investments) securing such funds that is superior to
claims of any other depositors or creditors of the depository institution or
trust company in which such account is maintained, or (iii) a trust account or
accounts maintained with the trust department of a federal or state chartered
depository institution or trust company, acting in its fiduciary capacity or
(iv) any other account acceptable to each Rating Agency, as evidenced by a
signed writing delivered by each Rating Agency. Eligible Accounts may bear
interest, and may include, if otherwise qualified under this definition,
accounts maintained with the Trustee, the Paying Agent, the Securities
Administrator or the Master Servicer.
Eligible Institution: An institution having the highest short-term debt
rating, and one of the two highest long-term debt ratings of the Rating
Agencies or the approval of the Rating Agencies.
ERISA: The Employee Retirement Income Security Act of 1974, as amended.
ERISA-Qualifying Underwriting: A best efforts or firm commitment
underwriting or private placement that meets the requirements of an
Underwriter's Exemption.
ERISA-Restricted Certificate: As specified in the Preliminary Statement.
Escrow Account: With respect to each Mortgage Loan, as defined in Article
I of the related Purchase and Servicing Agreement.
14
Estoppel Letter: A document executed by the Cooperative Corporation
certifying, with respect to a Cooperative Unit, (i) the appurtenant
Proprietary Lease will be in full force and effect as of the date of issuance
thereof, (ii) the related stock certificate was registered in the Mortgagor's
name and the Cooperative Corporation has not been notified of any lien upon,
pledge of, levy of execution on or disposition of such stock certificate, and
(iii) the Mortgagor is not in default under the appurtenant Proprietary Lease
and all charges due the Cooperative Corporation have been paid.
Event of Default: Any one of the conditions or circumstances enumerated
in Section 6.14.
Excess Loss: With respect to the Aggregate Group I Certificates and the
Aggregate Group II Certificates, the amount of any (i) Fraud Loss on a
Mortgage Loan in any Loan Group in the related Aggregate Loan Group realized
after the related Fraud Loss Coverage Termination Date, (ii) Special Hazard
Loss on a Mortgage Loan in any Loan Group in the related Aggregate Loan Group
realized after the related Special Hazard Coverage Termination Date or (iii)
Bankruptcy Loss on a Mortgage Loan in any Loan Group in the related Aggregate
Loan Group realized after the related Bankruptcy Coverage Termination Date.
▇▇▇▇▇▇ ▇▇▇: The entity formerly known as the Federal National Mortgage
Association, a federally chartered and privately owned corporation organized
and existing under the Federal National Mortgage Association Charter Act, or
any successor thereto.
FDIC: The Federal Deposit Insurance Corporation or any successor thereto.
FHLMC: The Federal Home Loan Mortgage Corporation, a corporate
instrumentality of the United States created and existing under Title III of
the Emergency Home Finance Act of 1970, as amended, or any successor thereto.
Fiscal Agent: Not applicable.
Fitch: Fitch, Inc., or any successor thereto. If Fitch is designated as a
Rating Agency in the Preliminary Statement, for purposes of Section 11.07 the
address for notices to Fitch shall be Fitch, Inc., ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇
▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention: Residential Mortgage Surveillance Group, or
such other address as Fitch may hereafter furnish to the Depositor, the
Trustee and the Master Servicer.
Fraud Loan: A Liquidated Mortgage Loan as to which a Fraud Loss has
occurred, as reported by the related Servicer to the Master Servicer.
Fraud Loss Coverage Amount: As of the Closing Date, (x) $3,713,510, with
respect to the Aggregate Group I Certificates and (y) $13,286,895, with
respect to the Aggregate Group II Certificates, in each case, subject to
reduction from time to time, by the amount of Fraud Losses allocated to the
Certificates. In addition, on each anniversary of the Cut-off Date, each Fraud
Loss Coverage Amount will be reduced as follows: on the fifth anniversary of
the Cut-off Date, to zero and on the first, second, third and fourth
anniversaries of the Cut-off Date, to an amount equal to the lesser of (x) 2%,
in the case of the first anniversary, and 1%, in the case of the second, third
and fourth anniversaries, of the then current aggregate Stated Principal
Balance of
15
the Mortgage Loans in the related Aggregate Loan Group on such anniversary and
(y) the excess of the Fraud Loss Coverage Amount as of the preceding
anniversary of the Cut-off Date over the cumulative amount of Fraud Losses
allocated to the Certificates in the related Aggregate Certificate Group since
the preceding anniversary.
Fraud Loss Coverage Termination Date: With respect to each Aggregate
Certificate Group the point in time at which the related Fraud Loss Coverage
Amount is reduced to zero.
Fraud Losses: Realized Losses on Mortgage Loans as to which a loss is
sustained by reason of a default arising from fraud, dishonesty or
misrepresentation in connection with the related Mortgage Loan, including a
loss by reason of the denial of coverage under any related Primary Mortgage
Insurance Policy because of such fraud, dishonesty or misrepresentation.
Global Securities: The global certificates representing the Book-Entry
Certificates.
GreenPoint Serviced Mortgage Loan: Each Mortgage Loan originated and
serviced by GreenPoint Mortgage Funding, Inc. and listed on the Mortgage Loan
Schedule.
GreenPoint Purchase and Servicing Agreement: The Mortgage Loan Sale
Servicing Agreement listed in Exhibit E hereto between the Seller and
GreenPoint Mortgage Funding, Inc.
Group 1 Certificates: As specified in the Preliminary Statement.
Group 1 Mortgage Loans: The Mortgage Loans in Loan Group 1.
Group 1 Senior Certificates: As specified in the Preliminary Statement.
Group 2 Certificates: As specified in the Preliminary Statement.
Group 2 Mortgage Loans: The Mortgage Loans in Loan Group 2.
Group 2 Senior Certificates: As specified in the Preliminary Statement.
Group 3 Certificates: As specified in the Preliminary Statement.
Group 3 Mortgage Loans: The Mortgage Loans in Loan Group 3.
Group 3 Senior Certificates: As specified in the Preliminary Statement.
Group 4 Certificates: As specified in the Preliminary Statement.
Group 4 Mortgage Loans: The Mortgage Loans in Loan Group 4.
Group 4 Senior Certificates: As specified in the Preliminary Statement.
Holder: The registered owner of any Certificate as recorded on the books
of the Certificate Registrar except that, solely for the purposes of taking
any action or giving any consent pursuant to this Agreement, any Certificate
registered in the name of the Depositor, the Trustee, the Master Servicer, the
Securities Administrator and any Servicer, or any Affiliate
16
thereof shall be deemed not to be outstanding in determining whether the
requisite percentage necessary to effect any such consent has been obtained,
except that, in determining whether the Trustee or the Securities
Administrator shall be protected in relying upon any such consent, only
Certificates that a Responsible Officer of the Trustee or the Securities
Administrator, respectively, knows to be so owned shall be disregarded. The
Trustee or the Securities Administrator may request and conclusively rely on
certifications by the Depositor, the Master Servicer, the Securities
Administrator or any Servicer in determining whether any Certificates are
registered to an Affiliate of the Depositor, the Master Servicer, the
Securities Administrator or any Servicer.
HUD: The United States Department of Housing and Urban Development, or
any successor thereto.
Independent: When used with respect to any Accountants, a Person who is
"independent" within the meaning of Rule 2-01(b) of the Securities and
Exchange Commission's Regulation S-X. When used with respect to any other
Person, a Person who (a) is in fact independent of another specified Person
and any Affiliate of such other Person, (b) does not have any material direct
financial interest in such other Person or any Affiliate of such other Person,
and (c) is not connected with such other Person or any Affiliate of such other
Person as an officer, employee, promoter, underwriter, trustee, partner,
director or Person performing similar functions.
Index: As to each Mortgage Loan, the index from time to time in effect
for adjustment of the Mortgage Rate as set forth as such on the related
Mortgage Note.
Initial Bankruptcy Coverage Amount: With respect to the Aggregate Group I
Certificates, $150,000. With respect to the Aggregate Group II Certificates,
$172,752.
Initial Component Balance: As specified in the Preliminary Statement.
Initial Optional Purchase Date: With respect to the Aggregate Group I
Mortgage Loans, the first Distribution Date following the date on which the
aggregate Stated Principal Balance of the Aggregate Group I Mortgage Loans is
equal to or less than 1% of the aggregate Stated Principal Balance thereof as
of the Cut-off Date. With respect to the Aggregate Group II Mortgage Loans,
the first Distribution Date following the date on which the aggregate Stated
Principal Balance of the Aggregate Group II Mortgage Loans is equal to or less
than 1% of the aggregate Stated Principal Balance thereof as of the Cut-off
Date.
Insurance Policy: With respect to any Mortgage Loan, any insurance
policy, including all names and endorsements thereto in effect, including any
replacement policy or policies for any Insurance Policies.
Insurance Proceeds: Proceeds paid by any Insurance Policy (excluding
proceeds required to be applied to the restoration and repair of the related
Mortgaged Property or released to the Mortgagor), in each case other than any
amount included in such Insurance Proceeds in respect of Insured Expenses and
the proceeds from any Limited Purpose Surety Bond.
17
Insured Expenses: Expenses covered by an Insurance Policy or any other
insurance policy with respect to the Mortgage Loans.
Interest Accrual Period: With respect to each Class of Delay
Certificates, its corresponding Subsidiary REMIC Regular Interest and any
Distribution Date, the calendar month prior to the month of such Distribution
Date. With respect to any Class of Non-Delay Certificates, its corresponding
Subsidiary REMIC Regular Interest and any Distribution Date, the one month
period commencing on the 25th day of the month preceding the month in which
such Distribution Date occurs and ending on the 24th day of the month in which
such Distribution Date occurs.
Interest Determination Date: With respect to any Interest Accrual Period
for any Class of LIBOR Certificates, the second Business Day prior to the
first day of such Interest Accrual Period.
Interest Transfer Amount: For any Distribution Date and for any
Undercollateralized Group, an amount equal to one month's interest on the
applicable Principal Transfer Amount at the weighted average Pass-Through Rate
of the applicable Undercollateralized Group, plus any interest accrued on such
Undercollateralized Group remaining unpaid from prior Distribution Dates.
Last Scheduled Distribution Date: The Distribution Date in October 2034.
Latest Possible Maturity Date: The Distribution Date occurring in October
2034.
LIBOR: The London interbank offered rate for one-month United States
dollar deposits calculated in the manner described in Section 5.09.
LIBOR Certificates: As specified in the Preliminary Statement.
LIBOR Business Day: Any day on which banks in London, England and The
City of New York are open and conducting transactions in foreign currency and
exchange.
Limited Purpose Surety Bond: Collectively, Ambac Assurance Corporation
Surety Bond No. AB0039BE and any other Limited Purpose Surety Bond securing an
Additional Collateral Mortgage Loan.
Liquidated Mortgage Loan: With respect to any Distribution Date, a
defaulted Mortgage Loan (including any REO Property) which was liquidated in
the calendar month preceding the month of such Distribution Date and as to
which the related Servicer has certified (in accordance with its Purchase and
Servicing Agreement) that it has received all amounts it expects to receive in
connection with the liquidation of such Mortgage Loan including the final
disposition of an REO Property.
Liquidation Proceeds: Amounts, including Insurance Proceeds, received in
connection with the partial or complete liquidation of defaulted Mortgage
Loans, whether through trustee's sale, foreclosure sale or otherwise or
amounts received in connection with any condemnation or
18
partial release of a Mortgaged Property and any other proceeds received in
connection with an REO Property.
Living Holders: Not applicable.
Loan Group: Any of Loan Group 1, Loan Group 2, Loan Group 3 or Loan Group
4, as applicable.
Loan Group 1: All Mortgage Loans identified as Group 1 Mortgage Loans on
the Mortgage Loan Schedule.
Loan Group 2: All Mortgage Loans identified as Group 2 Mortgage Loans on
the Mortgage Loan Schedule.
Loan Group 3: All Mortgage Loans identified as Group 3 Mortgage Loans on
the Mortgage Loan Schedule.
Loan Group 4: All Mortgage Loans identified as Group 4 Mortgage Loans on
the Mortgage Loan Schedule.
Loan Group Percentage: As to any Loan Group and any Distribution Date,
the fraction, expressed as a percentage, the numerator of which is the
aggregate Stated Principal Balance of all of the Mortgage Loans in that Loan
Group as of the related Due Date, and the denominator of which is the
aggregate Stated Principal Balance of all of the Mortgage Loans as of that Due
Date.
Loan Group Principal Balance: As to any Distribution Date and Loan Group,
the aggregate Stated Principal Balance of the Mortgage Loans in that Loan
Group outstanding on the Due Date in the month preceding the month of the
Distribution Date (after giving effect to prepayments received in the
Prepayment Period related to such prior Due Date).
Loan-To-Value Ratio: With respect to any Mortgage Loan and as to any date
of determination, the fraction (expressed as a percentage) the numerator of
which is the principal balance of the related Mortgage Loan at such date of
determination and the denominator of which is the Appraised Value of the
related Mortgaged Property.
LPMI Mortgage Loan: Certain Mortgage Loans as to which the lender (rather
than the borrower) acquires the Primary Mortgage Insurance Policy and charges
the related borrower an interest premium.
Master REMIC: As described in the Preliminary Statement.
Master Servicer: ▇▇▇▇▇ Fargo Bank, National Association, a national
banking association organized under the laws of the United States in its
capacity as Master Servicer and any Person succeeding as Master Servicer
hereunder or any successor in interest, or if any successor master servicer
shall be appointed as herein provided, then such successor master servicer.
Memorandum: The private placement memorandum dated September 30, 2004,
relating to the Private Certificates.
19
MERS: Mortgage Electronic Registration Systems, Inc., a corporation
organized and existing under the laws of the State of Delaware, or any
successor to Mortgage Electronic Registration Systems, Inc.
MERS Mortgage Loan: Any Mortgage Loan registered with MERS on the MERS[R]
System.
MERS[R] System: The system of recording transfers of mortgages
electronically maintained by MERS.
Middle REMIC: As specified in the Preliminary Statement.
Middle REMIC Interest: As specified in the Preliminary Statement.
Middle REMIC Regular Interest: As specified in the Preliminary Statement.
MIN: The mortgage identification number for any MERS Mortgage Loan.
MOM Loan: Any Mortgage Loan as to which MERS is acting as mortgagee,
solely as nominee for the originator of such Mortgage Loan and its successors
and assigns.
Moody's: ▇▇▇▇▇'▇ Investors Service, Inc., or any successor thereto. If
▇▇▇▇▇'▇ is designated as a Rating Agency in the Preliminary Statement, for
purposes of Section 11.07 the address for notices to Moody's shall be ▇▇▇▇▇'▇
Investors Service, Inc., ▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇,
Attention: Residential Pass-Through Monitoring, or such other address as
Moody's may hereafter furnish to the Depositor or the Master Servicer.
Mortgage: A mortgage, deed of trust or other instrument encumbering a fee
simple interest in real property securing a Mortgage Note, together with
improvements thereto.
Mortgage Loan: A Mortgage and the related notes or other evidences of
indebtedness secured by each such Mortgage conveyed, transferred, sold,
assigned to or deposited with the Trustee pursuant to Section 2.01 (including
any REO Property), including without limitation, each Mortgage Loan listed on
the Mortgage Loan Schedule, as amended from time to time.
Mortgage Loan Schedule: The schedule attached hereto as Schedule A, which
shall identify each Mortgage Loan, as such schedule may be amended by the
Depositor or a Servicer from time to time to reflect the addition of
Replacement Mortgage Loans to, or the deletion of Deleted Mortgage Loans from,
the Trust Fund. Such schedule shall, among other things (i) designate the
Servicer servicing such Mortgage Loan and the applicable Servicing Fee Rate;
(ii) identify the designated Loan Group in which such Mortgage Loan is
included, (iii) identify any LPMI Mortgage Loan and designate the rate at
which the premium for such insurance is calculated and (iv) separately
identify the Additional Collateral Mortgage Loans, if any.
Mortgage Note: The original executed note or other evidence of the
indebtedness of a Mortgagor secured by a Mortgage under a Mortgage Loan.
20
Mortgaged Property: The underlying property, including any Additional
Collateral, securing a Mortgage Loan which, with respect to a Cooperative
Loan, is the related Cooperative Shares and Proprietary Lease.
Mortgage Rate: As to any Mortgage Loan, the annual rate of interest borne
by the related Mortgage Notes.
Mortgagor: The obligor on a Mortgage Note.
MSMCI Mortgage Loan: A Mortgage Loan sold by the Seller to the Depositor
pursuant to the MSMCI Purchase Agreement.
MSMCI Purchase Agreement: The Mortgage Loan Purchase Agreement listed in
Exhibit E hereto between the Seller and the Depositor.
National City Serviced Mortgage Loan: Each Mortgage Loan originated and
serviced by National City Mortgage Co. and listed on the Mortgage Loan
Schedule.
National City Servicing Agreement: The Mortgage Loan Sale Servicing
Agreement listed in Exhibit E hereto between the Seller and National City
Mortgage Co.
Net Liquidation Proceeds: With respect to any Liquidated Mortgage Loan or
any other disposition of related Mortgaged Property, the related Liquidation
Proceeds net of Advances, Servicer Advances, Servicing Fees and any other
accrued and unpaid servicing fees received and retained in connection with the
liquidation of such Mortgage Loan or Mortgaged Property.
Net Mortgage Rate: With respect to any Mortgage Loan and any Distribution
Date, the related Mortgage Rate as of the Due Date in the month preceding the
month of such Distribution Date reduced by the Aggregate Expense Rate for such
Mortgage Loan.
Net Prepayment Interest Shortfalls: As to any Distribution Date and Loan
Group, the amount by which the aggregate of Prepayment Interest Shortfalls for
such Loan Group exceeds the Compensating Interest Payments for such Loan Group
and that Distribution Date.
Non-Book-Entry Certificate: Any Certificate other than a Book-Entry
Certificate.
Non-Delay Certificates: As specified in the Preliminary Statement.
Non-permitted Foreign Holder: As defined in Section 3.03(f).
Non-U.S. Person: Any person other than a "United States person" within
the meaning of Section 7701(a)(30) of the Code.
Nonrecoverable Advance: Any portion of an Advance or Servicer Advance
previously made or proposed to be made by the Master Servicer and/or a
Servicer (as certified in an Officer's Certificate of such Servicer), which in
the good faith judgment of such party, shall not be ultimately recoverable by
such party from the related Mortgagor, related Liquidation Proceeds or
otherwise.
21
Notional Amount: With respect to the Class 1-X Certificates and any
Distribution Date, an amount equal to the Class Principal Balance of the Class
1-A Certificates immediately prior to that Distribution Date. With respect to
the Class 2-X Certificates and any Distribution Date, an amount equal to the
Class Principal Balance of the Class 2-A Certificates immediately prior to
that Distribution Date.
Notional Amount Certificates: As specified in the Preliminary Statement.
Offered Certificates: As specified in the Preliminary Statement.
Offering Document: The Prospectus or the Memorandum, as applicable.
Officer's Certificate: A certificate signed by two Authorized Officers of
the Depositor or the Chairman of the Board, any Vice Chairman, the President,
any Vice President or any Assistant Vice President of the Master Servicer or
the Securities Administrator, and in each case delivered to the Trustee or the
Securities Administrator, as applicable.
Officer's Certificate of a Servicer: A certificate (i) signed by the
Chairman of the Board, the Vice Chairman of the Board, the President, a
Managing Director, a Vice President (however denominated), an Assistant Vice
President, the Treasurer, the Secretary, or one of the Assistant Treasurers or
Assistant Secretaries of a Servicer, or (ii) if provided for herein, signed by
a Servicing Officer, as the case may be, and delivered to the Trustee, the
Securities Administrator or the Master Servicer, as required hereby.
Opinion of Counsel: A written opinion of counsel, reasonably acceptable
in form and substance to the Trustee, the Securities Administrator or the
Master Servicer, as required hereby, and who may be in-house or outside
counsel to the Depositor, the Master Servicer, the Securities Administrator or
the Trustee but which must be Independent outside counsel with respect to any
such opinion of counsel concerning the transfer of any Residual Certificate or
concerning certain matters with respect to ERISA, or the taxation, or the
federal income tax status, of each REMIC.
Option One Servicing Agreement: The Servicing Agreement listed in Exhibit
E hereto between the Seller and Option One Mortgage Corporation.
Option One Serviced Mortgage Loan: Each Mortgage Loan serviced by Option
One Mortgage Corporation and listed on the Mortgage Loan Schedule.
Original Applicable Credit Support Percentage: With respect to each of
the following Classes of Subordinated Certificates in an Aggregate Certificate
Group, the corresponding percentage described below, as of the Closing Date:
22
Group I
Subordinated Certificates
-------------------------
Class S-B-1..................8.00%
Class S-B-2..................4.50%
Class S-B-3..................3.00%
Class S-B-4..................2.00%
Class S-B-5..................1.15%
Class S-B-6..................0.50%
Group II
Subordinated Certificates
-------------------------
Class B-1....................5.95%
Class B-2....................3.10%
Class B-3....................2.00%
Class B-4....................1.40%
Class B-5....................0.75%
Class B-6....................0.30%
Original Subordinate Principal Balance: For the Aggregate Group I
Certificates and any related Loan Group, on or prior to a related Senior
Termination Date, the Subordinated Portion for that Loan Group, in each case
as of the Cut-off Date or, if such date is after a related Senior Termination
Date, the aggregate Class Principal Balance of the Aggregate Group I
Subordinated Certificates as of the Closing Date. For the Aggregate Group II
Certificates and any related Loan Group, on or prior to a related Senior
Termination Date, the Subordinated Portion for that Loan Group, in each case
as of the Cut-off Date or, if such date is after a related Senior Termination
Date, the aggregate Class Principal Balance of the Aggregate Group II
Subordinated Certificates as of the Closing Date.
Originator: Any one of Bank of America, N.A. Cendant Mortgage
Corporation, GreenPoint Mortgage Funding, Inc., National City Mortgage Co., or
Quicken Loans, Inc., as applicable.
Overcollateralized Group: As defined in Section 5.08 hereof.
Pass-Through Rate: For any interest bearing Class of Certificates or
Component, the per annum rate set forth or calculated in the manner described
in the Preliminary Statement.
Paying Agent: Any paying agent appointed pursuant to Section 3.08. The
initial Paying Agent shall be the Securities Administrator under this
Agreement.
Percentage Interest: As to any Certificate, the percentage interest
evidenced thereby in distributions required to be made on the related Class,
such percentage interest being set forth on the face thereof or equal to the
percentage obtained by dividing the initial principal balance or notional
amount, as applicable, of such Certificate by the aggregate of the Class
Principal Balance or Notional Amount, as applicable, of all Certificates of
the same Class.
23
Permitted Investments: At any time, any one or more of the following
obligations and securities:
(i) obligations of the United States or any agency thereof, provided
that such obligations are backed by the full faith and credit of the
United States;
(ii) general obligations of or obligations guaranteed by any state
of the United States or the District of Columbia receiving the highest
long-term debt rating of each Rating Agency, or such lower rating as
shall not result in the downgrading or withdrawal of the ratings then
assigned to the Certificates by the Rating Agencies, as evidenced by a
signed writing delivered by each Rating Agency;
(iii) commercial or finance company paper which is then receiving
the highest commercial or finance company paper rating of each Rating
Agency rating such paper, or such lower rating as shall not result in the
downgrading or withdrawal of the ratings then assigned to the
Certificates by the Rating Agencies, as evidenced by a signed writing
delivered by each Rating Agency;
(iv) certificates of deposit, demand or time deposits, or bankers'
acceptances issued by any depository institution or trust company
incorporated under the laws of the United States or of any state thereof
and subject to supervision and examination by federal and/or state
banking authorities, provided that the commercial paper and/or long-term
unsecured debt obligations of such depository institution or trust
company (or in the case of the principal depository institution in a
holding company system, the commercial paper or long-term unsecured debt
obligations of such holding company, but only if ▇▇▇▇▇'▇ is not the
applicable Rating Agency) are then rated one of the two highest long-term
and the highest short-term ratings of each Rating Agency for such
securities, or such lower ratings as shall not result in the downgrading
or withdrawal of the ratings then assigned to the Certificates by the
Rating Agencies, as evidenced by a signed writing delivered by each
Rating Agency;
(v) demand or time deposits or certificates of deposit issued by any
bank or trust company or savings institution to the extent that such
deposits are fully insured by the FDIC;
(vi) guaranteed reinvestment agreements issued by any bank,
insurance company or other corporation acceptable to the Rating Agencies
at the time of the issuance of such agreements, as evidenced by a signed
writing delivered by each Rating Agency;
(vii) repurchase obligations with respect to any security described
in clauses (i) and (ii) above, in either case entered into with a
depository institution or trust company (acting as principal) described
in clause (iv) above;
(viii) securities (other than stripped bonds, stripped coupons or
instruments sold at a purchase price in excess of 115% of the face amount
thereof) bearing interest or sold at a discount issued by any corporation
incorporated under the laws of the United States or any state thereof
which, at the time of such investment, have one of the two highest
24
ratings of each Rating Agency (except if the Rating Agency is Moody's,
such rating shall be the highest commercial paper rating of Moody's for
any such series), or such lower rating as shall not result in the
downgrading or withdrawal of the ratings then assigned to the
Certificates by the Rating Agencies, as evidenced by a signed writing
delivered by each Rating Agency;
(ix) interests in any money market fund which at the date of
acquisition of the interests in such fund and throughout the time such
interests are held in such fund has the highest applicable rating by each
Rating Agency rating such fund or such lower rating as shall not result
in a change in the rating then assigned to the Certificates by each
Rating Agency, as evidenced by a signed writing delivered by each Rating
Agency, including funds for which the Trustee, the Master Servicer, the
Securities Administrator or any of its Affiliates is investment manager
or adviser;
(x) short-term investment funds sponsored by any trust company or
national banking association incorporated under the laws of the United
States or any state thereof which on the date of acquisition has been
rated by each applicable Rating Agency in their respective highest
applicable rating category or such lower rating as shall not result in a
change in the rating then specified stated maturity and bearing interest
or sold at a discount acceptable to each Rating Agency as shall not
result in the downgrading or withdrawal of the ratings then assigned to
the Certificates by the Rating Agencies, as evidenced by a signed writing
delivered by each Rating Agency; and
(xi) such other investments having a specified stated maturity and
bearing interest or sold at a discount acceptable to the Rating Agencies
as shall not result in the downgrading or withdrawal of the ratings then
assigned to the Certificates by the Rating Agencies, as evidenced by a
signed writing delivered by each Rating Agency;
provided, that no such instrument shall be a Permitted Investment if (i) such
instrument evidences the right to receive interest only payments with respect
to the obligations underlying such instrument or (ii) such instrument would
require the Depositor to register as an investment company under the
Investment Company Act of 1940, as amended.
Person: Any individual, corporation, partnership, joint venture,
association, joint-stock company, limited liability company, trust,
unincorporated organization or government or any agency or political
subdivision thereof.
Plan Asset Regulations: The Department of Labor regulations set forth in
29 C.F.R. 2510.3-101.
Planned Balance: With respect to any group of Planned Principal Classes
or Components in the aggregate and any Distribution Date appearing in Schedule
B hereto, the Aggregate Planned Balance for such group and Distribution Date.
With respect to any other Planned Principal Class or Component and any
Distribution Date appearing in Schedule B hereto, the applicable amount
appearing opposite such Distribution Date for such Class or Component.
Planned Principal Classes: As specified in the Preliminary Statement.
25
Prepayment Interest Shortfall: With respect to each Mortgage Loan, the
amount of the shortfall in interest payable on such Mortgage Loan that occurs
as a result of the prepayment by the related Mortgagor of such Mortgage Loan
calculated in accordance with formula set forth in the related Purchase and
Servicing Agreement.
Prepayment Penalty: As to a Mortgage Loan, any penalty payable by a
Mortgagor in connection with certain partial prepayments and all prepayments
in full made within the related Prepayment Penalty Period, the Prepayment
Penalties with respect to each applicable Mortgage Loan so held by the Trust
Fund being identified in the Prepayment Penalty Schedule.
Prepayment Penalty Period: As to any Mortgage Loan, the period of time
during which a Prepayment Penalty may be imposed.
Prepayment Penalty Schedule: As of any date, the list of Prepayment
Penalties included in the Trust Fund on that date (including the Prepayment
Penalty summary attached thereto). The Prepayment Penalty Schedule shall set
forth the following information with respect to each Prepayment Penalty:
o the Mortgage Loan account number;
o a code indicating the type of Prepayment Penalty;
o the state of origination in which the related Mortgage Property is
located;
o the first date on which a monthly payment is or was due under the
related Mortgage Note;
o the term of the Prepayment Penalty;
o the original principal amount of the related Mortgage Loan; and
o the Cut-off Date Principal Balance of the related Mortgage Loan.
The Prepayment Penalty Schedule shall be amended from time to time by the
Seller in accordance with this Agreement.
Prepayment Period: With respect to any Mortgage Loan other than a Cendant
Serviced Mortgage Loan, a CMMC Serviced Mortgage Loan or an Option One
Serviced Mortgage Loan and any Distribution Date, the calendar month preceding
that Distribution Date, and (ii) for any Cendant Serviced Mortgage Loan, the
second day of the calendar month immediately preceding the month in which that
Distribution Date occurs to and including the first day of the calendar month
in which that Distribution Date occurs, (iii) for any Option One Serviced
Mortgage Loan, the period from the fifteenth day of the calendar month
immediately preceding the month in which the Distribution Date occurs (or in
the case of the first Distribution Date, from September 1, 2004) through the
fourteenth day of the calendar month in which the Distribution Date occurs and
(iv) for any CMMC Serviced Mortgage Loan, the period from the sixteenth day of
the calendar month immediately preceding the month in which the Distribution
Date occurs (or in
26
the case of the first Distribution Date, from September 1, 2004) through the
fifteenth day of the calendar month in which the Distribution Date occurs.
Prepayment Shift Percentage: Not applicable.
Primary Mortgage Insurance Policy: Each policy of primary mortgage
guaranty insurance or any replacement policy therefor with respect to any
Mortgage Loan.
Principal Amount: As to any Distribution Date and Loan Group, the sum of
(a) the principal portion of each Scheduled Payment (without giving effect,
prior to the Bankruptcy Coverage Termination Date, to any reductions thereof
caused by any Debt Service Reductions or Deficient Valuations) due on each
Mortgage Loan in the related Loan Group on the related Due Date, (b) the
Stated Principal Balance of each Mortgage Loan in the related Loan Group that
was repurchased by the Seller or an Originator or purchased by the Master
Servicer pursuant to this Agreement as of such Distribution Date, (c) the
Substitution Adjustment Amount in connection with any Deleted Mortgage Loan in
such Loan Group received with respect to such Distribution Date, (d) any
Insurance Proceeds or Liquidation Proceeds allocable to recoveries of
principal of Mortgage Loans in the related Loan Group that are not yet
Liquidated Mortgage Loans received during the calendar month preceding the
month of such Distribution Date, (e) with respect to each Mortgage Loan in a
Loan Group that became a Liquidated Mortgage Loan during the calendar month
preceding the month of such Distribution Date, the amount of the Liquidation
Proceeds allocable to principal and, if such Liquidated Mortgage Loan is an
Additional Collateral Mortgage Loan, the proceeds of any Additional Collateral
from the related Additional Collateral Mortgage Loan, in each case received
during the calendar month preceding the month of such Distribution Date with
respect to such Mortgage Loan, (f) all Principal Prepayments for such Loan
Group received during the related Prepayment Period and (g) any Subsequent
Recoveries for such Loan Group received during the calendar month preceding
the month of such Distribution Date.
Principal Prepayment: Any payment of principal by a Mortgagor on a
Mortgage Loan that is received in advance of its scheduled Due Date and is not
accompanied by an amount representing scheduled interest due on any date or
dates in any month or months subsequent to the month of prepayment.
Principal Prepayment in Full: Any Principal Prepayment made by a
Mortgagor of the entire principal balance of a Mortgage Loan.
Principal Reductions: For each Loan Group, the sum of the Principal
Amount and any Realized Losses.
Principal Relocation Payment: A payment from any Loan Group to a
Subsidiary REMIC Regular Interest other than a Regular Interest corresponding
to that Loan Group as provided in the Preliminary Statement. Principal
Relocation Payments shall be made of principal allocations comprising the
Principal Amount from a Loan Group and shall include a proportionate
allocation of Realized Losses from the Mortgage Loans of such Loan Group.
Priority Amount: Not applicable.
27
Priority Percentage: Not applicable.
Private Certificate: As specified in the Preliminary Statement.
Pro Rata Share: As to any Distribution Date, the Subordinated Principal
Distribution Amount for an Aggregate Loan Group and any related Class of
Subordinated Certificates, the portion of the related Subordinated Principal
Distribution Amount allocable to such Class, equal to the product of the
related Subordinated Principal Distribution Amount on such Distribution Date
and a fraction, the numerator of which is the related Class Principal Balance
thereof and the denominator of which is the aggregate of the Class Principal
Balances of the Aggregate Group I Subordinated Certificates or Aggregate Group
II Subordinated Certificates, as applicable.
Pro Rata Subordinated Percentage: As to any Distribution Date and Loan
Group, 100% minus the related Senior Percentage for such Distribution Date.
Proceeding: Any suit in equity, action at law or other judicial or
administrative proceeding.
Proprietary Lease: With respect to any Cooperative Property, a lease or
occupancy agreement between a Cooperative Corporation and a holder of related
Cooperative Shares.
Prospectus: The prospectus supplement dated September 28, 2004, together
with the accompanying prospectus dated January 28, 2004, relating to the
Certificates.
Purchase and Servicing Agreements: Collectively, the mortgage loan
purchase and servicing agreements, each as amended by the related
Acknowledgement, listed in Exhibit E hereto, as each such agreement may be
amended or supplemented from time to time as permitted hereunder. Purchase
Date: As defined in Section 7.01(c).
Purchase Price: With respect to any Mortgage Loan required or permitted
to be purchased by the Seller or Depositor pursuant to this Agreement, or by
the related Originator or Servicer pursuant to the related Purchase and
Servicing Agreement, an amount equal to the sum of (i) 100% of the unpaid
principal balance of the Mortgage Loan on the date of such purchase and (ii)
accrued interest thereon at the applicable Net Mortgage Rate from the date
through which interest was last paid by the Mortgagor to the Due Date in the
month in which the Purchase Price is to be distributed to Certificateholders,
or such other amount as may be specified in the related Purchase and Servicing
Agreement and (iii) costs and damages incurred by the Trust Fund in connection
with a repurchase pursuant to Section 2.05 hereof that arises out of a
violation of any predatory or abusive lending law with respect to the related
Mortgage Loan.
Quicken Mortgage Loan: Each Mortgage Loan originated by Quicken Loans,
Inc. and listed on the Mortgage Loan Schedule.
Quicken Purchase and Servicing Agreement: The Mortgage Loan Sale
Servicing Agreement listed in Exhibit E hereto between the Seller and Quicken
Loans, Inc.
28
Rating Agency: Each of the Rating Agencies specified in the Preliminary
Statement. If any such organization or a successor is no longer in existence,
"Rating Agency" shall be such nationally recognized statistical rating
organization, or other comparable Person, as is designated by the Depositor,
notice of which designation shall be given to the Trustee. References herein
to a given rating category of a Rating Agency shall mean such rating category
without giving effect to any modifiers.
Realized Loss: With respect to each Liquidated Mortgage Loan, an amount
(not less than zero or more than the Stated Principal Balance of the related
Mortgage Loan) as of the date of such liquidation, equal to (i) the Stated
Principal Balance of the Liquidated Mortgage Loan as of the date of such
liquidation, plus (ii) interest at the Net Mortgage Rate from the Due Date as
to which interest was last paid or advanced (and not reimbursed) to
Certificateholders up to the Due Date in the month in which Liquidation
Proceeds are required to be distributed on the Stated Principal Balance of
such Liquidated Mortgage Loan from time to time, minus (iii) the Liquidation
Proceeds, if any, received during the month in which such liquidation
occurred, to the extent applied as recoveries of interest at the Net Mortgage
Rate and to principal of the Liquidated Mortgage Loan. With respect to each
Mortgage Loan which has become the subject of a Deficient Valuation, if the
principal amount due under the related Mortgage Note has been reduced, the
difference between the principal balance of the Mortgage Loan outstanding
immediately prior to such Deficient Valuation and the principal balance of the
Mortgage Loan as reduced by the Deficient Valuation. With respect to each
Mortgage Loan which has become the subject of a Debt Service Reduction and any
Distribution Date, the amount, if any, by which the principal portion of the
related Scheduled Payment has been reduced.
To the extent the Master Servicer or a 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 by such Subsequent
Recoveries.
Recognition Agreement: An agreement among a Cooperative Corporation, a
lender and a Mortgagor with respect to a Cooperative Loan whereby such parties
(i) acknowledge that such lender may make, or intends to make, such
Cooperative Loan, and (ii) make certain agreements with respect to such
Cooperative Loan.
Record Date: As to any Distribution Date (i) with respect to the
Non-Delay Certificates, the last Business Day preceding such Distribution Date
(or the Closing Date, in the case of the first Distribution Date) unless such
Certificates shall no longer be Book-Entry Certificates, in which case the
Record Date shall be the last Business Day of the month preceding the month of
such Distribution Date and (ii) in the case of the Delay Certificates
(including the Non-Delay Certificates that are subsequently reissued as
Definitive Certificates), the last Business Day of the month preceding the
month of each Distribution Date.
