EXHIBIT 4.1
▇▇▇▇▇▇▇ ▇▇▇▇▇ MORTGAGE INVESTORS, INC.
Depositor,
CENDANT MORTGAGE CORPORATION
Servicer,
and
▇▇▇▇▇ FARGO BANK N.A.
Trustee
---------------------------
POOLING AND SERVICING AGREEMENT
Dated as of May 1, 2004
---------------------------
▇▇▇▇▇▇▇ ▇▇▇▇▇ MORTGAGE INVESTORS TRUST SERIES MLCC 2004-B
MORTGAGE PASS-THROUGH CERTIFICATES
TABLE OF CONTENTS
PAGE
ARTICLE I DEFINITIONS................................................................................... 6
Section 1.01 Definitions..................................................................... 6
Section 1.02 Calculations Respecting Mortgage Loans.......................................... 34
ARTICLE II DECLARATION OF TRUST; ISSUANCE OF CERTIFICATES................................................ 35
Section 2.01 Creation and Declaration of Trust Fund; Conveyance of Mortgage Loans............ 35
Section 2.02 Acceptance of Trust Fund by Trustee; Review of Documentation for Trust Fund..... 36
Section 2.03 Representations and Warranties of the Depositor and the Servicer................ 37
Section 2.04 Discovery of Breach; Repurchase or Substitution of Mortgage Loans............... 42
Section 2.05 Grant Clause.................................................................... 44
ARTICLE III THE CERTIFICATES.............................................................................. 45
Section 3.01 The Certificates................................................................ 45
Section 3.02 Registration.................................................................... 46
Section 3.03 Transfer and Exchange of Certificates........................................... 46
Section 3.04 Cancellation of Certificates.................................................... 49
Section 3.05 Replacement of Certificates..................................................... 49
Section 3.06 Persons Deemed Owners........................................................... 50
Section 3.07 Temporary Certificates.......................................................... 50
Section 3.08 Appointment of Paying Agent..................................................... 50
Section 3.09 Book-Entry Certificates......................................................... 50
ARTICLE IV ADMINISTRATION OF THE TRUST FUND.............................................................. 52
Section 4.01 Custodial Accounts; Distribution Account........................................ 52
Section 4.02 Reports to Trustee and Certificateholders....................................... 53
ARTICLE V DISTRIBUTIONS TO HOLDERS OF CERTIFICATES...................................................... 55
Section 5.01 Distributions Generally......................................................... 55
Section 5.02 Distributions from the Distribution Account..................................... 55
Section 5.03 Allocation of Losses............................................................ 58
Section 5.04 Advances........................................................................ 59
ARTICLE VI CONCERNING THE TRUSTEE; EVENTS OF DEFAULT..................................................... 59
Section 6.01 Duties of Trustee............................................................... 59
Section 6.02 Certain Matters Affecting the Trustee........................................... 61
Section 6.03 Trustee Not Liable for Certificates............................................. 62
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TABLE OF CONTENTS
(continued)
PAGE
Section 6.04 Trustee May Own Certificates.................................................... 63
Section 6.05 Eligibility Requirements for Trustee............................................. 63
Section 6.06 Resignation and Removal of Trustee............................................... 63
Section 6.07 Successor Trustee................................................................ 64
Section 6.08 Merger or Consolidation of Trustee............................................... 64
Section 6.09 Appointment of Co-Trustee, Separate Trustee or Custodian......................... 64
Section 6.10 Authenticating Agents............................................................ 66
Section 6.11 Indemnification of Trustee....................................................... 66
Section 6.12 Fees and Expenses of the Trustee................................................. 67
Section 6.13 Collection of Monies............................................................. 67
Section 6.14 Events of Default; Trustee To Act; Appointment of Successor...................... 67
Section 6.15 Additional Remedies of Trustee Upon Event of Default............................. 69
Section 6.16 Waiver of Defaults............................................................... 70
Section 6.17 Notification to Holders.......................................................... 70
Section 6.18 Directions by Certificateholders and Duties of Trustee During Event of Default... 70
Section 6.19 Preparation of Tax Returns and Other Reports..................................... 70
Section 6.20 Annual Certificate by Trustee.................................................... 71
ARTICLE VII PURCHASE OF MORTGAGE LOANS AND TERMINATION OF THE TRUST FUND................................... 72
Section 7.01 Purchase of Mortgage Loans; Termination of Trust Fund Upon Purchase or
Liquidation of All Mortgage Loans................................................ 72
Section 7.02 Procedure Upon Termination of Trust Fund......................................... 72
Section 7.03 Additional Trust Fund Termination Requirements................................... 73
ARTICLE VIII RIGHTS OF CERTIFICATEHOLDERS................................................................... 74
Section 8.01 Limitation on Rights of Holders.................................................. 74
Section 8.02 Access to List of Holders........................................................ 74
Section 8.03 Acts of Holders of Certificates.................................................. 75
ARTICLE IX ADMINISTRATION AND SERVICING OF THE MORTGAGE LOANS............................................. 76
Section 9.01 Servicer to Act as Servicer...................................................... 76
Section 9.02 Title, Management and Disposition of REO Property................................ 77
Section 9.03 Trustee and Depositor's Right to Examine Servicer Records........................ 78
Section 9.04 Legal Proceedings Involving the Servicer and/or the Mortgage Loans............... 79
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TABLE OF CONTENTS
(continued)
PAGE
Section 9.05 Material Changes................................................................. 79
Section 9.06 Servicer Shall Provide Information as Reasonably Required........................ 80
Section 9.07 Servicer Not to Resign........................................................... 80
Section 9.08 Custodial Accounts and Escrow Accounts........................................... 80
Section 9.09 Assumption Processing............................................................ 80
Section 9.10 Books and Records................................................................ 80
Section 9.11 Annual Statement as to Compliance................................................ 81
Section 9.12 Annual Independent Certified Public Accountants' Servicing Reports............... 81
Section 9.13 Officer's Certificate............................................................ 81
Section 9.14 Servicing Compensation........................................................... 81
Section 9.15 Indemnification.................................................................. 82
Section 9.16 Non Solicitation................................................................. 83
Section 9.17 Successor to the Servicer........................................................ 83
Section 9.18 Statements to the Trustee........................................................ 83
ARTICLE X REMIC ADMINISTRATION.......................................................................... 84
Section 10.01 REMIC Administration........................................................... 84
Section 10.02 Prohibited Transactions and Activities......................................... 86
Section 10.03 Indemnification with Respect to Prohibited Transactions or Loss of REMIC
Status......................................................................... 87
Section 10.04 REO Property................................................................... 87
ARTICLE XI MISCELLANEOUS PROVISIONS...................................................................... 88
Section 11.01 Binding Nature of Agreement; Assignment........................................ 88
Section 11.02 Entire Agreement............................................................... 88
Section 11.03 Amendment...................................................................... 88
Section 11.04 Voting Rights.................................................................. 89
Section 11.05 Provision of Information....................................................... 89
Section 11.06 Governing Law.................................................................. 90
Section 11.07 Notices........................................................................ 90
Section 11.08 Severability of Provisions..................................................... 90
Section 11.09 Indulgences; No Waivers........................................................ 90
Section 11.10 Headings Not To Affect Interpretation.......................................... 90
Section 11.11 Benefits of Agreement.......................................................... 91
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TABLE OF CONTENTS
(continued)
PAGE
Section 11.12 Special Notices to the Rating Agencies......................................... 91
Section 11.13 [RESERVED]..................................................................... 92
Section 11.14 Counterparts................................................................... 92
Section 11.15 No Petitions................................................................... 92
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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-1 Standard Layout for Monthly Remittance Advice
Exhibit D-2 Standard Layout for Monthly Defaulted Loan Report
Exhibit E Mortgage Loan Purchase and Sale Agreement
Exhibit F List of Limited Purpose Surety Bonds
Exhibit G Form of Rule 144A Transfer Certificate
Exhibit H Form of Purchaser's Letter for Institutional Accredited Investors
Exhibit I Form of ERISA Transfer Affidavit
Exhibit J Form of Letter of Representations with the Depository Trust Company
Exhibit K Form of Initial Certification
Exhibit L Form of Final Certification
Exhibit M List of Servicing Officers
Exhibit N Form of Request for Release
Exhibit O Custodial Agreement (without Exhibits)
Exhibit P Amendment No. 1 to Custodial Agreement (without Exhibits)
Exhibit Q Officer's Certificate - Trustee
Exhibit R Officer's Certificate - Servicer
Schedule A Mortgage Loan Schedule
Schedule B Mortgage Loan Representations and Warranties of the Seller
v
This POOLING AND SERVICING AGREEMENT, dated as of May 1, 2004 (the
"Agreement"), by and among ▇▇▇▇▇▇▇ ▇▇▇▇▇ MORTGAGE INVESTORS, INC., a Delaware
corporation, as depositor (the "Depositor"), CENDANT MORTGAGE CORPORATION, a New
Jersey corporation, as servicer (the "Servicer") and ▇▇▇▇▇ FARGO BANK N.A., as
Trustee (the "Trustee"), and acknowledged by ▇▇▇▇▇▇▇ ▇▇▇▇▇ CREDIT CORPORATION a
Delaware corporation, as seller (the "Seller"), for purposes of Section 2.04.
PRELIMINARY STATEMENT
The Depositor has acquired the Mortgage Loans from the Seller and at
the Closing Date is the owner of the Mortgage Loans and the other property being
conveyed by the Depositor to the Trustee hereunder for inclusion in the Trust
Fund. On the Closing Date, the Depositor will acquire the Certificates from the
Trustee as consideration for the Depositor's transfer to the Trust Fund of the
Mortgage Loans and the other property constituting the Trust Fund. The Depositor
has duly authorized the execution and delivery of this Agreement to provide for
the conveyance to the Trustee of the Mortgage Loans and the other property
constituting the Trust Fund. All covenants and agreements made by the Seller in
the Mortgage Loan Purchase and Sale Agreement and in this Agreement and all
covenants and agreements made by the Depositor, the Servicer and the Trustee
herein with respect to the Mortgage Loans and the other property constituting
the Trust Fund are for the benefit of the Holders from time to time of the
Certificates. The Depositor, the Servicer and the Trustee are entering into this
Agreement, and the Trustee is accepting the Trust Fund created hereby, for good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged.
As provided herein, the Trustee shall elect that the Trust Fund be
treated for federal income tax purposes as comprising three real estate mortgage
investment conduits (each a "REMIC" or, in the alternative, "REMIC 1," "REMIC 2"
and the "Upper Tier REMIC," respectively) in a tiered structure. The
Certificates, other than the Class A-R Certificate, shall represent ownership of
regular interests in the Upper Tier REMIC. For federal income tax purposes, in
addition to representing ownership of a REMIC regular interest, (i) each of the
Class A-1 Certificates represents the right to receive payments in respect of
Basis Risk Shortfalls and Unpaid Basis Risk Shortfalls, (ii) each of the Class
A-2 Certificates represents the right to receive payments in respect of Basis
Risk Shortfalls and Unpaid Basis Risk Shortfalls and (iii) each of the Class
B-1, Class B-2 and Class B-3 Certificates represents the right to receive
payments in respect of Basis Risk Shortfalls and Unpaid Basis Risk Shortfalls as
provided in Section 5.02. For federal income tax purposes, (i) each Class X-A
Certificate will represent two REMIC regular interests and the obligation to
make certain non-REMIC payments to the holders of the Class A-1 and Class A-2
Certificates and (ii) each Class X-B Certificate will represent three REMIC
regular interests and the obligation to make certain non-REMIC payments to the
holders of the Class B-1, Class B-2 and Class B-3 Certificates in respect of
Basis Risk Shortfalls and Unpaid Basis Risk Shortfalls. The Class A-R
Certificate represents the sole class of residual interest in each of REMIC 1,
REMIC 2 and the Upper Tier REMIC.
The Upper Tier REMIC shall hold as its assets the several classes of
uncertificated REMIC 2 Regular Interests. REMIC 2 shall hold as its assets the
several uncertificated classes of REMIC 1 Regular Interests. REMIC 1 shall hold
as its assets the property of the Trust Fund other than the REMIC 1 Interests,
the REMIC 2 Interests and the interests in the grantor trusts described herein.
Each Upper Tier REMIC Regular Interest is hereby designated as a
regular interest in the Upper Tier REMIC for purposes of the REMIC Provisions.
Each REMIC 2 Regular Interest is hereby designated as a regular interest in
REMIC 2 for purposes of the REMIC provisions. Each REMIC 1
Regular Interest is hereby designated as a regular interest in REMIC 1 for
purposes of the REMIC Provisions.
The Class LT1-R Interest is hereby designated as the sole class of
residual interest in REMIC 1 for purposes of the REMIC Provisions. The Class
LT2-R Interest is hereby designated as the sole class of residual interest in
REMIC 2 for purposes of the REMIC provisions. The Class A-R Certificate, other
than the portion thereof representing the right to receive payments in respect
of the Class LT1-R Interest or the Class LT2-R Interest is hereby designated as
the sole class of residual interest in the Upper Tier REMIC for purposes of the
REMIC provisions and will also represent the Class LT1-R Interest and the Class
LT2-R Interest.
THE REMIC 1 INTERESTS
The following table sets forth (or describes) the class designation,
interest rate, initial principal amount, and related pool of Mortgage Loans for
each class of REMIC 1 Interests:
Interest Related Mortgage Pool
Class Designation Principal Amount Rate or Pools
----------------- ---------------- ---- --------
LT11A $179,164.5202 (2) Pool 1
LT11B $5,874,165.5202 (3) Pool 1
LT12A $55,062.3373 (2) Pool 2
LT12B $1,805,062.3373 (4) Pool 2
LT13A $70,805.6716 (2) Pool 3
LT13B $2,320,805.6716 (5) Pool 3
LT1Z $989,698,286.8518 (2) Pool 1, Pool 2 and Pool 3
LT1-R (1) (1) N/A
(1) The Class LT1-R Interest represents the sole class of residual interest
in REMIC 1 and has neither a principal amount nor an interest rate. The
Class LT1-R Interest shall be represented by the Class A-R Certificate.
(2) The Class LT11A Interest, the Class LT12A Interest, the Class LT13A
Interest, and the Class LT1Z Interest shall have an interest rate for
each Distribution Date (and the related Accrual Period) equal to the
Net WAC.
(3) The Class LT11B Interest shall have an interest rate for any
Distribution Date (and the related Accrual Period) equal to the Pool 1
Net WAC.
(4) The Class LT12B Interest shall have an interest rate for any
Distribution Date (and the related Accrual Period) equal to the Pool 2
Net WAC.
(5) The Class LT13B Interest shall have an interest rate for any
Distribution Date (and the related Accrual Period) equal to the Pool 3
Net WAC.
On each Distribution Date, the Trustee shall first pay or charge as an
expense of REMIC 1 all expenses of the Trust for such Distribution Date.
Principal distributions shall be deemed to be made on the REMIC 1
Interests first, so as to keep the uncertificated principal balance of each
REMIC 1 Interest ending with the designation "A" equal to 1% of the excess of
(x) the aggregate Principal Balance of the Mortgage Loans in the related
Mortgage Pool over (y) the aggregate class principal amounts of the Certificates
in the Certificate Group related to such Mortgage Pool (except that if 1% of any
such excess is greater than the principal amount of the corresponding REMIC 1
Interest ending with the designation "A", the least amount of principal shall be
distributed to such REMIC 1 Interests such that the REMIC 1 Subordinated Balance
Ratio is maintained);
2
second, to each REMIC 1 Interest ending with the designation "B" so as to keep
the uncertificated principal balance of each such REMIC 1 Interest equal to 1%
of the aggregate Principal Balance of the Mortgage Loans in the related Mortgage
Pool and finally, all remaining principal amounts shall be distributed in
respect of the Class LT1Z Interest. Realized Losses with respect to principal
shall be allocated among the REMIC 1 Interests first, so as to keep the
uncertificated principal balance of each REMIC 1 Interest ending with the
designation "A" equal to 1% of the excess of (x) the aggregate Principal Balance
of the Mortgage Loans in the related Mortgage Pool over (y) the aggregate class
principal amounts of the Certificates in the Certificate Group related to such
Mortgage Pool (except that if 1% of any such excess is greater than the
principal amount of the corresponding REMIC 1 Interest ending with the
designation "A", the least amount of losses shall be allocated to such REMIC 1
Interests such that the REMIC 1 Subordinated Balance Ratio is maintained);
second, to each REMIC 1 Interest ending with the designation "B" so as to keep
the uncertificated principal balance of each such REMIC 1 Interest equal to 1%
of the aggregate Principal Balance of the Mortgage Loans in the related Mortgage
Pool and finally, all remaining Realized Losses with respect to principal shall
be distributed in respect of the Class LT1Z Interest.
If on any Distribution Date the Certificate Principal Amount of any
Class of Certificates is increased pursuant to the penultimate sentence of the
definition of "Certificate Principal Amount", then there shall be an equivalent
aggregate increase in the principal amounts of the REMIC 1 Regular Interests,
with such increase allocated (before the making of distributions and the
allocation of losses on the REMIC 1 Regular Interests on such Distribution Date)
among the REMIC 1 Regular Interests as follows: (i) first, to each REMIC 1
Interest ending with the designation "B" so as to keep the uncertificated
principal balance of each such REMIC 1 Interest equal to 1% of the aggregate
Principal Balance of the Mortgage Loans in the related Mortgage Pool, (ii)
second, to each REMIC 1 Regular Interest ending with the designation "A", so
that the uncertificated principal balance of each REMIC 1 Regular Interest
ending with the designation "A" is as close as possible to (but does not exceed)
1% of the excess of (x) the aggregate Principal Balance of the Mortgage Loans in
related Mortgage Pool over (y) the aggregate class principal balance of the
Certificates in the Certificate Group related to such Mortgage Pool; provided,
however, that (a) the REMIC 1 Subordinated Balance Ratio is maintained and (b)
amounts allocated to any REMIC 1 Regular Interest pursuant to this clause (ii)
shall not exceed the amount of any previous realized losses allocated to such
REMIC 1 Regular Interest not previously offset by distributions or increases in
the principal amount of such REMIC 1 Regular Interest and (iii) finally, all
remaining amounts to the Class LT1Z Interest.
All computations with respect to the REMIC 1 Interests shall be
computed to eight decimal places.
THE REMIC 2 INTERESTS
The following table sets forth (or describes) the class designation,
interest rate, initial principal amount, and corresponding class of certificates
or components for each class of REMIC 2 Interests:
Interest Corresponding Class of
Class Designation Principal Amount Rate Certificates or Components
----------------- ---------------- ---- --------------------------
LT2A1 $569,500,000.00 (2) Class A-1, X-A1 Component
LT2A2 $175,000,000.00 (3) Class A-2, X-A2 Component
LT2A3 $225,000,000.00 (4) Class A-3
LT2B1 $10,000,000.00 (5) Class ▇-▇, ▇▇▇▇▇▇▇▇▇ ▇-▇▇
▇▇▇▇▇ $8,000,000.00 (5) Class ▇-▇, ▇▇▇▇▇▇▇▇▇ ▇-▇▇
▇▇▇▇▇ $4,500,000.00 (5) Class ▇-▇, ▇▇▇▇▇▇▇▇▇ ▇-▇▇
▇▇▇▇▇ $2,500,000.00 (5) Class B-4
3
Interest Corresponding Class of
Class Designation Principal Amount Rate Certificates or Components
----------------- ---------------- ---- --------------------------
LT2B5 $2,000,000.00 (5) Class B-5
LT2B6 $3,503,252.91 (5) Class B-6
LT2AR $100.00 (6) Class A-R
LT2-R (1) (1) N/A
---------
(1) The Class LT2-R Interest represents the sole class of residual interest
in REMIC 2 and has neither a principal amount nor an interest rate. The
Class LT2-R Interest shall be represented by the Class A-R Certificate.
(2) The Class LT2A1 Interest shall have an interest rate for each
Distribution Date (and the related Accrual Period) equal to the Pool 1
Net WAC.
(3) The Class LT2A2 Interest shall have an interest rate for each
Distribution Date (and the related Accrual Period) equal to the Pool 2
Net WAC.
(4) The Class LT2A3 Interest shall have an interest rate for each
Distribution Date (and the related Accrual Period) equal to the Pool 3
Net WAC.
(5) Each of the Class LT2B1 Interest, the Class LT2B2 Interest, the Class
LT2B3 Interest, the Class LT2B4 Interest, the Class LT2B5 Interest and
the Class LT2B6 Interest shall have an interest rate for each
Distribution Date (and the related Accrual Period) equal to the
Subordinate Net WAC which is the numerical equivalent of the weighted
average of the interest rates on the Class LT11A Interest, the Class
LT12A Interest and the Class LT13A Interest (treating, for purposes of
computing this weighted average, the Class LT11A Interest as subject to
a cap and a floor equal to the interest rate on the Class LT11B
Interest, the Class LT12A Interest as subject to a cap and a floor
equal to the interest rate on the Class LT12B Interest and the Class
LT13A Interest as subject to a cap and a floor equal to the interest
rate on the Class LT13B Interest).
(6) The Class LT2AR Interest shall have an interest rate for each
Distribution Date (and the related Accrual Period) equal to the Pool 1
Net WAC.
Principal payments shall be deemed made and Realized Losses with
respect to principal shall be allocated among the REMIC 2 Interests in the same
manner as such payments are made or such Realized Losses are allocated among the
Corresponding Classes of Certificates (treating the initial Class Principal
Amount of the Class B-6 Certificates, for purposes of this sentence, as being
$3,503,252.91, treating the first $0.91 of distributions to the Class A-R
Certificate under Section 5.02(a)(vi) from principal payments on the Mortgage
Loans as distributed to the Class B-6 Certificates and disregarding Section
5.03(c)).
The principal amount of each REMIC 2 Regular Interest shall be
increased on any Distribution Date on which, and in the amount by which, the
Certificate Principal Amount of any Corresponding Class of Certificates is
increased pursuant to the penultimate sentence of "Certificate Principal
Amount."
THE CERTIFICATES
The following table sets forth (or describes) the Class designation,
Certificate Interest Rate, initial Class Principal Amount (or initial Class
Notional Amount), and minimum denomination for each Class of Certificates
comprising interests in the Trust Fund created hereunder.
4
Related Class or Initial Class
Classes of Certificate Principal Amount Minimum
Class interests in the Interest or Class Notional Denominations or
Designation Upper Tier REMIC Rate Amount Percentage Interest
----------- -------------------------- ----------- ----------------- -------------------
Class A-1 Upper Tier REMIC Class A-1 (1) $ 569,500,000 $ 25,000.00
Interest
Class A-2 Upper Tier REMIC Class A-2 (2) $ 175,000,000 $ 25,000.00
Interest
Class A-3 Class A-3 (3) $ 225,000,000 $ 25,000.00
Class X-A X-A1 Component and X-A2 Component (4) (4) $ 25,000.00
Class X-B Component XB1, Component XB2 and (5) (5) $ 25,000.00
Component XB3
Class A-R Class A-R (6) $ 100 100%
Class B-1 Upper Tier REMIC Class B-1 (7) $ 10,000,000 $ 25,000.00
Interest
Class B-2 Upper Tier REMIC Class B-2 (8) $ 8,000,000 $ 25,000.00
Interest
Class B-3 Upper Tier REMIC Class B-3 (9) $ 4,500,000 $ 100,000.00
Interest
Class B-4 Class B-4 (10) $ 2,500,000 $ 100,000.00
Class B-5 Class B-5 (10) $ 2,000,000 $ 100,000.00
Class B-6 Class B-6 (10) $ 3,503,252 $ 100,000.00
---------
(1) The Certificate Interest Rate with respect to any Distribution Date
(and the related Accrual Period) for the Class A-1 Certificates will be
the least of (i) LIBOR plus 0.25%; (ii) the Pool 1 Net WAC and (iii)
11.75%; provided, however, if the Mortgage Loans and related property
are not purchased pursuant to Section 7.01(c) on the Initial Optional
Purchase Date, then with respect to each subsequent Distribution Date
the per annum rate calculated pursuant to clause (i) above with respect
to the Class A-1 Certificates will be LIBOR plus 0.50%.
(2) The Certificate Interest Rate with respect to any Distribution Date
(and the related Accrual Period) for the Class A-2 Certificates will be
the least of (i) LIBOR plus 0.27%; (ii) the Pool 2 Net WAC and (iii)
11.75%; provided, however, if the Mortgage Loans and related property
are not purchased pursuant to Section 7.01(c) on the Initial Optional
Purchase Date, then with respect to each subsequent Distribution Date
the per annum rate calculated pursuant to clause (i) above with respect
to the Class A-2 Certificates will be LIBOR plus 0.54%.
(3) The Certificate Interest Rate with respect to any Distribution Date
(and the related Accrual Period) for the Class A-3 Certificates will be
the lesser of (i) the Pool 3 Net WAC and (ii) 11.75%.
(4) The Class X-A Certificates consist of two components, the X-A1
Component and the X-A2 Component. On any Distribution Date, the Class
X-A Certificate will have a Class Notional Amount equal to the sum of
the Component
5
Related Class or Initial Class Minimum
Classes of Certificate Principal Amount Denominations or
Class interests in the Interest or Class Notional Percentage
Designation Upper Tier REMIC Rate Amount Interest
----------- -------------------------- ----------- ----------------- -------------------
Notional Amount of the X-A1 Component and the X-A2 Component. The Class
X-A Certificates are entitled to receive on each Distribution Date the
sum of the amount of interest accrued on the X-A1 Component and the
X-A2 Component.
(5) The Class X-B Certificates will represent a 100% interest in each of
Component XB1, Component XB2 and Component XB3. See the definitions of
"Component XB1," "Component XB2" and "Component XB3" for the interest
rate and notional balance of these Components. On any Distribution
Date, the Class X-B Certificates will have a Class Notional Amount
equal to the sum of the Component Notional Amount of Component XB1,
Component XB2 and Component XB3.
(6) The Certificate Interest Rate with respect to any Distribution Date
(and the related Accrual Period) for the Class A-R Certificate will
equal the Pool 1 Net WAC.
(7) The Certificate Interest Rate with respect to any Distribution Date
(and the related Accrual Period) for the Class B-1 Certificates will be
the least of (i) LIBOR plus 0.48%; (ii) the Subordinate Net WAC and
(iii) 11.75%; provided, however, if the Mortgage Loans and related
property are not purchased pursuant to Section 7.01(c) on the Initial
Optional Purchase Date, then with respect to each subsequent
Distribution Date the per annum rate calculated pursuant to clause (i)
above with respect to the Class B-1 Certificates will be LIBOR plus
0.72%.
(8) The Certificate Interest Rate with respect to any Distribution Date
(and the related Accrual Period) for the Class B-2 Certificates will be
the least of (i) LIBOR plus 0.88%; (ii) the Subordinate Net WAC and
(iii) 11.75%; provided, however, if the Mortgage Loans and related
property are not purchased pursuant to Section 7.01(c) on the Initial
Optional Purchase Date, then with respect to each subsequent
Distribution Date the per annum rate calculated pursuant to clause (i)
above with respect to the Class B-2 Certificates will be LIBOR plus
1.32%.
(9) The Certificate Interest Rate with respect to any Distribution Date
(and the related Accrual Period) for the Class B-3 Certificates will be
the least of (i) LIBOR plus 1.60%; (ii) the Subordinate Net WAC and
(iii) 11.75%; provided, however, if the Mortgage Loans and related
property are not purchased pursuant to Section 7.01(c) on the Initial
Optional Purchase Date, then with respect to each subsequent
Distribution Date the per annum rate calculated pursuant to clause (i)
above with respect to the Class B-3 Certificates will be LIBOR plus
2.40%.
(10) The Certificate Interest Rates with respect to any Distribution Date
(and the related Accrual Period) for the Class B-4, Class B-5 and Class
B-6 Certificates will be equal to the Subordinate Net WAC.
As of the Cut-off Date, the Mortgage Loans had an aggregate Scheduled
Principal Balance of $1,000,003,352.91.
In consideration of the mutual agreements herein contained, the
Depositor, the Servicer and the Trustee hereby agree as follows:
ARTICLE I
DEFINITIONS
Section 1.01 Definitions.
The following words and phrases, unless the context otherwise requires,
shall have the following meanings:
Accepted Servicing Practices: The Servicer's normal servicing
practices, which will conform to the mortgage servicing practices of prudent
mortgage lending institutions which service for their own account mortgage loans
of the same type as the Mortgage Loans in the jurisdictions in which the related
Mortgaged Properties are located.
6
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.
Accrual Period: With respect to any Distribution Date and any Class of
LIBOR Certificates, the period commencing on the 25th day of the month preceding
the month in which the Distribution Date occurs and ending on the 24th day of
the month in which the Distribution Date occurs; provided, however, that the
first Accrual Period with respect to the LIBOR Certificates shall be the period
beginning on the Closing Date and ending on June 24, 2004. The Accrual Period
applicable to the Components, the Class A-3, Class A-R, Class B-4, Class B-5,
Class B-6 Certificates and each Class of Lower Tier REMIC Interests shall be the
calendar month immediately preceding the month in which the related Distribution
Date occurs. Interest shall accrue on all Classes of Certificates, all
Components and on all Lower Tier REMIC Interests on the basis of a 360-day year
consisting of twelve 30-day months.
Act: The Securities Act of 1933, as amended.
Additional Collateral: With respect to any Additional Collateral
Mortgage Loan, the meaning assigned thereto in the Mortgage Loan Purchase and
Sale Agreement.
Additional Collateral Mortgage Loan: Each Mortgage Loan identified as
such in the Mortgage Loan Schedule.
Adjustment Date: As to any Mortgage Loan, the date on which the related
Mortgage Rate adjusts in accordance with the terms of the related Mortgage Note.
Advance: With respect to a Mortgage Loan, the payments required to be
made by the Trustee solely in its capacity as successor servicer or by the
Servicer with respect to any Distribution Date pursuant to this Agreement, 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 payment
that either the Trustee or the Servicer has determined would constitute
Nonrecoverable Advances if advanced.
Adverse REMIC Event: As defined in Section 10.01(f) hereof.
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.
Aggregate Senior Percentage: As to any Distribution Date, the
percentage equivalent of a fraction, the numerator of which is the aggregate of
the Class Principal Amounts of the Class A-1, Class A-2, Class A-3 and Class A-R
Certificates and the denominator of which is the Aggregate Stated Principal
Balance, but in no event greater than 100%.
Aggregate Stated Principal Balance: As to any Distribution Date, the
aggregate of the Stated Principal Balances for all Mortgage Loans (and when such
term is used with respect to a particular Mortgage Pool, the aggregate of the
Stated Principal Balances of the Mortgage Loans in such Mortgage
7
Pool) which were outstanding on the Due Date in the month preceding the month of
such Distribution Date.
Aggregate Subordinate Percentage: As to any Distribution Date, the
difference between 100% and the Aggregate Senior Percentage for such
Distribution Date, but in no event less than zero.
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 and
supplements hereto.
Allocable Share: With respect to each Class of Subordinate Certificates
and any Distribution Date, the percentage equivalent of a fraction, the
numerator of which is the Class Principal Amount of such Class and the
denominator of which is the aggregate of the Class Principal Amounts of each
Class of Subordinate Certificates.
Ancillary Fees: With respect to any Mortgage Loan, (i) all late
charges, (ii) all fees payable pursuant to Cendant's "Speed Pay" program, (iii)
all returned-item charges (e.g. insufficient funds charges) and (iv)
modification or conversion fees.
Applicable Credit Support Percentage: As to any Class of Subordinate
Certificates and any Distribution Date, the sum of the Class Subordination
Percentages of such Class and the aggregate Class Subordination Percentage of
all other Classes of Subordinate Certificates having higher numerical Class
designations than such Class.
Apportioned Principal Balance: As to any Distribution Date and each
Class of Subordinate Certificates and any Mortgage Pool, the Class Principal
Amount thereof multiplied by a fraction, the numerator of which is the
applicable Pool Subordinate Amount (i.e., the Pool 1 Subordinate Amount, the
Pool 2 Subordinate Amount or the Pool 3 Subordinate Amount as the case may
require), and the denominator of which is the sum of such Pool Subordinate
Amounts on such date.
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 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.
Authenticating Agent: The Trustee or any authenticating agent appointed
by the Trustee pursuant to Section 6.10 until any successor authenticating agent
for the Certificates is named, and thereafter "Authenticating Agent" shall mean
any such successor.
8
Authorized Officer: Any Person who may execute an Officer's Certificate
on behalf of the Depositor.
Available Distribution Amount: With respect to any Distribution Date
and each Mortgage Pool, the total amount of all cash received by the Trustee on
the Mortgage Loans in such Mortgage Pool from the Servicer or otherwise through
the Distribution Account Deposit Date for deposit into the Distribution Account
in respect of such Distribution Date, including (1) all scheduled installments
of interest (net of the Servicing Fee) and principal collected on the related
Mortgage Loans and due during the Due Period related to such Distribution Date,
together with any Advances in respect thereof, (2) all Insurance Proceeds,
Liquidation Proceeds, Subsequent Recoveries and the proceeds of any Additional
Collateral from the related Mortgage Loans, in each case for such Distribution
Date, (3) all partial or full Principal Prepayments, together with any accrued
interest thereon, identified as having been received from the related Mortgage
Loans during the related Prepayment Period, (4) any amounts received from the
Servicer in respect of Prepayment Interest Shortfalls with respect to the
related Mortgage Loans; and (5) the aggregate Purchase Price of all Defective
Mortgage Loans and Converted Mortgage Loans (if any) in such Mortgage Pool
purchased from the Trust Fund during the related Prepayment Period, minus:
(A) all related fees, charges and amounts payable or reimbursable
to the Trustee under this Agreement, to the extent that, if paid by the Trust
Fund, such fees, charges or other amounts would constitute "unanticipated
expenses" (within the meaning of Treasury Regulations Section
1.860G-1(b)(3)(ii)) of any of the REMICs provided for herein and up to an
aggregate maximum amount equal to $300,000 annually, such annual aggregate
maximum amount not to include any Servicing Transfer Costs, or amounts
reimbursable to the Servicer under this Agreement;
(B) in the case of (2), (3), (4) and (5) above, any related
unreimbursed expenses incurred by the Servicer in connection with a liquidation
or foreclosure and any unreimbursed Advances or Servicing Advances due to the
Servicer (or, pursuant to Section 5.04, the Trustee);
(C) any related unreimbursed Nonrecoverable Advances due to the
Servicer (or, pursuant to Section 5.04, the Trustee); and
(D) in the case of (1) through (4) above, any related amounts
collected which are determined to be attributable to a subsequent Due Period or
Prepayment Period.
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.
Basis Risk Shortfall: With respect to any Distribution Date and any
Class of LIBOR Certificates, the excess, if any, of (i) the amount of Current
Interest that would have been payable on such Class for such Distribution Date
if the Certificate Interest Rate for such Class as set forth in the Preliminary
Statement hereto were determined without regard to clause (ii) in the definition
thereof, over (ii) the actual Current Interest payable on such Class for such
Distribution Date.
BBA: The British Banker's Association.
9
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." As of the Closing Date, the following Classes of Certificates
constitute Book-Entry Certificates: the Class A-1, Class A-2, Class A-3, Class
X-A, Class B-1, Class B-2, Class B-3, Class B-4, Class B-5, Class B-6 and Class
X-B.
Book-Entry Termination: The occurrence of any of the following events:
(i) 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; or (ii) the Depositor at its option
advises the Trustee and the Certificate Registrar in writing that it elects to
terminate the book-entry system through the Clearing Agency.
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 Maryland or Minnesota, are authorized or obligated by law or
executive order to be closed.
Cendant: Cendant Mortgage Corporation or its successors in interest.
Certificate: Any one of the certificates signed by the Trustee and
authenticated by the Authenticating Agent in substantially the forms attached
hereto as Exhibit A.
Certificate Group: Each of the Group 1 Certificates, the Group 2
Certificates and the Group 3 Certificates.
Certificate Interest Rate: With respect to each Class of Certificates
and any Distribution Date, the applicable per annum rate described in the
Preliminary Statement hereto.
