STRUCTURED ASSET MORTGAGE INVESTMENTS II INC.,
DEPOSITOR
U.S. BANK NATIONAL ASSOCIATION
TRUSTEE
WELLS FARGO BANK, N.A.,
MASTER SERVICER AND SECURITIES ADMINISTRATOR
and
EMC MORTGAGE CORPORATION
SELLER AND COMPANY
POOLING AND SERVICING AGREEMENT
Dated as of April 1, 2005
Structured Asset Mortgage Investments II Inc.
Bear Stearns ARM Trust, Mortgage Pass-Through Certificates
Series 2005-3
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TABLE OF CONTENTS
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ARTICLE I
Definitions..........................................................................................
ARTICLE
II.....................................................................................................
Conveyance of Mortgage Loans; Original
Issuance of
Certificates................................................
Section 2.01
Conveyance of Mortgage Loans to
Trustee..................................................
Section 2.02
Acceptance of Mortgage Loans by
Trustee..................................................
Section 2.03
Assignment of Interest in the Mortgage Loan Purchase
Agreement...........................
Section 2.04
Substitution of Mortgage
Loans...........................................................
Section 2.05
Issuance of
Certificates.................................................................
Section 2.06
Representations and Warranties Concerning the
Depositor..................................
ARTICLE III Administration and Servicing of
Mortgage
Loans.....................................................
Section 3.01
Master
Servicer..........................................................................
Section 3.02
REMIC-Related
Covenants..................................................................
Section 3.03
Monitoring of
Servicers..................................................................
Section 3.04
Fidelity
Bond............................................................................
Section 3.05
Power to Act;
Procedures.................................................................
Section 3.06
Due-on-Sale Clauses; Assumption
Agreements...............................................
Section 3.07
Release of Mortgage
Files................................................................
Section 3.08
Documents, Records and Funds in Possession of
Master Servicer To Be Held for
Trustee...................................................
Section 3.09
Standard Hazard Insurance and Flood Insurance
Policies...................................
Section 3.10
Presentment of Claims and Collection of
Proceeds.........................................
Section 3.11
Maintenance of the Primary Mortgage Insurance
Policies...................................
Section 3.12 Trustee to Retain
Possession of Certain Insurance Policies
and
Documents............................................................................
Section 3.13
Realization Upon Defaulted Mortgage
Loans................................................
Section 3.14
Compensation for the Master
Servicer.....................................................
Section 3.15 REO
Property.............................................................................
Section 3.16
Annual Officer's Certificate as to
Compliance............................................
Section 3.17
Annual Independent Accountant's Servicing
Report.........................................
Section 3.18
Reports Filed with Securities and Exchange
Commission....................................
Section 3.19
UCC......................................................................................
Section 3.20
Optional Purchase of Defaulted Mortgage
Loans............................................
ARTICLE IV
Accounts............................................................................................
Section 4.01
Protected
Accounts.......................................................................
Section 4.02
Master Servicer Collection
Account.......................................................
Section 4.03
Permitted Withdrawals and Transfers from the
Master Servicer Collection
Account.......................................................
Section 4.04
Distribution
Account.....................................................................
Section 4.05
Permitted Withdrawals and Transfers from the Distribution
Account........................
ARTICLE V
Certificates.........................................................................................
Section 5.01
Certificates.............................................................................
Section 5.02
Registration of Transfer and Exchange of
Certificates....................................
Section 5.03
Mutilated, Destroyed, Lost or Stolen
Certificates........................................
Section 5.04
Persons Deemed
Owners....................................................................
Section 5.05
Transfer Restrictions on Residual
Certificates...........................................
Section 5.06
Restrictions on Transferability of
Certificates..........................................
Section 5.07
ERISA
Restrictions.......................................................................
Section 5.08 Rule
144A
Information....................................................................
Section 5.09
Appointment of Paying Agent and Certificate
Registrar....................................
ARTICLE VI Payments to
Certificateholders......................................................................
Section 6.01
Distributions on the
Certificates........................................................
Section 6.02
Allocation of
Losses.....................................................................
Section 6.03
Payments.................................................................................
Section 6.04
Statements to
Certificateholders.........................................................
Section 6.05
Monthly
Advances.........................................................................
Section 6.06
Compensating Interest
Payments...........................................................
ARTICLE VII The Master
Servicer................................................................................
Section 7.01
Liabilities of the Master
Servicer.......................................................
Section 7.02
Merger or Consolidation of the Master
Servicer...........................................
Section 7.03
Indemnification of the Trustee, the Master Servicer
and the Securities
Administrator.........................................................
Section 7.04
Limitations on Liability of the Master Servicer and
Others...............................
Section 7.05
Master Servicer Not to
Resign............................................................
Section 7.06
Successor Master
Servicer................................................................
Section 7.07 Sale
and Assignment of Master
Servicing..................................................
ARTICLE VIII
Default...........................................................................................
Section 8.01
Events of
Default........................................................................
Section 8.02
Trustee to Act; Appointment of
Successor.................................................
Section 8.03
Notification to
Certificateholders.......................................................
Section 8.04
Waiver of
Defaults.......................................................................
Section 8.05 List
of
Certificateholders...............................................................
ARTICLE IX Concerning the Trustee and the
Securities
Administrator.............................................
Section 9.01
Duties of
Trustee........................................................................
Section 9.02
Certain Matters Affecting the Trustee and the Securities
Administrator...................
Section 9.03
Trustee and Securities Administrator Not Liable for
Certificates or Mortgage
Loans...........................................................
Section 9.04
Trustee and Securities Administrator May Own
Certificates................................
Section 9.05
Trustee's and Securities Administrator's Fees and
Expenses...............................
Section 9.06
Eligibility Requirements for Trustee, Paying Agent
and Securities
Administrator.............................................................
Section 9.07
Insurance................................................................................
Section 9.08
Resignation and Removal of the Trustee and Securities
Administrator......................
Section 9.09
Successor Trustee, Paying Agent and Successor Securities
Administrator...................
Section 9.10
Merger or Consolidation of Trustee, Paying Agent
or Securities
Administrator..............................................................
Section 9.11
Appointment of Co-Trustee or Separate
Trustee............................................
Section 9.12
Federal Information Returns and Reports to
Certificateholders; REMIC
Administration.................................................
ARTICLE X
Termination..........................................................................................
Section 10.01
Termination Upon
Repurchase by the
Depositor or its Designee or
Liquidation of the Mortgage Loans
Section 10.02 Additional
Termination
Requirements......................................................
ARTICLE XI Miscellaneous
Provisions............................................................................
Section 11.01 Intent of
Parties........................................................................
Section 11.02
Amendment................................................................................
Section 11.03
Recordation of
Agreement.................................................................
Section 11.04 Limitation
on Rights of
Certificateholders...............................................
Section 11.05 Acts of
Certificateholders...............................................................
Section 11.06 Governing
Law............................................................................
Section 11.07
Notices..................................................................................
Section 11.08
Severability of
Provisions...............................................................
Section 11.09 Successors
and
Assigns...................................................................
Section 11.10 Article
and Section
Headings.............................................................
Section 11.11
Counterparts.............................................................................
Section 11.12 Notice to
Rating
Agencies................................................................
EXHIBITS
Exhibit A-1
- Form of
Class A Certificates and Class X Certificates
Exhibit A-2
- Form of
Class B Certificates
Exhibit A-3
- Form of
Class R Certificates
Exhibit B
- Mortgage
Loan Schedule
Exhibit C
-
[Reserved]
Exhibit D
- Request
for Release of Documents
Exhibit E
- Form of
Affidavit pursuant to Section 860E(e)(4)
Exhibit F-1
- Form of
Investment Letter
Exhibit F-2
- Form of
Rule 144A and Related Matters Certificate
Exhibit G
- Form of
Custodial Agreement
Exhibit H-1 to H-4
-
Servicing Agreements
Exhibit I
-
Assignment Agreements
Exhibit J
- Mortgage
Loan Purchase Agreement
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POOLING AND SERVICING AGREEMENT
-------------------------------
Pooling and Servicing Agreement dated as of April 1, 2005,
among
Structured Asset Mortgage Investments II
Inc., a Delaware corporation, as
depositor (the "Depositor"), U.S. Bank
National Association, a national banking
association, not in its individual capacity
but solely as trustee (the
"Trustee"), Wells Fargo Bank, N.A., as
master servicer (in such capacity, the
"Master Servicer") and as securities
administrator (in such capacity, the
"Securities Administrator"), and EMC
Mortgage Corporation, as seller (in such
capacity, the "Seller") and as company (in
such capacity, the "Company").
PRELIMINARY STATEMENT
On or prior to the Closing Date, the Depositor acquired the
Mortgage
Loans from the Seller. On the Closing Date,
the Depositor will sell the Mortgage
Loans and certain other property to the
Trust Fund and receive in consideration
therefor Certificates evidencing the entire
beneficial ownership interest in the
Trust Fund.
The Trustee on behalf of the Trust shall make an election for
the
assets constituting REMIC I to be treated
for federal income tax purposes as a
REMIC. On the Startup Day, the REMIC I
Regular Interests will be designated
"regular interests" in such REMIC and the
Class R-I Certificate will be
designated the "residual interest" in such
REMIC.
The Trustee on behalf of the Trust shall make an election for
the
assets constituting REMIC II to be treated
for federal income tax purposes as a
REMIC. On the Startup Day, the REMIC II
Regular Interests will be designated
"regular interests" in such REMIC and the
Class R-II Certificate will be
designated the "residual interest" in such
REMIC.
The Trustee on behalf of the Trust shall make an election for
the
assets constituting REMIC III to be treated
for federal income tax purposes as a
REMIC. On the Startup Day, the REMIC III
Regular Interests will be designated
"regular interests" in such REMIC and the
Class R-III Certificate will be
designated the "residual interest" in such
REMIC.
The Mortgage Loans will have an Outstanding Principal Balance as of
the
Cut-off Date, after deducting all Scheduled
Principal due on or before the
Cut-off Date, of $643,692,976.20. The
initial principal amount of the
Certificates will not exceed such
Outstanding Principal Balance. The Group I
Mortgage Loans will have an Outstanding
Principal Balance as of the Cut-off
Date, after deducting all Scheduled
Principal due on or before the Cut-off Date,
of $143,779,460.74. The Group II Mortgage
Loans will have an Outstanding
Principal Balance as of the Cut-off Date,
after deducting all Scheduled
Principal due on or before the Cut-off
Date, of $499,913,515.46.
In consideration of the mutual agreements herein contained, the
Depositor, the Master Servicer, the
Securities Administrator, the Seller, the
Company and the Trustee agree as
follows:
<PAGE>
ARTICLE I
Definitions
Whenever used in this Agreement, the following words and
phrases,
unless otherwise expressly provided or
unless the context otherwise requires,
shall have the meanings specified in this
Article.
ACCEPTED MASTER SERVICING PRACTICES: With respect to any Mortgage
Loan,
those customary mortgage servicing
practices of prudent mortgage servicing
institutions that master service mortgage
loans of the same type and quality as
such Mortgage Loan in the jurisdiction
where the related Mortgaged Property is
located, to the extent applicable to the
Trustee or the Master Servicer (except
in its capacity as successor to a
Servicer).
ACCOUNT: The Master Servicer Collection Account, the
Distribution
Account and the Protected Account as the
context may require.
ACCRUED CERTIFICATE INTEREST: For any Certificate for any
Distribution
Date, the interest accrued during the
related Interest Accrual Period at the
applicable Pass-Through Rate on the Current
Principal Amount, or Notional Amount
in the case of the Interest Only
Certificates, of such Certificate immediately
prior to such Distribution Date, on the
basis of a 360-day year consisting of
twelve 30-day months, less (i) in the case
of a Senior Certificate, such
Certificate's share of any Net Interest
Shortfall from the related Mortgage
Loans and, after the Cross-Over Date, the
interest portion of any Realized
Losses on the related Mortgage Loans
allocated thereto in accordance with
Section 6.02(g) and (ii) in the case of a
Subordinate Certificate, such
Certificate's share of any Net Interest
Shortfall from the related Mortgage
Loans and the interest portion of any
Realized Losses on the related Mortgage
Loans allocated thereto in accordance with
Section 6.02(g).
AFFILIATE: As to any Person, any other Person controlling,
controlled
by or under common control with such
Person. "Control" means the power to direct
the management and policies of a Person,
directly or indirectly, whether through
ownership of voting securities, by contract
or otherwise. "Controlled" and
"Controlling" have meanings correlative to
the foregoing. The Trustee may
conclusively presume that a Person is not
an Affiliate of another Person unless
a Responsible Officer of the Trustee has
actual knowledge to the contrary.
AGGREGATE EXPENSE RATE: With respect to any Mortgage Loan, the sum
of
the Servicing Fee Rate and the Lender-Paid
PMI Rate (if applicable).
AGREEMENT: This Pooling and Servicing Agreement and all
amendments
hereof and supplements hereto.
ALLOCABLE SHARE: With respect to each Class of Subordinate
Certificates:
(a) as to any Distribution Date and amounts distributable pursuant
to
clauses (i) and (iv) of the definition of
Subordinate Optimal Principal Amount,
the fraction, expressed as a percentage,
the numerator of which is the Current
Principal Amount of such Class and the
denominator of which is the aggregate
Current Principal Amount of all Classes of
the Subordinate Certificates; and
(b) as to any Distribution Date and amounts distributable pursuant
to
clauses (ii), (iii) and (v) of the
definition of Subordinate Optimal Principal
Amount, and as to each Class of Subordinate
Certificates (other than the Class
of Subordinate Certificates having the
lowest numerical designation as to which
the Class Prepayment Distribution Trigger
shall not be applicable) for which (x)
the Class Prepayment Distribution Trigger
has been satisfied on such
Distribution Date, the fraction, expressed
as a percentage, the numerator of
which is the Current Principal Amount of
such Class and the denominator of which
is the aggregate Current Principal Amount
of all such Classes of Subordinate
Certificates and (y) the Class Prepayment
Distribution Trigger has not been
satisfied on such Distribution Date, 0%;
provided that if on a Distribution
Date, the Current Principal Amount of any
Class of Subordinate Certificates for
which the Class Prepayment Distribution
Trigger was satisfied on such
Distribution Date is reduced to zero, any
amounts distributed pursuant to this
clause (b), to the extent of such Class's
remaining Allocable Share, shall be
distributed to the remaining Classes of
Subordinate Certificates which satisfy
the Class Prepayment Distribution Trigger
and to the Class of Subordinate
Certificates having the lowest numerical
Class designation in reduction of their
respective Current Principal Amounts in the
order of their numerical Class
designations.
APPLICABLE CREDIT RATING: For any long-term deposit or security,
a
credit rating of AAA in the case of S&P
and Aaa in the case of Moody's. For any
short-term deposit or security, a credit
rating of A-l+ in the case of S&P and
P-1 in the case of Moody's.