Redemption Price: With respect to any Class of Certificates to be
redeemed, an amount equal to 100% of the related Class Principal Balance of
the Certificates to be so redeemed, together with interest on such amount at
the applicable Pass-Through Rate through the related Accrual Period (as
increased by any Class Unpaid Interest Amounts), and including, in the case of
the Redemption Price payable in connection with the redemption and retirement
of all of the Certificates, the payment of all amounts (including, without
limitation, all previously
29
unreimbursed Advances and Servicer Advances and accrued and unpaid Servicing
Fees) payable or reimbursable to the Trustee, the Securities Administrator,
the Master Servicer and the Servicers pursuant to this Agreement and the
Purchase and Servicing Agreements.
Refinancing Mortgage Loan: Any Mortgage Loan originated in connection
with the refinancing of an existing mortgage loan.
Regular Certificates: As specified in the Preliminary Statement.
Relief Act: The Servicemembers Civil Relief Act (formerly known as the
Soldiers' and Sailors' Civil Relief Act of 1940), as amended, and any similar
state laws.
Relief Act Shortfalls: With respect to any Distribution Date and any
Mortgage Loan as to which there has been a reduction in the amount of interest
collectible thereon for the most recently ended calendar month as a result of
the application of the Relief Act, the amount, if any, by which (i) interest
collectible on such Mortgage Loan for the most recently ended calendar month
is less than (ii) interest accrued thereon for such month pursuant to the
Mortgage Note.
REMIC: Each pool of assets in the Trust Fund designated as a REMIC as
described in the Preliminary Statement.
REMIC Provisions: The provisions of the federal income tax law relating
to real estate mortgage investment conduits, which appear at Sections 860A
through 860G of the Code, and related provisions, and regulations, including
proposed regulations and rulings, and administrative pronouncements
promulgated thereunder, as the foregoing may be in effect from time to time.
REO Property: A Mortgaged Property acquired by the Trust Fund through
foreclosure or deed-in-lieu of foreclosure in connection with a defaulted
Mortgage Loan or otherwise treated as having been acquired pursuant to the
REMIC Provisions.
Replacement Mortgage Loan: A mortgage loan substituted by an Originator
or the Seller for a Deleted Mortgage Loan which must, on the date of such
substitution, as confirmed in a request for release, substantially in the form
attached to the related Custodial Agreement, (i) have a Stated Principal
Balance, after deduction of all Scheduled Payments due in the month of
substitution, not in excess of the Stated Principal Balance of the Deleted
Mortgage Loan, (ii) have a Mortgage Rate not less than (and not more than two
percentage points greater than) the mortgage rate of the Deleted Mortgage
Loan, (iii) have a Loan-to-Value Ratio equal to or less than that of the
Deleted Mortgage Loan, (iv) have a remaining term to maturity not greater than
(and not more than one year less than) that of the Deleted Mortgage Loan, (v)
is otherwise acceptable to the Seller, (vi) have the same adjustment date as
that of the Deleted Mortgage Loan, (vii) have a minimum Mortgage Rate not less
than that of the Deleted Mortgage Loan, (viii) have the same Index as that of
the Deleted Mortgage Loan, (ix) comply with all of the representations and
warranties set forth in the related underlying servicing agreement, as
modified by any related assignment thereof, and (x) shall be accompanied by an
Opinion of Counsel that such Replacement Mortgage Loan would not adversely
affect the REMIC status of any REMIC created hereunder or would not otherwise
be prohibited by this Pooling and Servicing Agreement.
30
Residual Certificate: The Class A-R Certificates.
Responsible Officer: With respect to the Trustee, any officer in the
corporate trust department or similar group of the Trustee with direct
responsibility for the administration of this Agreement and also, with respect
to a particular corporate trust matter, any other officer to whom such matter
is referred because of his or her knowledge of and familiarity with the
particular subject. With respect to the Master Servicer, any officer in its
master servicing operations with direct responsibility for the Administration
of this Agreement. With respect to the Securities Administrator, any officer
in the corporate trust department or similar group of the Securities
Administrator with direct responsibility for the administration of this
Agreement and also, with respect to a particular corporate trust matter, any
other officer to whom such matter is referred because of his or her knowledge
of and familiarity with the particular subject.
Restricted Classes: As defined in Section 5.02(e).
Restricted Global Security: As defined in Section 3.01(c).
SAIF: The Saving's Association Insurance Fund, or any successor thereto.
S&P: Standard & Poor's, a division of The ▇▇▇▇▇▇-▇▇▇▇ Companies, Inc. If
S&P is designated as a Rating Agency in the Preliminary Statement, for
purposes of Section 11.07 the address for notices to S&P shall be Standard &
Poor's, ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention: Mortgage
Surveillance Monitoring, or such other address as S&P may hereafter furnish to
the Depositor and the Master Servicer.
Scheduled Balances: Not applicable.
Scheduled Payment: The scheduled monthly payment on a Mortgage Loan due
on any Due Date allocable to principal and/or interest on such Mortgage Loan
which, unless otherwise specified in the related Purchase and Servicing
Agreement, shall give effect to any related Debt Service Reduction and any
Deficient Valuation that affects the amount of the monthly payment due on such
Mortgage Loan.
Scheduled Principal Classes: As specified in the Preliminary Statement.
Scheduled Principal Distribution Amount: Not applicable.
Securities Administrator: ▇▇▇▇▇ Fargo Bank, National Association, not in
its individual capacity but solely as Securities Administrator, or any
successor in interest, or if any successor Securities Administrator shall be
appointed as herein provided, then such successor Securities Administrator.
Seller: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Mortgage Capital Inc., a New York corporation.
Senior Certificate Group: As specified in the Preliminary Statement.
Senior Certificates: As specified in the Preliminary Statement.
31
Senior Credit Support Depletion Date: With respect to the Aggregate Group
I Senior Certificates and the Aggregate Group II Senior Certificates, as
applicable, the date on which the aggregate Class Principal Balance of the
Aggregate Group I Subordinated Certificates or Aggregate Group II Subordinated
Certificates, respectively, have been reduced to zero.
Senior Percentage: As to any Senior Certificate Group and Distribution
Date, the percentage equivalent of a fraction the numerator of which is the
aggregate Class Principal Balance of each Class of Senior Certificates of such
Senior Certificate Group (other than the related Notional Amount Certificates)
immediately prior to such Distribution Date, and the denominator of which is
the aggregate Stated Principal Balance of each Mortgage Loan in the related
Loan Group as of the Due Date occurrring in the month prior to the month of
such Distribution Date (after giving effect to prepayments received in the
Prepayment Period related to such prior Due Date); provided, however, that,
(x) with respect to the Aggregate Group I Senior Certificates, on any
Distribution Date after a related Senior Termination Date, the Senior
Percentage for the Senior Certificates of the related remaining Senior
Certificate Group in Aggregate Certificate Group I is the percentage
equivalent of a fraction, the numerator of which is the aggregate of the Class
Principal Balances of each such Class of Senior Certificates (other than the
related Notional Amount Certificates) of such remaining Senior Certificate
Group immediately prior to such Distribution Date, and the denominator of
which is the aggregate of the Class Principal Balances of all Classes of
Aggregate Group I Certificates (other than the related Notional Amount
Certificates) immediately prior to such Distribution Date, and (y) with
respect to the Aggregate Group II Senior Certificates, on any Distribution
Date after a related Senior Termination Date, the Senior Percentage for the
Senior Certificates of the related remaining Senior Certificate Group in
Aggregate Certificate Group II is the percentage equivalent of a fraction, the
numerator of which is the aggregate of the Class Principal Balances of each
such Class of Senior Certificates (other than the related Notional Amount
Certificates) of such remaining Senior Certificate Group immediately prior to
such Distribution Date, and the denominator of which is the aggregate of the
Class Principal Balances of all Classes of Aggregate Group II Certificates
(other than the related Notional Amount Certificates) immediately prior to
such Distribution Date. In no event will any Senior Percentage be greater than
100%.
Senior Prepayment Percentage: As to the Aggregate Group I Senior
Certificates and any Distribution Date during the ten years beginning on the
first Distribution Date, 100%. The Senior Prepayment Percentage for any
Distribution Date occurring on or after the tenth anniversary of the first
Distribution Date will, except as provided herein, be as follows: for any
Distribution Date in the first year thereafter, the related Senior Percentage
plus 70% of the related Subordinated Percentage for such Distribution Date;
for any Distribution Date in the second year thereafter, the related Senior
Percentage plus 60% of the related Subordinated Percentage for such
Distribution Date; for any Distribution Date in the third year thereafter, the
related Senior Percentage plus 40% of the related Subordinated Percentage for
such Distribution Date; for any Distribution Date in the fourth year
thereafter, the related Senior Percentage plus 20% of the related Subordinated
Percentage for such Distribution Date; and for any Distribution Date
thereafter, the related Senior Percentage for such Distribution Date (unless
on any Distribution Date the related Senior Percentage exceeds the Senior
Percentage of such Senior Certificate Group as of the Closing Date, in which
case the Senior Prepayment Percentage for such Distribution Date will once
again equal 100%). Notwithstanding the foregoing, no decrease
32
in any Senior Prepayment Percentage related to Aggregate Loan Group I will
occur unless (i) both of the Senior Step Down Conditions are satisfied with
respect to each Loan Group in Aggregate Loan Group I and (ii) if the Two Times
Test is satisfied on a Distribution Date, (a) on or before the Distribution
Date in September 2007, the related Senior Prepayment Percentage for each Loan
Group in Aggregate Loan Group I will equal the related Senior Percentage plus
50% of the Pro Rata Subordinated Percentage and (b) after the Distribution
Date in September 2007, the related Senior Prepayment Percentage for each Loan
Group in Aggregate Loan Group I will equal the related Senior Percentage.
As to the Aggregate Group II Senior Certificates and any Distribution
Date during the seven years beginning on the first Distribution Date, 100%.
The related Senior Prepayment Percentage for any Distribution Date occurring
on or after the seventh anniversary of the first Distribution Date will,
except as provided in this Agreement, be as follows: for any Distribution Date
in the first year thereafter, the related Senior Percentage plus 70% of the
related Subordinated Percentage for such Distribution Date; for any
Distribution Date in the second year thereafter, the related Senior Percentage
plus 60% of the related Subordinated Percentage for such Distribution Date;
for any Distribution Date in the third year thereafter, the related Senior
Percentage plus 40% of the related Subordinated Percentage for such
Distribution Date; for any Distribution Date in the fourth year thereafter,
the related Senior Percentage plus 20% of the related Subordinated Percentage
for such Distribution Date; and for any Distribution Date thereafter, the
related Senior Percentage for such Distribution Date (unless on any
Distribution Date the related Senior Percentage exceeds the Senior Percentage
of such Senior Certificate Group as of the Closing Date, in which case the
related Senior Prepayment Percentage for such Distribution Date will once
again equal 100%). Notwithstanding the foregoing, no decrease in any Senior
Prepayment Percentage related to Aggregate Loan Group II will occur unless
both of the Senior Step Down Conditions are satisfied with respect to each
Loan Group in Aggregate Loan Group II. Notwithstanding the foregoing, if the
Two Times Test is satisfied with respect to the Aggregate Group II
Certificates on a Distribution Date (x) on or before the Distribution Date in
September 2007, the related Senior Prepayment Percentage for each Loan Group
in Aggregate Loan Group II will equal the related Senior Percentage for that
Distribution Date plus 50% of the amount equal to the related Pro Rata
Subordinated Percentage and (y) after the Distribution Date in September 2007,
the related Senior Prepayment Percentage for each Loan Group in Aggregate Loan
Group II will equal the related Senior Percentage.
Senior Principal Distribution Amount: As to any Distribution Date and
Senior Certificate Group, the sum of (i) the sum, not less than zero, of the
related Senior Percentage of all amounts described in clauses (a) through (d)
of the definition of Principal Amount with respect to the related Loan Group
for such Distribution Date, (ii) with respect to any Mortgage Loan in the
related Loan Group that became a Liquidated Mortgage Loan during the calendar
month preceding the month of such Distribution Date, the lesser of (x) the
related Senior Percentage of the Stated Principal Balance of such Mortgage
Loan and (y) either (A) the related Senior Prepayment Percentage of the amount
of the Liquidation Proceeds allocable to principal received on the Mortgage
Loan, or (B) if an Excess Loss was sustained with respect to such Liquidated
Mortgage Loan during such prior calendar month, the related Senior Percentage,
of the amount of the Liquidation Proceeds allocable to principal received with
respect to such Mortgage Loan, and (iii) the sum of (x) the related Senior
Prepayment Percentage of the amounts described in clause (f) of the definition
of Principal Amount with respect to the related Loan Group for such
33
Distribution Date plus (y) the related Senior Prepayment Percentage of any
Subsequent Recoveries described in clause (g) of the definition of Principal
Amount for such Distribution Date; provided, however, that if a Bankruptcy
Loss that is an Excess Loss is sustained on a Mortgage Loan in the related
Loan Group that is not a Liquidated Mortgage Loan, the Senior Principal
Distribution Amount will be reduced on the related Distribution Date by the
related Senior Percentage of the principal portion of such Bankruptcy Loss;
provided further, however, on any Distribution Date after a related Senior
Termination Date, the Senior Principal Distribution Amount for the remaining
Senior Certificate Group in an Aggregate Certificate Group will be calculated
pursuant to the above formula based on all the Mortgage Loans in the related
Aggregate Loan Group, as opposed to only the Mortgage Loans in the related
Loan Group and, if such Distribution Date is after a related Senior
Termination Date, shall be reduced by the amount of the principal distribution
made pursuant to (a) if the Group 1 Senior Certificates are reduced to zero on
such date, Section 5.02(a)(1)(iv)(y), (b) if the Group 2 Senior Certificates
are reduced to zero on such date, Section 5.02(a)(2)(iv)(y), (c) if the Group
3 Senior Certificates are reduced to zero on such date, Section
5.02(a)(3)(iv)(y) or (d) if the Group 4 Senior Certificates are reduced to
zero on such date, Section 5.02(a)(4)(iv)(y).
Senior Step Down Conditions: With respect to each Loan Group in Aggregate
Loan Group I: (i) the outstanding principal balance of all Mortgage Loans in a
Loan Group in Aggregate Loan Group I delinquent 60 days or more (including any
related Mortgage Loans in foreclosure, REO Property and Mortgage Loans the
mortgagors of which are in bankruptcy) (averaged over the preceding six month
period), as a percentage of (a) if such date is on or prior to a related
Senior Termination Date, the Subordinated Percentage for such Loan Group of
the aggregate Stated Principal Balance of the Mortgage Loans in that Loan
Group, or (b) if such date is after a related Senior Termination Date, the
aggregate Class Principal Balance of the Aggregate Group I Subordinated
Certificates, does not equal or exceed 50%, and (ii) cumulative Realized
Losses on the Mortgage Loans in Aggregate Loan Group I do not exceed: (a)
commencing with the Distribution Date on the tenth anniversary of the first
Distribution Date, 30% of the Original Subordinate Principal Balance, (b)
commencing with the Distribution Date on the eleventh anniversary of the first
Distribution Date, 35% of the Original Subordinate Principal Balance, (c)
commencing with the Distribution Date on the twelfth anniversary of the first
Distribution Date, 40% of the Original Subordinate Principal Balance, (d)
commencing with the Distribution Date on the thirteenth anniversary of the
first Distribution Date, 45% of the Original Subordinate Principal Balance,
and (e) commencing with the Distribution Date on the fourteenth anniversary of
the first Distribution Date, 50% of the Original Subordinate Principal
Balance.
With respect to each Loan Group in Aggregate Loan Group II: (i) the
outstanding principal balance of all Mortgage Loans in a Loan Group in
Aggregate Loan Group II delinquent 60 days or more (including any related
Mortgage Loans in foreclosure, REO Property and Mortgage Loans the Mortgagors
of which are in bankruptcy) (averaged over the preceding six month period), as
a percentage of (a) if such date is on or prior to a related Senior
Termination Date, the Subordinated Percentage for such Loan Group of the
aggregate Stated Principal Balances of the Mortgage Loans in that Loan Group,
or (b) if such date is after a related Senior Termination Date, the aggregate
Class Principal Balance of the Aggregate Group I Subordinated Certificates for
such Distribution Date does not equal or exceed 50%, and (ii) cumulative
Realized Losses on all the Mortgage Loans in Aggregate Loan Group II do not
exceed: (a)
34
commencing with the Distribution Date on the seventh anniversary
of the first Distribution Date, 30% of the related Original Subordinate
Principal Balance, (b) commencing with the Distribution Date on the eighth
anniversary of the first Distribution Date, 35% of the related Original
Subordinate Principal Balance, (c) commencing with the Distribution Date on
the ninth anniversary of the first Distribution Date, 40% of the related
Original Subordinate Principal Balance, (d) commencing with the Distribution
Date on the tenth anniversary of the first Distribution Date, 45% of the
related Original Subordinate Principal Balance and (e) commencing with the
Distribution Date on the eleventh anniversary of the first Distribution Date,
50% of the related Original Subordinate Principal Balance.
Senior Termination Date: For each Senior Certificate Group, the
Distribution Date on which the aggregate Class Principal Balance of the Senior
Certificates in that Senior Certificate Group has been reduced to zero.
Servicer: Each Servicer under a Purchase and Servicing Agreement, and its
respective successors and assigns.
Servicer Advance: A "Servicer Advance" or "Servicing Advance" as defined
in the applicable Purchase and Servicing Agreement.
Servicing Fee: As to any Distribution Date and each Mortgage Loan, an
amount equal to the product of (a) one-twelfth of the related Servicing Fee
Rate and (b) the Stated Principal Balance of such Mortgage Loan as of the
first day of the related Due Period.
Servicing Fee Rate: With respect to each Mortgage Loan and any
Distribution Date, the per annum rate specified in the related Purchase and
Servicing Agreement.
Servicing Officer: Any officer of the related Servicer involved in, or
responsible for, the administration and servicing of the related Mortgage
Loans whose name and facsimile signature appear on a list of servicing
officers furnished to the Master Servicer by the related Servicer on the
Closing Date pursuant to the related Purchase and Servicing Agreement, as such
list may from time to time be amended.
Shift Percentage: Not applicable.
Special Hazard Coverage Termination Date: With respect to each Aggregate
Certificate Group the point in time at which the related Special Hazard Loss
Coverage Amount is reduced to zero.
Special Hazard Loss: Any Realized Loss suffered by a Mortgaged Property
on account of direct physical loss, as reported by the related Servicer to the
Master Servicer, but not including (i) any loss of a type covered by a hazard
insurance policy or a flood insurance policy required to be maintained with
respect to such Mortgaged Property to the extent of the amount of such loss
covered thereby, or (ii) any loss caused by or resulting from:
(a) normal wear and tear;
35
(b) fraud, conversion or other dishonest act on the part of the
Trustee, the Master Servicer or any of their agents or employees (without
regard to any portion of the loss not covered by any errors and omissions
policy);
(c) errors in design, faulty workmanship or faulty materials, unless
the collapse of the property or a part thereof ensues and then only for
the ensuing loss;
(d) nuclear or chemical reaction or nuclear radiation or radioactive
or chemical contamination, all whether controlled or uncontrolled, and
whether such loss be direct or indirect, proximate or remote or be in
whole or in part caused by, contributed to or aggravated by a peril
covered by the definition of the term "Special Hazard Loss;"
(e) hostile or warlike action in time of peace and war, including
action in hindering, combating or defending against an actual, impending
or expected attack:
1. by any government or sovereign power, de jure or de facto,
or by any authority maintaining or using military, naval or air
forces; or
2. by military, naval or air forces; or
3. by an agent of any such government, power, authority or
forces;
(f) any weapon of war employing nuclear fission, fusion or other
radioactive force, whether in time of peace or war; or
(g) insurrection, rebellion, revolution, civil war, usurped power or
action taken by governmental authority in hindering, combating or
defending against such an occurrence, seizure or destruction under
quarantine or customs regulations, confiscation by order of any
government or public authority or risks of contraband or illegal
transportation or trade.
Special Hazard Loss Coverage Amount: With respect to the first
Distribution Date and (a) the Aggregate Group I Certificates, $4,000,000, and
(b) the Aggregate Group II Certificates, $4,428,965. With respect to any
Distribution Date after the first Distribution Date, the lesser of (a) the
greatest of (i) 1% of the aggregate of the principal balances of the Mortgage
Loans in the applicable Aggregate Loan Group, (ii) twice the principal balance
of the largest Mortgage Loan in the applicable Aggregate Loan Group and (iii)
the aggregate of the principal balances of all Mortgage Loans in the
applicable Aggregate Loan Group secured by Mortgaged Properties located in the
single California postal zip code area having the highest aggregate principal
balance of any such zip code area and (b) the related Special Hazard Loss
Coverage Amount as of the Closing Date less the amount, if any, of Special
Hazard Losses allocated to the Certificates in the related Aggregate
Certificate Group since the Closing Date. All principal balances for the
purpose of this definition will be calculated as of the first day of the
calendar month preceding the month of such Distribution Date after giving
effect to Scheduled Payments on the Mortgage Loans then due, whether or not
paid.
Special Hazard Mortgage Loan: A Liquidated Mortgage Loan as to which a
Special Hazard Loss has occurred.
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Startup Day: The day designated as such pursuant to Section 10.01(b)
hereof.
Stated Principal Balance: As to any Mortgage Loan and Due Date, the
unpaid principal balance of such Mortgage Loan as of such Due Date as
specified in the amortization schedule at the time relating thereto (before
any adjustment to such amortization schedule by reason of any moratorium or
similar waiver or grace period) after giving effect to any previous partial
Principal Prepayments and Liquidation Proceeds allocable to principal (other
than with respect to any Liquidated Mortgage Loan) and to the payment of
principal due on such Due Date and irrespective of any delinquency in payment
by the related Mortgagor.
Subordinated Certificates: As specified in the Preliminary Statement.
Subordinated Percentage: As to any Distribution Date on or prior to a
related Senior Termination Date and the portion of (x) the Aggregate Group I
Subordinated Certificates relating to Loan Group 1 or Loan Group 2, as
applicable, and (y) the Aggregate Group II Subordinated Certificates relating
to Loan Group 3 or Loan Group 4, as applicable, in each case, 100% minus the
Senior Percentage for the Senior Certificate Group relating to such Loan Group
for such Distribution Date. As to any Distribution Date after the third Senior
Termination Date and the entire interest of (x) the Aggregate Group I
Subordinated Certificates in Aggregate Group I and (y) the Aggregate Group II
Subordinated Certificates in Aggregate Group II, 100% minus the Senior
Percentage for the Aggregate Group I Senior Certificates and Aggregate Group
II Senior Certificates, respectively, for such Distribution Date.
Subordinated Portion: For any Distribution Date, an amount equal to the
aggregate Stated Principal Balance of the Mortgage Loans in the related Loan
Group as of the end of the Prepayment Period related to the immediately
preceding Distribution Date, minus the aggregate Class Principal Balance of
the Senior Certificates in the related Senior Certificate Group immediately
prior to such Distribution Date.
Subordinated Prepayment Percentage: As to any Distribution Date and Loan
Group, 100% minus the related Senior Prepayment Percentage for such
Distribution Date.
Subordinated Principal Distribution Amount: With respect to any
Distribution Date and the Aggregate Group I Subordinated Certificates, the sum
of the following amounts for each Loan Group in Aggregate Loan Group I: an
amount equal to the excess of (A) the sum of (i) the Subordinated Percentage
for such Loan Group of all amounts described in clauses (a) through (d) of the
definition of "Principal Amount" for that Loan Group and that Distribution
Date, (ii) with respect to each Mortgage Loan in that Loan Group that became a
Liquidated Mortgage Loan during the calendar month preceding the month of such
Distribution Date, the amount of the Liquidation Proceeds allocated to
principal received with respect thereto remaining after application thereof
pursuant to clause (ii) of the definition of "Senior Principal Distribution
Amount", up to the Subordinated Percentage for such Loan Group of the Stated
Principal Balance of that Mortgage Loan, and (iii) the sum of the Subordinated
Prepayment Percentage for that Loan Group of all amounts described in clause
(f) of the definition of "Principal Amount" for such Loan Group and
Distribution Date, and (iv) the Subordinated Prepayment Percentage of any
Subsequent Recoveries described in clause (g) of the definition of Principal
Amount for such Distribution Date over (B) any Transfer Payments Made for such
Loan Group;
37
provided, however, that on any Distribution Date after a related
Senior Termination Date, the Subordinated Principal Distribution Amount will
not be calculated by Loan Group but will equal the amount calculated pursuant
to the formula set forth above based on the applicable Subordinated Percentage
and Subordinated Prepayment Percentage for the Aggregate Group I Subordinated
Certificates for such Distribution Date with respect to all of the Mortgage
Loans in Aggregate Loan Group I as opposed to the Mortgage Loans only in the
related Loan Group.
With respect to any Distribution Date and the Aggregate Group II
Subordinated Certificates, the sum of the following amounts for each Loan
Group in Aggregate Loan Group II, an amount equal to the excess of (A) the sum
of (i) the Subordinated Percentage for such Loan Group of all amounts
described in clauses (a) through (d) of the definition of "Principal Amount"
for that Loan Group and that Distribution Date, (ii) with respect to each
Mortgage Loan in that Loan Group that became a Liquidated Mortgage Loan during
the calendar month preceding the month of such Distribution Date, the amount
of the Liquidation Proceeds allocated to principal received with respect
thereto remaining after application thereof pursuant to clause (ii) of the
definition of "Senior Principal Distribution Amount", up to the Subordinated
Percentage for such Loan Group of the Stated Principal Balance of that
Mortgage Loan, and (iii) the sum of the Subordinated Prepayment Percentage for
that Loan Group of all amounts described in clause (f) of the definition of
"Principal Amount" for such Loan Group and Distribution Date," and (iv) the
Subordinated Prepayment Percentage of any Subsequent Recoveries described in
clause (g) of the definition of Principal Amount for such Distribution Date
over (B) any Transfer Payments Made for such Loan Group; provided, however,
that on any Distribution Date after a related Senior Termination Date, the
Subordinated Principal Distribution Amount will not be calculated by Loan
Group but will equal the amount calculated pursuant to the formula set forth
above based on the applicable Subordinated Percentage and Subordinated
Prepayment Percentage for the Aggregate Group II Subordinated Certificates for
such Distribution Date with respect to all of the Mortgage Loans in Aggregate
Loan Group II as opposed to the Mortgage Loans only in the related Loan Group.
Subsequent Recoveries: As to any Distribution Date, with respect to a
Liquidated Mortgage Loan that resulted in a Realized Loss in a prior calendar
month, amounts received by the Securities Administrator from the related
Servicer (net of any related expenses permitted to be reimbursed pursuant to
Section 4.02) specifically related to such Liquidated Mortgage Loan.
Subsidiary REMIC 1: As specified in the Preliminary Statement.
Subsidiary REMIC 1 Interest: As specified in the Preliminary Statement.
Subsidiary REMIC 1 Regular Interest: As specified in the Preliminary
Statement.
Subsidiary REMIC 2: As specified in the Preliminary Statement.
Subsidiary REMIC 2 Interest: As specified in the Preliminary Statement.
Subsidiary REMIC 2 Regular Interest: As specified in the Preliminary
Statement.
38
Substitution Adjustment Amount: As defined in the second paragraph of
Section 2.05(b).
Targeted Balance: With respect to any group of Targeted Principal Classes
or Components in the aggregate and any Distribution Date appearing in Schedule
B hereto, the Aggregate Targeted Balance for such group and Distribution Date.
With respect to any other Targeted Principal Class or Component and any
Distribution Date appearing in Schedule B hereto, the applicable amount
appearing opposite such Distribution Date for such Class or Component.
Tax Matters Person: The person designated as "tax matters person" in the
manner provided under Treasury regulation Section 1.860F-4(d) and temporary
Treasury regulation Section 301.6231(a)(7)1T. Initially, the Tax Matters
Person shall be the Securities Administrator.
Tax Matters Person Certificate: The Class A-R Certificate with a
Denomination of $0.01. Transfer Payment: Either or both of a Transfer Payment
Made or a Transfer Payment Received.
Transfer Payment Made: As defined in Section 5.08.
Transfer Payment Received: As defined in Section 5.08.
Trust Fund: The corpus of the trust created pursuant to this Agreement
consisting of (i) the Mortgage Loans and all interest and principal received
on or with respect thereto after the Cut-off Date (other than Scheduled
Payments due on or prior to the Cut-off Date) to the extent not applied in
computing the Cut-off Date Principal Balance thereof; (ii) all cash,
instruments or property held or required to be held in the Custodial Accounts
and the Distribution Account and all amounts deposited therein pursuant to the
applicable provisions of this Agreement; (iii) property that secured a
Mortgage Loan and has been acquired by foreclosure, deed-in-lieu of
foreclosure or otherwise; (iv) the Depositor's rights assigned to the Trustee
under the Purchase and Servicing Agreements, as modified by the
Acknowledgements; (v) the pledge, control and guaranty agreements and the
Limited Purpose Surety Bond relating to the Additional Collateral Mortgage
Loans; and (vi) all proceeds of the conversion, voluntary or involuntary, of
any of the foregoing.
Trustee: Deutsche Bank National Trust Company, a national banking
association, organized under the laws of the United States and any Person
succeeding the Trustee hereunder, or if any successor trustee or any
co-trustee shall be appointed as herein provided, then such successor trustee
and such co-trustee, as the case may be.
Trustee Mortgage Files: With respect to each Mortgage Loan, the Mortgage
Documents to be retained in the custody and possession of the Trustee or
Custodian on behalf of the Trustee.
Two Times Test: As to any Distribution Date and the Aggregate Group I
Subordinated Certificates, if (i) the Aggregate Subordinated Percentage for
the Aggregate Group I Subordinated Certificates is at least 200% of the
related Aggregate Subordinated Percentage as of the Closing Date, (ii) the
outstanding aggregate Stated Principal Balance of all Mortgage
39
Loans in Aggregate Loan Group I delinquent 60 days or more (averaged over the
preceding six month period), as a percentage of the aggregate Class Principal
Balance of the Aggregate Group I Subordinated Certificates, does not equal or
exceed 50% and (ii) the cumulative Realized Losses on all the Mortgage Loans
in Aggregate Loan Group I do not exceed (x) with respect to any Distribution
Date on or prior to September 2007, 20% of the related Original Subordinate
Principal Balance or (y) with respect to any Distribution Date after September
2007, 30% of the related Original Subordinate Principal Balance.
As to any Distribution Date and the Aggregate Group II Subordinated
Certificates, if (i) the Aggregate Subordinated Percentage for the Aggregate
Group II Subordinated Certificates is at least 200% of the related Aggregate
Subordinated Percentage as of the Closing Date, (ii) the outstanding aggregate
Stated Principal Balance of all Mortgage Loans in Aggregate Loan Group II
delinquent 60 days or more (averaged over the preceding six month period), as
a percentage of the aggregate Class Principal Balance of the Aggregate Group
II Subordinated Certificates, does not equal or exceed 50% and (ii) the
cumulative Realized Losses on all the Mortgage Loans in Aggregate Loan Group
II do not exceed (x) with respect to any Distribution Date on or prior to
September 2007, 20% of the related Original Subordinate Principal Balance or
(y) with respect to any Distribution Date after September 2007, 30% of the
related Original Subordinate Principal Balance.
UCC: The Uniform Commercial Code as enacted in the relevant jurisdiction.
Undercollateralized Group: As defined in Section 5.08 hereof.
Underwriter's Exemption: Prohibited Transaction Exemption 2002-41, 67
Fed. Reg. 54487 (2002), as amended (or any successor thereto), or any
substantially similar administrative exemption granted by the U.S. Department
of Labor.
Underwriter: As specified in the Preliminary Statement.
Unscheduled Principal Distribution Amount: Not applicable.
Uniform Commercial Code: The Uniform Commercial Code as in effect in any
applicable jurisdiction from time to time.
Voting Interests: The portion of the voting rights of all the
Certificates that is allocated to any Certificate for purposes of the voting
provisions of this Agreement. At all times during the term of this Agreement,
1.00% of all Voting Interests shall be allocated to each Class of Notional
Amount Certificates and the Class A-R Certificates. Voting Interests shall be
allocated among all other Classes of Certificates pro rata based on Class
Principal Balances for each Class then outstanding. Voting Interests shall be
allocated among the Certificates within each such Class in proportion to their
Certificate Balances or Percentage Interests.
Weighted Average Net Mortgage Rate: As to any Distribution Date and Loan
Group, the average of the Net Mortgage Rate of each Mortgage Loan in that Loan
Group, weighted on the basis of its Stated Principal Balance as of the end of
the Prepayment Period related to the immediately preceding Distribution Date.
40
ARTICLE II
DECLARATION OF TRUST;
ISSUANCE OF CERTIFICATES
Section 2.01 Creation and Declaration of Trust Fund; Conveyance of
Mortgage Loans.
(a) Concurrently with the execution and delivery of this Agreement, the
Depositor does hereby transfer, assign, set over, deposit with and otherwise
convey to the Trustee, without recourse, subject to Sections 2.02 and 2.05, in
trust, all the right, title and interest of the Depositor in and to the Trust
Fund. Such conveyance includes, without limitation, (i) the Mortgage Loans,
including the right to all payments of principal and interest received on or
with respect to the Mortgage Loans on and after the Cut-off Date (other than
Scheduled Payments due on or before such date), and all such payments due
after such date but received prior to such date and intended by the related
Mortgagors to be applied after such date; (ii) all of the Depositor's right,
title and interest in and to all amounts from time to time credited to and the
proceeds of the Distribution Account, any Custodial Accounts or any Escrow
Account established with respect to the Mortgage Loans; (iii) all of the
rights of the Depositor as assignee of the Seller with respect to the Seller's
rights under the Purchase and Servicing Agreements pursuant to the
Acknowledgements; (iv) all of the Depositor's right, title or interest in REO
Property and the proceeds thereof; (v) all of the Depositor's rights under any
Insurance Policies related to the Mortgage Loans; (vi) $100 (which amount has
been delivered by the Depositor to the Securities Administrator to be held in
the Distribution Account until distributed to the Holders of the Class P
Certificates pursuant to Section 5.02(a)); and (vii) if applicable, the
Depositor's security interest in any collateral pledged to secure the Mortgage
Loans, including the Mortgaged Properties and any Additional Collateral
relating to the Additional Collateral Mortgage Loans, including, but not
limited to, the pledge, control and guaranty agreements and the Limited
Purpose Surety Bond, to have and to hold, in trust; and the Trustee declares
that, subject to the review provided for in Section 2.02, it has received and
shall hold the Trust Fund, as trustee, in trust, for the benefit and use of
the Holders of the Certificates and for the purposes and subject to the terms
and conditions set forth in this Agreement, and, concurrently with such
receipt, has caused to be executed, authenticated and delivered to or upon the
order of the Depositor, in exchange for the Trust Fund, Certificates in the
authorized denominations evidencing the entire ownership of the Trust Fund.
The foregoing sale, transfer, assignment, set-over, deposit and
conveyance does not and is not intended to result in the creation or
assumption by the Trustee of any obligation of the Depositor, the Seller or
any other Person in connection with the Mortgage Loans or any other agreement
or instrument relating thereto except as specifically set forth therein.
In connection with such transfer and assignment of the Mortgage Loans,
the Trustee will continue to hold the documents or instruments listed below
with respect to each Mortgage Loan (each, a "Trustee Mortgage File") so
transferred and assigned.