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 Principal Amount: With respect to any Certificate (other
than a Class X-A or Class X-B Certificate), at the time of determination, the
maximum specified dollar amount of principal to which the Holder thereof is then
entitled hereunder, such amount being equal to the initial principal amount set
forth on the face of such Certificate, less (i) the amount of all principal
distributions previously made with respect to such Certificate; (ii) all
Realized Losses allocated to such Certificate; and (iii) in the case of a
Subordinate Certificate, any Subordinate Certificate Writedown Amount allocated
to such Certificates. Notwithstanding the foregoing, on any Distribution Date
relating to a Due Period in which a Subsequent Recovery has been received by the
Servicer, the Certificate Principal Amount of any Class of Certificates then
outstanding for which any Realized Loss or any Subordinate Certificate Writedown
Amount has been applied will be increased, in order of seniority, by an amount
equal to the lesser of (i) the amount such Class of Certificates has been
written down in respect of Realized Losses or Subordinate Certificate Writedown
Amounts, to the extent not previously offset by increases in Certificate
Principal Amount pursuant to this sentence and (ii) the total of any Subsequent
Recovery distributed on such date to the Certificateholders (reduced (x) by the
amount of the increase in the Certificate Principal Amount of any more senior
Class of Certificates pursuant to this sentence on such Distribution Date and
(y) to reflect a
10
proportionate amount of the increase in the Certificate Principal Amount of any
pari passu Class of Certificates on such Distribution Date pursuant to this
sentence). For purposes of Article V hereof, unless specifically provided to the
contrary, Certificate Principal Amounts shall be determined as of the close of
business of the immediately preceding Distribution Date, after giving effect to
all distributions made on such date.
Certificate Register and Certificate Registrar: The register maintained
and the registrar appointed pursuant to Section 3.02.
Certificateholder: The meaning provided in the definition of "Holder."
Civil Relief Act: The Servicemembers' Civil Relief Act of 1940, as
amended.
Class: Collectively, Certificates bearing the same class designation.
In the case of the REMIC 1, REMIC 2 and the Upper Tier REMIC, the term "Class"
refers to all REMIC Interests having the same alphanumeric designation.
Class A-1 Excess Interest Amount: The product of (i) the initial Class
Principal Amount of the Class A-1 Certificates, (ii) the initial Certificate
Interest Rate of the Class A-1 Certificates and (iii) a fraction, the numerator
of which is the excess of 30 over the number of days in the initial Accrual
Period for the Class A-1 Certificates and the denominator of which is 360.
Class A-2 Excess Interest Amount: The product of (i) the initial Class
Principal Amount of the Class A-2 Certificates, (ii) the initial Certificate
Interest Rate of the Class A-2 Certificates and (iii) a fraction, the numerator
of which is the excess of 30 over the number of days in the initial Accrual
Period for the Class A-2 Certificates and the denominator of which is 360.
Class A-R Certificate: The Class A-R Certificate executed by the
Trustee, and authenticated and delivered by the Authenticating Agent,
substantially in the form annexed hereto as Exhibit A, and evidencing the
ownership of the Class LT1-R Interest, the Class LT2-R Interest and the residual
interest in the Upper Tier REMIC.
Class B-1 Excess Interest Amount: The product of (i) the initial Class
Principal Amount of the Class B-1 Certificates, (ii) the initial Certificate
Interest Rate of the Class B-1 Certificates and (iii) a fraction, the numerator
of which is the excess of 30 over the number of days in the initial Accrual
Period for the Class B-1 Certificates and the denominator of which is 360.
Class B-2 Excess Interest Amount: The product of (i) the initial Class
Principal Amount of the Class B-2 Certificates, (ii) the initial Certificate
Interest Rate of the Class B-2 Certificates and (iii) a fraction, the numerator
of which is the excess of 30 over the number of days in the initial Accrual
Period for the Class B-2 Certificates and the denominator of which is 360.
Class B-3 Excess Interest Amount: The product of (i) the initial Class
Principal Amount of the Class B-3 Certificates, (ii) the initial Certificate
Interest Rate of the Class B-3 Certificates and (iii) a fraction, the numerator
of which is the excess of 30 over the number of days in the initial Accrual
Period for the Class B-3 Certificates and the denominator of which is 360.
Class Notional Amount: With respect to the Class X-A and Class X-B
Certificates, the class notional amount calculated as provided in the
Preliminary Statement hereto.
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Class Principal Amount: With respect to each Class of Certificates
(other than a Class X-A or Class X-B Certificate) the aggregate of the
Certificate Principal Amounts of all Certificates of such Class at the date of
determination.
Class X Certificates: Any of the Class X-A or Class X-B Certificates.
Class Subordination Percentage: With respect to each Class of
Subordinate Certificates, for each Distribution Date, the percentage obtained by
dividing the Class Principal Amount of such Class immediately prior to such
Distribution Date by the sum of the Class Principal Amounts of all Classes of
Certificates immediately prior to such Distribution Date.
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: May 27, 2004.
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, the lesser
of (1) the Servicing Fee for such date and (2) any Prepayment Interest Shortfall
for such date.
Component Interest Rate: With respect to the X-A1 Component and any
Distribution Date, the interest rate specified in the definition of X-A1
Component. With respect to the X-A2 Component and any Distribution Date, the
interest rate specified in the definition of X-A2 Component. With respect to
Component XB1 and any Distribution Date, the interest rate specified in the
definition of Component XB1. With respect to Component XB2 and any Distribution
Date, the interest rate specified in the definition of Component XB2. With
respect to Component XB3 and any Distribution Date, the interest rate specified
in the definition of Component XB3.
Component Notional Amount: With respect to X-A1 Component and any
Distribution Date, the notional amount specified in the definition of X-A1
Component. With respect to X-A2 Component and any Distribution Date, the
notional amount specified in the definition of X-A2 Component. With respect to
Component XB1 and any Distribution Date, the notional amount specified in the
definition of Component XB1. With respect to Component XB2 and any Distribution
Date, the notional amount specified in the definition of Component XB2. With
respect to Component XB3 and any Distribution Date, the notional amount
specified in the definition of Component XB3.
Component XB1: A regular interest in the Upper Tier REMIC having a
notional amount for any Distribution Date equal to the Class Principal Amount of
the Class B-1 Certificates immediately before such Distribution Date and having
an interest rate with respect to any Distribution Date (and the related Accrual
Period) equal to the excess, if any, of (x) the Subordinate Net WAC for such
Distribution Date over (y) the Certificate Interest Rate on the Class B-1
Certificates for such Distribution Date.
12
Component XB2: A regular interest in the Upper Tier REMIC having a
notional amount for any Distribution Date equal to the Class Principal Amount of
the Class B-2 Certificates immediately before such Distribution Date and having
an interest rate with respect to any Distribution Date (and the related Accrual
Period) equal to the excess, if any, of (x) the Subordinate Net WAC for such
Distribution Date over (y) the Certificate Interest Rate on the Class B-2
Certificates for such Distribution Date.
Component XB3: A regular interest in the Upper Tier REMIC having a
notional amount for any Distribution Date equal to the Class Principal Amount of
the Class B-3 Certificates immediately before such Distribution Date and having
an interest rate with respect to any Distribution Date (and the related Accrual
Period) equal to the excess, if any, of the Subordinate Net WAC for such
Distribution Date over (y) the Certificate Interest Rate on the Class B-3
Certificates for such Distribution Date.
Components: Each of the X-A1 Component, the X-A2 Component, Component
XB1, Component XB2 and Component XB3.
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.
Corporate Trust Office: With respect to the presentment of Certificates
for registration of transfer, exchange or final payment, ▇▇▇▇▇ Fargo Bank N.A.,
▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention:
▇▇▇▇▇▇▇ ▇▇▇▇▇ Mortgage Investors Trust Series MLCC 2004-B and for all other
purposes, ▇▇▇▇▇ Fargo Bank N.A., ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇
▇▇▇▇▇, Attention: Client Manager - MLCC 2004-B, or such other address as the
Trustee may designate from time to time by notice to the Certificateholders.
Corresponding Classes of Certificates or Components: With respect to
each Lower Tier REMIC Interest, the Class or Classes of Certificates or
Components appearing opposite such Lower Tier REMIC Interest as described in the
Preliminary Statement hereto.
Credit Support Depletion Date: The first Distribution Date, if any, on
which the aggregate Certificate Principal Amounts of the Subordinate
Certificates have been reduced to zero.
Current Interest: With respect to each Class of Certificates and each
Component on each Distribution Date, the aggregate amount of interest accrued at
the applicable Certificate Interest Rate or Component Interest Rate during the
related Accrual Period on the Class Principal Amount or Component Notional
Amount of such Class or Component; provided, however, that with respect to the
first Distribution Date only, (i) the aggregate Current Interest for the X-A1
Component will be increased by the Class A-1 Excess Interest Amount, (ii) the
aggregate Current Interest for the X-A2 Component will be increased by the Class
A-2 Excess Interest Amount, (iii) the aggregate Current Interest for the X-B1
Component will be increased by the Class B-1 Excess Interest Amount, (iv) the
aggregate Current Interest
13
for the X-B2 Component will be increased by the Class B-2 Excess Interest Amount
and (v) the aggregate Current Interest for the X-B3 Component will be increased
by the Class B-3 Excess Interest Amount.
Custodial Account: The separate trust account or accounts created and
maintained by the Servicer pursuant to the ▇▇▇▇▇▇ ▇▇▇ Servicing Guide which
shall be entitled "▇▇▇▇▇ Fargo Bank N.A., in trust for the registered holders
for ▇▇▇▇▇▇▇ ▇▇▇▇▇ Mortgage Investors Trust Series MLCC 2004-B Mortgage
Pass-Through Certificates." The Custodial Account shall be an Eligible Account.
Custodial Agreement: The Custodial Agreement, dated as of December 15,
2000, between ▇▇▇▇▇▇▇ ▇▇▇▇▇ Credit Corporation and ▇▇▇▇▇ Fargo Bank Minnesota,
N.A., as custodian, as amended by Amendment No. 1, dated as of January 16, 2002
a copy of which (excluding all exhibits thereto) is attached hereto as Exhibit
O.
Custodian: ▇▇▇▇▇ Fargo Bank N.A., any successor in interest or any
successor custodian appointed pursuant to the Custodial Agreement.
Cut-off Date: May 1, 2004.
Cut-off Date Balance: With respect to the Mortgage Loans in the Trust
Fund on the Closing Date, the Aggregate Stated Principal Balance as of 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.
Defective Mortgage Loan: The meaning specified in Section 2.04(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.
Deleted Mortgage Loan: As defined in Section 2.04(a).
Delinquent: Any Mortgage Loan with respect to which the Scheduled
Payment due on a Due Date is not received.
Depositor: ▇▇▇▇▇▇▇ ▇▇▇▇▇ Mortgage Investors, Inc., a Delaware
corporation, having its principal place of business at ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, 4 World
Financial Center, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, or its successors in
interest.
Determination Date: With respect to each Distribution Date, the 15th
day of the month in which such Distribution Date occurs, or, if such 15th day is
not a Business Day, the next succeeding Business Day.
14
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 Trustee pursuant to Section 4.01 in the name of the Trustee
for the benefit of the Certificateholders and designated "▇▇▇▇▇ Fargo Bank N.A.,
in trust for registered holders of ▇▇▇▇▇▇▇ ▇▇▇▇▇ Mortgage Investors Trust Series
MLCC 2004-B, Mortgage Pass-Through Certificates." 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: The 18th day of each calendar month
after the initial issuance of the Certificates or, if such 18th day is not a
Business Day, the immediately preceding Business Day, commencing in June 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 June 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
Mortgage Note, which is the first day of the calendar month.
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.
EDP: The electronic data processing system used by the Seller and the
Servicer, which are licensees of ALLTEL Information Services, Inc.
Effective Loan-to-Value Ratio: A fraction, expressed as a percentage,
the numerator of which is the original Stated Principal Balance of the Mortgage
Loan, less the amount of Additional Collateral required to secure such Mortgage
Loan at the time of origination, if any, and the denominator of which is the
Appraised Value of the related Mortgage Property at such 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. Eligible Accounts may bear interest, and may
include, if otherwise qualified under this definition, accounts maintained with
the Trustee, any Paying Agent, or the Servicer.
15
ERISA: The Employee Retirement Income Security Act of 1974, as amended,
and as it may be further amended from time to time, any successor statutes
thereto, and applicable U.S. Department of Labor regulations issued pursuant
thereto in temporary or final form.
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: The Class A-R, Class B-4, Class B-5 or
Class B-6 Certificates.
Escrow Account: The separate trust account or accounts created and
maintained by the Servicer pursuant to the ▇▇▇▇▇▇ Mae Servicing Guide which
shall be entitled "▇▇▇▇▇ Fargo Bank N.A., in trust for the registered holders
for ▇▇▇▇▇▇▇ ▇▇▇▇▇ Mortgage Investors Trust Series MLCC 2004-B Mortgage
Pass-Through Certificates." The Escrow Account shall be an Eligible Account.
Event of Default: As defined in Section 6.14.
▇▇▇▇▇▇ Mae: 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.
FHA: The Federal Housing Administration 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.
Final Certification: As referred to in Section 2.02(c), the form of
which is set forth at Exhibit ▇.
▇▇▇▇▇ Ratings: Fitch, Inc., or any successor in interest.
GNMA: The Government National Mortgage Association, or any successor
thereto.
Global Securities: The global certificates representing the Book-Entry
Certificates.
Group 1: All of the Group 1 Certificates.
Group 1 Certificate: Any Class A-1 or Class A-R Certificate.
Group 2: All of the Group 2 Certificates.
Group 2 Certificate: Any Class A-2 Certificate.
Group 3: All of the Group 3 Certificates.
Group 3 Certificate: Any Class A-3 Certificate.
Holder or Certificateholder: 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 or the
Servicer, or any Affiliate thereof shall be deemed not to be outstanding in
determining whether the
16
requisite percentage necessary to effect any such consent has been obtained,
except that, in determining whether the Trustee shall be protected in relying
upon any such consent, only Certificates which a Responsible Officer of the
Trustee knows to be so owned shall be disregarded. The Trustee may request and
conclusively rely on certifications by the Depositor and the Servicer in
determining whether any Certificates are registered to an Affiliate of the
Depositor or the Servicer.
HUD: The United States Department of Housing and Urban Development, or
any successor thereto.
Indemnified Parties: As defined in Section 9.15.
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 Certification: As referred to in Section 2.02(a), the form of
which is set forth at Exhibit K.
Initial LIBOR Rate: 1.10% with respect to the Class A-1, Class B-1,
Class B-2 and Class B-3 Certificates and 1.37% with respect to the Class A-2
Certificates.
Initial Optional Purchase Date: The first Distribution Date following
the date on which the Aggregate Stated Principal Balance is less than 10.00% of
the Cut-off Date Balance.
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
(i) the proceeds from any Limited Purpose Surety Bond.
Insured Expenses: Expenses covered by an Insurance Policy or any other
insurance policy with respect to the Mortgage Loans.
Interest Distribution Amount: For each Class of Certificates or
Component, on any Distribution Date, the Current Interest for such Class or
Component, as reduced by such Class's or Component's share of Net Prepayment
Interest Shortfalls and Relief Act Reductions. Any such shortfalls and
reductions shall be allocated among (i) all Classes of Certificates (other than
the Interest Only Certificates) of the related Certificate Group from such
Mortgage Pool, (ii) the X-A1 Component (in the case of Net Prepayment Interest
Shortfalls or Relief Act Reductions related to Pool 1) or the X-A2 Component (in
the case of Net Prepayment Interest Shortfalls or Relief Act Reductions related
to Pool 2), and (iii) the Subordinate Certificates proportionately on the basis
of (1) in the case of the Senior Certificates (other than the Class X
Certificates), Current Interest otherwise distributable thereon on such
Distribution Date; (2) in the case
17
of the X-A1 Component and the X-A2 Component, the Current Interest otherwise
distributable thereon on such Distribution Date and (3) in the case of
Subordinate Certificates, interest accrued at the Net WAC of the applicable
Mortgage Pool on their Apportioned Principal Balance before taking into account
any reductions in such amounts from Net Interest Shortfalls for that
Distribution Date.
Interest-Only Certificates: Any of the Class X-A and Class X-B
Certificates.
Interest Shortfall: As to any Class of Certificates or Component and
any Distribution Date, (i) the amount by which the Interest Distribution Amount
(exclusive of any payments to such Class in respect of Basis Risk Shortfalls or
Unpaid Basis Risk Shortfalls) for such Class or Component on such Distribution
Date and all prior Distribution Dates exceeds (ii) amounts distributed in
respect thereof to such Class or Component on prior Distribution Dates (as
determined without reduction for amounts not paid to such Class or in respect of
such Component as a result of the provisos set forth in Sections 5.02(a)(i) and
5.02(b) hereof.
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 related Mortgage Pool's Net WAC,
plus any shortfall of interest on the Senior Certificates related to such
Undercollateralized Group remaining unpaid from prior Distribution Dates.
Intervening Assignments: The original intervening assignments of the
Mortgage, notices of transfer or equivalent instrument.
Latest Possible Maturity Date: The Distribution Date in May 2029.
LIBOR: With respect to the first Accrual Period, the Initial LIBOR
Rate. With respect to each subsequent Accrual Period, a per annum rate
determined on the LIBOR Determination Date in the following manner by the
Trustee on the basis of the "Interest Settlement Rate" set by the BBA for
one-month (or six-month with respect to the Class A-2 Certificates) United
States dollar deposits, as such rates appear on the Telerate Page 3750, as of
11:00 a.m. (London time) on such LIBOR Determination Date.
(a) If on such a LIBOR Determination Date, the BBA's Interest
Settlement Rate does not appear on the Telerate Page 3750 as of 11:00 a.m.
(London time), or if the Telerate Page 3750 is not available on such date, the
Trustee will obtain such rate from Reuters' "page LIBOR 01" or Bloomberg's page
"BBAM." If such rate is not published for such LIBOR Determination Date, LIBOR
for such date will be the most recently published Interest Settlement Rate. In
the event that the BBA no longer sets an Interest Settlement Rate, the Trustee
will designate an alternative index that has performed, or that the Trustee
expects to perform, in a manner substantially similar to the BBA's Interest
Settlement Rate. The Trustee will select a particular index as the alternative
index only if it receives an Opinion of Counsel, which opinion shall be an
expense reimbursed from the Distribution Account, that the selection of such
index will not cause any of the REMICs to lose their classification as REMICs
for federal income tax purposes.
(b) The establishment of LIBOR by the Trustee and the Trustee's
subsequent calculation of the Certificate Interest Rate applicable to the LIBOR
Certificates for the relevant Accrual Period, in the absence of manifest error,
will be final and binding.
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.
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LIBOR Certificate: Any Class A-1, Class A-2, Class B-1, Class B-2 and
Class B-3 Certificate.
LIBOR Determination Date: With respect to any LIBOR Certificates other
than the Class A-2 Certificates, the second LIBOR Business Day immediately
preceding the commencement of each Accrual Period and with respect to the Class
A-2 Certificates, the second LIBOR Business Day immediately preceding every
sixth Accrual Period beginning with the Accrual Period commencing during June
2004.
Limited Purpose Surety Bond: Any Limited Purpose Surety Bond listed in
Exhibit F.
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
Servicer has certified (in accordance with this 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 partial release of a Mortgaged
Property and any other proceeds received in connection with an REO Property.
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.
Loss: With respect to any indemnification arising under Section 9.15 of
this Agreement, any and all losses, claims, damages, penalties, liabilities,
obligations, judgments, settlements, awards, demands, offsets, defenses,
counterclaims, actions or proceedings, reasonable out-of-pocket costs, expenses
and attorneys' fees of an Indemnified Party (including but not limited to, (a)
any reasonable costs, expenses and attorneys' fees incurred by such Indemnified
Party in enforcing such right of indemnification against any Indemnifying Party
or with respect to any appeal, and (b) interest on any amount for which an
Indemnified Party is entitled to be indemnified from the date such Indemnified
Party notifies the Servicer of the expenditure or such amounts until such
amounts are paid by the Servicer; provided, however, that in no event shall a
"Loss" include a claim for consequential damages, indirect damages or lost
profits except when the Loss results from the gross negligence, fraud or willful
misconduct of the Servicer.
Lower Tier REMIC Interests: Any of the REMIC 1 Interests or the REMIC 2
Interests.
Lower Tier Regular Interests: Any of the REMIC 1 Regular Interests or
the REMIC 2 Regular Interests.
Margin: As to each Mortgage Loan, the percentage amount set forth on
the related Mortgage Note added to the Index in calculating the Mortgage Rate
thereon.
Material Defect: As defined in Section 2.02(b).
Maximum Rate: As to any Mortgage Loan, the maximum rate set forth on
the related Mortgage Note at which interest can accrue on such Mortgage Loan.
MERS: Mortgage Electronic Registration Systems, Inc., a corporation
organized and existing under the laws of the State of Delaware or any successor
thereto.
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MERS Mortgage Loan: Any Mortgage Loan registered with MERS on the MERS
System.
MERS System: The system of recording transfers of mortgages
electronically maintained by MERS.
Moody's: ▇▇▇▇▇'▇ Investors Service, Inc., or any successor in interest.
Monthly Statement: The statement delivered to the Certificateholders
pursuant to Section 4.02.
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 Documents: With respect to each Mortgage Loan, the mortgage
documents required to be delivered to the Trustee pursuant to this Agreement.
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
Replacement Loan and REO Property), including without limitation, each Mortgage
Loan listed on the Mortgage Loan Schedule, as amended from time to time.
Mortgage Loan Purchase and Sale Agreement: The Mortgage Loan Purchase
and Sale Agreement, dated as of May 1, 2004, between the Seller and the
Depositor with respect to the sale and purchase of the Mortgage Loans.
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 the 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 (1) identify the
designated Mortgage Pool in which such Mortgage Loan is included and (2)
separately identify One-Month LIBOR Loans, Six-Month LIBOR Loans and Additional
Collateral Mortgage Loans.
Mortgage Note: The original executed note or other evidence of the
indebtedness of a Mortgagor secured by a Mortgage under a Mortgage Loan.
Mortgage Pools: Any of Pool 1, Pool 2 and Pool 3.
Mortgage Rate: As to any Mortgage Loan, the annual rate of interest
borne by the related Mortgage Notes.
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 Property Lease.
Mortgagor: The obligor on a Mortgage Note.
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, related Servicing Fees and any
other accrued and unpaid fees received and retained in connection with the
liquidation of such Mortgage Loan or Mortgaged Property.
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Net Interest Shortfalls: With respect to any Distribution Date, any Net
Prepayment Interest Shortfalls for that Distribution Date and the amount of
interest that would otherwise have been received with respect to any Mortgage
Loan which was subject to (i) a Relief Act Reduction or (ii) the interest
portion of any Debt Service Reduction or Deficient Valuation, after exhaustion
of the respective amounts of coverage provided by the Subordinate Certificates
for those type of losses.
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 Servicing Fee Rate
for such Mortgage Loan.
Net Prepayment Interest Shortfall: With respect to any Mortgage Loan
and any Distribution Date, the amount by which any Prepayment Interest Shortfall
for such date exceeds the amount payable by the Servicer in respect of such
shortfall.
Net WAC: As to any Distribution Date, the weighted average of the Net
Mortgage Rates of the Mortgage Loans as of the first day of the calendar month
immediately preceding the calendar month of such Distribution Date, weighted on
the basis of their outstanding Stated Principal Balances at such time. When the
term "Net WAC" is used herein with reference to only the One-Month LIBOR Loans
or only the Six-Month LIBOR Loans, such weighted average shall be computed with
reference solely to the Mortgage Loans in the relevant group.
Non-Book-Entry Certificate: Any Certificate other than a Book-Entry
Certificate.
Non-permitted Foreign Holder: As defined in Section 3.03(f).
Nonrecoverable Advance: Any portion of an Advance or Servicer Advance
previously made or proposed to be made by the Servicer (as certified in an
Officer's Certificate of the Servicer) or by the Trustee pursuant to Section
5.04, 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.
Non-U.S. Person: Any person other than a "United States person" within
the meaning of Section 7701(a)(30) of the Code.
Offering Document: The Prospectus.
Officer's Certificate: A certificate signed by the Chairman of the
Board, the Vice Chairman of the Board, the President, a vice president (however
denominated), an Assistant Vice President, the Treasurer, the Secretary, or one
of the assistant treasurers or assistant secretaries (or any other officer
customarily performing functions similar to those performed by any of the above
designated officers and also to whom, with respect to a particular matter, such
matter is referred because of such officer's knowledge of and familiarity with a
particular subject) of the Depositor or the Trustee, as the case may be, and
delivered to the Depositor or the Trustee, as the case may be, as required by
this Agreement.
Officer's Certificate of the 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 the Servicer, or (ii) if provided for herein, signed by a
Servicing Officer, as the case may be, and delivered to the Trustee or the
Depositor, as the case may be.
One-Month LIBOR Loan: Each Mortgage Loan bearing a Mortgage Rate that
adjusts in accordance with LIBOR for one-month U.S. dollar deposits.
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Opinion of Counsel: A written opinion of counsel, who may be an
employee of the Depositor or the Servicer, that is reasonably acceptable to each
addressee of such opinion; provided that any Opinion of Counsel relating to (a)
qualification of the Mortgage Loans in a REMIC or (b) compliance with the REMIC
Provisions, must be an opinion of counsel reasonably acceptable to each
addressee of such opinion, who (i) is in fact independent of the Servicer and
the Depositor, (ii) does not have any material direct or indirect financial
interest in the Servicer or the Depositor or in an affiliate of either and (iii)
is not connected with the Servicer or the Depositor as an officer, employee,
director or person performing similar functions.
Optional Termination Price: An amount equal to the sum of (i) 100% of
the Stated Principal Balance of the Mortgage Loans (other than any Mortgage Loan
that has become an REO Property) plus accrued interest thereon at the applicable
Mortgage Rate through the Due Date in the month in which the Optional
Termination Price is to be distributed to the Certificateholders and the fair
market value of any REO Property plus accrued interest thereon; (ii) any
unreimbursed costs and damages incurred by the Trust Fund (or the Trustee on
behalf of the Trust Fund) in connection with the violation of any anti-predatory
or anti-abusive lending laws; and (iii) the payment of all amounts (including,
without limitation, all previously unreimbursed Advances and Servicing Advances
and accrued and unpaid Servicing Fees and the cost of any auction conducted
pursuant to Section 7.01(c) hereof) payable or reimbursable to the Servicer or
Trustee.
Original Applicable Credit Support Percentage: With respect to each
Class of Subordinate Certificates, the corresponding percentage set forth
opposite its Class designation: Class B-1 - 3.05%; Class B-2 - 2.05%; Class B-3
- 1.25%; Class B-4 - 0.80%; Class B-5 - 0.55%; and Class B-6 - 0.35%.
Original Subordinate Principal Amount: The aggregate of the initial
Class Principal Amounts of the Classes of Subordinated Certificates.
Originator: With respect to any Mortgage Loan, the entity that (i) took
the Mortgagor's loan application, (ii) processed the Mortgagor's loan
application, and (iii) closed and/or funded the Mortgagor's Mortgage Loan.
Overcollateralized Group: On any Distribution Date, any Certificate
Group which is not an Undercollateralized Group.
Parent Power(R)Guaranty and Security Agreement: With respect to any
Additional Collateral Loan, as defined in the Mortgage Loan Purchase and Sale
Agreement.
Paying Agent: Any paying agent appointed by the Trustee pursuant to
Section 3.08.
Percentage Interest: With respect to any Certificate, its percentage
interest in the undivided beneficial ownership interest in the Trust Fund
evidenced by all Certificates of the same Class as such Certificate. With
respect to any Certificate other than a Class X-A Certificate, a Class X-B
Certificate or the Class A-R Certificate, the Percentage Interest evidenced
thereby shall equal the initial Certificate Principal Amount thereof divided by
the initial Class Principal Amount of all Certificates of the same Class. With
respect to the Class A-R Certificate, the Percentage Interest evidenced thereby
shall be as specified on the face thereof, or otherwise, be equal to 100%. With
respect to any Class X-A Certificate, the Percentage Interest evidenced thereby
shall equal its initial Class Notional Amount as set forth on the face thereof
divided by the initial Class Notional Amount of such Class. With respect to any
Class X-B Certificate, the Percentage Interest represented thereby shall equal
the initial Class Notional Amount thereof divided by the initial Class Notional
Amount of all of the Certificates of the same class.
Permitted Investments: At any time, any one or more of the following
obligations and securities:
22
(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) 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;
(vi) 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;
(vii) 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 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;
(viii) 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 including funds for which the Trustee or any of
its Affiliates is investment manager or adviser;
23
(ix) 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; and
(x) 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;
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, (ii) such instrument would require
the Depositor to register as an investment company under the Investment Company
Act of 1940, as amended, or (iii) such instrument would not be a "permitted
investment" within the meaning of such term as provided for in Section
860G(a)(5) of the Code and the Treasury Regulations thereunder.
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.
Pool Net WAC: The Pool 1 Net WAC, Pool 2 Net WAC, or Pool 3 Net WAC, as
the context may require.
Pool 1: The aggregate of Mortgage Loans identified on the Mortgage Loan
Schedule as being included in Pool 1.
Pool 1 Mortgage Loans: Any Mortgage Loan in Pool 1.
Pool 1 Net WAC: With respect to any Distribution Date, the weighted
average of the Net Mortgage Rates of the Pool 1 Mortgage Loans as of the first
day of the calendar month immediately preceding the calendar month of such
Distribution Date, weighted on the basis of their Stated Principal Balances at
such time.
Pool 1 Subordinate Amount: For any Distribution Date, the excess of (a)
the Aggregate Stated Principal Balance of the Pool 1 Mortgage Loans as of the
first day of the month preceding the month in which such Distribution Date
occurs over (b) the sum of the Class Principal Amounts of the Class A-1 and
Class A-R Certificates immediately before such Distribution Date.
Pool 2: The aggregate of Mortgage Loans identified on the Mortgage Loan
Schedule as being included in Pool 2.
Pool 2 Mortgage Loans: Any Mortgage Loan in Pool 2.
Pool 2 Net WAC: With respect to any Distribution Date, the weighted
average of the Net Mortgage Rates of the Pool 2 Mortgage Loans as of the first
day of the calendar month immediately preceding the calendar month of such
Distribution Date, weighted on the basis of their Stated Principal Balances at
such time.
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Pool 2 Subordinate Amount: For any Distribution Date, the excess of (a)
the Aggregate Stated Principal Balance of the Pool 2 Mortgage Loans as of the
first day of the month preceding the month in which such Distribution Date
occurs over (b) the Class Principal Amount of the Class A-2 Certificates
immediately before such Distribution Date.
Pool 3: The aggregate of Mortgage Loans identified on the Mortgage Loan
Schedule as being included in Pool 3.
Pool 3 Mortgage Loans: Any Mortgage Loan in Pool 3.
Pool 3 Net WAC: With respect to any Distribution Date, the weighted
average of the Net Mortgage Rates of the Pool 3 Mortgage Loans as of the first
day of the calendar month immediately preceding the calendar month of such
Distribution Date, weighted on the basis of their Stated Principal Balances at
such time.
Pool 3 Subordinate Amount: For any Distribution Date, the excess of (a)
the Aggregate Stated Principal Balance of the Pool 3 Mortgage Loans as of the
first day of the month preceding the month in which such Distribution Date
occurs over (b) the Class Principal Amount of the Class A-3 Certificates
immediately before such Distribution Date.
Pool Percentage: With respect to each Mortgage Pool and any
Distribution Date, a fraction, expressed as a percentage, the numerator of which
is the Aggregate Stated Principal Balance of such Mortgage Pool and the
denominator of which is the Aggregate Stated Principal Balance as of such Due
Date.
Pool Subordinate Amount: Any of the Pool 1 Subordinate Amount, Pool 2
Subordinate Amount or the Pool 3 Subordinate Amount.
Prepayment Interest Shortfall: With respect to any full or partial
Principal Prepayment of a Mortgage Loan, the excess, if any, of (i) one full
month's interest at the applicable Mortgage Rate on the outstanding principal
balance of such Mortgage Loan immediately prior to such Principal Prepayment
over (ii) the amount of interest actually received with respect to such Mortgage
Loan in connection with such Principal Prepayment.
Prepayment Period: With respect to each Distribution Date, the calendar
month immediately preceding the month in which the Distribution Date occurs.
Primary Mortgage Insurance Policy: Each policy of primary mortgage
guaranty insurance or any replacement policy therefor with respect to any
Mortgage Loan.
Principal Distribution Amount: With respect to any Mortgage Pool and
any Distribution Date, the sum of (a) each Scheduled Payment of principal
collected or advanced on the related Mortgage Loans (before taking into account
any Deficient Valuations or Debt Service Reductions) and due during the related
Due Period, (b) that portion of the Purchase Price representing principal of any
Mortgage Loans in such Mortgage Pool purchased in accordance with Section 2.04
hereof and received during the related Prepayment Period, (c) the principal
portion of any related Substitution Amount received during the related
Prepayment Period, (d) the principal portion of all Insurance Proceeds received
during the related Prepayment Period with respect to Mortgage Loans in such
Mortgage Pool that are not yet Liquidated Mortgage Loans, (e) the principal
portion of all Net Liquidation Proceeds and Subsequent Recoveries received
during the related Prepayment Period with respect to Liquidated Mortgage Loans
in such Mortgage Pool, (f) the principal portion of the proceeds of any
Additional Collateral with respect to the
25
Mortgage Loans in such Mortgage Pool, (g) the principal portion of all partial
and full principal prepayments of Mortgage Loans in such Mortgage Pool applied
by the Servicer during the related Prepayment Period and (h) on the Distribution
Date on which the Trust Fund is to be terminated pursuant to Article X hereof,
that portion of the Optional Termination Price in respect of principal for such
Mortgage Pool.
Principal Prepayment: Any Mortgagor payment of principal or other
recovery of principal on a Mortgage Loan that is recognized as having been
received or recovered in advance of its scheduled Due Date and applied to reduce
the principal balance of the Mortgage Loan in accordance with the terms of the
Mortgage Note or this Agreement.
Principal Prepayment In Full: Any Principal Prepayment of the entire
principal balance of the Mortgage Loans.
Principal Transfer Amount: For any Distribution Date and for any
Undercollateralized Group, the excess, if any, of the aggregate Class Principal
Amount of such Undercollateralized Group immediately prior to such Distribution
Date over the Aggregate Stated Principal Balance of the related Mortgage Pool
immediately prior to 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.
Pro Rata Senior Percentage: With respect to each Distribution Date and
each Mortgage Pool, the percentage equivalent of a fraction the numerator of
which is the aggregate Class Principal Amount of the Class or Classes of the
Related Certificate Group immediately prior to such Distribution Date and the
denominator of which is the Aggregate Stated Principal Balance of the related
Mortgage Pool for such Distribution Date.
Prospectus: The prospectus supplement dated May 25, 2004, together with
the accompanying prospectus dated February 25, 2004, relating to the initial
sale of the Class A-1, Class A-2, Class A-3, Class A-R, Class X-A, Class B-1,
Class B-2 and Class B-3 Certificates.
Purchase Date: Any Distribution Date on which Certificates may be
repurchased pursuant to Section 7.01(c).
Purchase Price: With respect to any Mortgage Loan required or permitted
to be purchased by the Depositor pursuant to this Agreement, by the Servicer
pursuant to this Agreement, or by the Seller pursuant to the Mortgage Loan
Purchase 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, (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 and
(iii) any unreimbursed costs, penalties and/or damages incurred by the Trust
Fund in connection with any violation relating to such Mortgage Loan of any
predatory or abusive lending law.
Rapid Prepayment Conditions: As to any Distribution Date either of the
following conditions: if (1) the Aggregate Subordinate Percentage on such date
is less than 200% of the Aggregate Subordinate Percentage on the Closing Date or
(2) the outstanding Stated Principal Balance of the Mortgage Loans in any
Mortgage Pool delinquent 60 days or months, as a percentage of such Mortgage
Pool's Pool Subordinate Amount, is greater than or equal to 50%.
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Rating Agency: Each of ▇▇▇▇▇'▇, S&P and Fitch Ratings.
Realized Loss: With respect to each Liquidated Mortgage Loan, an amount
(not less than zero or more than the Stated Principal Balance of the 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 Net Liquidation Proceeds and the proceeds of
any Additional Collateral, 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.