APPLICABLE STATE LAW: For purposes of Section 9.12(d), the
Applicable
State Law shall be (a) the law of the State
of New York and (b) such other state
law whose applicability shall have been
brought to the attention of the
Securities Administrator and the Trustee by
either (i) an Opinion of Counsel
reasonably acceptable to the Securities
Administrator and the Trustee delivered
to it by the Master Servicer or the
Depositor, or (ii) written notice from the
appropriate taxing authority as to the
applicability of such state law.
APPRAISED VALUE: For any Mortgaged Property related to a Mortgage
Loan,
the amount set forth as the appraised value
of such Mortgaged Property in an
appraisal made for the mortgage originator
in connection with its origination of
the related Mortgage Loan.
ASSIGNMENT AGREEMENTS: The agreements attached hereto as Exhibit
I,
whereby the Servicing Agreements were
assigned to the Trustee for the benefit of
the Certificateholders.
ASSUMED FINAL DISTRIBUTION DATE: June 25, 2035, or if such day is
not a
Business Day, the next succeeding Business
Day.
AVAILABLE FUNDS: With respect to any Distribution Date, the sum of
the
Group I Available Funds and Group II
Available Funds for such Distribution Date.
AVERAGE LOSS SEVERITY PERCENTAGE: With respect to any Distribution
Date
and each Loan Group, the percentage
equivalent of a fraction, the numerator of
which is the sum of the Loss Severity
Percentages for each Mortgage Loan in such
Loan Group which had a Realized Loss and
the denominator of which is the number
of Mortgage Loans in the related Loan Group
which had Realized Losses.
BANKRUPTCY CODE: The United States Bankruptcy Code, as amended
as
codified in 11 U.S.C. ss.ss.101-1330.
BANKRUPTCY LOSS: With respect to any Mortgage Loan, any
Deficient
Valuation or Debt Service Reduction related
to such Mortgage Loan as reported by
the applicable Servicer to the Master
Servicer.
BOOK-ENTRY CERTIFICATES: Initially, all Classes of Certificates
other
than the Private Certificates and the
Residual Certificates.
BUSINESS DAY: Any day other than (i) a Saturday or a Sunday, or
(ii) a
day on which the New York Stock Exchange or
Federal Reserve is closed or on
which banking institutions in the
jurisdiction in which the Trustee, the Master
Servicer, any Servicer or the Securities
Administrator is located are authorized
or obligated by law or executive order to
be closed.
CERTIFICATE: Any mortgage pass-through certificate evidencing a
beneficial ownership interest in the Trust
Fund signed and countersigned by the
Certificate Registrar in substantially the
forms annexed hereto as Exhibits A-1,
A-2 and A-3 with the blanks therein
appropriately completed.
CERTIFICATE GROUP: The Group I Senior Certificates and Group II
Senior
Certificates, as applicable.
CERTIFICATE OWNER: Any Person who is the beneficial owner of a
Certificate registered in the name of the
Depository or its nominee.
CERTIFICATE REGISTER: The register maintained pursuant to Section
5.02.
CERTIFICATE REGISTRAR: The Securities Administrator or any
successor
certificate registrar appointed
hereunder.
CERTIFICATEHOLDER: A Holder of a Certificate.
CLASS: With respect to the Certificates, I-A-1, II-A-1, II-X,
II-A-2,
R-I, R-II, R-III, B-1, B-2, B-3, B-4, B-5,
B-6, B-7 and B-8.
CLASS PREPAYMENT DISTRIBUTION TRIGGER: For a Class of
Subordinate
Certificates for any Distribution Date, the
Class Prepayment Distribution
Trigger is satisfied if the fraction
(expressed as a percentage), the numerator
of which is the aggregate Current Principal
Amount of such Class and each Class
of Subordinate Certificates subordinate
thereto, if any, and the denominator of
which is the Scheduled Principal Balance of
all of the Mortgage Loans as of the
related Due Date, equals or exceeds such
percentage calculated as of the Closing
Date.
CLASS R CERTIFICATES: The Class R-I, Class R-II and Class R-III
Certificates.
CLOSING DATE: April 29, 2005.
CODE: The Internal Revenue Code of 1986, as amended.
COMPENSATING INTEREST PAYMENT: As defined in Section 6.06.
CORPORATE TRUST OFFICE: The office of the Trustee at which at
any
particular time its corporate trust
business is administered, which office, at
the date of the execution of this
Agreement, is located at U.S. Bank Corporate
Trust Services, One Federal Street, 3rd
Floor, Boston, Massachusetts 02110,
Attention: Corporate Trust Services/BART
Series 2005-3. For purposes of
registration and transfer and exchange
only, the Corporate Trust Office shall be
located at U.S. Bank National Association,
60 Livingston Avenue, Bond Drop
Window, St. Paul, Minnesota 55107. With
respect to the Certificate Registrar and
the presentment of Certificates for
registration of transfer, exchange or final
payment, Wells Fargo Bank, National
Association, Sixth Street and Marquette
Avenue, Minneapolis, Minnesota 55479,
Attention: Corporate Trust/BART Series
2005-3, and for all other purposes, P.O.
Box 98, Columbia, Maryland 21046 (or
for overnight deliveries, 9062 Old
Annapolis Road, Columbia, Maryland 21045),
Attention: Corporate Trust/BART Series
2005-3.
CORRESPONDING CERTIFICATES: With respect to each REMIC II
Regular
Interest, the Class with the same
designation.
COUNTRYWIDE: Countrywide Home Loans Servicing LP, as successor
to
Countrywide Home Loans, Inc., or its
successor in interest.
COUNTRYWIDE SERVICING AGREEMENT: The Seller's Warranties and
Servicing
Agreement, dated as of September 1, 2002,
as amended on January 1, 2003 and
September 1, 2004, between the Seller and
Countrywide, attached hereto as
Exhibit H-1, as modified by the related
Assignment Agreement.
CROSS-OVER DATE: The first Distribution Date on which the
aggregate
Current Principal Amount of the Subordinate
Certificates has been reduced to
zero (giving effect to all distributions on
such Distribution Date).
CURRENT PRINCIPAL AMOUNT: With respect to any Certificate (other
than
the Interest Only Certificates) as of any
Distribution Date, the initial
principal amount of such Certificate plus
any Subsequent Recoveries added to the
Current Principal Amount of such
Certificate pursuant to Section 6.02(h), and
reduced by (i) all amounts distributed on
previous Distribution Dates on such
Certificate with respect to principal, (ii)
the principal portion of all
Realized Losses allocated prior to such
Distribution Date to such Certificate,
taking account of the Loss Allocation
Limitation and (iii) in the case of a
Subordinate Certificate, such Certificate's
pro rata share, if any, of the
applicable Subordinate Certificate
Writedown Amount for previous Distribution
Dates. With respect to any Class of
Certificates (other than the Interest Only
Certificates) the Current Principal Amount
thereof will equal the sum of the
Current Principal Amounts of all
Certificates in such Class. Notwithstanding the
foregoing, solely for purposes of giving
consents, directions, waivers,
approvals, requests and notices, the Class
R-I, Class R-II and Class R-III
Certificates after the Distribution Date on
which they each receive the
distribution of the last dollar of their
respective original principal amount
shall be deemed to have Current Principal
Amounts equal to their respective
Current Principal Amounts on the day
immediately preceding such Distribution
Date.
CUSTODIAL AGREEMENT: An agreement, dated as of the Closing Date
among
the Depositor, the Master Servicer, the
Trustee and the Custodian in
substantially the form of Exhibit G
hereto.
CUSTODIAN: Wells Fargo Bank, N.A., or any successor custodian
appointed
pursuant to the provisions hereof and of
the Custodial Agreement.
CUT-OFF DATE: April 1, 2005.
CUT-OFF DATE BALANCE: $643,692,976.20.
DEBT SERVICE REDUCTION: Any reduction of the Scheduled Payments
which a
Mortgagor is obligated to pay with respect
to a Mortgage Loan as a result of any
proceeding under the Bankruptcy Code or any
other similar state law or other
proceeding.
DEFICIENT VALUATION: With respect to any Mortgage Loan, a valuation
of
the Mortgaged Property by a court of
competent jurisdiction in an amount less
than the then outstanding indebtedness
under the Mortgage Loan, which valuation
results from a proceeding initiated under
the Bankruptcy Code or any other
similar state law or other proceeding.
DEPOSITOR: Structured Asset Mortgage Investments II Inc., a
Delaware
corporation, or its successors in
interest.
DEPOSITORY: The Depository Trust Company, the nominee of which is
Cede
& Co., or any successor thereto.
DEPOSITORY AGREEMENT: The meaning specified in Subsection
5.01(a)
hereof.
DEPOSITORY PARTICIPANT: A broker, dealer, bank or other
financial
institution or other Person for whom from
time to time the Depository effects
book-entry transfers and pledges of
securities deposited with the Depository.
DESIGNATED DEPOSITORY INSTITUTION: A depository institution
(commercial
bank, federal savings bank, mutual savings
bank or savings and loan association)
or trust company (which may include the
Trustee), the deposits of which are
fully insured by the FDIC to the extent
provided by law.
DETERMINATION DATE: With respect to each Mortgage Loan, the
Determination Date as defined in the
related Servicing Agreement.
DISQUALIFIED ORGANIZATION: Any of the following: (i) the United
States,
any State or political subdivision thereof,
any possession of the United States,
or any agency or instrumentality of any of
the foregoing (other than an
instrumentality which is a corporation if
all of its activities are subject to
tax and, except for the Freddie Mac or any
successor thereto, a majority of its
board of directors is not selected by such
governmental unit), (ii) any foreign
government, any international organization,
or any agency or instrumentality of
any of the foregoing, (iii) any
organization (other than certain farmers'
cooperatives described in Section 521 of
the Code) which is exempt from the tax
imposed by Chapter 1 of the Code (including
the tax imposed by Section 511 of
the Code on unrelated business taxable
income), (iv) rural electric and
telephone cooperatives described in Section
1381(a)(2)(C) of the Code or (v) any
other Person so designated by the Trustee
and the Certificate Registrar based
upon an Opinion of Counsel that the holding
of an ownership interest in a
Residual Certificate by such Person may
cause any REMIC contained in the Trust
or any Person having an ownership interest
in the Residual Certificate (other
than such Person) to incur a liability for
any federal tax imposed under the
Code that would not otherwise be imposed
but for the transfer of an ownership
interest in a Residual Certificate to such
Person. The terms "United States,"
"State" and "international organization"
shall have the meanings set forth in
Section 7701 of the Code or successor
provisions.
DISTRIBUTION ACCOUNT: The trust account or accounts created and
maintained pursuant to Section 4.04, which
shall be denominated "Wells Fargo
Bank, National Association, as Paying
Agent, for the benefit of the registered
holders of Structured Asset Mortgage
Investments II Inc., Bear Stearns ARM
Trust, Mortgage Pass-Through Certificates,
Series 2005-3 - Distribution
Account." The Distribution Account shall be
an Eligible Account.
DISTRIBUTION ACCOUNT DEPOSIT DATE: The Business Day prior to
each
Distribution Date.
DISTRIBUTION DATE: The 25th day of any month, beginning in the
month
immediately following the month of the
Closing Date, or, if such 25th day is not
a Business Day, the Business Day
immediately following.
DTC CUSTODIAN: U.S. Bank National Association, or its successors
in
interest as custodian for the
Depository.
DUE DATE: With respect to each Mortgage Loan, the date in each
month on
which its Scheduled Payment is due if such
due date is the first day of a month
and otherwise is deemed to be the first day
of the following month or such other
date specified in the related Servicing
Agreement.
DUE PERIOD: With respect to any Distribution Date and each
Mortgage
Loan, the period commencing on the second
day of the month preceding the month
in which the Distribution Date occurs and
ending at the close of business on the
first day of the month in which the
Distribution Date occurs.
ELIGIBLE ACCOUNT: Any of (i) a segregated account maintained with
a
federal or state chartered depository
institution (A) the short-term obligations
of which are rated A-2 or better by S&P
and P-1 by Moody's at the time of any
deposit therein or (B) insured by the FDIC
(to the limits established by such
Corporation), the uninsured deposits in
which account are otherwise secured such
that, as evidenced by an Opinion of Counsel
(obtained by the Person requesting
that the account be held pursuant to this
clause (i)) delivered to the Trustee
prior to the establishment of such account,
the Certificateholders will have a
claim with respect to the funds in such
account and a perfected first priority
security interest against any collateral
(which shall be limited to Permitted
Investments, each of which shall mature not
later than the Business Day
immediately preceding the Distribution Date
next following the date of
investment in such collateral or the
Distribution Date if such Permitted
Investment is an obligation of the
institution that maintains the Distribution
Account) securing such funds that is
superior to claims of any other depositors
or general creditors of the depository
institution with which such account is
maintained, (ii) a segregated trust account
or accounts maintained with a
federal or state chartered depository
institution or trust company with trust
powers acting in its fiduciary capacity or
(iii) a segregated account or
accounts of a depository institution
acceptable to the Rating Agencies (as
evidenced in writing by the Rating Agencies
that use of any such account as the
Distribution Account will not have an
adverse effect on the then-current ratings
assigned to the Classes of Certificates
then rated by the Rating Agencies).
Eligible Accounts may bear interest.
EMC: EMC Mortgage Corporation, or its successor in interest.
EMC MORTGAGE LOANS: Shall mean those Mortgage Loans serviced by
EMC
pursuant to the terms of the EMC Servicing
Agreement.
EMC SERVICING AGREEMENT: The Servicing Agreement, dated as of
February
1, 2005, between the Seller and EMC,
attached hereto as Exhibit H-2, as modified
by the related Assignment Agreement.
ERISA: The Employee Retirement Income Security Act of 1974, as
amended.
EVENT OF DEFAULT: An event of default described in Section
8.01.
EVERHOME: EverHome
Mortgage Company, or its successor in interest.
EVERHOME SERVICING AGREEMENT: The Subservicing Agreement, dated as
of
August 1, 2002, between the Seller and
EverHome, attached hereto as Exhibit H-3,
as modified by the related Assignment
Agreement.
EXCESS LIQUIDATION PROCEEDS: To the extent that such amount is
not
required by law to be paid to the related
Mortgagor, the amount, if any, by
which Liquidation Proceeds with respect to
a Liquidated Mortgage Loan exceed the
sum of (i) the Outstanding Principal
Balance of such Mortgage Loan and accrued
but unpaid interest at the related Mortgage
Interest Rate through the last day
of the month in which the related
Liquidation Date occurs, plus (ii) related
Liquidation Expenses.
FANNIE MAE: Federal National Mortgage Association or any
successor
thereto.
FDIC: Federal Deposit Insurance Corporation or any successor
thereto.
FINAL CERTIFICATION: The certification substantially in the form
of
Exhibit Three to the Custodial
Agreement.
FISCAL QUARTER: December 1 to February 29 (or the last day in
such
month), March 1 to May 31, June 1 to August
31, or September 1 to November 30,
as applicable.
FRACTIONAL UNDIVIDED INTEREST: With respect to any Class of
Certificates, the fractional undivided
interest evidenced by any Certificate of
such Class the numerator of which is the
Current Principal Amount, or the
Notional Amount in the case of the Interest
Only Certificates, of such
Certificate and the denominator of which is
the Current Principal Amount, or
Notional Amount in the case of the Interest
Only Certificates, of such Class.