41
On the Closing Date, the Trustee shall deliver to the Depositor
certification (each, a "Trustee Certification") in the form attached hereto as
Exhibit L certifying that the applicable Originator delivered and released to
the Trustee, subject to and in accordance with the relevant section of each
related Purchase and Servicing Agreement, the documents identified in the
relevant section of such Purchase and Servicing Agreement as being required to
be delivered to the Seller as Purchaser, pertaining to the Mortgage Loans as
identified in the related Mortgage Loan Schedule (provided, however, that the
Trustee shall not be required nor does it intend to re-examine the contents of
the Trustee Mortgage File for any of the Mortgage Loans in connection with
entering into this Agreement or providing the Custodian Certification required
pursuant to this Section 2.01):
(i) with respect to each Mortgage Loan, the original Mortgage Note
endorsed without recourse in proper form to the order of the Trustee, or in
blank (in each case, with all necessary intervening endorsements, as
applicable);
(ii) with respect to each Mortgage Loan (other than a Cooperative Loan)
that is not a MERS Mortgage Loan, the original Mortgage with evidence of
recording thereon, or if the original Mortgage has not yet been returned from
the recording office, a copy of such Mortgage certified by the applicable
Originator, title company, escrow agent or closing attorney to be a true copy
of the original of the Mortgage which has been sent for recording in the
appropriate jurisdiction in which the Mortgaged Property is located, and in
the case of the each MERS Mortgage Loan, the original Mortgage, noting the
presence of the MIN of the Mortgage Loans and either language indicating that
the Mortgage Loan is a MOM Loan if the Mortgage Loan is a MOM Loan or if the
Mortgage Loan was not a MOM Loan at origination, the original Mortgage and the
assignment thereof to MERS, with evidence of recording indicated thereon;
(iii) with respect to each Mortgage Loan (other than a Cooperative Loan)
that is not a MERS Mortgage Loan, the Assignment of Mortgage in form and
substance acceptable for recording in the relevant jurisdiction, such
assignment being either (A) in blank, without recourse, or (B) endorsed to
"Deutsche Bank National Trust Company, as Trustee of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Mortgage
Loan Trust 2004-8AR, Mortgage Pass-Through Certificates, without recourse";
(iv) with respect to each Mortgage Loan (other than a Cooperative Loan)
that is not a MERS Mortgage Loan, the originals of all intervening assignments
of the Mortgage, if any, with evidence of recording thereon, or if the
original intervening assignment has not yet been returned from the recording
office, a copy of such assignment certified by the applicable Originator,
title company, escrow agent or closing attorney to be a true copy of the
original of the assignment which has been sent for recording in the
appropriate jurisdiction in which the Mortgaged Property is located;
(v) with respect to each Mortgage Loan (other than a Cooperative Loan),
the originals of all assumption, modification, consolidation or extension
agreements, if any, with evidence of recording thereon;
(vi) if any, with respect to each Mortgage Loan (other than a Cooperative
Loan),
42
the original policy of title insurance (or a true copy thereof) with respect
to any such Mortgage Loan, or, if such policy has not yet been delivered by
the insurer, the title commitment or title binder to issue same;
(vii) if any, with respect to each Mortgage Loan (other than a
Cooperative Loan), the original power of attorney and guaranty agreement
with respect to such Mortgage Loan;
(viii) [reserved];
(ix) with respect to each Mortgage Loan which constitutes a
Cooperative Loan:
(a) the original of any security agreement or similar document executed
in connection with the Cooperative Loan;
(b) the original Recognition Agreement and the original Assignment of
Recognition Agreement;
(c) UCC-1 financing statements with recording information thereon from
the appropriate governmental recording offices if necessary to perfect the
security interest of the Cooperative Loan under the Uniform Commercial Code in
the jurisdiction in which the Cooperative Property is located, accompanied by
UCC-3 financing statements executed in blank for recordation of the change in
the secured party thereunder;
(d) an Estoppel Letter and/or Consent;
(e) a search for (i) federal tax liens, mechanics' liens, lis pendens,
judgments of record or otherwise against (x) the Cooperative Corporation and
(y) the seller of the Cooperative Unit, (ii) filings of financing statements
and (iii) the deed of the cooperative project into the Cooperative
Corporation;
(f) the guaranty of the Mortgage Note and Cooperative Loan, if any;
(g) the original Proprietary Lease and the Assignment of Proprietary
Lease executed by the Mortgagor in blank or if the Proprietary Lease has been
assigned by the Mortgagor to the Seller, then the Seller must execute an
assignment of the Assignment of Proprietary Lease in blank; and
(h) if any, the original or certified copy of the certificates evidencing
ownership of the Cooperative Shares issued by the Cooperative Corporation and
related assignment of such certificates or an assignment of such Cooperative
Shares, in blank, executed by the Mortgagor with such signature guaranteed;
(x) [reserved]; and
(xi) any other document or instruments required to be delivered under the
related Custodial Agreement.
In addition, in connection with the assignment of any MERS Mortgage Loan,
it is understood that the related Originator will cause the MERS(R) System to
indicate that such
43
Mortgage Loans have been assigned by the related Originator to the Trustee in
accordance with this Agreement for the benefit of the Certificateholders by
including (or deleting, in the case of Mortgage Loans which are repurchased in
accordance with this Agreement) in such computer files the information
required by the MERS(R) System to identify the series of Certificates issued in
connection with such Mortgage Loans. It is further understood that the related
Originator will not, and the Master Servicer hereby agrees that it will not
alter the information referenced in this paragraph with respect to any
Mortgage Loan during the term of this Agreement unless and until such Mortgage
Loan is repurchased in accordance with the terms of this Agreement.
(b) As soon as is practicable after the Closing Date, the Depositor shall
cause the Servicer of any Additional Collateral Mortgage Loan to deliver to
the Trustee the Assignment and Notice of Transfer with respect to each
Additional Collateral Mortgage Loan as well as the assignments of any rights
with respect to each Additional Collateral Mortgage Loan under any Limited
Purpose Surety Bond.
(c) In instances where a title insurance policy is required to be
delivered to the Trustee and is not so delivered, the Depositor will provide a
copy of such title insurance policy to the Trustee as promptly as practicable
after the execution and delivery hereof, but in any case within 180 days of
the Closing Date.
(d) For Mortgage Loans (if any) that 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, herewith delivers such amount to the
Securities Administrator, the Trustee, an Officer's Certificate which shall
include a statement to the effect that all amounts received in connection with
such prepayment that are required to be deposited in the Distribution Account
pursuant to Section 4.01 have been so deposited. All original documents that
are not delivered to the Trustee shall be held by the Master Servicer or the
related Servicer in trust for the benefit of the Trustee and the
Certificateholders.
Section 2.02 Acceptance of Trust Fund by Trustee; Review of Documentation
for Trust Fund.
(a) The Trustee, by execution and delivery hereof, acknowledges receipt
by it of the Trustee Mortgage Files pertaining to the Mortgage Loans listed on
the Mortgage Loan Schedule.
(b) Nothing in this Agreement shall be construed to constitute an
assumption by the Trust Fund, the Trustee or the Certificateholders of any
unsatisfied duty, claim or other liability on any Mortgage Loan or to any
Mortgagor.
(c) Each of the parties hereto acknowledges that (i) the Trustee has
delivered the Trustee Certification stating that it has performed the
applicable review of the Mortgage Loans as required herein on the Closing Date
and (ii) thereafter, if applicable, the Trustee shall perform the applicable
review of the Mortgage Loans and deliver the further certifications as
provided herein.
(d) Upon execution of this Agreement, the Depositor hereby delivers to
the Trustee (with a copy to the Securities Administrator) and the Trustee
acknowledges receipt of the Acknowledgements, together with the related
Purchase and Servicing Agreements.
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Section 2.03 Representations and Warranties of the Depositor.
(a) The Depositor hereby represents and warrants to the Trustee, for the
benefit of the Certificateholders, and to the Master Servicer and the
Securities Administrator as of the Closing Date or such other date as is
specified, that:
(i) the Depositor is a corporation duly organized, validly existing
and in good standing under the laws governing its creation and existence
and has full corporate power and authority to own its property, to carry
on its business as presently conducted, to enter into and perform its
obligations under this Agreement, and to create the trust pursuant
hereto;
(ii) 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; 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 certificate of incorporation or
bylaws of the Depositor;
(iii) 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
such as has been obtained, given, effected or taken prior to the date
hereof;
(iv) this Agreement has been duly executed and delivered by the
Depositor and, assuming due authorization, execution and delivery by the
Trustee, the Master Servicer and the Securities Administrator,
constitutes a valid and binding obligation of the Depositor enforceable
against it in accordance with its terms except as such enforceability may
be subject to (A) applicable bankruptcy and insolvency laws and other
similar laws affecting the enforcement of the rights of creditors
generally and (B) general principles of equity regardless of whether such
enforcement is considered in a proceeding in equity or at law;
(v) there are no actions, suits or proceedings pending or, to the
knowledge of the Depositor, threatened or likely to be asserted against
or affecting the Depositor, before or by any court, administrative
agency, arbitrator or governmental body (A) with respect to any of the
transactions contemplated by this Agreement or (B) 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 it or its business, assets,
operations or condition, financial or otherwise, or adversely affect its
ability to perform its obligations under this Agreement;
(vi) immediately prior to the transfer and assignment of the
Mortgage Loans to the Trustee, the Depositor was the sole owner of record
and holder of each Mortgage
45
Loan, and the Depositor had good and marketable title thereto, and had
full right to transfer and sell each Mortgage Loan to the Trustee free
and clear, subject only to (1) liens of current real property taxes and
assessments not yet due and payable and, if the related Mortgaged
Property is a condominium unit, any lien for common charges permitted by
statute, (2) covenants, conditions and restrictions, rights of way,
easements and other matters of public record as of the date of recording
of such Mortgage acceptable to mortgage lending institutions in the area
in which the related Mortgaged Property is located and specifically
referred to in the lender's title insurance policy or attorney's opinion
of title and abstract of title delivered to the originator of such
Mortgage Loan, and (3) such other matters to which like properties are
commonly subject which do not, individually or in the aggregate,
materially interfere with the benefits of the security intended to be
provided by the Mortgage, of any encumbrance, equity, participation
interest, lien, pledge, charge, claim or security interest, and had full
right and authority, subject to no interest or participation of, or
agreement with, any other party, to sell and assign each Mortgage Loan
pursuant to this Agreement;
(vii) This Agreement creates a valid and continuing security
interest (as defined in the applicable Uniform Commercial Code (the
"UCC"), in the Mortgage Loans in favor of the Trustee, which security
interest is prior to all other liens, and is enforceable as such against
creditors of and purchasers from the Depositor;
(viii) The Mortgage Loans constitute "instruments" within the
meaning of the applicable UCC;
(ix) Other than the security interest granted to the Trustee
pursuant to this Agreement, the Depositor has not pledged, assigned,
sold, granted a security interest in, or otherwise conveyed any of the
Mortgage Loans. The Depositor has not authorized the filing of and is not
aware of any financing statement against the Depositor that includes a
description of the collateral covering the Mortgage Loans other than a
financing statement relating to the security interest granted to the
Trustee hereunder or that has been terminated. The Depositor is not aware
of any judgment or tax lien filings against the Depositor;
(x) None of the Mortgage Loans have any marks or notations
indicating that such Mortgage Loans have been pledged, assigned or
otherwise conveyed to any Person other than the Trustee; and
(xi) The Depositor has received all consents and approvals required
by the terms of the Mortgage Loans to convey the Mortgage Loans hereunder
to the Trustee.
The foregoing representations made in this Section 2.03 shall survive the
termination of this Agreement and shall not be waived by any party hereto.
46
Section 2.04 Representations and Warranties of the Depositor and the
Seller as to the Mortgage Loans.
The Depositor hereby represents and warrants to the Trustee with respect
to the Mortgage Loans or each Mortgage Loan, as the case may be, as of the
date hereof or such other date set forth herein that as of the Closing Date:
(a) Immediately prior to the transfer and assignment contemplated herein,
the Depositor was the sole owner and holder of the Mortgage Loans. The
Mortgage Loans were not assigned or pledged by the Depositor and the Depositor
had good and marketable title thereto, and the Depositor had full right to
transfer and sell the Mortgage Loans to the Trustee free and clear of any
encumbrance, participation interest, lien, equity, pledge, claim or security
interest and had full right and authority subject to no interest or
participation in, or agreement with any other party to sell or otherwise
transfer the Mortgage Loans.
(b) As of the Closing Date, the Depositor has transferred all right,
title and interest in the Mortgage Loans to the Trustee on behalf of the
Trust.
(c) As of the Closing Date, the Depositor has not transferred the
Mortgage Loans to the Trustee on behalf of the Trust with any intent to
hinder, delay or defraud an of its creditors.
It is understood and agreed that the representations and warranties set
forth in this Section 2.04 shall survive delivery of the respective Mortgage
Files to the Trustee and shall inure to the benefit of the Trustee,
notwithstanding any restrictive or qualified endorsement or assignment.
Section 2.05 Representations and Warranties of the Seller; Discovery of
Breach; Repurchase or Substitution of Mortgage Loans.
(a) With respect to the MSMCI Mortgage Loans the Seller hereby makes the
representations and warranties contained in Section 3.01 of the MSMCI Purchase
Agreement to and for the benefit of the Depositor, the Trustee and the Trust
Fund.
(b) The Seller hereby represents and warrants that no Mortgage Loan
contains a provision whereby the related mortgagor is permitted to convert the
Mortgage Rate from an adjustable rate to a fixed rate.
With respect to the Quicken Mortgage Loans, the Seller hereby makes the
representations and warranties contained in Section 9.02 of the Quicken
Purchase and Servicing Agreement with respect to each of the Quicken Mortgage
Loans to and for the benefit of the Depositor, the Trustee and the Trust Fund.
The Seller agrees to comply with the provisions of Section 9.03 of the Quicken
Purchase and Servicing Agreement in respect of a breach of any of such
representations and warranties. In addition, with respect to the Quicken
Mortgage Loans, the Seller hereby represents and warrants that each such
Quicken Mortgage Loan is a "qualified mortgage" within the meaning of Section
860G(a)(3) of the Code.
The Seller agrees to comply with the provisions of this Section 2.05 in
respect of a breach of any of such representations and warranties.
47
The Seller hereby represents and warrants to the Trustee with respect to
the Mortgage Loans as of the date hereof or such other date set forth herein
that as of the Closing Date:
(i) Each Mortgage Loan at origination complied in all material
respects with applicable predatory and abusive lending laws and
consummation of the transactions contemplated by this Agreement will not
involve the violation of any such laws.
(ii) All of the Mortgage Loans were originated in compliance with
all applicable laws, including, but not limited to, all applicable
anti-predatory and abusive lending laws.
(iii) No Mortgage Loan is a High Cost Loan or Covered Loan, as
applicable, and with respect to the foregoing, the terms "High Cost Loan"
and "Covered Loan" have the meaning assigned to them in the Standard &
Poor's LEVELS(R) Version 5.6 Glossary Revised, Appendix E which is
attached hereto as Exhibit Q (the "Glossary") where (x) a "High Cost
Loan" is each loan identified in the column "Category under applicable
anti-predatory lending law" of the table entitled "Standard & Poor's High
Cost Loan Categorization" in the Glossary as each such loan is defined in
the applicable anti-predatory lending law of the State or jurisdiction
specified in such table and (y) a "Covered Loan" is each loan identified
in the column "Category under applicable anti-predatory lending law" of
the table entitled "Standard & Poor's High Covered Loan Categorization"
in the Glossary as each such loan is defined in the applicable
anti-predatory lending law of the State or jurisdiction specified in such
table.
(iv) No Mortgage Loan originated on or after October 1, 2002 through
March 6, 2003 is governed by the Georgia Fair Lending Act.
(v) None of the Mortgage Loans that are secured by property located
in the State of Illinois are in violation of the provisions of the
Illinois Interest Act (815 Ill. Comp. Stat. 205/1 et. seq.).
Upon discovery by the Depositor, the Seller or the related Originator or
receipt of written notice of any materially defective document in, or,
following the date of delivery to the Trustee of the Custodian's
certifications as required under the related Custodial Agreements, that a
document is missing from, a Trustee Mortgage File, or discovery by the
Trustee, the Depositor, the Seller or the related Originator of the breach by
such Originator or Seller of any representation or warranty under the related
Purchase and Servicing Agreement, as modified by the Acknowledgement, in the
case of the Originator, or under this Agreement, in the case of the Seller, in
respect of any Mortgage Loan which materially adversely affects the value of
that Mortgage Loan or the interest therein of the Certificateholders (a
"Defective Mortgage Loan") (each of the Depositor, the Seller and the related
Originator hereby agreeing to give written notice thereof to the Trustee and
the other of such parties), the Trustee, or its designee, shall promptly
notify the Depositor and the Seller or the related Originator, as applicable,
in writing of such nonconforming or missing document or breach and request
that the Seller or related Originator deliver such missing document or cure or
cause the cure of such defect or breach within a period of time specified in
the related Purchase and Servicing Agreement, and if the Seller or related
Originator, as applicable, does not deliver such missing document or cure such
48
defect or breach in all material respects during such period, the Trustee,
shall enforce the obligations of the related Originator under the related
Purchase and Servicing Agreement, as modified by the Acknowledgement, or the
Seller under this Agreement, as applicable, and cause the related Originator
or the Seller, as the case may be, to repurchase that Mortgage Loan from the
Trust Fund at the Purchase Price on or prior to the Determination Date
following the expiration of such specified period (subject to Section 2.05(c)
below); provided, however, that, in connection with any such breach that could
not reasonably have been cured within such specified period (unless permitted
a greater period of time to cure under the related Purchase and Servicing
Agreement), subject to Section 2.05(c) below, if the related Originator or the
Seller, as applicable, shall have commenced to cure such breach within such
specified period, the related Originator or the Seller shall be permitted to
proceed thereafter diligently and expeditiously to cure the same within such
additional time as is reasonably necessary to cure such breach. To the extent
that any costs and damages are incurred by the Trust Fund as a result of any
violation of any applicable federal, state, or local predatory or abusive
lending law arising from or in connection with the origination of any Mortgage
Loan repurchased by the related Originator or the Seller, such costs and
damages shall be included in the Purchase Price of such repurchased Mortgage
Loan and shall be borne by the Seller. The Purchase Price for the repurchased
Mortgage Loan shall be deposited in the related Distribution Account, and the
Trustee, or its designee, upon receipt of written certification from the
Securities Administrator of such deposit, shall release to the related
Originator or the Seller, as applicable, the related Trustee Mortgage File and
shall execute and deliver such instruments of transfer or assignment, in each
case without recourse, representation or warranties, as either party shall
furnish to it and as shall be necessary to vest in such party any Mortgage
Loan released pursuant hereto and the Trustee, or its designee, shall have no
further responsibility with regard to such Trustee Mortgage File (it being
understood that the Trustee shall have no responsibility for determining the
sufficiency of such assignment for its intended purpose). If pursuant to the
foregoing provisions the related Originator or the Seller repurchases a
Mortgage Loan that is a MERS Mortgage Loan, the related Servicer shall cause
MERS to designate on the MERS(R) System the related Originator or the Seller,
as applicable, as the beneficial holder of such Mortgage Loan.
In lieu of repurchasing any such Mortgage Loan as provided above, either
party may cause such Mortgage Loan to be removed from the Trust Fund (in which
case it shall become a Deleted Mortgage Loan) and substitute one or more
Replacement Mortgage Loans in the manner and subject to the limitations set
forth in Section 2.05(b) below. It is understood and agreed that the
obligations of the Originators and the Seller to cure or to repurchase (or to
substitute for) any related Mortgage Loan as to which a document is missing, a
material defect in a constituent document exists or as to which such a breach
has occurred and is continuing shall constitute the sole remedy against the
such party respecting such omission, defect or breach available to the Trustee
on behalf of the Certificateholders.
(c) Any substitution of Replacement Mortgage Loans for Deleted Mortgage
Loans made pursuant to Section 2.05(b) above must be effected prior to the
last Business Day that is within two years after the Closing Date. As to any
Deleted Mortgage Loan for which the related Originator or the Seller
substitutes a Replacement Mortgage Loan or Loans, such substitution shall be
effected by delivering to the Trustee for such Replacement Mortgage Loan or
Loans, the Mortgage Note, the Mortgage, any related assignment thereof and the
Acknowledgement to the Trustee, and such other documents and agreements, with
all necessary endorsements thereon,
49
together with an Officers' Certificate stating that each such Replacement
Mortgage Loan satisfies the definition thereof and specifying the Substitution
Adjustment Amount (as described below), if any, in connection with such
substitution. Monthly Payments due with respect to Replacement Mortgage Loans
in the month of substitution shall not be included as part of the Trust Fund
and shall be retained by the related Originator or the Seller, as applicable.
For the month of substitution, distributions to the Certificateholders shall
reflect the collections and recoveries in respect of such Deleted Mortgage in
the Due Period preceding the month of substitution and the related Originator
or the Seller, as applicable, shall thereafter be entitled to retain all
amounts subsequently received in respect of such Deleted Mortgage Loan. Upon
such substitution, such Replacement Mortgage Loan shall constitute part of the
Trust Fund and shall be subject in all respects to the terms of this Agreement
and the related Purchase and Servicing Agreement, as modified by the related
Acknowledgement, including all representations and warranties thereof included
in such Purchase and Servicing Agreement, as modified by the Acknowledgement,
in each case as of the date of substitution.
For any month in which an Originator or the Seller substitutes one or
more Replacement Mortgage Loans for one or more Deleted Mortgage Loans, the
related Servicer shall determine the excess (each, a "Substitution Adjustment
Amount"), if any, by which the aggregate Purchase Price of all such Deleted
Mortgage Loans exceeds the aggregate Stated Principal Balance of the
Replacement Mortgage Loans replacing such Deleted Mortgage Loans, together
with one month's interest on such excess amount at the applicable Net Mortgage
Rate. On the date of such substitution, the related Originator or Seller, as
applicable, shall deliver or cause to be delivered to the related Servicer for
deposit in the related Custodial Account an amount equal to the related
Substitution Adjustment Amount, if any, and the Trustee, upon receipt of the
related Replacement Mortgage Loan or Loans and certification by such Servicer
of such deposit, shall release to the related Originator or the Seller, as
applicable, the related Trustee Mortgage File or Files and shall execute and
deliver such instruments of transfer or assignment, in each case without
recourse, as the related Originator or Seller shall deliver to it and as shall
be necessary to vest therein any Deleted Mortgage Loan released pursuant
hereto.
In addition, the related Originator or the Seller, as applicable, shall
obtain at its own expense and deliver to the Trustee and the Securities
Administrator an Opinion of Counsel to the effect that such substitution
(either specifically or as a Class of transactions) shall not cause an Adverse
REMIC Event. If such Opinion of Counsel cannot be delivered, then such
substitution may only be effected at such time as the required Opinion of
Counsel can be given.
(d) Upon discovery by the related Originator, the Seller, the Depositor
or the Trustee that any Mortgage Loan does not constitute a "qualified
mortgage" within the meaning of Section 860G(a)(3) of the Code, the party
discovering such fact shall within two Business Days give written notice
thereof to the other parties. In connection therewith, the applicable party
shall repurchase or, subject to the limitations set forth in Section 2.05(b),
substitute one or more Replacement Mortgage Loans for the affected Mortgage
Loan within 90 days of the earlier of discovery or receipt of such notice with
respect to such affected Mortgage Loan. Any such repurchase or substitution
shall be made in the same manner as set forth in Section 2.05(a) above and/or
in accordance with this Section 2.05(c). The Trustee shall re-convey to the
related Originator or the Seller, as applicable, the Mortgage Loan to be
released pursuant hereto in the
50
same manner, and on the same terms and conditions, as it would a Mortgage Loan
repurchased for breach of a representation or warranty.
Section 2.06 Grant Clause.
(a) It is intended that the conveyance of the Depositor's right, title
and interest in and to property constituting the Trust Fund pursuant to this
Agreement shall constitute, and shall be construed as, a sale of such property
and not a grant of a security interest to secure a loan. However, if such
conveyance is deemed to be in respect of a loan, it is intended that: (1) the
rights and obligations of the parties shall be established pursuant to the
terms of this Agreement; (2) the Depositor hereby grants to the Trustee for
the benefit of the Holders of the Certificates a first priority security
interest in all of the Depositor's right, title and interest in, to and under,
whether now owned or hereafter acquired, the Trust Fund and all proceeds of
any and all property constituting the Trust Fund to secure payment of the
Certificates; and (3) this Agreement shall constitute a security agreement
under applicable law. If such conveyance is deemed to be in respect of a loan
and the trust created by this Agreement terminates prior to the satisfaction
of the claims of any Person holding any Certificate, the security interest
created hereby shall continue in full force and effect and the Trustee shall
be deemed to be the collateral agent for the benefit of such Person, and all
proceeds shall be distributed as herein provided.
(b) The Depositor shall, to the extent consistent with this Agreement,
take such reasonable actions as may be necessary to ensure that, if this
Agreement were deemed to create a security interest in the Mortgage Loans and
the other property described above, such security interest would be deemed to
be a perfected security interest of first priority under applicable law and
will be maintained as such throughout the term of this Agreement. The
Depositor will, at its own expense, make all initial filings on or about the
Closing Date and shall forward a copy of such filing or filings to the
Trustee. Without limiting the generality of the foregoing, the Depositor shall
prepare and forward for filing, or shall cause to be forwarded for filing, at
the expense of the Depositor, all filings necessary to maintain the
effectiveness of any original filings necessary under the relevant UCC to
perfect the Trustee's security interest in or lien on the Mortgage Loans,
including without limitation (x) continuation statements, and (y) such other
statements as may be occasioned by (1) any change of name of an Originator,
the Depositor or the Trustee, (2) any change of location of the place of
business or the chief executive office of the Seller or the Depositor, (3) any
transfer of any interest of an Originator or the Depositor in any Mortgage
Loan or (4) any change under the relevant UCC or other applicable laws.
Neither the Originators nor the Depositor shall organize under the law of any
jurisdiction other than the State under which each is organized as of the
Closing Date (whether changing its jurisdiction of organization or organizing
under an additional jurisdiction) without giving 30 days prior written notice
of such action to its immediate and intermediate transferee, including the
Trustee. Before effecting such change, any Originator or the Depositor
proposing to change its jurisdiction of organization shall prepare and file in
the appropriate filing office any financing statements or other statements
necessary to continue the perfection of the interests of its immediate and
intermediate transferees, including the Trustee, in the Mortgage Loans. In
connection with the transactions contemplated by this Agreement, each of the
Originators and the Depositor authorizes its immediate or intermediate
transferee (but not the Trustee) to file in any filing office any initial
financing statements, any amendments to financing statements, any continuation
statements, or any other statements or filings described in this paragraph
(b).
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ARTICLE III
THE CERTIFICATES
Section 3.01 The Certificates.
(a) The Certificates shall be issuable in registered form only and shall
be securities governed by Article 8 of the New York Uniform Commercial Code.
The Book-Entry Certificates will be evidenced by one or more certificates,
beneficial ownership of which will be held in the dollar denominations in
Certificate Balance, or Notional Amount, as applicable, or in the Percentage
Interests, specified herein. Each Class of Certificates will be issued in the
minimum denominations and integral multiples thereof of the initial
Certificate Balance (or Notional Amount) specified in the Preliminary
Statement hereto.
(b) The Certificates shall be executed by manual or facsimile signature
on behalf of the Trustee by an authorized officer of the Trustee or of the
Securities Administrator on the Trustee's behalf. Each Certificate shall, on
original issue, be authenticated by the Authenticating Agent upon the order of
the Depositor upon receipt by the Trustee of the Trustee Mortgage Files
described in Section 2.01. No Certificate shall be entitled to any benefit
under this Agreement, or be valid for any purpose, unless there appears on
such Certificate a certificate of authentication substantially in the form
provided for herein, executed by an authorized officer of the Authenticating
Agent, by manual signature, and such certification upon any Certificate shall
be conclusive evidence, and the only evidence, that such Certificate has been
duly authenticated and delivered hereunder. All Certificates shall be dated
the date of their authentication. At any time and from time to time after the
execution and delivery of this Agreement, the Depositor may deliver
Certificates executed by or on behalf of the Trustee to the Authenticating
Agent for authentication and the Authenticating Agent shall authenticate and
deliver such Certificates as in this Agreement provided and not otherwise.
(c) The Class S-B-4, Class B-4, Class S-B-5, Class B-5, Class S-B-6,
Class B-6 and Class P Certificates offered and sold in reliance on the
exemption from registration under Rule 144A under the Act shall be issued
initially in definitive, fully registered form without interest coupons with
the applicable legends set forth in Exhibit A added to the forms of such
Certificates (each, a "Restricted Global Security").
Section 3.02 Registration.
The Securities Administrator is hereby appointed, and the Securities
Administrator hereby accepts its appointment as, initial Certificate Registrar
in respect of the Certificates and shall maintain books for the registration
and for the transfer of Certificates (the "Certificate Register"). The Trustee
may appoint a bank or trust company to act as successor Certificate Registrar.
A registration book shall be maintained for the Certificates collectively. The
Certificate Registrar may resign or be discharged or removed and a new
successor may be appointed in accordance with the procedures and requirements
set forth in Sections 6.06 and 6.07 hereof with respect to the resignation,
discharge or removal of the Securities Administrator and the appointment of a
successor Securities Administrator. The Certificate Registrar may appoint, by
a written instrument delivered to the Holders and the Master Servicer, any
bank or trust
52
company to act as co-registrar under such conditions as the Certificate
Registrar may prescribe; provided, however, that the Certificate Registrar
shall not be relieved of any of its duties or responsibilities hereunder by
reason of such appointment.
Section 3.03 Transfer and Exchange of Certificates.
(a) A Certificate (other than Book-Entry Certificates which shall be
subject to Section 3.09 hereof) may be transferred by the Holder thereof only
upon presentation and surrender of such Certificate at the office of the
Certificate Registrar duly endorsed or accompanied by an assignment duly
executed by such Holder or his duly authorized attorney in such form as shall
be satisfactory to the Certificate Registrar. Upon the transfer of any
Certificate in accordance with the preceding sentence, the Securities
Administrator on behalf of the Trustee shall execute, and the Authenticating
Agent shall authenticate and deliver to the transferee, one or more new
Certificates of the same Class and evidencing, in the aggregate, the same
aggregate Certificate Balance (or Notional Amount) as the Certificate being
transferred. No service charge shall be made to a Certificateholder for any
registration of transfer of Certificates, but the Certificate Registrar may
require payment of a sum sufficient to cover any tax or governmental charge
that may be imposed in connection with any registration of transfer of
Certificates.
(b) A Certificate may be exchanged by the Holder thereof for any number
of new Certificates of the same Class, in authorized denominations,
representing in the aggregate the same Certificate Balance (or Notional
Amount) as the Certificate surrendered, upon surrender of the Certificate to
be exchanged at the office of the Certificate Registrar duly endorsed or
accompanied by a written instrument of transfer duly executed by such Holder
or his duly authorized attorney in such form as is satisfactory to the
Certificate Registrar. Certificates delivered upon any such exchange will
evidence the same obligations, and will be entitled to the same rights and
privileges, as the Certificates surrendered. No service charge shall be made
to a Certificateholder for any exchange of Certificates, but the Certificate
Registrar may require payment of a sum sufficient to cover any tax or
governmental charge that may be imposed in connection with any exchange of
Certificates. Whenever any Certificates are so surrendered for exchange, the
Securities Administrator on behalf of the Trustee shall execute, and the
Authenticating Agent shall authenticate, date and deliver the Certificates
which the Certificateholder making the exchange is entitled to receive.
(c) By acceptance of a Restricted 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
thereon and agrees that it will transfer such a Certificate only as provided
herein.
The following restrictions shall apply with respect to the transfer and
registration of transfer of a Restricted Certificate to a transferee that
takes delivery in the form of a Definitive Certificate:
(i) The Certificate Registrar shall register the transfer of a
Restricted Certificate if the requested transfer is (x) to the Depositor
or an affiliate (as defined in Rule 405 under the ▇▇▇▇ ▇▇▇) of the
Depositor or (y) being made to a "qualified
53
institutional buyer" (a "QIB") as defined in Rule 144A under the
Securities Act of 1933, as amended (the "Act") by a transferor that has
provided the Certificate Registrar with a certificate in the form of
Exhibit H hereto; and
(ii) The Certificate Registrar shall register the transfer of a
Restricted Certificate if the requested transfer is being made to an
"accredited investor" under Rule 501(a)(1), (2), (3) or (7) under the
Act, or to any Person all of the equity owners in which are such
accredited investors, by a transferor who furnishes to the Certificate
Registrar a letter of the transferee substantially in the form of Exhibit
I hereto.
(d) No transfer of an ERISA-Restricted Certificate in the form of a
Definitive Certificate shall be made to any Person or shall be effective
unless the Certificate Registrar, on behalf of the Trustee, has received
(A) a certificate substantially in the form of Exhibit J hereto (or
Exhibit B, in the case of a Residual Certificate) from such transferee or
(B) an Opinion of Counsel satisfactory to the Certificate Registrar to
the effect that the purchase and holding of such a Certificate will not
constitute or result in any nonexempt prohibited transactions under Title
I of ERISA or Section 4975 of the Code and will not subject the
Certificate Registrar, the Trustee, the Master Servicer, the Depositor or
the Securities Administrator to any obligation in addition to those
undertaken in the Agreement; provided, however, that the Certificate
Registrar will not require such certificate or opinion in the event that,
as a result of a change of law or otherwise, counsel satisfactory to the
Certificate Registrar has rendered an opinion to the effect that the
purchase and holding of an ERISA-Restricted Certificate by a Plan or a
Person that is purchasing or holding such a Certificate with the assets
of a Plan will not constitute or result in a prohibited transaction under
Title I of ERISA or Section 4975 of the Code and will not subject the
Certificate Registrar, the Trustee, the Master Servicer, the Depositor or
the Securities Administrator to any obligation in addition to those
undertaken in this Agreement. Each Transferee of an ERISA-Restricted
Certificate that is a Book-Entry Certificate shall be deemed to have made
the appropriate representation set forth in paragraph 2 and the
representation set forth in paragraph 3 of Exhibit J. The preparation and
delivery of the certificate and opinions referred to above shall not be
an expense of the Trust Fund, the Certificate Registrar, the Trustee, the
Master Servicer, the Depositor or the Securities Administrator.
Notwithstanding the foregoing, no opinion or certificate shall be
required for the initial issuance of the ERISA-Restricted Certificates to the
Underwriter. The Certificate Registrar shall have no obligation to monitor
transfers of Book-Entry Certificates that are ERISA-Restricted Certificates
and shall have no liability for transfers of such Certificates in violation of
the transfer restrictions. The Certificate Registrar shall be under no
liability to any Person for any registration of transfer of any
ERISA-Restricted Certificate that is in fact not permitted by this Section
3.03(d) and neither the Securities Administrator nor the Paying Agent shall
have any liability for making any payments due on such Certificate to the
Holder thereof or taking any other action with respect to such Holder under
the provisions of this Agreement so long as the transfer was registered by the
Certificate Registrar in accordance with the foregoing requirements. The
Securities Administrator, on behalf of the Trustee, shall be entitled, but not
obligated, to recover from any Holder of any ERISA-Restricted Certificate that
was in fact a Plan or a Person acting on behalf of a Plan any payments made on
such ERISA-Restricted Certificate at and after such time. Any such payments so
recovered by the Securities Administrator, on behalf of
54
the Trustee, shall be paid and delivered by the Securities Administrator, on
behalf of the Trustee, to the last preceding Holder of such Certificate that
is not such a Plan or Person acting on behalf of a Plan.
(e) As a condition of the registration of transfer or exchange of any
Certificate, the Certificate Registrar may require the certified taxpayer
identification number of the owner of the Certificate and the payment of a sum
sufficient to cover any tax or other governmental charge imposed in connection
therewith; provided, however, that the Certificate Registrar shall have no
obligation to require such payment or to determine whether or not any such tax
or charge may be applicable. No service charge shall be made to the
Certificateholder for any registration, transfer or exchange of a Certificate.
(f) Notwithstanding anything to the contrary contained herein, no
Residual Certificate may be owned, pledged or transferred, directly or
indirectly, by or to (i) a Disqualified Organization or (ii) an individual,
corporation or partnership or other person unless such person (A) is not a
Non-U.S. Person or (B) is a Non-U.S. Person that holds a Residual Certificate
in connection with the conduct of a trade or business within the United States
and has furnished the transferor and the Certificate Registrar with an
effective Internal Revenue Service Form W-8ECI or successor form at the time
and in the manner required by the Code (any such person who is not covered by
clause (A) or (B) above is referred to herein as a "Non-permitted Foreign
Holder").
Prior to and as a condition of the registration of any transfer, sale or
other disposition of a Residual Certificate, the proposed transferee shall
deliver to the Certificate Registrar an affidavit in substantially the form
attached hereto as Exhibit B representing and warranting, among other things,
that such transferee is neither a Disqualified Organization, an agent or
nominee acting on behalf of a Disqualified Organization, nor a Non-permitted
Foreign Holder (any such transferee, a "Permitted Transferee"), and the
proposed transferor shall deliver to the Trustee and the Certificate Registrar
an affidavit in substantially the form attached hereto as Exhibit C. In
addition, the Trustee or the Certificate Registrar may (but shall have no
obligation to) require, prior to and as a condition of any such transfer, the
delivery by the proposed transferee of an Opinion of Counsel, addressed to the
Trustee and the Certificate Registrar, that such proposed transferee or, if
the proposed transferee is an agent or nominee, the proposed beneficial owner,
is not a Disqualified Organization, agent or nominee thereof, or a
Non-permitted Foreign Holder. Notwithstanding the registration in the
Certificate Register of any transfer, sale, or other disposition of a Residual
Certificate to a Disqualified Organization, an agent or nominee thereof, or
Non-permitted Foreign Holder, such registration shall be deemed to be of no
legal force or effect whatsoever and such Disqualified Organization, agent or
nominee thereof, or Non-permitted Foreign Holder shall not be deemed to be a
Certificateholder for any purpose hereunder, including, but not limited to,
the receipt of distributions on such Residual Certificate. The Depositor and
the Certificate Registrar shall be under no liability to any Person for any
registration or transfer of a Residual Certificate to a Disqualified
Organization, agent or nominee thereof or Non-permitted Foreign Holder or for
the Paying Agent making any payments due on such Residual Certificate to the
Holder thereof or for taking any other action with respect to such Holder
under the provisions of the Agreement, so long as the transfer was effected in
accordance with this Section 3.03(f), unless the Certificate Registrar shall
have actual knowledge at the time of such transfer or the time of such payment
or other action that the transferee is a Disqualified Organization, or an
agent or nominee thereof, or Non-permitted Foreign Holder. The Certificate
55
Registrar shall be entitled to recover from any Holder of a Residual
Certificate that was a Disqualified Organization, agent or nominee thereof, or
Non-permitted Foreign Holder at the time it became a Holder or any subsequent
time it became a Disqualified Organization, agent or nominee thereof, or
Non-permitted Foreign Holder, all payments made on such Residual Certificate
at and after either such times (and all costs and expenses, including but not
limited to attorneys' fees, incurred in connection therewith). Any payment
(not including any such costs and expenses) so recovered by the Certificate
Registrar shall be paid and delivered to the last preceding Holder of such
Residual Certificate.
If any purported transferee shall become a registered Holder of a
Residual Certificate in violation of the provisions of this Section 3.03(f),
then upon receipt of written notice to the Trustee or the Certificate
Registrar that the registration of transfer of such Residual Certificate was
not in fact permitted by this Section 3.03(f), the last preceding Permitted
Transferee shall be restored to all rights as Holder thereof retroactive to
the date of such registration of transfer of such Residual Certificate. The
Depositor, the Certificate Registrar and the Trustee shall be under no
liability to any Person for any registration of transfer of a Residual
Certificate that is in fact not permitted by this Section 3.03(f), or for the
Paying Agent making any payment due on such Certificate to the registered
Holder thereof or for taking any other action with respect to such Holder
under the provisions of this Agreement so long as the transfer was registered
upon receipt of the affidavit described in the preceding paragraph of this
Section 3.03(f).