Record Date: As to any Distribution Date (i) with respect to the LIBOR
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 all other Certificates (including
LIBOR Certificates that are subsequently reissued as Definitive Certificates),
the last Business Day of the month preceding the month of each Distribution
Date.
Refinancing Mortgage Loan: Any Mortgage Loan originated in connection
with the refinancing of an existing mortgage loan.
Related Certificate Group: The Certificate Group related to a
particular Mortgage Pool as indicated by the same numerical designation (i.e.,
Group 1 Certificates are related to Pool 1, Group 2 Certificates are related to
Pool 2 and Group 3 Certificates are related to Pool 3).
Related Class of Upper Tier REMIC Interest: With respect to any Class
of Certificates, the interest in the Upper Tier REMIC appearing opposite such
Class in the Preliminary Statement hereto.
Relief Act Reductions: 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 Civil 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 Components: Each of the X-A1 Component, the X-A2 Component,
Component XB1, Component XB2 and Component XB3.
REMIC Interests: Any regular or residual interest in any of REMIC 1,
REMIC 2 or the Upper Tier 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 Subchapter M of Chapter 1 of the Code, and related provisions,
and regulations, including proposed regulations and rulings, and
27
administrative pronouncements promulgated thereunder, as the foregoing may be in
effect from time to time.
REMIC 1: As described in the Preliminary Statement.
REMIC 1 Interest: Each class of interest in REMIC 1 as described in the
Preliminary Statement.
REMIC 1 Regular Interest: Each of the REMIC 1 Interests other than the
Class LT1-R Interest.
REMIC 1 Subordinated Balance Ratio: The ratio among the uncertificated
principal balances of each of the REMIC 1 Interests ending with the designation
"A" that is equal to the ratio among, with respect to each such REMIC 1
Interest, the excess of (x) the aggregate Scheduled Principal Balance of the
Mortgage Loans in the related Mortgage Pool over (y) the aggregate Class
Principal Amounts of the Certificates in the Certificate Group related to such
Mortgage Pool.
REMIC 2: As described in the Preliminary Statement.
REMIC 2 Interest: Each class of interest in REMIC 2 as described in the
Preliminary Statement.
REMIC 2 Regular Interest: Each of the REMIC 2 Interests other than the
Class LT2-R Interest.
REO Disposition: The final sale by the Servicer of an REO Property.
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 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 this
Agreement, (i) have a Stated Principal Balance, after deduction of the principal
portion of the Scheduled Payment due in the month of substitution, not in excess
of, and not more than 10% less than, the Stated Principal Balance of the Deleted
Mortgage Loan; (ii) have a Maximum Rate not less than (and not more than two
percentage points greater than) the Maximum Rate of the Deleted Mortgage Loan;
(iii) have a gross margin not less than that of the Deleted Mortgage Loan and,
if Mortgage Loans equal to 1% or more of the balance of the related Mortgage
Pool as of the Cut-off Date have become Deleted Mortgage Loans, not more than
two percentage points more than that of the Deleted Mortgage Loan; (iv) have an
Effective Loan-to-Value Ratio no higher than that of the Deleted Mortgage Loan;
(v) have Adjustment Dates that are no more or less frequent than the Deleted
Mortgage Loan; (vi) have a remaining term to maturity no greater than (and not
more than one year less than that of) the Deleted Mortgage Loan; (vii) not
permit conversion of the related Mortgage Rate to a permanent fixed Mortgage
Rate; (viii) not be a Cooperative Loan unless the Deleted Mortgage Loan was a
Cooperative Loan; (ix) have the same or better FICO credit score; (x) have an
initial interest adjustment date no earlier than five months before (and no
later than five months after) the initial adjustment date of the Deleted
Mortgage Loan, (xi) comply with each representation and warranty set forth in
Schedule B of this Agreement; and (xii) shall be accompanied by an Opinion of
Counsel that such Replacement Mortgage Loan would not adversely affect the REMIC
status of the Trust Estate or would not otherwise be prohibited by this
Indenture.
Request for Release: A request for release, substantially in the form
of Exhibit N attached hereto, properly completed and signed by a Servicing
Officer (or, if delivered on behalf of the Seller or Depositor, an Authorized
Officer thereof).
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Residual Certificate: The Class A-R Certificate.
Residual Interest: The Residual Certificate, other than the portion
thereof representing the right to payments in respect of the Class LT1-R
Interest and the Class LT2-R Interest.
RESPA: The Real Estate Settlement Procedures Act, 12 U.S.C Section 2601
et seq., and Regulation X, 24 C.F.R. Section 3500.21, thereunder, as the
foregoing may be amended from time to time.
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.
Restricted Certificate: Any Class X-B, Class B-4, Class B-5 or Class
B-6 Certificate.
Restricted Global Security: As defined in Section 3.01(c).
S&P: Standard & Poor's, a division of The ▇▇▇▇▇▇-▇▇▇▇ Companies, Inc.,
or any successor in interest.
SAIF: The Saving's Association Insurance Fund, or any successor
thereto.
Schedule of Exceptions: As defined in Section 2.02(a) of this
Agreement.
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 this 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.
Section 302 Requirements: Any rules or regulations promulgated pursuant
to the ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act of 2002 (as such may be amended from time to time).
Seller: ▇▇▇▇▇▇▇ ▇▇▇▇▇ Credit Corporation., a Delaware corporation.
Senior Certificate: Any one of the Class A-1, Class A-2, Class A-3,
Class X-A, Class X-B or Class A-R Certificates.
Senior Percentage: Except as provided in this definition, for each
Mortgage Pool with respect to any Distribution Date before June 2014, 100%. The
Senior Percentage for each Mortgage Pool for any Distribution Date occurring (i)
before the Distribution Date in June 2014, but in or after June 2007 on which
the Two Times Test is satisfied, or (ii) in or after June 2014, is the related
Pro Rata Senior Percentage. If the Two Times Test is satisfied with respect to
any Distribution Date prior to the Distribution Date in June 2007, the Senior
Percentage for such Mortgage Pool is the Pro Rata Senior Percentage plus 50% of
an amount equal to 100% minus the related Pro Rata Senior Percentage. With
respect to any Distribution Date after the Senior Termination Date, the Senior
Percentage for such Mortgage Pool will equal zero. If on any Distribution Date
the allocation to the Senior Certificates of the related Certificate Group then
entitled to distributions of principal of full and partial principal prepayments
and other amounts in the percentage required above would reduce the sum of the
Class Principal Amounts of those Certificates to below zero, the Senior
Percentage for such Distribution Date shall be limited to the percentage
necessary to reduce such Class Principal Amounts to zero.
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Senior Prepayment Percentage: With respect to any Distribution Date,
during the ten years beginning on the first Distribution Date, 100%. Except as
provided herein, the related Senior Prepayment Percentage for each Mortgage Pool
and any Distribution Date occurring on or after the tenth anniversary of the
first Distribution Date shall be as follows: (i) from June 2014 through May
2015, the Senior Percentage plus 70% of the Subordinate Percentage for that
Distribution Date; (ii) from June 2015 through May 2016, the Senior Percentage
plus 60% of the Subordinate Percentage for that Distribution Date; (iii) from
June 2016 through May 2017, the Senior Percentage plus 40% of the Subordinate
Percentage for that Distribution Date; (iv) from June 2017 through May 2018, the
related Senior Percentage plus 20% of the Subordinate Percentage for that
Distribution Date; and (v) from and after June 2018, the Senior Percentage for
that Distribution Date; provided, however, that there shall be no reduction in
the Senior Prepayment Percentage for a Mortgage Pool unless both Step Down
Conditions are satisfied; and provided, further, that if on any such
Distribution Date the Pro Rata Senior Percentage exceeds the initial Pro Rata
Senior Percentage, the Senior Prepayment Percentage for a Mortgage Pool for that
Distribution Date shall again equal 100%.
Notwithstanding the above, if on any Distribution Date the Two Times
Test is satisfied, the Senior Prepayment Percentage for a Mortgage Pool shall
equal the related Senior Percentage for such Distribution Date. In addition, if
on any Distribution Date the allocation to the Senior Certificates of the
related Certificate Group then entitled to distributions of principal of full
and partial principal prepayments and other amounts in the percentage required
above would reduce the sum of the Class Principal Amounts of those Certificates
to below zero, the Senior Prepayment Percentage for a Mortgage Pool for such
Distribution Date shall be limited to the percentage necessary to reduce the
related Class Principal Amounts to zero.
Senior Principal Distribution Amount: With respect to any Mortgage Pool
and Distribution Date, the sum of:
(1) the related Senior Percentage of all amounts
described in clauses (a) through (d) of the definition of "Principal
Distribution Amount" for that Distribution Date;
(2) with respect to each Mortgage Loan in the related
Mortgage Pool which became a Liquidated Mortgage Loan during the
related Prepayment Period, the lesser of
(x) the related Senior Percentage of the Stated
Principal Balance of that Mortgage Loan and
(y) the related Senior Prepayment Percentage of
the amount of the Net Liquidation Proceeds allocable to
principal received with respect to that Mortgage Loan; and
(3) the related Senior Prepayment Percentage of the
amounts described in clause (g) of the definition of "Principal
Distribution Amount".
Senior Termination Date: For each Certificate Group, the Distribution
Date when the aggregate of the Class Certificate Principal Balances of that
Group has been reduced to zero.
Servicer: Cendant and its successors and assigns.
Servicer Advance: The outstanding moneys that have been advanced by the
Servicer from its funds in connection with its servicing of a Mortgage Loan
(including, but not limited to, taxes, ground rents, assessments, insurance
premiums, release fees, foreclosure and bankruptcy fees and expenses, and
30
other expenses) (i) that have been made by the Servicer in accordance with the
terms and provisions herein, (ii) that are recoverable through Liquidation
Proceeds and/or Insurance Proceeds, or that are made at the direction of the
Seller or to preserve its security interest in the related Mortgaged Property
and (iii) for which the Servicer has a right of reimbursement.
Servicing Fee: As to any Distribution Date and each Mortgage Loan, an
amount equal to the product of (a) one-twelfth of the Servicing Fee Rate and (b)
the outstanding 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, 0.25% per annum.
Servicing Officer: Any officer of the Servicer involved in, or
responsible for, the administration and servicing of the Mortgage Loans whose
name and facsimile signature appear on a list of servicing officers furnished to
the Trustee by the Servicer on the Closing Date and attached hereto as Exhibit
M, as such list may from time to time be amended.
Servicing Transfer Costs: As defined in Section 6.14(b).
Six-Month LIBOR Loan: Each Mortgage Loan bearing a Mortgage Rate that
adjusts in accordance with LIBOR for six-month U.S. dollar deposits.
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 Principal Prepayments and
Liquidation Proceeds allocable to principal and to the payment of principal due
on such Due Date and irrespective of any delinquency in payment by the related
Mortgagor.
Step Down Conditions: As of the first Distribution Date as to which any
decrease in any Senior Prepayment Percentage applies, (i) the outstanding Stated
Principal Balance of all Mortgage Loans 60 days or more Delinquent (including
Mortgage Loans in bankruptcy, REO and foreclosure) (averaged over the preceding
six month period), as a percentage of the aggregate of the Class Principal
Amounts of the Classes of Subordinate Certificates on such Distribution Date,
does not equal or exceed 50% and (ii) cumulative Realized Losses with respect to
the Mortgage Loans do not exceed (a) with respect to each Distribution Date from
June 2014 through May 2015, 30% of the Original Subordinate Principal Amount,
(b) with respect to each Distribution Date from June 2015 through May 2016, 35%
of the Original Subordinate Principal Amount, (c) with respect to each
Distribution Date from June 2016 through May 2017, 40% of the Original
Subordinate Principal Amount, (d) with respect to each Distribution Date from
June 2017 through May 2018, 45% of the Original Subordinate Principal Amount and
(e) with respect to each Distribution Date from and after June 2018, 50% of the
Original Subordinate Principal Amount.
Subordinate Certificate: Any of the Class B-1, Class B-2, Class B-3,
Class B-4, Class B-5 or Class B-6 Certificates.
Subordinate Certificate Writedown Amount: The amount described in
Section 5.03(b)(iii).
Subordinate Class Percentage: As to any Distribution Date and any Class
of Subordinate Certificates, a fraction, expressed as a percentage, the
numerator of which is the Class Principal Amount
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of such Class on such date, and the denominator of which is the aggregate Class
Principal Amount of all Classes of Subordinate Certificates on such date.
Subordinate Net WAC: For any Distribution Date, the weighted average of
the Pool 1 Net WAC, the Pool 2 Net WAC and the Pool 3 Net WAC, weighted on the
basis of the Pool Subordinate Amounts for Pool 1, Pool 2 and Pool 3,
respectively, for such Distribution Date.
Subordinate Percentage: With respect to each Mortgage Pool and any
Distribution Date, the difference between 100% and the related Senior Percentage
for such Mortgage Pool for such Distribution Date.
Subordinate Prepayment Percentage: With respect to any Distribution
Date and for any Mortgage Pool, the difference between 100% and the related
Senior Prepayment Percentage for such Mortgage Pool for that Distribution Date.
Subordinate Principal Distribution Amount: With respect to any
Distribution Date and each Mortgage Pool, an amount equal to the sum of:
(1) the related Subordinate Percentage of all amounts
described in clauses (a) through (d) of the definition of "Principal
Distribution Amount" for that Distribution Date;
(2) with respect to each Mortgage Loan in the related
Mortgage Pool that became a Liquidated Mortgage Loan during the related
Prepayment Period the amount of the Net Liquidation Proceeds allocated
to principal received with respect thereto remaining after application
thereof pursuant to clause (2) of the definition of "Senior Principal
Distribution Amount" for that Distribution Date, up to the Subordinate
Percentage of the Stated Principal Balance of such Mortgage Loan; and
(3) the related Subordinate Prepayment Percentage of all
amounts described in clause (g) of the definition of "Principal
Distribution Amount" for that Mortgage Pool and that Distribution Date;
minus the sum of:
any Principal Transfer Amount paid from the Available
Distribution Amount of the Related Certificate Group to an
Undercollateralized Group; and
the amount of principal distributions made to the Senior
Certificates pursuant to Section 5.02(h);
Subsequent Recovery: The amount, if any, recovered by the Servicer with
respect to a Liquidated Mortgage Loan with respect to which a Realized Loss has
been incurred after liquidation and disposition of such Mortgage Loan.
Substitution Amount: As defined in the second paragraph of Section
2.04(b).
Tax Matters Person: The "tax matters person" as specified in the REMIC
Provisions which shall initially be the Holder of the Class A-R Certificate.
32
Telerate Page 3750: The display currently so designated as "Page 3750"
on the Bridge Telerate Service (or such other page selected by the Trustee as
may replace Page 3750 on that service for the purpose of displaying daily
comparable rates on prices).
Trust Fund: The corpus of the trust created pursuant to this Agreement,
consisting of (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 Accounts established with respect to the Mortgage Loans;
(iii) all of the Depositor's rights under the Mortgage Loan Purchase and Sale
Agreement and the Mortgage Loan Purchase Agreement; (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 relating to the Mortgage
Loans; (vi) all proceeds of the conversion, voluntary or involuntary, of any of
the foregoing into cash or other liquid assets, including without limitation,
all Insurance Proceeds, Liquidation Proceeds and condemnation awards; and (vii)
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, any pledge, control and guaranty agreements and the Limited Purpose Surety
Bond and any proceeds of the foregoing.
Trustee: ▇▇▇▇▇ Fargo Bank N.A. and any Person succeeding the Trustee
hereunder, or if any separate trustee or any co-trustee shall be appointed as
herein provided, then such separate 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.
Two Times Test: As to any Distribution Date, (i) the Aggregate
Subordinate Percentage is at least two times the Aggregate Subordinate
Percentage as of the Closing Date; (ii) the aggregate of the Stated Principal
Balances of all Mortgage Loans Delinquent 60 days or more (including Mortgage
Loans in bankruptcy, REO and foreclosure) (averaged over the preceding six-month
period), as a percentage of the aggregate of the Class Principal Amount of the
Subordinate Certificates on such Distribution Date, does not equal or exceed
50%; and (iii) cumulative Realized Losses with respect to the Mortgage Loans do
not exceed 20% of the Original Subordinate Principal Amount.
UCC: The Uniform Commercial Code as enacted in the relevant
jurisdiction.
Undercollateralized Group: With respect to any Distribution Date, and
any Certificate Group, the aggregate Class Principal Amount of such Certificate
Group is greater than the aggregate Stated Principal Balance of the Mortgage
Loans in the related Mortgage Pool immediately prior to such Distribution Date.
Underwriters: ▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇ Incorporated, Bank
of America Securities LLC and Countrywide Securities Corporation.
Underwriter's Exemption: Prohibited Transaction Exemption ("PTE") 90-29
(Exemption Application No. D-8019, 55 Fed. Reg. 21459 (1990)) as amended, or any
substantially similar administrative exemption granted by the U.S. Department of
Labor to an Underwriter.
33
Underwriting Agreement: The underwriting agreement, dated February 28,
2003 and the terms agreement, dated May 25, 2004, each between the Depositor and
the Underwriters, referred to collectively.
Underwriting Standards: As to each Mortgage Loan, the Seller's or
Originator's written underwriting guidelines in effect as of the origination
date of such Mortgage Loan.
Uniform Commercial Code: The Uniform Commercial Code as in effect in
any applicable jurisdiction from time to time.
Unpaid Basis Risk Shortfall: With respect to any Distribution Date and
any Class of LIBOR Certificates, the aggregate of all Basis Risk Shortfalls with
respect to such Certificate remaining unpaid from previous Distribution Dates,
plus interest accrued thereon at the applicable Certificate Interest Rate
determined without regard to clause (ii) of the definition therefor to the
extent not paid on prior Distribution Dates.
Upper Tier REMIC: As described in the Preliminary Statement.
Upper Tier REMIC Class A-1 Interest: An uncertificated interest in the
Upper Tier REMIC having the same characteristics as the Class A-1 Certificates,
but without the right to receive payments in respect of Basis Risk Shortfalls
and Unpaid Basis Risk Shortfalls.
Upper Tier REMIC Class A-2 Interest: An uncertificated interest in the
Upper Tier REMIC having the same characteristics as the Class A-2 Certificates,
but without the right to receive payments in respect of Basis Risk Shortfalls
and Unpaid Basis Risk Shortfalls.
Upper Tier REMIC Class B-1 Interest: An uncertificated interest in the
Upper Tier REMIC having the same characteristics as the Class B-1 Certificates,
but without the right to receive payments in respect of Basis Risk Shortfalls
and Unpaid Basis Risk Shortfalls.
Upper Tier REMIC Class B-2 Interest: An uncertificated interest in the
Upper Tier REMIC having the same characteristics as the Class B-2 Certificates,
but without the right to receive payments in respect of Basis Risk Shortfalls
and Unpaid Basis Risk Shortfalls.
Upper Tier REMIC Class B-3 Interest: An uncertificated interest in the
Upper Tier REMIC having the same characteristics as the Class B-3 Certificates,
but without the right to receive payments in respect of Basis Risk Shortfalls
and Unpaid Basis Risk Shortfalls.
Upper Tier REMIC Regular Interest: Each of the REMIC Components, the
Upper Tier REMIC Class A-1 Interest, the Upper Tier REMIC Class A-2 Interest,
the Upper-Tier REMIC Class B-1 Interest, the Upper-Tier REMIC Class B-2
Interest, the Upper-Tier REMIC Class B-3 Interest, the Class A-3 Certificates,
the Class B-4 Certificates, the Class B-5 Certificates and the Class B-6
Certificates.
USAP Report: A report in compliance with the Uniform Single Attestation
Program for Mortgage Bankers delivered in accordance with Section 9.13.
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,
98.00% of all Voting Interests shall be allocated to the Class A-1, Class A-2,
Class A-3, Class A-R, Class B-1, Class B-2, Class B-3, Class B-4, Class B-5 and
Class B-6 Certificates. Voting Interests shall be allocated among such
Certificates (other than the Class A-R Certificates) based on the
34
product of (i) 98.00% and (ii) the fraction, expressed as a percentage, the
numerator of which is the aggregate Class Principal Amounts for each Class then
outstanding and the denominator of which is the Aggregate Stated Principal
Balance outstanding, and the remainder of such percentage of Voting Interests
shall be allocated to the Class A-R Certificates. At all times during the term
of this Agreement, 2.00% of all Voting Interests shall be allocated among the
Class X-A and Class X-B Certificates, while they remain outstanding, in
proportion to their relative Class Notional Amounts. Voting Interests shall be
allocated among the Certificates within each such Class in proportion to their
Certificate Principal Amounts or Percentage Interests.
X-A1 Component: An interest only Component represented by the Class X-A
Certificates which has a notional amount for any Distribution Date equal to the
Class Principal Amount of the Class A-1 Certificates immediately prior to such
Distribution Date and having an interest rate with respect to any Distribution
Date (and the related Accrual Period) equal to the excess, if any, of (i) the
Pool 1 Net WAC for such Distribution Date over (ii) the Certificate Interest
Rate of the Class A-1 Certificates for such Distribution Date. The X-A1
Component shall be related to the Group 1 Certificates.
X-A2 Component: An interest-only Component represented by the Class X-A
Certificates which has a notional amount for any Distribution Date equal to the
Class Principal Amount of the Class A-2 Certificates immediately prior to such
Distribution Date and having an interest rate with respect to any Distribution
Date (and the related Accrual Period) equal to the excess, if any, of (i) the
Pool 2 Net WAC for such Distribution Date over (ii) the Certificate Interest
Rate of the Class A-2 Certificates for such Distribution Date. The X-A2
Component shall be related to the Group 2 Certificates.
Section 1.02 Calculations Respecting Mortgage Loans.
Calculations required to be made pursuant to this Agreement with
respect to any Mortgage Loan in the Trust Fund shall be made based upon current
information as to the terms of the Mortgage Loans and reports of payments
received from the Mortgagor on such Mortgage Loans and payments to be made to
the Trustee as provided by the Servicer. The Trustee shall not be required to
recompute, verify or recalculate the information supplied to it by the Servicer.
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 establish the
Trust Fund and transfer, assign, set over, deposit
with and otherwise convey to the Trustee, without
recourse, subject to Sections 2.02 and 2.04, 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
Depositor's rights
35
under the Mortgage Loan Purchase and Sale Agreement;
(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
relating to the Mortgage Loans; (vi) all proceeds of
the conversion, voluntary or involuntary, of any of
the foregoing into cash or other liquid assets,
including, without limitation, all Insurance
Proceeds, Liquidation Proceeds and condemnation
awards; and (vii) 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, any pledge, control and guaranty agreements and
the Limited Purpose Surety Bond and any proceeds of
the foregoing, 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.
Notwithstanding anything to the contrary in this
Agreement, the Trust Fund shall not obtain title to
or beneficial ownership of any Additional Collateral
as a result of or in lieu of the disposition thereof
or otherwise.
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.
It is agreed and understood by the parties hereto that it is not
intended that any Mortgage Loan be included in the Trust Fund that is a
"High-Cost Home Loan" as defined in the New Jersey Home Ownership Act, effective
November 27, 2003, and the New Mexico Home Loan Protection Act, effective
January 1, 2004.
In connection with such transfer and assignment of the Mortgage Loans,
the Depositor shall deliver to, and deposit with, or cause to be delivered to
and deposited with, the Trustee, the documents or instruments described in
Section 2 of the Custodial Agreement with respect to each Mortgage Loan;
provided that in Section 2a thereof, a lost note affidavit (including a copy of
the original Mortgage Note) may be delivered in lieu of the original Mortgage
Note (each a "Trustee Mortgage File") (the Custodial Agreement to be deemed
modified by the foregoing) so transferred and assigned.
(b) The Depositor shall cause the Mortgage Notes with
respect to each Mortgage Loan to be completed either
(A) in blank, without recourse, or (B) endorsed to
"▇▇▇▇▇ Fargo Bank N.A., as Trustee of the ▇▇▇▇▇▇▇
▇▇▇▇▇ Mortgage Investors Trust Series MLCC 2004-B,
Mortgage Pass-Through Certificates, without recourse"
and the Depositor shall cause Assignments of Mortgage
with respect to each Mortgage Loan other than a
Cooperative Mortgage Loan to be completed either (A)
in blank or (B) to "▇▇▇▇▇ Fargo Bank N.A., as Trustee
of the ▇▇▇▇▇▇▇ ▇▇▇▇▇ Mortgage Investors Trust Series
MLCC 2004-B, Mortgage Pass-Through Certificates,"
within 30 days of the Closing Date for purpose of
their recording; provided, however, that such
Assignments of Mortgage need not be recorded unless
required in writing by the Rating Agencies; provided,
further, that with respect to each MERS Mortgage Loan
where MERS is not the Mortgagee of
36
record, the original Assignment of Mortgage showing
MERS as the assignee of the Mortgage, with the
evidence of recording thereon or copies thereof
certified by an officer of the Depositor to have been
submitted for recordation, shall be delivered to the
Trustee.
If any Mortgage has been recorded in the name of MERS or its designee,
no Assignment of Mortgage in favor of the Trustee will be required to be
prepared or delivered and instead, the Servicer shall take all actions as are
necessary to cause the Trustee to be shown as the owner of the related Mortgage
Loan on the records of MERS for the purpose of the system of recording transfer
of beneficial ownership of mortgages maintained by MERS.
(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 270 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
Trustee Mortgage File, shall deliver to 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 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, subject to review thereof as
provided herein. Upon receipt by the Trustee of each
Trustee Mortgage File, the Trustee shall review each
Trustee Mortgage File in accordance with the review
procedures set forth in Section 2 of Amendment No. 1
to the Custodial Agreement.
In making such verifications, the Trustee may rely conclusively on the
Mortgage Loan Schedule and the documents constituting the Trustee Mortgage File,
and the Trustee shall have no obligation to independently verify the validity,
enforceability, recordability, sufficiency, due authorization or genuineness of
any document in any Trustee Mortgage File or any Mortgage Loan hereunder, nor
the collectibility, insurability, effectiveness or suitability of any Mortgage
Loan hereunder. The Trustee shall prepare an initial certification to be
delivered to the Depositor, the Seller and the Servicer on the Closing Date in
the form annexed hereto as Exhibit K (the "Initial Certification") with respect
to the Mortgage Loans (other than any Mortgage Loan paid in full or any Mortgage
Loan specifically identified on the Schedule of Exceptions attached to the
Initial Certification (the "Schedule of Exceptions") as not covered by such
Initial Certification) listed on the Mortgage Loan Schedule. If the Trustee
determines from such verification that any discrepancy or deficiency exists with
respect to a Trustee Mortgage File, the Trustee shall note such omission,
discrepancy or deficiency on the Schedule of Exceptions attached to the Initial
Certification, and shall deliver a copy (which shall be electronic, if
requested) of the Schedule of Exceptions to the Depositor on the Closing Date.
During the life of the Mortgage Loans (while subject to this Agreement), in the
event the Trustee discovers any defect with respect to any Trustee Mortgage
File, the Trustee shall give written specification of such defect to the
Depositor. Except as specifically
37
provided above, the Trustee shall be under no duty to review, inspect or examine
such documents to determine that any of them are enforceable or appropriate for
their prescribed purpose.
(b) If in the course of the review described in paragraph
(a) of this Section 2.02 the Trustee discovers any
document or documents constituting a part of a
Trustee Mortgage File that is missing, does not
appear regular on its face (i.e., is mutilated,
damaged, defaced, torn or otherwise physically
altered) or appears to be unrelated to the Mortgage
Loans identified in the Mortgage Loan Schedule (each,
a "Material Defect"), the Trustee, upon discovering
such Material Defect shall promptly identify the
Mortgage Loan to which such Material Defect relates
to the Depositor, the Seller and the Servicer. Within
90 days of its receipt of such notice (but in no case
prior to the 270th day following the Closing Date),
the Depositor shall be required to cure such Material
Defect (and, in such event, the Depositor shall
provide the Trustee with an Officer's Certificate
confirming that such cure has been effected). If the
Servicer notifies the Depositor and the Trustee in
writing that (i) a loss has occurred and (ii) such
loss relates to a Mortgage Loan for which the Trustee
previously identified a Material Defect or for which
the Servicer has identified a Material Defect and the
Depositor has not cured such Material Defect, then
the Depositor shall repurchase such Mortgage Loan at
the Purchase Price therefore in the event that such
loss would, if such Mortgage Loan is not repurchased
by the Depositor, constitute a Realized Loss and such
loss is attributable to the failure of the Depositor
to have cured such Material Defect. A loss shall be
deemed to be attributable to the failure of the
Depositor to cure a Material Defect if, as determined
by the Depositor, upon mutual agreement with the
Trustee each acting in good faith, absent such
Material Defect, such loss would not have been
incurred. Within the two-year period following the
Closing Date, the Depositor may, in lieu of
repurchasing a Mortgage Loan pursuant to this Section
2.02(b), substitute for such Mortgage Loan a
Replacement Mortgage Loan subject to the provisions
of Section 2.04.
(c) Within 270 days following the Closing Date, the
Trustee shall deliver to the Depositor, the Seller
and the Servicer, a final certification substantially
in the form attached as Exhibit L (the "Final
Certification") evidencing the completeness of the
Trustee Mortgage Files in its possession or control,
with any exceptions noted on the Scheduled of
Exceptions attached to the Final Certification.
(d) 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.
(e) Upon execution of this Agreement, the Depositor
hereby delivers to the Trustee and the Trustee
acknowledges receipt of the Mortgage Loan Purchase
and Sale Agreement.
Section 2.03 Representations and Warranties of the Depositor and the
Servicer.
A. The Depositor hereby represents and warrants to the Servicer and to the
Trustee , for the benefit of the Certificateholders as of the Closing Date or
such other date as is specified, that:
38
(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, 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 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
39
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;
(xii) As of the Closing Date, each Mortgage Loan
is a "qualified mortgage" within the meaning of Section
860G(a)(3) of the Code (without regard to Treasury Regulations
Section 1.860G-2(f)) or any similar rule that provides that a
defective obligation is a qualified mortgage for a temporary
period);
(xiii) As of the Closing Date, no Mortgage Loan
provides for interest other than at either (x) a single fixed
rate in effect throughout the term of the Mortgage Loan or (y)
a single "variable rate" (within the meaning of Treasury
Regulations Section 1.860G-1(a)(3)) in effect throughout the
term of the Mortgage Loan;
(xiv) As of the Closing Date, no Mortgage is the
subject of pending or final foreclosure proceedings; and
(xv) As of the Closing Date, the Depositor would
not initiate foreclosure proceedings with respect to any
Mortgage Loan based on such Mortgage Loan's delinquency status
prior to the next scheduled payment date for such Mortgage
Loan.
The foregoing representations made in this Section 2.03 by the
Depositor shall survive the termination of this Agreement and shall not be
waived by any party hereto
B. The Servicer hereby represents and warrants to the Depositor and to the
Trustee, for the benefit of the Certificateholders as of the Closing Date that:
40
(i) The Servicer is a corporation duly
organized, validly existing and in good standing under the
laws of the State of New Jersey. The Servicer has in full
force and effect (without notice of possible suspension,
revocation or impairment) all required qualifications,
permits, approvals, licenses, and registrations, or exemption
therefrom, to conduct all activities in all jurisdictions in
which its activities with respect to the Mortgage Loans
require it to be qualified or licensed;
(ii) The Servicer has all requisite corporate
power, authority and capacity to carry on its business as it
is now being conducted, to execute and deliver this Agreement,
and to perform all of its obligations hereunder. The Servicer
does not believe, nor does it have any cause or reason to
believe, that it cannot perform each and every covenant
contained in this Agreement;
(iii) The execution, delivery and performance of
this Agreement by the Servicer and consummation of the
transactions contemplated hereby have been duly and validly
authorized by all necessary corporate, shareholder or other
action by the Servicer; this Agreement has been duly and
validly executed and delivered by the Servicer; and this
Agreement is a valid and legally binding agreement of the
Servicer, enforceable against the Servicer in accordance with
its respective terms, subject to bankruptcy, insolvency and
similar laws affecting generally the enforcement of creditors'
rights and the discretion of a court to grant specific
performance of contracts;
(iv) Neither the execution and delivery of this
Agreement, nor the consummation of the transactions
contemplated hereby, nor compliance with their respective
terms and conditions shall (a) violate, conflict with, result
in the breach of, constitute a default under, be prohibited by
or require any additional approval under any terms, conditions
or provisions of the Servicer's articles of incorporation or
by-laws or any other similar corporate or organizational
document of the Servicer; any mortgage, indenture, deed of
trust, loan or credit agreement or other agreement or
instrument to which the Servicer is now a party or by which it
is bound; or any law, ordinance, rule, regulation, order,
judgment or decree of any governmental authority applicable to
the Servicer; or (b) result in the creation or imposition of
any lien, charge or encumbrance of any material nature upon
any of the properties or assets of the Servicer;
(v) The Servicer holds all licenses, approvals,
permits and other authorizations, or exemptions therefrom,
required under applicable law to assume responsibility for
servicing the Mortgage Loans;
(vi) There is no litigation, claim, demand,
proceeding or governmental investigation existing or pending,
or to the knowledge of the Servicer, threatened, nor is there
any order, injunction or decree outstanding against or
relating to the Servicer that could (i) have a material
adverse effect upon the performance by the Servicer of its
obligations under this Agreement or (ii) to the Servicer's
knowledge, result in any material loss or liability to
Depositor, the Trustee, the Trust Fund or the Seller. Further,
to the Servicer's knowledge, there is no meritorious basis for
any such litigation, claim, demand, proceeding, or
governmental investigation;
(vii) The Servicer has been approved by GNMA,
▇▇▇▇▇▇ ▇▇▇ and FHLMC and will remain approved as an "eligible
seller/servicer" of residential mortgage loans as provided in
GNMA, ▇▇▇▇▇▇ Mae, or FHLMC guidelines and in good standing.
The Servicer has not received any notification from GNMA,
▇▇▇▇▇▇ ▇▇▇ or FHLMC that the
41
Servicer is not in compliance with the requirements of the
approved "seller/servicer" status. The Servicer is a mortgagee
approved by the Secretary of HUD pursuant to Section 203 and
211 of the National Housing Act. The Servicer has not received
any notification from HUD that the Servicer is not in
compliance with the requirements of the approved mortgagee
status;
(viii) The servicing practices to be used by the
Servicer under this Agreement are, and shall remain, in all
material respects in compliance with Accepted Servicing
Practices, including without limitation, all federal, state
and local laws, rules, all regulations and requirements in
connection therewith, and ▇▇▇▇▇▇ Mae guidelines, as
applicable;
(ix) The Servicer has not received written notice
from or on behalf of FHA, HUD, FDIC, ▇▇▇▇▇▇ ▇▇▇, FHLMC or
GNMA, advising the Servicer of its failure to comply with
applicable servicing or claims procedures, or resulted in a
request for repurchase of mortgage loans or indemnification in
connection with any mortgage loans;
(x) The Servicer has in place a contingency plan
that will enable it to perform its obligations under this
Agreement in all material respects, at another location within
five (5) Business Days in the event its primary location is
rendered inoperative as a result of a natural or other
disaster or emergency;
(xi) The Servicer maintains and shall maintain,
in good standing, all licenses and approvals necessary to
service the Mortgage Loans and maintains and shall at all
times maintain the capital requirements imposed by the
licensing or approving entities having jurisdiction over the
Servicer. The Servicer has filed applications for all
applicable licenses and qualifications to do business and to
service the Mortgage Loans in the U.S. Virgin Islands;
(xii) The Servicer maintains and shall at all
times maintain error and omissions and fidelity insurance
coverage of the type and in the amounts required by ▇▇▇▇▇▇
Mae;
(xiii) The Servicer has, and shall at all times
maintain during the term of this Agreement, sufficient
systems, including but not limited to the Servicer's EDP, and
trained and experienced personnel in place to perform its
obligations under this Agreement;
(xiv) For so long as, and to the extent that, the
Servicer services the Mortgage Loans, the Servicer will
continue to comply with each applicable federal, state, or
local, law, statute, and ordinance, and any rule, regulation,
or order issued thereunder, pertaining to the subject matter
of this Agreement, including, but not limited to, usury,
RESPA, Consumer Credit Reporting Act, Equal Credit Opportunity
Act, Federal Deposit Insurance Corporation Improvement Act,
Regulation B, Fair Credit Reporting Act, Fair Debt Collection
Practices Act, Fair Housing Act, Truth in Lending Act and
Regulation Z, Flood Disaster Protection Act of 1973, and any
applicable regulations related thereto, and such other fair
housing, anti-redlining, equal credit opportunity,
truth-in-lending, real estate settlement procedures, fair
credit reporting, and every other prohibition against unlawful
discrimination in residential mortgage lending or governing
consumer credit, and all state consumer credit statutes and
regulations, as amended. In the event the Depositor or the
Trustee has a reasonable good faith belief in the Servicer's
non-
42
compliance with this representation and warranty and upon the
Depositor's or the Trustee's written request, the Servicer
shall deliver to the Depositor or the Trustee reasonable
evidence of compliance with any of the requirements of this
representation and warranty; and
(xv) Neither the Servicer, its parent, nor any of
its subsidiaries is in bankruptcy, receivership or
conservatorship. The Servicer has the requisite financial
resources and ability to meet its obligations under this
Agreement, including, but not limited to, any and all
indemnification obligations,
Within 60 days of the earlier of either discovery by or notice to the
Servicer of any breach of a representation or warranty set forth in this Section
2.03(B) which materially and adversely affects the ability of the Servicer to
perform its duties and obligations under this Agreement or otherwise materially
and adversely affects the value of the Mortgage Loans, the Mortgaged Property or
the priority of the security interest on such Mortgaged Property, the Servicer
shall use its best efforts promptly to cure such breach in all material respects
and, if such breach cannot be cured, the Servicer shall, at the Trustee's
option, assign the Servicer's rights and obligations under this Agreement (or
respecting the affected Mortgage Loans) to a successor servicer selected by the
Depositor with the prior consent and approval of the Trustee. Such assignment
shall be made in accordance with this Agreement.