With respect to the Certificates in the
aggregate, the fractional undivided
interest evidenced by (i) each Class of
Residual Certificates will be deemed to
equal 0.25% multiplied by the percentage
interest of such Residual Certificate,
(ii) the Interest Only Certificates will be
deemed to equal 1.0% multiplied by a
fraction, the numerator of which is the
Notional Amount of such Certificate and
the denominator of which is the aggregate
Notional Amount of such Class and
(iii) a Certificate of any other Class will
be deemed to equal 98.25% multiplied
by a fraction, the numerator of which is
the Current Principal Amount of such
Certificate and the denominator of which is
the aggregate Current Principal
Amount of all the Certificates; provided
however, the percentage in clause (iii)
above shall be increased by 1.0% upon the
retirement of the Interest Only
Certificates.
FREDDIE MAC: Freddie Mac, formerly the Federal Home Loan
Mortgage
Corporation, or any successor thereto.
GLOBAL CERTIFICATE: Any Private Certificate registered in the name
of
the Depository or its nominee, beneficial
interests in which are reflected on
the books of the Depository or on the books
of a Person maintaining an account
with such Depository (directly or as an
indirect participant in accordance with
the rules of such depository).
GROSS MARGIN: As to each Mortgage Loan, the fixed percentage set
forth
in the related Mortgage Note and indicated
on the Mortgage Loan Schedule which
percentage is added to the related Index on
each Interest Adjustment Date to
determine (subject to rounding, the minimum
and maximum Mortgage Interest Rate
and the Periodic Rate Cap) the Mortgage
Interest Rate until the next Interest
Adjustment Date.
GROUP I AVAILABLE FUNDS AND GROUP II AVAILABLE FUNDS: With respect
to
any Distribution Date, an amount equal to
the aggregate of the following amounts
with respect to the Mortgage Loans in the
related Loan Group: (a) all previously
undistributed payments on account of
principal (including the principal portion
of Scheduled Payments, Principal
Prepayments and the principal portion of Net
Liquidation Proceeds) and all previously
undistributed payments on account of
interest received after the Cut-off Date
and on or prior to the related
Determination Date, (b) any Monthly
Advances and Compensating Interest Payments
by the Servicers or the Master Servicer
with respect to such Distribution Date
and (c) any reimbursed amount in connection
with losses on investments of
deposits in an account, except:
(i)all payments that were due on or before the Cut-off Date;
(ii)all Principal Prepayments and Liquidation Proceeds
received after the applicable Prepayment
Period;
(iii)all payments, other than Principal Prepayments, that
represent early receipt of Scheduled
Payments due on a date or dates subsequent
to the related Due Date;
(iv)amounts received on particular Mortgage Loans as late
payments of principal or interest and
respecting which, and to the extent that,
there are any unreimbursed Monthly
Advances;
(v)amounts representing Monthly Advances determined to be
Nonrecoverable Advances;
(vi)any investment earnings on amounts on deposit in the
Master Servicer Collection Account and the
Distribution Account and amounts
permitted to be withdrawn from the Master
Servicer Collection Account and the
Distribution Account pursuant to this
Agreement;
(vii)amounts needed to pay the Servicing Fees or to reimburse
any Servicer or the Master Servicer for
amounts due under the applicable
Servicing Agreement and the Agreement to
the extent such amounts have not been
retained by, or paid previously to, such
Servicer or the Master Servicer;
(viii)any fees payable under any lender-paid primary mortgage
insurance policy; and
(ix)any expenses or other amounts reimbursable to the Trustee,
the Securities Administrator and the
Custodian pursuant to Section 7.04(c) or
Section 9.05.
GROUP I MORTGAGE LOANS: The Mortgage Loans identified as such on
the
Mortgage Loan Schedule.
GROUP I SENIOR CERTIFICATES: The Class I-A-1, Class R-I, Class R-II
and
Class R-III Certificates.
GROUP I SENIOR OPTIMAL PRINCIPAL AMOUNT AND GROUP II SENIOR
OPTIMAL
PRINCIPAL AMOUNT: With respect to each
Distribution Date, an amount equal to the
sum, without duplication, of the following
(but in no event greater than the
aggregate Current Principal Amount of the
Group I Senior Certificates or Group
II Senior Certificates, as applicable,
immediately prior to such Distribution
Date):
(i)the applicable Senior Percentage of the principal portion
of all Scheduled Payments due on each
Outstanding Mortgage Loan in the related
Loan Group on the related Due Date as
specified in the amortization schedule at
the time applicable thereto (after
adjustments for previous Principal
Prepayments but before any adjustment to
such amortization schedule by reason of
any bankruptcy or similar proceeding or any
moratorium or similar waiver or
grace period);
(ii)the
applicable Senior Prepayment Percentage of the
Scheduled Principal Balance of each
Mortgage Loan in the related Loan Group
which was the subject of a Principal
Prepayment in full received by the Master
Servicer during the related Prepayment
Period;
(iii)the applicable Senior Prepayment Percentage of all
Principal Prepayments in part received by
the Master Servicer during the related
Prepayment Period with respect to each
Mortgage Loan in the related Loan Group;
(iv)the lesser
of (a) the applicable Senior Prepayment
Percentage of the sum of (A) all Net
Liquidation Proceeds allocable to principal
received in respect of each Mortgage Loan
in the related Loan Group which became
a Liquidated Mortgage Loan during the
related Prepayment Period (other than
Mortgage Loans described in the immediately
following clause (B)) and all
Subsequent Recoveries received in respect
of each Liquidated Mortgage Loan in
the related Loan Group during the related
Due Period and (B) the Scheduled
Principal Balance of each such Mortgage
Loan in the related Loan Group purchased
by an insurer from the Trustee during the
related Prepayment Period pursuant to
the related Primary Mortgage Insurance
Policy, if any, or otherwise; and (b) the
applicable Senior Percentage of the sum of
(A) the Scheduled Principal Balance
of each Mortgage Loan in the related Loan
Group which became a Liquidated
Mortgage Loan during the related Prepayment
Period (other than the Mortgage
Loans described in the immediately
following clause (B)) and (B) the Scheduled
Principal Balance of each such Mortgage
Loan in the related Loan Group that was
purchased by an insurer from the Trust
during the related Prepayment Period
pursuant to the related Primary Mortgage
Insurance Policy, if any or otherwise;
and
(v)the applicable Senior Prepayment Percentage of the sum of
(a) the Scheduled Principal Balance of each
Mortgage Loan in the related Loan
Group which was repurchased by the Seller
in connection with such Distribution
Date and (b) the excess, if any, of the
Scheduled Principal Balance of each
Mortgage Loan in the related Loan Group
that has been replaced by the Seller
with a Substitute Mortgage Loan pursuant to
the Mortgage Loan Purchase Agreement
in connection with such Distribution Date
over the Scheduled Principal Balance
of each such Substitute Mortgage Loan.
GROUP I SENIOR PERCENTAGE: Initially, 93.90%. On any Distribution
Date,
the lesser of (i) 100% and (ii) the
percentage (carried to six places rounded
up) obtained by dividing the aggregate
Current Principal Amount of the Group I
Senior Certificates immediately preceding
such Distribution Date by the
aggregate Scheduled Principal Balance of
the Group I Mortgage Loans as of the
beginning of the related Due Period.
GROUP I SENIOR PREPAYMENT PERCENTAGE: On any Distribution Date
occurring during the periods set forth
below, as follows:
<TABLE>
<CAPTION>
Period (dates inclusive)
Group I Senior Prepayment Percentage
------------------------
------------------------------------
<S>
<C>
May 25, 2005 - April 25, 2012
100%
May 25, 2012 - April 25, 2013
Group I Senior Percentage plus 70% of the Group I Subordinate
Percentage
May 25, 2013 - April 25, 2014
Group I Senior Percentage plus 60% of the Group I Subordinate
Percentage
May 25, 2014 - April 25, 2015
Group I Senior Percentage plus 40% of the Group I Subordinate
Percentage
May 25, 2015 - April 25, 2016
Group I Senior Percentage plus 20% of the Group I Subordinate
Percentage
May 25, 2016 and thereafter
Group I Senior Percentage
</TABLE>
In addition, no reduction of the Group I Senior Prepayment
Percentage
shall occur on any Distribution Date
unless, as of the last day of the month
preceding such Distribution Date, (A) the
aggregate Scheduled Principal Balance
of the Mortgage Loans delinquent 60 days or
more (including for this purpose any
such Mortgage Loans in foreclosure and
Mortgage Loans with respect to which the
related Mortgaged Property has been
acquired by the Trust), averaged over the
last six months, as a percentage of the sum
of the aggregate Current Principal
Amount of the Subordinate Certificates does
not exceed 50%; and (B) cumulative
Realized Losses on the Mortgage Loans do
not exceed (a) 30% of the Original
Subordinate Principal Balance if such
Distribution Date occurs between and
including May 2012 and April 2013, (b) 35%
of the Original Subordinate Principal
Balance if such Distribution Date occurs
between and including May 2013 and
April 2014, (c) 40% of the Original
Subordinate Principal Balance if such
Distribution Date occurs between and
including May 2014 and April 2015, (d) 45%
of the Original Subordinate Principal
Balance if such Distribution Date occurs
between and including May 2015 and April
2016, and (e) 50% of the Original
Subordinate Principal Balance if such
Distribution Date occurs during or after
May 2016.
In addition, if on any Distribution Date the current weighted
average
of the Subordinate Percentages is equal to
or greater than two times the initial
weighted average of the Subordinate
Percentages, and (a) the aggregate Scheduled
Principal Balance of the Mortgage Loans
delinquent 60 days or more (including
for this purpose any such Mortgage Loans in
foreclosure and bankruptcy and such
Mortgage Loans with respect to which the
related Mortgaged Property has been
acquired by the Trust), averaged over the
last six months, as a percentage of
the aggregate Current Principal Amount of
the Subordinate Certificates does not
exceed 50% and (b)(i) on or prior to the
Distribution Date in April 2008
cumulative Realized Losses on the Mortgage
Loans as of the end of the related
Prepayment Period do not exceed 20% of the
Original Subordinate Principal
Balance and (ii) after the Distribution
Date in April 2008 cumulative Realized
Losses on the Mortgage Loans as of the end
of the related Prepayment Period do
not exceed 30% of the Original Subordinate
Principal Balance, then, the Group I
Senior Prepayment Percentage for such
Distribution Date will equal the Group I
Senior Percentage; provided, however, if on
such Distribution Date the current
weighted average of the Subordinate
Percentages is equal to or greater than two
times the initial weighted average of the
Subordinate Percentages on or prior to
the Distribution Date occurring in April
2008 and the above delinquency and loss
tests are met, then the Group I Senior
Prepayment Percentage for such
Distribution Date will equal the Group I
Senior Percentage plus 50% of the Group
I Subordinate Percentage.
Notwithstanding the foregoing, if on any Distribution Date, the
percentage, the numerator which is the
aggregate Current Principal Amount of the
Senior Certificates immediately preceding
such Distribution Date, and the
denominator of which is the Scheduled
Principal Balance of the Mortgage Loans as
of the beginning of the related Due Period,
exceeds such percentage as of the
Cut-off Date, then the Group I Senior
Prepayment Percentage for such
Distribution Date will equal 100%. On the
Distribution Date on which the Current
Principal Amounts of the Group I Senior
Certificates are reduced to zero, the
Group I Senior Prepayment Percentage shall
be the minimum percentage sufficient
to effect such reduction and thereafter
shall be zero.
GROUP I SUBORDINATE PERCENTAGE: On any Distribution Date, 100%
minus
the Group I Senior Percentage.
GROUP I SUBORDINATE PREPAYMENT PERCENTAGE: With respect to the
Group I
Mortgage Loans, on any Distribution Date,
100% minus the Group I Senior
Prepayment Percentage, except that on any
Distribution Date after the Current
Principal Amounts of the Group I Senior
Certificates have each been reduced to
zero, if (a) the weighted average of the
Subordinate Percentages on such
Distribution Date equals or exceeds two
times the initial weighted average of
the Subordinate Percentages and (b) the
aggregate Scheduled Principal Balance of
the Mortgage Loans delinquent 60 days or
more (including for this purpose any
such Mortgage Loans in foreclosure and
Mortgage Loans with respect to which the
related Mortgaged Property has been
acquired by the Trust), averaged over the
last six months, as a percentage of the sum
of the aggregate Current Principal
Amount of the Subordinate Certificates does
not exceed 100%, the Group I
Subordinate Prepayment Percentage will
equal 100%. If the test set forth in the
preceding sentence is not satisfied on any
Distribution Date after the Current
Principal Amount of the Group I Senior
Certificates have each been reduced to
zero, then the Group I Subordinate
Prepayment Percentage will equal zero for
such Distribution Date.
GROUP II MORTGAGE LOANS: The Mortgage Loans identified as such on
the
Mortgage Loan Schedule.
GROUP II SENIOR CERTIFICATES: The Class II-A-1, Class II-X and
Class
II-A-2 Certificates.
GROUP II SENIOR PERCENTAGE: Initially, 93.90%. On any
Distribution
Date, the lesser of (i) 100% and (ii) the
percentage (carried to six places
rounded up) obtained by dividing the
aggregate Current Principal Amount of the
Group II Senior Certificates (other than
the Interest Only Certificates)
immediately preceding such Distribution
Date by the aggregate Scheduled
Principal Balance of the Group II Mortgage
Loans as of the beginning of the
related Due Period.
GROUP II SENIOR PREPAYMENT PERCENTAGE: On any Distribution Date
occurring during the periods set forth
below, as follows:
<TABLE>
<CAPTION>
Period (dates inclusive)
Group II Senior Prepayment Percentage
------------------------
-------------------------------------
<S>
<C>
May 25, 2005 - April 25, 2012
100%
May 25, 2012 - April 25, 2013
Group II Senior Percentage plus 70% of the Group II
Subordinate Percentage
May 25, 2013 - April 25, 2014
Group II Senior Percentage plus 60% of the Group II
Subordinate Percentage
May 25, 2014 - April 25, 2015
Group II Senior Percentage plus 40% of the Group II
Subordinate Percentage
May 25, 2015 - April 25, 2016
Group II Senior Percentage plus 20% of the Group II
Subordinate Percentage
May 25, 2016 and thereafter
Group II Senior Percentage
</TABLE>
In addition, no reduction of the Group II Senior Prepayment
Percentage
shall occur on any Distribution Date
unless, as of the last day of the month
preceding such Distribution Date, (A) the
aggregate Scheduled Principal Balance
of the Mortgage Loans delinquent 60 days or
more (including for this purpose any
such Mortgage Loans in foreclosure and
Mortgage Loans with respect to which the
related Mortgaged Property has been
acquired by the Trust), averaged over the
last six months, as a percentage of the sum
of the aggregate Current Principal
Amount of the Subordinate Certificates does
not exceed 50%; and (B) cumulative
Realized Losses on the Mortgage Loans do
not exceed (a) 30% of the Original
Subordinate Principal Balance if such
Distribution Date occurs between and
including May 2012 and April 2013, (b) 35%
of the Original Subordinate Principal
Balance if such Distribution Date occurs
between and including May 2013 and
April 2014, (c) 40% of the Original
Subordinate Principal Balance if such
Distribution Date occurs between and
including May 2014 and April 2015, (d) 45%
of the Original Subordinate Principal
Balance if such Distribution Date occurs
between and including May 2015 and April
2016, and (e) 50% of the Original
Subordinate Principal Balance if such
Distribution Date occurs during or after
May 2016.