(g) Each Holder or Certificate Owner of a Restricted Certificate,
ERISA-Restricted Certificate or Residual Certificate, or an interest therein,
by such Holder's or Owner's acceptance thereof, shall be deemed for all
purposes to have consented to the provisions of this section.
Section 3.04 Cancellation of Certificates.
Any Certificate surrendered for registration of transfer or exchange
shall be cancelled and retained in accordance with normal retention policies
with respect to cancelled certificates maintained by the Certificate
Registrar.
Section 3.05 Replacement of Certificates.
If (i) any Certificate is mutilated and is surrendered to the Trustee or
the Certificate Registrar or (ii) the Certificate Registrar receives evidence
to its satisfaction of the destruction, loss or theft of any Certificate, and
there is delivered to the Trustee and the Certificate Registrar such security
or indemnity as may be required by them to save each of them harmless, then,
in the absence of notice to the Depositor, the Trustee or the Certificate
Registrar that such destroyed, lost or stolen Certificate has been acquired by
a protected purchaser, the Securities Administrator on behalf of the Trustee
shall execute and the Authenticating Agent shall authenticate and deliver, in
exchange for or in lieu of any such mutilated, destroyed, lost or stolen
Certificate, a new Certificate of like tenor and Certificate Balance. Upon the
issuance of any new Certificate under this Section 3.05, the Trustee, the
Depositor or the Certificate Registrar may require the payment of a sum
sufficient to cover any tax or other governmental charge that may be imposed
in relation thereto and any other expenses (including the fees and expenses of
the Trustee, the Depositor or the Certificate Registrar) connected therewith.
Any
56
replacement Certificate issued pursuant to this Section 3.05 shall
constitute complete and indefeasible evidence of ownership in the applicable
Trust Fund, as if originally issued, whether or not the lost, stolen or
destroyed Certificate shall be found at any time.
If after the delivery of such new Certificate, a protected purchaser of
the original Certificate in lieu of which such new Certificate was issued
presents for payment such original Certificate, the Depositor, the Certificate
Registrar and the Trustee or any agent shall be entitled to recover such new
Certificate from the Person to whom it was delivered or any Person taking
therefrom, except a protected purchaser, and shall be entitled to recover upon
the security or indemnity provided therefor to the extent of any loss, damage,
cost or expenses incurred by the Depositor, the Certificate Registrar, the
Trustee or any agent in connection therewith.
Section 3.06 Persons Deemed Owners.
Subject to the provisions of Section 3.09 with respect to Book-Entry
Certificates, the Depositor, the Master Servicer, the Trustee, the Certificate
Registrar, the Paying Agent and any agent of any of them shall treat the
Person in whose name any Certificate is registered upon the books of the
Certificate Registrar as the owner of such Certificate for the purpose of
receiving distributions pursuant to Sections 5.01 and 5.02 and for all other
purposes whatsoever, and neither the Depositor, the Master Servicer, the
Trustee, the Certificate Registrar, the Paying Agent nor any agent of any of
them shall be affected by notice to the contrary.
Section 3.07 Temporary Certificates.
(a) Pending the preparation of definitive Certificates, upon the order of
the Depositor, the Securities Administrator on behalf of the Trustee shall
execute and the Authenticating Agent shall authenticate and deliver temporary
Certificates that are printed, lithographed, typewritten, mimeographed or
otherwise produced, in any authorized denomination, substantially of the tenor
of the definitive Certificates in lieu of which they are issued and with such
variations as the authorized officers executing such Certificates may
determine, as evidenced by their execution of such Certificates.
(b) 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 or agency of the Certificate Registrar without
charge to the Holder. Upon surrender for cancellation of any one or more
temporary Certificates, the Securities Administrator on behalf of the Trustee
shall execute and the Authenticating Agent shall authenticate and deliver in
exchange therefor a like aggregate Certificate Balance of definitive
Certificates of the same Class in the authorized denominations. Until so
exchanged, the temporary Certificates shall in all respects be entitled to the
same benefits under this Agreement as definitive Certificates of the same
Class.
Section 3.08 Appointment of Paying Agent.
The Trustee may appoint a Paying Agent (which may be the Trustee) for the
purpose of making distributions to the Certificateholders hereunder. The
Securities Administrator is hereby appointed as the initial Paying Agent. The
Trustee shall cause any Paying Agent, other than the
57
Securities Administrator, to execute and deliver to the Trustee an instrument
in which such Paying Agent shall agree with the Trustee that such Paying Agent
will hold all sums held by it for the payment to the Certificateholders in an
Eligible Account (which shall be the Distribution Account) in trust for the
benefit of the Certificateholders entitled thereto until such sums shall be
paid to the Certificateholders. All funds remitted by the Securities
Administrator to any such Paying Agent for the purpose of making distributions
shall be paid to the Certificateholders on each Distribution Date and any
amounts not so paid shall be returned on such Distribution Date to the
Securities Administrator. If the Paying Agent is not the Trustee or the
Securities Administrator, the Securities Administrator shall cause to be
remitted to the Paying Agent on or before the Business Day prior to each
Distribution Date, by wire transfer in immediately available funds, the funds
to be distributed on such Distribution Date. Any Paying Agent shall be either
a bank or trust company or otherwise authorized under law to exercise
corporate trust powers.
Section 3.09 Book-Entry Certificates.
(a) Each Class of Book-Entry Certificates, upon original issuance, shall
be issued in the form of one or more typewritten Certificates representing the
Book-Entry Certificates. The Book-Entry Certificates shall initially be
registered on the Certificate Register in the name of the nominee of the
Clearing Agency, and no Certificate Owner will receive a definitive
certificate representing such Certificate Owner's interest in the Book-Entry
Certificates, except as provided in Section 3.09(c). Unless Definitive
Certificates have been issued to Certificate Owners of Book-Entry Certificates
pursuant to Section 3.09(c):
(i) the provisions of this Section 3.09 shall be in full force and
effect;
(ii) the Certificate Registrar, the Paying Agent and the Trustee
shall deal with the Clearing Agency for all purposes (including the
making of distributions on the Book-Entry Certificates) as the authorized
representatives of the Certificate Owners and the Clearing Agency and
shall be responsible for crediting the amount of such distributions to
the accounts of such Persons entitled thereto, in accordance with the
Clearing Agency's normal procedures;
(iii) to the extent that the provisions of this Section 3.09
conflict with any other provisions of this Agreement, the provisions of
this Section 3.09 shall control; and
(iv) the rights of Certificate Owners shall be exercised only
through the Clearing Agency and the Clearing Agency Participants and
shall be limited to those established by law and agreements between such
Certificate Owners and the Clearing Agency and/or the Clearing Agency
Participants. Unless and until Definitive Certificates are issued
pursuant to Section 3.09(c), the initial Clearing Agency will make
book-entry transfers among the Clearing Agency Participants and receive
and transmit distributions of principal of and interest on the Book-Entry
Certificates to such Clearing Agency Participants.
(b) Whenever notice or other communication to the Certificateholders is
required under this Agreement, unless and until Definitive Certificates shall
have been issued to
58
Certificate Owners pursuant to Section 3.09(c), the Securities Administrator
shall give all such notices and communications specified herein to be given to
Holders of the Book-Entry Certificates to the Clearing Agency.
(c) If (i) (A) the Clearing Agency or the Depositor advises the
Certificate Registrar in writing that the Clearing Agency is no longer willing
or able to discharge properly its responsibilities with respect to the
Book-Entry Certificates, and (B) the Depositor is unable to locate a qualified
successor satisfactory to the Depositor and the Certificate Registrar or, (ii)
after the occurrence of an Event of Default, Certificate Owners representing
beneficial interests aggregating not less than 50% of the Class Principal
Balance of a Class of Book-Entry Certificates advise the Paying Agent and the
Clearing Agency through the Clearing Agency Participants in writing that the
continuation of a book-entry system through the Clearing Agency is no longer
in the best interests of the Certificate Owners of a Class of Book-Entry
Certificates, the Certificate Registrar shall notify the Clearing Agency to
effect notification to all Certificate Owners, through the Clearing Agency, of
the occurrence of any such event and of the availability of Definitive
Certificates to Certificate Owners requesting the same. Upon surrender to the
Certificate Registrar of the Book-Entry Certificates by the Clearing Agency,
accompanied by registration instructions from the Clearing Agency for
registration, the Certificate Registrar shall issue the Definitive
Certificates. Neither the Depositor, the Certificate Registrar nor the Trustee
shall be liable for any delay in delivery of such instructions and may
conclusively rely on, and shall be protected in relying on, such instructions.
Upon the issuance of Definitive Certificates all references herein to
obligations imposed upon or to be performed by the Clearing Agency shall be
deemed to be imposed upon and performed by the Certificate Registrar, to the
extent applicable, with respect to such Definitive Certificates and the
Certificate Registrar shall recognize the holders of the Definitive
Certificates as Certificateholders hereunder. Notwithstanding the foregoing,
the Certificate Registrar, upon the instruction of the Depositor, shall have
the right to issue Definitive Certificates on the Closing Date in connection
with credit enhancement programs.
ARTICLE IV
ADMINISTRATION OF THE TRUST FUND
Section 4.01 Custodial Accounts; Distribution Account.
(a) On or prior to the Closing Date, the Master Servicer shall have
caused each Servicer to establish and maintain one or more Custodial Accounts,
as provided in the related Purchase and Servicing Agreement, into which all
Scheduled Payments and unscheduled payments with respect to the related
Mortgage Loans, net of any deductions or reimbursements permitted under the
related Purchase and Servicing Agreement, shall be deposited. On each
Distribution Account Deposit Date, the Servicers shall remit to the Securities
Administrator for deposit into the Distribution Account, all amounts so
required to be deposited into such account in accordance with the terms of the
related Purchase and Servicing Agreements.
(b) The Securities Administrator, as Paying Agent for the Trustee, shall
establish and maintain an Eligible Account entitled "Distribution Account of
Deutsche Bank National Trust Company, as Trustee for the benefit of ▇▇▇▇▇▇
▇▇▇▇▇▇▇ Mortgage Loan Trust 2004-8AR,
59
Holders of Mortgage Pass-Through Certificates." The Securities Administrator
shall, promptly upon receipt from the Servicers on each related Distribution
Account Deposit Date, deposit into the Distribution Account and retain on
deposit until the related Distribution Date the following amounts:
(i) the aggregate of collections with respect to the Mortgage Loans
remitted by the Servicers from the related Custodial Accounts in
accordance with the Purchase and Servicing Agreements;
(ii) any amounts required to be deposited by the Master Servicer
with respect to the Mortgage Loans for the related Due Period pursuant to
this Agreement, including the amount of any Advances or Compensating
Interest Payments with respect to the Mortgage Loans not paid by the
Servicers; and
(iii) any other amounts so required to be deposited in the
Distribution Account in the related Due Period pursuant to this
Agreement.
(c) In the event the Master Servicer or a Servicer has remitted in error
to the Distribution Account any amount not required to be remitted in
accordance with the definition of Available Funds, it may at any time direct
the Securities Administrator to withdraw such amount from the Distribution
Account for repayment to the Master Servicer or Servicer, as applicable, by
delivery of an Officer's Certificate to the Securities Administrator and the
Trustee which describes the amount deposited in error.
(d) On each Distribution Date and Initial Optional Purchase Date, the
Securities Administrator, as Paying Agent, shall withdraw from funds available
in the Distribution Account and distribute the Available Funds to the
Certificateholders and any other parties entitled thereto in the amounts and
priorities set forth in Section 5.02. The Securities Administrator may from
time to time withdraw from the Distribution Account and pay the Master
Servicer, the Trustee, the Securities Administrator or any Servicer any
amounts permitted to be paid or reimbursed to such Person from funds in the
Distribution Account pursuant to this Agreement or any Purchase and Servicing
Agreement.
(e) [Reserved].
(f) Funds in the Distribution Account may be invested in Permitted
Investments selected by and at the written direction of the Securities
Administrator, which shall mature not later than one Business Day prior to the
Distribution Date (except that if such Permitted Investment is an obligation
of the Securities Administrator or any of its Affiliates, or is managed or
advised by the Securities Administrator or any Affiliate, then such Permitted
Investment shall mature not later than such applicable Distribution Date) and
any such Permitted Investment shall not be sold or disposed of prior to its
maturity. All such Permitted Investments shall be made in the name of the
Trustee (in its capacity as such) or its nominee. All income and gain realized
from any Permitted Investment of amounts on deposit in the Distribution
Account shall be for the benefit of the Securities Administrator, as
additional compensation for its duties hereunder, and shall be subject to its
withdrawal or order from time to time, and shall not be part of the Trust
Fund. The amount of any losses incurred in respect of any such investments
shall be
60
deposited in such Distribution Account by the Securities
Administrator out of its own funds, without any right of reimbursement
therefor, immediately as realized.
Section 4.02 Permitted Withdrawals from the Custodial Accounts and the
Distribution Account.
(a) Each Servicer may from time to time make withdrawals from its
Custodial Account for the following purposes:
(i) to reimburse itself for unreimbursed Advances made by it, such
right of reimbursement pursuant to this subclause (i) being limited to
amounts received on the Mortgage Loan(s) in respect of which any such
Advance was made;
(ii) to reimburse itself for any Nonrecoverable Advance previously
made by it;
(iii) to reimburse itself for unreimbursed Servicer Advances, each
Servicer's right to reimbursement pursuant to this clause (a) with
respect to any Mortgage Loan being limited to amounts received on such
Mortgage Loan(s) which represent late recoveries of the payments for
which such advances were made pursuant to the related Purchase and
Servicing Agreement;
(iv) to reimburse itself for expenses incurred by it and
reimbursable pursuant to the related Purchase and Servicing Agreement;
and
(v) to withdraw any amount deposited in the Custodial Account and
not required to be deposited therein.
To the extent required by the related Purchase and Servicing Agreement
each Servicer shall keep and maintain separate accounting, on a Mortgage Loan
by Mortgage Loan basis, for the purpose of justifying any withdrawal from its
Custodial Account pursuant to such subclauses (i), (ii), (iii), (iv) and (v).
Prior to making any withdrawal from its Custodial Account pursuant to
subclause (ii), the related Servicer shall deliver to the Master Servicer an
Officer's Certificate of a Servicing Officer indicating the amount of any
previous Advance determined by the Servicer to be a Nonrecoverable Advance and
identifying the related Mortgage Loans(s), and their respective portions of
such Nonrecoverable Advance.
(b) The Securities Administrator shall withdraw funds from the
Distribution Account for distributions to Certificateholders in the manner
specified in this Agreement (and to withhold from the amounts so withdrawn,
the amount of any taxes that it is authorized to withhold pursuant to Section
10.01). In addition, the Securities Administrator may from time to time make
withdrawals from the Distribution Account for the following purposes:
(i) to pay all costs and expenses described in clause (d) of the
definition of "Available Funds";
(ii) to pay to the Securities Administrator the investment earnings
on the Distribution Account as its compensation for the related
Distribution Date;
61
(iii) to withdraw and return to the Master Servicer any amount
deposited in the Distribution Account and not required to be deposited
therein; and
(iv) to clear and terminate the Distribution Account upon
termination of the Agreement pursuant to Section 7.01 hereof.
(v) [Reserved].
Section 4.03 [Reserved].
Section 4.04 [Reserved].
Section 4.05 Reports to Trustee and Certificateholders.
On each Distribution Date, the Securities Administrator shall have
prepared and shall make available to the Trustee, the Depositor, the Rating
Agencies and each Certificateholder a written report setting forth the
following information (on the basis of Mortgage Loan level information
obtained from the Master Servicer and the Servicers):
(a) the amount of the distributions, separately identified, with respect
to each Class of Certificates;
(b) the amount of the distributions set forth in the clause (a) allocable
to principal, separately identifying the aggregate amount of any Principal
Prepayments or other unscheduled recoveries of principal included in that
amount;
(c) the amount of the distributions set forth in the clause (a) allocable
to interest and how it was calculated;
(d) the amount of any unpaid Class Interest Shortfall and the related
accrued interest thereon, with respect to each Class of Certificates;
(e) the Class Principal Balance of each Class of Certificates after
giving effect to the distribution of principal on that Distribution Date;
(f) the aggregate Stated Principal Balance of the Mortgage Loans in each
Loan Group and in each Aggregate Loan Group at the end of the related
Prepayment Period, and the applicable Weighted Average Net Mortgage Rate of
each Loan Group, each Aggregate Loan Group and the Mortgage Pool at the
beginning of the related Due Period;
(g) the Senior Percentage and the Subordinated Percentage for each Loan
Group and for each Aggregate Loan Group for the following Distribution Date;
(h) the Senior Prepayment Percentage and Subordinate Prepayment
Percentage for each Loan Group for the following Distribution Date;
62
(i) in the aggregate and with respect to each Loan Group, the amount of
the Servicing Fee paid to or retained by the Master Servicer and by each
Servicer, respectively, and in the aggregate with respect to each Loan Group;
(j) in the aggregate and with respect to each Loan Group, the amount of
Monthly Advances for the related Due Period;
(k) in the aggregate and with respect to each Loan Group, the number and
Stated Principal Balance of the Mortgage Loans that were (A) Delinquent
(exclusive of Mortgage Loans in foreclosure) (1) 30 to 59 days, (2) 60 to 89
days and (3) 90 or more days, (B) in foreclosure and Delinquent (1) 30 to 59
days, (2) 60 to 89 days and (3) 90 or more days and (C) in bankruptcy as of
the close of business on the last day of the calendar month preceding that
Distribution Date;
(l) in the aggregate and with respect to each Loan Group, the total
number and principal balance of any REO properties as of the close of business
on the last day of the preceding Due Period;
(m) in the aggregate and with respect to each Loan Group, the amount of
Realized Losses incurred during the preceding calendar month;
(n) in the aggregate and with respect to each Loan Group, the cumulative
amount of Realized Losses incurred since the Closing Date;
(o) the Realized Losses, if any, allocated to each Class of Certificates
on that Distribution Date;
(p) the Class Principal Balance of each Class of Certificates after
giving effect to the distribution of principal on the Distribution Date;
(q) the Special Hazard Loss Coverage Amount, the Fraud Loss Coverage
Amount and the Bankruptcy Loss Coverage Amount, in each case as of the related
Determination Date;
(r) the Pass-Through Rate for each Class of Certificates for that
Distribution Date;
(s) the amount of any Transfer Payment Received paid to an
Undercollateralized Group or Transfer Payment Made by an Overcollateralized
Group pursuant to Section 5.08 hereof; and
(t) the total amount of Prepayment Penalties collected, as reported by
the Servicers.
The Securities Administrator shall make such reports available each month
via its website at ▇▇▇▇://▇▇▇.▇▇▇▇▇▇▇.▇▇▇. Assistance in using the website may
be obtained by calling the Securities Administrator's customer service desk at
(▇▇▇) ▇▇▇-▇▇▇▇. Certificateholders and other parties that are unable to use
the website are entitled to have a paper copy mailed to them via first class
mail by contacting the Securities Administrator and indicating such. In
preparing or furnishing the foregoing reports, the Securities Administrator
shall be entitled to rely conclusively on the accuracy of the information or
data regarding the Mortgage Loans and the
63
related REO Properties that has been provided to the Securities Administrator
by the Master Servicer and the Servicers, and neither the Trustee nor the
Securities Administrator shall be obligated to verify, recompute, reconcile or
recalculate any such information or data.
Upon the reasonable advance written request of any Certificateholder that
is a savings and loan, bank or insurance company, which request, if received
by the Trustee or any agent thereof, shall be promptly forwarded to the
Securities Administrator, the Securities Administrator shall provide, or cause
to be provided, (or, to the extent that such information or documentation is
not required to be provided by a Servicer under the applicable Purchase and
Servicing Agreement, shall use reasonable efforts to obtain such information
and documentation from such Servicer, and provide) to such Certificateholders
such reports and access to information and documentation regarding the
Mortgage Loans as such Certificateholders may reasonably deem necessary to
comply with applicable regulations of the Office of Thrift Supervision or its
successor or other regulatory authorities with respect to an investment in the
Certificates; provided, however, that the Securities Administrator shall be
entitled to be reimbursed by such Certificateholders for the Securities
Administrator's actual expenses incurred in providing such reports and access.
ARTICLE V
DISTRIBUTIONS TO HOLDERS OF CERTIFICATES
Section 5.01 Distributions Generally.
(a) Subject to Section 7.01 respecting the final distribution on the
Certificates, on each Distribution Date the Securities Administrator or the
Paying Agent shall make all distributions in accordance with this Article V.
Such distributions shall be made by check mailed to each Certificateholder's
address as it appears on the Certificate Register of the Certificate Registrar
or, upon written request made to the Securities Administrator at least five
Business Days prior to the related Record Date by any Certificateholder owning
an aggregate initial Certificate Balance of at least $1,000,000, or in the
case of a Class of Interest-Only Certificates or Residual Certificate, a
Percentage Interest of not less than 100%, by wire transfer in immediately
available funds to an account specified in the request and at the expense of
such Certificateholder; provided, however, that the final distribution in
respect of any Certificate shall be made only upon presentation and surrender
of such Certificate at the Certificate Registrar's Corporate Trust Office;
provided, further, that the foregoing provisions shall not apply to any Class
of Certificates as long as such Certificate remains a Book-Entry Certificate
in which case all payments made shall be made through the Clearing Agency and
its Clearing Agency Participants. Notwithstanding the reduction of the Class
Principal Balance of any Class of Certificates to zero, such Class will be
outstanding hereunder (solely for the purpose of receiving distributions and
not for any other purpose) until the termination of the respective obligations
and responsibilities of the Depositor, the Master Servicer, the Securities
Administrator and the Trustee hereunder in accordance with Article VII. Wire
transfers will be made at the expense of the Holder requesting such wire
transfer by deducting a wire transfer fee from the related distribution.
Notwithstanding such final payment of principal of any of the Certificates,
each Residual Certificate will remain outstanding until the termination of
each REMIC and the payment in full of all other amounts due with respect to
the Residual Certificates and at such
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time such final payment in retirement of any Residual Certificate will be made
only upon presentation and surrender of such Certificate at the Certificate
Registrar's Corporate Trust Office. If any payment required to be made on the
Certificates is to be made on a day that is not a Business Day, then such
payment will be made on the next succeeding Business Day.
(b) All distributions or allocations made with respect to the
Certificateholders within each Class on each Distribution Date shall be
allocated among the outstanding Certificates in such Class equally in
proportion to their respective initial Class Principal Balances or initial
Class Notional Amounts (or Percentage Interests).
Section 5.02 Priorities of Distribution.
(a) (1) With respect to Available Funds for Loan Group 1, on each
Distribution Date, the Securities Administrator shall withdraw the Available
Funds from the funds available therefor in the Distribution Account and apply
such funds to distributions on the specified Classes of Group 1 Senior
Certificates in the following order and priority and, in each case, to the
extent of Available Funds remaining:
(i) [Reserved];
(ii) concurrently, to each interest-bearing Class of Group 1 Senior
Certificates, an amount allocable to interest equal to the related Class
Optimal Interest Distribution Amount, any shortfall being allocated among
such Classes in proportion to the amount of the Class Optimal Interest
Distribution Amount that would have been distributed in the absence of
such shortfall; provided that prior to an Accrual Termination Date, the
related Accrual Amount shall be distributed as provided in Section
5.02(a)(1)(iii);
(iii) the Accrual Amount shall be distributed in accordance with the
Accretion Direction Rule;
(iv) to each Class of Group 1 Senior Certificates, concurrently as
follows:
(x) [Reserved]; and
(y) on each Distribution Date prior to the Senior Credit
Support Depletion Date the related Principal Amount up to the amount
of the Senior Principal Distribution Amount for Loan Group 1 for
such Distribution Date will be distributed sequentially, to the
Class A-R and Class 1-A Certificates, in that order, until their
respective Class Principal Balances are reduced to zero; and
(v) [Reserved];
(2) With respect to the Available Funds for Loan Group 2 on each
Distribution Date, the Securities Administrator shall withdraw such Available
Funds from the funds available therefor in the Distribution Account and apply
such funds to distributions on the specified Classes of Group 2 Senior
Certificates in the following order and priority and, in each case, to the
extent of such Available Funds remaining:
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(i) [Reserved];
(ii) concurrently, to each interest-bearing Class of Group 2 Senior
Certificates, an amount allocable to interest equal to the related Class
Optimal Interest Distribution Amount, any shortfall being allocated among
such Classes in proportion to the amount of the Class Optimal Interest
Distribution Amount, with respect to the Group 2 Certificates that would
have been distributed in the absence of such shortfall; provided that
prior to an Accrual Termination Date, the related Accrual Amount shall be
distributed as provided in Section 5.02(a)(2)(iii);
(iii) [Reserved];
(iv) to each Class of Group 2 Senior Certificates, concurrently as
follows:
(x) [Reserved]; and
(y) the related Principal Amount, up to the amount of the
Senior Principal Distribution Amount for Loan Group 2 for such
Distribution Date, will be distributed to the Class 2-A
Certificates, until its Class Principal Balance is reduced to zero;
and
(v) [Reserved];
(3) With respect to the Available Funds for Loan Group 3 on each
Distribution Date, the Securities Administrator shall withdraw such Available
Funds from the funds available therefor in the Distribution Account and apply
such funds to distributions on the specified Classes of Group 3 Senior
Certificates in the following order and priority and, in each case, to the
extent of such Available Funds remaining:
(i) [Reserved];
(ii) concurrently, to each interest-bearing Class of Group 3 Senior
Certificates, an amount allocable to interest equal to the related Class
Optimal Interest Distribution Amount, any shortfall being allocated among
such Classes in proportion to the amount of the Class Optimal Interest
Distribution Amount, with respect to the Group 3 Certificates that would
have been distributed in the absence of such shortfall; provided that
prior to an Accrual Termination Date, the related Accrual Amount shall be
distributed as provided in Section 5.02(a)(3)(iii);
(iii) [Reserved];
(iv) to each Class of Group 3 Senior Certificates, concurrently as
follows:
(x) [Reserved]; and
(y) the related Principal Amount, up to the amount of the
Senior Principal Distribution Amount for Loan Group 3 for such
Distribution Date, will be distributed to the Class 3-A
Certificates, until its Class Principal Balance is reduced to zero;
and
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(v) [Reserved];
(4) With respect to the Available Funds for Loan Group 4 on each
Distribution Date, the Securities Administrator shall withdraw such Available
Funds from the funds available therefor in the Distribution Account and apply
such funds to distributions on the specified Classes of Group 4 Senior
Certificates in the following order and priority and, in each case, to the
extent of such Available Funds remaining:
(i) [Reserved];
(ii) concurrently, to each interest-bearing Class of Group 4 Senior
Certificates, an amount allocable to interest equal to the related Class
Optimal Interest Distribution Amount, any shortfall being allocated among
such Classes in proportion to the amount of the Class Optimal Interest
Distribution Amount, with respect to the Group 4 Certificates that would
have been distributed in the absence of such shortfall; provided that
prior to an Accrual Termination Date, the related Accrual Amount shall be
distributed as provided in Section 5.02(a)(4)(iii);
(iii) [Reserved];
(iv) to each Class of Group 4 Senior Certificates, concurrently as
follows:
(x) [Reserved]; and
(y) the related Principal Amount, up to the amount of the
Senior Principal Distribution Amount for Loan Group 2 for such
Distribution Date, will be distributed concurrently to the following
Classes of Certificates:
(▇) ▇▇.▇▇▇▇▇▇▇▇▇▇% concurrently, to the Class 4-A-1, Class
4-A-2 and Class 4-A-5 Certificates, pro rata, until their
respective Class Principal Balances are reduced to zero; and
(▇) ▇▇.▇▇▇▇▇▇▇▇▇▇% sequentially, to the Class 4-A-3 and
Class 4-A-4 Certificates, in that order, until their respective
Class Principal Balances are reduced to zero; and
(v) [Reserved];
(5) (i) On each Distribution Date, after making the distributions described in
Section 5.02(a)(1) and Section 5.02(a)(2), Available Funds from each Loan
Group in Aggregate Loan Group I after making the distributions described in
Section 5.02(a)(1) and Section 5.02(a)(2) will be distributed to the Aggregate
Group I Senior Certificates to the extent provided in Section 5.08 hereof. (i)
On each Distribution Date, after making the distributions described in Section
5.02(a)(3) and Section 5.02(a)(4), Available Funds from each Loan Group in
Aggregate Loan Group II after making the distributions described in Section
5.02(a)(3) and Section 5.02(a)(4) will be distributed to the Aggregate Group
II Senior Certificates to the extent provided in Section 5.08 hereof.
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(6) I. On each Distribution Date, Available Funds from all of the Loan
Groups in Aggregate Loan Group I remaining after making the distributions
described in Section 5.02(a)(1), Section 5.02(a)(2) and Section 5.02(a)(5)
above will be distributed to the Aggregate Group I Subordinated Certificates,
the Class P Certificates and the Class A-R Certificates in the following order
and priority and, in each case, to the extent of such funds remaining:
(A) to the Class S-B-1 Certificates, an amount allocable
to interest equal to the Class Optimal Interest Distribution
Amount for such Class for such Distribution Date;
(B) to the Class S-B-1 Certificates, an amount allocable
to principal equal to its Pro Rata Share for such Distribution
Date until the Class Principal Balance thereof is reduced to
zero;
(C) to the Class S-B-2 Certificates, an amount allocable
to interest equal to the Class Optimal Interest Distribution
Amount for such Class for such Distribution Date;
(D) to the Class S-B-2 Certificates, an amount allocable
to principal equal to its Pro Rata Share for such Distribution
Date until the Class Principal Balance thereof is reduced to
zero;
(E) to the Class S-B-3 Certificates, an amount allocable
to interest equal to the amount of the Class Optimal Interest
Distribution Amount for such Class for such Distribution Date;
(F) to the Class S-B-3 Certificates, an amount allocable
to principal equal to its Pro Rata Share for such Distribution
Date until the Class Principal Balance thereof is reduced to
zero;
(G) to the Class S-B-4 Certificates, an amount allocable
to interest equal to the amount of the Class Optimal Interest
Distribution Amount for such Class for such Distribution Date;
(H) to the Class S-B-4 Certificates, an amount allocable
to principal equal to its Pro Rata Share for such Distribution
Date until the Class Principal Balance thereof is reduced to
zero;
(I) to the Class S-B-5 Certificates, an amount allocable
to interest equal to the Class Optimal Interest Distribution
Amount for such Class for such Distribution Date;
(J) to the Class S-B-5 Certificates, an amount allocable
to principal equal to its Pro Rata Share for such Distribution
Date until the Class Principal Balance thereof is reduced to
zero;
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(K) to the Class S-B-6 Certificates, an amount allocable
to interest equal to the Class Optimal Interest Distribution
Amount for such Class for such Distribution Date; and
(L) to the Class S-B-6 Certificates, an amount allocable
to principal equal to its Pro Rata Share for such Distribution
Date until the Class Principal Balance thereof is reduced to
zero;
(M) [Reserved]; and
(N) to the Class A-R Certificates, any remaining funds in
the Trust Fund; provided, that such amounts shall not include
the $100 held in trust for the Class P Certificates.
II. On each Distribution Date, Available Funds from all of the Loan
Groups in Aggregate Loan Group II remaining after making the distributions
described in Section 5.02(a)(3), Section 5.02(a)(4) and Section 5.02(a)(5)
above, will be distributed to the Group II Subordinated Certificates, the
Class P Certificates and the Class A-R Certificates in the following order and
priority and, in each case, to the extent of such funds remaining:
(A) to the Class B-1 Certificates, an amount allocable to
interest equal to the Class Optimal Interest Distribution
Amount for such Class for such Distribution Date;
(B) to the Class B-1 Certificates, an amount allocable to
principal equal to its Pro Rata Share for such Distribution
Date until the Class Principal Balance thereof is reduced to
zero;
(C) to the Class B-2 Certificates, an amount allocable to
interest equal to the Class Optimal Interest Distribution
Amount for such Class for such Distribution Date;
(D) to the Class B-2 Certificates, an amount allocable to
principal equal to its Pro Rata Share for such Distribution
Date until the Class Principal Balance thereof is reduced to
zero;
(E) to the Class B-3 Certificates, an amount allocable to
interest equal to the amount of the Class Optimal Interest
Distribution Amount for such Class for such Distribution Date;
(F) to the Class B-3 Certificates, an amount allocable to
principal equal to its Pro Rata Share for such Distribution
Date until the Class Principal Balance thereof is reduced to
zero;
(G) to the Class B-4 Certificates, an amount allocable to
interest equal to the amount of the Class Optimal Interest
Distribution Amount for such Class for such Distribution Date;
69
(H) to the Class B-4 Certificates, an amount allocable to
principal equal to its Pro Rata Share for such Distribution
Date until the Class Principal Balance thereof is reduced to
zero;
(I) to the Class B-5 Certificates, an amount allocable to
interest equal to the Class Optimal Interest Distribution
Amount for such Class for such Distribution Date;
(J) to the Class B-5 Certificates, an amount allocable to
principal equal to its Pro Rata Share for such Distribution
Date until the Class Principal Balance thereof is reduced to
zero;
(K) to the Class B-6 Certificates, an amount allocable to
interest equal to the Class Optimal Interest Distribution
Amount for such Class for such Distribution Date; and
(L) to the Class B-6 Certificates, an amount allocable to
principal equal to its Pro Rata Share for such Distribution
Date until the Class Principal Balance thereof is reduced to
zero;
(M) [Reserved]; and
(N) to the Class A-R Certificates, any remaining funds in
the Trust Fund; provided, that such amounts shall not include
the $100 held in trust for the Class P Certificates.
On each Distribution Date, all amounts representing Prepayment Penalties
received by the Securities Administrator with respect to the related
Prepayment Period will be distributed to the holders of the Class P
Certificates. On the Distribution Date in September 2009, the $100 held in
trust for the Class P Certificates will be distributed to the holders of the
Class P Certificates.
(b) On each Distribution Date with respect to each Class or Component of
Accrual Certificates, the Accrual Amount for such Class or Component for such
Distribution Date shall not (except as provided in the second to last sentence
in this paragraph) be distributed as interest with respect to such Class or
Component of Accrual Certificates, but shall instead be added to the related
Class Principal Balance of such Class on the related Distribution Date. With
respect to any Distribution Date on which principal payments on any Class or
Component of Accrual Certificates are distributed pursuant to Section
5.02(a)(1)(iv)(y), Section 5.02(a)(2)(iv)(y), Section 5.02(a)(3)(iv)(y) or
Section 5.02(a)(4)(iv)(y), as applicable, the related Accrual Amount shall be
deemed to have been added on such Distribution Date to the related Class
Principal Balance or Component Balance (and included in the amount
distributable on the related Class or Classes or Component of Accretion
Directed Certificates pursuant to Section 5.02(a)(1)(iii), Section
5.02(a)(2)(iii), Section 5.02(a)(3)(iii), or Section 5.02(a)(4)(iii), as
applicable, for such Distribution Date) and the related distribution thereon
shall be deemed to have been applied concurrently towards the reduction of all
or a portion of the amount so added and, to the extent of any excess, towards
the reduction of the Class Principal Balance or Component Balance of such
Class or Component of Accrual Certificates immediately prior to such
Distribution Date.
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(c) On each Distribution Date on or after the related Senior Credit
Support Depletion Date, notwithstanding the allocation and priorities set
forth in Section 5.02(a)(4)(iv)(y), the Principal Amount for the Group 4
Senior shall be distributed concurrently, as principal, on such Classes, pro
rata, on the basis of their respective Class Principal Balances, until the
Class Principal Balances thereof are reduced to zero.
(d) On each Distribution Date, the amount referred to in clause (i) of
the definition of Class Optimal Interest Distribution Amount for each Class of
Certificates or Component thereof for such Distribution Date shall be reduced
for each Class or Component of Senior Certificates of a Senior Certificate
Group, each related Class of Subordinated Certificates by (i) the related
Class' pro rata share of the Net Prepayment Interest Shortfalls for the
related Loan Group based (x) with respect to a Class of Senior Certificates or
Component thereof, on the related Class Optimal Interest Distribution Amount
for such Distribution Date, and (y) (1) with respect to the Group I
Subordinated Certificates on and prior to the related Senior Termination Date
on the Assumed Interest Amount or after such related Senior Termination Date,
the related Class Optimal Interest Distribution Amount for such Distribution
Date in the absence of such Net Prepayment Interest Shortfalls and (2) with
respect to the Group II Subordinated Certificates on and prior to the related
Senior Termination Date on the Assumed Interest Amount or after such related
Senior Termination Date, the related Class Optimal Interest Distribution
Amount for such Distribution Date in the absence of such Net Prepayment
Interest Shortfalls, and (ii) the related Class' Allocable Share of (A) after
the related Special Hazard Coverage Termination Date, with respect to each
Mortgage Loan in the related Loan Group (or after the related Senior Credit
Support Depletion Date, any Mortgage Loan in Aggregate Loan Group I or any
Mortgage Loan in Aggregate Loan Group II, as applicable) that became a Special
Hazard Mortgage Loan during the calendar month preceding the month of such
Distribution Date, the excess of one month's interest at the related Adjusted
Net Mortgage Rate on the Stated Principal Balance of such Mortgage Loan as of
the first day of the related Due Period in such month over the amount of
Liquidation Proceeds applied as interest on such Mortgage Loan with respect to
such month, (B) after the related Bankruptcy Coverage Termination Date, with
respect to each Mortgage Loan in the related Loan Group (or after the related
Senior Credit Support Depletion Date, any Mortgage Loan in Aggregate Loan
Group I or any Mortgage Loan in Aggregate Loan Group II, as applicable) that
became subject to a Bankruptcy Loss during the calendar month preceding the
month of such Distribution Date, the interest portion of the related Debt
Service Reduction or Deficient Valuation, (C) each Relief Act Reduction for
the Mortgage Loans in the related Loan Group (or after the related Senior
Credit Support Depletion Date, any Mortgage Loan in Aggregate Loan Group I or
any Mortgage Loan in Aggregate Loan Group II, as applicable) incurred during
the calendar month preceding the month of such Distribution Date and (D) after
the related Fraud Loss Coverage Termination Date, with respect to each
Mortgage Loan in the related Loan Group (or after the related Senior Credit
Support Depletion Date, any Mortgage Loan in Aggregate Loan Group I or any
Mortgage Loan in Aggregate Loan Group II, as applicable) that became a Fraud
Loan during the calendar month preceding the month of such Distribution Date,
the excess of one month's interest at the related Adjusted Net Mortgage Rate
on the Stated Principal Balance of such Mortgage Loan as of the related Due
Period in such month over the amount of Liquidation Proceeds applied as
interest on such Mortgage Loan with respect to such month.