Section 2.04 Discovery of Breach; Repurchase or Substitution of
Mortgage Loans.
(a) Pursuant to Sections 3(a) and 3(b) of the Mortgage
Loan Purchase and Sale Agreement, the Seller has made
certain representations and warranties as to the
characteristics of the Mortgage Loans (such
representations and warranties are set out in full in
Schedule B of this Agreement) as of the Closing Date
and the conveyance thereof from the Seller to the
Depositor, for the benefit of the Trustee and the
Certificateholders, and the Seller has agreed to
comply with the provisions of this Section 2.04 in
respect of a breach of any of such representations
and warranties.
It is understood and agreed that (i) the representations and warranties
of the Depositor and the Servicer set forth in Section 2.03 and (ii) the
representations and warranties of the Seller set forth in Sections 3(a) and 3(b)
of the Mortgage Loan Purchase and Sale Agreement shall survive delivery of the
Trustee Mortgage Files and the Assignment of Mortgage of each Mortgage Loan to
the Trustee and shall continue throughout the term of this Agreement. Upon
discovery (i) by the Depositor, the Seller, the Servicer or the Trustee of a
breach of any representation or warranty made by the Depositor under Section
2.03 which materially adversely affects the value of a Mortgage Loan or the
interest therein of the Certificateholder (a "Defective Mortgage Loan"), or (ii)
by the Depositor or the Seller of the breach by the Seller of any representation
or warranty under the Mortgage Loan Purchase and Sale Agreement in respect of
any Mortgage Loan, which breach results in the Mortgage Loan being a "Defective
Mortgage Loan" (each of such parties hereby agreeing to give written notice of
such breach to the Trustee and the other of such parties), the Trustee, or its
designee, shall promptly notify the Depositor in writing of such breach and
request that the Depositor cure or cause the cure of such breach within 90 days
from the date that the Depositor discovered or was notified of such breach, and
if the Depositor does not cure such breach in all material respects during such
period, the Trustee shall (i) in the case of an uncured breach under Section
2.03, cause the Depositor to repurchase such Defective Mortgage Loan at the
Purchase Price and (ii) in the case of an uncured breach by the Seller under the
Mortgage Loan Purchase and Sale Agreement, cause the Depositor to enforce the
Seller's obligation under the Mortgage Loan Purchase and Sale Agreement to
repurchase that Defective Mortgage Loan from the Trust Fund at the Purchase
Price, in each case on or prior to the Determination Date following the
expiration of such 90-day period (subject
43
to Section 2.04(b) below); provided, however, that, in connection with any such
breach under clause (ii) above that could not reasonably have been cured within
such 90-day period, if the Seller shall have commenced to cure such breach
within such 90-day period and, if the defective Mortgage Loan qualifies as a
"qualified mortgage" within the meaning of Section 860G(a)(3) of the Code
following such 90-day period, the Seller shall be permitted to proceed
thereafter diligently and expeditiously to cure the same within an additional
90-day period. The Purchase Price for the repurchased Defective Mortgage Loan
shall be deposited in the related Distribution Account, and the Trustee, or its
designee, upon receipt of such deposit and two copies of a Request for Release
with respect to such Defective Mortgage Loan, shall release to the Seller or the
Depositor, 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 Defective 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). In lieu of repurchasing any such
Defective Mortgage Loan as provided above, the Seller may cause such Defective
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 2.04(b) below. It
is understood and agreed that the obligation of the Seller (or the Depositor, if
applicable) to cure or to repurchase (or to substitute for) any Mortgage Loan as
to which a breach has occurred and is continuing shall constitute the sole
remedy against the Seller (or the Depositor, if applicable) respecting such
breach available to the Trustee on behalf of the Certificateholders. With
respect to the representations and warranties described in Schedule B which are
made to the best of the Seller's knowledge, if it is discovered by any of the
Depositor, the Seller or the Trustee that the substance of such representation
and warranty is inaccurate and such inaccuracy materially and adversely affects
the value of the related Mortgage Loan, then notwithstanding the Seller's lack
of knowledge with respect to the substance of such representation and warranty,
such inaccuracy shall be deemed a breach of the applicable representation or
warranty.
(b) Any substitution of Replacement Mortgage Loans for
Deleted Mortgage Loans made pursuant to Section
2.04(a) 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 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, the Assignment to the Trustee, and such
other documents and agreements, with all necessary
endorsements thereon, together with an Officers'
Certificate stating that each such Replacement
Mortgage Loan satisfies the definition thereof and
specifying the Substitution Amount (as described
below), if any, in connection with such substitution.
The Trustee shall acknowledge receipt for such
Replacement Mortgage Loan and, within 45 days
thereafter, shall review such Mortgage Documents as
specified in this Agreement under Section 2.02(a) and
deliver to the Depositor, with respect to such
Replacement Mortgage Loans, a certification
substantially in the form of a revised Initial
Certification, with any exceptions noted thereon.
Within one year of the date of substitution, the
Trustee shall deliver to the Depositor a
certification substantially in the form of a revised
Final Certification, with respect to such Replacement
Mortgage Loans, with any exceptions noted thereon.
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 Seller. For the month of
substitution, distributions to Certificateholders
shall reflect the collections and recoveries in
respect of such Deleted Mortgage in the Due Period
preceding the month of
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substitution and the Seller 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 Mortgage Loan Purchase and Sale
Agreement, including all representations and
warranties thereof included in the Mortgage Loan
Purchase and Sale Agreement, in each case as of the
date of substitution.
For any month in which the Seller substitutes one or more Replacement
Mortgage Loans for one or more Deleted Mortgage Loans, the Trustee, based upon
information provided by the Servicer, shall determine the excess (each, a
"Substitution 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 Seller shall deliver or cause to be
delivered to the Servicer for deposit in the Custodial Account an amount equal
to the related Substitution Amount, if any, and the Trustee, upon receipt of the
related Replacement Mortgage Loan or Loans and two copies of a Request for
Release with respect to the Deleted Mortgage Loan or Loans, shall release to the
Seller 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 Seller shall deliver to it and as shall be necessary to vest therein any
Deleted Mortgage Loan released pursuant hereto.
In addition, the Seller shall obtain at its own expense and deliver to
the Trustee an Opinion of Counsel to the effect that such substitution (either
specifically or as a class of transactions) shall not cause (a) any federal tax
to be imposed on the Trust Fund, including without limitation, any federal tax
imposed on "prohibited transactions" under Section 860F(a)(l) of the Code or on
"contributions after the startup date" under Section 860G(d)(l) of the Code, or
(b) any REMIC created hereunder to fail to qualify as a REMIC at any time that
any Certificate is outstanding. If such Opinion of Counsel can not be delivered,
then such substitution may only be effected at such time as the required Opinion
of Counsel can be given.
(c) Upon discovery by the Seller, the Depositor, the
Servicer or the Trustee that any Mortgage Loan does
not constitute a "qualified mortgage" within the
meaning of Section 860G(a)(3) of the Code, the party
discovering such fact shall within two Business Days
give written notice thereof to the other parties. In
connection therewith, the Seller or Depositor, as
applicable, shall repurchase, or the Seller, subject
to the limitations set forth in Section 2.04(b),
shall 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 Sections 2.04(a) and 2.04(b)
above. The Trustee shall re-convey to the Seller the
Mortgage Loan to be released pursuant hereto in the
same manner, and on the same terms and conditions, as
it would a Mortgage Loan repurchased for breach of a
representation or warranty.
The Seller indemnifies and holds the Trust Fund, the Trustee, the
Depositor, the Servicer and each Certificateholder harmless against any and all
taxes, claims, losses, penalties, fines, forfeitures, reasonable legal fees and
related costs, judgments, and any other costs, fees and expenses that the Trust
Fund, the Trustee, the Depositor, the Servicer and any Certificateholder may
sustain in connection with any actions of such party relating to a repurchase of
a Mortgage Loan other than in compliance with the terms of this Section 2.04 and
the Mortgage Loan Purchase and Sale Agreement, to the extent that any such
action causes (i) any federal or state tax to be imposed on the Trust Fund,
including without limitation, any federal tax imposed on "prohibited
transactions" under Section 860F(a)(1) of the Code or
45
on "contributions after the startup date" under Section 860G(d)(1) of the Code,
or (ii) any REMIC formed hereby to fail to qualify as a REMIC at any time that
any Certificate is outstanding.
(d) Notwithstanding anything to the contrary in this
Agreement, Seller shall service and administer the
Additional Collateral, it being understood and agreed
that only Seller shall service and administer the
related securities accounts, lines of credit and
guarantees with respect to Additional Collateral.
Section 2.05 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 and the
other property described above, including without
limitation (x) continuation statements, and (y) such
other statements as may be occasioned by (1) any
change of name of Seller, 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
the Depositor in any Mortgage Loan or (4) any change
under the relevant UCC or other applicable laws. The
Depositor shall not 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, the
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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 mediate
transferees, including the Trustee, in the Mortgage
Loans and the other property described above. In
connection with the transactions contemplated by this
Agreement, the Depositor authorizes its immediate or
mediate transferee 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).
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
Principal Amount, or Class Notional Amount, as
applicable, or in the Percentage Interests, specified
herein. Each Class of Book-Entry Certificates will be
issued in the minimum denominations in Certificate
Principal Amount (or Class Notional Amount) specified
in the Preliminary Statement hereto and in integral
multiples of $1 in excess thereof. Each Class of
Non-Book-Entry Certificates other than the Residual
Certificates shall be issued in definitive, fully
registered form in the minimum denominations in
Certificate Principal Amount specified in the
Preliminary Statement hereto and in integral
multiples of $1 in excess thereof. The Residual
Certificates shall be issued as single Certificates
and maintained in definitive, fully registered form
in a denomination equal to 100% of the Percentage
Interest of each such Class. The Class X-A and Class
X-B Certificates shall each be issued as single
Certificates in a denomination equal to 100% of the
Percentage Interest of each such Class.
(b) The Certificates shall be executed by manual or
facsimile signature on behalf of the Trustee by an
authorized officer. Each Certificate shall, on
original issue, be authenticated by the Trustee or an
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 Trustee or
of an 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 the Trustee to the Trustee or the
Authenticating Agent for authentication and the
Trustee or the Authenticating Agent shall
authenticate and deliver such Certificates as in this
Agreement provided and not otherwise.
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(c) The Class X-B, Class B-4, Class B-5 and Class B-6
certificates offered and sold in reliance on the
exemption from registration under Rule 144A under the
Act shall be issued initially in the form of one or
more permanent global Certificates 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 Trustee is hereby appointed, and the Trustee 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 Trustee and the
appointment of a successor Trustee. The Certificate Registrar may appoint, by a
written instrument delivered to the Holders, any bank or trust 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 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 Principal Amount (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 Principal Amount (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
48
exchange, 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 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 G 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
H hereto.
(d) No transfer of an ERISA-Restricted Certificate in the
form of a Definitive Certificate shall be made to any
Person unless the Certificate Registrar has received
(A) a certificate substantially in the form of
Exhibit I hereto 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 the assets of the Trust Fund being deemed to be
"plan assets" subject to the prohibited transactions
provisions of ERISA, Section 4975 of the Code, or any
provisions of applicable federal, state or local law
substantially similar to the foregoing provisions of
ERISA or the Code ("Similar Law"), and will not
subject the Trustee, the Certificate Registrar, the
Servicer or the Depositor 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 ERISA, Section 4975 of the Code or
Similar Law. The preparation and delivery of the
certificates and opinions referred to above shall not
be an expense of the Trust Fund, the Trustee, the
Certificate Registrar or the Depositor.
Notwithstanding the foregoing, no Opinion of Counsel or certificate
shall be required for the initial issuance of the ERISA-Restricted Certificates.
Notwithstanding anything to the contrary herein, any purported transfer of an
ERISA-Restricted Certificate to or on behalf of an employee benefit plan subject
to Title I of ERISA or a plan subject to Section 4975 of the Code or a plan
subject to Similar Law without the delivery to the Certificate Registrar of a
certificate substantially in the form of Exhibit I
49
hereto or an Opinion of Counsel satisfactory to the Certificate Registrar as
described above shall be void and of no effect. The Trustee, the Certificate
Registrar and the Depositor 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) or for the Paying Agent 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 last preceding Holder of such Certificate that is
not a plan or a Person acting on behalf of a plan shall be entitled to recover
from any purported Holder of any ERISA-Restricted Certificate that was in fact
an employee benefit plan subject to Title I of ERISA or a plan subject to
Section 4975 of the Code or a plan subject to Similar Law or a Person acting on
behalf of any such plan at the time it became a Holder or, at such subsequent
time as it became such a plan or Person acting on behalf of such a plan, all
payments made on such ERISA-Restricted Certificate at and after either such
time; provided that none of the Depositor, the Certificate Registrar or the
Trustee shall be responsible for such recovery if they otherwise made a good
faith effort to comply with this Section 3.03(d).
(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 or beneficial
interest therein 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, in
the case of clause (ii), such person is (A) 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 or a beneficial interest therein,
the proposed transferee shall deliver to the Trustee and 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
50
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, the Certificate Registrar and the Trustee 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 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 at any subsequent time became a Disqualified Organization, agent or nominee
thereof, or Non-permitted Foreign Holder, all payments made on such Residual
Certificate at and after either of 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 that the registration of
transfer of such Residual Certificate was not in fact permitted by this Section
3.03(f), such transfer shall be absolutely null and void and shall vest no
rights in the purported transferee and 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 Trustee or 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 Trustee or 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 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 Principal Amount. Upon the issuance of any
51
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 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 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 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 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
Trustee shall execute and the Authenticating Agent
shall authenticate and deliver in exchange therefor a
like aggregate Certificate Principal Amount (or
Notional Amount) 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.
52
The Trustee may appoint a Paying Agent (which may be the Trustee) for
the purpose of making distributions to Certificateholders hereunder. The Trustee
shall cause any Paying Agent to execute and deliver to the Trustee an instrument
in which such Paying Agent shall agree with the Trustee that such Paying Agent
will hold all sums held by it for the payment to Certificateholders in 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 Trustee to any such Paying
Agent for the purpose of making distributions shall be paid to
Certificateholders on each Distribution Date and any amounts not so paid shall
be returned on such Distribution Date to the Trustee. If the Paying Agent is not
the Trustee, the Trustee 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 Certificate Owners pursuant to Section
3.09(c), the Trustee shall give all such notices and
communications specified herein to be given to
Holders of the Book-Entry Certificates to the
Clearing Agency.
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(c) If (i) (A) the Clearing Agency or the Depositor
advises the Paying Agent 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 Paying Agent, (ii) the
Depositor, at its option, advises the Paying Agent in
writing that it elects to terminate the book-entry
system through the Clearing Agency or (iii) after the
occurrence of an Event of Default, Certificate Owners
representing beneficial interests aggregating not
less than 50% of the Class Principal Amount (or Class
Notional Amount) 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 Servicer shall
establish and maintain one or more Custodial
Accounts, as provided herein, into which all
Scheduled Payments and unscheduled payments with
respect to the Mortgage Loans, net of any deductions
or reimbursements permitted under this Agreement,
shall be deposited. Prior to 1:00 p.m. New York City
time on each Distribution Account Deposit Date, the
Servicer shall remit to the Trustee for deposit into
the Distribution Account, all amounts so required to
be deposited into such account in accordance with the
terms of this Agreement.
(b) The Trustee, shall establish and maintain an Eligible
Account entitled "Distribution Account of ▇▇▇▇▇ Fargo
Bank N.A., as Trustee, for the benefit of ▇▇▇▇▇▇▇
▇▇▇▇▇ Mortgage Investors Trust Series MLCC 2004-B
Holders of Mortgage Pass-Through Certificates." The
Trustee shall, promptly upon receipt
54
from the Servicer on each 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 Servicer from the Custodial
Accounts in accordance with this Agreement, including the
amount of any Advances or Compensating Interest Payments with
respect to the Mortgage Loans required to be paid by the
Servicer; and
(ii) 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 Servicer has remitted in error to the
Distribution Account any amount not required to be
remitted in accordance with the definition of
Available Distribution Amount, it may at any time
direct the Trustee to withdraw such amount from the
Distribution Account for repayment to the Servicer,
as applicable, by delivery of an Officer's
Certificate of the Servicer to the Trustee which
describes the amount deposited in error.
(d) On each Distribution Date and Purchase Date, the
Trustee shall distribute the Available Distribution
Amount to the Certificateholders and any other
parties entitled thereto in the amounts and
priorities set forth in Section 5.02. The Trustee may
from time to time withdraw from the Distribution
Account and pay itself or the Servicer any amounts
permitted to be paid or reimbursed to such Person
from funds in the Distribution Account pursuant to
the clauses (A) through (D) of the definition of
Available Distribution Amount.
(e) Funds in the Distribution Account may be invested in
Permitted Investments selected by the Trustee, 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 Trustee or is
managed or advised by the Trustee or its affiliates,
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 shall be for
the benefit of the Trustee 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 deposited in such Distribution Account by
the Trustee out of its own funds, without any right
of reimbursement therefor, immediately as realized.
Any such funds that are not invested in Permitted
Investments may be held uninvested.
Section 4.02 Reports to Trustee and Certificateholders.
On each Distribution Date, the Trustee shall have prepared and shall
make available to each Certificateholder and other interested parties a written
report setting forth the following information (based solely on the report
provided to the Trustee by the Servicer pursuant to Section 9.18).
(a) the amount of the distributions, separately
identified, with respect to each Class of
Certificates;
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(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 Interest Shortfall, Basis
Risk Shortfall or Unpaid Basis Risk Shortfall (if
applicable) and the related accrued interest thereon,
with respect to each Class of Certificates;
(e) the Class Principal Amount of each Class of
Certificates after giving effect to the distribution
of principal on that Distribution Date;
(f) the Aggregated Stated Principal Balance of the
Mortgage Loans in each Mortgage Pool and the
applicable Net WAC of the Mortgage Loans at the end
of the related Prepayment Period;
(g) the Stated Principal Balance of the Mortgage Loans in
each Mortgage Pool whose Mortgage Rates adjust on the
basis of the One-Month LIBOR index and the Six-Month
LIBOR index at the end of the related Prepayment
Period;
(h) the Pro Rata Senior Percentage, Senior Percentage and
the Subordinate Percentage for each Mortgage Pool for
the following Distribution Date;
(i) the Senior Prepayment Percentage and Subordinate
Prepayment Percentage for each Mortgage Pool the
following Distribution Date;
(j) in the aggregate and with respect to each Mortgage
Pool, the amount of Servicing Fee paid to or retained
by the Servicer;
(k) in the aggregate and with respect to each Mortgage
Pool, the amount of Advances for the related Due
Period;
(l) in the aggregate and with respect to each Mortgage
Pool, 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;
(m) in the aggregate and with respect to each Mortgage
Pool, for any Mortgage Loan as to which the related
Mortgaged Property was an REO property during the
preceding calendar month, the principal balance of
that Mortgage Loan as of the close of business on the
last day of the related Due Period;
(n) in the aggregate and with respect to each Mortgage
Pool, 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;
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(o) in the aggregate and with respect to each Mortgage
Pool, the amount of Realized Losses incurred during
the preceding calendar month;
(p) in the aggregate and with respect to each Mortgage
Pool, the cumulative amount of Realized Losses
incurred since the Closing Date;
(q) the Realized Losses, if any, allocated to each Class
of Certificates on that Distribution Date;
(r) the Certificate Interest Rate for each Class of
Certificates for that Distribution Date;
(s) the amount of any Principal Transfer Amounts or
Interest Transfer Amounts paid to an
Undercollateralized Group or Principal Transfer
Amounts between Groups in the event of Rapid
Prepayment Conditions; and
(t) for each Class of Certificates, the amounts accrued
or paid in respect of each deemed interest rate cap
agreement under which such Class of Certificates is
deemed entitled to receive or deemed obligated to
make payments as provided for in Section 10.01
hereof.
The Trustee shall make such reports available each month via its
website at ▇▇▇▇://▇▇▇.▇▇▇▇▇▇▇.▇▇▇. Assistance in using the website may be
obtained by calling the Trustee'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 Trustee and indicating such. In preparing or furnishing the foregoing
information, the Trustee shall be entitled to rely conclusively on the accuracy
of the information or data regarding the Mortgage Loans and the related REO
Properties that has been provided to the Trustee by the Servicer, and the
Trustee shall not be obligated to verify, recompute, reconcile or recalculate
any such information or data.
Upon receipt by the Trustee of the reasonable advance written request
of any Certificateholder that is a savings and loan, bank or insurance company,
the Trustee 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
this Agreement, shall use reasonable efforts to obtain such information and
documentation from the 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 Trustee shall be entitled to be reimbursed by such
Certificateholders for the Trustee's actual expenses incurred in providing such
reports and access.
The Trustee shall prepare and file with the Internal Revenue Service
("IRS"), on behalf of the Trust Fund, an application for an employer
identification number on IRS Form SS-4 or by any other acceptable method. The
Trustee shall also file a Form 8811 as required. The Trustee, 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 Depositor. The Trustee
shall furnish any other information that is required by the Code and regulations
thereunder to be made available to Certificateholders. The Depositor shall cause
the Servicer to provide the Trustee with such information as is necessary for
the Trustee to prepare such reports.
57
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 Trustee or the Paying Agent
shall make 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 Trustee at least five Business Days prior to
the related Record Date by any Certificateholder
owning an aggregate initial Certificate Principal
Amount 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.
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 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
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 Amounts or initial Class Notional Amounts
(or Percentage Interests).
Section 5.02 Distributions from the Distribution Account.
(a) Subject to Sections 5.02(g) and 5.02(h), on each
Distribution Date, the Available Distribution Amount
for the related Mortgage Pool (in the case of the
Components of the Class X-A Certificates and the
Senior Certificates other than the Class X-B
Certificates) and the Mortgage Pools in the aggregate
(in the case of the Subordinate Certificates and the
Class X-B Certificates) shall be withdrawn by the
Trustee from the Distribution Account and allocated
among the classes of Senior Certificates and
Subordinate Certificates in the following order of
priority:
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(i) Concurrently, to the payment of the Interest
Distribution Amount and any accrued but unpaid Interest
Shortfalls with respect to each class of Senior Certificates
(other than the Class X Certificates) and the Components,
with, subject to the proviso set forth below, (x) all amounts
payable in respect of Component XB1, Component XB2 and
Component XB3 being payable to the Class X-B Certificates and
(y) all amounts payable in respect of the X-A1 Component and
the X-A2 Component being payable to the Class X-A
Certificates; provided, however, that on each Distribution
Date, amounts that would otherwise be payable to the Class X-A
or Class X-B Certificates under this clause (a)(i) will (A) in
the case of amounts otherwise payable to the Class X-A
Certificates in respect of the X-A1 Component, be paid to the
Class A-1 Certificates to the extent of any Basis Risk
Shortfalls and Unpaid Basis Risk Shortfalls for the Class A-1
Certificates as of such Distribution Date, (B) in the case of
amounts otherwise payable to the Class X-A Certificates in
respect of the X-A2 Component, be paid to the Class A-2
Certificates to the extent of any Basis Risk Shortfalls and
Unpaid Basis Risk Shortfalls for the Class A-2 Certificates as
of such Distribution Date and (C) in the case of amounts
otherwise payable to the Class X-B Certificates, be paid to
the Class B-1, Class B-2 and Class B-3 Certificates to the
extent of any Basis Risk Shortfalls and Unpaid Basis Risk
Shortfalls for the Class B-1, Class B-2 and Class B-3
Certificates, respectively, as of such Distribution Date;
(ii) Concurrently, to the Senior Certificates
from the Available Distribution Amount remaining in the
related Mortgage Pool after application of amounts pursuant to
clause (i) above, as follows:
(a) sequentially to the Class A-R and Class A-1
Certificates, in that order, the Senior Principal Distribution Amount for Pool
1, until their respective Class Principal Amounts have been reduced to zero;
(b) to the Class A-2 Certificates, the Senior Principal
Distribution Amount for Pool 2, until its Class Principal Amount has been
reduced to zero; and
(c) to the Class A-3 Certificates, the Senior Principal
Distribution Amount for Pool 3, until its Class Principal Amount has been
reduced to zero.
(iii) From the Available Distribution Amount from
the Mortgage Pools in the aggregate remaining after the
application of amounts pursuant to clauses (i) and (ii) above,
to the Class B-1, Class B-2 and Class B-3 Certificates,
sequentially, in that order, the Interest Distribution Amount
and any Interest Shortfalls, in each case, for such Class on
such date;
(iv) From the Available Distribution Amount from
the Mortgage Pools in the aggregate remaining after
application of amounts pursuant to clauses (i) through (iii)
above, to the Class B-1, Class B-2 and Class B-3 Certificates,
sequentially, in that order, such Class' Subordinate Class
Percentage of the Subordinate Principal Distribution Amount
for each Mortgage Pool, until its Class Principal Amount has
been reduced to zero;
(v) From the remaining Available Distribution
Amount from the Mortgage Pools in the aggregate remaining
after application of amounts pursuant to clauses (i) through
(iv) in the following order of priority:
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(a) to the Class B-4 Certificates, the payment of its
Interest Distribution Amount and any outstanding Interest Shortfalls;
(b) to the Class B-4 Certificates, such Class'
Subordinate Class Percentage of the Subordinate Principal Distribution Amount
for each Mortgage Pool, until its Class Principal Amount has been reduced to
zero;
(c) to the Class B-5 Certificates, the payment of its
Interest Distribution Amount and any outstanding Interest Shortfalls;
(d) to the Class B-5 Certificates, such Class'
Subordinate Class Percentage of the Subordinate Principal Distribution Amount
for each Mortgage Pool, until its Class Principal Amount has been reduced to
zero;
(e) to the Class B-6 Certificates, the payment of its
Interest Distribution Amount and any outstanding Interest Shortfalls; and
(f) to the Class B-6 Certificates, such Class'
Subordinate Class Percentage of the Subordinate Principal Distribution Amount
for each Mortgage Pool, until its Class Principal Amount has been reduced to
zero;
(vi) To the Class A-R Certificate, any remaining
amount of the Available Distribution Amount from the Mortgage
Pools in the aggregate allocated as provided in Section
5.02(d).
Amounts that would have been distributed in respect of the Class X-A and Class
X-B Certificates, but for the proviso set forth in clause (a)(i) above shall be
treated as having been distributed to the Class X-A Certificates (in respect of
the X-A1 Component, in the case of payments to the Class A-1 Certificates, or
the X-A2 Component, in the case of payments to the Class A-2 Certificates) and
the Class X-B Certificates, as the case may be, for purposes of determining
subsequent Interest Shortfalls with respect to the Class X-B Certificates and
the Components of the Class X-A Certificates.
(b) On each Distribution Date on and after the Credit
Support Depletion Date, the Available Distribution
Amount for each Mortgage Pool shall be distributed to
the remaining Classes of Certificates of the related
Certificate Group (and to the related Components of
the Class X-A Certificates) on a pro rata basis,
first, to pay the Interest Distribution Amount and
any accrued but unpaid Interest Shortfalls; provided,
however, that on each Distribution Date with respect
to the Class A-1 or Class A-2 Certificates (as
applicable) (x) the amount of the Interest
Distribution Amount that would otherwise be payable
to the X-A1 Component will be paid to the Class A-1
Certificates to the extent of any Basis Risk
Shortfalls or Unpaid Basic Risk Shortfalls for the
Class A-1 Certificates and (y) the amount of the
Interest Distribution Amount that would otherwise be
payable to the X-A2 Component will be paid to the
Class A-2 Certificates to the extent of any Basis
Risk Shortfalls or Unpaid Basis Risk Shortfalls for
the Class A-2 Certificates; second, to pay the Senior
Principal Distribution Amount for such Mortgage Pool;
and third, to the Class A-R Certificate, any
remaining Available Distribution Amount from such
Mortgage Pool.
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Amounts that would have been distributed in respect of the X-A1 Component or the
X-A2 Component but for the proviso set forth in this Section 5.02(b) shall be
treated as having been distributed to such Components for purposes of
determining subsequent Interest Shortfalls with respect to such Components.
(c) Notwithstanding the priority and allocation set forth
in Section 5.02(a)(iv) and Section 5.02(a)(v) above,
if with respect to any Class of Subordinate
Certificates on any Distribution Date the sum of the
related Class Subordination Percentages of such Class
and of all other Classes of Subordinate Certificates
which have a higher numerical Class designation than
such Class is less than the Original Applicable
Credit Support Percentage for such Class, no
distribution of Principal Prepayments shall be made
to any such Classes and the amount of such Principal
Prepayment otherwise distributable to such Classes
shall be distributed to any Classes of Subordinate
Certificates having lower numerical Class
designations than such Class, pro rata, based on the
Class Principal Amounts of the respective Classes
immediately prior to such Distribution Date and shall
be distributed in the sequential order provided in
Section 5.02(a)(iv) and Section 5.02(a)(v) above.
(d) Amounts distributed to the Residual Certificates
pursuant to subparagraph (a)(vi) of this Section 5.02
on any Distribution Date shall be allocated among the
REMIC residual interests represented thereby such
that each such interest is allocated the excess of
funds available to the related REMIC over required
distributions to the regular interests in such REMIC
on such Distribution Date.
(e) For purposes of distributions provided in this
Section 5.02, each Mortgage Pool shall "relate" to
the Senior Class or Classes of the applicable Related
Certificate Group, the X-A1 Component shall be
related to Pool 1 and the X-A2 Component shall be
related to Pool 2.
(f) For purposes of distributions of interest in
paragraph (a) of this Section 5.02 such distributions
to a Class of Certificates on any Distribution Date
shall be made first, in respect of Current Interest;
and second, in respect of Interest Shortfalls.
(g) Notwithstanding the priority of distributions set
forth in paragraph (a) of this Section 5.02, if on
any Distribution Date prior to the Credit Support
Depletion (1) either one of the Rapid Prepayment
Conditions is satisfied on such date and (2) the
Certificate Principal Amount of the Senior
Certificates relating to one of the Mortgage Pools
has been reduced to zero, then that portion of the
Available Distribution Amount for such Mortgage Pool
described in Section 5.02(a)(ii) that represents
principal collections on the Mortgage Loans shall be
applied as an additional distribution to the
remaining Classes of Senior Certificates on a pro
rata basis in reduction of, and in proportion to, the
Class Principal Amounts thereof; provided, however,
that any such amounts distributable to the Class A-R
and Class A-1 Certificates shall be distributed
sequentially thereto in such order.
(h) If, on any Distribution Date, any Certificate Group
or Groups would constitute an Undercollateralized
Group and the other Certificate Group or Groups
constitute an Overcollateralized Group, then
notwithstanding Section 5.02(a)(ii), the Available
Distribution Amount for the Overcollateralized Group
or Groups, to the extent remaining following
distributions of interest and principal to the
related Senior Certificates of that Certificate Group
or Groups and to the Components of the Class X-A
Certificates, if any, related to the
61
Overcollateralized Group or Groups, shall be
distributed up to the sum of the Interest Transfer
Amount and the Principal Transfer Amount for the
Undercollateralized Group or Groups to the Senior
Certificates related to the Undercollateralized Group
or Groups and to the Components of the Class X-A
Certificates related to the Undercollateralized Group
or Groups in payment of accrued but unpaid interest,
if any, and then to such Senior Certificates as
principal, in the same order and priority as such
Certificates would receive other distributions of
principal.
Section 5.03 Allocation of Losses.
(a) On or prior to each Distribution Date, the Trustee
shall aggregate the information provided by the
Servicer with respect to the total amount of Realized
Losses, with respect to the Mortgage Loans for the
related Distribution Date.
(b) On each Distribution Date, the principal portion of
Realized Losses with respect to such Distribution
Date shall be allocated as follows:
(i) Realized Losses shall be allocated in the
following order:
first, to the Classes of Subordinate Certificates in
reverse order of their respective numerical Class designations
(beginning with the Class of Subordinate Certificates with the
highest numerical Class designation) until the Class Principal
Amount of each such Class is reduced to zero; and
second, to each Class of Senior Certificates relating
to the Mortgage Pool which sustained such loss (allocated
among the related Senior Classes on a pro rata basis), in each
case, until the Class Principal Amount of each Class of Senior
Certificates is reduced to zero.
(ii) Reserved.
(iii) The Class Principal Amount of the Class of
Subordinate Certificates 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 Amounts of all outstanding
Classes of 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 for the following Distribution Date.
(iv) Any allocation of a loss pursuant to this
section to a Class of Certificates shall be achieved by
reducing the Class Principal Amount thereof by the amount of
such loss.
(c) Notwithstanding the other provisions of Section 5.03,
the first $0.91 of Realized Losses shall not be
allocated to any Class of Certificates.
Section 5.04 Advances.
If the Servicer fails to remit any Advance required to be made under
this Agreement, the Trustee solely in its capacity as successor Servicer shall
itself make, or shall cause the successor Servicer to make, such Advance. If the
Trustee solely in its capacity as successor Servicer determines that an Advance
is
62
required, it shall on the Business Day preceding the related Distribution Date
immediately following such Determination Date remit from its own funds (or funds
advanced by the successor Servicer) for deposit in the Distribution Account
immediately available funds in an amount equal to such Advance. Each of the
Trustee and the Servicer shall be entitled to be reimbursed for all Advances
made by it, respectively. Notwithstanding anything to the contrary herein, in
the event the Trustee (or successor servicer) determines in its reasonable
judgment that an Advance is Nonrecoverable, the Trustee (or successor servicer)
shall be under no obligation to make such Advance.
ARTICLE VI
CONCERNING THE TRUSTEE; EVENTS OF DEFAULT
Section 6.01 Duties of Trustee.
(a) The Trustee, except during the continuance of an
Event of Default, undertakes to perform such duties
and only such duties as are specifically set forth in
this Agreement. Any permissive right of the Trustee
provided for in this Agreement shall not be construed
as a duty of the Trustee. If an Event of Default has
occurred and has not otherwise been cured or waived,
the Trustee shall exercise such of the rights and
powers vested in it by this Agreement and use the
same degree of care and skill in their exercise as a
prudent Person would exercise or use under the
circumstances in the conduct of such Person's own
affairs.