In addition, if
on any Distribution Date the current weighted average
of the Subordinate Percentages is equal to
or greater than two times the initial
weighted average of the Subordinate
Percentages, and (a) the aggregate Scheduled
Principal Balance of the Mortgage Loans
delinquent 60 days or more (including
for this purpose any such Mortgage Loans in
foreclosure and bankruptcy and such
Mortgage Loans with respect to which the
related Mortgaged Property has been
acquired by the Trust), averaged over the
last six months, as a percentage of
the aggregate Current Principal Amount of
the Subordinate Certificates does not
exceed 50% and (b)(i) on or prior to the
Distribution Date in April 2008
cumulative Realized Losses on the Mortgage
Loans as of the end of the related
Prepayment Period do not exceed 20% of the
Original Subordinate Principal
Balance and (ii) after the Distribution
Date in April 2008 cumulative Realized
Losses on the Mortgage Loans as of the end
of the related Prepayment Period do
not exceed 30% of the Original Subordinate
Principal Balance, then, the Group II
Senior Prepayment Percentage for such
Distribution Date will equal the Group II
Senior Percentage; provided, however, if on
such Distribution Date the current
weighted average of the Subordinate
Percentages is equal to or greater than two
times the initial weighted average of the
Subordinate Percentages on or prior to
the Distribution Date occurring in April
2008 and the above delinquency and loss
tests are met, then the Group II Senior
Prepayment Percentage for such
Distribution Date will equal the Group II
Senior Percentage plus 50% of the
Group II Subordinate Percentage.
Notwithstanding the foregoing, if on any Distribution Date, the
percentage, the numerator which is the
aggregate Current Principal Amount of the
Senior Certificates (other than the
Interest Only Certificates) immediately
preceding such Distribution Date, and the
denominator of which is the Scheduled
Principal Balance of the Mortgage Loans as
of the beginning of the related Due
Period, exceeds such percentage as of the
Cut-off Date, then the Group II Senior
Prepayment Percentage for such Distribution
Date will equal 100%. On the
Distribution Date on which the Current
Principal Amounts of the Group II Senior
Certificates are reduced to zero, the Group
II Senior Prepayment Percentage
shall be the minimum percentage sufficient
to effect such reduction and
thereafter shall be zero.
GROUP II SUBORDINATE PERCENTAGE: On any Distribution Date, 100%
minus
the Group II Senior Percentage.
GROUP II SUBORDINATE PREPAYMENT PERCENTAGE: With respect to the
Group
II Mortgage Loans, on any Distribution
Date, 100% minus the Group II Senior
Prepayment Percentage, except that on any
Distribution Date after the Current
Principal Amounts of the Group II Senior
Certificates have each been reduced to
zero, if (a) the weighted average of the
Subordinate Percentages on such
Distribution Date equals or exceeds two
times the initial weighted average of
the Subordinate Percentages and (b) the
aggregate Scheduled Principal Balance of
the Mortgage Loans delinquent 60 days or
more (including for this purpose any
such Mortgage Loans in foreclosure and
Mortgage Loans with respect to which the
related Mortgaged Property has been
acquired by the Trust), averaged over the
last six months, as a percentage of the sum
of the aggregate Current Principal
Amount of the Subordinate Certificates does
not exceed 100%, the Group II
Subordinate Prepayment Percentage will
equal 100%. If the test set forth in the
preceding sentence is not satisfied on any
Distribution Date after the Current
Principal Amount of the Group II Senior
Certificates have each been reduced to
zero, then the Group II Subordinate
Prepayment Percentage will equal zero for
such Distribution Date.
HOLDER: The Person in whose name a Certificate is registered in
the
Certificate Register, except that, subject
to Subsections 11.02(b) and 11.05(e),
solely for the purpose of giving any
consent pursuant to this Agreement, any
Certificate registered in the name of the
Depositor, the Master Servicer or the
Trustee or any Affiliate thereof shall be
deemed not to be outstanding and the
Fractional Undivided Interest evidenced
thereby shall not be taken into account
in determining whether the requisite
percentage of Fractional Undivided
Interests necessary to effect any such
consent has been obtained.
HMBC: HomeBanc Mortgage Corporation, or its successor in
interest.
HMBC MORTGAGE LOANS: Shall mean those Mortgage Loans serviced by
HBMC
pursuant to the terms of the HBMC Servicing
Agreement.
HMBC SERVICING AGREEMENT: The Servicing Agreement, dated as of
April 1,
2005, between the Seller and HBMC, attached
hereto as Exhibit H-4, as modified
by the related Assignment Agreement.
INDEMNIFIED PERSONS: The Trustee, the Master Servicer, the
Custodian
and the Securities Administrator and their
officers, directors, agents and
employees and, with respect to the Trustee,
any separate co-trustee and its
officers, directors, agents and
employees.
INDEPENDENT: When used with respect to any specified Person, this
term
means that such Person (a) is in fact
independent of the Depositor or the Master
Servicer and of any Affiliate of the
Depositor or the Master Servicer, (b) does
not have any direct financial interest or
any material indirect financial
interest in the Depositor or the Master
Servicer or any Affiliate of the
Depositor or the Master Servicer and (c) is
not connected with the Depositor or
the Master Servicer or any Affiliate as an
officer, employee, promoter,
underwriter, trustee, partner, director or
person performing similar functions.
INDEX: The index, if any, specified in a Mortgage Note by reference
to
which the related Mortgage Interest Rate
will be adjusted from time to time.
INDIVIDUAL CERTIFICATE: Any Private Certificate registered in the
name
of the Holder other than the Depository or
its nominee.
INITIAL CERTIFICATION: The certification substantially in the form
of
Exhibit One to the Custodial Agreement.
INSTITUTIONAL ACCREDITED INVESTOR: Any Person meeting the
requirements
of Rule 501(a)(l), (2), (3) or (7) of
Regulation D under the Securities Act or
any entity all of the equity holders in
which come within such paragraphs.
INSURANCE POLICY: With respect to any Mortgage Loan, any
standard
hazard insurance policy, flood insurance
policy or title insurance policy.
INSURANCE PROCEEDS: Amounts paid by the insurer under any
Insurance
Policy covering any Mortgage Loan or
Mortgaged Property other than amounts
required to be paid over to the Mortgagor
pursuant to law or the related
Mortgage Note or Security Instrument and
other than amounts used to repair or
restore the Mortgaged Property or to
reimburse insured expenses.
INTEREST ACCRUAL PERIOD: With respect to each Distribution Date,
for
each Class of Certificates, the calendar
month preceding the month in which such
Distribution Date occurs.
INTEREST ADJUSTMENT DATE: With respect to a Mortgage Loan, the
date, if
any, specified in the related Mortgage Note
on which the Mortgage Interest Rate
is subject to adjustment.
INTEREST ONLY CERTIFICATES: The Class II-X Certificates.
INTEREST SHORTFALL: With respect to any Distribution Date and
each
Mortgage Loan that during the related
Prepayment Period was the subject of a
Principal Prepayment or constitutes a
Relief Act Mortgage Loan, an amount
determined as follows:
(a)Partial principal prepayments received during the relevant
Prepayment Period: The difference between
(i) one month's interest at the
applicable Net Rate on the amount of such
prepayment and (ii) the amount of
interest of such prepayment (adjusted to
the applicable Net Rate) received at
the time of such prepayment;
(b)Principal prepayments in full received during the relevant
Prepayment Period: The difference between
(i) one month's interest at the
applicable Net Rate on the Scheduled
Principal Balance of such Mortgage Loan
immediately prior to such prepayment and
(ii) the amount of interest of such
prepayment (adjusted to the applicable Net
Rate) received at the time of such
prepayment; and
(c)Relief Act Mortgage Loans: As to any Relief Act Mortgage Loan,
the
excess of (i) 30 days' interest (or, in the
case of a principal prepayment in
full, interest to the date of prepayment)
on the Scheduled Principal Balance
thereof (or, in the case of a principal
prepayment in part, on the amount so
prepaid) at the related Net Rate over (ii)
30 days' interest (or, in the case of
a principal prepayment in full, interest to
the date of prepayment) on such
Scheduled Principal Balance (or, in the
case of a Principal Prepayment in part,
on the amount so prepaid) at the Net Rate
required to be paid by the Mortgagor
as limited by application of the Relief
Act.
INTERIM CERTIFICATION: The certification substantially in the form
of
Exhibit Two to the Custodial Agreement.
INVESTMENT LETTER: The letter to be furnished by each
Institutional
Accredited Investor which purchases any of
the Private Certificates in
connection with such purchase,
substantially in the form set forth as Exhibit
F-1 hereto.
LENDER-PAID PMI RATE: With respect to each Mortgage Loan covered by
a
lender-paid primary mortgage insurance
policy, the amount payable to the related
insurer, as stated in the Mortgage Loan
Schedule.
LIQUIDATED MORTGAGE LOAN: Any defaulted Mortgage Loan as to which
the
related Servicer or the Master Servicer has
determined that all amounts it
expects to recover from or on account of
such Mortgage Loan have been recovered.
LIQUIDATION DATE: With respect to any Liquidated Mortgage Loan,
the
date on which the Master Servicer or the
related Servicer has certified that
such Mortgage Loan has become a Liquidated
Mortgage Loan.
LIQUIDATION EXPENSES: With respect to a Mortgage Loan in
liquidation,
unreimbursed expenses paid or incurred by
or for the account of the Master
Servicer or the related Servicers in
connection with the liquidation of such
Mortgage Loan and the related Mortgage
Property, such expenses including (a)
property protection expenses, (b) property
sales expenses, (c) foreclosure and
sale costs, including court costs and
reasonable attorneys' fees, and (d)
similar expenses reasonably paid or
incurred in connection with liquidation.
LIQUIDATION PROCEEDS: Cash received in connection with the
liquidation
of a defaulted Mortgage Loan, whether
through trustee's sale, foreclosure sale,
Insurance Proceeds, condemnation proceeds
or otherwise and any Subsequent
Recoveries.
LOAN GROUP: Loan Group I or Loan Group II, as applicable.
LOAN GROUP I: The group of Mortgage Loans designated as belonging
to
Loan Group I on the Mortgage Loan
Schedule.
LOAN GROUP II: The group of Mortgage Loans designated as belonging
to
Loan Group II on the Mortgage Loan
Schedule.
LOAN-TO-VALUE RATIO: With respect to any Mortgage Loan, the
fraction,
expressed as a percentage, the numerator of
which is the original principal
balance of the related Mortgage Loan and
the denominator of which is the
Original Value of the related Mortgaged
Property.
LOSS ALLOCATION LIMITATION: The meaning specified in Section
6.02(c)
hereof.
LOSS SEVERITY PERCENTAGE: With respect to any Distribution Date,
the
percentage equivalent of a fraction, the
numerator of which is the amount of
Realized Losses incurred on a Mortgage Loan
and the denominator of which is the
Scheduled Principal Balance of such
Mortgage Loan immediately prior to the
liquidation of such Mortgage Loan.
LOST NOTES: The original Mortgage Notes that have been lost, as
indicated on the Mortgage Loan
Schedule.
MASTER SERVICER: As of the Closing Date, Wells Fargo Bank, N.A.
and,
thereafter, its respective successors in
interest who meet the qualifications of
the Servicing Agreements and this
Agreement.
MASTER SERVICER CERTIFICATION: A written certification covering
servicing of the Mortgage Loans by all
Servicers and signed by an officer of the
Master Servicer that complies with (i) the
Sarbanes-Oxley Act of 2002, as
amended from time to time, and (ii) the
February 21, 2003 Statement by the Staff
of the Division of Corporation Finance of
the Securities and Exchange Commission
Regarding Compliance by Asset-Backed
Issuers with Exchange Act Rules 13a-14 and
15d-14, as in effect from time to time;
provided that if, after the Closing Date
(a) the Sarbanes-Oxley Act of 2002 is
amended, (b) the Statement referred to in
clause (ii) is modified or superceded by
any subsequent statement, rule or
regulation of the Securities and Exchange
Commission or any statement of a
division thereof, or (c) any future
releases, rules and regulations are
published by the Securities and Exchange
Commission from time to time pursuant
to the Sarbanes-Oxley Act of 2002, which in
any such case affects the form or
substance of the required certification and
results in the required
certification being, in the reasonable
judgment of the Master Servicer,
materially more onerous than the form of
the required certification as of the
Closing Date, the Master Servicer
Certification shall be as agreed to by the
Master Servicer and the Depositor following
a negotiation in good faith to
determine how to comply with any such new
requirements.
MASTER SERVICER COLLECTION ACCOUNT: The trust account or
accounts
created and maintained pursuant to Section
4.02, which shall be denominated
"U.S. Bank National Association, as Trustee
f/b/o holders of Structured Asset
Mortgage Investments II Inc., Bear Stearns
ARM Trust, Mortgage Pass-Through
Certificates, Series 2005-3 - Master
Servicer Collection Account." The Master
Servicer Collection Account shall be an
Eligible Account.
MASTER SERVICING COMPENSATION: The meaning specified in Section
3.14.
MATERIAL DEFECT: The meaning specified in Section 2.02(a).
MAXIMUM LIFETIME MORTGAGE RATE: The maximum level to which a
Mortgage
Interest Rate can adjust in accordance with
its terms, regardless of changes in
the applicable Index.
MERS: Mortgage Electronic Registration Systems, Inc., a
corporation
organized and existing under the laws of
the State of Delaware, or any successor
thereto.
MERS(R) SYSTEM: The system of recording transfers of Mortgages
electronically maintained by MERS.
MIN: The Mortgage Identification Number for Mortgage Loans
registered
with MERS on the MERS(R) System.
MINIMUM LIFETIME MORTGAGE RATE: The minimum level to which a
Mortgage
Interest Rate can adjust in accordance with
its terms, regardless of changes in
the applicable Index.
MOM LOAN: With respect to any Mortgage Loan, MERS acting as the
mortgagee of such Mortgage Loan, solely as
nominee for the originator of such
Mortgage Loan and its successors and
assigns, at the origination thereof, or as
nominee for any subsequent assignee of the
originator pursuant to an assignment
of mortgage to MERS.
MONTHLY ADVANCE: An advance of principal or interest required to
be
made by the applicable Servicer pursuant to
the related Servicing Agreement or
the Master Servicer pursuant to Section
6.05.
MOODY'S: Moody's Investors Service, Inc. or its successor in
interest.