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(e) Notwithstanding the priority and allocation contained in Section
5.02(a)(6)I., if, on any Distribution Date, with respect to any Class of Group
I Subordinated Certificates, the sum of the related Class Subordination
Percentages of such Class and of all Classes of Group I Subordinated
Certificates which have a higher numerical Class designation than such Class
(the "Applicable Credit Support Percentage") is less than the Original
Applicable Credit Support Percentage for such Class, no distribution of
Principal Prepayments will be made to any such Classes (the "Restricted
Classes") and the amount of such Principal Prepayments otherwise distributable
to the Restricted Classes shall be distributed to the outstanding Classes of
Group I Subordinated Certificates having lower numerical Class designations
than such Class, pro rata, based on their respective Class Principal Balances
immediately prior to such Distribution Date and shall be distributed in the
sequential order provided in Section 5.02(a)(6)I. Notwithstanding anything in
this Agreement to the contrary, the Class of Group I Subordinated Certificates
then outstanding with the highest distribution priority shall not be a
Restricted Class.
(f) Notwithstanding the priority and allocation contained in Section
5.02(a)(6)II., if, on any Distribution Date, with respect to any Class of
Group II Subordinated Certificates, the Applicable Credit Support Percentage
for a Class of Group II Subordinated Certificates is less than the Original
Applicable Credit Support Percentage for such Class, no distribution of
Principal Prepayments will be made to any such Classes (the "Restricted
Classes") and the amount of such Principal Prepayments otherwise distributable
to the Restricted Classes shall be distributed to the outstanding Classes of
Group II Subordinated Certificates having lower numerical Class designations
than such Class, pro rata, based on their respective Class Principal Balances
immediately prior to such Distribution Date and shall be distributed in the
sequential order provided in Section 5.02(a)(6)II. Notwithstanding anything in
this Agreement to the contrary, the Class of Group II Subordinated
Certificates then outstanding with the highest distribution priority shall not
be a Restricted Class.
(g) If Subsequent Recoveries have been received with respect to a
Liquidated Mortgage Loan in an Aggregate Loan Group, the amount of such
Subsequent Recoveries will be applied sequentially, in the order of payment
priority, to increase the Class Principal Balance or Component Principal
Balance of each Class of Certificates or Component thereof related to that
Aggregate Loan Group (other than the Class I-C and Class II-C Certificates) to
which Realized Losses have been allocated, but in each case by not more than
the amount of Realized Losses previously allocated to that Class of
Certificates or Component pursuant to Section 4.02. Holders of such
Certificates will not be entitled to any payment in respect of the Class
Optimal Interest Distribution Amount 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 pro rata to the Certificate
Balance or Component Balance of each Certificate of such Class or Component
thereof.
Section 5.03 [Reserved].
Section 5.04 Allocation of Losses.
(a) On or prior to each Distribution Date, the Securities Administrator
shall aggregate the information provided by each Servicer with respect to the
total amount of Realized Losses, including Excess Losses, experienced on the
Mortgage Loans for the related Distribution Date.
(b) Realized Losses with respect to the Mortgage Loans in any Aggregate
Loan Group on any Distribution Date shall be allocated as follows:
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(i) [Reserved]; and
(ii) (A) any Realized Loss with respect to any Loan Group in
Aggregate Loan Group I (other than an Excess Loss) shall be allocated
first to the Aggregate Group I Subordinated Certificates in reverse order
of their respective numerical Class designations (beginning with the
Class of Aggregate Group I Subordinated Certificates then outstanding
with the highest numerical Class designation) until the respective Class
Principal Balance of each such Class is reduced to zero, and second to
the Senior Certificates (other than any Notional Amount Certificates, if
applicable), pro rata on the basis of their respective Class Principal
Balances or, in the case of any Class of Accrual Certificates or Accrual
Component, on the basis of the lesser of their Class Principal Balance or
Component Balance, as applicable, and their initial Class Principal
Balance or Component Balance, as applicable, in each case immediately
prior to the related Distribution Date until the respective Class
Principal Balance of each such Class is reduced to zero;
(B) any Excess Losses on the Mortgage Loans in a Loan Group in
Aggregate Loan Group I shall be allocated to the Classes of Certificates
of the related Senior Certificate Group (other than any Notional Amount
Certificates) and the Aggregate Group I Subordinated Certificates then
outstanding, pro rata, on the basis of, with respect to such Senior
Certificates, their respective Class Principal Balances, or in the case
of any Class of Accrual Certificates or Accrual Component, on the basis
of the lesser of their respective Class Principal Balance and their
respective initial Class Principal Balance or their respective Component
Balance or their respective initial Component Balance, as the case may
be, in each case immediately prior to the related Distribution Date and,
with respect to each Class of Aggregate Group I Subordinated
Certificates, the applicable Assumed Balance for each such Class relating
to the Loan Group in Aggregate Loan Group I in which such Excess Loss
occurs; provided, however, on any Distribution Date after a related
Senior Termination Date for a Senior Certificate Group in Aggregate
Certificate Group I, (i) any Bankruptcy Losses or Fraud Losses on the
Mortgage Loans in the related Loan Group shall be allocated pro rata to
all Classes and Components of Senior Certificates (other than any
Notional Amount Certificates, if applicable) in the related Senior
Certificate Group on the basis of their respective initial Class
Principal Balances or Component Balances, as applicable, or in the case
of any or in the case of any Class of Accrual Certificates or Accrual
Component, on the basis of the lesser of their respective Class Principal
Balance and their respective initial Class Principal Balance or their
respective Component Balance or their respective initial Component
Balance, as the case may be, in each case immediately prior to the
related Distribution Date, and (ii) any Special Hazard Losses on the
Mortgage Loans in the related Loan Group shall be allocated pro rata to
(x) all Classes and Components of Senior Certificates (other than any
Notional Amount Certificates, if applicable) in the related Senior
Certificate Group on the basis of their respective initial Class
Principal Balances or Component Balances, as applicable, or in the case
of any or in the case of any Class of Accrual Certificates or Accrual
Component, on the basis of the lesser of their respective
73
Class Principal Balance and their respective initial Class Principal
Balance or their respective Component Balance or their respective initial
Component Balance, as the case may be, in each case immediately prior to
the related Distribution Date, and (y) to the Aggregate Group II
Subordinated Certificates, to the extent set forth in Section 5.04(g)
hereof;
(C) any Realized Loss with respect to any Loan Group in Aggregate
Loan Group II (other than an Excess Loss) shall be allocated first to the
Aggregate Group II Subordinated Certificates in reverse order of their
respective numerical Class designations (beginning with the Class of
Aggregate Group II Subordinated Certificates then outstanding with the
highest numerical Class designation) until the respective Class Principal
Balance of each such Class is reduced to zero, and second to the Senior
Certificates (other than any Notional Amount Certificates, if
applicable), pro rata on the basis of their respective Class Principal
Balances or, in the case of any Class of Accrual Certificates or Accrual
Component, on the basis of the lesser of their Class Principal Balance or
Component Balance, as applicable, and their initial Class Principal
Balance or Component Balance, as applicable, in each case immediately
prior to the related Distribution Date until the respective Class
Principal Balance of each such Class is reduced to zero; provided, that
any Realized Losses on the Group 4 Mortgage Loans that would otherwise be
allocated to the Class 4-A-2 or Class 4-A-3 Certificates will instead be
allocated to the Class 4-A-5 Certificates, until its Class Principal
Balance is reduced to zero; and
(D) any Excess Losses on the Mortgage Loans in a Loan Group in
Aggregate Loan Group II shall be allocated to the Classes of Certificates
of the related Senior Certificate Group (other than any Notional Amount
Certificates) and the Aggregate Group II Subordinated Certificates then
outstanding, pro rata, on the basis of, with respect to such Senior
Certificates, their respective Class Principal Balances, or in the case
of any Class of Accrual Certificates or Accrual Component, on the basis
of the lesser of their respective Class Principal Balance and their
respective initial Class Principal Balance or their respective Component
Balance or their respective initial Component Balance, as the case may
be, in each case immediately prior to the related Distribution Date and,
with respect to each Class of Aggregate Group II Subordinated
Certificates, the applicable Assumed Balance for each such Class relating
to the Loan Group in Aggregate Loan Group II in which such Excess Loss
occurs; provided, however, on any Distribution Date after a related
Senior Termination Date for a Senior Certificate Group in Aggregate
Certificate Group II, (i) any Bankruptcy Losses or Fraud Losses on the
Mortgage Loans in the related Loan Group shall be allocated pro rata to
all Classes and Components of Senior Certificates (other than any
Notional Amount Certificates, if applicable) in the related Senior
Certificate Group on the basis of their respective initial Class
Principal Balances or Component Balances, as applicable, or in the case
of any or in the case of any Class of Accrual Certificates or Accrual
Component, on the basis of the lesser of their respective Class Principal
Balance and their respective initial Class Principal Balance or their
respective Component Balance or their respective initial Component
Balance, as the case may be, in each case immediately prior to the
related Distribution Date, and (ii) any Special Hazard Losses on the
Mortgage Loans in the related Loan Group shall be allocated pro rata to
(x) all Classes and Components of Senior Certificates
74
(other than any Notional Amount Certificates, if applicable) in the
related Senior Certificate Group on the basis of their respective initial
Class Principal Balances or Component Balances, as applicable, or in the
case of any or in the case of any Class of Accrual Certificates or
Accrual Component, on the basis of the lesser of their respective Class
Principal Balance and their respective initial Class Principal Balance or
their respective Component Balance or their respective initial Component
Balance, as the case may be, in each case immediately prior to the
related Distribution Date, and (y) to the Aggregate Group I Subordinated
Certificates, to the extent set forth in Section 5.04(g) hereof;
(c) The Class Principal Balance of the Class of Aggregate Group I
Subordinated Certificates and Aggregate Group II Subordinated Certificates, as
applicable, then outstanding with the highest numerical Class designation
shall be reduced on each Distribution Date by the amount, if any, by which the
aggregate of the Class Principal Balances of all outstanding Classes of
Aggregate Group I Certificates or Group II, as applicable, Certificates (after
giving effect to the distribution of principal and the allocation of Realized
Losses on such Distribution Date) exceeds the aggregate Stated Principal
Balance of the Mortgage Loans in the related Aggregate Loan Group for the
following Distribution Date.
(d) Any Realized Loss allocated to a Class of Certificates or any
reduction in the Class Principal Balance of a Class of Certificates pursuant
to Section 5.04(b) above or Section 5.04(g) below shall be allocated among the
Certificates of such Class in proportion to their respective Certificate
Balances.
(e) Any allocation of Realized Losses to a Certificate or to any
Component or any reduction in the Certificate Balance of a Certificate,
pursuant to Section 5.04(b) above or Section 5.04(g) below shall be
accomplished by reducing the Certificate Balance or Component Balance thereof,
as applicable, immediately following the distributions made on the related
Distribution Date in accordance with the definition of "Certificate Balance"
or "Component Balance," as the case may be. All Realized Losses or Excess
Losses allocated to a Class of Component Certificates will be allocated, pro
rata, to the related Components.
(f) For the avoidance of doubt, no Realized Losses shall be allocated to
the Class P Certificates.
(g) On any Distribution Date after the Senior Credit Support Depletion
Date has occurred with respect to an Aggregate Certificate Group, if a Special
Hazard Loss on a Mortgage Loan in the related Aggregate Loan Group is
allocated to the related Classes of Senior Certificates, such Special Hazard
Loss will be allocated among such Senior Certificates and the most subordinate
outstanding Class of Subordinated Certificates related to the other Aggregate
Loan Group, pro rata, based on their respective Class Principal Balances
immediately prior to such Distribution Date; provided, however, that any such
Special Hazard Loss allocated to such Subordinated Certificates will not
exceed the remaining Special Hazard Loss Coverage Amount for such other
Aggregate Loan Group.
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Section 5.05 Advances by the Master Servicer.
If any Servicer fails to remit any Advance required to be made under the
applicable Purchase and Servicing Agreement, the Master Servicer shall itself
make, or shall cause the successor Servicer to make, such Advance. If the
Master Servicer determines that an Advance is required, it shall on the
Business Day preceding the related Distribution Date immediately following
such Determination Date remit to the Securities Administrator from its own
funds (or funds advanced by the applicable Servicer) for deposit in the
Distribution Account immediately available funds in an amount equal to such
Advance. The Master Servicer and each Servicer shall be entitled to be
reimbursed for all Advances made by it. Notwithstanding anything to the
contrary herein, in the event the Master Servicer determines in its reasonable
judgment that an Advance is non-recoverable, the Master Servicer shall be
under no obligation to make such Advance. If the Master Servicer determines
that an Advance is non-recoverable, it shall, on or prior to the related
Distribution Date, deliver an Officer's Certificate to the Trustee and the
Securities Administrator to such effect.
Section 5.06 Compensating Interest Payments.
The amount of compensation payable to the Securities Administrator in
respect of the Mortgage Loans and any Distribution Date shall be reduced (but
not below zero) by the amount of any aggregate Compensating Interest Payment
from the Servicers for such Distribution Date, but only to the extent that
Prepayment Interest Shortfalls relating to such Distribution Date are required
to be paid by the Servicers pursuant to the Purchase and Servicing Agreements,
as amended by the Acknowledgements, but are not actually paid by the Servicer.
Such amount shall not be treated as an Advance and shall not be reimbursable.
Section 5.07 [Reserved].
Section 5.08 Cross-Collateralization; Adjustments to Available Funds.
(a) If on any Distribution Date the aggregate Class Principal Balance of
Senior Certificates in a Senior Certificate Group in Aggregate Certificate
Group I is greater than the aggregate Stated Principal Balance of the Mortgage
Loans in the related Loan Group (with respect to the Aggregate Group I Senior
Certificates, the "Undercollateralized Group") at the end of the Prepayment
Period related to the immediately preceding Distribution Date, then the
Securities Administrator shall apply the Available Funds of the other Loan
Group in Aggregate Loan Group I that is not undercollateralized (with respect
to the Aggregate Group I Senior Certificates, the "Overcollateralized Group"),
as follows:
(i) to add to the Available Funds of the Undercollateralized Group
an amount equal to the lesser of (a) one month's interest on the Transfer
Payment Received of the Undercollateralized Group at the Weighted Average
Mortgage Rate (minus the weighted average Expense Fee Rate) applicable to
the Undercollateralized Group and (b) Available Funds of the
Overcollateralized Group remaining after making distributions to the
Certificates of the Overcollateralized Group(s) on such Distribution Date
pursuant to Section 5.02; and
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(ii) to the Senior Certificates in Aggregate Senior Certificate
Group that are the Undercollateralized Group, to the extent of the
principal portion of Available Funds of the Overcollateralized Group in
Senior Certificate Group I remaining after making distributions to the
Senior Certificates in Aggregate Senior Certificate Group I that are the
Overcollateralized Group on such Distribution Date pursuant to Section
5.02, until the Class Principal Balance of the Senior Certificates of
such Undercollateralized Group equals the aggregate Stated Principal
Balance of the Mortgage Loans in the related Loan Group.
(b) If on any Distribution Date the aggregate Class Principal Balance of
Senior Certificates in a Senior Certificate Group in Aggregate Certificate
Group II is greater than the aggregate Stated Principal Balance of the
Mortgage Loans in the related Loan Group (with respect to the Aggregate Group
II Senior Certificates, the "Undercollateralized Group") at the end of the
Prepayment Period related to the immediately preceding Distribution Date, then
the Securities Administrator shall apply the Available Funds of the other Loan
Group in Aggregate Loan Group II that is not undercollateralized (with respect
to the Aggregate Group II Senior Certificates, the "Overcollateralized
Group"), as follows:
(i) to add to the Available Funds of the Undercollateralized Group
an amount equal to the lesser of (a) one month's interest on the Transfer
Payment Received of the Undercollateralized Group at the Weighted Average
Mortgage Rate (minus the weighted average Expense Fee Rate) applicable to
the Undercollateralized Group and (b) Available Funds of the
Overcollateralized Group remaining after making distributions to the
Certificates of the Overcollateralized Group(s) on such Distribution Date
pursuant to Section 5.02; and
(ii) to the Senior Certificates in Aggregate Senior Certificate
Group that are the Undercollateralized Group, to the extent of the
principal portion of Available Funds of the Overcollateralized Group in
Senior Certificate Group II remaining after making distributions to the
Senior Certificates in Aggregate Senior Certificate Group II that are the
Overcollateralized Group on such Distribution Date pursuant to Section
5.02, until the Class Principal Balance of the Senior Certificates of
such Undercollateralized Group equals the aggregate Stated Principal
Balance of the Mortgage Loans in the related Loan Group.
(c) The payment received by an Undercollateralized Group in an Aggregate
Loan Group is referred to as a "Transfer Payment Received." The payment made
by an Overcollateralized Group in an Aggregate Loan Group is referred to as a
"Transfer Payment Made."
Section 5.09 Determination of Pass-Through Rates for LIBOR Certificates.
(a) On each Interest Determination Date so long as any LIBOR Certificates
are outstanding, the Securities Administrator will determine LIBOR on the
basis of the British Bankers' Association ("BBA") "Interest Settlement Rate"
for one-month deposits in U.S. dollars as found on Telerate page 3750 as of
11:00 a.m. London time on each LIBOR Determination Date. "Telerate Page 3750"
means the display page currently so designated on the Moneyline
77
Telerate Service (formerly the Dow ▇▇▇▇▇ Markets) (or such other page as may
replace that page on that service for the purpose of displaying comparable
rates or prices).
(b) If on any Interest Determination Date, LIBOR cannot be determined as
provided in paragraph (a) of this Section 5.09, the Securities Administrator
shall either (i) request each Reference Bank to inform the Securities
Administrator of the quotation offered by its principal London office for
making one-month United States dollar deposits in leading banks in the London
interbank market, as of 11:00 a.m. (London time) on such Interest
Determination Date or (ii) in lieu of making any such request, rely on such
Reference Bank quotations that appear at such time on the Reuters Screen LIBO
Page (as defined in the International Swap Dealers Association Inc. Code of
Standard Wording, Assumptions and Provisions for Swaps, 1986 Edition), to the
extent available. LIBOR for the next Interest Accrual Period will be
established by the Securities Administrator on each interest Determination
Date as follows:
(i) If on any Interest Determination Date two or more Reference
Banks provide such offered quotations, LIBOR for the next applicable
Interest Accrual Period shall be the arithmetic mean of such offered
quotations (rounding such arithmetic mean upwards if necessary to the
nearest whole multiple of 1/32%).
(ii) If on any Interest Determination Date only one or none of the
Reference Banks provides such offered quotations, LIBOR for the next
Interest Accrual Period shall be whichever is the higher of (i) LIBOR as
determined on the previous Interest Determination Date or (ii) the
Reserve Interest Rate. The "Reserve Interest Rate" shall be the rate per
annum which the Securities Administrator determines to be either (i) the
arithmetic mean (rounded upwards if necessary to the nearest whole
multiple of 1/32%) of the one-month United States dollar lending rates
that New York City banks selected by the Securities Administrator are
quoting, on the relevant Interest Determination Date, to the principal
London offices of at least two of the Reference Banks to which such
quotations are, in the opinion of the Securities Administrator, being so
made, or (ii) in the event that the Securities Administrator can
determine no such arithmetic mean, the lowest one-month United States
dollar lending rate which New York City banks selected by the Securities
Administrator are quoting on such Interest Determination Date to leading
European banks.
(iii) If on any Interest Determination Date the Securities
Administrator is required but is unable to determine the Reserve Interest
Rate in the manner provided in paragraph (b) above, LIBOR for the related
Classes of Certificates shall be LIBOR as determined on the preceding
applicable Interest Determination Date.
Until all of the LIBOR Certificates are paid in full, the Securities
Administrator will at all times retain at least four Reference Banks for the
purpose of determining LIBOR with respect to each Interest Determination Date.
The Securities Administrator initially shall designate the Reference Banks.
Each "Reference Bank" shall be a leading bank engaged in transactions in
Eurodollar deposits in the international Eurocurrency market, shall not
control, be controlled by, or be under common control with, the Securities
78
Administrator and shall have an established place of business in London. If
any such Reference Bank should be unwilling or unable to act as such or if the
Master Servicer should terminate its appointment as Reference Bank, the
Securities Administrator shall promptly appoint or cause to be appointed
another Reference Bank. The Securities Administrator shall have no liability
or responsibility to any Person for (i) the selection of any Reference Bank
for purposes of determining LIBOR or (ii) any inability to retain at least
four Reference Banks which is caused by circumstances beyond its reasonable
control.
(c) The Pass-Through Rate for each Class of LIBOR Certificates for each
Interest Accrual Period shall be determined by the Securities Administrator on
each Interest Determination Date so long as the LIBOR Certificates are
outstanding on the basis of LIBOR and the respective formulae appearing in
footnotes corresponding to the LIBOR Certificates in the table relating to the
Certificates in the Preliminary Statement.
(d) In determining LIBOR, any Pass-Through Rate for the LIBOR
Certificates, any Interest Settlement Rate, or any Reserve Interest Rate, the
Securities Administrator may conclusively rely and shall be protected in
relying upon the offered quotations (whether written, oral or on the Dow ▇▇▇▇▇
Markets) from the BBA designated banks, the Reference Banks or the New York
City banks as to LIBOR, the Interest Settlement Rate or the Reserve Interest
Rate, as appropriate, in effect from time to time. The Securities
Administrator shall not have any liability or responsibility to any Person for
(i) the selection of New York City banks for purposes of determining any
Reserve Interest Rate or (ii) its inability, following a good-faith reasonable
effort, to obtain such quotations from, the BBA designated banks, the
Reference Banks or the New York City banks or to determine such arithmetic
mean, all as provided for in this Section 5.09.
(e) The establishment of LIBOR and each Pass-Through Rate for the LIBOR
Certificates by the Securities Administrator shall (in the absence of manifest
error) be final, conclusive and binding upon each Holder of a Certificate and
the Securities Administrator.
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ARTICLE VI
CONCERNING THE TRUSTEE AND
THE SECURITIES ADMINISTRATOR; EVENTS OF DEFAULT
Section 6.01 Duties of Trustee and the Securities Administrator.
(a) The Trustee, except during the continuance of an Event of Default,
and the Securities Administrator undertakes to perform such duties and only
such duties as are specifically set forth in this Agreement. Any permissive
right of the Trustee or the Securities Administrator provided for in this
Agreement shall not be construed as a duty of the Trustee or the Securities
Administrator. If an Event of Default has occurred and has not otherwise been
cured or waived, the Trustee or the Securities Administrator shall exercise
such of the rights and powers vested in it by this Agreement and use the same
degree of care and skill in their exercise as a prudent Person would exercise
or use under the circumstances in the conduct of such Person's own affairs,
unless the Trustee is acting as master servicer, in which case it shall use
the same degree of care and skill (in its capacity as successor Master
Servicer) as a master servicer hereunder.
(b) Each of the Trustee and the Securities Administrator, upon receipt of
all resolutions, certificates, statements, opinions, reports, documents,
orders or other instruments furnished to the Trustee or the Securities
Administrator which are specifically required to be furnished pursuant to any
provision of this Agreement, 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 such resolution, certificate, statement, opinion, report,
document, order or other instrument furnished by the Master Servicer or any
Servicer to the Trustee or the Securities Administrator pursuant to this
Agreement, and shall not be required to recalculate or verify any numerical
information furnished to the Trustee or the Securities Administrator pursuant
to this Agreement. Subject to the immediately preceding sentence, if any such
resolution, certificate, statement, opinion, report, document, order or other
instrument is found not to conform to the form required by this Agreement in a
material manner the Securities Administrator shall take such action as it
deems appropriate to cause the instrument to be corrected, and if the
instrument is not corrected to the Securities Administrator 's satisfaction,
the Securities Administrator will provide notice thereof to the
Certificateholders and will, at the expense of the Trust Fund, which expense
shall be reasonable given the scope and nature of the required action, take
such further action as directed by the Certificateholders.
(c) Neither the Trustee nor the Securities Administrator shall have any
liability arising out of or in connection with this Agreement, except for its
negligence or willful misconduct. Notwithstanding anything in this Agreement
to the contrary, neither the Trustee nor the Securities Administrator shall be
liable for special, indirect or consequential losses or damages of any kind
whatsoever (including, but not limited to, lost profits). 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:
80
(i) The Trustee shall not be personally liable with respect to any
action taken, suffered or omitted to be taken by it in good faith in
accordance with the direction of Holders of Certificates as provided in
Section 6.18 hereof;
(ii) For all purposes under this Agreement, the Trustee shall not be
deemed to have notice of any Event of Default unless a Responsible
Officer of the Trustee has actual knowledge thereof or unless written
notice of any event which is in fact such a default is received by the
Trustee at the Corporate Trust Office of the Trustee, and such notice
references the Holders of the Certificates and this Agreement;
(iii) For all purposes under this Agreement, the Securities
Administrator shall not be deemed to have notice of any Event of Default
(other than resulting from a failure by the Master Servicer (i) to remit
funds (or to make Advances) or (ii) to furnish information to the
Securities Administrator when required to do so) unless a Responsible
Officer of the Securities Administrator has actual knowledge thereof or
unless written notice of any event which is in fact such a default is
received by the Securities Administrator at the address provided in
Section 11.07, and such notice references the Holders of the Certificates
and this Agreement;
(iv) No provision of this Agreement shall require the Trustee or the
Securities Administrator to expend or risk its own funds or otherwise
incur any financial liability in the performance of any of its duties
hereunder, or in the exercise of any of its rights or powers, if it shall
have reasonable grounds for believing that repayment of such funds or
indemnity reasonably satisfactory to it 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 this Agreement;
(v) Neither the Trustee nor the Securities Administrator shall be
responsible for any act or omission of the Master Servicer, the
Depositor, the Seller or any Servicer.
(d) The Trustee shall have no duty hereunder with respect to any
complaint, claim, demand, notice or other document it may receive or which may
be alleged to have been delivered to or served upon it by the parties as a
consequence of the assignment of any Mortgage Loan hereunder; provided,
however, that the Trustee shall promptly remit to the Master Servicer, upon
receipt any such complaint, claim, demand, notice or other document (i) which
is delivered to the Corporate Trust Office of the Trustee, (ii) of which a
Responsible Officer has actual knowledge, and (iii) which contains information
sufficient to permit the Trustee to make a determination that the real
property to which such document relates is a Mortgaged Property related to a
Mortgage Loan.
(e) Neither the Trustee nor the Securities Administrator shall be
personally liable with respect to any action taken, suffered or omitted to be
taken by it in good faith in accordance with the direction of the
Certificateholders of any Class holding Certificates which evidence, as to
such Class, Percentage Interests aggregating not less than 25% as to the time,
method and place of conducting any proceeding for any remedy available to the
Trustee or the Securities Administrator or exercising any trust or power
conferred upon the Trustee or the Securities
81
Administrator, as applicable, under this Agreement or the Acknowledgements.
(f) Neither the Trustee nor the Securities Administrator shall be
required to perform services under this Agreement, or to expend or risk its
own funds or otherwise incur financial liability for the performance of any of
its duties hereunder or the exercise of any of its rights or powers if there
is reasonable ground for believing that the timely payment of its fees and
expenses or the repayment of such funds or indemnity reasonably satisfactory
to it 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, as applicable, to perform, or be
responsible for the manner of performance of, any of the obligations of the
Master Servicer or any Servicer under this Agreement or any Purchase and
Servicing 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.
(g) The Trustee shall not be held liable by reason of any insufficiency
in the Distribution Account resulting from any investment loss on any
Permitted Investment included therein (except to the extent that the Trustee
is the obligor and has defaulted thereon).
(h) Neither the Trustee nor, except as otherwise provided herein, the
Securities Administrator shall have any duty (A) to see to any recording,
filing, or depositing of this Agreement or any agreement referred to herein or
any financing statement or continuation statement evidencing a security
interest, or to see to the maintenance of any such recording or filing or
depositing or to any rerecording, refiling or redepositing of any thereof, (B)
to see to any insurance, (C) to see to the payment or discharge of any tax,
assessment, or other governmental charge or any lien or encumbrance of any
kind owing with respect to, assessed or levied against, any part of the Trust
Fund other than from funds available in the Distribution Account, or (D) to
confirm or verify the contents of any reports or certificates of the Master
Servicer or any Servicer delivered to the Trustee or the Securities
Administrator pursuant to this Agreement believed by the Trustee or the
Securities Administrator, as applicable, to be genuine and to have been signed
or presented by the proper party or parties.
(i) Neither the Securities Administrator nor the Trustee shall be liable
in its individual capacity for an error of judgment made in good faith by a
Responsible Officer or other officers of the Trustee or the Securities
Administrator, as applicable, unless it shall be proved that the Trustee or
the Securities Administrator, as applicable, was negligent in ascertaining the
pertinent facts.
(j) Notwithstanding anything in this Agreement to the contrary, neither
the Securities Administrator nor the Trustee shall be liable for special,
indirect or consequential losses or damages of any kind whatsoever (including,
but not limited to, lost profits), even if the Trustee or the Securities
Administrator, as applicable, has been advised of the likelihood of such loss
or damage and regardless of the form of action.
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(k) Neither the Securities Administrator nor 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 agents of one another, or
of any Servicer.
Section 6.02 Certain Matters Affecting the Trustee and the Securities
Administrator.
Except as otherwise provided in Section 6.01:
(i) Each of the Trustee and the Securities Administrator may
request, and may rely and shall be protected in acting or refraining from
acting upon any resolution, Officer's Certificate, certificate of
auditors or any other certificate, statement, instrument, opinion,
report, notice, request, consent, order, approval, bond or other paper or
document believed by it to be genuine and to have been signed or
presented by the proper party or parties;
(ii) Each of the Trustee and the Securities Administrator may
consult with counsel and any advice of its counsel or Opinion of Counsel
shall be full and complete authorization and protection in respect of any
action taken or suffered or omitted by it hereunder in good faith and in
accordance with such advice or Opinion of Counsel;
(iii) Neither the Trustee nor the Securities Administrator shall be
personally liable for any action taken, suffered or omitted by it in good
faith and reasonably believed by it to be authorized or within the
discretion or rights or powers conferred upon it by this Agreement;
(iv) Unless an Event of Default shall have occurred and be
continuing, 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 the Holders of at least a
majority in Class Principal Balance (or Percentage Interest) of each
Class of Certificates; provided, however, that, if 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, not reasonably
assured to the Trustee or the Securities Administrator by the security
afforded to it by the terms of this Agreement, the Trustee or the
Securities Administrator, as applicable, may require indemnity reasonably
satisfactory to it against such expense or liability or payment of such
estimated expenses from the Certificateholders as a condition to
proceeding. The reasonable expense thereof shall be paid by the party
requesting such investigation and if not reimbursed by the requesting
party shall be reimbursed to the Trustee or the Securities Administrator,
as applicable, by the Trust Fund;
(v) Each of the Trustee and the Securities Administrator may execute
any of the trusts or powers hereunder or perform any duties hereunder
either directly or by or through agents, custodians or attorneys, which
agents, custodians or attorneys shall have any and all of the rights,
powers, duties and obligations of the Trustee and the Securities
83
Administrator conferred on them by such appointment, provided that each
of the Trustee and the Securities Administrator shall continue to be
responsible for its duties and obligations hereunder to the extent
provided herein, and provided further that neither the Trustee nor the
Securities Administrator shall be responsible for any misconduct or
negligence on the part of any such agent or attorney appointed with due
care by the Trustee or the Securities Administrator, as applicable;
(vi) 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 or the Acknowledgements or to institute, conduct or
defend any litigation hereunder or in relation hereto, in each case 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 or the Securities Administrator, as
applicable, security or indemnity reasonably satisfactory to it against
the costs, expenses and liabilities which may be incurred therein or
thereby;
(vii) The right of the Trustee and 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 answerable for other than its negligence or
willful misconduct in the performance of such act;
(viii) Neither the Trustee nor the Securities Administrator shall be
required to give any bond or surety in respect of the execution of the
Trust Fund created hereby or the powers granted hereunder; and
(ix) In order to comply with its duties under the U.S. Patriot Act,
the Trustee shall obtain and verify certain information and documentation
from the other parties established pursuant to this Agreement, including,
but not limited to each such party's name, address and other identifying
information.
Section 6.03 Trustee and Securities Administrator Not Liable for
Certificates.
The Trustee and the Securities Administrator make no representations as
to the validity or sufficiency of this Agreement, any Purchase and Servicing
Agreement or Acknowledgement or of the Certificates (other than, in the case
of the Securities Administrator, the certificate of authentication on the
Certificates) or of any Mortgage Loan, or related document save that the
Trustee and the Securities Administrator represent that, assuming due
execution and delivery by the other parties hereto, this Agreement has been
duly authorized, executed and delivered by it and constitutes its valid and
binding obligation, enforceable against it in accordance with its terms except
that such enforceability may be subject to (A) applicable bankruptcy and
insolvency laws and other similar laws affecting the enforcement of the rights
of creditors generally, and (B) general principles of equity regardless of
whether such enforcement is considered in a proceeding in equity or at law.
The Trustee and the Securities Administrator shall not be accountable for the
use or application by the Depositor of funds paid to the Depositor in
consideration of the assignment of the Mortgage Loans to the Trust Fund by the
Depositor or for the use or application of any funds deposited into the
Distribution Account or any other fund or account maintained with respect to
the Certificates. The Trustee and the
84
Securities Administrator shall not be responsible for the legality or validity
of this Agreement or any other document or agreement described in this Section
6.03 or the validity, priority, perfection or sufficiency of the security for
the Certificates issued or intended to be issued hereunder. Neither the
Trustee nor, except as otherwise provided herein, 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.
Section 6.04 Trustee and the Securities Administrator May Own
Certificates.
The Trustee and the Securities Administrator and any Affiliate or agent
of either of them in its individual or any other capacity may become the owner
or pledgee of Certificates and may transact banking and trust business with
the other parties hereto and their Affiliates with the same rights it would
have if it were not Trustee, Securities Administrator or such agent.
Section 6.05 Eligibility Requirements for Trustee.
The Trustee hereunder shall at all times be (i) an institution whose
accounts are insured by the FDIC, (ii) a corporation or national banking
association, organized and doing business under the laws of any State or the
United States of America, authorized under such laws to exercise corporate
trust powers, having a combined capital and surplus of not less than
$50,000,000 and subject to supervision or examination by federal or state
authority and (iii) not an Affiliate of the Master Servicer or any Servicer.
If such corporation or national banking association publishes reports of
condition at least annually, pursuant to law or to the requirements of the
aforesaid supervising or examining authority, then, for the purposes of this
Section, the combined capital and surplus of such corporation or national
banking association shall be deemed to be its combined capital and surplus as
set forth in its most recent report of condition so published. In case at any
time the Trustee shall cease to be eligible in accordance with provisions of
this Section, the Trustee shall resign immediately in the manner and with the
effect specified in Section 6.06.
Section 6.06 Resignation and Removal of Trustee and the Securities
Administrator.
(a) Each of 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 Trustee or the Securities Administrator, as applicable,
the Depositor and the Master Servicer. Upon receiving such notice of
resignation, the Depositor will promptly appoint a successor trustee or a
successor securities administrator, as applicable, by written instrument, one
copy of which instrument shall be delivered to the resigning Trustee or
resigning Securities Administrator, as applicable, one copy to the successor
trustee or successor securities administrator, as applicable, and one copy to
the Master Servicer. If no successor trustee or successor securities
administrator shall have been so appointed and shall have accepted appointment
within 30 days after the giving of such notice of resignation, the resigning
Trustee or resigning Securities Administrator, as applicable, may petition any
court of competent jurisdiction for the appointment of a successor trustee or
successor securities administrator, as applicable.
85
(b) If at any time (i) the Trustee shall cease to be eligible in
accordance with the provisions of Section 6.05 and shall fail to resign after
written request therefor by the Depositor, (ii) 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 of its property shall be appointed, or any public officer shall
take charge or control of the Trustee or the Securities Administrator or of
either of their property or affairs for the purpose of rehabilitation,
conservation or liquidation, (iii) a tax is imposed or threatened with respect
to the Trust Fund by any state in which the Trustee or the Trust Fund held by
the Trustee is located due to the location of the Trustee, or (iv) the
continued use of the Trustee or Securities Administrator would result in a
downgrading of the rating by any Rating Agency of any Class of Certificates
with a rating, then the Depositor shall remove the Trustee or the Securities
Administrator, as applicable, and the Depositor shall appoint a successor
trustee or successor securities administrator, as applicable, acceptable to
the Master Servicer by written instrument, one copy of which instrument shall
be delivered to the Trustee or Securities Administrator so removed, one copy
each to the successor trustee or successor securities Administrator, as
applicable, and one copy to the Master Servicer.