(b) The Trustee, upon receipt of all resolutions,
certificates, statements, opinions, reports,
documents, orders or other instruments furnished to
the Trustee 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 the Trustee shall not be
responsible for the accuracy or content of any such
resolution, certificate, statement, opinion, report,
document, order or other instrument furnished by the
Servicer to the Trustee pursuant to this Agreement,
and shall not be required to recalculate or verify
any numerical information furnished to the Trustee
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 Trustee shall take such action as
it deems appropriate to cause the instrument to be
corrected, and if the instrument is not corrected to
the Trustee's satisfaction, the Trustee 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) The Trustee shall not 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, the
Trustee shall not 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 of liability for its
own negligent action, its own negligent failure to
act or its own willful misconduct; provided, however,
that:
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(i) The Trustee shall not be 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 (other than resulting from a failure by the Servicer
(i) to remit funds (or to make Advances) or (ii) to furnish
information to the Trustee when required to do so) 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) No provision of this Agreement shall require
the Trustee 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 adequate indemnity against such
risk or liability is not reasonably assured to it; and none of
the provisions contained in this Agreement shall in any event
require the Trustee to perform, or be responsible for the
manner of performance of, any of the obligations of the
Servicer under this Agreement;
(iv) The Trustee shall not be responsible for any
act or omission of the Servicer, the Depositor or the Seller.
(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 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.
(e) 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 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 exercising any trust or power conferred
upon the Trustee under this Agreement.
(f) The Trustee shall not 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 adequate indemnity against such risk or
liability is not reasonably assured to it, and none
of the provisions contained in this Agreement shall
in any event require the Trustee to perform, or be
responsible for the manner of performance of, any of
the obligations of the
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Servicer under this 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 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) Except as otherwise provided herein, the Trustee
shall not 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
re-recording, refiling or redepositing of any
thereof, (B) to see to the provision of 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
Servicer delivered to the Trustee pursuant to this
Agreement believed by the Trustee to be genuine and
to have been signed or presented by the proper party
or parties.
(i) The Trustee shall not 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, unless it shall be proved that the Trustee
was negligent in ascertaining the pertinent facts.
(j) Notwithstanding anything in this Agreement to the
contrary, Trustee shall not 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 has been advised of the
likelihood of such loss or damage and regardless of
the form of action.
Section 6.02 Certain Matters Affecting the Trustee.
Except as otherwise provided in Section 6.01:
(i) The Trustee 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) The Trustee 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;
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(iii) The Trustee shall not 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, the Trustee shall not be bound to
make any investigation into the facts or matters stated in any
resolution, certificate, statement, instrument, opinion,
report, notice, request, consent, order, approval, bond or
other paper or document (provided the same appears regular on
its face), unless requested in writing to do so by the Holders
of at least a majority in Class Principal Amount (or
Percentage Interest) of each Class of Certificates; provided,
however, that, if the payment within a reasonable time to the
Trustee 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, not reasonably assured to the Trustee
by the security afforded to it by the terms of this Agreement,
the Trustee may require reasonable indemnity 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 by the
Trust Fund;
(v) The Trustee 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
conferred on it by such appointment, provided that the Trustee
shall continue to be responsible for its duties and
obligations hereunder to the extent provided herein, and
provided further that the Trustee shall not be responsible for
any misconduct or negligence on the part of any such agent or
attorney appointed with due care by the Trustee;
(vi) The Trustee shall not be under any
obligation to exercise any of the trusts or powers vested in
it by this Agreement 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 reasonable security or indemnity against the
costs, expenses and liabilities which may be incurred therein
or thereby;
(vii) The right of the Trustee to perform any
discretionary act enumerated in this Agreement shall not be
construed as a duty, and the Trustee shall not be answerable
for other than its negligence or willful misconduct in the
performance of such act; and
(viii) The Trustee shall not be required to give
any bond or surety in respect of the execution of the Trust
Fund created hereby or the powers granted hereunder.
Section 6.03 Trustee Not Liable for Certificates.
The Trustee make no representations as to the validity or sufficiency
of this Agreement or of the Certificates (other than the certificate of
authentication on the Certificates) or of any Mortgage Loan, or related document
save that the Trustee represents 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 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
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regardless of whether such enforcement is considered in a proceeding in equity
or at law. The Trustee 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 shall
not be responsible for the legality or validity of this Agreement or the
validity, priority, perfection or sufficiency of the security for the
Certificates issued or intended to be issued hereunder. Except as otherwise
provided herein, the Trustee shall have no 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 May Own Certificates.
The Trustee and any Affiliate or agent of the Trustee 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 or such
agent.
Section 6.05 Eligibility Requirements for Trustee.
The Trustee hereunder shall at all times (i) be an institution insured
by the FDIC, (ii) a corporation or national banking association, organized and
doing business under the laws of the United States of America or any state
thereof, 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 be an
Affiliate of the 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.
(a) The Trustee may at any time resign and be discharged
from the trust hereby created by giving written
notice thereof to the Depositor and the Servicer.
Upon receiving such notice of resignation, the
Depositor will promptly appoint a successor trustee
by written instrument, one copy of which instrument
shall be delivered to the resigning Trustee, one copy
to the successor trustee and one copy to the
Servicer. If no successor trustee shall have been so
appointed and shall have accepted appointment within
30 days after the giving of such notice of
resignation, the resigning Trustee may petition any
court of competent jurisdiction for the appointment
of a successor trustee.
(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 shall
become incapable of acting, or shall be adjudged a
bankrupt or insolvent, or a receiver of the Trustee
of its property shall be appointed, or any public
officer shall take charge or control of the Trustee
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,
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or (iv) the continued use of the Trustee 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 and the Depositor
shall appoint a successor trustee by written
instrument, one copy of which instrument shall be
delivered to the Trustee so removed, one copy each to
the successor trustee and one copy to the Servicer.
(c) The Holders of more than 50% of the Class Principal
Amount (or Percentage Interest) of each Class of
Certificates may at any time upon 30 days' written
notice to the Trustee and to the Depositor remove the
Trustee 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 and one copy to the Trustee; the
Depositor shall thereupon appoint a successor trustee
in accordance with this Section.
(d) Any resignation or removal of the Trustee and
appointment of a successor trustee pursuant to any of
the provisions of this Section shall become effective
upon acceptance by the successor trustee of
appointment, as provided in Section 6.07.
Section 6.07 Successor Trustee.
(a) Any successor trustee appointed as provided in
Section 6.06 shall execute, acknowledge and deliver
to the Depositor and to its predecessor trustee, an
instrument accepting such appointment hereunder, and
thereupon the resignation or removal of the
predecessor trustee shall become effective and such
successor trustee, without any further act, deed or
conveyance, shall become fully vested with all the
rights, powers, duties and obligations of its
predecessor hereunder, with like effect as if
originally named as trustee. The predecessor trustee
shall deliver to the successor trustee 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 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 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 by a successor trustee of appointment
as provided in this Section, the predecessor trustee
shall mail notice of the succession of such successor
trustee hereunder to all Holders of Certificates at
their addresses as shown in the Certificate Register
and to any Rating Agency. The expenses of such
mailing shall be borne by the Depositor.
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Section 6.08 Merger or Consolidation of Trustee.
Any Person into which the Trustee may be merged or with which it may be
consolidated, or any Person resulting from any merger, conversion or
consolidation to which the Trustee shall be a party, or any Persons succeeding
to the business of the Trustee shall be the successor to the Trustee 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 Amount (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
advisable (or the Trustee has been advised by the
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 Trustee to make Advances pursuant to Section
5.04 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 at the sole discretion of the
Trustee;
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(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 Servicer.
(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 Certificateholders of the
appointment shall be required under Section 6.07
hereof.
(f) 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. If such
an agent is so appointed by the Trustee, 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
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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 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 Trustee.
The Trustee and its respective directors, officers, employees and
agents shall be entitled to indemnification from the Depositor and the Trust
Fund; provided that the Trust Fund's indemnification under this Section 6.11 is
limited by Section 4.01(d) for any loss, liability or expense (including,
without limitation, reasonable attorneys' fees and disbursements (and, in
connection with any custody agreement the Trustee may enter pursuant to this
Agreement, including the reasonable compensation and the expenses and
disbursements of its agents or counsel), incurred without negligence or willful
misconduct on its part, arising out of, or in connection with, the acceptance or
administration of the trusts created hereunder or in connection with the
performance of their duties hereunder 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, provided that:
(i) with respect to any such claim, the Trustee
shall have given the Depositor written notice thereof promptly
after the Trustee shall have knowledge thereof;
(ii) while maintaining control over its own
defense, the Trustee shall cooperate and consult fully with
the Depositor in preparing such defense;
(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 entered into
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without the prior consent of the Depositor, which consent
shall not be unreasonably withheld; and
(iv) the Trust's Fund's indemnification
obligations hereunder shall be limited to losses, liability,
costs or expenses, payments in respect of which by the Trust
Fund would constitute "unanticipated expenses" within the
meaning of Treasury Regulations Section 1.860G-1(b)(3)(ii)).
The provisions of this Section 6.11 shall survive any termination of
this Agreement and the resignation or removal of the Trustee 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 the Trustee.
As compensation for its services hereunder, the Trustee shall be
entitled to retain any and all investment earnings on amounts on deposit in the
Distribution Account pending the distribution of such funds to
Certificateholders on each Distribution Date (which compensation shall not be
limited by any provision of law in regard to the compensation of a trustee of an
express trust). Any expenses incurred by the Trustee shall be reimbursed to the
extent provided in Section 6.11.
Section 6.13 Collection of Monies.
Except as otherwise expressly provided in this Agreement, the Trustee
may demand payment or delivery of, and shall receive and collect, all money and
other property payable to or receivable by the Trustee pursuant to this
Agreement. 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) "Event of Default," wherever used herein, means any
one of the following events:
(i) any failure by the Servicer to make any
Advance, to deposit in the Custodial Account or to remit to
the Trustee any payment required to be made under the terms of
this Agreement on the day it is due;
(ii) any material breach on the part of the
Servicer of any other term, agreement, covenant,
representation or warranty in this Agreement that has not been
cured after written notice and a thirty (30) day curative
period;
(iii) following entry against the Servicer of a
decree or order of a court or agency or supervisory authority
having jurisdiction for the appointment of a trustee,
conservator, receiver, liquidator, assignee, custodian or
sequestrator (or other similar official) for the Servicer in
any federal or state bankruptcy, insolvency, readjustment of
debt, marshaling of assets and liabilities or similar
proceedings, or for the winding-up or liquidation of the
Servicer's affairs, if such decree or order has remained in
force undischarged or unstayed for a period of sixty (60)
days;
(iv) upon consent by the Servicer to the
appointment of a trustee, conservator, receiver, liquidator,
assignee, custodian or sequestrator (or other similar
official) in, or commencement of a voluntary case under, any
federal or state bankruptcy
72
insolvency, readjustment of debt, marshaling of assets and
liabilities or similar proceedings of or relating to the
Servicer or of or relating to all or substantially all of the
Servicer's property;
(v) upon the Servicer's (A) admitting in writing
its inability to pay its debts generally as they become due,
(B) filing a petition to take advantage of any applicable
insolvency or reorganization statute, (C) making an assignment
for the benefit of its creditors or (D) voluntarily suspending
payment of its obligations;
(vi) the Servicer ceases to be eligible to sell
mortgage loans to or service mortgage loans for FNMA, FHLMC or
GNMA or ceases to be a HUD-approved mortgagee;
(vii) the Servicer (a) merges or consolidates with
or into another Person, (b) sells substantially all of its
assets or (c) sells a controlling interest that results in a
change in control of the Servicer (other than any such change
of control that results in the Servicer being owned or
controlled by an Affiliate of the Servicer, in existence on
the date of this Agreement).
If an Event of Default shall occur and be continuing, 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
Agreement, by notice in writing to the Servicer either (x) the Depositor or (y)
the Trustee may (or the Trustee shall if so directed by Certificateholders
evidencing more than 50% of the Class Principal Amount (or Class Notional
Amount) of each Class of Certificates) terminate all of the rights and
obligations of the Servicer under this Agreement in accordance with the terms of
this Agreement. On or after the receipt by the Servicer of such written notice,
all authority and power of the Servicer, 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 Servicer as attorney-in-fact or otherwise, any and all documents and
other instruments, and to do or accomplish all other acts or things necessary or
appropriate to effect the purposes of such notice of termination, whether to
complete the transfer and endorsement or assignment of the Mortgage Loans and
related documents or otherwise.
If any Event of Default shall occur, the Trustee, upon becoming aware
of the occurrence thereof, shall promptly notify the Depositor and each Rating
Agency of the nature and extent of such Event of Default.
(b) Within 90 days of the time the Servicer receives a
notice of termination from the Trustee pursuant to
Section 6.14, the Trustee, unless another Servicer
shall have been appointed, shall be the successor in
all respects to the Servicer in its capacity as such
under this Agreement and the transactions set forth
or provided for therein 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 Servicer
thereunder, including the obligation to make
Advances; provided, however, that any failure to
perform such duties or responsibilities caused by the
Servicer's failure to provide information required by
this Agreement or this Agreement shall not be
considered a default by the Trustee hereunder. In
addition, the Trustee shall have no responsibility
for any act or omission of the Servicer prior to the
issuance of any notice of termination. The Trustee
shall have no liability relating to any
representations and warranties of the Servicer set
forth in this Agreement. In the Trustee's capacity as
such successor, the Trustee
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shall have the same limitations on liability provided
to the Servicer in this Agreement. As compensation
therefor, the Trustee shall be entitled to receive
all compensation payable to the Servicer under this
Agreement.
The Trustee shall be entitled to be reimbursed by the Depositor and the
Trust Fund (pursuant to Section 6.11 but without regard to any annual limitation
thereunder), in the event that the Servicer does not reimburse the Trustee under
this Agreement, for all costs associated with the transfer of servicing from the
predecessor Servicer, including, without limitation, any costs or expenses
associated with the termination of the predecessor Servicer, the appointment of
a successor servicer, the complete transfer of all servicing data and the
completion, correction or manipulation of such servicing data as may be required
by the Trustee or any successor servicer to correct any errors or
insufficiencies in the servicing data or otherwise to enable the Trustee or
successor servicer to service the Mortgage Loans property and effectively (such
costs, "Servicing Transfer Costs").
(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, with the
consent of the Depositor, appoint on its own behalf
any established housing and home finance institution
servicer, or servicing or mortgage servicing
institution having a net worth of not less than
$15,000,000 and meeting such other standards for a
successor servicer as are set forth in this Agreement
and reasonably satisfactory to the Depositor, as the
successor to the Servicer in the assumption of all of
the responsibilities, duties or liabilities of a
servicer, like the Servicer. Any entity designated by
the Trustee as a successor servicer 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 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 under this Agreement. In
connection with such appointment and assumption, the
Trustee may make such arrangements for the
compensation of such successor out of payments on
Mortgage Loans as it and such successor shall agree;
provided, however, that no such compensation shall be
in excess of that permitted to the Servicer under
this Agreement. 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
servicing to be conducted hereunder which are not
inconsistent herewith and therewith. Neither the
Trustee nor any other successor servicer shall be
deemed to be in default hereunder by reason of any
failure to make, or any delay in making, any
distribution hereunder or any portion thereof caused
by (i) the failure of the Servicer to deliver, or any
delay in delivering, cash, documents or records to
it, (ii) the failure of the Servicer to cooperate as
required by this Agreement, (iii) the failure of the
Servicer to deliver the Mortgage Loan data to the
Trustee as required by this Agreement or (iv)
restrictions imposed by any regulatory authority
having jurisdiction over the Servicer.
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
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remedies, of the Certificateholders (including the institution 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 Certificateholders
may waive any default or Event of Default by the 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
Trustee 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 Servicer or appointment of a successor to the
Servicer, in each case as provided herein, the Trustee shall promptly mail
notice thereof by first class mail to 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 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 Amount (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 Servicer or any successor servicer from its rights and duties
as servicer) at the request, order or direction of any of the
Certificateholders, unless such Certificateholders shall have offered to the
Trustee reasonable security or indemnity 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 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 or be unjustly prejudicial to the
non-assenting Certificateholders.
Section 6.19 Preparation of Tax Returns and Other Reports.
(a) The Trustee 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
Trustee shall file federal tax returns,
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all in accordance with Article X hereof. The Trustee
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, and shall file any other
documents to the extent required by applicable state
tax law (to the extent such documents are in the
Trustee's possession). The Trustee 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 Trustee as the
Depositor may reasonably request in writing, and
shall distribute to each Certificateholder such forms
and furnish such information within the control of
the Trustee as are required by the Code and the REMIC
Provisions to be furnished to them, and will prepare
and distribute to Certificateholders Form 1099
(supplemental tax information) (or otherwise furnish
information within the control of the Trustee) to the
extent required by applicable law.
(b) The Trustee shall prepare and file with the Internal
Revenue Service ("IRS"), on behalf of each of REMIC
1, REMIC 2 and the Upper Tier REMIC, an application
on IRS Form SS-4 or shall obtain a Taxpayer
Identification Number for each of REMIC 1, REMIC 2
and the Upper Tier REMIC using another reasonable
method. If the application is filed on Form SS-4, the
Trustee, upon receipt from the IRS of the Notice of
Taxpayer Identification Number Assigned for each
REMIC, shall promptly forward copies of such notices
to the Depositor, upon request. The Trustee will file
an IRS Form 8811.
(c) The Depositor shall prepare or cause to be prepared
the initial current report on Form 8-K. Thereafter,
within 15 days after each Distribution Date, the
Trustee shall, 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 with a copy of
the statement to the Certificateholders for such
Distribution Date as an exhibit thereto. Prior to
January 31, 2005, the Trustee shall, in accordance
with industry standards, file a Form 15 Suspension
Notification with respect to the Trust Fund, if
applicable. Prior to March 31, 2005, the Trustee
shall file a Form 10-K executed by the Depositor, in
substance conforming to industry standards, with
respect to the Trust Fund. The Depositor shall be
responsible for preparing all filings and
certificates required by the ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act of
2002. The Trustee agrees to promptly furnish to the
Depositor, 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 Depositor
reasonably deems appropriate to prepare and file all
necessary reports with the Commission.
Section 6.20 Annual Certificate by Trustee.
(a) By March 15th of each year for which a Form 10-K is
to be filed with a certification by the Depositor, an
officer of the Trustee shall execute and deliver an
Officer's Certificate, signed by the senior officer
in charge of the Trustee or any officer to whom that
officer reports, to the Depositor for the benefit of
such Depositor and its officers, directors and
affiliates, certifying as to the matters described in
the Officer's Certificate attached hereto as Exhibit
P.
(b) The Trustee shall indemnify and hold harmless the
Depositor and its officers, directors, agents and
affiliates from and against any losses, damages,
penalties,
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fines, forfeitures, reasonable legal fees and related
costs, judgments and other costs and expenses arising
out of or based upon a breach by the Trustee or any
of its officers, directors, agents or affiliates of
its obligations under this Section 6.20 any material
misstatement or omission in the Officer's Certificate
required under this Section or the negligence, bad
faith or willful misconduct of the Trustee in
connection therewith. If the indemnification provided
for herein is unavailable or insufficient to hold
harmless the Depositor, then the Trustee agrees that
it shall contribute to the amount paid or payable by
the Depositor as a result of the losses, claims,
damages or liabilities of the Depositor in such
proportion as is appropriate to reflect the relative
fault of the Trustee on the one had and the Depositor
on the other in connection with a breach of the
Trustee's obligations under this Section 6.20, any
material misstatement or omission in the Officer's
Certificate required under this Section or the
Trustee's negligence, bad faith or willful misconduct
in connection therewith.
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 Servicer and the Depositor created
hereby (other than the obligation of the Trustee to
make payments to 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 at auction in
accordance with Section 7.01(c) 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) Any termination of the Trust Fund pursuant to clause
(a)(ii) above shall be effected by the auction by the
Trustee of all of the Mortgage Loans and REO
Properties via a solicitation of bids in accordance
with procedures to be agreed upon by the Trustee and
the Depositor. The Trustee shall accept the highest
such bid, provided that such bid equals or exceeds
the amount described in the definition of "Optional
Termination Price." Notwithstanding anything to the
contrary herein, the Optional Termination Price
received by the Trustee shall be deposited by the
Trustee directly into the Distribution Account no
later than the Business Day prior to the date of
termination.
The right of the Trustee to conduct an auction pursuant to the
preceding paragraph shall be conditioned upon the aggregate outstanding Stated
Principal Balance of the Mortgage Loans, at the time
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of such auction, aggregating ten (10) percent or less of the Stated Principal
Balance of the Mortgage Loans as of the Cut-off Date.
(d) The Servicer and the Trustee shall be reimbursed from
the Optional Termination Price for any Advances,
Servicer Advances, accrued and unpaid Servicing Fees,
the cost of any auction conducted pursuant to (c)
above or other amounts with respect to the Mortgage
Loans that are reimbursable to such parties under
this Agreement.
Section 7.02 Procedure Upon Termination of Trust Fund.
(a) Notice of any optional termination pursuant to the
provisions of Section 7.01(c) specifying the
Distribution Date upon which the final distribution
shall be made or the Purchase Date, shall be given
promptly by the Trustee by first class mail to
Certificateholders mailed no later than the first day
of the month in which the Distribution Date selected
for purchase of the Mortgage Loans occurs or upon (x)
the sale of all of the property of the Trust Fund by
the Trustee 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
Purchase Date and the Distribution Date upon which
final distribution on the 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
Trustee therein specified. The Trustee shall give
such notice to the Certificate Registrar at the time
such notice is given to Holders of the Certificates.
Upon any such termination, the duties of the Trustee
and the Certificate Registrar with respect to the
Certificates shall terminate and the Trustee shall
terminate the Distribution Account and any other
account or fund maintained with respect to the
Certificates, subject to the Trustee's obligation
hereunder to hold all amounts payable to
Certificateholders in trust without interest pending
such payment.
(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 Trustee shall
give a second written notice to the remaining
Certificateholders to surrender their Certificates
for cancellation and receive the final distribution
with respect thereto. If within one year after the
second notice any Certificates shall not have been
surrendered for cancellation, the Trustee 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 Trustee 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 Trustee 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.
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(c) Any reasonable expenses incurred by the Trustee, to
the extent that such expenses, if paid or reimbursed
by the Trust Fund, would constitute "unanticipated
expenses" within the meaning of Treasury Regulations
Section 1.860G-1(b)(3)(ii), in connection with any
redemption or termination or liquidation of the Trust
Fund shall be reimbursed from proceeds received from
the liquidation of the Trust Fund.
Section 7.03 Additional Trust Fund Termination Requirements.
(a) Any termination of the Trust Fund shall be effected
in accordance with the following additional
requirements, unless the Trustee seeks and receives
an Opinion of Counsel (at the expense of such
requesting party), addressed to the Trustee, to the
effect that the failure of the Trust Fund to comply
with the requirements of this Section 7.03 will not
(I) result in the imposition of taxes on any REMIC
under the REMIC Provisions or (II) cause any REMIC
established hereunder to fail to qualify as a REMIC
at any time that any Certificates are outstanding:
(i) Within 89 days prior to the time of the
making of the final payment on the Certificates upon
notification to the Depositor that it intends to exercise its
option to cause the termination of the Trust Fund, the Trustee
shall adopt a plan of complete liquidation prepared by the
Depositor of the Trust Fund on behalf of each REMIC, meeting
the requirements of a qualified liquidation under the REMIC
Provisions;
(ii) Any sale of the assets of the Trust Fund
pursuant to Section 7.01 or 7.02 shall be a sale for cash and
shall occur at or after the time of adoption of such a plan of
complete liquidation and prior to the time of making of the
final payment on the Certificates;
(iii) On the date specified for final payment of
the Certificates, the Trustee shall make final distributions
of principal and interest on the 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 Trust Fund (and
each REMIC) shall terminate at that time; and
(iv) In no event may the final payment on the
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 Trustee under
this Section and to take such other action in
connection therewith as may be reasonably requested
by the Trustee.
ARTICLE VIII
RIGHTS OF CERTIFICATEHOLDERS
Section 8.01 Limitation on Rights of Holders.
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(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 Trustee 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 itself of any provision of this
Agreement to institute any suit, action or proceeding
in equity or at law upon, under or with respect to
this Agreement, 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 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
and the Trustee, that no one or more Holders of
Certificates shall have any right in any manner
whatever by virtue or by availing itself 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.
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(b) If three or more Holders or Certificate Owners
(hereinafter referred to as "Applicants") apply in
writing to the Trustee, 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 Trustee
shall, within five Business Days after the receipt of
such application, afford such Applicants reasonable
access during the normal business hours of the
Trustee to the most recent list of Certificateholders
held by the Trustee 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
Certificate Registrar and the Trustee that neither
the Depositor, the Certificate Registrar nor the
Trustee shall be held accountable by reason of the
disclosure of any 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. 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, if made in
the manner provided in this Section.
(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 neither the Trustee nor
the Depositor shall be affected by any notice to the
contrary.
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(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 in reliance thereon, whether
or not notation of such action is made upon such
Certificate.
ARTICLE IX
ADMINISTRATION AND SERVICING OF THE MORTGAGE LOANS
Section 9.01 Servicer to Act as Servicer.
(a) Commencing on the Closing Date, the Servicer shall
service each Mortgage Loan in accordance with
Accepted Servicing Practices.
(b) The Servicer shall maintain an EDP containing all
information and programming necessary to service the
Mortgage Loans in accordance with Section 2.01(a)
hereof. The Mortgage Loans shall be grouped on the
Servicer's EDP to reflect the Trust Fund as the owner
of the Mortgage Loans.
(c) The Servicer may not waive, modify or vary any term
of a Mortgage Note without the Depositor's prior
written consent. The Servicer shall comply with all
applicable federal, state and local legal and
regulatory requirements (including laws, statutes,
rules, regulations and ordinances) in connection with
the modification of the Mortgage Note.
(d) Notwithstanding anything herein to the contrary, the
Servicer shall follow any reasonable directions given
by the Trustee and/or the Depositor with respect to
the servicing of the Mortgage Loans.
(e) With the exception of Ancillary Fees and any other
charges expressly permitted by the Mortgage Note and
applicable law, the Servicer covenants and agrees
that it will not, without the prior written consent
of the Seller, charge or collect from any Mortgagor,
or trustee under a deed of trust, any fees of any
kind including, but not limited to charges for
amounts expended by the Servicer, regardless of the
characterization of the fee or charge.
(f) The Trustee agrees to execute such limited powers of
attorney provided to it by the Servicer as are
necessary and appropriate to assist the Servicer to
carry out its servicing and administrative
responsibilities under this Agreement.
(g) In connection with its duties hereunder, in the event
the Servicer requires an original of any document
contained in a Mortgagor's file to service a Mortgage
Loan, it shall submit a written request to the
Custodian and the Custodian shall provide the
original document to the Servicer within two (2)
Business Days after receipt of the written request,
provided that (a) as to any recorded document, the
applicable recorder's office has returned the
recorded document to the Servicer or (b) as to the
original title insurance policy, the Servicer has
received such policy. When requesting a release of
documents from the Custodian, the Servicer shall use
the form attached hereto as Exhibit N.
Notwithstanding the foregoing,
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the Servicer acknowledges and agrees that the Seller
maintains agreements with document custodians
selected by it from time to time, pursuant to which
such custodians maintain Mortgage Loan files on
behalf of the Seller. The Servicer agrees to
cooperate with such custodians and request from such
custodians the documents and Mortgage Files required
by the Servicer which are maintained by such
custodians (with a copy of such request sent to the
Seller).
(h) The Servicer shall not, unless default by the related
Mortgagor has occurred or is imminent, knowingly
permit any modification, waiver or amendment of any
material term of any Mortgage Loan (including but not
limited to the interest rate, the principal balance,
the amortization schedule, or any other term
affecting the amount or timing of payments on the
Mortgage Loan or the collateral therefor) unless the
Servicer shall have provided to the Depositor and the
Trustee an Opinion of Counsel in writing to the
effect that such modification, waiver or amendment
would not cause an Adverse REMIC Event.
Section 9.02 Title, Management and Disposition of REO Property.
(a) If title to a Mortgaged Property is acquired in
foreclosure or by deed in lieu of foreclosure, the
deed or certificate of sale shall be taken in the
name of the Trustee or its designee. Notwithstanding
the foregoing, the Servicer shall not acquire title
to any Mortgaged Property, or proceed with the
management of any REO Property, for which the
Servicer has knowledge that such Mortgaged Property
or REO Property is affected by hazardous waste. The
Servicer shall either itself, or through an agent,
manage, conserve, protect and operate each REO
Property (and may temporarily rent the same) on
behalf of the Trust Fund.
In the event that the Trust Fund acquires any REO Property in
connection with a default or imminent default on a Mortgage Loan, the Servicer
shall dispose of such REO Property not later than the end of the third taxable
year after the year of its acquisition by the Trust Fund unless the Servicer has
applied for and 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 Trust Fund may hold REO Property
for a longer period without adversely affecting the REMIC status of such REMIC
or causing the imposition of a federal or state tax upon such REMIC. If the
Servicer has received such an extension, then the Servicer shall 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
the Servicer has not received such an extension and the Servicer is unable to
sell the REO Property within the period ending 3 months before the end of such
third taxable year after its acquisition by the Trust Fund or if the Servicer
has received such an extension, and the Servicer is unable to sell the REO
Property within the period ending three months before the close of the Extended
Period, the Servicer shall, before the end of the three year period or the
Extended Period, as applicable, (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 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. The Trustee shall sign any document
prepared by the Servicer or take any other action reasonably requested by the
Servicer which would enable the Servicer, on behalf of the Trust Fund, to
request such grant of extension.
Notwithstanding any other provisions of this Agreement, no REO Property
acquired by the Trust Fund shall be rented (or allowed to continue to be rented)
or otherwise used by or on behalf of the Trust Fund in such a manner or pursuant
to any terms that would: (i) cause such REO Property to fail to qualify as
"foreclosure property" within the meaning of Section 860G(a)(8) of the Code; or
(ii) subject the Trust
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Fund to the imposition of any federal income taxes on the income earned from
such REO Property, including any taxes imposed by reason of Sections 860F or
860G(c) of the Code, unless the Servicer has agreed to indemnify and hold
harmless the Trust Fund with respect to the imposition of any such taxes.
(b) The Servicer shall deposit or cause to be deposited
in the applicable Custodial Account, on a daily
basis, all revenues received with respect to each REO
Property and shall be permitted to withdraw
therefrom, to the extent of the amount of such
revenues on deposit therein, funds necessary for the
proper operation, management and maintenance of such
REO Property, including but not limited to the cost
of maintaining any hazard insurance and the fees of
any managing agent acting on behalf of the Servicer.
(c) If the Servicer elects to dispose of an REO Property
without utilizing the services of an agent, the
Servicer shall notify the Trustee of its receipt of
any and all bona fide offers to purchase that REO
Property. Each such REO Disposition shall be carried
out by the Servicer at such price, and upon such
terms and conditions.
If the Servicer utilizes the services of an approved agent to dispose
of an REO Property, the Servicer shall provide the Trustee with a copy of such
agent's marketing plan, which shall include, but not be limited to, (i) the
marketing time period, (ii) an estimate of the costs of any repairs or
improvements, (iii) the lowest acceptable sale price for the REO Property and
(iv) other proposed terms and conditions of sale. The REO Disposition shall be
carried out by the Servicer in accordance with the terms thereof. If the
Servicer receives a bona fide offer to purchase an REO Property and would like
to accept the offer, but the offer is outside the parameters of the approved
marketing plan, the Servicer shall provide the Trustee with written notification
of the terms and conditions of the offer.
The Servicer, upon an REO Disposition, shall be entitled to
reimbursement for any related unreimbursed Servicing Advances from proceeds
received in connection with such REO Disposition. If the proceeds from an REO
Disposition are insufficient to reimburse the Servicer for any related
unreimbursed Servicing Advances, to the extent such reimbursement will
constitute an "unanticipated expense" (within the meaning of Treasury
Regulations Section 1.860G-1(b)(3)(ii)) of a REMIC provided for herein, the
Servicer shall be entitled to withdraw any such deficiency from amounts on
deposit in the applicable Custodial Account. All proceeds from an REO
Disposition, net of any reimbursement to the Servicer as provided above, shall
be remitted to the Trustee within three (3) Business Days following receipt
thereof.
Section 9.03 Trustee and Depositor's Right to Examine Servicer Records.
(a) The Servicer shall cooperate with the Depositor
and/or the Trustee, its counsel, accountants
(including outside accountants), supervisory agents,
examiners and other representatives in providing
reasonable access during normal business hours to
examine and audit any and all of the books, records,
documentation or other information of the Servicer
related to the Mortgage Loans, which may be relevant
to the performance or observance by the Servicer of
the terms, covenants or conditions of this Agreement.
(b) The examination and audit rights and other rights to
access described in clause (a) above shall be
afforded by the Servicer at its offices without
charge, upon reasonable request, and during normal
business hours or at such other times as may be
reasonable under applicable circumstances. The
Servicer, at its expense, shall make available all
customary, reasonable office space, facilities, and
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equipment for the visiting party and shall provide
the visiting party with access to reasonable
cooperation with its officers and employees. The
salaries, travel, subsistence and other related
expenses for the Depositor's and/or the Trustee's
representatives shall be borne by the Depositor
and/or the Trustee.
Section 9.04 Legal Proceedings Involving the Servicer and/or the
Mortgage Loans.
(a) The Servicer shall commence, defend, appear, or
otherwise participate in any foreclosure,
condemnation, bankruptcy, or other legal proceedings
relating to a Mortgage Loan in the name of the
Trustee and/or the Trust Fund. The Servicer shall
provide the Trustee, on a monthly basis, with such
written reports as it receives regarding any legal
proceedings.
(b) The Servicer shall commence all foreclosures,
bankruptcies and other legal proceedings in the name
of the Trustee and/or the Trust Fund unless otherwise
directed in writing by the Trustee.
Section 9.05 Material Changes.
The Servicer shall promptly report to the Trustee and the Depositor any
change in its business operations, financial condition, properties or assets
that could have a material adverse effect on the Servicer's ability to perform
its obligations hereunder. Events for which the Trustee and the Depositor must
receive notice include, but are not limited to, the following:
(a) any merger or consolidation, any changes in the
Servicer's ownership whether directly or indirectly
(including any change in ownership of the Servicer's
parent), or any significant reorganization;
(b) any material changes in management ordered or
required by a regulatory authority supervising or
licensing the Servicer;
(c) the entry against the Servicer of a decree or order
of a court or agency or supervisory authority having
jurisdiction for the appointment of a trustee,
conservator, receiver, liquidator, assignee,
custodian or sequestrator (or other similar official)
in any federal or state bankruptcy, insolvency,
readjustment of debt, marshaling of assets and
liabilities or similar proceedings, or for the
winding-up or liquidation of its affairs, if such
decree or order has remained in force undischarged or
unstayed for a period of sixty (60) days;
(d) the consent by the Servicer to the appointment of a
trustee, conservator, receiver, liquidator, assignee,
custodian or sequestrator (or other similar official)
in, or commencement of a voluntary case under, any
federal or state bankruptcy, insolvency, readjustment
of debt, marshaling of assets and liabilities or
similar proceedings;
(e) upon the Servicer's (A) admitting in writing its
inability to pay its debts generally as they become
due, (B) filing a petition to take advantage of any
applicable insolvency or reorganization statute, (C)
making an assignment for the benefit of its creditors
or (D) voluntarily suspending payment of its
obligations;
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(f) entry of any court judgment or regulatory order in
which the Servicer is or may be required to pay a
claim or claims that may have a material adverse
effect on the Servicer's financial condition;
(g) any admission by the Servicer to the commission of,
or any finding that the Servicer has committed, any
violation of any law, regulation or order in any
proceeding or audit commenced by any governmental, or
regulatory authority, or any proceeding commenced in
any court of law;
(h) the commencement of any class action law suits
against the Servicer; and
(i) the Servicer's entry into any agreement with a third
party that would result in any material change in the
financial status or ownership of the Servicer or any
merger of the Servicer.
Section 9.06 Servicer Shall Provide Information as Reasonably Required.
During the term of this Agreement, the Servicer shall furnish any
reports or documentation that the Trustee and/or the Depositor may reasonably
request. Reports requested may include reports not specified or otherwise
required by this Agreement or reports required to comply with any regulations
regarding any supervisory agents or examiners of the Trustee and/or the
Depositor, as applicable. All reports will be delivered in accordance with the
Trustee and/or the Depositor's reasonable instructions and directions. The
Servicer agrees to execute and deliver all such instruments and take all such
action as the Trustee and/or the Depositor, as applicable, from time to time,
may reasonably request in order to effectuate the purpose and to carry out the
terms of this Agreement.