MORTGAGE FILE: The mortgage documents listed in Section 2.01(b)
pertaining to a particular Mortgage Loan
and any additional documents required
to be added to the Mortgage File pursuant
to this Agreement.
MORTGAGE INTEREST RATE: The annual rate at which interest accrues
from
time to time on any Mortgage Loan pursuant
to the related Mortgage Note, which
rate is initially equal to the "Mortgage
Interest Rate" set forth with respect
thereto on the Mortgage Loan Schedule.
MORTGAGE LOAN: A mortgage loan transferred and assigned to the
Trustee
pursuant to Section 2.01 or Section 2.04
and held as a part of the Trust Fund,
as identified in the Mortgage Loan Schedule
(which shall include, without
limitation, each related Mortgage Note,
Mortgage and Mortgage File and all
rights appertaining thereto), including a
mortgage loan the property securing
which has become an REO Property.
MORTGAGE LOAN PURCHASE AGREEMENT: The Mortgage Loan Purchase
Agreement
dated as of April 29, 2005, between EMC
Mortgage Corporation, as seller, and
Structured Asset Mortgage Investments II
Inc., as purchaser, and all amendments
thereof and supplements thereto, attached
as Exhibit J.
MORTGAGE LOAN SCHEDULE: The schedule, attached hereto as Exhibit B
with
respect to the Mortgage Loans, as amended
from time to time to reflect the
repurchase or substitution of Mortgage
Loans pursuant to this Agreement or the
Mortgage Loan Purchase Agreement, as the
case may be.
MORTGAGE NOTE: The originally executed note or other evidence of
the
indebtedness of a Mortgagor under the
related Mortgage Loan.
MORTGAGED PROPERTY: Land and improvements securing the indebtedness
of
a Mortgagor under the related Mortgage Loan
or, in the case of REO Property,
such REO Property.
MORTGAGOR: The obligor on a Mortgage Note.
NET INTEREST SHORTFALL: With respect to any Distribution Date,
the
Interest Shortfall, if any, for such
Distribution Date net of Compensating
Interest Payments made with respect to such
Distribution Date.
NET LIQUIDATION PROCEEDS: As to any Liquidated Mortgage Loan,
Liquidation Proceeds net of (i) Liquidation
Expenses which are payable therefrom
to the related Servicer or the Master
Servicer in accordance with the related
Servicing Agreement or this Agreement and
(ii) unreimbursed advances by the
related Servicer or the Master Servicer and
Monthly Advances.
NET RATE: With respect to each Mortgage Loan, the Mortgage
Interest
Rate in effect from time to time less the
Aggregate Expense Rate (expressed as a
per annum rate).
NON-OFFERED SUBORDINATE CERTIFICATES: The Class B-6, Class B-7
and
Class B-8 Certificates.
NONRECOVERABLE ADVANCE: Any advance or Monthly Advance (i) which
was
previously made or is proposed to be made
by the Master Servicer, the Trustee
(as successor Master Servicer) or the
applicable Servicer and (ii) which, in the
good faith judgment of the Master Servicer,
the Trustee or the applicable
Servicer, will not or, in the case of a
proposed advance or Monthly Advance,
would not, be ultimately recoverable by the
Master Servicer, the Trustee (as
successor Master Servicer) or the
applicable Servicer from Liquidation Proceeds,
Insurance Proceeds or future payments on
the Mortgage Loan for which such
advance or Monthly Advance was made or is
proposed to be made.
NOTIONAL AMOUNT: The Notional Amount of the Class II-X
Certificates, as
of any date of determination, is equal to
the Current Principal Amount of the
Class II-A-2 Certificates. Reference to the
Notional Amount of the Class II-X
Certificates is solely for convenience in
calculation and does not represent the
right to receive any distributions
allocable to principal. For federal income
tax purposes, however, the Notional Amount
of the Class II-X Certificates is the
Uncertificated Principal Balance of the
REMIC II Regular Interest II-A-2.
OFFERED CERTIFICATES: The Class I-A-1, Class II-A-1, Class II-X,
Class
II-A-2, Class R-I, Class R-II, Class R-III,
Class B-l, Class B-2, Class B-3,
Class B-4 and Class B-5 Certificates.
OFFERED SUBORDINATE CERTIFICATES: The Class B-l, Class B-2, Class
B-3,
Class B-4 and Class B-5 Certificates.
OFFICER'S CERTIFICATE: A certificate signed by the Chairman of
the
Board, the Vice Chairman of the Board, the
President or a Vice President or
Assistant Vice President or other
authorized officer of the Master Servicer or
the Depositor, as applicable, and delivered
to the Trustee, as required by this
Agreement.
OPINION OF COUNSEL: A written opinion of counsel who is or are
acceptable to the Trustee and who, unless
required to be Independent (an
"Opinion of Independent Counsel"), may be
internal counsel for the Company, the
Master Servicer or the Depositor.
ORIGINAL SUBORDINATE PRINCIPAL BALANCE: The sum of the
aggregate
Current Principal Amounts of each Class of
Subordinate Certificates as of the
Closing Date.
ORIGINAL VALUE: The lesser of (i) the Appraised Value or (ii) the
sales
price of a Mortgaged Property at the time
of origination of a Mortgage Loan,
except in instances where either clauses
(i) or (ii) is unavailable, the other
may be used to determine the Original
Value, or if both clauses (i) and (ii) are
unavailable, Original Value may be
determined from other sources reasonably
acceptable to the Depositor.
OUTSTANDING MORTGAGE LOAN: With respect to any Due Date, a
Mortgage
Loan which, prior to such Due Date, was not
the subject of a Principal
Prepayment in full, did not become a
Liquidated Mortgage Loan and was not
purchased or replaced.
OUTSTANDING PRINCIPAL BALANCE: As of the time of any determination,
the
principal balance of a Mortgage Loan
remaining to be paid by the Mortgagor, or,
in the case of an REO Property, the
principal balance of the related Mortgage
Loan remaining to be paid by the Mortgagor
at the time such property was
acquired by the Trust Fund less any Net
Liquidation Proceeds with respect
thereto to the extent applied to
principal.
PASS-THROUGH RATE: As to each Class of Certificates, the REMIC
I
Regular Interests and the REMIC II Regular
Interests, the rate of interest
determined as provided with respect thereto
in Section 5.01(c). Any monthly
calculation of interest at a stated rate
shall be based upon annual interest at
such rate divided by twelve.
PAYING AGENT: The Securities Administrator or any successor
paying
agent appointed hereunder.
PERIODIC RATE CAP: With respect to each Mortgage Loan, the
maximum
adjustment that can be made to the Mortgage
Interest Rate on each Interest
Adjustment Date in accordance with its
terms, regardless of changes in the
applicable Index.
PERMITTED INVESTMENTS: Any one or more of the following obligations
or
securities held in the name of the Trustee
for the benefit of the
Certificateholders:
(i)direct obligations of, and obligations the timely payment
of which are fully guaranteed by the United
States of America or any agency or
instrumentality of the United States of
America the obligations of which are
backed by the full faith and credit of the
United States of America;
(ii)(a) demand or time deposits, federal funds or bankers'
acceptances issued by any depository
institution or trust company incorporated
under the laws of the United States of
America or any state thereof (including
the Trustee or the Master Servicer or its
Affiliates acting in its commercial
banking capacity) and subject to
supervision and examination by federal and/or
state banking authorities, provided that
the commercial paper and/or the
short-term debt rating and/or the long-term
unsecured debt obligations of such
depository institution or trust company at
the time of such investment or
contractual commitment providing for such
investment have the Applicable Credit
Rating or better from each Rating Agency
and (b) any other demand or time
deposit or certificate of deposit that is
fully insured by the Federal Deposit
Insurance Corporation;
(iii)repurchase obligations with respect to (a) any security
described in clause (i) above or (b) any
other security issued or guaranteed by
an agency or instrumentality of the United
States of America, the obligations of
which are backed by the full faith and
credit of the United States of America,
in either case entered into with a
depository institution or trust company
(acting as principal) described in clause
(ii)(a) above where the Trustee holds
the security therefor;
(iv)securities bearing interest or sold at a discount issued
by any corporation (including the Trustee
or the Master Servicer or its
Affiliates) incorporated under the laws of
the United States of America or any
state thereof that have the Applicable
Credit Rating or better from each Rating
Agency at the time of such investment or
contractual commitment providing for
such investment; provided, however, that
securities issued by any particular
corporation will not be Permitted
Investments to the extent that investments
therein will cause the then outstanding
principal amount of securities issued by
such corporation and held as part of the
Trust to exceed 10% of the aggregate
Outstanding Principal Balances of all the
Mortgage Loans and Permitted
Investments held as part of the Trust;
(v)commercial paper (including both non-interest-bearing
discount obligations and interest-bearing
obligations payable on demand or on a
specified date not more than one year after
the date of issuance thereof) having
the Applicable Credit Rating or better from
each Rating Agency at the time of
such investment;
(vi)a Reinvestment Agreement issued by any bank, insurance
company or other corporation or entity;
(vii)any other demand, money market or time deposit,
obligation, security or investment as may
be acceptable to each Rating Agency as
evidenced in writing by each Rating Agency
to the Trustee; and
(viii)any money market or common trust fund having the
Applicable Credit Rating or better from
each Rating Agency, including any such
fund for which the Trustee or Master
Servicer or any affiliate of the Trustee or
Master Servicer acts as a manager or an
advisor; provided, however, that no
instrument or security shall be a Permitted
Investment if such instrument or
security evidences a right to receive only
interest payments with respect to the
obligations underlying such instrument or
if such security provides for payment
of both principal and interest with a yield
to maturity in excess of 120% of the
yield to maturity at par or if such
instrument or security is purchased at a
price greater than par.
PERMITTED TRANSFEREE: Any Person other than a Disqualified
Organization
or an "electing large partnership" (as
defined by Section 775 of the Code).
PERSON: Any individual, corporation, partnership, joint
venture,
association, limited liability company,
joint-stock company, trust,
unincorporated organization or government
or any agency or political subdivision
thereof.
PHYSICAL CERTIFICATES: The Residual Certificates and the
Private
Certificates.
PREPAYMENT CHARGE: With respect to any Mortgage Loan, the charges
or
premiums, if any, due in connection with a
full or partial prepayment of such
Mortgage Loan in accordance with the terms
thereof.
PREPAYMENT PERIOD: As to any Distribution Date and (i) each EMC
Mortgage Loan, the period commencing on the
16th day of the month prior to the
month in which the related Distribution
Date occurs (or, with respect to the
first Distribution Date, the Cut-off Date)
and ending on the 15th day of the
month in which such Distribution Date
occurs and (ii) any other Mortgage Loan,
the period set forth in the related
Servicing Agreement.
PRIMARY MORTGAGE INSURANCE POLICY: Any primary mortgage
guaranty
insurance policy issued in connection with
a Mortgage Loan which provides
compensation to a Mortgage Note holder in
the event of default by the obligor
under such Mortgage Note or the related
Security Instrument, if any or any
replacement policy therefor through the
related Interest Accrual Period for such
Class relating to a Distribution Date.
PRINCIPAL PREPAYMENT: Any payment (whether partial or full) or
other
recovery of principal on a Mortgage Loan
which is received in advance of its
scheduled Due Date to the extent that it is
not accompanied by an amount as to
interest representing scheduled interest
due on any date or dates in any month
or months subsequent to the month of
prepayment, including Insurance Proceeds
and Repurchase Proceeds, but excluding the
principal portion of Net Liquidation
Proceeds.
PRIVATE CERTIFICATES: The Class B-6, Class B-7 and Class B-8
Certificates.
PROTECTED ACCOUNT: An account established and maintained for
the
benefit of Certificateholders by each
Servicer with respect to the related
Mortgage Loans and with respect to REO
Property pursuant to the respective
Servicing Agreements.
QIB: A Qualified Institutional Buyer as defined in Rule 144A
promulgated under the Securities Act.
QUALIFIED INSURER: Any insurance company duly qualified as such
under
the laws of the state or states in which
the related Mortgaged Property or
Mortgaged Properties is or are located,
duly authorized and licensed in such
state or states to transact the type of
insurance business in which it is
engaged and approved as an insurer by the
Master Servicer, so long as the claims
paying ability of which is acceptable to
the Rating Agencies for pass-through
certificates having the same rating as the
Certificates rated by the Rating
Agencies as of the Closing Date.
RATING AGENCIES: Moody's and S&P.
REALIZED LOSS: Any (i) Bankruptcy Loss or (ii) as to any
Liquidated
Mortgage Loan, (x) the Outstanding
Principal Balance of such Liquidated Mortgage
Loan plus accrued and unpaid interest
thereon at the Mortgage Interest Rate
through the last day of the month of such
liquidation, less (y) the related Net
Liquidation Proceeds with respect to such
Mortgage Loan and the related
Mortgaged Property. In addition, to the
extent the Paying Agent receives
Subsequent Recoveries with respect to any
Mortgage Loan, the amount of the
Realized Loss with respect to that Mortgage
Loan will be reduced to the extent
such recoveries are applied to reduce the
Current Principal Amount of any Class
of Certificates on any Distribution
Date.
RECORD DATE: With respect to any Distribution Date, the close
of
business on the last Business Day of the
month immediately preceding the month
of such Distribution Date.
REINVESTMENT AGREEMENTS: One or more reinvestment agreements,
acceptable to the Rating Agencies, from a
bank, insurance company or other
corporation or entity (including the
Trustee).
RELIEF ACT: The Servicemembers Civil Relief Act, or similar state
law.
RELIEF ACT MORTGAGE LOAN: Any Mortgage Loan as to which the
Scheduled
Payment thereof has been reduced due to the
application of the Relief Act.
REMIC: A real estate mortgage investment conduit, as defined in
the
Code.
REMIC I: That group of assets contained in the Trust Fund
designated as
a REMIC consisting of (i) the Mortgage
Loans, (ii) the Master Servicer
Collection Account, (iii) the Distribution
Account, (iv) any REO Property
relating to the Mortgage Loans, (v) the
rights with respect to any related
Servicing Agreement, (vi) the rights with
respect to any related Assignment
Agreement and (vii) any proceeds of the
foregoing.
REMIC I INTERESTS: The REMIC I Regular Interests and the Class
R-I
Certificates.
REMIC I REGULAR INTERESTS: REMIC I Regular Interests I-A, I-B,
II-A,
II-B, and ZZZ.
REMIC I SUBORDINATED BALANCE RATIO: The ratio among the
Uncertificated
Principal Balances of each of the REMIC I
Regular Interests ending with the
designation "A," equal to the ratio among,
with respect to each such REMIC I
Regular Interest, the excess of (x) the
aggregate Scheduled Principal Balance of
the Mortgage Loans in the related Loan
Group over (y) the Current Principal
Amount of the Senior Certificates in the
related Certificate Group.
REMIC II: That group of assets contained in the Trust Fund
designated
as a REMIC consisting of the REMIC I
Regular Interests.
REMIC II INTERESTS: The REMIC II Regular Interests and the Class
R-II
Certificates.