(c) The Holders of more than 50% of the Class Principal Balance (or
Percentage Interest) of each Class of Certificates may at any time upon 30
days' written notice to the Trustee or the Securities Administrator, as
applicable, and to the Depositor remove the Trustee or the Securities
Administrator, as applicable, by such written instrument, signed by such
Holders or their attorney-in-fact duly authorized, one copy of which
instrument shall be delivered to the Depositor, one copy to the Trustee or
Securities Administrator, as applicable and one copy to the Master Servicer;
the Depositor shall thereupon appoint a successor trustee or successor
securities administrator, as applicable, in accordance with this Section.
(d) Any resignation or removal of the Trustee or the Securities
Administrator, as applicable, and appointment of a successor trustee or
successor securities administrator pursuant to any of the provisions of this
Section shall become effective upon acceptance of appointment by the successor
trustee or the successor securities administrator, as applicable, as provided
in Section 6.07. If no successor trustee or successor securities administrator
shall have been so appointed and shall have accepted appointment within 30
days after such notice of dismissal, the Trustee or Securities Administrator,
as applicable, who received such notice of dismissal may petition any court of
competent jurisdiction for the appointment of a successor trustee or successor
securities administrator, as applicable.
(e) Any removal of the Master Servicer pursuant to an Event of Default
shall also result in the removal of the Securities Administrator and require
the appointment of a successor pursuant to Section 6.07.
Section 6.07 Successor Trustee and Successor Securities Administrator.
(a) Any successor trustee or successor securities administrator appointed
as provided in Section 6.06 shall execute, acknowledge and deliver to the
Depositor and to its predecessor trustee or predecessor securities
administrator, as applicable, an instrument accepting such appointment
hereunder, and thereupon the resignation or removal of the predecessor trustee
or predecessor securities administrator, as applicable, shall become effective
and such successor
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trustee or successor securities administrator, as applicable, 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, as
applicable, herein. The predecessor trustee or predecessor securities
administrator, as applicable, shall deliver to the successor trustee or
successor securities administrator, as applicable, all Trustee Mortgage Files
and documents and statements related to each Trustee Mortgage File held by it
hereunder, and shall duly assign, transfer, deliver and pay over to the
successor trustee the entire Trust Fund, together with all necessary
instruments of transfer and assignment or other documents properly executed
necessary to effect such transfer and such of the records or copies thereof
maintained by the predecessor trustee in the administration hereof as may be
requested by the successor trustee and shall thereupon be discharged from all
duties and responsibilities under this Agreement. In addition, the Depositor
and the predecessor trustee or predecessor securities administrator, as
applicable, shall execute and deliver such other instruments and do such other
things as may reasonably be required to more fully and certainly vest and
confirm in the successor trustee or successor securities administrator, as
applicable, all such rights, powers, duties and obligations.
(b) No successor trustee shall accept appointment as provided in this
Section unless at the time of such appointment such successor trustee shall be
eligible under the provisions of Section 6.05.
(c) Upon acceptance of appointment by a successor trustee or successor
securities administrator, as applicable, as provided in this Section, the
Master Servicer shall mail notice of the succession of such trustee or
securities administrator, as applicable, hereunder to all Holders of
Certificates at their addresses as shown in the Certificate Register and to
any Rating Agency. The costs of such mailing shall be borne by the Master
Servicer.
Section 6.08 Merger or Consolidation of Trustee or the Securities
Administrator.
Any Person into which the Trustee or Securities Administrator may be
merged or with which it may be consolidated, or any Person resulting from any
merger, conversion or consolidation to which the Trustee or Securities
Administrator shall be a party, or any Persons succeeding to the business of
the Trustee or Securities Administrator, shall be the successor to the Trustee
or Securities Administrator hereunder, without the execution or filing of any
paper or any further act on the part of any of the parties hereto, anything
herein to the contrary notwithstanding, provided that, in the case of the
Trustee, such Person shall be eligible under the provisions of Section 6.05.
Section 6.09 Appointment of Co-Trustee, Separate Trustee or Custodian.
(a) Notwithstanding any other provisions hereof, at any time, the
Trustee, the Depositor or the Certificateholders evidencing more than 50% of
the Class Principal Balance (or Percentage Interest) of every Class of
Certificates shall have the power from time to time to appoint one or more
Persons, approved by the Trustee, to act either as co-trustees jointly with
the Trustee, or as separate trustees, or as custodians, for the purpose of
holding title to, foreclosing or otherwise taking action with respect to any
Mortgage Loan outside the state where the Trustee has its principal place of
business where such separate trustee or co-trustee is necessary or
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advisable (or the Trustee has been advised by the Master Servicer that such
separate trustee or co-trustee is necessary or advisable) under the laws of
any state in which a property securing a Mortgage Loan is located or for the
purpose of otherwise conforming to any legal requirement, restriction or
condition in any state in which a property securing a Mortgage Loan is located
or in any state in which any portion of the Trust Fund is located. The
separate Trustees, co-trustees, or custodians so appointed shall be trustees
or custodians for the benefit of all the Certificateholders and shall have
such powers, rights and remedies as shall be specified in the instrument of
appointment; provided, however, that no such appointment shall, or shall be
deemed to, constitute the appointee an agent of the Trustee. The obligation of
the Master Servicer to make Advances pursuant to Section 5.05 hereof shall not
be affected or assigned by the appointment of a co-trustee.
(b) Every separate trustee, co-trustee, and custodian shall, to the
extent permitted by law, be appointed and act subject to the following
provisions and conditions:
(i) all powers, duties, obligations and rights conferred upon the
Trustee in respect of the receipt, custody and payment of moneys shall be
exercised solely by the Trustee;
(ii) all other rights, powers, duties and obligations conferred or
imposed upon the Trustee shall be conferred or imposed upon and exercised
or performed by the Trustee and such separate trustee, co-trustee, or
custodian jointly, except to the extent that under any law of any
jurisdiction in which any particular act or acts are to be performed the
Trustee shall be incompetent or unqualified to perform such act or acts,
in which event such rights, powers, duties and obligations, including the
holding of title to the Trust Fund or any portion thereof in any such
jurisdiction, shall be exercised and performed by such separate trustee,
co-trustee, or custodian;
(iii) no trustee or custodian hereunder shall be personally liable
by reason of any act or omission of any other trustee or custodian
hereunder; and
(iv) the Trustee may at any time, by an instrument in writing
executed by it, with the concurrence of the Depositor, accept the
resignation of or remove any separate trustee, co-trustee or custodian,
so appointed by it or them, if such resignation or removal does not
violate the other terms of this Agreement.
(c) 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, co-trustee or custodian shall refer to this
Agreement and the conditions of this Article VI. Each separate trustee and
co-trustee, upon its acceptance of the trusts conferred, shall be vested with
the estates or property specified in its instrument of appointment, either
jointly with the Trustee or separately, as may be provided therein, subject to
all the provisions of this Agreement, specifically including every provision
of this Agreement relating to the conduct of, affecting the liability of, or
affording protection to, the Trustee. Every such instrument shall be filed
with the Trustee and a copy given to the Master Servicer.
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(d) Any separate trustee, co-trustee or custodian may, at any time,
constitute the Trustee its agent or attorney-in-fact with full power and
authority, to the extent not prohibited by law, to do any lawful act under or
in respect of this Agreement on its behalf and in its name. If any separate
trustee, co-trustee or custodian 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.
(e) No separate trustee, co-trustee or custodian hereunder shall be
required to meet the terms of eligibility as a successor trustee under Section
6.05 hereunder and no notice to the Certificateholders of the appointment
shall be required under Section 6.07 hereof.
(f) The Securities Administrator on behalf of the Trustee agrees to
instruct the co-trustees, if any, to the extent necessary to fulfill the
Trustee's obligations hereunder.
(g) The Trust shall pay the reasonable compensation of the co-trustees
(which compensation shall not reduce any compensation payable to the Trustee
under such Section).
Section 6.10 Authenticating Agents.
(a) The Trustee may appoint one or more Authenticating Agents which shall
be authorized to act on behalf of the Trustee in authenticating Certificates.
The Securities Administrator is hereby appointed as initial Authenticating
Agent, and the Securities Administrator accepts such appointment. Wherever
reference is made in this Agreement to the authentication of Certificates by
the Trustee or the Trustee's certificate of authentication, such reference
shall be deemed to include authentication on behalf of the Trustee by an
Authenticating Agent and a certificate of authentication executed on behalf of
the Trustee by an Authenticating Agent. Each Authenticating Agent must be a
corporation organized and doing business under the laws of the United States
of America or of any state, having a combined capital and surplus of at least
$15,000,000, authorized under such laws to do a trust business and subject to
supervision or examination by federal or state authorities.
(b) Any Person into which any Authenticating Agent may be merged or
converted or with which it may be consolidated, or any Person resulting from
any merger, conversion or consolidation to which any Authenticating Agent
shall be a party, or any Person succeeding to the corporate agency business of
any Authenticating Agent, shall continue to be the Authenticating Agent
without the execution or filing of any paper or any further act on the part of
the Trustee or the Authenticating Agent.
(c) Any Authenticating Agent may at any time resign by giving at least 30
days' advance written notice of resignation to the Trustee and the Depositor.
The Trustee may at any time terminate the agency of any Authenticating Agent
by giving written notice of termination to such Authenticating Agent and the
Depositor. Upon receiving a notice of resignation or upon such a termination,
or in case at any time any Authenticating Agent shall cease to be eligible in
accordance with the provisions of this Section 6.10, the Trustee may appoint a
successor authenticating agent, shall give written notice of such appointment
to the Depositor and shall mail notice of such appointment to all Holders of
Certificates. Any successor authenticating
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agent upon acceptance of its appointment hereunder shall become vested with
all the rights, powers, duties and responsibilities of its predecessor
hereunder, with like effect as if originally named as Authenticating Agent. No
successor authenticating agent shall be appointed unless eligible under the
provisions of this Section 6.10. No Authenticating Agent shall have
responsibility or liability for any action taken by it as such at the
direction of the Trustee.
Section 6.11 Indemnification of the Trustee and the Securities
Administrator.
The Trustee and the Securities Administrator and their respective
directors, officers, employees and agents shall be entitled to indemnification
from the Trust Fund for any loss, liability or expense (including the
reasonable compensation and the expenses and disbursements of its agents or
counsel), incurred without negligence or willful misconduct on their part,
arising out of, or in connection with, the acceptance or administration of the
trusts created hereunder or under the Purchase and Servicing Agreements or
Acknowledgements or in connection with the performance of their duties
hereunder or thereunder including the costs and expenses of defending
themselves against any claim in connection with the exercise or performance of
any of their powers or duties hereunder or thereunder, provided that:
(i) with respect to any such claim, the Trustee or the Securities
Administrator, as applicable, shall have given the Depositor written
notice thereof promptly after the Trustee, the Securities Administrator,
as applicable, shall have knowledge thereof;
(ii) while maintaining control over its own defense, the Trustee or
the Securities Administrator, as applicable, shall cooperate and consult
fully with the Depositor in preparing such defense; and
(iii) notwithstanding anything to the contrary in this Section 6.11,
the Trust Fund shall not be liable for settlement of any such claim by
the Trustee or the Securities Administrator, as applicable, entered into
without the prior consent of the Depositor, which consent shall not be
unreasonably withheld.
The provisions of this Section 6.11 shall survive any termination of this
Agreement and the resignation or removal of the Trustee or the Securities
Administrator, as applicable, and shall be construed to include, but not be
limited to any loss, liability or expense under any environmental law.
Section 6.12 Fees and Expenses of Securities Administrator and the
Trustee.
(a) Compensation for the services of the Master Servicer for its duties
hereunder with respect to the Mortgage Loans shall be paid by the Securities
Administrator. The Securities Administrator shall be compensated for its
duties hereunder pursuant to Section 4.02(b) hereof. The Securities
Administrator shall be entitled to all disbursements and advancements incurred
or made by the Securities Administrator in accordance with this Agreement
(including fees and expenses of its counsel and all persons not regularly in
its employment), except any such expenses arising from its negligence, bad
faith or willful misconduct.
(b) As compensation for its services hereunder, the Trustee shall be
entitled to receive a fee (which shall not be limited by any provision of law
in regard to the compensation of a
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trustee of an express trust) which shall be paid by the Master Servicer
pursuant to a separate agreement between the Trustee and the Master Servicer.
Any expenses incurred by the Trustee shall be reimbursed in accordance with
Section 6.11.
Section 6.13 Collection of Monies.
Except as otherwise expressly provided in this Agreement, the Securities
Administrator on behalf of the Trustee may demand payment or delivery of, and
shall receive and collect, all money and other property payable to or
receivable by the Securities Administrator on behalf of the Trustee pursuant
to this Agreement. The Securities Administrator on behalf of the Trustee shall
hold all such money and property received by it as part of the Trust Fund and
shall distribute it as provided in this Agreement.
Section 6.14 Events of Default; Trustee To Act; Appointment of Successor.
(a) The occurrence of any one or more of the following events shall
constitute an "Event of Default" with respect to the Master Servicer:
(i) Any failure by the Master Servicer to furnish the Securities
Administrator the Mortgage Loan data on the Mortgage Loans sufficient to
prepare the reports described in Section 4.05 which continues unremedied
for a period of one Business Day after the date upon which written notice
of such failure shall have been given to the Master Servicer by the
Trustee or the Securities Administrator or to the Master Servicer, the
Securities Administrator and the Trustee by the Holders of not less than
25% of the Class Principal Balance of each Class of Certificates affected
thereby; or
(ii) Any failure on the part of the Master Servicer duly to observe
or perform in any material respect any other of the covenants or
agreements (other than those referred to in (vii) and (ix) below) on the
part of the Master Servicer contained in this Agreement which continues
unremedied for a period of 60 days after the date on which written notice
of such failure, requiring the same to be remedied, shall have been given
to the Master Servicer by the Trustee or the Securities Administrator, or
to the Master Servicer, the Securities Administrator and the Trustee by
the Holders of more than 50% of the Aggregate Voting Interests of the
Certificates; or
(iii) A decree or order of a court or agency or supervisory
authority having jurisdiction for the appointment of a conservator or
receiver or liquidator in any insolvency, readjustment of debt,
marshalling of assets and liabilities or similar proceedings, or for the
winding-up or liquidation of its affairs, shall have been entered against
the Master Servicer, and such decree or order shall have remained in
force undischarged or unstayed for a period of 60 days or any Rating
Agency reduces or withdraws or threatens to reduce or withdraw the rating
of the Certificates because of the financial condition or loan servicing
capability of such Master Servicer; or
(iv) The Master Servicer shall consent to the appointment of a
conservator or receiver or liquidator in any insolvency, readjustment of
debt, marshalling of assets and liabilities, voluntary liquidation or
similar proceedings of or relating to the Master Servicer or of or
relating to all or substantially all of its property; or
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(v) The Master Servicer shall admit in writing its inability to pay
its debts generally as they become due, file a petition to take advantage
of any applicable insolvency or reorganization statute, make an
assignment for the benefit of its creditors or voluntarily suspend
payment of its obligations; or
(vi) The Master Servicer shall be dissolved, or shall dispose of all
or substantially all of its assets, or consolidate with or merge into
another entity or shall permit another entity to consolidate or merge
into it, such that the resulting entity does not meet the criteria for a
successor servicer as specified in Section 9.05 hereof; or
(vii) If a representation or warranty set forth in Section 9.03
hereof shall prove to be incorrect as of the time made in any respect
that materially and adversely affects the interests of the
Certificateholders, and the circumstance or condition in respect of which
such representation or warranty was incorrect shall not have been
eliminated or cured within 90 days after the date on which written notice
of such incorrect representation or warranty shall have been given to the
Master Servicer by the Trustee or the Securities Administrator, or to the
Master Servicer, the Securities Administrator and the Trustee by the
Holders of more than 50% of the Aggregate Voting Interests of the
Certificates; or
(viii) A sale or pledge of any of the rights of the Master Servicer
hereunder or an assignment of this Agreement by the Master Servicer or a
delegation of the rights or duties of the Master Servicer hereunder shall
have occurred in any manner not otherwise permitted hereunder and without
the prior written consent of the Trustee and Certificateholders holding
more than 50% of the Aggregate Voting Interests of the Certificates; or
(ix) After receipt of notice from the Trustee or the Securities
Administrator, any failure of the Master Servicer to make any Advances
required to be made by it hereunder.
If an Event of Default described in clauses (i) through (ix) of this
Section shall occur with respect to the Master Servicer, then, in each and
every case, subject to applicable law, so long as any such Event of Default
shall not have been remedied within any period of time prescribed by this
Section, the Trustee, by notice in writing to the Master Servicer may, and
shall, if so directed by Certificateholders evidencing more than 50% of the
Class Principal Balance of each Class of Certificates, terminate all of the
respective rights and obligations of the Master Servicer hereunder and in and
to the Mortgage Loans and the proceeds thereof. On or after the receipt by the
Master Servicer of such written notice, all authority and power of the Master
Servicer, and with respect to the Master Servicer only in its capacity as
Master Servicer under this Agreement, whether with respect to the Mortgage
Loans or otherwise, shall pass to and be vested in the Trustee; and the
Trustee is hereby authorized and empowered to execute and deliver, on behalf
of the defaulting 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 affected Mortgage Loans and related documents or otherwise. The defaulting
Master Servicer agrees to cooperate with the Trustee and the Securities
Administrator in effecting the termination of the defaulting Master Servicer's
responsibilities and
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rights hereunder as Master Servicer which includes, without limitation,
notifying the Servicers of the assignment of the master servicing function and
providing the Trustee or its designee all documents and records in electronic
or other form reasonably requested by it to enable the Trustee or its designee
to assume the defaulting Master Servicer's functions hereunder and the
transfer to the Trustee for administration by it of all amounts which shall at
the time be or should have been deposited by the defaulting Master Servicer in
the Distribution Account, any related Custodial Account and any other account
or fund maintained with respect to the Certificates or thereafter received
with respect to the affected Mortgage Loans. The Master Servicer being
terminated shall bear all costs of the transfer of the master servicing to the
successor master servicer, including but not limited to those of the Trustee
or Securities Administrator reasonably allocable to specific employees and
overhead, legal fees and expenses, accounting and financial consulting fees
and expenses, and costs of amending the Agreement, if necessary. If such costs
are not paid by the terminated Master Servicer, the Trustee shall pay such
costs from the Trust Fund.
Notwithstanding the termination of its activities as Master Servicer, any
terminated Master Servicer shall continue to be entitled to reimbursement
under this Agreement to the extent such reimbursement relates to the period
prior to such Master Servicer's termination.
If any Event of Default shall occur, the Trustee, upon a Responsible
Officer of the Trustee becoming aware of the occurrence thereof, shall
promptly notify the Securities Administrator and each Rating Agency of the
nature and extent of such Event of Default. The Securities Administrator shall
immediately give written notice to the Master Servicer upon the failure of the
Master Servicer to make Advances as required under this Agreement with a copy
to the Trustee.
(b) On and after the time the Master Servicer receives a notice of
termination from the Trustee or the Securities Administrator, as applicable,
pursuant to Section 6.14(a) or the Trustee or the Securities Administrator, as
applicable, receives the resignation of the Master Servicer evidenced by an
Opinion of Counsel pursuant to Section 9.06, the Trustee, unless another
master servicer shall have been appointed, shall be the successor in all
respects to the Master Servicer, in its capacity as such under this Agreement
and the transactions set forth or provided for herein and shall have all the
rights and powers and be subject to all the responsibilities, duties and
liabilities relating thereto and arising thereafter placed on the Master
Servicer, hereunder, including the obligation to make Advances; provided,
however, that any failure to perform such duties or responsibilities caused by
the failure of the Master Servicer to provide information required by this
Agreement shall not be considered a default by the Trustee or the Securities
Administrator, as applicable, hereunder. In addition, neither the Trustee nor
the Securities Administrator, as applicable, shall have any responsibility for
any act or omission of the Master Servicer prior to the issuance of any notice
of termination. The Trustee shall have no liability relating to the
representations and warranties of the Master Servicer set forth in Section
9.03. In the capacity as such successor, the Trustee shall have the same
limitations on liability herein granted to the Master Servicer. As
compensation for being the successor master servicer, the Trustee shall be
entitled to receive all compensation payable to the Master Servicer under this
Agreement.
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(c) Notwithstanding the above, the Trustee may, if it shall be unwilling
to continue to so act, or shall, if it is unable to so act, petition a court
of competent jurisdiction to appoint, or appoint on its own behalf any
established housing and home finance institution servicer, master servicer,
servicing or mortgage servicing institution having a net worth of not less
than $15,000,000 and meeting such other standards for a successor master
servicer, as are set forth in this Agreement, as the successor to such Master
Servicer in the assumption of all of the respective responsibilities, duties
or liabilities of a master servicer, like the Master Servicer. Any entity
designated by the Trustee, may be an Affiliate of the Trustee; provided,
however, that, unless such Affiliate meets the net worth requirements and
other standards set forth herein for a successor master servicer, the Trustee,
in its individual capacity shall agree, at the time of such designation, to be
and remain liable to the Trust Fund for such Affiliate's actions and omissions
in performing its duties hereunder. 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 no such compensation shall be in excess
of that permitted to the Master Servicer hereunder. The Trustee and such
successor shall take such actions, consistent with this Agreement, as shall be
necessary to effectuate any such succession and may make other arrangements
with respect to the master servicing to be conducted hereunder which are not
inconsistent herewith. The Master Servicer shall cooperate with the Trustee
and any successor master servicer in effecting the termination of the Master
Servicer's responsibilities and rights hereunder including, without
limitation, notifying the Servicers of the assignment of the master servicing
functions and providing the Trustee and successor master servicer all
documents and records in electronic or other form reasonably requested by it
to enable it to assume the Master Servicer's functions hereunder and the
transfer to the Trustee or such successor all amounts which shall at the time
be or should have been deposited by the Master Servicer in the Distribution
Account, any Custodial Account, or any other account or fund maintained with
respect to the Certificates or thereafter be received with respect to the
Mortgage Loans. Neither the Trustee nor the Securities Administrator, as
applicable, nor any other successor, as applicable, shall be deemed to be in
default hereunder by reason of any failure to make, or any delay in making,
any distribution hereunder or any portion thereof caused by (i) the failure of
the Master Servicer to deliver, or any delay in delivering, cash, documents or
records to it, (ii) the failure of the Master Servicer to cooperate as
required by this Agreement, (iii) the failure of the Master Servicer to
deliver the related Mortgage Loan data as required by this Agreement or (iv)
restrictions imposed by any regulatory authority having jurisdiction over the
Master Servicer. No successor master servicer shall be deemed to be in default
hereunder by reason of any failure to make, or any delay in making, any
distribution hereunder or any portion thereof caused by (i) the failure of the
Securities Administrator to deliver, or any delay in delivering cash,
documents or records to it related to such distribution, or (ii) the failure
of Trustee or the Securities Administrator to cooperate as required by this
Agreement.
Section 6.15 Additional Remedies of Trustee Upon Event of Default.
During the continuance of any Event of Default, so long as such Event of
Default shall not have been remedied, the Trustee, in addition to the rights
specified in Section 6.14, shall have the right, in its own name and as
trustee of the Trust Fund, to take all actions now or hereafter existing at
law, in equity or by statute to enforce its rights and remedies and to protect
the interests, and enforce the rights and remedies, of the Certificateholders
(including the institution
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and prosecution of all judicial, administrative and other proceedings and the
filings of proofs of claim and debt in connection therewith). Except as
otherwise expressly provided in this Agreement, no remedy provided for by this
Agreement shall be exclusive of any other remedy, and each and every remedy
shall be cumulative and in addition to any other remedy, and no delay or
omission to exercise any right or remedy shall impair any such right or remedy
or shall be deemed to be a waiver of any Event of Default.
Section 6.16 Waiver of Defaults.
More than 50% of the Aggregate Voting Interests of the Certificateholders
may waive any default or Event of Default by the Master Servicer in the
performance of its obligations hereunder, except that a default in the making
of any required deposit to the Distribution Account that would result in a
failure of the Securities Administrator or the Paying Agent to make any
required payment of principal of or interest on the Certificates may only be
waived with the consent of 100% of the affected Certificateholders. Upon any
such waiver of a past default, such default shall cease to exist, and any
Event of Default arising therefrom shall be deemed to have been 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.
Section 6.17 Notification to Holders.
Upon termination of the Master Servicer or appointment of a successor to
the Master Servicer, in each case as provided herein, the Trustee shall
promptly mail notice thereof by first class mail to the Securities
Administrator and the Certificateholders at their respective addresses
appearing on the Certificate Register. The Trustee shall also, within 45 days
after the occurrence of any Event of Default known to the Trustee, give
written notice thereof to the Securities Administrator and the
Certificateholders, unless such Event of Default shall have been cured or
waived prior to the issuance of such notice and within such 45-day period.
Section 6.18 Directions by Certificateholders and Duties of Trustee
During Event of Default.
Subject to the provisions of Section 8.01 hereof, during the continuance
of any Event of Default, Holders of Certificates evidencing not less than 25%
of the Class Principal Balance (or Percentage Interest) of each Class of
Certificates affected thereby may direct the time, method and place of
conducting any proceeding for any remedy available to the Trustee, or
exercising any trust or power conferred upon the Trustee, under this
Agreement; provided, however, that the Trustee shall be under no obligation to
pursue any such remedy, or to exercise any of the trusts or powers vested in
it by this Agreement (including, without limitation, (i) the conducting or
defending of any administrative action or litigation hereunder or in relation
hereto and (ii) the terminating of the Master Servicer or any successor master
servicer from its rights and duties as master servicer hereunder) at the
request, order or direction of any of the Certificateholders, unless such
Certificateholders shall have offered to the Trustee security or indemnity
reasonably satisfactory to it against the cost, expenses and liabilities which
may be incurred therein or thereby; and, provided further, that, subject to
the provisions of Section 8.01, the Trustee shall have the right to decline to
follow any such direction if the Trustee, in accordance with an
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Opinion of Counsel, determines that the action or proceeding so directed may
not lawfully be taken or if the Trustee in good faith determines that the
action or proceeding so directed would involve it in personal liability for
which it is not indemnified to its satisfaction.
Section 6.19 Action Upon Certain Failures of the Master Servicer and Upon
Event of Default.
In the event that a Responsible Officer of the Trustee shall have actual
knowledge or written notice of any action or inaction of the Master Servicer
that would become an Event of Default upon the Master Servicer's failure to
remedy the same after notice, the Trustee shall give notice thereof to the
Master Servicer.
Section 6.20 Preparation of Tax Returns and Other Reports.
(a) The Securities Administrator shall prepare or cause to be prepared on
behalf of the Trust Fund, based upon information calculated in accordance with
this Agreement pursuant to instructions given by the Depositor, and the
Securities Administrator shall file federal tax returns, all in accordance
with Article X hereof. If the Securities Administrator is notified in writing
that a state tax return or other return is required, then, at the sole expense
of the Trust Fund, the Securities Administrator shall prepare and file such
state income tax returns and such other returns as may be required by
applicable law relating to the Trust Fund, and, if required by state law,
shall file any other documents to the extent required by applicable state tax
law (to the extent such documents are in the Securities Administrator's
possession). The Securities Administrator shall forward copies to the
Depositor of all such returns and Form 1099 supplemental tax information and
such other information within the control of the Securities Administrator as
the Depositor may reasonably request in writing, and shall forward to each
Certificateholder such forms and furnish such information within the control
of the Securities Administrator as are required by the Code and the REMIC
Provisions to be furnished to them, and will prepare and forward to
Certificateholders Form 1099 (supplemental tax information) (or otherwise
furnish information within the control of the Securities Administrator) to the
extent required by applicable law. The Master Servicer will indemnify the
Securities Administrator and the Trustee for any liability of or assessment
against the Securities Administrator or the Trustee, as applicable, resulting
from any error in any of such tax or information returns directly resulting
from errors in the information provided by such Master Servicer except to the
extent that such information was provided in reasonable reliance upon
information from any Servicer.
(b) The Securities Administrator shall prepare and file with the Internal
Revenue Service ("IRS"), on behalf of the Trust Fund and each REMIC created
hereunder, an application for an employer identification number on IRS Form
SS-4 or by any other acceptable method. The Securities Administrator shall
also file a Form 8811 as required. The Securities Administrator, upon receipt
from the IRS of the Notice of Taxpayer Identification Number Assigned, shall
upon request promptly forward a copy of such notice to the Trustee and the
Depositor. The Securities Administrator shall furnish any other information
that is required by the Code and regulations thereunder to be made available
to the Certificateholders. The Master Servicer agrees that it shall cause each
Servicer to, provide the Securities Administrator with such information
related to the Mortgage Loans in the possession of such Servicer, as may
reasonably be required for the Securities Administrator to prepare such
reports.
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(c) Within 15 days after each Distribution Date, the Securities
Administrator shall, on behalf of the Trust and in accordance with industry
standards, file with the Securities and Exchange Commission (the "Commission")
via the Electronic Data Gathering and Retrieval System (▇▇▇▇▇), a Form 8-K (or
any comparable form containing the same or comparable information or other
information mutually agreed upon) with a copy of the report to the
Certificateholders for such Distribution Date as an exhibit thereto. Prior to
▇▇▇▇▇ ▇▇, ▇▇▇▇ (▇▇▇, if applicable, prior to March 30 of each year), the
Securities Administrator shall, on behalf of the Trust and in accordance with
industry standards, file with the Commission via ▇▇▇▇▇ a Form 10-K with
respect to the Trust Fund. In addition, the Master Servicer will cause an
officer in charge of master servicing to execute the certification (the "Form
10-K Certification") required pursuant to Rule 13a-14 under the Securities
Exchange Act of 1934, as amended, and to file the same with the Commission
prior to ▇▇▇▇▇ ▇▇, ▇▇▇▇ (▇▇▇, if applicable, prior to March 30 of each year).
To the extent any information or exhibits required to be included in the Form
10-K are not timely received by the Securities Administrator prior to March
30, the Securities Administrator shall, on behalf of the Trust, file one or
more amended Form 10-Ks to include such missing information or exhibits
promptly after receipt thereof by the Securities Administrator. Promptly
following the first date legally permissible under applicable regulations and
interpretations of the Commission, the Securities Administrator shall, on
behalf of the Trust and in accordance with industry standards, file with the
Commission via ▇▇▇▇▇ a Form 15 Suspension Notification with respect to the
Trust Fund, if applicable. The Master Servicer agrees to furnish to the
Securities Administrator promptly, 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 with the Commission other than those
specified in this section.
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ARTICLE VII
PURCHASE OF MORTGAGE LOANS AND
TERMINATION OF THE TRUST FUND
Section 7.01 Purchase of Mortgage Loans; Termination of Trust Fund Upon
Purchase or Liquidation of All Mortgage Loans.
(a) The respective obligations and responsibilities of the Trustee, the
Securities Administrator and the Master Servicer created hereby (other than
the obligation of the Securities Administrator to make payments to the
Certificateholders as set forth in Section 7.02), shall terminate on the
earliest of (i) the final payment or other liquidation of the last Mortgage
Loan remaining in the Trust Fund and the disposition of all REO Property, (ii)
the sale of the property held by the Trust Fund in accordance with both
Section 7.01(c)(i) and Section 7.01(c)(ii) and (iii) the Latest Possible
Maturity Date; provided, however, that in no event shall the Trust Fund
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 hereof.
Any termination of the Trust Fund shall be carried out in such a manner so
that the termination of each REMIC included therein shall qualify as a
"qualified liquidation" under the REMIC Provisions.
(b) [Reserved].
(c) In the event that the Master Servicer chooses to exercise its
optional termination rights it shall do so in accordance with the following:
(i) Optional Termination Related to the Aggregate Group I Mortgage
Loans. On any Distribution Date occurring on or after the Initial
Optional Purchase Date related to the Aggregate Group I Mortgage Loans,
the Master Servicer has the option to cause the Trust Fund to adopt a
plan of complete liquidation of the Aggregate Group I Mortgage Loans
pursuant to Sections 7.02 and 7.03 hereof to sell all of the property
related thereto. If the Master Servicer elects to exercise such option,
it shall no later than 30 days prior to the Distribution Date selected
for purchase of the Aggregate Group I Mortgage Loans and all other assets
of the Trust Fund related to the Aggregate Group I Certificates (with
respect to the Aggregate Group I Mortgage Loans, the "Purchase Date")
deliver written notice to the Trustee and the Securities Administrator
and either (a) deposit in the Distribution Account the related Redemption
Price or (b) state in such notice that the Redemption Price shall be
deposited in the Distribution Account not later than 10:00 a.m., New York
City time, on the applicable Purchase Date. Upon exercise of such option,
the property of the Trust Fund related to the Aggregate Group I Mortgage
Loans shall be sold to the Master Servicer at a price equal to the
related Redemption Price.
(ii) Optional Termination Related to the Aggregate Group II Mortgage
Loans. On any Distribution Date occurring on or after the Initial
Optional Purchase Date related to the Aggregate Group II Mortgage Loans,
the Master Servicer has the option to cause the Trust Fund to adopt a
plan of complete liquidation of the Aggregate Group II
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Mortgage Loans pursuant to Sections 7.02 and 7.03 hereof to sell all of
the property related thereto. If the Master Servicer elects to exercise
such option, it shall no later than 30 days prior to the Distribution
Date selected for purchase of the Aggregate Group II Mortgage Loans and
all other assets of the Trust Fund related to the Aggregate Group II
Certificates (with respect to the Aggregate Group II Mortgage Loans, the
"Purchase Date") deliver written notice to the Trustee and the Securities
Administrator and either (a) deposit in the Distribution Account the
related Redemption Price or (b) state in such notice that the Redemption
Price shall be deposited in the Distribution Account not later than 10:00
a.m., New York City time, on the applicable Purchase Date. Upon exercise
of such option, the property of the Trust Fund related to the Aggregate
Group II Mortgage Loans shall be sold to the Master Servicer at a price
equal to the related Redemption Price.
(d) The Depositor, the Master Servicer, each Servicer, the Securities
Administrator and the Trustee shall be reimbursed from the related Redemption
Price for any Advances, Servicer Advances, accrued and unpaid Servicing Fees
or other amounts with respect to the Mortgage Loans and any related assets
being purchased pursuant to Section 7.01(c) above that are reimbursable to
such parties (and such other amounts which, if not related to the Mortgage
Loans and other assets of the Trust Fund not being purchased, that are then
due and owing to any such Person) under this Agreement and the related
Purchase and Servicing Agreement.
Section 7.02 Procedure Upon Redemption Termination of Trust Fund.
(a) Notice of any termination pursuant to the provisions of Section 7.01,
specifying the Distribution Date upon which the final distribution shall be
made or the purchase of the Trust's assets related to the Aggregate Group I
Certificates or the Aggregate Group II Certificates, as applicable, will
occur, shall be given promptly by the Securities Administrator by first class
mail to the related Certificateholders mailed in the case of a redemption of
the related Certificates, no later than (i) the first day of the month in
which the Distribution Date selected for redemption of such Certificates shall
occur or (ii) upon (x) the sale of all of the property of the Trust Fund by
the Securities Administrator or in the case of a sale of assets of the Trust
Fund, or (y) upon the final payment or other liquidation of the last Mortgage
Loan or REO Property in the Trust Fund. Such notice shall specify (A) the
Initial Optional Purchase Date, Distribution Date upon which final
distribution on the related Certificates of all amounts required to be
distributed to Certificateholders pursuant to Section 5.02 will be made upon
presentation and surrender of the Certificates at the Certificate Registrar's
Corporate Trust Office, and (B) that the Record Date otherwise applicable to
such Distribution Date is not applicable, distribution being made only upon
presentation and surrender of the Certificates at the office or agency of the
Securities Administrator therein specified. The Securities Administrator shall
give such notice to the Trustee, the Master Servicer and the Certificate
Registrar at the time such notice is given to Holders of the Certificates.
Upon any such termination, the duties of the Certificate Registrar with
respect to the affected Certificates shall terminate and, in the event that
such termination is the second termination pursuant to Section 7.01, the
Securities Administrator shall terminate the Distribution Account and any
other account or fund maintained with respect to the Certificates, subject to
the Securities Administrator's obligation hereunder to hold all amounts
payable to Certificateholders in trust without interest pending such payment.
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(b) In the event that all of the Holders do not surrender their
Certificates for cancellation within three months after the time specified in
the above-mentioned written notice, the Securities Administrator 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 one year after the second notice any Certificates shall not
have been surrendered for cancellation, the Securities Administrator may take
appropriate steps to contact the remaining Certificateholders concerning
surrender of such Certificates, and the cost thereof shall be paid out of the
amounts distributable to such Holders. If within two years after the second
notice any Certificates shall not have been surrendered for cancellation, the
Securities Administrator shall deliver any remaining funds being held by it to
the Holder of the Class A-R Certificates and the Holder of the Class A-R
Certificates shall, subject to applicable state law relating to escheatment,
hold all amounts distributable to such Holders for the benefit of such
Holders. No interest shall accrue on any amount held by the Securities
Administrator and not distributed to a Certificateholder due to such
Certificateholder's failure to surrender its Certificate(s) for payment of the
final distribution thereon in accordance with this Section.
(c) Any reasonable expenses incurred by the Securities Administrator in
connection with any purchase or termination or liquidation of the portion of
the Trust Fund related to the Aggregate Group I Certificates or the Aggregate
Group II Certificates, as applicable, shall be reimbursed from proceeds
received from the liquidation of the Trust Fund.