Section 9.07 Servicer Not to Resign.
The Servicer shall neither assign this Agreement or the servicing
hereunder or delegate its rights or duties hereunder or any portion hereof (to
other than a third party in the case of outsourcing routine tasks such as taxes,
insurance and property inspection, in which case the Servicer shall be fully
liable for such tasks as if the Servicer performed them itself) nor sell or
otherwise dispose of all or substantially all of its property or assets without
the prior written consent of the Trustee and the Depositor, which consent shall
be granted or withheld in the reasonable discretion of such parties, provided,
however, that (i) the Servicer may assign its rights and obligations hereunder
without prior written consent of the Trustee and the Depositor to any entity
that is directly owned or controlled by the Servicer, and the Servicer
guarantees the performance of such entity hereunder, (ii) the Servicer is no
longer permitted to act as Servicer under applicable law as evidenced by an
Opinion of Counsel or (iii) upon a sale of its servicing rights with respect to
the Mortgage Loans with the prior written consent of the Seller. In the case of
item (i) above, the Servicer shall provide the Trustee and the Depositor with a
written statement guaranteeing the successor entity's performance of the
Servicer's obligations under the Agreement.
Section 9.08 Custodial Accounts and Escrow Accounts.
The Servicer shall segregate and hold all funds collected and received
pursuant to each Mortgage Loan separate and apart from any of its own funds and
general assets. The Servicer shall create and maintain Custodial Accounts and
Escrow Accounts for the deposit of all funds, except as otherwise provided
herein, received by the Servicer on the Mortgage Loans.
Section 9.09 Assumption Processing.
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Within three (3) Business Days of receipt by the Servicer of a request
by a Mortgagor to be released from liability for payment of a Mortgage Loan in
connection with an assumption of the related Mortgage Note, the Servicer shall
notify the Trustee of such request. Upon the completion of the assumption
processing, the Seller shall provide the Servicer with all necessary information
to enable the Servicer to update its EDP.
Section 9.10 Books and Records.
The Servicer shall be responsible for maintaining, and shall maintain,
a complete set of records for the Mortgage Loans. The Servicer's books and
records shall clearly reflect the ownership of the Mortgage Loans by the Trust
Fund. All documents, records and correspondence, regardless of the media in
which they are stored or maintained, are property of the Trust Fund, and the
Servicer shall hold the same in a fiduciary capacity for the Trust Fund. The
Servicer may retain copies of all such documents, records and correspondence as
may be necessary to service the Mortgage Loans under this Agreement.
Section 9.11 Annual Statement as to Compliance.
The Servicer will deliver to the Depositor and the Trustee on or before
February 28 of each year, beginning in 2005 or such other date that the
Depositor gives the Servicer at least 30 days prior notice of in order to remain
in compliance with the Section 302 Requirements, an Officer's Certificate of the
Servicer stating that (i) a review of the activities of the Servicer during the
preceding calendar year and of performance under this Agreement has been made
under such officer's supervision, and (ii) to the best of such officer's
knowledge, based on such review, the Servicer has fulfilled all of its
obligations under this Agreement throughout such year, or, if there has been a
default in the fulfillment of any such obligation, specifying each such default
known to such officer and the nature and status thereof.
Section 9.12 Annual Independent Certified Public Accountants' Servicing
Reports.
On or before March 15 of each year, beginning in 2005 or such other
date that the Depositor gives the Servicer at least 30 days prior written notice
of, in order to remain in compliance with the Section 302 Requirements, the
Servicer at its expense shall cause a nationally recognized firm of independent
certified public accountants that is a member of the American Institute of
Certified Public Accountants to furnish a USAP Report to the Trustee and the
Depositor.
Section 9.13 Officer's Certificate.
(a) By February 28th of each year beginning in 2005 or
such other date specified in a written notice within
15 days prior to the date on which a Form 10-K is
required to be filed with a certification by the
Depositor, an officer of the Servicer shall execute
and deliver an Officer's Certificate substantially in
the form of Exhibit R attached hereto, signed by the
senior officer in charge of servicing of the Servicer
or any officer to whom that officer reports, to the
Trustee and Depositor for the benefit of such parties
and their respective officers, directors and
affiliates.
(b) The Servicer shall indemnify and hold harmless the
Depositor and its officers, directors, agents and
affiliates from and against any losses, damages,
penalties, fines, forfeitures, reasonable legal fees
and related costs, judgments and other costs and
expenses arising out of or based upon a breach by the
Servicer or any of its officers, directors, agents or
affiliates of its obligations under this Section 9.13
any material misstatement or omission in the
Officer's Certificate required under this Section
9.13 or the negligence, bad faith or willful
misconduct of the
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Servicer in connection therewith. If the
indemnification provided for herein is unavailable or
insufficient to hold harmless the Depositor, then the
Servicer agrees that it shall contribute to the
amount paid or payable by the Depositor as a result
of the losses, claims, damages or liabilities of the
Depositor in such proportion as is appropriate to
reflect the relative fault of the Servicer on the one
had and the Depositor on the other in connection with
a breach of the Servicer's obligations under this
Section 9.13, any material misstatement or omission
in the Officer's Certificate required under this
Section 9.13 or the Servicer's negligence, bad faith
or willful misconduct in connection therewith.
Section 9.14 Servicing Compensation.
(a) Subject to the following paragraph, as compensation
for its services hereunder, the Servicer shall be
entitled to a Servicing Fee payable with respect to
each Mortgage Loan. As to each Mortgage Loan, the
Servicing Fee shall be payable monthly from payments
of interest on such Mortgage Loan prior to the
deposit of such payments into the applicable
Custodial Account, shall accrue at the applicable
Servicing Fee Rate, and shall be computed on the
basis of the same principal amount and for the same
period respecting which such interest payment was
computed.
(b) The Servicing Fee for each Mortgage Loan shall be
payable solely from (i) the interest portion of the
related Monthly Payment (to the extent paid by the
Mortgagor, but only if a full interest payment is
received), or (ii) from any payment of interest made
with respect to the Mortgage Loan from the proceeds
of foreclosure or any judgment, writ of attachment or
levy against the Mortgagor or the Mortgagor's assets,
or (iii) from funds paid in connection with any
prepayment in full, or (iv) from Insurance Proceeds
or Liquidation Proceeds.
(c) As additional compensation hereunder, the Servicer
may retain (i) all net interest earnings on balances
maintained in the Custodial Account and Escrow
Accounts and (ii) the Ancillary Fees.
(d) The Servicer's right to the Servicing Fee shall not
be transferred in whole or in part except in
connection with any permitted transfer of all the
Servicer's obligations under this Agreement. The
Servicer shall be required to pay all expenses
incurred by it in connection with its servicing
activities hereunder and shall not be entitled to
reimbursement therefor except as specifically
provided for herein.
Section 9.15 Indemnification.
The Servicer shall indemnify and hold the Trustee, the Trust Fund and
the Depositor and their respective officers, directors, employees and agents
(collectively, the "Indemnified Parties") harmless from, and will reimburse the
Indemnified Parties for, any and all Losses incurred by any of the Indemnified
Parties to the extent that such Losses result from, are caused by or arise out
of any one or more of the following:
(a) Any material misrepresentations made by the Servicer
in this Agreement, or in any schedule, exhibit, or
certificate furnished pursuant hereto;
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(b) Any material breach of any of the representations and
warranties of the Servicer or the nonfulfillment of
any term, covenant, condition or obligation of the
Servicer set forth in this Agreement or in any
schedule, statement, exhibit, or certificate
furnished pursuant hereto, or any default or failure
to perform by the Servicer hereunder;
(c) Any failure of the Servicer to comply with Accepted
Servicing Practices in connection with servicing the
Mortgage Loans;
(d) Any liabilities or obligations, contingent or
otherwise, of the Servicer of any nature whatsoever
relating to the Servicer's obligations under this
Agreement, to the extent that any related Loss to the
Trustee, Trust Fund or Depositor is not increased by
negligence, bad faith or willful misconduct on the
part of the Trustee, Trust Fund or Depositor; or
(e) Any non-compliance with the terms of the powers of
attorney or the use thereof that results in a Loss to
the Trustee, Trust Fund or Depositor.
The indemnity provided in this Section 9.15 shall remain in full force
and effect regardless of any investigation made by the Trustee, Trust Fund or
Depositor or its representatives. The provisions of this Section 9.15 shall
survive the termination of this Agreement and the payment of the outstanding
Certificates.
Section 9.16 Non Solicitation.
For as long as the Servicer services the Mortgage Loans, the Servicer
covenants that it will not, and that it will ensure that its affiliates and
agents, will not, directly solicit or provide information for any other party to
solicit for prepayment or refinancing of any of the Mortgage Loans by the
related Mortgagors. It is understood that the promotions undertaken by the
Servicer which are directed to the general public at large, or certain segments
thereof, shall not constitute solicitation as that term is used in this Section
9.16.
Section 9.17 Successor to the Servicer.
Simultaneously with the termination of the Servicer's responsibilities
and duties under this Agreement (a) the Trustee shall, in accordance with the
provisions of this Agreement (i) succeed to and assume all of the Servicer's
responsibilities, rights, duties and obligations under this Agreement, or (ii)
appoint a successor meeting the eligibility requirements set forth herein and
which shall succeed to all rights and assume all of the responsibilities, duties
and liabilities of the Servicer under this Agreement with the termination of the
Servicer's responsibilities, duties and liabilities under this Agreement. If the
Trustee shall succeed to and assume the Servicer's responsibilities, rights,
duties and obligations under this Agreement, such succession shall not be
effective prior to 90 days after the Trustee's knowledge that the Servicer shall
be terminated hereunder. The Servicer shall not be removed hereunder prior to
the effectiveness of the assumption of its responsibilities, rights, duties and
obligations by the successor thereto. Any successor to the Servicer that is not
at that time a servicer of other Mortgage Loans for the Trust Fund shall be
subject to the approval of the Depositor, the Trustee and each Rating Agency.
Unless the successor servicer is at that time a servicer of other mortgage loans
for the Trust Fund, each Rating Agency must deliver to the Trustee a letter to
the effect that such transfer of servicing will not result in a qualification,
withdrawal or downgrade of the then-current rating of any of the Certificates.
In connection with such appointment and assumption, the Trustee or the
Depositor, as applicable, may make such arrangements for the compensation of
such successor out of payments on the Mortgage Loans as it and
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such successor shall agree; provided, however, that no such compensation shall
be in excess of that permitted the Servicer under this Agreement. In the event
that the Servicer's duties, responsibilities and liabilities under this
Agreement should be terminated pursuant to the aforementioned sections, the
Servicer shall discharge such duties and responsibilities during the period from
the date it acquires knowledge of such termination until the effective date
thereof with the same degree of diligence and prudence which it is obligated to
exercise under this Agreement, and shall take no action whatsoever that might
impair or prejudice the rights or financial condition of its successor. The
resignation or removal of the Servicer pursuant to the aforementioned sections
shall not become effective until a successor shall be appointed pursuant to this
Section 9.17 and shall in no event relieve the Servicer of the representations
and warranties made herein and the remedies available to the Trustee herein, it
being understood and agreed that the provisions of this Agreement regarding
indemnification and nonsolicitation shall be applicable to the Servicer
notwithstanding any such resignation or termination of the Servicer, or the
termination of this Agreement.
Section 9.18 Statements to the Trustee.
(a) Not later than the 15th calendar day of each month
(or if such calendar day is not a Business Day, the
immediately succeeding Business Day), the Servicer
shall furnish to the Trustee (i) a monthly remittance
advice in the format set forth in Exhibit D-1 hereto
and a monthly defaulted loan report in the format set
forth in Exhibit D-2 hereto relating to the period
ending on the first day of the current calendar month
and (ii) all such information required on a magnetic
tape or other similar media mutually agreed upon by
the Trustee and the Servicer.
(b) The Servicer shall provide the Trustee with such
information concerning the Mortgage Loans as is
necessary for the Trustee to prepare its federal
income tax return as the Trustee may reasonably
request from time to time.
Section 9.19 Limitation on Liability of the Servicer.
Neither the Servicer nor any of its directors, officers, employees or
agents shall be under any liability to 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 Servicer or any such Person against any breach
of representations or warranties made by it herein or protect the Servicer or
any such Person from any liability which would otherwise be imposed by reasons
of willful misfeasance, bad faith or negligence in the performance of its duties
or by reason of reckless disregard of its obligations and duties hereunder. The
Servicer and any director, officer, employee or agent of the Servicer shall be
indemnified by the Trust Fund and held harmless against any loss, liability or
expense incurred in connection with any audit, controversy or judicial
proceeding relating to a governmental taxing authority or any legal action
relating to this Agreement or the Certificates or any other unanticipated or
extraordinary expense, other than any loss, liability or expense incurred by
reason of willful misfeasance, bad faith or negligence in the performance of
duties hereunder or by reason of reckless disregard of obligations and duties
hereunder. The Servicer shall not be under any obligation to appear in,
prosecute or defend any legal action that is not incidental to its respective
duties hereunder and which in its opinion may involve it in any expense or
liability; provided, however, that the Servicer may in its discretion undertake
any such action that it may deem necessary or desirable in respect of this
Agreement and the rights and duties of the parties hereto and interests of the
Trustee and the Certificateholders hereunder. In such event, the legal expenses
and costs of such action and any liability resulting therefrom shall be
expenses, costs and liabilities of the Trust Fund, and the Servicer shall be
entitled to be reimbursed therefor out of the Custodial Account.
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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
and Section 1.01.
(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 Trustee 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 Trustee 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 Trustee in fulfilling its duties hereunder
(including its duties as tax return preparer). The
Trustee shall be entitled to reimbursement of
expenses to the extent provided in clause (i) above
from the Distribution Account, provided, however, the
Trustee shall not be entitled to reimbursement for
expenses incurred in connection with the preparation
of tax returns and other reports as required by
Section 6.19 and this Section.
(d) The Trustee shall prepare, sign and 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 Trustee.
(e) The Trustee 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 Trustee shall
provide, upon receipt of additional reasonable
compensation, 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.
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(f) The Trustee and the Holders of Certificates shall
take any action or cause any REMIC to take any action
necessary to create or 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. Neither the Trustee 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 (i) endanger the status of any
REMIC as a REMIC or (ii) result in the imposition of
a tax upon any REMIC (including but not limited to
the tax on prohibited transactions as defined in Code
Section 860F(a)(2) and the tax on prohibited
contributions set forth on Section 860G(d) of the
Code) (either such event, an "Adverse REMIC Event")
unless the Trustee has 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, 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 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 Trustee or 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, out of other amounts
held in the Collection Account, and shall reduce
amounts otherwise payable to holders of regular
interests in any such REMIC, as the case may be.
(h) The Trustee 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) The Trustee shall not enter into any arrangement by
which any REMIC will receive a fee or other
compensation for services.
(k) (i) The Trustee shall treat the Class A-1
Certificates as representing ownership, through a
grantor trust, of the Upper Tier REMIC Class A-1
Interest. The Trustee shall treat the rights of the
Holders of the Class A-1 Certificates to receive
distributions in respect of Basis Risk Shortfalls and
Unpaid Basis Risk Shortfalls, as interests in
interest rate cap contracts written by the Holders of
the
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Class X-A Certificates (as holders of interests in
the X-A1 Component) in favor of the Holders of the
Class A-1 Certificates.
(ii) The Trustee shall treat the Class A-2
Certificates as representing ownership, through a grantor
trust, of the Upper Tier REMIC Class A-2 Interest. The Trustee
shall treat the rights of the Holders of the Class A-2
Certificates to receive distributions in respect of Basis Risk
Shortfalls and Unpaid Basis Risk Shortfalls, as interests in
interest rate cap contracts written by the Holders of each of
the Class X-A Certificates (as holders of interests in the
X-A2 Component) in favor of the Holders of the Class A-2
Certificates.
(iii) The Trustee shall treat each of the Class
B-1, Class B-2 and Class B-3 Certificates as representing
ownership, through grantor trusts, of the Upper Tier REMIC
Class B-1 Interest, the Upper Tier REMIC Class B-2 Interest
and the Upper Tier REMIC Class B-3 Interest respectively. The
Trustee shall treat the rights of the Holders of the Class
B-1, Class B-2 and Class B-3 Certificates to receive payments
in respect of Basis Risk Shortfalls and Unpaid Basis Risk
Shortfalls as interests in interest rate cap contracts written
by the Holders of the Class X-B Certificate in favor of the
Holders of the Class B-1, Class B-2 and Class B-3
Certificates.
(iv) For purposes of determining the issue prices
of the REMIC regular interests or portions thereof represented
by the Certificates, the interest rate cap contracts described
in this Section 10.01(k) shall be assumed to have a zero value
unless and until required otherwise by an applicable taxing
authority.
(v) Each holder or beneficial owner of a Class
A-1, Class A-2, Class X-A, Class X-B, Class B-1, Class B-2 or
Class B-3 Certificate agrees, by its acceptance of such
Certificate or a beneficial interest therein, to treat, for
tax purposes, such Certificate in a manner consistent with the
treatment described in this Section 10.01(k). For information
reporting purposes, the Trustee shall treat the rights of the
holders of the Class A-1, Class A-2, Class B-1, Class B-2 and
Class B-3 Certificates to receive payments that are treated
under this Section 10.01(k) as payments on cap contracts or
interest rate cap agreements as having no value unless and
until required otherwise by an applicable taxing authority.
(vi) For federal income tax purposes, the Trustee
shall treat distributions from the Trust Fund as occurring as
required by the terms of the Upper Tier REMIC Interests, with
any difference between such and actual distributions being
treated as resulting from payments in respect of the interest
rate cap agreements described in this Section 10.01(k).
(l) The Class A-R Holder shall act as "tax matters
person" with respect to each REMIC and irrevocably
appoints the Trustee to act as its agent in such
roles.
(m) Neither the Trustee nor the Depositor, as assignees
under this Agreement, shall provide any consent
pursuant to this Agreement or knowingly take any
action under this Agreement that would conflict with
or violate the provisions of this Article X.
Section 10.02 Prohibited Transactions and Activities.
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Neither the Depositor 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, or substitution) that such disposition,
acquisition, substitution, or acceptance will not (a) affect adversely the
status of any such REMIC as a REMIC or of the interests therein other than the
Residual Certificate as the regular interests therein, (b) affect the
distribution of interest or principal on the Certificates, (c) result in the
encumbrance of the assets transferred or assigned to the Trust Fund (except
pursuant to the provisions of this Agreement) or (d) cause any such REMIC to be
subject to any tax including a tax on prohibited transactions or prohibited
contributions pursuant to the REMIC Provisions.
Section 10.03 Indemnification with Respect to Prohibited Transactions
or Loss of REMIC Status.
In the event that a REMIC fails to qualify as a REMIC, loses its status
as a REMIC, or incurs federal, state or local taxes as a result of a prohibited
transaction or prohibited contribution under the REMIC Provisions due to the
negligent performance by the Trustee of its duties and obligations set forth
herein, the Trustee 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
Trustee shall not be liable for any such Losses attributable to the action or
inaction of the Depositor 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 Trustee has relied. Notwithstanding the foregoing, however,
in no event shall the Trustee 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 the Mortgage
Loan Purchase and Sale Agreement, (2) for any Losses other than arising out of
malfeasance, willful misconduct or negligent performance by the Trustee with
respect to 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).
Section 10.04 REO Property.
(a) Notwithstanding any other provision of this
Agreement, the Trustee shall not, except to the
extent provided in this 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 such REO Property to fail
to qualify as "foreclosure property" within the
meaning of section 860G(a)(8) of the Code or result
in the receipt by any REMIC of any "income from
non-permitted assets" within the meaning of section
860F(a)(2) of the Code or any "net income from
foreclosure property" which is subject to tax under
the REMIC Provisions unless the Servicer has provided
to the Trustee 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 the imposition of a tax
upon such REMIC.
(b) The Depositor shall cause the Servicer (to the extent
provided in this Agreement) to make reasonable
efforts to sell any REO Property for its fair market
value. In
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any event, however, the Depositor shall, or shall
cause the Servicer (to the extent provided in this
Agreement) to, dispose of any REO Property within
three years of its acquisition by the Trust Fund
unless the Depositor or the 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
adversely affecting the REMIC status of such REMIC or
causing the imposition of a Federal or state tax upon
such REMIC. If such an extension has been received,
then the Depositor, acting on behalf of the Trustee
hereunder, shall, or shall cause the 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 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 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 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 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.
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 Servicer 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
this Agreement, (iii) to add any other provisions
with respect to matters or questions
95
arising under this Agreement, (iv) to modify alter,
amend, add to or rescind any of the terms or
provisions contained in this Agreement or (v) 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, adversely affect the status of
any REMIC created pursuant to this Agreement, nor
shall such amendment effected pursuant to clauses
(iii) or (iv) of such sentence adversely affect in
any material respect the interests of any Holder
unless such Holder has consented thereto. 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 Servicer and the Trustee, with
the consent of the Holders of not less than 66-2/3%
of the Class Principal Amount (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 such
change will not adversely affect the status of any
REMIC as a REMIC or cause a tax to be imposed on such
REMIC; 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 Amount 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
Amount 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 Trustee shall furnish written notification of the
substance of such amendment to each Holder, the
Depositor, the Servicer 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.
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(e) Notwithstanding anything to the contrary in this
Agreement, the Trustee shall not consent to any
amendment of this Agreement except pursuant to the
standards provided in this Section with respect to
amendment of this Agreement.
(f) Neither the Seller nor the Trustee shall consent to
the assignment by the Servicer of the Servicer's
rights and obligations under this Agreement without
the prior written consent of the Depositor, which
consent shall not be unreasonably withheld.
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
Principal Amount or Class Notional Amount (or Percentage Interest), Certificates
owned by the Depositor, the Trustee, the Servicer or any Affiliates thereof are
not to be counted so long as such Certificates are owned by the Depositor, the
Trustee, the Servicer or any Affiliate thereof.
Section 11.05 Provision of Information.
(a) For so long as any of the Certificates of any Series
or Class are "restricted securities" within the
meaning of Rule 144(a)(3) under the Act, each of the
Depositor, the Servicer and the Trustee 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 or the Servicer in providing such information
shall be reimbursed by the Depositor.
(b) The Trustee shall provide to any person to whom a
Prospectus was delivered, upon the request of such
person specifying the document or documents
requested, (i) 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 9.23(b) and (ii) a copy of any other document
incorporated by reference in the Prospectus. Any
reasonable out-of-pocket expenses incurred by the
Trustee in providing copies of such documents shall
be reimbursed by the Depositor.
(c) On each Distribution Date, the Trustee shall deliver
or cause to be delivered by first class mail or make
available on its website to the Depositor, a copy of
the report delivered to Certificateholders pursuant
to Section 4.02.
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.
97
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, ▇▇▇▇▇▇▇
▇▇▇▇▇ Mortgage Investors, Inc., ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, 4 World ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇
▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇▇▇, telecopy number (▇▇▇) ▇▇▇-▇▇▇▇, Attention:
▇▇▇▇▇▇▇ ▇▇▇▇▇ Mortgage Investors Trust Series MLCC 2004-B, (b) in the case of
the Servicer, Cendant Mortgage Corporation, ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇. ▇▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇, telecopy number (▇▇▇) ▇▇▇-▇▇▇▇, Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Chief
Operating Officer, (c) in the case of the Seller, ▇▇▇▇▇▇▇ ▇▇▇▇▇ Credit
Corporation, ▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇, telecopy
number (▇▇▇) ▇▇▇-▇▇▇▇, Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇ Mortgage Investors Trust Series
MLCC 2004-B, and (d) with respect to the Trustee or the Certificate Registrar,
▇.▇. ▇▇▇ ▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: Client Manager - MLMI Trust
Series MLCC 2004-B, with a copy to it at its respective Corporate Trust Office,
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, 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:
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(i) any amendment to this Agreement pursuant to
Section 11.03;
(ii) the occurrence of any Event of Default;
(iii) any notice of termination given to the
Servicer pursuant to Section 6.14 or any resignation of the
Servicer pursuant to this Agreement;
(iv) the appointment of any successor to the
Servicer pursuant to Section 6.14; and
(v) the making of a final payment pursuant to
Section 7.02.
(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, as follows:
If to Moody's, to:
▇▇▇▇▇'▇ Investors Service, Inc.
▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ABS Monitoring
If to S&P, to:
Standard & Poor's Ratings Service,
a division of The ▇▇▇▇▇▇-▇▇▇▇ Companies, Inc.
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: Residential Mortgages
If to Fitch Ratings, to:
Fitch, Inc.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: Surveillance Group
(c) The Trustee shall provide or make available to the
Rating Agencies reports prepared pursuant to Section
4.02. In addition, the Trustee 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 Trustee.
Section 11.13 [RESERVED].
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.
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Section 11.15 No Petitions.
The Trustee and the Servicer, by entering into this Agreement, hereby
covenants and agrees that it 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.
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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.
▇▇▇▇▇▇▇ ▇▇▇▇▇ MORTGAGE INVESTORS,
INC., as Depositor
By: _____________________________
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Title: President
CENDANT MORTGAGE CORPORATION,
as Servicer
By: _____________________________
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Title: Vice President
▇▇▇▇▇ FARGO BANK N.A.,
as Trustee
By: _____________________________
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇
Title: Vice President
Solely for purposes of Section 2.04,
accepted and agreed to by:
▇▇▇▇▇▇▇ ▇▇▇▇▇ CREDIT CORPORATION
By: _____________________________
Name: ▇▇▇▇▇ ▇▇▇▇▇▇
Title: Vice President
EXHIBIT A
FORMS OF CERTIFICATES
[INTENTIONALLY OMITTED]
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 subject to Title I of the Employee Retirement
Income Security Act of 1974, as amended ("ERISA"), or Section
4975 of the Code or any provisions of federal, state or local
law substantially similar to the foregoing provisions of ERISA
or the Code ("Similar Law"), the trustee of any such plan or a
person acting on behalf of any such plan or investing the
assets of any such plan to acquire a Residual Certificate; or
(y) herewith delivers to the Certificate Registrar an opinion
of counsel satisfactory to the Certificate Registrar, and upon
which the Certificate Registrar shall be entitled to rely, to
the effect that the purchase and holding of such Residual
Certificate by the Investor will not result in the assets of
the Trust Fund being deemed to be plan assets and subject to
the prohibited transaction provisions of ERISA or the Code or
Similar Law, and will not subject the Trustee, the Certificate
Registrar, the Servicer or the Depositor to any obligation in
addition to those undertaken by such entities in the
B-1
Agreement (defined below), which opinion of counsel shall not
be an expense of the Trust Fund, the Trustee, the Certificate
Registrar, the Servicer or the Depositor.
5. That the Purchaser hereby acknowledges that under the terms of
the Pooling and Servicing Agreement dated as of May 1, 2004
(the "Agreement"), among ▇▇▇▇▇▇▇ ▇▇▇▇▇ Mortgage Investors,
Inc., as Depositor, Cendant Mortgage Corporation, as Servicer
and ▇▇▇▇▇ Fargo Bank N.A., as Trustee with respect to ▇▇▇▇▇▇▇
▇▇▇▇▇ Mortgage Investors Trust Series MLCC 2004-B Mortgage
Pass-Through Certificates, no transfer of the Residual
Certificates shall be permitted to be made to any person
unless the Certificate Registrar and Trustee have 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 Trustee and
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 Trustee
and the Certificate Registrar with an effective Internal
Revenue Service Form W-8ECI (Certificate of Foreign 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. "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.
B-2
11. The Purchaser will not cause income from the Residual
Certificate to be attributable to a foreign permanent
establishment or fixed base (within the meaning of an
applicable income tax treaty) of the Purchaser or another U.S.
taxpayer.
12. That the Purchaser agrees to such amendments of the 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 Trustee
to act as agent for the "tax matters person" of each REMIC
created by the Trust Fund pursuant to the Agreement.
14. That the Purchaser agrees to be bound by Section 3.03(f) of
the 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
RESIDUAL CERTIFICATE TRANSFER AFFIDAVIT (TRANSFEROR)
____________________________
Date
Re: ▇▇▇▇▇▇▇ ▇▇▇▇▇ Mortgage Investors Trust Series MLCC 2004-B
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:
▇-▇
▇▇▇▇▇▇▇ ▇-▇
STANDARD LAYOUT FOR MONTHLY REMITTANCE ADVICE
[INTENTIONALLY OMITTED]
▇-▇-▇
▇▇▇▇▇▇▇ ▇-▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ FOR MONTHLY DEFAULTED LOAN REPORT
OUR LOAN INVESTOR INVESTOR MORTGAGOR DUE PAYT PRINCIPAL PRIN-INT LOAN
NO. BK. CAT TP LOAN NO. NAME DATE NO. BALANCE CONSTANT --DELINQUENCIES-- DESC.
-------- ---------- -------- --------- ----- ---- --------- -------- --------------------- -----
PRINCIPAL INTEREST
-------- ---------- -------- --------- ----- ----- --------- -------- ---------------------- -----
D-2-1
EXHIBIT E
MORTGAGE LOAN PURCHASE AND SALE AGREEMENT
See Exhibit 99.1, filed herewith
E-1
EXHIBIT F
LIST OF LIMITED PURPOSE SURETY BONDS
Ambac Assurance Corporation Surety Bond No. AB0039BE, issued February
26, 1996, for ▇▇▇▇▇▇▇ ▇▇▇▇▇ Credit Corporation.
F-1
EXHIBIT G
FORM OF RULE 144A TRANSFER CERTIFICATE
Re: ▇▇▇▇▇▇▇ ▇▇▇▇▇ Mortgage Investors Trust Series MLCC 2004-B
Mortgage Pass-Through Certificates
Reference is hereby made to the Pooling and Servicing Agreement, dated
as of May 1, 2004 (the "Agreement"), among ▇▇▇▇▇▇▇ ▇▇▇▇▇ Mortgage Investors,
Inc., as Depositor, Cendant Mortgage Corporation, as Servicer and ▇▇▇▇▇ Fargo
Bank N.A., as Trustee. Capitalized terms used but not defined herein shall have
the meanings given to them in the 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 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 Underwriters and the Depositor.
________________________________
[Name of Transferor]
By: ____________________________
Name:
Title:
Dated: ____________________
G-1
EXHIBIT H
FORM OF PURCHASER'S LETTER FOR
INSTITUTIONAL ACCREDITED INVESTOR
Date
Dear Sirs:
In connection with our proposed purchase of $______________ principal
amount of ▇▇▇▇▇▇▇ ▇▇▇▇▇ Mortgage Investors Trust Series MLCC 2004-B Mortgage
Pass-Through Certificates (the "Privately Offered Certificates") of ▇▇▇▇▇▇▇
▇▇▇▇▇ Mortgage Investors, 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 May 1, 2004 (the "Agreement"), among ▇▇▇▇▇▇▇
▇▇▇▇▇ Mortgage Investors, Inc., as Depositor, Cendant Mortgage
Corporation, as Servicer and ▇▇▇▇▇ Fargo Bank N.A., 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.
H-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 Agreement.
Terms used in this letter which are not otherwise defined herein have
the respective meanings assigned thereto in the Agreement.
H-2
You 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:
H-3
EXHIBIT I
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 subject to Title I of the
Employee Retirement Income Security Act of 1974, as amended ("ERISA"), or
Section 4975 of the Internal Revenue Code of 1986, as amended (the "Code") or
any provisions of applicable federal, state or local law substantially similar
to the foregoing provisions of ERISA or the Code ("Similar Law"), the trustee of
any such plan or a person acting on behalf of any such plan or investing the
assets of any such plan; (y) if the Certificate (other than the Class A-R
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 are covered 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 shall be
entitled to rely, to the effect that the purchase and holding of such
Certificate by the Investor will not result in the assets of the Trust Fund
being deemed to be plan assets and subject to the prohibited transaction
provisions of ERISA or the Code or Similar Law, and will not subject the
Trustee, the Certificate Registrar, the Servicer or the Depositor to any
obligation in addition to those undertaken by such entities in the Agreement,
which opinion of counsel shall not be an expense of the Trust Fund, the Trustee,
the Certificate Registrar, the Servicer or the Depositor.
3. The Investor hereby acknowledges that under the terms of the
Pooling and Servicing Agreement dated as of May 1, 2004 (the "Agreement"), among
▇▇▇▇▇▇▇ ▇▇▇▇▇ Mortgage Investors, Inc., as Depositor, Cendant Mortgage
Corporation, as Servicer and ▇▇▇▇▇ Fargo Bank N.A., 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.
I-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___.
I-2
EXHIBIT J
FORM OF LETTER OF REPRESENTATIONS
WITH THE DEPOSITORY TRUST COMPANY
[INTENTIONALLY OMITTED]
J-1
EXHIBIT K
FORM OF INITIAL CERTIFICATION
▇▇▇▇▇▇▇ ▇▇▇▇▇ MORTGAGE INVESTORS TRUST SERIES MLCC 2004-B
___________, 2004
To: ▇▇▇▇▇▇▇ ▇▇▇▇▇ Mortgage Investors, Inc.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
4 World Financial ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Cendant Mortgage Corporation
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇. ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇ Credit Corporation
▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Reference is made to the Pooling and Servicing Agreement among ▇▇▇▇▇▇▇
▇▇▇▇▇ Mortgage Investors, Inc. (the "Depositor"), Cendant Mortgage Corporation
(the "Servicer") and ▇▇▇▇▇ Fargo Bank N.A., as Trustee (the "Trustee"), dated as
of May 1, 2004 (the "Agreement"), pursuant to which the Depositor has delivered
to the Trustee, with respect to each Mortgage Loan set forth on Schedule A
hereto (the "Mortgage Loan Schedule"), the documents set forth in Section 2.01
of the Agreement.
With respect to each Mortgage Loan listed on the Mortgage Loan Schedule
and except as otherwise noted on the Schedule of Exceptions set forth on
Schedule B hereto, the Trustee confirms that (1) the Trustee has received all of
the documents required to be delivered to the Trustee pursuant to Section 2.01
of the Agreement, (2) the Trustee has reviewed each Trustee's Mortgage File in
accordance with Section 2.02(a) of the Agreement, and the documents contained in
each Trustee's Mortgage File conform to the requirements set forth in such
Section 2.02(a), and (3) the Trustee has physical possession of the documents in
each Trustee's Mortgage File. The Trustee has not independently verified the
validity, enforceability, sufficiency, recordability, due authorization or
genuineness or any document in any Trustee's Mortgage File or any related
Mortgage Loan, nor the collectibility, insurability, effectiveness or
suitability of any related Mortgage Loan.
All terms used herein and not otherwise defined herein shall have the
respective meaning ascribed to such term in the Agreement.
▇▇▇▇▇ FARGO BANK N.A.,
as Trustee
By: __________________________
Name: ________________________
Title: _______________________
K-1
K-2
EXHIBIT L
FORM OF FINAL CERTIFICATION
▇▇▇▇▇▇▇ ▇▇▇▇▇ MORTGAGE INVESTORS TRUST SERIES MLCC 2004-B
_____________, 2004
To: ▇▇▇▇▇▇▇ ▇▇▇▇▇ Mortgage Investors, Inc.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
4 World Financial ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Cendant Mortgage Corporation
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇. ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇ Credit Corporation
▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Reference is made to the Pooling and Servicing Agreement among ▇▇▇▇▇▇▇
▇▇▇▇▇ Mortgage Investors, Inc. (the "Depositor"), Cendant Mortgage Corporation
(the "Servicer") and ▇▇▇▇▇ Fargo Bank N.A., as Trustee (the "Trustee"), dated as
of May 1, 2004 (the "Agreement"), pursuant to which the Depositor has delivered
to the Trustee, with respect to each Mortgage Loan set forth on Schedule A
hereto (the "Mortgage Loan Schedule"), the documents set forth in Section 2.01
of the Agreement.