REMIC II REGULAR INTERESTS: REMIC II Regular Interests I-A-1,
II-A-1,
II-A-2, B-1, B-2, B-3, B-4, B-5, B-6, B-7,
B-8 and R-III.
REMIC III: That group of assets contained in the Trust Fund
designated
as a REMIC consisting of the REMIC II
Regular Interests.
REMIC III CERTIFICATES: The Class I-A-1, Class II-A-1, Class
II-X,
Class II-A-2, Class B-1, Class B-2, Class
B-3, Class B-4, Class B-5, Class B-6,
Class B-7, Class B-8 and Class R-III
Certificates.
REMIC
OPINION: An Opinion of Independent Counsel, to the effect that
the proposed action described therein would
not, under the REMIC Provisions, (i)
cause any REMIC to fail to qualify as a
REMIC while any regular interest in such
REMIC is outstanding, (ii) result in a tax
on prohibited transactions with
respect to any REMIC or (iii) constitute a
taxable contribution to any REMIC
after the Startup Day.
REMIC PROVISIONS: The provisions of the federal income tax law
relating
to the REMIC, which appear at Sections 860A
through 860G of the Code, and
related provisions and regulations
promulgated thereunder, as the foregoing may
be in effect from time to time.
REO PROPERTY: A Mortgaged Property acquired in the name of the
Trustee,
for the benefit of Certificateholders, by
foreclosure or deed-in-lieu of
foreclosure in connection with a defaulted
Mortgage Loan.
REPURCHASE PRICE: With respect to any Mortgage Loan (or any
property
acquired with respect thereto) required to
be repurchased by the Seller pursuant
to the Mortgage Loan Purchase Agreement or
Article II of this Agreement, an
amount equal to the sum of (i)(a) 100% of
the Outstanding Principal Balance of
such Mortgage Loan as of the date of
repurchase (or if the related Mortgaged
Property was acquired with respect thereto,
100% of the Outstanding Principal
Balance at the date of the acquisition),
plus (b) accrued but unpaid interest on
the Outstanding Principal Balance at the
related Mortgage Interest Rate, through
and including the last day of the month of
repurchase, plus (c) any unreimbursed
Monthly Advances and servicing advances
payable to the Servicer of the Mortgage
Loan or to the Master Servicer and (ii) any
costs and damages (if any) incurred
by the Trust in connection with any
violation of such Mortgage Loan of any
anti-predatory lending laws.
REPURCHASE PROCEEDS: the Repurchase Price in connection with
any
repurchase of a Mortgage Loan by the Seller
and any cash deposit in connection
with the substitution of a Mortgage
Loan.
REQUEST FOR RELEASE: A request for release in the form attached
hereto
as Exhibit D.
REQUIRED INSURANCE POLICY: With respect to any Mortgage Loan,
any
insurance policy which is required to be
maintained from time to time under this
Agreement with respect to such Mortgage
Loan.
RESIDUAL CERTIFICATES: Any of the Class R Certificates.
RESPONSIBLE OFFICER: Any officer assigned to the Corporate Trust
Office
(or any successor thereto), including any
Vice President, Assistant Vice
President, Trust Officer, any Assistant
Secretary, any trust officer or any
other officer of the Trustee customarily
performing functions similar to those
performed by any of the above designated
officers and having direct
responsibility for the administration of
this Agreement, and any other officer
of the Trustee to whom a matter arising
hereunder may be referred.
RULE 144A CERTIFICATE: The certificate to be furnished by each
purchaser of a Private Certificate (which
is also a Physical Certificate) which
is a Qualified Institutional Buyer as
defined under Rule 144A promulgated under
the Securities Act, substantially in the
form set forth as Exhibit F-2 hereto.
S&P: Standard & Poor's, a division of The McGraw-Hill
Companies, Inc.,
and its successors in interest.
SCHEDULED PAYMENT: With respect to any Mortgage Loan and any month,
the
scheduled payment or payments of principal
and interest due during such month on
such Mortgage Loan which either is payable
by a Mortgagor in such month under
the related Mortgage Note or, in the case
of REO Property, would otherwise have
been payable under the related Mortgage
Note.
SCHEDULED PRINCIPAL: The principal portion of any Scheduled
Payment.
SCHEDULED PRINCIPAL BALANCE: With respect to any Mortgage Loan on
any
Distribution Date, (i) the unpaid principal
balance of such Mortgage Loan as of
the close of business on the related Due
Date (i.e., taking account of the
principal payment to be made on such Due
Date and irrespective of any
delinquency in its payment), as specified
in the amortization schedule at the
time relating thereto (before any
adjustment to such amortization schedule by
reason of any bankruptcy or similar
proceeding occurring after the Cut-off Date
(other than a Deficient Valuation) or any
moratorium or similar waiver or grace
period) and less (ii) any Principal
Prepayments (including the principal portion
of Net Liquidation Proceeds) received
during or prior to the related Prepayment
Period; provided that the Scheduled
Principal Balance of a Liquidated Mortgage
Loan is zero.
SECURITIES ACT: The Securities Act of 1933, as amended.
SECURITIES ADMINISTRATOR: Wells Fargo Bank, N.A., or its successor
in
interest, or any successor securities
administrator appointed as herein
provided.
SECURITIES LEGEND: "THIS CERTIFICATE HAS NOT BEEN AND WILL NOT
BE
REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED (THE "SECURITIES ACT"),
OR UNDER ANY STATE SECURITIES LAWS. THE
HOLDER HEREOF, BY PURCHASING THIS
CERTIFICATE, AGREES THAT THIS CERTIFICATE
MAY BE REOFFERED, RESOLD, PLEDGED OR
OTHERWISE TRANSFERRED ONLY IN COMPLIANCE
WITH THE SECURITIES ACT AND OTHER
APPLICABLE LAWS AND ONLY (1) PURSUANT TO
RULE 144A UNDER THE SECURITIES ACT
("RULE 144A") TO A PERSON THAT THE HOLDER
REASONABLY BELIEVES IS A QUALIFIED
INSTITUTIONAL BUYER WITHIN THE MEANING OF
RULE 144A (A "QIB"), PURCHASING FOR
ITS OWN ACCOUNT OR A QIB PURCHASING FOR THE
ACCOUNT OF A QIB, WHOM THE HOLDER
HAS INFORMED, IN EACH CASE, THAT THE
REOFFER, RESALE, PLEDGE OR OTHER TRANSFER
IS BEING MADE IN RELIANCE ON RULE 144A, (2)
PURSUANT TO AN EXEMPTION FROM
REGISTRATION PROVIDED BY RULE 144 UNDER THE
SECURITIES ACT (IF AVAILABLE) OR (3)
IN CERTIFICATED FORM TO AN "INSTITUTIONAL
ACCREDITED INVESTOR" WITHIN THE
MEANING THEREOF IN RULE 501(a)(1), (2), (3)
or (7) OF REGULATION D UNDER THE ACT
OR ANY ENTITY IN WHICH ALL OF THE EQUITY
OWNERS COME WITHIN SUCH PARAGRAPHS
PURCHASING NOT FOR DISTRIBUTION IN
VIOLATION OF THE SECURITIES ACT, SUBJECT TO
(A) THE RECEIPT BY THE TRUSTEE AND THE
CERTIFICATE REGISTRAR OF A LETTER
SUBSTANTIALLY IN THE FORM PROVIDED IN THE
AGREEMENT AND (B) THE RECEIPT BY THE
TRUSTEE AND THE CERTIFICATE REGISTRAR OF
SUCH OTHER EVIDENCE ACCEPTABLE TO THE
TRUSTEE AND THE CERTIFICATE REGISTRAR THAT
SUCH REOFFER, RESALE, PLEDGE OR
TRANSFER IS IN COMPLIANCE WITH THE
SECURITIES ACT AND OTHER APPLICABLE LAWS OR
IN EACH CASE IN ACCORDANCE WITH ALL
APPLICABLE SECURITIES LAWS OF THE UNITED
STATES AND ANY OTHER APPLICABLE
JURISDICTION. THIS CERTIFICATE MAY NOT BE
ACQUIRED DIRECTLY OR INDIRECTLY BY, OR ON
BEHALF OF, AN EMPLOYEE BENEFIT PLAN OR
OTHER RETIREMENT ARRANGEMENT WHICH IS
SUBJECT TO TITLE I OF THE EMPLOYEE
RETIREMENT INCOME SECURITY ACT OF 1974, AS
AMENDED, OR SECTION 4975 OF THE
INTERNAL REVENUE CODE OF 1986, AS AMENDED
[in the case of a Residual
Certificate:] UNLESS THE PROPOSED
TRANSFEREE PROVIDES THE TRUSTEE WITH AN
OPINION OF COUNSEL ADDRESSED TO THE
DEPOSITOR, TRUSTEE, MASTER SERVICER AND
SECURITIES ADMINISTRATOR AND ON WHICH THEY
MAY RELY THAT IS SATISFACTORY TO THE
TRUSTEE THAT THE PURCHASE OF CERTIFICATES
ON BEHALF OF SUCH PERSON WILL NOT
RESULT IN OR CONSTITUTE A NONEXEMPT
PROHIBITED TRANSACTION, IS PERMISSIBLE UNDER
APPLICABLE LAW AND WILL NOT GIVE RISE TO
ANY ADDITIONAL OBLIGATIONS ON THE PART
OF THE DEPOSITOR, THE MASTER SERVICER, THE
SECURITIES ADMINISTRATOR OR THE
TRUSTEE [in the case of the Class B-6,
Class B-7 and Class B-8 Certificates:],
UNLESS THE TRANSFEREE CERTIFIES OR
REPRESENTS THAT THE PROPOSED TRANSFER AND
HOLDING OF A CERTIFICATE AND THE SERVICING,
MANAGEMENT AND OPERATION OF THE
TRUST AND ITS ASSETS: (I) WILL NOT RESULT
IN ANY PROHIBITED TRANSACTION WHICH IS
NOT COVERED UNDER AN INDIVIDUAL OR CLASS
PROHIBITED TRANSACTION EXEMPTION,
INCLUDING, BUT NOT LIMITED TO, PROHIBITED
TRANSACTION EXEMPTION ("PTE") 84-14,
PTE 91-38, PTE 90-1, PTE 95-60 OR PTE 96-23
AND (II) WILL NOT GIVE RISE TO ANY
ADDITIONAL OBLIGATIONS ON THE PART OF THE
DEPOSITOR, THE SECURITIES
ADMINISTRATOR, THE MASTER SERVICER, ANY
SERVICER OR THE TRUSTEE, WHICH WILL BE
DEEMED REPRESENTED BY AN OWNER OF A
BOOK-ENTRY CERTIFICATE OR A GLOBAL
CERTIFICATE OR UNLESS AN OPINION OF COUNSEL
SPECIFIED IN SECTION 5.07 OF THE
AGREEMENT IS PROVIDED."
SECURITY AGREEMENT: With respect to a Cooperative Loan, the
agreement
creating a security interest in favor of
the originator in the related
Cooperative Stock.
SECURITY INSTRUMENT: A written instrument creating a valid first
lien
on a Mortgaged Property securing a Mortgage
Note, which may be any applicable
form of mortgage, deed of trust, deed to
secure debt or security deed, including
any riders or addenda thereto.
SELLER: EMC Mortgage Corporation, as mortgage loan seller under
the
Mortgage Loan Purchase Agreement.
SENIOR CERTIFICATES: The Class I-A-1, Class II-A-1, Class II-X,
Class
II-A-2, Class R-I, Class R-II and Class
R-III Certificates.
SENIOR OPTIMAL PRINCIPAL AMOUNT: The Group I Senior Optimal
Principal
Amount or Class II Senior Optimal Principal
Amount, as applicable.
SENIOR PERCENTAGE: The Group I Senior Percentage or Group II
Senior
Percentage, as applicable.
SENIOR PREPAYMENT PERCENTAGE: The Group I Senior Prepayment
Percentage
or Group II Senior Prepayment Percentage,
as applicable.
SERVICER: With respect to each Mortgage Loan, Countrywide, EMC,
EverHome, and HomeBanc.
SERVICER REMITTANCE DATE: With respect to each Mortgage Loan, the
date
set forth in the related Servicing
Agreement.
SERVICING AGREEMENTS: The Countrywide Servicing Agreement, EMC
Servicing Agreement, EverHome Servicing
Agreement and HomeBanc Servicing
Agreement.
SERVICING FEE: As to any Mortgage Loan and Distribution Date, an
amount
equal to the product of (i) the Scheduled
Principal Balance of such Mortgage
Loan as of the Due Date in the preceding
calendar month and (ii) the applicable
Servicing Fee Rate.
SERVICING FEE RATE: As to any Mortgage Loan, a per annum rate as
set
forth in the Mortgage Loan Schedule.
SERVICING OFFICER: Any officer of the related Servicer or
Master
Servicer involved in or responsible for the
administration and servicing or
master servicing, as applicable, of the
Mortgage Loans as to which officer
evidence, reasonably acceptable to the
Trustee, of due authorization of such
officer by such Servicer or Master
Servicer, has been furnished from time to
time to the Trustee.
STARTUP DAY: April 29,
2005.
SUBORDINATE CERTIFICATES: The Class B-1, Class B-2, Class B-3,
Class
B-4, Class B-5, Class B-6, Class B-7 and
Class B-8 Certificates.
SUBORDINATE CERTIFICATE WRITEDOWN AMOUNT: As to any Distribution
Date,
the amount by which (a) the sum of the
Current Principal Amounts of all the
Certificates (after giving effect to the
distribution of principal and the
allocation of applicable Realized Losses in
reduction of the Current Principal
Amounts of the Certificates on such
Distribution Date) exceeds (b) the aggregate
Scheduled Principal Balances of the
Mortgage Loans on the Due Date related to
such Distribution Date.
SUBORDINATE OPTIMAL PRINCIPAL AMOUNT: As to any Distribution Date,
an
amount equal to the sum, without
duplication, of the following for the Group I
Mortgage Loans and Group II Mortgage Loans
(but in no event greater than the
aggregate Current Principal Amount of the
Subordinate Certificates immediately
prior to such Distribution Date):
(i)the applicable Subordinate Percentage of the principal
portion of all Scheduled Payments due on each Outstanding
Mortgage Loan in the related Loan Group on the related Due
Date as specified in the amortization schedule at the time
applicable thereto (after adjustment for previous Principal
Prepayments but before any adjustment to such amortization
schedule by reason of any bankruptcy or similar proceeding or
any moratorium or similar waiver or grace period);
(ii)the applicable Subordinate Prepayment Percentage of the
Scheduled Principal Balance of each Mortgage Loan in the
related Loan Group that was the subject of a Principal
Prepayment in full received by the Master Servicer during the
related Prepayment Period;
(iii)the applicable Subordinate Prepayment Percentage of each
Principal Prepayment in part received during the related
Prepayment Period with respect to each Mortgage Loan in the
related Loan Group;
(iv)the excess, if any, of (a) all Net Liquidation Proceeds
allocable to principal received during the related Prepayment
Period in respect of each Liquidated Mortgage Loan in the
related Loan Group and all Subsequent Recoveries received in
respect of each Liquidated Mortgage Loan in the related Loan
Group during the related Due Period over (b) the sum of the
amounts distributable to the related Senior Certificateholders
pursuant to clause (iv) of the related definition of Senior
Optimal Principal Amount on such Distribution Date;
(v)the applicable Subordinate Prepayment Percentage of the sum
of (a) the Scheduled Principal Balance of each Mortgage Loan
in the related Loan Group which was purchased with respect to
such Distribution Date and (b) the difference, if any, between
the Scheduled Principal Balance of each Mortgage Loan in the
related Loan Group that has been replaced by the Seller with a
Substitute Mortgage Loan pursuant to the Mortgage Loan
Purchase Agreement in connection with such Distribution Date
over the Scheduled Principal Balance of each such Substitute
Mortgage Loan;
and
(vi)on the Distribution Date on which the Current Principal
Amounts of the Group I Senior Certificates or Group II Senior
Certificates (other than the Interest Only Certificates) have
all been reduced to zero, 100% of the related Senior Optimal
Principal Amount. After the aggregate Current Principal Amount
of the Subordinate Certificates has been reduced to zero, the
Subordinate Optimal Principal Amount shall be zero.