Section 7.03 Additional Trust Fund Termination Requirements.
(a) On the termination of the Trust Fund under Section 7.01 (a), or upon
the exercise of the right to purchase all of the Aggregate Group I Mortgage
Loans or the Aggregate Group II Mortgage Loans, as applicable, pursuant to
Section 7.01(c), the Securities Administrator, on behalf of the Trustee, shall
comply with requirements of this Section 7.03 with respect to each Lower Tier
REMIC relating to the assets to be sold (the "Affected REMIC") and with
respect to the Certificates corresponding to the Affected REMIC (the
"Corresponding Certificates"), unless the party having the right to purchase
the assets of the Affected REMIC (the "Purchaser") delivers to the Trustee and
the Securities Administrator, an Opinion of Counsel (at the Master Servicer's
expense), addressed to the Trustee and the Securities Administrator to the
effect that the failure of the Trustee and the Securities Administrator to
comply with the requirements of this Section 7.03 will not result in an
Adverse REMIC Event:
Within 89 days prior to the time of making the final payment on the
Corresponding Certificates, (and upon notification by the Master Servicer
in the case of a purchase under Section 7.01(c)(i) or Section
7.01(c)(ii), as applicable) the Securities Administrator on behalf of the
Trustee shall adopt on behalf of the Affected REMIC, a plan of complete
liquidation, meeting the requirements of a qualified liquidation under
the REMIC Provisions;
Any sale of the assets of the Affected REMIC shall be for cash and
shall occur at or after the time the plan of complete liquidation is
adopted and prior to the time the final payments on the Corresponding
Certificates are made;
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On the date specified for final payment of the Corresponding
Certificates, the Securities Administrator shall make final distributions
of principal and interest on the Corresponding Certificates in accordance
with Section 5.02 and, after payment of, or provision for any outstanding
expenses, distribute or credit, or cause to be distributed or credited,
to the Holders of the Residual Certificates all cash on hand after such
final payment (other than cash retained to meet claims), and the portion
of the Trust Fund (and the Affected REMIC) shall terminate at that time;
and
(i) In no event may the final payment on the Corresponding
Certificates or the final distribution or credit to the Holders of the
Residual Certificates be made after the 89th day from the date on which
the plan of complete liquidation is adopted.
(b) By its acceptance of a Residual Certificate, each Holder thereof
hereby agrees to accept the plan of complete liquidation adopted by the
Securities Administrator on behalf of the Trustee under this Section and to
take such other action in connection therewith as may be reasonably requested
by the Trustee, the Securities Administrator or any Servicer.
ARTICLE VIII
RIGHTS OF CERTIFICATEHOLDERS
Section 8.01 Limitation on Rights of Holders.
(a) The death or incapacity of any Certificateholder shall not operate to
terminate this Agreement or this Trust Fund, nor entitle such
Certificateholder's legal representatives or heirs to claim an accounting or
take any action or proceeding in any court for a partition or winding up of
this Trust Fund, nor otherwise affect the rights, obligations and liabilities
of the parties hereto or any of them. Except as otherwise expressly provided
herein, no Certificateholder, solely by virtue of its status as a
Certificateholder, shall have any right to vote or in any manner otherwise
control the Master Servicer or the operation and management of the Trust Fund,
or the obligations of the parties hereto, nor shall anything herein set forth,
or contained in the terms of the Certificates, be construed so as to
constitute the Certificateholders from time to time as partners or members of
an association, nor shall any Certificateholder be under any liability to any
third person by reason of any action taken by the parties to this Agreement
pursuant to any provision hereof.
(b) No Certificateholder, solely by virtue of its status as
Certificateholder, shall have any right by virtue or by availing of any
provision of this Agreement to institute any suit, action or proceeding in
equity or at law upon or under or with respect to this Agreement, unless such
Holder previously shall have given to the Trustee a written notice of an Event
of Default and of the continuance thereof, as hereinbefore provided, and
unless also the Holders of Certificates evidencing not less than 25% of the
Class Principal Amount or Class Notional Amount (or Percentage Interest) of
Certificates of each Class affected thereby 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 cost, expenses and liabilities to be
incurred therein or thereby, and the Trustee, for sixty days after its receipt
of such notice, request and offer of indemnity, shall have neglected or
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refused to institute any such action, suit or proceeding and no direction
inconsistent with such written request has been given such Trustee during such
sixty-day period by such Certificateholders; it being understood and intended,
and being expressly covenanted by each Certificateholder with every other
Certificateholder, the Securities Administrator and the Trustee, that no one
or more Holders of Certificates shall have any right in any manner whatever by
virtue or by availing of any provision of this Agreement to affect, disturb or
prejudice the rights of the Holders of any other of such Certificates, or to
obtain or seek to obtain priority over or preference to any other such Holder,
or to enforce any right under this Agreement, except in the manner herein
provided and for the benefit of all Certificateholders. For the protection and
enforcement of the provisions of this Section, each and every
Certificateholder and the Trustee shall be entitled to such relief as can be
given either at law or in equity.
Section 8.02 Access to List of Holders.
(a) If the Trustee is not acting as Certificate Registrar, the
Certificate Registrar will furnish or cause to be furnished to the Trustee,
within fifteen days after receipt by the Certificate Registrar of a request by
the Trustee in writing, a list, in such form as the Trustee may reasonably
require, of the names and addresses of the Certificateholders of each Class as
of the most recent Record Date.
(b) If three or more Holders or Certificate Owners (hereinafter referred
to as "Applicants") apply in writing to the Certificate Registrar, and such
application states that the Applicants desire to communicate with other
Holders with respect to their rights under this Agreement or under the
Certificates and is accompanied by a copy of the communication which such
Applicants propose to transmit, then the Certificate Registrar shall, within
five Business Days after the receipt of such application, afford such
Applicants reasonable access during the normal business hours of the
Certificate Registrar to the most recent list of Certificateholders held by
the Certificate Registrar or shall, as an alternative, send, at the
Applicants' expense, the written communication proffered by the Applicants to
all Certificateholders at their addresses as they appear in the Certificate
Register.
(c) Every Holder or Certificate Owner, if the Holder is a Clearing
Agency, by receiving and holding a Certificate, agrees with the Depositor, the
Master Servicer, the Securities Administrator, the Certificate Registrar and
the Trustee that none of the Depositor, the Master Servicer, the Securities
Administrator, the Certificate Registrar nor the Trustee shall be held
accountable by reason of the disclosure of any such information as to the
names and addresses of the Certificateholders hereunder, regardless of the
source from which such information was derived.
Section 8.03 Acts of Holders of Certificates.
(a) Any request, demand, authorization, direction, notice, consent,
waiver or other action provided by this Agreement to be given or taken by
Holders or Certificate Owners, if the Holder is a Clearing Agency, may be
embodied in and evidenced by one or more instruments of substantially similar
tenor signed by such Holders in person or by agent duly appointed in writing;
and, except as herein otherwise expressly provided, such action shall become
effective when such instrument or instruments are delivered to the Trustee and
the Securities
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Administrator and, where expressly required herein, to the Master Servicer.
Such instrument or instruments (as the action embodies therein and evidenced
thereby) are herein sometimes referred to as an "Act" of the Holders signing
such instrument or instruments. Proof of execution of any such instrument or
of a writing appointing any such agents shall be sufficient for any purpose of
this Agreement and conclusive in favor of the Trustee, the Securities
Administrator and the Master Servicer, if made in the manner provided in this
Section. Each of the Trustee, the Securities Administrator and the Master
Servicer shall promptly notify the others of receipt of any such instrument by
it, and shall promptly forward a copy of such instrument to the others.
(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 the certificate of any notary public or other officer
authorized by law to take acknowledgments or deeds, certifying that the
individual signing such instrument or writing acknowledged to him the
execution thereof. Whenever such execution is by an officer of a corporation
or a member of a partnership on behalf of such corporation or partnership,
such certificate or affidavit shall also constitute sufficient proof of his
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 (whether or not such Certificates shall
be overdue and notwithstanding any notation of ownership or other writing
thereon made by anyone other than the Trustee) shall be proved by the
Certificate Register, and none of the Trustee, the Securities Administrator,
the Master Servicer or the Depositor shall be affected by any notice to the
contrary.
(d) Any request, demand, authorization, direction, notice, consent,
waiver or other action by 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 thereof or in exchange therefor or in
lieu thereof, in respect of anything done, omitted or suffered to be done by
the Trustee or the Master Servicer in reliance thereon, whether or not
notation of such action is made upon such Certificate.
ARTICLE IX
ADMINISTRATION AND SERVICING OF MORTGAGE LOANS
BY THE MASTER SERVICER
Section 9.01 Duties of the Master Servicer; Enforcement of Servicers' and
Master Servicer's Obligations.
(a) The Master Servicer, on behalf of the Trustee, the Depositor and the
Certificateholders shall monitor the performance of the Servicers under the
Purchase and Servicing Agreements, and shall use its reasonable good faith
efforts to cause the Servicers duly and punctually to perform all of their
respective duties and obligations thereunder. Upon the occurrence of a default
of which a Responsible Officer of the Master Servicer has actual knowledge
under a Purchase and Servicing Agreement, the Master Servicer shall promptly
notify
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the Trustee thereof, and shall specify in such notice the action, if any, the
Master Servicer is taking in respect of such default. So long as any such
default shall be continuing, the Master Servicer may, and shall if it
determines such action to be in the best interests of Certificateholders, (i)
terminate all of the rights and powers of such Servicer pursuant to the
applicable provisions of the related Purchase and Servicing Agreement; (ii)
exercise any rights it may have to enforce the related Purchase and Servicing
Agreement against such Servicer; and/or (iii) waive any such default under the
related Purchase and Servicing Agreement or take any other action with respect
to such default as is permitted thereunder. Notwithstanding anything to the
contrary in this Agreement, with respect to any Additional Collateral Mortgage
Loan, the Master Servicer will have no duty or obligation to supervise,
monitor or oversee the activities of the related Servicer under any Purchase
and Servicing Agreement with respect to any Additional Collateral or under any
agreement relating to the pledge of, or the perfection of a pledge or security
interest in, any Additional Collateral except upon the occurrence of the
following events (i) in the case of a final liquidation of any Mortgaged
Property secured by Additional Collateral, the Master Servicer shall enforce
the obligation of the Servicer under the related Servicing Agreement to
liquidate such Additional Collateral as required by such Servicing Agreement,
and (ii) if the Master Servicer assumes the obligations of such Servicer as
successor Servicer under the related Servicing Agreement pursuant to this
Section 9.01, as successor Servicer, it shall be bound to service and
administer the Additional Collateral in accordance with the provisions of such
Servicing Agreement.
(b) Upon any termination by the Master Servicer of a Servicer's rights
and powers pursuant to its Purchase and Servicing Agreement, the rights and
powers of such Servicer with respect to the related Mortgage Loans shall vest
in the Master Servicer and the Master Servicer shall be the successor in all
respects to such Servicer in its capacity as Servicer with respect to such
Mortgage Loans under the related Purchase and Servicing Agreement, unless or
until the Master Servicer shall have appointed (and the Trustee shall have
acknowledged), with the consent of the Rating Agencies and in accordance with
the applicable provisions of the related Purchase and Servicing Agreement, a
new ▇▇▇▇▇▇ ▇▇▇- or FHLMC-approved Person to serve as successor to the
Servicer; provided, however, that it is understood and agreed 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 a successor
servicer (including the Master Servicer). With such letter from the Rating
Agencies, the Master Servicer may elect to continue to serve as successor
servicer under the Purchase and Servicing Agreement. Upon appointment of a
successor servicer, as authorized under this Section 9.01(b), unless the
successor servicer shall have assumed the obligations of the terminated
Servicer under such Purchase and Servicing Agreement, the Master Servicer and
such successor servicer shall enter into a servicing agreement in a form
substantially similar to the affected Purchase and Servicing Agreement, and
the Trustee shall acknowledge such servicing agreement. In connection with any
such appointment, the Master Servicer may make such arrangements for the
compensation of such successor servicer as it and such successor servicer
shall agree, but in no event shall such compensation of any successor servicer
(including the Master Servicer) be in excess of that payable to the Servicer
under the affected Purchase and Servicing Agreement.
The Master Servicer shall pay the costs of such enforcement (including
the termination of a Servicer, the appointment of a successor servicer or the
transfer and assumption of the servicing by the Master Servicer) at its own
expense and shall be reimbursed therefor initially
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(i) by the terminated Servicer, (ii) from a general recovery resulting from
such enforcement only to the extent, if any, that such recovery exceeds all
amounts due in respect of the related Mortgage Loans, (iii) from a specific
recovery of costs, expenses or attorney's fees against the party against whom
such enforcement is directed, or (iv) to the extent that such amounts
described in (i)-(iii) above are insufficient to reimburse the Master Servicer
for such costs of enforcement, from the Trust Fund, as provided in Section
9.04.
If the Master Servicer assumes the servicing with respect to any of the
Mortgage Loans, it will not assume liability for the representations and
warranties of any Servicer it replaces or for the errors or omissions of such
Servicer.
If the Seller is the owner of the servicing rights and the Seller chooses
to terminate that Servicer with or without cause and sell those servicing
rights to a successor servicer, then the Depositor shall cause the Seller to
give reasonable prior written notice to the Master Servicer, and obtain the
prior written consent of the Rating Agencies and a New ▇▇▇▇▇▇ Mae- or
FHLMC-approved Person reasonably acceptable to the Master Servicer shall be
chosen by the Seller and appointed as successor servicer with the
acknowledgment of the Master Servicer and the Trustee. The Depositor shall
cause the costs of such transfer (including any costs of the Master Servicer)
to be borne by the Seller.
(c) Upon any termination of a Servicer's rights and powers pursuant to
its Purchase and Servicing Agreement, the Master Servicer shall promptly
notify the Trustee and the Rating Agencies, specifying in such notice that the
Master Servicer or any successor servicer, as the case may be, has succeeded
such Servicer under the related Purchase and Servicing Agreement, which notice
shall also specify the name and address of any such successor servicer.
(d) The Depositor shall not consent to the assignment by any Servicer of
such Servicer's rights and obligations under the related Purchase and
Servicing Agreement without the prior written consent of the Master Servicer,
which consent shall not be unreasonably withheld.
Section 9.02 Assumption of Master Servicing by Trustee.
(a) In the event the Master Servicer shall for any reason no longer be
the Master Servicer (including by reason of any Event of Default by the Master
Servicer under this Agreement), the Trustee shall thereupon assume all of the
rights and obligations of such Master Servicer hereunder and under each
Purchase and Servicing Agreement entered into with respect to the Mortgage
Loans or shall appoint or petition a court to appoint a ▇▇▇▇▇▇-▇▇▇ or
FHLMC-approved servicer as successor servicer that is acceptable to the
Depositor and the Rating Agencies. The Trustee, as successor master servicer,
its designee or any successor master servicer appointed by the Trustee shall
be deemed to have assumed all of the Master Servicer's interest herein and
therein to the same extent as if such Purchase and Servicing Agreements had
been assigned to the assuming party, except that the Master Servicer shall not
thereby be relieved of any liability or obligations of the Master Servicer
under such Purchase and Servicing Agreement accruing prior to its replacement
as Master Servicer, and shall be liable to the Trustee, and hereby agrees to
indemnify and hold harmless the Trustee from and against all costs, damages,
expenses and liabilities (including reasonable attorneys' fees) incurred by
the
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Trustee as a result of such liability or obligations of the Master Servicer
and in connection with the Trustee's assumption (but not its performance,
except to the extent that costs or liability of the Trustee are created or
increased as a result of negligent or wrongful acts or omissions of the Master
Servicer prior to its replacement as Master Servicer) of the Master Servicer's
obligations, duties or responsibilities thereunder.
(b) The Master Servicer that has been terminated shall, upon request of
the Trustee but at the expense of such Master Servicer, deliver to the
assuming party all documents and records relating to each Purchase and
Servicing Agreement, this Agreement and the related Mortgage Loans and an
accounting of amounts collected and held by it and otherwise use its best
efforts to effect the orderly and efficient transfer of each Purchase and
Servicing Agreement and this Agreement to the assuming party.
Section 9.03 Representations and Warranties of the Master Servicer.
The Master Servicer hereby represents and warrants to the Depositor, the
Securities Administrator and the Trustee, for the benefit of the
Certificateholders, as of the Closing Date that:
(i) it is validly existing and in good standing under the laws of
the United States of America as a national banking association, and as
Master Servicer has full power and authority to transact any and all
business contemplated by this Agreement and to execute, deliver and
comply with its obligations under the terms of this Agreement, the
execution, delivery and performance of which have been duly authorized by
all necessary corporate action on the part of the Master Servicer;
(ii) the execution and delivery of this Agreement by the Master
Servicer and its performance and compliance with the terms of this
Agreement will not (A) violate the Master Servicer's charter or bylaws,
(B) violate any law or regulation or any administrative decree or order
to which it is subject or (C) constitute a default (or an event which,
with notice or lapse of time, or both, would constitute a default) under,
or result in the breach of, any material contract, agreement or other
instrument to which the Master Servicer is a party or by which it is
bound or to which any of its assets are subject, which violation, default
or breach would materially and adversely affect the Master Servicer's
ability to perform its obligations under this Agreement;
(iii) this Agreement constitutes, assuming due authorization,
execution and delivery hereof by the other respective parties hereto, a
legal, valid and binding obligation of the Master Servicer, enforceable
against it in accordance with the terms hereof, except as such
enforcement may be limited by bankruptcy, insolvency, reorganization,
moratorium and other laws affecting the enforcement of creditors' rights
in general, and by general equity principles (regardless of whether such
enforcement is considered in a proceeding in equity or at law);
(iv) the Master Servicer is not in default with respect to any order
or decree of any court or any order or regulation of any federal, state,
municipal or governmental
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agency to the extent that any such default would materially and adversely
affect its performance hereunder;
(v) the Master Servicer is not a party to or bound by any agreement
or instrument or subject to any charter provision, bylaw or any other
corporate restriction or any judgment, order, writ, injunction, decree,
law or regulation that may materially and adversely affect its ability as
Master Servicer to perform its obligations under this Agreement or that
requires the consent of any third person to the execution of this
Agreement or the performance by the Master Servicer of its obligations
under this Agreement;
(vi) no litigation is pending or, to the best of the Master
Servicer's knowledge, threatened against the Master Servicer which would
prohibit its entering into this Agreement or performing its obligations
under this Agreement;
(vii) the Master Servicer, or an affiliate thereof the primary
business of which is the servicing of conventional residential mortgage
loans, is a ▇▇▇▇▇▇ Mae- or FHLMC-approved seller/servicer;
(viii) no consent, approval, authorization or order of any court or
governmental agency or body is required for the execution, delivery and
performance by the Master Servicer of or compliance by the Master
Servicer with this Agreement or the consummation of the transactions
contemplated by this Agreement, except for such consents, approvals,
authorizations and orders (if any) as have been obtained; and
(ix) the consummation of the transactions contemplated by this
Agreement are in the ordinary course of business of the Master Servicer.
It is understood and agreed that the representations and warranties set
forth in this Section shall survive the execution and delivery of this
Agreement. The Master Servicer shall indemnify the Depositor, the Securities
Administrator and the Trustee and hold them harmless against any loss,
damages, penalties, fines, forfeitures, legal fees and related costs,
judgments, and other costs and expenses resulting from any claim, demand,
defense or assertion based on or grounded upon, or resulting from, a material
breach of the Master Servicer's representations and warranties contained in
this Section 9.03. It is understood and agreed that the enforcement of the
obligation of the Master Servicer set forth in this Section to indemnify the
Depositor, the Securities Administrator and the Trustee as provided in this
Section constitutes the sole remedy (other than as set forth in Section 6.14)
of the Depositor, the Securities Administrator and the Trustee, respecting a
breach of the foregoing representations and warranties. Such indemnification
shall survive any termination of the Master Servicer as Master Servicer
hereunder, the resignation or removal of the Trustee and any termination of
this Agreement.
Any cause of action against the Master Servicer relating to or arising
out of the breach of any representations and warranties made in this Section
shall accrue upon discovery of such breach by either the Depositor, the Master
Servicer or the Trustee or notice thereof by any one of such parties to the
other parties.
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Section 9.04 Compensation to the Master Servicer.
The Master Servicer shall be entitled to be paid by the Securities
Administrator reasonable compensation for the Master Servicer's services
hereunder, and the Master Servicer shall be entitled to be paid by the Trust
Fund, and either retain or withdraw from the Distribution Account (i) amounts
necessary to reimburse itself for any previously unreimbursed Advances,
Servicer Advances and Nonrecoverable Advances with respect to the Mortgage
Loans in accordance with the definition of "Available Funds" and (ii) amounts
representing assumption fees, late payment charges or other ancillary income
not included in the definition of "Available Funds" and which are not required
to be remitted by the Servicers to the Securities Administrator or deposited
by the Securities Administrator into the Distribution Account. The Master
Servicer shall be required to pay all expenses incurred by it in connection
with its activities hereunder and shall not be entitled to reimbursement
therefor except as provided in this Agreement.
In addition, the Master Servicer shall be entitled to reimbursement from
the Distribution Account for all reasonable expenses, disbursements and
advances incurred or made by the Master Servicer in connection with the
performance of its duties hereunder and under the Purchase and Servicing
Agreements, as modified by the Acknowledgements (including the reasonable
compensation and the expenses and disbursements of its agents and counsel), to
the extent not otherwise reimbursed pursuant to this Agreement, except any
such expense, disbursement or advance as may be attributable to its willful
misfeasance, bad faith or negligence.
The Master Servicer and any director, officer, employee or agent of the
Master Servicer 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 Purchase and Servicing Agreements or the Certificates, other
than any loss, liability or expense resulting from the Master Servicer's
failure to perform its duties hereunder or thereunder or incurred by reason of
the Master Servicer's negligence, willful misfeasance or bad faith.
Section 9.05 Merger or Consolidation.
Any Person into which the Master Servicer may be merged or consolidated,
or any Person resulting from any merger, conversion, other change in form 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 to
the Master Servicer hereunder, without the execution or filing of any paper or
any further act on the part of any of the parties hereto, anything herein to
the contrary notwithstanding; provided, however, that the successor or
resulting Person to the Master Servicer shall be a Person that shall be
qualified and approved to service mortgage loans for ▇▇▇▇▇▇ ▇▇▇ or FHLMC and
shall have a net worth of not less than $15,000,000.
Section 9.06 Resignation of Master Servicer.
Except as otherwise provided in Sections 9.05 and 9.07 hereof, the Master
Servicer shall not resign from the obligations and duties hereby imposed on it
unless the duties of the Master
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Servicer hereunder are no longer permissible under applicable law or are in
material conflict by reason of applicable law with any other activities
carried on by it and cannot be cured. Any such determination permitting the
resignation of the Master Servicer shall be evidenced by an Opinion of Counsel
that shall be Independent to such effect delivered to the Trustee. No
resignation of the Master Servicer shall become effective until the Trustee
shall have assumed, or a successor master servicer shall have been appointed
pursuant to Section 9.02 and until such successor shall have assumed, the
Master Servicer's responsibilities and obligations under this Agreement.
Notice of any such resignation shall be given promptly by the Master Servicer
and the Depositor to the Trustee.
If, at any time, the Master Servicer resigns under this Section 9.06, or
transfers or assigns its rights and obligations under Section 9.07, or is
removed as Master Servicer pursuant to Section 6.14, then at such time ▇▇▇▇▇
Fargo Bank, National Association (or any successor thereto) also shall resign
(and shall be entitled to resign) as Securities Administrator, Paying Agent,
Authenticating Agent and Certificate Registrar under this Agreement. In such
event, the obligations of each such party shall be assumed by the Trustee or
such successor master servicer appointed by the Trustee (subject to the
provisions of Section 9.02(a)).
Section 9.07 Assignment or Delegation of Duties by the Master Servicer.
Except as expressly provided herein, the Master Servicer shall not assign
or transfer any of its rights, benefits or privileges hereunder to any other
Person, or delegate to or subcontract with, or authorize or appoint any other
Person to perform any of the duties, covenants or obligations to be performed
by the Master Servicer hereunder; provided, however, that the Master Servicer
shall have the right with the prior written consent of the Trustee and the
Depositor (which consent shall not be unreasonably withheld), and upon
delivery to the Trustee and the Depositor of a letter from each Rating Agency
to the effect that such action shall not result in a downgrading of the
Certificates, to delegate or assign to or subcontract with or authorize or
appoint any qualified Person to perform and carry out any duties, covenants or
obligations to be performed and carried out by the Master Servicer hereunder.
Notice of such permitted assignment shall be given promptly by the Master
Servicer to the Depositor and the Trustee. If, pursuant to any provision
hereof, the duties of the Master Servicer are transferred to a successor
master servicer, the entire amount of the compensation payable to the Master
Servicer pursuant hereto shall thereafter be payable to such successor master
servicer. Such successor Master Servicer shall also pay the fees of the
Trustee and the Securities Administrator, as provided herein.
Section 9.08 Limitation on Liability of the Master Servicer and Others.
(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
Trustee or the Certificateholders for any action taken or for refraining from
the taking of any action in good faith pursuant to this Agreement, or for
errors in judgment; provided, however, that this provision shall not protect
the Master Servicer or any such person against any liability that would
otherwise be imposed by reason of willful misfeasance, bad faith or negligence
in its performance of its duties or by reason of reckless disregard for its
obligations and duties under this Agreement. The Master Servicer and any
director, officer, employee or agent of the Master Servicer may rely in good
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faith on any document of any kind prima facie properly executed and submitted
by any Person respecting any matters arising hereunder. The Master Servicer
shall be under no obligation to appear in, prosecute or defend any legal
action that is not incidental to its duties to master service the Mortgage
Loans in accordance with this Agreement and that in its opinion may involve it
in any expenses or liability; provided, however, that the Master Servicer may
in its sole discretion undertake any such action that it may deem necessary or
desirable in respect to this Agreement and the rights and duties of the
parties hereto and the interests of the Certificateholders hereunder. In such
event, the legal expenses and costs of such action and any liability resulting
therefrom shall be expenses, costs and liabilities of the Trust Fund and the
Master Servicer shall be entitled to be reimbursed therefor out of the
Distribution Account.
The Master Servicer shall not be liable for any acts or omissions of the
Servicers except to the extent that damages or expenses are incurred as a
result of such act or omissions and such damages and expenses would not have
been incurred but for the negligence, willful misfeasance, bad faith or
recklessness of the Master Servicer in supervising, monitoring and overseeing
the obligations of the Servicers in this Agreement and the Purchase and
Servicing Agreements.
Section 9.09 Indemnification; Third-Party Claims.
The Master Servicer agrees to indemnify the Depositor, the Securities
Administrator and the Trustee, and hold them harmless against any and all
claims, losses, penalties, fines, forfeitures, legal fees and related costs,
judgments, and any other costs, liability, fees and expenses that the
Depositor, the Securities Administrator or the Trustee may sustain as a result
of the Master Servicer's willful misfeasance, bad faith or negligence in the
performance of its duties hereunder or by reason of its reckless disregard for
its obligations and duties under this Agreement, the Acknowledgements and the
related Purchase and Servicing Agreements. The Depositor, the Securities
Administrator and the Trustee shall immediately notify the Master Servicer if
a claim is made by a third party with respect to this Agreement or the
Mortgage Loans entitling the Depositor, the Securities Administrator or the
Trustee to indemnification under this Section 9.09(a), whereupon the Master
Servicer shall assume the defense of any such claim and pay all expenses in
connection therewith, including counsel fees, and promptly pay, discharge and
satisfy any judgment or decree which may be entered against it or them in
respect of such claim.
ARTICLE X
REMIC ADMINISTRATION
Section 10.01 REMIC Administration.
(a) REMIC elections as set forth in the Preliminary Statement shall be
made on Forms 1066 or other appropriate federal tax or information return for
the taxable year ending on the last day of the calendar year in which the
Certificates are issued. The regular interests and residual interest in each
REMIC shall be as designated in the Preliminary Statement.
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(b) The Closing Date is hereby designated as the "Startup Day" of each
REMIC within the meaning of section 860G(a)(9) of the Code. The latest
possible maturity date for purposes of Treasury Regulation 1.860G-1(a)(4) will
be the Latest Possible Maturity Date.
(c) The Securities Administrator shall represent the Trust Fund in any
administrative or judicial proceeding relating to an examination or audit by
any governmental taxing authority with respect thereto. The Securities
Administrator shall pay any and all tax related expenses (not including taxes)
of each REMIC, including but not limited to any professional fees or expenses
related to audits or any administrative or judicial proceedings with respect
to such REMIC that involve the Internal Revenue Service or state tax
authorities, but only to the extent that (i) such expenses are ordinary or
routine expenses, including expenses of a routine audit but not expenses of
litigation (except as described in (ii)); or (ii) such expenses or liabilities
(including taxes and penalties) are attributable to the negligence or willful
misconduct of the Securities Administrator in fulfilling its duties hereunder
(including its duties as tax return preparer). The Securities Administrator
shall be entitled to reimbursement of expenses to the extent provided in
clause (i) above from the Distribution Account, provided, however, the
Securities Administrator shall not be entitled to reimbursement for expenses
incurred in connection with the preparation of tax returns and other reports
as required by Section 6.20 and this Section.
(d) The Securities Administrator shall prepare, the Trustee shall sign
and the Securities Administrator shall file all of each REMIC's federal and
appropriate state tax and information returns as such REMIC's direct
representative. The expenses of preparing and filing such returns shall be
borne by the Securities Administrator. In preparing such returns, the
Securities Administrator shall, with respect to each REMIC other than the
Master REMIC: (i) treat the accrual period for interests in such REMIC as the
calendar month; (ii) account for distributions made from each REMIC other than
the Master REMIC as made on the first day of each succeeding calendar month;
(iii) account for income under the all-OID method at the weighted average of
the Net Mortgage Rates; (iv) use the aggregation method provided in Treasury
Regulation section 1.1275-2(c); and (v) account for income and expenses
related to each REMIC other than the Master REMIC in the manner resulting in
the lowest amount of excess inclusion income possible accruing to the Holder
of the residual interest in each such REMIC.
(e) The Securities Administrator or its designee shall perform on behalf
of each REMIC all reporting and other tax compliance duties that are the
responsibility of such REMIC under the Code, the REMIC Provisions, or other
compliance guidance issued by the Internal Revenue Service or any state or
local taxing authority. Among its other duties, if required by the Code, the
REMIC Provisions, or other such guidance, the Securities Administrator shall
provide, upon receipt of additional reasonable compensation, (i) to the
Treasury or other governmental authority such information as is necessary for
the application of any tax relating to the transfer of a Residual Certificate
to any disqualified person or organization pursuant to Treasury Regulation
1.860E-2(a)(5) and any person designated in Section 860E(e)(3) of the Code and
(ii) to the Certificateholders and the Trustee such information or reports as
are required by the Code or REMIC Provisions.
(f) To the extent within their control, the Trustee, the Securities
Administrator, the Master Servicer and the Holders of Certificates shall take
any action or cause any REMIC to take
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any action necessary to maintain the status of any REMIC as a REMIC under the
REMIC Provisions and shall assist each other as necessary to create or
maintain such status. None of the Trustee, the Securities Administrator, the
Master Servicer, nor the Holder of any Residual Certificate shall knowingly
take any action, cause any REMIC to take any action or fail to take (or fail
to cause to be taken) any action that, under the REMIC Provisions, if taken or
not taken, as the case may be, could result in an Adverse REMIC Event unless
the Trustee, the Securities Administrator and the Master Servicer have
received an Opinion of Counsel (at the expense of the party seeking to take
such action) to the effect that the contemplated action will not endanger such
status or result in the imposition of such a tax. In addition, prior to taking
any action with respect to any REMIC or the assets therein, or causing any
REMIC to take any action, which is not expressly permitted under the terms of
this Agreement, any Holder of a Residual Certificate will consult with the
Trustee, the Securities Administrator, the Master Servicer or their respective
designees, in writing, with respect to whether such action could cause an
Adverse REMIC Event to occur with respect to any REMIC, and no such Person
shall take any such action or cause any REMIC to take any such action as to
which the Trustee, the Securities Administrator or the Master Servicer has
advised it in writing that an Adverse REMIC Event could occur; provided,
however, that if no Adverse REMIC Event would occur but such action could
result in the imposition of additional taxes on the Residual
Certificateholders, no such Person shall take any such action, or cause any
REMIC to take any such action without the written consent of the Residual
Certificateholders.
(g) Each Holder of a Residual Certificate shall pay when due any and all
taxes imposed on the related REMIC by federal or state governmental
authorities. To the extent that such taxes are not paid by a Residual
Certificateholder, the Paying Agent shall pay any remaining REMIC taxes out of
current or future amounts otherwise distributable to the Holder of the
Residual Certificate in any such REMIC or, if no such amounts are available,
(A) out of other amounts held in the Distribution Account, and shall reduce
amounts otherwise payable to holders of regular interests in any such REMIC or
(B) to the extent that any such taxes are imposed on the REMIC as a result of
the breach of any representation, warranty or covenant of the Master Servicer,
the Securities Administrator or any Servicer, then the Master Servicer, the
Securities Administrator, or that Servicer, as applicable, shall pay when due
any and all such taxes.
(h) The Securities Administrator shall, for federal income tax purposes,
maintain books and records with respect to each REMIC on a calendar year and
on an accrual basis.
(i) No additional contributions of assets shall be made to any REMIC,
except as expressly provided in this Agreement.
(j) Neither the Securities Administrator nor the Master Servicer shall
enter into any arrangement by which any REMIC will receive a fee or other
compensation for services.
(k) [Reserved].
(l) The Class A-R Holder shall act as "tax matters person" with respect
to each REMIC created hereunder and the Securities Administrator shall act as
agent for the Class A-R Holder in such roles, unless and until another party
is so designated by the Class A-R Holder.
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Section 10.02 Prohibited Transactions and Activities.
Neither the Depositor, the Master Servicer nor the Trustee shall sell,
dispose of, or substitute for any of the Mortgage Loans, except in a
disposition pursuant to (i) the foreclosure of a Mortgage Loan, (ii) the
bankruptcy of the Trust Fund, (iii) the termination of each REMIC pursuant to
Article VII of this Agreement, (iv) a substitution pursuant to Article II of
this Agreement or (v) a repurchase of Mortgage Loans pursuant to Article II of
this Agreement, nor acquire any assets for any REMIC, nor sell or dispose of
any investments in the Distribution Account for gain, nor accept any
contributions to any REMIC after the Closing Date, unless it has received an
Opinion of Counsel (at the expense of the party causing such sale,
disposition, substitution or acceptance) that such disposition, acquisition,
substitution, or acceptance will not result in an Adverse REMIC Event, (b)
affect the distribution of interest or principal on the Certificates or (c)
result in the encumbrance of the assets transferred or assigned to the Trust
Fund (except pursuant to the provisions of this Agreement).
The Master Servicer with respect to the Mortgage Loans shall not consent
to any modification of any such Mortgage Loan for which the consent of the
Master Servicer is required under the applicable Purchase and Servicing
Agreement under which such Mortgage Loan is serviced, that would (i) increase
the interest rate in respect of such Mortgage, defer for a period in excess of
six months or forgive the payment of any principal or interest, reduce the
outstanding principal amount (except for actual payments of principal),
increase the Servicing Fee on such Mortgage Loan or extend the final maturity
date on such Mortgage Loan, or (ii) result in a substitution or release of
collateral or in the provision of additional collateral for the Mortgage Loan,
unless the applicable Mortgage Loan is in default or default is reasonably
foreseeable in respect of such Mortgage Loan, or the Master Servicer has
received an Opinion of Counsel (at the expense of the party requesting consent
for such modification) that such modification will not result in an Adverse
REMIC Event.
Section 10.03 Indemnification with Respect to Prohibited Transactions or
Loss of REMIC Status.
Upon the occurrence of an Adverse REMIC Event due to the negligent
performance by the Securities Administrator of its duties and obligations set
forth herein, the Securities Administrator shall indemnify the
Certificateholders of the related Residual Certificate against any and all
losses, claims, damages, liabilities or expenses ("Losses") resulting from
such negligence; provided, however, that the Securities Administrator shall
not be liable for any such Losses attributable to the action or inaction of
the Depositor, the Trustee or the Holder of the Residual Certificate, nor for
any such Losses resulting from misinformation provided by any of the foregoing
parties on which the Securities Administrator has relied. Notwithstanding the
foregoing, however, in no event shall the Securities Administrator have any
liability (1) for any action or omission that is taken in accordance with and
in compliance with the express terms of, or which is expressly permitted by
the terms of, this Agreement or under any Purchase and Servicing Agreements or
under any Acknowledgement, (2) for any Losses other than arising out of
malfeasance, willful misconduct or negligent performance by the Service
Administrator of its duties and obligations set forth herein, and (3) for any
special or consequential damages to Certificateholders of the related Residual
Certificate (in addition to payment of principal and interest on the
Certificates).
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Section 10.04 REO Property.
(a) Notwithstanding any other provision of this Agreement, the Master
Servicer, acting on behalf of the Trustee hereunder, shall not, except to the
extent provided in the applicable Purchase and Servicing Agreement, knowingly
permit any Servicer to, rent, lease, or otherwise earn income on behalf of any
REMIC with respect to any REO Property which might cause an Adverse REMIC
Event unless the applicable Servicer has provided to the Trustee and the
Securities Administrator an Opinion of Counsel concluding that, under the
REMIC Provisions, such action would not adversely affect the status of any
REMIC as a REMIC and any income generated for any REMIC by the REO Property
would not result in an Adverse REMIC Event.