With respect to each Mortgage Loan listed on the Mortgage Loan Schedule
and except as otherwise noted on the Schedule of Exceptions set forth on
Schedule B hereto, the Trustee confirms that (1) the Trustee has received all of
the documents required to be delivered to the Custodian pursuant to Section 2.01
of the Agreement, (2) the Trustee has reviewed each Trustee's Mortgage File in
accordance with Section 2 of Amendment No. 1 to the Custodial Agreement, and the
documents contained in each Trustee's Mortgage File conform to the requirements
set forth in such Section 2, and (3) the Trustee has physical possession of the
documents in each Trustee's Mortgage File. The Trustee has not independently
verified the validity, enforceability, sufficiency, recordability, due
authorization or genuineness or any document in any Trustee's Mortgage File or
any related Mortgage Loan, nor the collectibility, insurability, effectiveness
or suitability of any related Mortgage Loan.
L-1
All terms used herein and not otherwise defined herein shall have the
respective meaning ascribed to such term in the Agreement.
▇▇▇▇▇ FARGO BANK N.A.,
as Trustee
By: __________________________
Name: ________________________
Title: _______________________
L-2
EXHIBIT M
LIST OF SERVICING OFFICERS
[INTENTIONALLY OMITTED]
M-1
EXHIBIT N
REQUEST FOR RELEASE
To: ▇▇▇▇▇ Fargo Bank, N.A.
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇.▇.
▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
(Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇ Mortgage Investors Trust Series MLCC 2004-B)
Re: Pooling and Servicing Agreement, dated as of May 1, 2004, among
▇▇▇▇▇▇▇ ▇▇▇▇▇ Mortgage Investors, Inc., as Depositor, Cendant
Mortgage Corporation, as Servicer and ▇▇▇▇▇ Fargo Bank, N.A., as
Trustee
In connection with the administration of the pool of Mortgage Loans
held by you as Trustee for the benefit of Certificateholders, we request the
release of the (Trustee's Mortgage File/[specify documents]) for the Mortgage
Loan described below, for the reason indicated.
File/document to be sent to:
[Company]
[Address]
[Attn:]
[Telephone Number ____]
Mortgagor's Name, Address & Zip Code:
Mortgage Loan Number:
Reason for Requesting Documents (check one)
______ 1. Mortgage Loan Paid in Full
([Seller/Depositor] [Servicer], hereby certifies that all
amounts received in connection therewith have been credited to
the Custodial Account or the Distribution Account, as
applicable.)
______ 2. Mortgage Loan in Foreclosure
______ 3. Mortgage Loan Repurchased or Substituted For
([Seller/Depositor] [Servicer], hereby certifies that any
applicable repurchase price or substitution shortfall amount
has been credited to the Custodial Account or the Distribution
Account, as applicable.)
______ 4. Mortgage Loan Liquidated
([Seller/Depositor] [Servicer], hereby certifies that all
proceeds of foreclosure, insurance or other liquidation have
been finally received and credited to the Custodial Account or
the Distribution Account, as applicable.)
______ 5. Other (explain) ______________________
N-1
If box 1, 2 or 3 above is checked, and if all or part of the
Trustee's Mortgage File was previously released to us, please
release to us our previous receipt on file with you, as well
as any additional documents in your possession relating to the
above specified Mortgage Loan.
If box 4 or 5 above is checked, upon our return of all of the
above documents to you as Trustee, please acknowledge your
receipt by signing in the space indicated below, and returning
this form.
[SELLER/DEPOSITOR]
[SERVICER]
By: __________________________
Date: ________________________
Documents returned to Trustee:
___________________________,
as Trustee
By: _______________________
Date: _____________________
N-2
EXHIBIT O
CUSTODIAL AGREEMENT
THIS CUSTODIAL AGREEMENT dated as of December 15, 2000 (this
"Agreement"), between ▇▇▇▇▇▇▇ ▇▇▇▇▇ CREDIT CORPORATION ("MLCC") having an
address at ▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇ and ▇▇▇▇▇
FARGO BANK MINNESOTA, N.A. ("Custodian"), having an address at Sixth and
Marquette, ▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇- 0031.
PRELIMINARY STATEMENT
MLCC may, from time to time, purchase certain Mortgage Loans from third
party sellers pursuant to the terms and conditions of certain mortgage loan
purchase agreements entered into between MLCC and such third parties (each, a
"Purchase Agreement"). MLCC desires that the Custodian act as custodian with
respect to the documents for the Mortgage Loans delivered from time to time to
the Custodian hereunder, and the Custodian desires to act as custodian with
respect to the documents for the Mortgage Loans.
NOW, THEREFORE, in consideration of the mutual covenants set forth
herein and for other good and valuable consideration, the sufficiency and
receipt of which is hereby acknowledged, the parties hereto hereby agree as
follows:
1. Definitions.
"Additional Collateral Mortgage Loan": Each Mortgage Loan that is
either a Mortgage 100(sm) Loan or Parent Power(R) Mortgage Loan as to which the
Additional Collateral is provided. For purposes hereof, the term "Additional
Collateral" shall mean (i) with respect to any Mortgage 100(sm) Loan, the
marketable securities subject to a security interest pursuant to the related
Mortgage 100(sm) Pledge Agreement, or (ii) with respect to any Parent Power(R)
Mortgage Loan, the related Parent Power(R) Agreement.
"Agreement": This Custodial Agreement and all amendments and
attachments hereto and supplements hereof.
"Assignment": 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 give record
notice of the sale or transfer of the Mortgage Loan.
"Business Day": Any day other than (i) a Saturday or Sunday, or (ii) a
day on which banking or savings associations in the State of New Jersey or the
State of Minnesota are authorized or obligated by law or executive order to be
closed.
"Closing Date": With respect to each Mortgage Loan, the date upon which
the MLCC completes the purchase of such Mortgage Loan.
"Custodian": ▇▇▇▇▇ Fargo Bank Minnesota, N.A., or its successor in
interest or assigns.
"Custodian's Mortgage File": As to each Mortgage Loan, all Mortgage
Loan documents delivered to the Custodian pursuant hereto and held by the
Custodian with respect to each Mortgage Loan.
O-1
"Custody Receipt": An Initial Custody Receipt and/or a Final Custody
Receipt.
"Cut-off Date": With respect to each Mortgage Loan, the first day of
the month in which the related Delivery Date occurs or such other date specified
by the Registered Holder.
"Delivery Date": The date on which MLCC delivers or causes to be
delivered to the Custodian the Mortgage Loans listed on the related Mortgage
Loan Schedule.
"Exception Report": The Exception Report prepared by the Custodian as
part of the Initial Custody Receipt and as updated thereafter.
"Final Custody Receipt": A final custody receipt as to each Mortgage
Loan, which final custody receipt is delivered to MLCC, or its successor in
interest or assigns, by the Custodian in the form annexed hereto as Exhibit Two.
"First Mortgage Loan": A Mortgage Loan that is secured by a first lien
on the Mortgaged Property securing the related Mortgage Note.
"Gross Margin": With respect to each adjustable rate Mortgage Loan, the
fixed number of basis points set forth in the Mortgage Loan Schedule that is
added to the Index on each Interest Rate Adjustment Date in accordance with the
terms of the related Mortgage Note to determine the Mortgage Interest Rate for
such Mortgage Loan, subject to any applicable Periodic Rate Cap or Lifetime Rate
Cap.
"Index": With respect to each adjustable rate Mortgage Loan, a rate per
annum to which the Gross Margin is added on each Interest Rate Adjustment Date
to determine the new Mortgage Interest Rate for such Mortgage Loan.
"Initial Custody Receipt": An initial custody receipt as to each
Mortgage Loan, which initial custody receipt is delivered to MLCC, or its
successor in interest or assigns, by the Custodian in the form annexed hereto as
Exhibit One.
"Interest Rate Adjustment Date": With respect to each adjustable rate
Mortgage Loan, the date on which the Mortgage Interest Rate is adjusted in
accordance with the terms of the related Mortgage Note.
"Lifetime Rate Cap": With respect to each adjustable rate Mortgage
Loan, the maximum Mortgage Interest Rate that may be borne thereby, as set forth
in the related Mortgage Note.
"Loan-to-Value Ratio": With respect to any First Mortgage Loan, as of
any date of determination, the ratio on such date of the outstanding principal
balance of such Mortgage Loan to the Appraised Value of the related Mortgaged
Property.
"Mortgage": The mortgage, deed of trust or other instrument creating a
first or second lien on real property securing the Mortgage Note.
"Mortgage Interest Rate": The annual rate at which interest accrues on
any Mortgage Loan and with respect to any adjustable rate Mortgage Loan, as such
annual rate may be adjusted on any Interest Rate Adjustment Date and subject to
the limitations on such interest rate imposed by any Lifetime Rate Cap or any
Periodic Rate Cap.
O-2
"Mortgage Loan": An individual Mortgage Loan, including but not limited
to all documents included in the Custodian's Mortgage File, monthly payments,
principal prepayments, proceeds from REO dispositions and any and all rights,
benefits, proceeds and obligations arising therefrom or in connection therewith,
and which is the subject of this Agreement.
"Mortgage Loan Schedule": The list of Mortgage Loans purchased by MLCC
from a third party seller from time to time that are subject to this Agreement
which list shall set forth the following information with respect to each
Mortgage Loan:
(i) the loan number;
(ii) the Mortgagor's name, social security number, and
FICO score;
(iii) the street address of the Mortgaged Property,
including city, state and zip code, if available;
(iv) the Mortgage Interest Rate at origination and, in the
case of an adjustable rate Mortgage Loan, the
Mortgage Interest Rate in effect as of the related
Cut-off Date, which rate may vary from that reflected
in the Mortgage and Note;
(v) for each adjustable rate Mortgage Loan, the first
Interest Rate Adjustment Date;
(vi) for each adjustable rate Mortgage Loan, the Gross
Margin;
(vii) for each adjustable rate Mortgage Loan, the Lifetime
Rate Cap, if applicable;
(viii) for each adjustable rate Mortgage Loan, the Periodic
Rate Cap, if applicable;
(ix) the original term to maturity and remaining term to
maturity;
(x) the original principal balance;
(xi) the first payment due date;
(xii) the maturity date;
(xiii) the monthly payment in effect as of the related
Cut-off Date;
(xiv) the principal balance as of the related Cut-off Date;
(xv) as to any First Mortgage Loan the Loan-to-Value Ratio
at origination;
(xvi) a code indicating whether the Mortgaged Property is
occupied by the Mortgagor;
(xvii) a code indicating the type of Residential Dwelling;
(xviii) a code indicating the purpose of the Mortgage Loan;
(xix) a code indicating the Mortgage Loan documentation
type (i.e. limited documentation, full documentation,
easy documentation, etc.); and
(xx) for each adjustable rate Mortgage Loan, a code
indicating the type of Index.
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"Mortgage Note": The note evidencing the indebtedness of a Mortgagor
secured by a Mortgage.
"Mortgaged Property": The underlying real property securing repayment
of a Mortgage Note, consisting of a fee simple estate in a single parcel of real
property improved by a Residential Dwelling.
"Mortgagor": The obligor on a Mortgage Note, the owner of the Mortgaged
Property and the grantor or mortgagor named in the related Mortgage and such
grantor's or mortgagor's successor in title to the Mortgaged Property.
"Opinion of Counsel": A document signed by an attorney, explaining the
attorney's understanding of the law as applicable to a state of facts submitted
for the purpose of an opinion.
"Periodic Rate Cap": With respect to each adjustable rate Mortgage Loan
as to which the related Mortgage Loan Schedule indicates the existence of a
Periodic Rate Cap, the provision of the related Mortgage Note that provides for
a maximum amount by which the Mortgage Interest Rate may increase (or, if so
indicated on such Mortgage Loan Schedule, decrease) on an Interest Rate
Adjustment Date above (or below) the Mortgage Interest Rate in effect
immediately prior to such Interest Rate Adjustment Date.
"Pledge Agreement": Any Mortgage 100 Pledge Agreement, Parent Power
Guaranty and Security Agreement for Securities Account, or Parent Power Guaranty
Agreement for Real Estate related to an Additional Collateral Mortgage Loan.
"Registered Holder": MLCC, its successors in interest or assigns, in
whole or in part, as the case may be.
"Residential Dwelling": Any one of the following: (i) a detached
one-family dwelling, (ii) a detached two- to four-family dwelling, (iii) a
one-family dwelling unit in a ▇▇▇▇▇▇ ▇▇▇-eligible condominium project, or (iv) a
detached one-family dwelling in a planned unit development, none of which is a
co-operative.
"Second Mortgage Loan": A Mortgage Loan that is secured by a second
lien on the Mortgaged Property securing the related Mortgage Note.
2. Delivery of Mortgage Loan Schedule and Custodian's Mortgage
File.
MLCC may, from time to time, deliver or cause to be delivered
to the Custodian a Mortgage Loan Schedule and the following documents for each
Mortgage Loan listed on such Mortgage Loan Schedule, to be held by the Custodian
for the benefit of the Registered Holder, as the owner thereof:
(a) The original Mortgage Note endorsed, "Pay to the
order of ___________, without recourse" and signed in the name of the name of
last endorsee, by an authorized officer of the last endorsee. If the Mortgage
Loan was acquired by the last endorsee in a merger or other type of acquisition,
the endorsement must be by "[name of last endorsee], successor [by merger to or
in interest to, as applicable] [name of predecessor]"; and if the Mortgage Loan
was acquired or originated by the last endorsee while doing business under
another name, the endorsement must be by "[name of last endorsee], successor in
interest to [previous name]." The Mortgage Note shall include all intervening
endorsements showing a complete chain of title from the originator to the last
endorsee.
(b) The original recorded Mortgage, with evidence of
recording thereon, or, if the original Mortgage has not yet been returned from
the recording office, a copy of the original Mortgage
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certified by the previous owner to be a true copy of the original of the
Mortgage which has been delivered for recording in the appropriate recording
office of the jurisdiction in which the Mortgaged Property is located.
(c) The original Assignment of each Mortgage, executed in
blank by either MLCC or its Servicer. If the Mortgage Loan was acquired by the
last endorsee in a merger or other type of acquisition, the assignment must be
by "[name of last assignee], successor [by merger to or in interest to, as
applicable] [name of predecessor]"; and if the Mortgage Loan was acquired or
originated by the last endorsee while doing business under another name, the
assignment must be by "[name of last assignee], successor in interest to
[previous name]."
(d) The original policy of title insurance (or a
preliminary title report if the original title insurance policy has not been
received from the title insurance company).
(e) Originals of any intervening assignments of the
Mortgage, 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 Seller to be a true copy of the original of the
assignment which has been delivered for recording in the appropriate recording
office of the jurisdiction in which the Mortgaged Property is located.
(f) With respect to a Mortgage Loan that, according to
the Mortgage Loan Schedule is covered by a primary mortgage insurance policy,
the original or a copy of primary mortgage insurance certificate, if any.
(g) If indicated on the Mortgage Loan Schedule, originals
of all assumption and modification agreements, if any, with originals or copies
of the underlying instruments being modified.
(h) With respect to each Additional Collateral Mortgage
Loan,
1. Copy of the related Mortgage 100 Pledge
Agreement for Securities Account or the Parent Power Guaranty and Security
Agreement for Securities Account or the Parent Power Guaranty Agreement for Real
Estate, as the case may be;
2. copy of the UCC-1 (applicable for South
Carolina and Rhode Island only);
3. an original form UCC-3, if applicable;
4. For loans originated by a correspondent
lender, an original assignment of security interest of the related Mortgage 100
Pledge Agreement or Parent Power Agreement, as the case may be.
(i) With respect to each Cooperative Loan:
1. the original proprietary lease;
2. the original recognition agreement;
3. the original security agreement;
4. the original or copy of the assignment of
proprietary lease;
5. the original cooperative stock certificate
and stock power executed by borrower in blank;
6. the original UCC-1 Financing Statements; and
7. the original UCC-3 Financing Statements.
(j) Power of Attorney, if applicable.
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From time to time, MLCC shall forward or cause to be forwarded to the
Custodian additional documents, original or otherwise, evidencing an assumption
or modification of a Mortgage Loan which documents shall become part of the
Custodian's Mortgage File.
3. Obligations of the Custodian.
(a) With respect to each Custodian's Mortgage File, the
Custodian is exclusively the custodian for the Registered Holder from and after
the related Delivery Date. The Custodian shall hold all documents constituting
the Custodian's Mortgage File received by it for the exclusive use and benefit
of the Registered Holder, and shall make disposition thereof only in accordance
with this Agreement and the instructions furnished by the Registered Holder. The
Custodian shall segregate and maintain continuous custody of all documents
constituting the Custodian's Mortgage File received by it in secure and
fire-resistant facilities in accordance with customary standards for such
custody. The Custodian represents and warrants that it will verify the receipt
of required documents, the accuracy of certain information, and indicate
discrepancies pursuant to the custody receipt requirements herein. The Custodian
makes no representations or warranties as to, and shall not be responsible to,
verify: (i) the validity, legality, enforceability, sufficiency, recordability,
due authorization or genuineness of any of the documents contained in each
Custodian's Mortgage File or any of the Mortgage Loans or (ii) the
collectibility, insurability, effectiveness or suitability of any such Mortgage
Loan. No provision of this Agreement shall be construed to impose on the
Custodian any obligation of a third party seller under this Agreement or a
Purchase Agreement under any circumstances.
(b) The Custodian shall, at its own expense, maintain at
all times during the existence of this Agreement and keep in full force and
effect a fidelity bond, errors and omissions insurance, theft and documents
insurance and forgery insurance in amounts and with standard coverage as is
customary for insurance typically maintained by institutions that act as
custodians. The minimum coverage under any such bond and insurance policies
shall be at least equal to the corresponding amounts required by the Government
National Mortgage Association, ▇▇▇▇▇▇ Mae or ▇▇▇▇▇▇▇ Mac either of the Custodian
or in their respective Seller/Servicing Guides. A certificate of an authorized
officer for the Custodian shall be furnished to the Registered Holder upon
request as evidence of its compliance with any such requirement.
4. Custody Receipts.
(a) Initial Custody Receipt. The Custodian shall review
the documents delivered to it on each Delivery Date and shall deliver to MLCC as
initial Registered Holder within two (2) Business Days following the Delivery
Date, or within a mutually agreed upon time between the Bank and the Custodian,
but prior to the Closing Date, an Initial Custody Receipt with respect to the
Mortgage Loans, in which the Custodian shall certify that such Mortgage Loans
are held for MLCC (as Registered Holder) and that, as to each Mortgage Loan
listed in the Mortgage Loan Schedule (other than any Mortgage Loan paid in full
or any Mortgage Loan specifically identified in such certification as not
covered by such certification), (a) all documents described in Paragraphs 2(a)
through 2(e) and to the extent provided in the Custodian's Mortgage Files
Paragraphs 2(f) through 2(j), if applicable, of this Agreement are in its
possession and (b) each Mortgage Note has been endorsed and each Assignment has
been executed as provided in Paragraph 2 hereof. If the Custodian determines
from such verification that any discrepancy or deficiency exists with respect to
a Custodian's Mortgage File, the Custodian shall note such discrepancy on the
schedule of exceptions attached to the Initial Custody Receipt as Schedule B
thereto (the "Exception Report").
The Custodian shall also note on the Exception Report, with respect to
each Mortgage Loan, whether a certified copy of the related Mortgage was
delivered to the Custodian in lieu of the original of
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such Mortgage, whether a certified copy of an intervening assignment of the
related Mortgage was delivered to the Custodian in lieu of the original of such
assignment, and whether a preliminary title report with respect to such Mortgage
Loan was delivered to the Custodian in lieu of the original policy of title
insurance.
On the first Business Day of each calendar month following delivery of
the Initial Custody Receipt until the month in which the Final Custody Receipt
is to be delivered pursuant to Subsection (b) below, the Custodian shall deliver
to the Registered Holder of the Initial Custody Receipt, an updated Exception
Report, revised to reflect any changes with respect to the status of the
exceptions noted for the related Mortgage Loans.
(b) Final Custody Receipt. Not later than sixty (60) days
following the date of each delivery of an Initial Custody Receipt, the Custodian
shall deliver to the Registered Holder of the Initial Custody Receipt the Final
Custody Receipt, with respect to the Mortgage Loans related to such Initial
Custody Receipt, in which the Custodian shall certify to the Registered Holder
that, as to each Mortgage Loan listed in the related Mortgage Loan Schedule
(other than any Mortgage Loan paid in full or any Mortgage Loan specifically
identified in such certification as not covered by such certification), (a) all
documents described in Paragraphs 2(a) through 2(e), and to the extent provided
in the Custodian's Mortgage Files Paragraphs 2(f) through 2(j), if applicable,
of this Agreement are in its possession, (b) such documents have been reviewed
by it and appear regular on their face and relate to such Mortgage Loan, (c)
based on its examination and only as to the foregoing documents, the information
set forth in items (i), (ii), (iii) excluding the zip code requirement, (iv),
(vi), (vii), (viii) and (x) of the definition of "Mortgage Loan Schedule"
respecting such Mortgage Loan is correct, and which as to items (iv), (vi),
(viii), and (x) for adjustable rate Mortgage Loans may reflect interest rates or
amounts that as of the Cutoff Date vary from those provided in the Mortgage Loan
Documents and (d) each Mortgage Note has been endorsed and each Assignment has
been executed as provided in Paragraph 2 hereof. If the Custodian determines
from such verification that any discrepancy or deficiency exists with respect to
a Custodian's Mortgage File, the Custodian shall note such discrepancy on the
Exception Report attached to the Final Custody Receipt as Schedule B thereto.
The Custodian shall also note on such Exception Report, with respect to each
Mortgage Loan, whether a certified copy of the related Mortgage was delivered to
the Custodian in lieu of the original of such Mortgage, whether a certified copy
of an intervening assignment of the related Mortgage was delivered to the
Custodian in lieu of the original of such assignment, and whether a preliminary
title report with respect to such Mortgage Loan was delivered to the Custodian
in lieu of the original policy of title insurance. Except as specifically
provided above, the Custodian shall be under no duty to review, inspect or
examine such documents to determine that any of them are enforceable or
appropriate for their prescribed purpose. Upon delivery of the Final Custody
Receipt to the Registered Holder of the Initial Custody Receipt, the Initial
Custody Receipt shall be of no further force or effect.
(c) Within five (5) days of receipt of written
directions, in the form attached hereto as Exhibit Six, from the Registered
Holder with respect to all or a portion of the Mortgage Loans owned by such
Registered Holder, and upon the prior tender by such Registered Holder of the
applicable Initial and/or Final Custody Receipt(s), as applicable, the Custodian
shall deliver all or any portion of the Custodian's Mortgage Files held by it to
the Registered Holder, or to such other party as the Registered Holder may
direct, as provided in Paragraph 19, at the place indicated in any such written
direction from the Registered Holder and shall deliver to the Registered Holder
a new Initial or Final Custody Receipt, as applicable, with respect to the
Custodian's Mortgage Files retained by the Custodian. The Registered Holder may
require the Custodian to complete the endorsements on any Mortgage Notes in its
possession and to complete the Assignment of Mortgages prepared by the Servicer
in blank, within a reasonable period of time. The cost of this shall be
reimbursed by the Registered Holder. A list of authorized signatures for such
written directions has been furnished to the Custodian by the Registered Holder
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pursuant to Paragraph 20 hereof. Upon the Custodian's receipt of such written
notification from the Registered Holder that the Registered Holder has sold any
or all of the Mortgage Loans, which notification shall be accompanied by the
Initial and/or Final Custody Receipt(s), as applicable that relate to such
Mortgage Loans, the Custodian shall change its records to reflect that such
purchaser is the owner of such Mortgage Loans and shall immediately, upon the
direction of such Registered Holder, either deliver the related Custodian's
Mortgage Files to such purchaser at the expense of such purchaser or issue an
Initial or Final Custody Receipt in the name of such purchaser. Such purchaser,
as a Registered Holder, shall be required to simultaneously furnish to the
Custodian a list of authorized signatures for written directions pursuant to
Paragraph 20 hereof. The Custodian shall then deliver to the Registered Holder a
new Initial and/or Final Custody Receipt, as applicable reflecting all Mortgage
Loans with respect to which the Custodian still holds the related Custodian's
Mortgage Files on behalf of the Registered Holder. The Registered Holder and the
Custodian agree herein that any purchaser of any or all of the Mortgage Loans
shall succeed to the rights and obligations of the Registered Holder under this
Agreement with respect to such Mortgage Loans upon receipt of the related
Initial and/or Final Custody Receipt, as applicable subject to the provisions of
Paragraph 15 hereof.
5. Fees and Expenses of the Custodian.
It is understood that the Custodian will charge such fees for its
services under this Agreement as are set forth in a separate agreement between
the Custodian and MLCC, the payment of which, together with the Custodian's
expenses in connection herewith, shall be solely the obligation of the
Registered Holder with respect to the related Mortgage Loans.
6. Removal of the Custodian.
Any Registered Holder with respect to all or a portion of the Mortgage
Loans owned by such Registered Holder, with or without cause, may, upon thirty
(30) days' written notice to the Custodian, remove and discharge or any
successor Custodian thereafter appointed, as to such portion or all of the
Mortgage Loans the Custodian, from the performance of its duties under this
Agreement. In the event of any such removal, upon tender of the Custody Receipts
and satisfaction of any outstanding fees and expenses of the Custodian, the
Custodian shall promptly transfer to such Registered Holder or to a successor
Custodian appointed by such Registered Holder at the expense of such Registered
Holder, as directed by such Registered Holder in writing, all Custodian's
Mortgage Files related to the Mortgage Loans as to which the Custodian is being
terminated.
7. Examination of the Custodian's Mortgage File.
Upon reasonable prior written notice to the Custodian, but not less
than two (2) Business Day, any Registered Holder with respect to all or a
portion of the Mortgage Loans owned by such Registered Holder and its agents,
accountants, attorneys, auditors, prospective purchasers, and third-party
contractors authorized by such Registered Holder will be permitted, during
normal business hours, to examine the Custodian's Mortgage Files, documents,
records and other papers in the possession of or under the control of the
Custodian relating to any or all of the Mortgage Loans for which the Custodian
holds the related Custodian's Mortgage File for such Registered Holder at the
expense of the inspecting party.
8. Counterparts.
For the purpose of facilitating the execution of this Agreement as
herein provided and for other purposes, this Agreement may be executed
simultaneously in any number of counterparts, each of which counterparts shall
be deemed to be an original and all of which together shall constitute and be
one and the same instrument.
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9. Periodic Statements.
Upon the request of any Registered Holder at any other time with at
least two (2) Business Days' notice to the Custodian, the Custodian shall
provide to the Registered Holder with respect to all or a portion of the
Mortgage Loans owned by such Registered Holder, a list of all of the Mortgage
Loans for which the Custodian holds a Custodian's Mortgage File pursuant to this
Agreement. Such list may be in the form of a copy of the Mortgage Loan Schedule
with manual deletions to denote specifically any Mortgage Loans paid off,
liquidated or repurchased or otherwise released by the Custodian since the date
of this Agreement.
10. Governing Law.
This Agreement shall be construed in accordance with the laws of the
State where MLCC is headquartered, and the obligations, rights and remedies of
the parties hereunder shall be determined in accordance with such laws.
11. Copies of Mortgage Documents.
Upon the request of the Registered Holder with respect to all or a
portion of the Mortgage Loans owned by such Registered Holder, and at the cost
and expense of such party, the Custodian shall provide such Registered Holder
with copies or originals as provided in Section 21 hereof, of the Mortgage
Notes, Mortgages, Assignments and other documents to the extent that such
documents are part of the Custodian's Mortgage File relating to one or more of
the Mortgage Loans.
12. No Adverse Interest of Custodian.
By execution of this Agreement, the Custodian represents, warrants and
covenants that it currently does not hold, and during the existence of this
Agreement shall not hold, any adverse interest, by way of security or otherwise,
in any Mortgage Loan.
13. Termination By Custodian.
The Custodian may terminate its obligations under this Agreement upon
at least sixty (60) days' notice to the Registered Holder with respect to all or
a portion of the Mortgage Loans owned by such Registered Holder. The Custodian
shall then be responsible for all costs associated with such termination,
including costs associated with the transfer of the Custodial Files. If, in the
event of such termination, the Registered Holder shall appoint a successor
Custodian within such sixty day period, then upon such appointment and tender of
the related Custody Receipts, the Custodian shall promptly transfer to such
successor Custodian, as directed by the Registered Holder with respect to all or
a portion of the Mortgage Loans owned by such Registered Holder, all of the
Custodian's Mortgage Files being administered under this Agreement and shall
either complete the Assignments and endorse the Mortgage Notes as directed by
the Registered Holder or allow the Registered Holder or its agents or attorneys,
access to the Custodian's Mortgage Files for such purpose. Notwithstanding the
foregoing, if the Registered Holder fails to appoint a Custodian within such
sixty day period, the Custodian may petition any court of competent jurisdiction
for the appointment of a successor Custodian.
14. Termination of Agreement.
This Agreement shall terminate upon the earlier of (a) the final
payment or other liquidation (or advance with respect thereto) of the last
Mortgage Loan, (b) the disposition of all property acquired upon foreclosure or
by deed in lieu of foreclosure of the last Mortgage Loan, or (c) the delivery by
the
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Custodian of the last Custodian's Mortgage File pursuant to the direction of the
Registered Holder hereunder. In such event the Registered Holder with respect to
all or a portion of the Mortgage Loans owned by such Registered Holder shall so
notify the Custodian and tender all Custody Receipts, and thereafter all
documents remaining in the Custodian's Mortgage Files shall be forwarded to the
Registered Holder.
15. Assignment of Agreement.
The Registered Holder with respect to all or a portion of the Mortgage
Loans owned by such Registered Holder shall have the right to assign, in whole
or in part, its interests under this Agreement with respect to some or all of
the Mortgage Loans, and to designate any person or exercise any rights of the
Registered Holder hereunder, and such assignee or designee shall accede to the
rights and obligations hereunder of the Registered Holder with respect to such
Mortgage Loans. All references to the Registered Holder shall be deemed to
include its assignee or designee. In connection with any such assignment, the
Registered Holder with respect to all or a portion of the Mortgage Loans owned
by such Registered Holder may require that arrangements reasonably satisfactory
to it be made for the exchange of previously executed and outstanding Custody
Receipt(s) for a Custody Receipt representing such assignment. The Custodian may
not assign its interests or delegate its duties under this Agreement without the
prior written consent of the Registered Holder. In the event of any such
assignment or delegation, the Registered Holder shall not be responsible for any
fees of the successor Custodian in excess of the fees formerly paid by the
Registered Holder to the Custodian.
16. Notice.
All demands, notices and communications hereunder shall be in writing
and shall be sent to the other party at the address shown on the first page
hereof, or such other address as may hereafter be furnished to the other party
by written notice given to the other party hereto in a notice complying with the
terms and provisions of this Section 16 or on an Exhibit Six notice provided
pursuant to Section 4(c).
Any such demand, notice or communication hereunder shall be deemed
conclusively to have been given if personally delivered at or mailed by
registered mail, postage prepaid, and return receipt requested or transmitted by
telex, telegraph or facsimile transmission and by a similar writing to the other
party at its address as described in Subclause (a).
17. Indemnification.
(a) Neither the Custodian nor any of its directors,
officers, agents or employees, shall be liable for any action taken or omitted
to be taken by it or them hereunder or in connection herewith in good faith and
believed by it or them to be within the purview of this Agreement, except for
its or their own negligence, lack of good faith or willful misconduct.
(b) The Registered Holder and the Custodian agree to
indemnify and hold each other and their respective directors, officers, agents
and employees harmless against any and all liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or disbursements
of any kind or nature whatsoever, including reasonable attorney's fees, that may
be imposed on, incurred by, or asserted against it or them in any action taken
or not taken by it or them hereunder. This indemnification shall include, but
not be limited to, the claims of third parties arising from or related to this
Agreement or the Mortgage Loans. This indemnification applies if such
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses, disbursements, or claims were imposed on, incurred by or
asserted against the party seeking indemnification because of the breach of the
obligations, negligence, lack of good faith or willful misconduct of the other
party or any of its directors, officers,
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agents or employees. The foregoing indemnification shall survive any termination
of this Agreement and the resignation or removal of the Custodian.
(c) In the event that the Custodian fails to produce a
Mortgage Note, Assignment of Mortgage or any other document related to a
Mortgage Loan that was in its possession pursuant to Section 2 within four (4)
Business Days after required or requested by the Registered Holder or its
Servicer (a "Custodial Delivery Failure"), and provided that (i) Custodian
previously delivered to the Registered Holder an Initial Custody Receipt which
did not list such document as an exception; (ii) such document is not
outstanding pursuant to a request for release in the form annexed hereto as
Exhibit Five; and (iii) such document was held by the Custodian on behalf of the
Registered Holder, then the Custodian shall: (a) with respect to any missing
Mortgage Note, promptly deliver to the Registered Holder upon request, a Lost
Note Affidavit in the form of Exhibit Seven hereto and (b) with respect to any
missing document related to such Mortgage Loan, including but not limited to a
missing Mortgage Note, (1) indemnify the Registered Holder, and its successor in
interest, in accordance with the succeeding paragraph and, (2) obtain and
maintain an insurance bond in the name of the Registered Holder, and its
successors in interest and assigns, insuring against any losses associated with
the loss of such document, in an amount equal to the then outstanding principal
balance of the related Mortgage Loan or such lesser amount requested by the
Registered Holder, at the Registered Holder's sole option, at any time the long
term obligations of the Custodian are rated below the second highest rating
category of ▇▇▇▇▇'▇ Investors Service, Inc. or Standard and Poor's Ratings
Group, a division of ▇▇▇▇▇▇-▇▇▇▇, Inc.
(d) The Custodian agrees to indemnify and hold the
Registered Holder, and its designees, harmless against any and all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements of any kind or nature whatsoever, including reasonable
attorney's fees, that may be imposed on, incurred by, or asserted against it or
them in any way relating to or arising out of a Custodial Delivery Failure, as
defined herein, or the Custodian's negligence, lack of good faith or willful
misconduct. The forgoing indemnification shall survive any termination or
assignment of this Agreement.
18. Reliance of Custodian.
In the absence of bad faith on the part of the Custodian, the Custodian
may conclusively rely, as to the truth of the statements and the correctness of
the opinions expressed therein, upon any request, instructions, certificate,
opinion or other document furnished to the Custodian, reasonably believed by
Custodian to be genuine and to have been signed or presented by the proper party
or parties and conforming to the requirements of this Agreement. No
representations, warranties, covenants or obligations of the Custodian shall be
implied with respect to this Agreement or the Custodian's services hereunder.
19. Transmission of Custodian's Mortgage File.
Written instructions as to the method of shipment and shipper(s)
Custodian is directed to utilize in connection with transmission of mortgage
files and loan documents in the performance of the Custodian's duties hereunder
shall be delivered by the Registered Holder (the "Requesting Party") with
respect to all or a portion of the Mortgage Loans owned by such Registered
Holder to the Custodian prior to any shipment of any mortgage files and loan
documents hereunder. The Registered Holder will arrange for the provision of
such services at its sole cost and expense (or, at Custodian's option, reimburse
Custodian for all costs and expenses incurred by Custodian consistent with such
instructions) and will maintain such insurance against loss or damage to
mortgage files and loan documents as the Requesting Party deems appropriate.
Without limiting the generality of the provisions of Paragraph 17 above, it is
expressly agreed that in no event shall the Custodian have any liability for any
losses or damages to any person,
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including, without limitation, the Requesting Party, arising out of actions of
the Custodian consistent with instructions of the Requesting Party. In the
absence of any written instructions with respect to the transmission of the
Custodian's Mortgage Files, the parties hereby agree that the Custodian may
utilize any nationally recognized overnight courier service and shall be
entitled to reimbursement from the Registered Holder.
20. Authorized Representative.
Unless the Registered Holder shall have given the Custodian written
notice to the contrary, each individual designated as an authorized
representative of the Registered Holder with respect to all or a portion of the
Mortgage Loans owned by such Registered Holder, and the Custodian, respectively
(an "Authorized Representative"), is authorized to give and receive notices,
requests and instructions and to deliver certificates and documents in
connection with this Agreement on behalf of the Registered Holder with respect
to all or a portion of the Mortgage Loans owned by such Registered Holder, or
the Custodian, as the case may be, and the specimen signature for each such
Authorized Representative of MLCC as the initial Registered Holder and each such
Authorized Representative of the Custodian initially authorized hereunder is set
forth on Exhibit Three and Exhibit Four hereof, respectively. Any subsequent
Registered Holder of the Mortgage Loans shall provide the Custodian specimen
signatures for each Authorized Representative of such Registered Holder. From
time to time, the Registered Holder and the Custodian may, by delivering to the
other party a revised exhibit, change the information previously given pursuant
to this Paragraph, but each of the parties hereto shall be entitled to rely
conclusively on the then current exhibit until receipt of a superseding exhibit.