SUBORDINATE PERCENTAGE: The Group I Subordinate Percentage or Group
II
Subordinate Percentage with respect to the
Group I Mortgage Loans and Group II
Mortgage Loans, respectively.
SUBORDINATE
PREPAYMENT PERCENTAGE: The Group I Subordinate Prepayment
Percentage, Group II Subordinate Prepayment
Percentage with respect to the Group
I Mortgage Loans and Group II Mortgage
Loans, respectively.
SUBSEQUENT RECOVERIES: As of any Distribution Date, amounts
received by
the Master Servicer during the related Due
Period or surplus amounts held by the
Master Servicer to cover estimated expenses
(including, but not limited to,
recoveries in respect of the
representations and warranties made by the Seller
pursuant to the Mortgage Loan Purchase
Agreement) specifically related to a
Liquidated Mortgage Loan or disposition of
an REO Property prior to the related
Prepayment Period that resulted in a
Realized Loss, after the liquidation or
disposition of such Mortgage Loan.
SUBSTITUTE MORTGAGE LOAN: A mortgage loan tendered to the
Trustee
pursuant to the related Servicing
Agreement, the Mortgage Loan Purchase
Agreement or Section 2.04 of this
Agreement, as applicable, in each case, (i)
which has an Outstanding Principal Balance
not greater nor materially less than
the Mortgage Loan for which it is to be
substituted; (ii) which has a Mortgage
Interest Rate and Net Rate not less than,
and not materially greater than, such
Mortgage Loan; (iii) which has a maturity
date not materially earlier or later
than such Mortgage Loan and not later than
the latest maturity date of any
Mortgage Loan; (iv) which is of the same
property type and occupancy type as
such Mortgage Loan; (v) which has a
Loan-to-Value Ratio not greater than the
Loan-to-Value Ratio of such Mortgage Loan;
(vi) which is current in payment of
principal and interest as of the date of
substitution; (vii) as to which the
payment terms do not vary in any material
respect from the payment terms of the
Mortgage Loan for which it is to be
substituted and (viii) which has a Gross
Margin, Periodic Rate Cap and Maximum
Lifetime Mortgage Rate no less than those
of such Mortgage Loan, has the same Index
and interval between Interest
Adjustment Dates as such Mortgage Loan, and
a Minimum Lifetime Mortgage Rate no
lower than that of such Mortgage Loan.
TAX ADMINISTRATION AND TAX MATTERS PERSON: The Securities
Administrator
or any successor thereto or assignee
thereof shall serve as tax administrator
hereunder and as agent for the Tax Matters
Person. The Holder of each Class of
Residual Certificates shall be the Tax
Matters Person for the related REMIC, as
more particularly set forth in Section 9.12
hereof.
TERMINATION PURCHASE PRICE: The price, calculated as set forth
in
Section 10.01, to be paid in connection
with the repurchase of the Mortgage
Loans pursuant to Section 10.01.
TRUST FUND OR TRUST: The corpus of the trust created by this
Agreement,
consisting of the Mortgage Loans and the
other assets described in Section
2.01(a).
TRUSTEE: U.S. Bank National Association, or its successor in
interest,
or any successor trustee appointed as
herein provided.
UNCERTIFICATED PRINCIPAL BALANCE: With respect to any REMIC I
Regular
Interest or REMIC II Regular Interest as of
any Distribution Date, the initial
principal amount of such regular interest
as set forth in Sections 5.01(c)(i)
and (ii), reduced by (i) all amounts
distributed on previous Distribution Dates
on such regular interest with respect to
principal, and (ii) the principal
portion of all Realized Losses allocated
prior to such Distribution Date to such
regular interest, taking account of the
Loss Allocation Limitation.
UNDERLYING SELLER: With respect to each Mortgage Loan, American
Mortgage Network, Countrywide, HomeBanc
Mortgage Corporation, Loancity.com and
Residential Capital Mortgage, as indicated
on the Mortgage Loan Schedule.
UNINSURED CAUSE: Any cause of damage to a Mortgaged Property or
related
REO Property such that the complete
restoration of such Mortgaged Property or
related REO Property is not fully
reimbursable by the hazard insurance policies
required to be maintained pursuant the
related Servicing Agreement, without
regard to whether or not such policy is
maintained.
UNITED STATES PERSON: A citizen or resident of the United States,
a
corporation or partnership (including an
entity treated as a corporation or
partnership for federal income tax
purposes) created or organized in, or under
the laws of, the United States or any state
thereof or the District of Columbia
(except, in the case of a partnership, to
the extent provided in regulations),
provided that, for purposes solely of the
Class R Certificates, no partnership
or other entity treated as a partnership
for United States federal income tax
purposes shall be treated as a United
States Person unless all persons that own
an interest in such partnership either
directly or through any entity that is
not a corporation for United States federal
income tax purposes are United
States Persons, or an estate whose income
is subject to United States federal
income tax regardless of its source, or a
trust if a court within the United
States is able to exercise primary
supervision over the administration of the
trust and one or more such United States
Persons have the authority to control
all substantial decisions of the trust. To
the extent prescribed in regulations
by the Secretary of the Treasury, which
have not yet been issued, a trust which
was in existence on August 20, 1996 (other
than a trust treated as owned by the
grantor under subpart E of part I of
subchapter J of chapter 1 of the Code), and
which was treated as a United States person
on August 20, 1996 may elect to
continue to be treated as a United States
person notwithstanding the previous
sentence.
WELLS FARGO: Wells
Fargo Bank, N.A., or its successor in interest.
<PAGE>
ARTICLE II
Conveyance of Mortgage Loans;
Original Issuance of Certificates
Section 2.01 Conveyance of Mortgage Loans to Trustee.
(a) The Depositor concurrently with the execution and delivery of
this
Agreement, sells, transfers and assigns to
the Trust without recourse all its
right, title and interest in and to (i) the
Mortgage Loans identified in their
respective Mortgage Loan Schedules,
including all interest and principal due
with respect to the Mortgage Loans after
the Cut-off Date, but excluding any
payments of principal and interest due on
or prior to the Cut-off Date; (ii)
such assets as shall from time to time be
credited or are required by the terms
of this Agreement to be credited to the
Master Servicer Collection Account,
(iii) such assets relating to the Mortgage
Loans as from time to time may be
held by the Servicers in Protected
Accounts, the Master Servicer in the Master
Servicer Collection Account and the Paying
Agent in the Distribution Account,
(iv) any REO Property, (v) the Required
Insurance Policies and any amounts paid
or payable by the insurer under any
Insurance Policy (to the extent the
mortgagee has a claim thereto), (vi) the
Mortgage Loan Purchase Agreement to the
extent provided in Subsection 2.03(a),
(vii) the rights with respect to the
Servicing Agreements as assigned to the
Trustee on behalf of the
Certificateholders by the Assignment
Agreements, (viii) such assets as shall
from time to time be credited or are
required by the terms of this Agreement to
be credited to the Distribution Account and
(ix) any proceeds of the foregoing.
Although it is the intent of the parties to
this Agreement that the conveyance
of the Depositor's right, title and
interest in and to the Mortgage Loans and
other assets in the Trust Fund pursuant to
this Agreement shall constitute a
purchase and sale and not a loan, in the
event that such conveyance is deemed to
be a loan, it is the intent of the parties
to this Agreement that the Depositor
shall be deemed to have granted to the
Trustee a first priority perfected
security interest in all of the Depositor's
right, title and interest in, to and
under the Mortgage Loans and other assets
in the Trust Fund, and that this
Agreement shall constitute a security
agreement under applicable law.
(b) In connection with the above transfer and assignment, the
Depositor
hereby delivers to the Custodian, as agent
for the Trustee, with respect to each
Mortgage Loan:
(i) the original Mortgage Note, endorsed without recourse (A)
to the order of the Trustee, or (B) in the
case of a loan registered on the MERS
system, in blank, and in each case showing
an unbroken chain of endorsements
from the originator thereof to the Person
endorsing it to the Trustee, or lost
note affidavit together with a copy of the
related Mortgage Note;
(ii) the original Mortgage and, if the related Mortgage Loan
is a MOM Loan, noting the presence of the
MIN and language indicating that such
Mortgage Loan is a MOM Loan, which shall
have been recorded (or if the original
is not available, a copy), with evidence of
such recording indicated thereon (or
if clause (w) in the proviso below applies,
shall be in recordable form);
(iii) unless the Mortgage Loan is a MOM Loan, a certified copy
of the assignment (which may be in the form
of a blanket assignment if permitted
in the jurisdiction in which the Mortgaged
Property is located) to "U.S. Bank
National Association, as Trustee", with
evidence of recording with respect to
each Mortgage Loan in the name of the
Trustee thereon (or if clause (w) in the
proviso below applies or for Mortgage Loans
with respect to which the related
Mortgaged Property is located in a state
other than Maryland or an Opinion of
Counsel has been provided as set forth in
this Section 2.01(b), shall be in
recordable form);
(iv) all intervening assignments of the Security Instrument,
if applicable and only to the extent
available to the Depositor with evidence of
recording thereon;
(v) the original or a copy of the policy or certificate of
primary mortgage guaranty insurance, to the
extent available, if any;
(vi) the original policy of title insurance or mortgagee's
certificate of title insurance or
commitment or binder for title insurance; and
(vii) originals of all modification agreements, if applicable
and available;
PROVIDED, HOWEVER, that in lieu of the
foregoing, the Depositor may deliver to
the Custodian, as agent of the Trustee, the
following documents, under the
circumstances set forth below: (w) in lieu
of the original Security Instrument,
assignments to the Trustee or intervening
assignments thereof which have been
delivered, are being delivered or will,
upon receipt of recording information
relating to the Security Instrument
required to be included thereon, be
delivered to recording offices for
recording and have not been returned to the
Depositor in time to permit their delivery
as specified above, the Depositor may
deliver a true copy thereof with a
certification by the Depositor, on the face
of such copy, substantially as follows:
"Certified to be a true and correct copy
of the original, which has been transmitted
for recording"; (x) in lieu of the
Security Instrument, assignment to the
Trustee or intervening assignments
thereof, if the applicable jurisdiction
retains the originals of such documents
(as evidenced by a certification from the
Depositor to such effect) the
Depositor may deliver photocopies of such
documents containing an original
certification by the judicial or other
governmental authority of the
jurisdiction where such documents were
recorded; (y) in lieu of the Mortgage
Notes relating to the Mortgage Loans
identified on Exhibit 5 to the Mortgage
Loan Purchase Agreement, the Depositor may
deliver lost note affidavits from the
Seller; and (z) the Depositor shall not be
required to deliver intervening
assignments or Mortgage Note endorsements
between the related Underlying Seller
and the Seller, between the Seller and the
Depositor, and between the Depositor
and the Trustee; and provided, further,
however, that in the case of Mortgage
Loans which have been prepaid in full after
the Cut-off Date and prior to the
Closing Date, the Depositor, in lieu of
delivering the above documents, may
deliver to the Trustee or the Custodian, as
its agent, a certification to such
effect and shall deposit all amounts paid
in respect of such Mortgage Loans in
the Master Servicer Collection Account on
the Closing Date. The Depositor shall
deliver such original documents (including
any original documents as to which
certified copies had previously been
delivered) to the Trustee or the Custodian,
as its agent, promptly after they are
received. The Depositor shall cause the
Seller, at its expense, to cause each
assignment of the Security Instrument to
the Trustee to be recorded not later than
180 days after the Closing Date,
unless (a) such recordation is not required
by the Rating Agencies or an Opinion
of Counsel addressed to the Trustee has
been provided to the Trustee (with a
copy to the Custodian) which states that
recordation of such Security Instrument
is not required to protect the interests of
the Certificateholders in the
related Mortgage Loans or (b) MERS is
identified on the Mortgage or on a
properly recorded assignment of the
Mortgage as the mortgagee of record solely
as nominee for the Seller and its successor
and assigns; provided, however,
notwithstanding the foregoing, each
assignment shall be submitted for recording
by the Seller in the manner described
above, at no expense to the Trust or the
Trustee or the Custodian, as its agent,
upon the earliest to occur of: (i)
reasonable direction by the Holders of
Certificates evidencing Fractional
Undivided Interests aggregating not less
than 25% of the Trust, (ii) the
occurrence of an Event of Default, (iii)
the occurrence of a bankruptcy,
insolvency or foreclosure relating to the
Seller and (iv) the occurrence of a
servicing transfer as described in Section
8.02 hereof. Notwithstanding the
foregoing, if the Seller fails to pay the
cost of recording the assignments,
such expense will be paid by the Trustee
and the Trustee shall be reimbursed for
such expenses by the Trust in accordance
with Section 9.05.
Section 2.02 Acceptance of Mortgage Loans by Trustee.