(b) The Depositor shall cause the applicable Servicer (to the extent
provided in its Purchase and Servicing Agreement) to make reasonable efforts
to sell any REO Property for its fair market value. In any event, however, the
Depositor shall, or shall cause the applicable Servicer (to the extent
provided in its Purchase and Servicing Agreement) to, dispose of any REO
Property within three years of its acquisition by the Trust Fund unless the
Depositor or the applicable Servicer (on behalf of the Trust Fund) has
received a grant of extension from the Internal Revenue Service to the effect
that, under the REMIC Provisions and any relevant proposed legislation and
under applicable state law, the REMIC may hold REO Property for a longer
period without causing an Adverse REMIC Event. If such an extension has been
received, then the Depositor, acting on behalf of the Trustee hereunder,
shall, or shall cause the applicable Servicer to, continue to attempt to sell
the REO Property for its fair market value for such period longer than three
years as such extension permits (the "Extended Period"). If such an extension
has not been received and the Depositor or the applicable Servicer, acting on
behalf of the Trust Fund hereunder, is unable to sell the REO Property within
33 months after its acquisition by the Trust Fund or if such an extension, has
been received and the Depositor or the applicable Servicer is unable to sell
the REO Property within the period ending three months before the close of the
Extended Period, the Depositor shall cause the applicable Servicer, before the
end of the three year period or the Extended Period, as applicable, to (i)
purchase such REO Property at a price equal to the REO Property's fair market
value or (ii) auction the REO Property to the highest bidder (which may be the
applicable Servicer) in an auction reasonably designed to produce a fair price
prior to the expiration of the three-year period or the Extended Period, as
the case may be.
Section 10.05 Fidelity.
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 and
trustees.
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ARTICLE XI
MISCELLANEOUS PROVISIONS
Section 11.01 Binding Nature of Agreement; Assignment.
This Agreement shall be binding upon and inure to the benefit of the
parties hereto and their respective successors and permitted assigns.
Section 11.02 Entire Agreement.
This Agreement contains the entire agreement and understanding among the
parties hereto with respect to the subject matter hereof, and supersedes all
prior and contemporaneous agreements, understandings, inducements and
conditions, express or implied, oral or written, of any nature whatsoever with
respect to the subject matter hereof. The express terms hereof control and
supersede any course of performance and/or usage of the trade inconsistent
with any of the terms hereof.
Section 11.03 Amendment.
(a) This Agreement may be amended from time to time by the Depositor, the
Master Servicer, the Securities Administrator, and the Trustee, without notice
to or the consent of any of the Holders, (i) to cure any ambiguity or mistake,
(ii) to cause the provisions herein to conform to or be consistent with or in
furtherance of the statements made with respect to the Certificates, the Trust
Fund or this Agreement in any Offering Document, or to correct or supplement
any provision herein which may be inconsistent with any other provisions
herein or with the provisions of any Purchase and Servicing Agreement, (iii)
to make any other provisions with respect to matters or questions arising
under this Agreement or (iv) to add, delete, or amend any provisions to the
extent necessary or desirable to comply with any requirements imposed by the
Code and the REMIC Provisions. No such amendment effected pursuant to the
preceding sentence shall, as evidenced by an Opinion of Counsel, result in an
Adverse REMIC Event, nor shall such amendment effected pursuant to clause
(iii) of such sentence adversely affect in any material respect the interests
of any Holder. Prior to entering into any amendment without the consent of
Holders pursuant to this paragraph, the Trustee shall be provided with an
Opinion of Counsel (at the expense of the party requesting such amendment) to
the effect that such amendment is permitted under this Section. Any such
amendment shall be deemed not to adversely affect in any material respect any
Holder, if the Trustee receives written confirmation from each Rating Agency
that such amendment will not cause such Rating Agency to reduce the then
current rating assigned to the Certificates.
(b) This Agreement may also be amended from time to time by the
Depositor, the Master Servicer, the Securities Administrator and the Trustee,
with the consent of the Holders of not less than 66-2/3% of the Class
Principal Balance (or Percentage Interest) of each Class of Certificates
affected thereby for the purpose of adding any provisions to or changing in
any manner or eliminating any of the provisions of this Agreement or of
modifying in any manner the rights of the Holders; provided, however, that no
such amendment shall be made unless the Trustee receives an Opinion of
Counsel, at the expense of the party requesting the change, that
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such change will not cause an Adverse REMIC Event; and provided further, that
no such amendment may (i) reduce in any manner the amount of, or delay the
timing of, payments received on Mortgage Loans which are required to be
distributed on any Certificate, without the consent of the Holder of such
Certificate or (ii) reduce the aforesaid percentages of Class Principal
Balance or Class Notional Amount (or Percentage Interest) of Certificates of
each Class, the Holders of which are required to consent to any such amendment
without the consent of the Holders of 100% of the Class Principal Balance or
Class Notional Amount (or Percentage Interest) of each Class of Certificates
affected thereby. For purposes of this paragraph, references to "Holder" or
"Holders" shall be deemed to include, in the case of any Class of Book-Entry
Certificates, the related Certificate Owners.
(c) Promptly after the execution of any such amendment, the Securities
Administrator shall furnish written notification of the substance of such
amendment to each Holder, the Depositor and the Rating Agencies.
(d) It shall not be necessary for the consent of Holders under this
Section 11.03 to approve the particular form of any proposed amendment, but it
shall be sufficient if such consent shall approve the substance thereof. The
manner of obtaining such consents and of evidencing the authorization of the
execution thereof by Holders shall be subject to such reasonable regulations
as the Trustee may prescribe.
Section 11.04 Voting Rights.
Except to the extent that the consent of all affected Certificateholders
is required pursuant to this Agreement, with respect to any provision of this
Agreement requiring the consent of Certificateholders representing specified
percentages of aggregate outstanding Certificate Balance or Class Notional
Amount (or Percentage Interest), Certificates owned by the Depositor, the
Master Servicer, the Securities Administrator, the Trustee, any Servicer or
any Affiliates thereof are not to be counted so long as such Certificates are
owned by the Depositor, the Master Servicer, the Securities Administrator, the
Trustee, any Servicer or any Affiliate thereof.
Section 11.05 Provision of Information.
(a) For so long as any of the Certificates of any Class are "restricted
securities" within the meaning of Rule 144(a)(3) under the Act, each of the
Depositor, the Master Servicer, the Securities Administrator and the Trustee
(upon instruction from the Depositor) agree to cooperate with each other to
provide to any Certificateholders and to any prospective purchaser of
Certificates designated by such holder, upon the request of such holder or
prospective purchaser, any information required to be provided to such holder
or prospective purchaser to satisfy the condition set forth in Rule 144A(d)(4)
under the Act. Any reasonable, out-of-pocket expenses incurred by the Trustee,
the Master Servicer or the Securities Administrator in providing such
information shall be reimbursed by the Depositor.
(b) The Securities Administrator shall provide to any person to whom a
Prospectus was delivered, upon the request of such person specifying the
document or documents requested, a copy (excluding exhibits) of any report on
Form 8-K or Form 10-K filed with the Securities and Exchange Commission
pursuant to Section 6.20(b). Any reasonable out-of-pocket expenses
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incurred by the Securities Administrator in providing copies of such documents
shall be reimbursed by the Depositor.
Section 11.06 Governing Law.
THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE
STATE OF NEW YORK, AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES
HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS WITHOUT REGARD TO
CONFLICT OF LAWS PRINCIPLES APPLIED IN NEW YORK.
Section 11.07 Notices.
All requests, demands, notices, authorizations, directions, consents,
waivers and communications hereunder shall be in writing and shall be deemed
to have been duly given when received by (a) in the case of the Depositor,
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Capital I Inc., ▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇,
telephone number (▇▇▇) ▇▇▇-▇▇▇▇, Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Mortgage Loan Trust
2004-8AR, (b) in the case of the Seller, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Mortgage Capital Inc.,
▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇▇▇
▇▇▇▇▇▇▇ Mortgage Loan Trust 2004-8AR, (c) in the case of the Master Servicer
or the Securities Administrator, ▇▇▇▇▇ Fargo Bank, National Association, ▇.▇.
▇▇▇ ▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ (or, for overnight deliveries, ▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇), telecopy number (▇▇▇) ▇▇▇-▇▇▇▇,
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Mortgage Loan Trust 2004-8AR, (d) with respect to
the Trustee or the Certificate Registrar, its respective Corporate Trust
Office and (e) in the case of the Rating Agencies, the address specified
therefor in the definition corresponding to the name of such Rating Agency, or
as to each party such other address as may hereafter be furnished by such
party to the other parties in writing. All demands, notices and communications
to a party hereunder shall be in writing and shall be deemed to have been duly
given when delivered to such party at the relevant address, facsimile number
or electronic mail address set forth above or at such other address, facsimile
number or electronic mail address as such party may designate from time to
time by written notice in accordance with this Section 11.07.
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 severable from the
remaining covenants, agreements, provisions or terms of this Agreement and
shall in no way affect the validity or enforceability of the other provisions
of this Agreement or of the Certificates or the rights of the Holders thereof.
Section 11.09 Indulgences; No Waivers.
Neither the failure nor any delay on the part of a party to exercise any
right, remedy, power or privilege under this Agreement shall operate as a
waiver thereof, nor shall any single or partial exercise of any right, remedy,
power or privilege preclude any other or further exercise of the same or of
any other right, remedy, power or privilege, nor shall any waiver of any
right, remedy, power or privilege with respect to any occurrence be construed
as a waiver of such right,
117
remedy, power or privilege with respect to any other occurrence. No waiver
shall be effective unless it is in writing and is signed by the party asserted
to have granted such waiver.
Section 11.10 Headings Not To Affect Interpretation.
The headings contained in this Agreement are for convenience of reference
only, and they shall not be used in the interpretation hereof.
Section 11.11 Benefits of Agreement.
Nothing in this Agreement or in the Certificates, express or implied,
shall give to any Person, other than the parties to this Agreement and their
successors hereunder and the Holders of the Certificates, any benefit or any
legal or equitable right, power, remedy or claim under this Agreement, except
to the extent specified in Section 11.15.
Section 11.12 Special Notices to the Rating Agencies.
(a) The Depositor shall give prompt notice to the Rating Agencies of the
occurrence of any of the following events of which it has notice:
(i) any amendment to this Agreement pursuant to Section 11.03;
(ii) any assignment by the Master Servicer of its rights hereunder
or delegation of its duties hereunder;
(iii) the occurrence of any Event of Default described in Section
6.14;
(iv) any notice of termination given to the Master Servicer pursuant
to Section 6.14 and any resignation of the Master Servicer hereunder;
(v) the appointment of any successor to any Master Servicer pursuant
to Section 6.14;
(vi) the making of a final payment pursuant to Section 7.02; and
(vii) any termination of the rights and obligations of any Servicer
under the applicable Purchase and Servicing Agreement.
(b) All notices to the Rating Agencies provided for this Section shall be
in writing and sent by first class mail, telecopy or overnight courier, to the
address specified therefor in the definition corresponding to the name of such
Rating Agency.
(c) The Securities Administrator shall provide or make available to the
Rating Agencies reports prepared pursuant to Section 4.05. In addition, the
Securities Administrator shall, at the expense of the Trust Fund, make
available to each Rating Agency such information as such Rating Agency may
reasonably request regarding the Certificates or the Trust Fund, to the extent
that such information is reasonably available to the Securities Administrator.
118
(d) The Depositor hereby represents to S&P that, to the Depositor's
knowledge, the information provided to such Rating Agency, including the loan
level detail, is true and correct according to such Rating Agency's
requirements.
Section 11.13 Conflicts.
To the extent that the terms of this Agreement conflict with the terms of
any Purchase and Servicing Agreement, the related Purchase and Servicing
Agreement shall govern.
Section 11.14 Counterparts.
This Agreement may be executed in one or more counterparts, each of which
shall be deemed to be an original, and all of which together shall constitute
one and the same instrument.
Section 11.15 No Petitions.
The Trustee and the Master Servicer (not in its individual corporate
capacity, but solely as Master Servicer hereunder), by entering into this
Agreement, hereby covenant and agree that they shall not at any time institute
against the Depositor, or join in any institution against the Depositor of,
any bankruptcy, reorganization, arrangement, insolvency or liquidation
proceedings, or other proceedings under any United States federal or state
bankruptcy or similar law in connection with any obligations relating to this
Agreement or any of the documents entered into by the Depositor in connection
with the transactions contemplated by this Agreement, except that the Trustee
shall not be prohibited from filing a proof of claim in any such proceeding.
119
IN WITNESS WHEREOF, the parties hereto have caused their names to be
signed hereto by their respective officers hereunto duly authorized as of the
day and year first above written.
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ CAPITAL I INC.,
as Depositor
By:
-------------------------------------
Name:
Title:
DEUTSCHE BANK NATIONAL TRUST COMPANY,
as Trustee
By:
-------------------------------------
Name:
Title:
By:
-------------------------------------
Name:
Title:
▇▇▇▇▇ FARGO BANK, NATIONAL ASSOCIATION,
as Master Servicer
By:
-------------------------------------
Name:
Title:
▇▇▇▇▇ FARGO BANK, NATIONAL ASSOCIATION,
as Securities Administrator
By:
-------------------------------------
Name:
Title:
Solely for purposes of Section 2.05
accepted and agreed to by:
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ MORTGAGE CAPITAL INC.
By:
-------------------------------
Name:
Title:
2
EXHIBIT A
FORMS OF CERTIFICATES
A-1
EXHIBIT B
FORM OF RESIDUAL CERTIFICATE TRANSFER AFFIDAVIT (TRANSFEREE)
STATE OF )
) ss.:
COUNTY OF )
[NAME OF OFFICER], _________________ being first duly sworn, deposes and
says:
1. That he [she] is [title of officer] ________________________ of
[name of Purchaser] _________________________________________ (the
"Purchaser"), a _______________________ [description of type of
entity] duly organized and existing under the laws of the [State of
__________] [United States], on behalf of which he [she] makes this
affidavit.
2. That the Purchaser's Taxpayer Identification Number is [ ].
3. That the Purchaser is not a "disqualified organization" within the
meaning of Section 860E(e)(5) of the Internal Revenue Code of 1986,
as amended (the "Code") and will not be a "disqualified
organization" as of [date of transfer], and that the Purchaser is
not acquiring a Residual Certificate (as defined in the Agreement)
for the account of, or as agent (including a broker, nominee, or
other middleman) for, any person or entity from which it has not
received an affidavit substantially in the form of this affidavit.
For these purposes, a "disqualified organization" means the United
States, any state or political subdivision thereof, any foreign
government, any international organization, any agency or
instrumentality of any of the foregoing (other than an
instrumentality if all of its activities are subject to tax and a
majority of its board of directors is not selected by such
governmental entity), any cooperative organization furnishing
electric energy or providing telephone service to persons in rural
areas as described in Code Section 1381(a)(2)(C), any "electing
large partnership" within the meaning of Section 775 of the Code, or
any organization (other than a farmers' cooperative described in
Code Section 521) that is exempt from federal income tax unless such
organization is subject to the tax on unrelated business income
imposed by Code Section 511.
4. That the Purchaser either (x) is not, and on __________________
[date of transfer] will not be, an employee benefit plan or other
retirement arrangement subject to Section 406 of the Employee
Retirement Income Security Act of 1974, as amended ("ERISA"), or
Section 4975 of the Code ("Code"), (collectively, a "Plan") or a
person acting on behalf of any such Plan or investing the assets of
any such Plan to acquire a Residual Certificate; (y) is an insurance
company that is purchasing the Certificate with funds contained in
an "insurance company general account" as defined in Section V(e) of
Prohibited Transaction Class Exemption ("PTCE") 95-60 and the
purchase and holding of the Certificate satisfy the requirements for
exemptive relief under Sections I and III of ▇▇▇▇
▇-▇
95-60; or (z) herewith delivers to the Certificate Registrar an
opinion of counsel satisfactory to the Certificate Registrar, and
upon which the Certificate Registrar, the Trustee, the Master
Servicer, the Depositor and Securities Administrator shall be
entitled to rely, to the effect that the purchase or holding of such
Residual Certificate by the Investor will not result in any
non-exempt prohibited transactions under Title I of ERISA or Section
4975 of the Code and will not subject the Certificate Registrar, the
Trustee, the Depositor, the Master Servicer or the Securities
Administrator to any obligation in addition to those undertaken by
such entities in the Pooling and Servicing Agreement, which opinion
of counsel shall not be an expense of the Trust Fund or any of the
above parties.
5. That the Purchaser hereby acknowledges that under the terms of the
Pooling and Servicing Agreement, dated as of August 1, 2004 (the
"Agreement"), by and among ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Capital I Inc., as
Depositor, ▇▇▇▇▇ Fargo Bank, National Association, as Master
Servicer and as Securities Administrator and Deutsche Bank National
Trust Company, as Trustee with respect to ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Mortgage
Loan Trust 2004-8AR, Mortgage Pass-Through Certificates, no transfer
of the Residual Certificates shall be permitted to be made to any
person unless the Certificate Registrar has received a certificate
from such transferee containing the representations in paragraphs 3
and 4 hereof.
6. That the Purchaser does not hold REMIC residual securities as
nominee to facilitate the clearance and settlement of such
securities through electronic book-entry changes in accounts of
participating organizations (such entity, a "Book-Entry Nominee").
7. That the Purchaser does not have the intention to impede the
assessment or collection of any federal, state or local taxes
legally required to be paid with respect to such Residual
Certificate.
8. That the Purchaser will not transfer a Residual Certificate to any
person or entity (i) as to which the Purchaser has actual knowledge
that the requirements set forth in paragraph 3, paragraph 6 or
paragraph 10 hereof are not satisfied or that the Purchaser has
reason to believe does not satisfy the requirements set forth in
paragraph 7 hereof, and (ii) without obtaining from the prospective
Purchaser an affidavit substantially in this form and providing to
the Certificate Registrar a written statement substantially in the
form of Exhibit C to the Agreement.
9. That the Purchaser understands that, as the holder of a Residual
Certificate, the Purchaser may incur tax liabilities in excess of
any cash flows generated by the interest and that it intends to pay
taxes associated with holding such Residual Certificate as they
become due.
10. That the Purchaser (i) is not a Non-U.S. Person or (ii) is a
Non-U.S. Person that holds a Residual Certificate in connection with
the conduct of a trade or business within the United States and has
furnished the transferor the Certificate Registrar with an effective
Internal Revenue Service Form W-8ECI (Certificate of Foreign
B-2
Person's Claim for Exemption From Withholding on Income Effectively
Connected With the Conduct of a Trade or Business in the United
States) or successor form at the time and in the manner required by
the Code or (iii) is a Non-U.S. Person that has delivered to the
transferor, the Trustee and the Certificate Registrar an opinion of
a nationally recognized tax counsel to the effect that the transfer
of such Residual Certificate to it is in accordance with the
requirements of the Code and the regulations promulgated thereunder
and that such transfer of a Residual Certificate will not be
disregarded for federal income tax purposes. "Non-U.S. Person" means
an individual, corporation, partnership or other person other than
(i) a citizen or resident of the United States; (ii) a corporation,
partnership or other entity created or organized in or under the
laws of the United States or any state thereof, including for this
purpose, the District of Columbia; (iii) an estate that is subject
to U.S. federal income tax regardless of the source of its income;
(iv) a trust if a court within the United States is able to exercise
primary supervision over the administration of the trust and one or
more United States trustees have authority to control all
substantial decisions of the trust; and, (v) to the extent provided
in Treasury regulations, certain trusts in existence on August 20,
1996 that are treated as United States persons prior to such date
and elect to continue to be treated as United States persons.
11. The Purchaser will not cause income from the Residual Certificate to
be attributable to a foreign permanent establishment or fixed base
of the Purchaser or another U.S. taxpayer.
12. That the Purchaser agrees to such amendments of the Pooling and
Servicing Agreement as may be required to further effectuate the
restrictions on transfer of any Residual Certificate to such a
"disqualified organization," an agent thereof, a Book-Entry Nominee,
or a person that does not satisfy the requirements of paragraph 7
and paragraph 10 hereof.
13. That the Purchaser consents to the designation of the Securities
Administrator to act as agent for the "tax matters person" of each
REMIC created by the Trust Fund pursuant to the Pooling and
Servicing Agreement.
B-3
IN WITNESS WHEREOF, the Purchaser has caused this instrument to be
executed on its behalf, pursuant to authority of its Board of Directors, by
its [title of officer] this _____ day of __________ 20__.
_________________________________
[name of Purchaser]
By:_______________________________
Name:
Title:
Personally appeared before me the above-named [name of officer]
________________, known or proved to me to be the same person who executed the
foregoing instrument and to be the [title of officer] _________________ of the
Purchaser, and acknowledged to me that he [she] executed the same as his [her]
free act and deed and the free act and deed of the Purchaser.
Subscribed and sworn before me this _____ day of __________ 20__.
NOTARY PUBLIC
_________________________
COUNTY OF _______________
STATE OF ________________
My commission expires the _____ day of __________ 20__.
B-4
EXHIBIT C
FORM OF RESIDUAL CERTIFICATE TRANSFER AFFIDAVIT (TRANSFEROR)
____________________________
Date
Re: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Mortgage Loan Trust 2004-8AR
Mortgage Pass-Through Certificates
_______________________ (the "Transferor") has reviewed the attached
affidavit of _____________________________ (the "Transferee"), and has no
actual knowledge that such affidavit is not true and has no reason to believe
that the information contained in paragraph 7 thereof is not true, and has no
reason to believe that the Transferee has the intention to impede the
assessment or collection of any federal, state or local taxes legally required
to be paid with respect to a Residual Certificate. In addition, the Transferor
has conducted a reasonable investigation at the time of the transfer and found
that the Transferee had historically paid its debts as they came due and found
no significant evidence to indicate that the Transferee will not continue to
pay its debts as they become due.
Very truly yours,
_________________________________
Name:
Title:
C-1
EXHIBIT D
FORM OF CERTIFICATION OF ▇▇▇▇▇ FARGO AS MASTER
SERVICER AND SECURITIES ADMINISTRATOR
Re: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Mortgage Loan Trust 2004-3 (the "Trust"), Mortgage
Pass-Through Certificates, Series 2004-3, issued pursuant to the Pooling
and Servicing Agreement, dated as of May 1, 2001 (the "Pooling and
Servicing Agreement"), among ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Capital I Inc., as depositor
(the "Depositor"), ▇▇▇▇▇ Fargo Bank, National Association, as master
servicer (the "Master Servicer") and as securities administrator (the
"Securities Administrator"), and Deutsche Bank National Trust Company, as
trustee
I, [identify the certifying individual], certify to the Depositor and its
officers, directors and affiliates, and with the knowledge and intent that
they will rely upon this certification, that:
1. I have reviewed the annual report on Form 10-K ("Annual Report"), and all
reports on Form 8-K containing distribution reports (collectively with
the Annual Report, the "Reports") filed in respect of periods included in
the year covered by the Annual Report, of the Trust;
2. To the best of my knowledge, the information in the Reports, taken as a
whole, does not contain any untrue statement of a material fact or omit
to state a material fact necessary to make the statements made, in light
of the circumstances under which such statements were made, not
misleading as of the last day of the period covered by the Annual Report;
3. To the best of my knowledge, the distribution or servicing information
required to be provided to the Trustee by the Securities Administrator or
the Master Servicer, as applicable, under the Pooling and Servicing
Agreement, for inclusion in the Reports is included in these Reports;
4. I am responsible for reviewing the activities performed by the Master
Servicer and the Securities Administrator under the Pooling and Servicing
Agreement and the servicers (the "Servicers") under their respective
purchase and servicing agreements (the "Purchase and Servicing
Agreements"), and to the best of my knowledge and the annual compliance
review required under the Purchase and Servicing Agreements, and except
as disclosed in the Reports, each of the Master Servicer, the Securities
Administrator and each Servicer has fulfilled its respective obligations
under the Pooling and Servicing Agreement or the applicable Purchase and
Servicing Agreement; and
5. The Reports disclose all significant deficiencies relating to the
compliance by each of the Servicers with the minimum servicing standards
based upon the reports provided by independent public accountants, after
conducting a review in compliance with the Uniform Single Attestation
Program for Mortgage Bankers or similar procedure, as set forth in the
related Purchase and Servicing Agreement, that are included in the
Reports.
D-1
In giving the certifications above, I have reasonably relied on
information provided to me by the following unaffiliated parties: the
Servicers.
By:__________________________________
Name:
Title:
Dated: ___________, ____
D-2
EXHIBIT E
LIST OF PURCHASE AND SERVICING AGREEMENTS
1. First Amended and Restated Mortgage Loan Flow Purchase, Sale And Servicing
Agreement, dated as of March 1, 2004 among Cendant Mortgage Corporation, as a
seller and servicer, ▇▇▇▇▇▇'▇ Gate Residential Mortgage Trust, as a seller,
and ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Mortgage Capital Inc., as purchaser;
2. Amended and Restated Master Seller's Warranties and Servicing Agreement,
dated as of February 5, 2004 between National City Mortgage Co., as seller and
servicer, and ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Mortgage Capital Inc., as purchaser;
3. Mortgage Loan Sale And Servicing Agreement, dated as of September 1, 2003
between GreenPoint Mortgage Funding, Inc., as seller and servicer, and ▇▇▇▇▇▇
▇▇▇▇▇▇▇ Mortgage Capital Inc., as purchaser, as amended by Amendment No. 1,
dated as of September 22, 2004;
4. Servicing Agreement, dated as of May 29, 2003 among Option One Mortgage
Corporation, as servicer, and ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Mortgage Capital Inc., as owner,
as amended by Amendment No. 1, dated as of September 1, 2004.
5. Mortgage Loan Purchase And Warranties Agreement dated as of June 1, 2004
between ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Mortgage Capital Inc., as purchaser, and Quicken Loans,
Inc., as seller.
6. Servicing Agreement, dated as of August 1, 2004 between ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Mortgage Capital Inc., and Chase Manhattan Mortgage Corporation.
7. Flow Mortgage Loan Sale and Servicing Agreement dated as of October 1, 2003
between Bank of America, N.A., as seller and servicer and ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Mortgage Capital Inc., as Purchaser.
E-1
EXHIBIT F
[RESERVED]
F-1
EXHIBIT G
ASSIGNMENT AND NOTICE OF TRANSFER WITH RESPECT
TO ADDITIONAL COLLATERAL MORTGAGE LOANS
G-1
EXHIBIT H
FORM OF RULE 144A TRANSFER CERTIFICATE
Re: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Mortgage Loan Trust 2004-8AR,
Mortgage Pass-Through Certificates
Reference is hereby made to the Pooling and Servicing Agreement, dated as
of September 1, 2004 (the "Pooling and Servicing Agreement"), by and among
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Capital I Inc., as Depositor, ▇▇▇▇▇ Fargo Bank, National
Association, as Master Servicer and as Securities Administrator and Deutsche
Bank National Trust Company, as Trustee. Capitalized terms used but not
defined herein shall have the meanings given to them in the Pooling and
Servicing Agreement.
This letter relates to $__________ initial Certificate Balance of Class
_____ Certificates which are held in the form of Definitive Certificates
registered in the name of ______________ (the "Transferor"). The Transferor
has requested a transfer of such Definitive Certificates for Definitive
Certificates of such Class registered in the name of [insert name of
transferee].
In connection with such request, and in respect of such Certificates, the
Transferor hereby certifies that such Certificates are being transferred in
accordance with (i) the transfer restrictions set forth in the Pooling and
Servicing Agreement and the Certificates and (ii) Rule 144A under the
Securities Act to a purchaser that the Transferor reasonably believes is a
"qualified institutional buyer" within the meaning of Rule 144A purchasing for
its own account or for the account of a "qualified institutional buyer," which
purchaser is aware that the sale to it is being made in reliance upon Rule
144A, in a transaction meeting the requirements of Rule 144A and in accordance
with any applicable securities laws of any state of the United States or any
other applicable jurisdiction.
This certificate and the statements contained herein are made for your
benefit and the benefit of the Underwriter, the Certificate Registrar and the
Depositor.
_____________________________________
[Name of Transferor]
By: _________________________________
Name:
Title:
Dated: ___________, ____
H-1
EXHIBIT I
FORM OF PURCHASER'S LETTER FOR
INSTITUTIONAL ACCREDITED INVESTOR
Date
Dear Sirs:
In connection with our proposed purchase of $______________ principal
amount of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Mortgage Loan Trust 2004-8AR, Mortgage Pass-Through
Certificates (the "Privately Offered Certificates") of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Capital
I Inc. (the "Depositor"), we confirm that:
(1) We understand that the Privately Offered Certificates have not been, and
will not be, registered under the Securities Act of 1933, as amended (the
"Securities Act"), and may not be sold except as permitted in the
following sentence. We agree, on our own behalf and on behalf of any
accounts for which we are acting as hereinafter stated, that if we should
sell any Privately Offered Certificates within two years of the later of
the date of original issuance of the Privately Offered Certificates or
the last day on which such Privately Offered Certificates are owned by
the Depositor or any affiliate of the Depositor we will do so only (A) to
the Depositor, (B) to "qualified institutional buyers" (within the
meaning of Rule 144A under the Securities Act) in accordance with Rule
144A under the Securities Act ("QIBs"), (C) pursuant to the exemption
from registration provided by Rule 144 under the Securities Act, or (D)
to an institutional "accredited investor" within the meaning of Rule
501(a)(1), (2), (3) or (7) of Regulation D under the Securities Act that
is not a QIB (an "Institutional Accredited Investor") which, prior to
such transfer, delivers to the Certificate Registrar under the Pooling
and Servicing Agreement, dated as of September 1, 2004 (the "Pooling and
Servicing Agreement"), by and among ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Capital I Inc., as
Depositor, ▇▇▇▇▇ Fargo Bank, National Association, as Master Servicer and
as Securities Administrator and Deutsche Bank National Trust Company, as
Trustee, a signed letter in the form of this letter; and we further
agree, in the capacities stated above, to provide to any person
purchasing any of the Privately Offered Certificates from us a notice
advising such purchaser that resales of the Privately Offered
Certificates are restricted as stated herein.
(2) We understand that, in connection with any proposed resale of any
Privately Offered Certificates to an Institutional Accredited Investor,
we will be required to furnish to the Certificate Registrar a
certification from such transferee in the form hereof to confirm that the
proposed sale is being made pursuant to an exemption from, or in a
transaction not subject to, the registration requirements of the
Securities Act. We further understand that the Privately Offered
Certificates purchased by us will bear a legend to the foregoing effect.
I-1
(3) We are acquiring the Privately Offered Certificates for investment
purposes and not with a view to, or for offer or sale in connection with,
any distribution in violation of the Securities Act. We have such
knowledge and experience in financial and business matters as to be
capable of evaluating the merits and risks of our investment in the
Privately Offered Certificates, and we and any account for which we are
acting are each able to bear the economic risk of such investment.
(4) We are an Institutional Accredited Investor and we are acquiring the
Privately Offered Certificates purchased by us for our own account or for
one or more accounts (each of which is an Institutional Accredited
Investor) as to each of which we exercise sole investment discretion.
(5) We have received such information as we deem necessary in order to make
our investment decision.
(6) If we are acquiring ERISA-Restricted Certificates, we understand that in
accordance with ERISA, the Code and the Exemption, no Plan and no person
acting on behalf of such a Plan may acquire such Certificate except in
accordance with Section 3.03(d) of the Pooling and Servicing Agreement.
Terms used in this letter which are not otherwise defined herein have the
respective meanings assigned thereto in the Pooling and Servicing Agreement.
I-1
You and the Certificate Registrar are entitled to rely upon this letter
and are irrevocably authorized to produce this letter or a copy hereof to any
interested party in any administrative or legal proceeding or official inquiry
with respect to the matters covered hereby.
Very truly yours,
_______________________________
[Purchaser]
By: ___________________________
Name:
Title:
I-3
EXHIBIT J
FORM OF ERISA TRANSFER AFFIDAVIT
STATE OF NEW YORK )
) ss.:
COUNTY OF NEW YORK )
The undersigned, being first duly sworn, deposes and says as follows:
1. The undersigned is the ______________________ of ______________ (the
"Investor"), a [corporation duly organized] and existing under the laws of
__________, on behalf of which he makes this affidavit.
2. The Investor either (x) is not, and on ___________ [date of transfer]
will not be, an employee benefit plan or other retirement arrangement subject
to Section 406 of the Employee Retirement Income Security Act of 1974, as
amended ("ERISA"), or Section 4975 of the Internal Revenue Code of 1986, as
amended (the "Code"), (collectively, a "Plan") or a person acting on behalf of
any such Plan or investing the assets of any such Plan; (y) if the Certificate
has been the subject of an ERISA-Qualifying Underwriting, is an insurance
company that is purchasing the Certificate with funds contained in an
"insurance company general account" as defined in Section V(e) of Prohibited
Transaction Class Exemption ("PTCE") 95-60 and the purchase and holding of the
Certificate satisfy the requirements for exemptive relief under Sections I and
III of PTCE 95-60; or (z) herewith delivers to the Certificate Registrar an
opinion of counsel satisfactory to the Certificate Registrar, and upon which
the Certificate Registrar, the Trustee, the Master Servicer, the Depositor and
the Securities Administrator shall be entitled to rely, to the effect that the
purchase or holding of such Certificate by the Investor will not constitute or
result in any non-exempt prohibited transactions under Title I of ERISA or
Section 4975 of the Code and will not subject the Certificate Registrar, the
Trustee, the Master Servicer, the Depositor or the Securities Administrator to
any obligation in addition to those undertaken by such entities in the Pooling
and Servicing Agreement, which opinion of counsel shall not be an expense of
the Trust Fund or the above parties.
3. The Investor hereby acknowledges that under the terms of the Pooling
and Servicing Agreement, dated as of September 1, 2004 (the "Pooling and
Servicing Agreement"), by and among ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Capital I Inc., as
Depositor, ▇▇▇▇▇ Fargo Bank, National Association, as Master Servicer and as
Securities Administrator and Deutsche Bank National Trust Company, as Trustee,
no transfer of the ERISA-Restricted Certificates shall be permitted to be made
to any person unless the Certificate Registrar has received a certificate from
such transferee in the form hereof.
J-1
IN WITNESS WHEREOF, the Investor has caused this instrument to be
executed on its behalf, pursuant to proper authority, by its duly authorized
officer, duly attested, this ____ day of _______________ 20___.
_______________________________________
[Investor]
By:____________________________________
Name:
Title:
ATTEST:
_________________________
STATE OF )
) ss.:
COUNTY OF )
Personally appeared before me the above-named ________________, known or
proved to me to be the same person who executed the foregoing instrument and
to be the ____________________ of the Investor, and acknowledged that he
executed the same as his free act and deed and the free act and deed of the
Investor.
Subscribed and sworn before me this _____ day of _________ 20___.
___________________________________
NOTARY PUBLIC
My commission expires the
_____ day of __________ 20___.
J-2
EXHIBIT K
FORM OF LETTER OF REPRESENTATIONS
WITH THE DEPOSITORY TRUST COMPANY
[On File with Securities Administrator]
K-1
EXHIBIT L
FORM OF TRUSTEE CERTIFICATION
September 30, 2004
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Capital I Inc.
▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated
▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ Fargo Bank, National Association
▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Re: Pooling and Servicing Agreement ("Pooling and Servicing Agreement")
relating to ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Mortgage Loan Trust 2004-8AR, Mortgage
Pass-Through Certificates, Series 2004-8AR
Ladies and Gentlemen:
In accordance with and subject to the provisions of Section 2.02 of the
Pooling and Servicing Agreement, the undersigned, as Trustee, hereby certifies
that, except for the exceptions noted on the schedule attached hereto, (a) all
documents required to be delivered to the Trustee pursuant to Sections
2.01(a)(i) through (iv) and (b), (c), (d), (e) and (g), and if delivered to
it, the documents identified in Section 2.01(a)(v) through (viii) and (ix)(c)
and (f) of the Pooling and Servicing Agreement are in its possession, (b) such
documents have been reviewed by it and have not been mutilated, damaged,
defaced, torn or otherwise physically altered, and such documents relate to
such Mortgage Loan, (c) based on its examination and only as to the foregoing
documents, these documents with respect to each Mortgage Loan accurately
reflect the information contained in the Mortgage Note and Mortgage and (d)
each Mortgage Note has been endorsed and each assignment of Mortgage has been
delivered as provided in Section 2.01 of the Pooling and Servicing Agreement.
The Trustee has made no independent examination of any documents contained in
each Mortgage File beyond the review specifically mentioned above. The Trustee
makes no representations as to: (i) the validity, legality, sufficiency,
enforceability or genuineness of any of the documents delivered in accordance
with Section 2.01 of the Pooling and Servicing Agreement or any of the
Mortgage Loans identified in the Mortgage Loan Schedule, or (ii) the
collectibility, insurability, effectiveness or suitability of any such
Mortgage Loan.
The Trustee acknowledges receipt of notice that the Depositor has granted
to the Trustee for the benefit of the Certificateholders a security interest
in all of the Depositor's right, title and interest in and to the Mortgage
Loans.
L-1
Capitalized terms used herein without definition shall have the meaning
assigned to them in the Pooling and Servicing Agreement.
DEUTSCHE BANK NATIONAL TRUST COMPANY,
as Trustee
By: _______________________
Authorized Representative
L-2
EXHIBIT M
[RESERVED]
M-1
SCHEDULE A
MORTGAGE LOAN SCHEDULE
[On File with the Trustee and the Securities Administrator]
S-A-1
SCHEDULE B
PRINCIPAL BALANCES SCHEDULE
[Not Applicable]
S-B-1