21. Release of Custodian's File for Servicing.
Upon written request by the Registered Holder or its Servicer with
respect to all or a portion of the Mortgage Loans owned by such Registered
Holder, pursuant to the form attached hereto as Exhibit Five, the Custodian
shall use its best efforts to promptly, and in no event no later than two (2)
Business Days after receipt of such written request completed in accordance with
this Agreement, release to the Registered Holder or its Servicer for the
servicing or foreclosure of any of the Mortgage Loans the related Custodian's
Mortgage File. All Custodian's Mortgage Files so released to the Registered
Holder's Servicer shall be held by such Servicer in trust for the benefit of the
Registered Holder in accordance with the provisions of a servicing agreement
entered into between the Registered Holder and such Servicer. The Registered
Holder or its Servicer shall return to the Custodian the Custodian's Mortgage
File that has been released to the Registered Holder or its Servicer, when the
Registered Holder's or its Servicer's need therefor in connection with such
servicing or foreclosure no longer exists, unless the Mortgage Loan shall be
liquidated, in which case, upon receipt of a certification to this effect from
the Registered Holder or its Servicer to the Custodian in the form annexed
hereto as Exhibit Five, and the Custodian shall thereupon reflect any such
liquidation on the list of Mortgage Loans maintained by it pursuant to Paragraph
9 of this Agreement.
Custodian shall not release more than 5% of the number of Mortgage
Loans at any time without additional written consent from Registered Holder.
This limitation shall not apply to the release of Custodial Files upon payment
in full.
22. Release of Custodian's Mortgage File for Payment.
Upon the repurchase or substitution of any Mortgage Loan pursuant to a
Purchase Agreement or the payment in full of any Mortgage Loan, which shall be
evidenced by the Custodian's receipt of a request for release, receipt and
certification in the form annexed hereto as Exhibit Five (which certification
shall include a statement to the effect that all amounts received in connection
with such
O-12
payment or repurchase have been credited to the account of the Registered
Holder), the Custodian shall use its best efforts promptly and in no event later
than two (2) Business Days after receipt of the written request therefor
completed in accordance with this Agreement, release the related Custodian's
Mortgage File to the Registered Holder or, at the request of the Registered
Holder, its Servicer, such repurchase thereupon to be noted on the list
maintained by the Custodian pursuant to Paragraph 9 of this Agreement.
23. Reproduction of Documents.
This Agreement and all documents relating thereto, including, without
limitation, (a) consents, waivers and modifications that may hereafter be
executed, and (b) certificates and other information previously or hereafter
furnished, may be reproduced by any photographic, photostatic, microfilm,
microcard, miniature photographic or other similar process. The parties agree
that any such reproduction shall be admissible in evidence as the original
itself in any judicial or administrative proceeding, whether or not the original
is in existence and whether or not such reproduction was made by a party in the
regular course of business, and that any enlargement, facsimile or further
reproduction of such reproduction shall likewise be admissible in evidence.
24. Severability.
If any one or more of the covenants, agreements, provisions or terms of
this Agreement shall be for any reason whatsoever held invalid, the invalidity
of any such covenant, agreement, provision or term of this Agreement shall in no
way affect the validity or enforceability of the other provisions of this
Agreement; provided, however, that if the invalidity of any covenant, agreement
or provision shall deprive any party of the economic benefit intended to be
conferred by this Agreement, the parties shall negotiate in good faith to
develop a structure the economic effect of which is as nearly as possible the
same as the economic effect of this Agreement.
25. Amendment; Exhibits.
This Agreement may be amended from time to time by the parties hereto
only by a written agreement signed by the parties hereto. The exhibits to this
Agreement are hereby incorporated and made a part hereof and are an integral
part of this Agreement.
26. Captions.
Section headings are used herein for convenience only and do not limit
or expand the scope of the provisions herein.
27. Representations and Warranties of Custodian.
Custodian represents and warrants to and covenants with MLCC as
follows:
(a) Custodian is a corporation duly incorporated, validly
existing and in good standing under the laws of Minnesota.
(b) Custodian has full corporate power to execute,
deliver and perform the obligations under this Agreement. MLCC may rely
on the actions of Custodian without further inquiry. No additional
consent, authorization, or regulatory filing is required in order for
Custodian to legally perform its obligations.
O-13
(c) This agreement constitutes a legal, valid and binding
obligation of Custodian, enforceable against Custodian in accordance
with the terms herein except as limited by bankruptcy, insolvency,
liquidation or other similar laws affecting generally the enforcement
of creditor's rights.
O-14
IN WITNESS WHEREOF, the Custodian and MLCC have caused this Agreement
to be executed as of the date and year first written above.
▇▇▇▇▇ FARGO BANK MINNESOTA, N.A.,
Custodian
By: _______________________________
Name: _____________________________
Title: ____________________________
▇▇▇▇▇▇▇ ▇▇▇▇▇ CREDIT CORPORATION
("MLCC")
By: _______________________________
Name: _____________________________
Title: ____________________________
O-15
EXHIBIT P
AMENDMENT ▇▇. ▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇. ▇, dated as of January 16, 2002 (this "Amendment"),
between ▇▇▇▇▇▇▇ ▇▇▇▇▇ Credit Corporation ("MLCC") and ▇▇▇▇▇ Fargo Bank
Minnesota, N.A. (the "Custodian"), to the Custodial Agreement, dated as of
December 15, 2000 (the "Custodial Agreement").
RECITALS
WHEREAS, MLCC may from time to time, purchase certain Mortgage Loans
from third party sellers pursuant to the terms and condition of certain mortgage
loan purchase agreements entered into between MLCC and such parties (each, a
"Purchase Agreement");
WHEREAS, pursuant to the Custodial Agreement, the Custodian has agreed
to take possession of mortgage notes evidencing Mortgage Loans and certain other
Mortgage Loan Documents delivered from time to time pursuant to the Custodial
Agreement;
WHEREAS, MLCC and the Custodian have agreed, subject to the terms and
conditions of this Amendment, that the Custodial Agreement be amended to reflect
the replacement of individual certifications with a Master Trust Receipt; and
Accordingly, MLCC and Custodian hereby agree, in consideration of the
mutual promises and mutual obligations set forth herein, that the Custodial
Agreement is hereby amended as follows:
SECTION 1. Definitions:
(a) Section 1 of the Custodial Agreement is hereby amended by
deleting the definitions of "Custody Receipt", "Final Custody Receipt" and
"Initial Custody Receipt."
(b) Section 1 of the Custodial Agreement is hereby amended by
inserting the following definition into its proper alphabetical order:
"Trust Receipt": A trust receipt in the form annexed hereto as
Exhibit One delivered to MLCC by the Custodian covering all of
the Mortgage Loans subject to this Custodial Agreement from
time to time, as reflected in the Mortgage Loan Schedule and
Exception Report attached thereto in accordance with Section
4(b).
(c) Section 1 of the Custodial Agreement is hereby amended by
deleting the definition of " Exception Report" and replacing it in its entirety
as follows:
"Exception Report": The Exception Report prepared by the
Custodian as an annex to the Trust Receipt which lists all
exceptions with respect to the Mortgage Loan Schedule and
attached thereto as Schedule B, as updated from time to time
in accordance with Section 4 hereof.
SECTION 2. Trust Receipt. Section 4 is hereby deleted in its entirety
and replaced in its entirety with the following:
(a) The Custodian shall review the documents delivered to it on
each Delivery Date and shall deliver to Registered Holder within the time frames
outlined in exhibit B to this amendment, but prior to
P-1
Closing Date, a Mortgage Loan Schedule and Exception Report with respect to the
Mortgage Loans, and the delivery of each Mortgage Loan Schedule and Exception
Report by the Custodian hereunder shall be the Custodian's certification that
such Mortgage Loans are held for MLCC (as Registered Holder) and that, as to
each Mortgage Loan listed in the related Mortgage Loan Schedule (other than any
Mortgage Loan paid in full or any Mortgage Loan specifically identified in such
certification as not covered by the Exception Report), (a) all documents
described in Paragraphs 2(a) through 2(e) and to the extent provided in the
Custodian's Mortgage Files Paragraphs 2(f) through 2(j), if applicable, of this
Agreement are in its possession, (b) such documents have reviewed by it and
appear regular on their face and relate to such Mortgage Loan, (c) based on its
examination and only as to the foregoing documents, the information set forth in
terms (i), (ii), (iii) excluding the zip code requirement, (iv), (vi), (vii),
(viii) and (x) of the definition of "Mortgage Loan Schedule" respecting such
Mortgage Loan is correct, and which as to items (iv) (vi), (viii) and (x) for
adjustable rate Mortgage Loan Documents and (d) each Mortgage Note has been
endorsed and each Assignment has been executed as provided in Paragraph 2
hereof. The Custodian shall determine whether any discrepancy or deficiency
exists with respect to a Custodian's Mortgage File and shall note such
discrepancy on the Exception Report. The Custodian shall also note on such
Exception Report, with respect to each Mortgage Loan, whether a certified copy
of the related Mortgage was delivered to the Custodian in lieu of the original
of such Mortgage, whether a certified copy of an intervening assignment of the
related Mortgage was delivered to the Custodian in lieu of the original of such
assignment, and whether a preliminary title report with respect to such Mortgage
Loan was delivered to the Custodian in lieu of the original policy of title
insurance. Except as specifically provided above, the Custodian shall be under
no duty to review, inspect or examine such documents to determine that any of
them are enforceable or appropriate for their prescribed purpose.
(b) On the date of this Amendment, the Custodian shall deliver to
MLCC, a Trust Receipt with a Mortgage Loan Schedule and Exception Report
attached thereto reflecting all Mortgage Loans subject to the Custodial
Agreement as of such date.
(c) Each Mortgage Loan Schedule and Exception Report delivered by
the Custodian to MLCC shall supersede and cancel the Mortgage Loan Schedule and
Exception Report previously delivered by the Custodian to MLCC hereunder, and
shall replace the then existing Mortgage Loan Schedule and Exception Report to
be attached to the Trust Receipt. Notwithstanding anything to the contrary set
forth herein, in the event that the Mortgage Loan Schedule and Exception Report
attached to the Trust Receipt is different from the most recently delivered
Mortgage Loan Schedule and Exception Report, then the most recently delivered
Mortgage Loan Schedule and Exception Report shall control and be binding upon
the parties hereto.
(d) The Custodian shall deliver to MLCC, electronically a Mortgage
Loan Schedule and Exception Report reflecting any additional Mortgage Loans
received and reviewed in accordance with the procedures set forth in Section
2(a) hereof.
(e) Within five (5) days of receipt of written directions, in the
form attached hereto as Exhibit Six, from the Registered Holder with respect to
all or a portion of the Mortgage Loans owned by such Registered Holder, the
Custodian shall deliver all or any portion of the Custodian's Mortgage Files
held by it to Registered Holder, or to such other party as the Registered Party
may direct, as provided in Paragraph 19, at the place indicated in any such
written direction from the Registered Holder and shall deliver to the Registered
Holder a new Mortgage Loan Schedule and Exception Report, with respect to the
Custodian's Mortgage Files retained by the Custodian. The Registered Holder may
require the Custodian to complete the endorsements on any Mortgage Notes in its
possession and to complete the Assignment of Mortgages prepared by the Servicer
in blank, within a reasonable period of time. The cost of this shall be
reimbursed by the Registered Holder. A list of authorized signatures for such
written directions has been furnished to the Custodian by the Registered Holder
pursuant to Paragraph 20 hereof.
P-2
Upon the Custodian's receipt of such written notification from the Registered
Holder that the Registered Holder has sold any or all of the Mortgage Loans,
which notification shall be accompanied by a Mortgage Loan Schedule identifying
such Mortgage Loans, the Custodian shall change its records to reflect that such
purchaser is the owner of such Mortgage Loans and shall immediately, upon the
direction of such Registered Holder, either deliver the related Custodian's
Mortgage Files to such purchaser at the expense of such purchaser or issue a
Mortgage Loan Schedule and Exception Report in the name of such purchaser. Such
purchaser, as a Registered Holder, shall be required to simultaneously furnish
to the Custodian a list of authorized signatures for written directions pursuant
to Paragraph 20 hereof. The Custodian shall then deliver to the Registered
Holder a new Mortgage Loan Schedule and Exception Report, reflecting all
Mortgage Loans with respect to which the Custodian still holds the related
Custodian's Mortgage Files on behalf of the Registered Holder. The Registered
Holder and the Custodian agree herein that any purchaser of any or all of the
Mortgage Loans shall succeed to the rights and obligations of the Registered
Holder under this Agreement with respect to such Mortgage Loans upon receipt of
its own Trust Receipt and Mortgage Loan Schedule and Exception Report, as
further specified in Paragraph 15 hereof.
SECTION 3. Termination of Agreement. Section 14 of the Custodial
Agreement is hereby amended by deleting "Custody Receipts" from the sixth line
of the paragraph and replacing it with "Mortgage Loan Schedule and Exception
Report."
SECTION 4. Assignment of Agreement. Section 15 of the Custodial
Agreement is hereby deleted in its entirety and replaced in its entirety with
the following:
"The Registered Holder with respect to all or a portion of the
Mortgage Loans owned by such Registered Holder shall have the right to assign,
in whole or in part, its interests under this Agreement with respect to some or
all of the Mortgage Loans, and to designate any person (such person, an
"Assignee") or exercise any rights of the Registered Holder hereunder, and such
assignee or designee shall accede to the rights and obligations hereunder of the
Registered Holder with respect to such Mortgage Loans. All references to the
Registered Holder shall be deemed to include its assignee or designee. In
connection with any such assignment, the Registered Holder with respect to all
or a portion of the Mortgage Loans owned by such Registered Holder, the
Custodian shall issue (a) a Trust Receipt in the form of Exhibit One hereto with
a Mortgage Loan Schedule and Exception Report with respect to the Mortgage Loans
subject to such assignment to the Assignee and (b) an updated Mortgage Loan
Schedule and Exception Report to the assigning Registered Holder with respect to
the Mortgage Loans which the Custodian holds for the Registered Holder. The
Custodian may not assign its interest or delegate its duties under this
Agreement without the prior written consent of the Registered Holder. In the
event of any such assignment or delegation, the Registered Holder shall not be
responsible for any fees of the successor Custodian in excess of the fees
formerly paid by the Registered Holder to the Custodian."
SECTION 5. Indemnification. Section 17 of the Custodial Agreement is
hereby amended by deleting "an Initial Custody Receipt" from the fifth line of
subsection (c) and replacing it with "a Mortgage Loan Schedule and Exception
Report."
SECTION 6. Exhibits. The Exhibits of the Custodial Agreement are hereby
amended by deleting "Exhibit One" and "Exhibit Two" and adding The Form of Trust
Receipt attached as Exhibit A to this Amendment as Exhibit One to the Custodial
Agreement.
SECTION 7. Delivered Documents. On the date hereof, MLCC shall have
received the following documents, each of which shall be satisfactory to the
MLCC in form and substance:
P-3
(a) Amendment. This Amendment No. 1, executed and delivered by a
duly authorized officer of MLCC and the Custodian; and
(b) Other Documents. Such other documents as the Purchaser or
counsel to the Purchaser may reasonably request.
SECTION 8. Limited Effect. Except as expressly amended and modified by
this Amendment, the Custodial Agreement shall continue to be, and shall remain,
in full force and effect in accordance with its terms.
SECTION 9. Counterparts. This Amendment may be executed by each of the
parties hereto on any number of separate counterparts, each of which shall be an
original and all of which taken together shall constitute one and the same
instrument.
SECTION 10. GOVERNING LAW. THIS AMENDMENT SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
[SIGNATURE PAGE FOLLOWS]
P-4
IN WITNESS WHEREOF, the parties have caused their names to be signed
hereto by their respective officers thereunto duly authorized as of the day and
year first above written.
▇▇▇▇▇ FARGO BANK MINNESOTA, N.A.,
("CUSTODIAN")
By: _______________________________
Name: ▇▇▇▇▇ ▇. ▇▇▇▇
Title: Assistant Vice President
▇▇▇▇▇▇▇ ▇▇▇▇▇ CREDIT CORPORATION
("MLCC")
By: _______________________________
Name: _________________________
Title: ________________________
P-5
EXHIBIT Q
OFFICER'S CERTIFICATE - TRUSTEE
▇▇▇▇▇▇▇ ▇▇▇▇▇ Mortgage Investors, Inc.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
4 World Financial ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Re: Pooling and Servicing Agreement (the "Agreement") dated as of May 1,
2004 among ▇▇▇▇▇▇▇ ▇▇▇▇▇ Mortgage Investors, Inc., as depositor (the
"Depositor"), Cendant Mortgage Corporation, as servicer (the
"Servicer") and ▇▇▇▇▇ Fargo Bank N.A., as trustee (the "Trustee") -
▇▇▇▇▇▇▇ ▇▇▇▇▇ Mortgage Investors Trust Series MLCC 2004-B Mortgage Loan
Pass-Through Certificates
I, [identify the certifying individual], a [title] of the Trustee
hereby 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 Monthly Statements delivered pursuant to
Section 4.02 the Agreement since the last Officer's
Certificate executed pursuant to Section 6.20 of the Agreement
[or in the case of the first certification, since the Cut-off
Date] (the "Trustee Information").
2. Based on my knowledge, the information in the Monthly
Statements , 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 date hereof;
3. Based on my knowledge, the Monthly Statements required to be
prepared by the Trustee under the Agreement has been prepared
and provided in accordance with the Agreement; and
4. I am responsible for reviewing the activities performed by the
Trustee under the Agreement and the Trustee has, as of the
date hereof fulfilled its obligations under the Agreement and
there are no significant deficiencies relating to the
Trustee's compliance with this Agreement.
Date: ▇▇▇▇▇ Fargo Bank, N.A., as Trustee
By: _______________________________
Name: _____________________________
Title: ____________________________
Q-1
EXHIBIT R
OFFICER'S CERTIFICATE - SERVICER
▇▇▇▇▇▇▇ ▇▇▇▇▇ Mortgage Investors, Inc.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
4 World Financial ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ Fargo Bank N.A.
▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Re: Pooling and Servicing Agreement (the "Agreement") dated as of May 1,
2004 among ▇▇▇▇▇▇▇ ▇▇▇▇▇ Mortgage Investors, Inc., as depositor (the
"Depositor"), Cendant Mortgage Corporation, as servicer (the
"Servicer") and ▇▇▇▇▇ Fargo Bank N.A., as trustee ( the "Trustee") -
▇▇▇▇▇▇▇ ▇▇▇▇▇ Mortgage Investors Trust Series MLCC 2004-B Mortgage Loan
Pass-Through Certificates
I, [identify the certifying individual], a [title] of the Servicer
hereby certify to the Trustee and the Depositor, and their respective officers,
directors and affiliates, and with the knowledge and intent that they will rely
upon this certification, that:
1. I have reviewed the information required to be delivered to
the Trustee pursuant to the Agreement (the "Servicing
Information").
2. Based on my knowledge, the information in the Annual Statement
of Compliance, and all servicing reports, officer's
certificates and other information relating to the servicing
of the Mortgage Loans submitted to the Trustee by the Servicer
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 Statement of
Compliance;
3. Based on my knowledge, the Servicing Information required to
be provided to the Trustee by the Servicer under the Agreement
has been provided to the Trustee;
4. I am responsible for reviewing the activities performed by the
Servicer under the Agreement and based upon the review
required under the Agreement, and except as disclosed in the
Annual Statement of Compliance, the Annual Independent
Certified Public Accountant's Servicing Report and all
servicing reports, officer's certificates and other
information relating to the servicing of the Mortgage Loans
submitted to the Trustee by the Servicer, the Servicer has, as
of the last day of the period covered by the Annual Statement
of Compliance fulfilled its obligations under the Agreement;
and
5. I have disclosed to the Trustee and the Depositor all
significant deficiencies relating to the Servicer's compliance
with the minimum servicing standards in accordance with a
review conducted in compliance with the Uniform Single
Attestation Program for Mortgage Bankers as set forth in the
Agreement.
N-1
Date: Cendant Mortgage Corporation, as
Servicer
By: _______________________________
Name: _____________________________
Title: ____________________________
N-2
SCHEDULE A
MORTGAGE LOAN SCHEDULE
[INTENTIONALLY OMITTED]
Schedule A-1
SCHEDULE B
MORTGAGE LOAN REPRESENTATIONS AND WARRANTIES
OF THE SELLER
The Seller hereby represents and warrants to the Depositor as to each
Mortgage Loan, as of the Closing Date as follows:
(a) The information set forth in the Mortgage Loan Schedule is
true and correct in all material respects as of the Cut-off Date;
(b) As of the related Closing Date, the Mortgage Loan is not
delinquent in payment more than 30 days and the Mortgage Loan has not been
dishonored; there are no material defaults under the terms of the Mortgage Loan;
the Seller has not advanced funds, or induced, solicited or knowingly received
any advance of funds from a party other than the owner of the Mortgaged Property
subject to the Mortgage, directly or indirectly, for the payment of any amount
required by the Mortgage Loan;
(c) To the best of the Seller's knowledge, with respect to those
Mortgage Loans as to which the Mortgagors are required to deposit funds into an
escrow account for payment of taxes, assessments, insurance premiums and similar
items as they become due, there are no delinquent taxes, ground rents, water
charges, sewer rents, assessments or other outstanding charges which constitute
a lien on the related Mortgaged Property, and all escrow deposits have been
collected, are under the control of the Servicer, and have been applied to the
payment of such items in a timely fashion, in accordance with such Mortgage. No
escrow deposits or escrow payments or other charges or payments due the Servicer
have been capitalized under the related Mortgage or Mortgage Note. With respect
to those Mortgage Loans for which escrow deposits are not required, to the best
of the Seller's knowledge, there are no delinquent taxes or other outstanding
charges affecting the related Mortgaged Property which constitute a lien on the
related Mortgaged Property;
(d) The terms of the Mortgage Note and the Mortgage have not been
impaired, waived, altered or modified in any respect, except by written
instruments contained in the Mortgage File, approved, if necessary, by the
insurer under any Primary Mortgage Insurance Policy and recorded in all places
necessary to maintain the first priority of the lien, the substance of which
waiver, alteration or modification is reflected on the Mortgage Loan Schedule.
No Mortgagor has been released, in whole or in part, except in connection with
an assumption agreement which assumption agreement is part of the Mortgage File
and the terms of which are reflected in the Mortgage Loan Schedule;
(e) Neither the Mortgage Note nor the Mortgage is subject to any
right of rescission, set-off, counterclaim or defense, including the defense of
usury, nor will the operation of any of the terms of the Mortgage Note and the
Mortgage, or the exercise of any right thereunder, render the Mortgage
unenforceable, in whole or in part, or subject to any right of rescission,
set-off, counterclaim or defense, including the defense of usury and to the best
of the Seller's knowledge, no such right of rescission, set-off, counterclaim or
defense has been asserted by any Person with respect thereto;
(f) All buildings upon the Mortgaged Property are required to be
insured by a generally acceptable insurer against loss by fire, hazards of
extended coverage and such other hazards as are customarily included in extended
coverage in the area where the Mortgaged Property is located, pursuant to
standard hazard insurance policies in an amount which is equal to the lesser of
(A) the replacement cost of the improvements securing such Mortgage Loan or (B)
the principal balance owing on such Mortgage
Schedule B-1
Loan. To the best knowledge of the Seller, all such standard hazard policies are
in effect. On the date of origination, such standard hazard policies contained a
standard mortgagee clause naming the Seller or the originator of the Mortgage
Loan and their respective successors in interest as mortgagee and, to the best
knowledge of the Seller, such clause is still in effect and, to the best of the
Seller's knowledge, all premiums due thereon have been paid. If the Mortgaged
Property is located in an area identified by the Federal Emergency Management
Agency as having special flood hazards under the National Flood Insurance Act of
1994, as amended, such Mortgaged Property is covered by flood insurance in the
amount required under the National Flood Insurance Act of 1994. The Mortgage
obligates the Mortgagor thereunder to maintain all such insurance at Mortgagor's
cost and expense, and on the Mortgagor's failure to do so, authorizes the holder
of the Mortgage to maintain such insurance at Mortgagor's cost and expense and
to seek reimbursement therefor from the Mortgagor;
(g) To the best of the Seller's knowledge, at the time of
origination of such Mortgage Loan and thereafter, all requirements of any
federal, state or local law including, without limitation, usury,
truth-in-lending, real estate settlement procedures, consumer credit protection,
equal credit opportunity or disclosure laws required to be complied with by the
Seller as the originator of the Mortgage Loan and applicable to the Mortgage
Loan have been complied with in all material respects;
(h) The Mortgage has not been satisfied as of the Closing Date,
canceled or subordinated, in whole, or rescinded, and the Mortgaged Property has
not been released from the lien of the Mortgage, in whole or in part (except for
a release that does not materially impair the security of the Mortgage Loan or a
release the effect of which is reflected in the Loan-to-Value Ratio for the
Mortgage Loan as set forth in the Mortgage Loan Schedule), nor to the best of
the Seller's knowledge has any instrument been executed that would effect any
such release, cancellation, subordination or rescission;
(i) Ownership of the Mortgaged Property is held in fee simple or a
leasehold estate. With respect to Mortgage Loans that are secured by a leasehold
estate, (i) the lease is valid, in full force and effect, and conforms to all of
▇▇▇▇▇▇ Mae's requirements for leasehold estates; (ii) all rents and other
payments due under the lease have been paid; (iii) the lessee is not in default
under any provision of the lease; (iv) the term of the lease exceeds the
maturity date of the related Mortgage Loan by at least five (5) years; and (v)
the terms of the lease provide a Mortgagee with an opportunity to cure any
defaults. Except as permitted by the fourth sentence of this paragraph (i), the
Mortgage is a valid, subsisting and enforceable first lien on the Mortgaged
Property, including all buildings on the Mortgaged Property and all
installations and mechanical, electrical, plumbing, heating and air conditioning
systems affixed to such buildings, and all additions, alterations and
replacements made at any time with respect to the foregoing securing the
Mortgage Note's original principal balance. The Mortgage and the Mortgage Note
do not contain any evidence on their face of any security interest or other
interest or right thereto. Such lien is free and clear of all adverse claims,
liens and encumbrances having priority over the first lien of the Mortgage
subject only to (1) the lien of non-delinquent current real property taxes and
assessments not yet due and payable, (2) covenants, conditions and restrictions,
rights of way, easements and other matters of the public record as of the date
of recording which are acceptable to mortgage lending institutions generally, or
which are specifically referred to in the lender's title insurance policy
delivered to the originator of the Mortgage Loan and either (A) which are
referred to or otherwise considered in the appraisal made for the originator of
the Mortgage Loan, or (B) which do not in the aggregate adversely affect the
appraised value of the Mortgaged Property as set forth in such appraisal, and
(3) other matters to which like properties are commonly subject which do not in
the aggregate materially interfere with the benefits of the security intended to
be provided by the Mortgage or the use, enjoyment, value or marketability of the
related Mortgaged Property. Any security agreement, chattel mortgage or
equivalent document related to and delivered in connection with the Mortgage
Loan establishes and creates a valid, subsisting and enforceable first lien and
first priority security interest on the property described therein. With respect
to each Co-op Loan, the security instruments create a valid, enforceable and
subsisting first
Schedule B-2
priority security interest in the Co-op Lease and Co-op Stock securing the
related Mortgage Note subject to only to (a) the lien of the related cooperative
for unpaid assessments representing the Mortgagor's pro rata share of payments
for a blanket mortgage, if any, current and future real property taxes,
insurance premiums, maintenance fees and other assessments to which like
collateral is commonly subject, and (b) other matters to which the collateral is
commonly subject which do not materially interfere with the benefits of the
security intended to be provided; provided, however, that the related Co-op Loan
may be subordinated or otherwise subject to the lien of a Mortgage on the
cooperative building;
(j) The Mortgage Note is not subject to a third party's security
interest or other rights or interest therein;
(k) The Mortgage Note and the related Mortgage are genuine and
each is the legal, valid and binding obligation of the maker thereof,
enforceable in accordance with its terms subject to bankruptcy, insolvency and
other laws of general application affecting the rights of creditors. All parties
to the Mortgage Note and the Mortgage had the legal capacity to enter into the
Mortgage Loan and to execute and deliver the Mortgage Note and the Mortgage. The
Mortgage Note and the Mortgage have been duly and properly executed by such
parties. The proceeds of the Mortgage Loan have been fully disbursed and there
is no requirement for future advances thereunder, and any and all requirements
as to completion of any on-site or off-site improvements and as to disbursements
of any escrow funds therefor have been complied with;
(l) Seller has good title to, and the full right to transfer and
sell, the Mortgage Loan free and clear of any encumbrance, equity, lien, pledge,
charge, claim or security interest, including, to the best knowledge of the
Seller, any lien, claim or other interest arising by operation of law;
(m) To the best of the Seller's knowledge, each Mortgage Loan is
covered by an ALTA lender's title insurance policy or other generally acceptable
form of policy or insurance acceptable to ▇▇▇▇▇▇ ▇▇▇ or FHLMC, issued by a title
insurer acceptable to ▇▇▇▇▇▇ Mae or FHLMC and qualified to do business in the
jurisdiction where the Mortgaged Property is located, insuring (subject to the
exceptions contained in paragraph (ix)(1) (2) and (3) above) the Seller, its
successors and assigns, as to the first priority lien of the Mortgage in the
original principal amount of the Mortgage Loan. To the best of the Seller's
knowledge, the Seller is the sole insured of such lender's title insurance
policy, such title insurance policy has been duly and validly endorsed to the
purchaser or the assignment to the purchaser of the Seller's interest therein
does not require the consent of or notification to the insurer and such lender's
title insurance policy is in full force and effect and will be in full force and
effect upon the consummation of the transactions contemplated by this Agreement.
To the best of the Seller's knowledge, no claims have been made under such
lender's title insurance policy, and no prior holder of the related Mortgage has
done, by act or omission, anything which would impair the coverage of such
lender's title insurance policy;
(n) To the best of the Seller's knowledge, there is no default,
breach, violation or event of acceleration existing under the Mortgage or the
related Mortgage Note and no event which, with the passage of time or with
notice and the expiration of any grace or cure period, would constitute a
default, breach, violation or event permitting acceleration, except for any
Mortgage Loan payment which is not late by more than 30 days, and the Seller has
not waived any default, breach, violation or event permitting acceleration;
(o) To the best of the Seller's knowledge, there are no mechanics'
or similar liens or claims which have been filed for work, labor or material
(and, to the best of the Seller's knowledge, no rights are outstanding that
under law could give rise to such lien) affecting the related Mortgaged Property
which are or may be liens prior to, or equal or coordinate with, the lien of the
related Mortgage;
Schedule B-3
(p) To the best of the Seller's knowledge, all improvements
subject to the Mortgage, lay wholly within the boundaries and building
restriction lines of the Mortgaged Property (and wholly within the project with
respect to a condominium unit) and no improvements on adjoining properties
encroach upon the Mortgaged Property except those which are insured against by
the title insurance policy referred to in paragraph (xiii) above and all
improvements on the property comply with all applicable zoning and subdivision
laws and ordinances;
(q) To the best of the Seller's knowledge, each Mortgage Loan was
originated by the Seller or by a savings association, a savings bank, a
commercial bank or similar banking institution that is supervised and examined
by a Federal or state banking authority, a mortgagee approved by the Secretary
of HUD pursuant to Section 203 and 211 of the National Housing Act, or a ▇▇▇▇▇▇
▇▇▇- or FHLMC-approved seller. To the best of the Seller's knowledge, each
Mortgage Loan was underwritten generally in accordance with the Underwriting
Standards as in effect at the time of origination. To the best of the Seller's
knowledge, the Mortgage contains the usual and customary provision of the Seller
at the time of origination for the acceleration of the payment of the unpaid
principal balance of the Mortgage Loan if the related Mortgaged Property is sold
without the prior consent of the mortgagee thereunder;
(r) The Mortgaged Property at origination or acquisition was and,
to the best of the Seller's knowledge, currently is free of material damage and
waste and at origination there was, and to the best of the Seller's knowledge
there currently is, no proceeding pending for the total or partial condemnation
thereof;
(s) The related Mortgage contains customary and enforceable
provisions such as to render the rights and remedies of the holder thereof
adequate for the realization against the Mortgaged Property of the benefits of
the security provided thereby, including, (1) in the case of a Mortgage
designated as a deed of trust, by trustee's sale or judicial foreclosure, and
(2) otherwise by judicial foreclosure. The Seller has no knowledge of any
homestead or other exemption available to the Mortgagor which would interfere
with the right to sell the Mortgaged Property at a trustee's sale or the right
to foreclose the Mortgage;
(t) To the best of the Seller's knowledge, if the Mortgage
constitutes a deed of trust, a trustee, duly qualified if required under
applicable law to act as such, has been properly designated and currently so
serves and is named in the Mortgage, and no fees or expenses are or will become
payable to the trustee under the deed of trust, except in connection with a
trustee's sale or attempted sale after default by the Mortgagor;
(u) With respect to each Mortgage Loan, there is an appraisal on a
▇▇▇▇▇▇ Mae-approved form (or a narrative residential appraisal) of the related
Mortgaged Property that conforms to the applicable requirements of the Financial
Institutions Reform Recovery and Enforcement Act and that was signed prior to
the approval of such Mortgage Loan application by a qualified appraiser,
appointed by the Seller or the originator of such Mortgage Loan, as appropriate,
who has no interest, direct or indirect, in the Mortgaged Property or in any
loan made on the security thereof, and whose compensation is not affected by the
approval or disapproval of such Mortgage Loan;
(v) No Mortgage Loan contains "subsidized buydown" or "graduated
payment" features;
(w) The Mortgaged Property is a single-family (one- to four-unit)
dwelling residence erected thereon, or an individual condominium unit in a
condominium, or a Co-operative Apartment or an individual unit in a planned unit
development or in a de minimis planned unit development as defined by ▇▇▇▇▇▇
▇▇▇. No such residence is a mobile home or a manufactured dwelling which is not
permanently attached to the land;
Schedule B-4
(x) No Mortgage Loan provides for negative amortization;
(y) No Mortgage Loan had an original term in excess of thirty (30)
years;
(z) [RESERVED]
(aa) As of the Closing Date, each Mortgage Loan is a "qualified
mortgage" within the meaning of Section 860G(a)(3) of the Code (without regard
to Treasury Regulations Section 1.860G-2(f) or any similar rule that provides
that a defective obligation is a qualified mortgage for a temporary period);
(bb) As of the Closing Date, no Mortgage Loan provides for interest
other than at either (x) a single fixed rate in effect throughout the term of
the Mortgage Loan or (y) a single "variable rate" (within the meaning of
Treasury Regulations Section 1.860G-1(a)(3)) in effect throughout the term of
the Mortgage Loan.
(cc) As of the Closing Date, no Mortgage Loan is the subject of
pending or final foreclosure proceedings.
(dd) Based on delinquencies in payment on the Mortgage Loans as of
the Closing Date, Seller would not initiate foreclosure proceedings with respect
to any of the Mortgage Loans prior to the next scheduled payment date on such
Mortgage Loan.
(ee) Each Mortgage Note is comprised of one original promissory
note and each such promissory note constitutes an "instrument" for purposes of
section 9-102(a)(65) of the UCC.
(ff) No Mortgage Loan is covered by the Home Ownership and Equity
Protection Act of 1994 ("HOEPA") and no Mortgage Loan is "high cost" as defined
by any applicable federal, state or local predatory or abusive lending law. Any
breach of this representation shall be deemed to materially and adversely affect
the value of the Mortgage Loan and shall require a repurchase of the affected
Mortgage Loan.
(gg) Each Mortgage Loan at the time it was made complied in all
material respects with applicable local, state and federal laws, including, but
not limited to, all applicable predatory or abusive lending laws.
Schedule B-5