(a) The Trustee acknowledges the sale, transfer and assignment of
the
Trust Fund to it by the Depositor and
receipt of, subject to further review and
the exceptions which may be noted pursuant
to the procedures described below,
and declares that it holds, the documents
(or certified copies thereof)
delivered to the Custodian, as its agent,
pursuant to Section 2.01, and declares
that it will continue to hold those
documents and any amendments, replacements
or supplements thereto and all other assets
of the Trust Fund delivered to it as
Trustee in trust for the use and benefit of
all present and future Holders of
the Certificates. On the Closing Date, with
respect to the Mortgage Loans, the
Custodian, with respect to the Mortgage
Loans, shall acknowledge with respect to
each Mortgage Loan by delivery to the
Depositor and the Trustee of an Initial
Certification receipt of the Mortgage File,
but without review of such Mortgage
File, except to the extent necessary to
confirm that such Mortgage File contains
the related Mortgage Note or lost note
affidavit. No later than 90 days after
the Closing Date (or with respect to any
Substitute Mortgage Loan, within five
Business Days after the receipt by the
Trustee or Custodian thereof), the
Trustee agrees, for the benefit of the
Certificateholders, to review or cause to
be reviewed by the Custodian on its behalf
(under the Custodial Agreement), each
Mortgage File delivered to it and to
execute and deliver, or cause to be
executed and delivered, to the Depositor
and the Trustee an Interim
Certification. In conducting such review,
the Trustee or Custodian will
ascertain whether all required documents
have been executed and received, and
based on the related Mortgage Loan
Schedule, whether those documents relate,
determined on the basis of the Mortgagor
name, original principal balance and
loan number, to the Mortgage Loans it has
received, as identified in the related
Mortgage Loan Schedule. In performing any
such review, the Trustee or the
Custodian, as its agent, may conclusively
rely on the purported due execution
and genuineness of any such document and on
the purported genuineness of any
signature thereon. If the Trustee or the
Custodian, as its agent, finds any
document constituting part of the Mortgage
File has not been executed or
received, or to be unrelated, determined on
the basis of the Mortgagor name,
original principal balance and loan number,
to the Mortgage Loans identified in
Exhibit B or to appear defective on its
face (a "Material Defect"), the Trustee
or the Custodian, as its agent, shall
promptly notify the Seller. In accordance
with the Mortgage Loan Purchase Agreement,
the Seller shall correct or cure any
such defect within ninety (90) days from
the date of notice from the Trustee or
the Custodian, as its agent, of the defect
and if the Seller fails to correct or
cure the defect within such period, and
such defect materially and adversely
affects the interests of the
Certificateholders in the related Mortgage Loan,
the Trustee shall enforce the Seller's
obligation under the Mortgage Loan
Purchase Agreement within 90 days from the
Trustee's or the Custodian's
notification or purchase such Mortgage Loan
at the Repurchase Price; provided
that, if such defect would cause the
Mortgage Loan to be other than a "qualified
mortgage" as defined in Section 860G(a)(3)
of the Code, any such cure or
repurchase must occur within 90 days from
the date such breach was discovered;
provided, however, that if such defect
relates solely to the inability of the
Seller to deliver the original Security
Instrument or intervening assignments
thereof, or a certified copy because the
originals of such documents, or a
certified copy have not been returned by
the applicable jurisdiction, the Seller
shall not be required to purchase such
Mortgage Loan if the Seller delivers such
original documents or certified copy
promptly upon receipt, but in no event
later than 360 days after the Closing Date.
The foregoing repurchase obligation
shall not apply in the event that the
Seller cannot deliver such original or
copy of any document submitted for
recording to the appropriate recording office
in the applicable jurisdiction because such
document has not been returned by
such office; provided that the Seller shall
instead deliver a recording receipt
of such recording office or, if such
receipt is not available, a certificate
confirming that such documents have been
accepted for recording, and delivery to
the Trustee or the Custodian, as its agent,
shall be effected by the Seller
within thirty days of its receipt of the
original recorded document.
(b) No later than 180 days after the Closing Date (or within 180
days
of the with respect to any Substitute
Mortgage Loan, within five Business Days
after the receipt by the Trustee or the
Custodian thereof), the Trustee or the
Custodian, as its agent, will review, for
the benefit of the Certificateholders,
the Mortgage Files delivered to it and will
execute and deliver or cause to be
executed and delivered to the Depositor and
the Trustee a Final Certification.
In conducting such review, the Trustee or
the Custodian, as its agent, will
ascertain whether an original of each
document required to be recorded has been
returned from the recording office with
evidence of recording thereon or a
certified copy has been obtained from the
recording office. If the Trustee or
the Custodian, as its agent, finds a
Material Defect, the Trustee or the
Custodian, as its agent, shall promptly
notify the Seller (provided, however,
that with respect to those documents
described in subsections (b)(iv), (v) and
(vii) of Section 2.01, the Trustee's and
Custodian's obligations shall extend
only to the documents actually delivered to
the Custodian pursuant to such
subsections). In accordance with the
Mortgage Loan Purchase Agreement, the
Seller shall correct or cure any such
defect within 90 days from the date of
notice from the Trustee or the Custodian,
as its agent, of the Material Defect
and if the Seller is unable to cure such
defect within such period, and if such
defect materially and adversely affects the
interests of the Certificateholders
in the related Mortgage Loan, the Trustee
shall enforce the Seller's obligation
under the Mortgage Loan Purchase Agreement
to, within 90 days from the Trustee's
or Custodian's notification, provide a
Substitute Mortgage Loan (if within two
years of the Closing Date) or purchase such
Mortgage Loan at the Repurchase
Price, provided that, if such defect would
cause the Mortgage Loan to be other
than a "qualified mortgage" as defined in
Section 860G(a)(3) of the Code, any
such cure, repurchase or substitution must
occur within 90 days from the date
such breach was discovered, provided,
however, that if such defect relates
solely to the inability of the Seller to
deliver the original Security
Instrument or intervening assignments
thereof, or a certified copy, because the
originals of such documents or a certified
copy, have not been returned by the
applicable jurisdiction, the Seller shall
not be required to purchase such
Mortgage Loan, if the Seller delivers such
original documents or certified copy
promptly upon receipt, but in no event
later than 360 days after the Closing
Date. The foregoing repurchase obligation
shall not apply in the event that the
Seller cannot deliver such original or copy
of any document submitted for
recording to the appropriate recording
office in the applicable jurisdiction
because such document has not been returned
by such office; provided that the
Seller shall instead deliver a recording
receipt of such recording office or, if
such receipt is not available, a
certificate confirming that such documents have
been accepted for recording, and delivery
to the Trustee or the Custodian, as
its agent, shall be effected by the Seller
within thirty days of its receipt of
the original recorded document.
(c) In the event that a Mortgage Loan is purchased by the Seller
in
accordance with Subsections 2.02(a) or (b)
above, the Seller shall remit to the
Master Servicer the Repurchase Price for
deposit in the Master Servicer Account
and the Seller shall provide to the Master
Servicer, Securities Administrator,
the Paying Agent and the Trustee written
notification detailing the components
of the Repurchase Price to the Trustee, the
Paying Agent and the Master
Servicer. Upon deposit of the Repurchase
Price in the Master Servicer Account,
the Depositor shall notify the Trustee and
the Custodian, as agent of the
Trustee (upon receipt of a Request for
Release in the form of Exhibit D attached
hereto with respect to such Mortgage Loan),
shall release to the Seller the
related Mortgage File and the Trustee shall
execute and deliver all instruments
of transfer or assignment, without
recourse, representation or warranty,
furnished to it by the Seller, as are
necessary to vest in the Seller title to
and rights under the Mortgage Loan. Such
purchase shall be deemed to have
occurred on the date on which the
Repurchase Price in available funds is
received by the Paying Agent. The Trustee
shall amend the Mortgage Loan
Schedule, which was previously delivered to
it by the Depositor in a form agreed
to between the Depositor and the Trustee,
to reflect such repurchase and shall
promptly notify the Rating Agencies and the
Master Servicer of such amendment.
The obligation of the Seller to repurchase
or substitute for any Mortgage Loan a
Substitute Mortgage Loan as to which such a
defect in a constituent document
exists shall be the sole remedy respecting
such defect available to the
Certificateholders or to the Trustee on
their behalf.
Section 2.03 Assignment of Interest in the Mortgage
Loan Purchase Agreement.
(a) The Depositor hereby assigns to the Trustee, on behalf of
the
Certificateholders, all of its right, title
and interest in the Mortgage Loan
Purchase Agreement, including but not
limited to the Depositor's rights and
obligations pursuant to the Servicing
Agreements (noting that the Seller has
retained the right in the event of breach
of the representations, warranties and
covenants, if any, with respect to the
related Mortgage Loans of the related
Servicer under the related Servicing
Agreement to enforce the provisions thereof
and to seek all or any available remedies).
The obligations of the Seller to
substitute or repurchase, as applicable, a
Mortgage Loan shall be the Trustee's
and the Certificateholders' sole remedy for
any breach thereof. At the request
of the Trustee, the Depositor shall take
such actions as may be necessary to
enforce the above right, title and interest
on behalf of the Trustee and the
Certificateholders or shall execute such
further documents as the Trustee may
reasonably require in order to enable the
Trustee to carry out such enforcement.
(b) If the Depositor, the Securities Administrator or the
Trustee
discovers a breach of any of the
representations and warranties set forth in the
Mortgage Loan Purchase Agreement, which
breach materially and adversely affects
the value of the interests of
Certificateholders or the Trustee in the related
Mortgage Loan, the party discovering the
breach shall give prompt written notice
of the breach to the other parties. The
Seller, within 90 days of its discovery
or receipt of notice that such breach has
occurred (whichever occurs earlier),
shall cure the breach in all material
respects or, subject to the Mortgage Loan
Purchase Agreement or Section 2.04 of this
Agreement, as applicable, shall
purchase the Mortgage Loan or any property
acquired with respect thereto from
the Trustee; provided, however, that if
there is a breach of any representation
set forth in the Mortgage Loan Purchase
Agreement or Section 2.04 of this
Agreement, as applicable, and the Mortgage
Loan or the related property acquired
with respect thereto has been sold, then
the Seller shall pay, in lieu of the
Repurchase Price, any excess of the
Repurchase Price over the Net Liquidation
Proceeds received upon such sale. If the
Net Liquidation Proceeds exceed the
Repurchase Price, any excess shall be paid
to the Seller to the extent not
required by law to be paid to the borrower.
Any such purchase by the Seller
shall be made by providing an amount equal
to the Repurchase Price to the Master
Servicer for deposit in the Master Servicer
Account and written notification
detailing the components of such Repurchase
Price to the Trustee, the Paying
Agent and the Master Servicer. The
Depositor shall notify the Trustee and submit
to the Custodian, as agent for the Trustee,
a Request for Release, and the
Custodian shall release, or the Trustee
shall cause the Custodian to release, to
the Seller the related Mortgage File and
the Trustee shall execute and deliver
all instruments of transfer or assignment
furnished to it by the Seller, without
recourse, representation or warranty as are
necessary to vest in the Seller
title to and rights under the Mortgage Loan
or any property acquired with
respect thereto. Such purchase shall be
deemed to have occurred on the date on
which the Repurchase Price in available
funds is received by the Trustee. The
Master Servicer shall amend the Mortgage
Loan Schedule to reflect such
repurchase and shall promptly notify the
Trustee and the Rating Agencies of such
amendment. Enforcement of the obligation of
the Seller to purchase (or
substitute a Substitute Mortgage Loan for)
any Mortgage Loan or any property
acquired with respect thereto (or pay the
Repurchase Price as set forth in the
above proviso) as to which a breach has
occurred and is continuing shall
constitute the sole remedy respecting such
breach available to the
Certificateholders or the Trustee on their
behalf.
Section 2.04 Substitution of Mortgage Loans.
Notwithstanding anything to the contrary in this Agreement, in lieu
of
purchasing a Mortgage Loan pursuant to the
Mortgage Loan Purchase Agreement or
Sections 2.02 or 2.03 of this Agreement,
the Seller may, no later than the date
by which such purchase by the Seller would
otherwise be required, tender to the
Trustee a Substitute Mortgage Loan
accompanied by a certificate of an authorized
officer of the Seller that such Substitute
Mortgage Loan conforms to the
requirements set forth in the definition of
"Substitute Mortgage Loan" in this
Agreement; provided, however, that
substitution pursuant to the Mortgage Loan
Purchase Agreement or Section 2.04 of this
Agreement, as applicable, in lieu of
purchase shall not be permitted after the
termination of the two-year period
beginning on the Startup Day; provided,
further, that if the breach would cause
the Mortgage Loan to be other than a
"qualified mortgage" as defined in Section
860G(a)(3) of the Code, any such cure or
substitution must occur within 90 days
from the date the breach was discovered.
The Custodian, as agent for the
Trustee, shall examine the Mortgage File
for any Substitute Mortgage Loan in the
manner set forth in Section 2.02(a) and the
Trustee or the Custodian, as its
agent, shall notify the Seller, in writing,
within five Business Days after
receipt, whether or not the documents
relating to the Substitute Mortgage Loan
satisfy the requirements of the fifth
sentence of Subsection 2.02(a). Within two
Business Days after such notification, the
Seller shall provide to the Paying
Agent for deposit in the Distribution
Account the amount, if any, by which the
Outstanding Principal Balance as of the
next preceding Due Date of the Mortgage
Loan for which substitution is being made,
after giving effect to the Scheduled
Principal due on such date, exceeds the
Outstanding Principal Balance as of such
date of the Substitute Mortgage Loan, after
giving effect to Scheduled Principal
due on such date, which amount shall be
treated for the purposes of this
Agreement as if it were the payment by the
Seller of the Repurchase Price for
the purchase of a Mortgage Loan by the
Seller. After such notification to the
Seller and, if any such excess exists, upon
receipt of such deposit, the Trustee
shall accept such Substitute Mortgage Loan
which shall thereafter be deemed to
be a Mortgage Loan hereunder. In the event
of such a substitution, accrued
interest on the Substitute Mortgage Loan
for the month in which the substitution
occurs and any Principal Prepayments made
thereon during such month shall be the
property of the Trust Fund and accrued
interest for such month on the Mortgage
Loan for which the substitution is made and
any Principal Prepayments made
thereon during such month shall be the
property of the Seller. The Scheduled
Principal on a Substitute Mortgage Loan due
on the Due Date in the month of
substitution shall be the property of the
Seller and the Scheduled Principal on
the Mortgage Loan for which the
substitution is made due on such Due Date shall
be the property of the Trust Fund. Upon
acceptance of the Substitute Mortgage
Loan (and delivery to the Custodian of a
Request for Release for such Mortgage
Loan), the Custodian, as agent for the
Trustee, shall release to the Seller the
related Mortgage File related to any
Mortgage Loan released pursuant to the
Mortgage Loan Purchase Agreement or Section
2.04 of this Agreement, as
applicable, and shall execute and deliver
all instruments of transfer or
assignment, without recourse,
representation or warranty in form as provided to
it as are necessary to vest in the Seller
title to and rights under any Mortgage
Loan released pursuant to the Mortgage Loan
Purchase Agreement or Section 2.04
of this Agreement, as applicable. The
Seller shall deliver to the Custodian the
documents related to the Substitute
Mortgage Loan in accordance with the
provisions of the Mortgage Loan Purchase
Agreement or Subsections 2.01(b) and
2.02(b) of this Agreement, as applicable,
with the date of acceptance of the
Substitute Mortgage Loan deemed to be the
Closing Date for purposes of the time
periods set forth in those Subsections. The
representations and warranties set
forth in the Mortgage Loan Purchase
Agreement shall be deemed to have been made
by the Seller with respect to each
Substitute Mortgage Loan as of the date of
acceptance of such Mortgage Loan by the
Trustee. The Master Servicer shall amend
the Mortgage Loan Schedule to reflect such
substitution and shall provide a copy
of such amended Mortgage Loan Schedule to
the Trustee and the Rating Agencies.
Section 2.05 Issuance of Certificates.
(a) The Trustee acknowledges the assignment to it of the Mortgage
Loans
and the other assets comprising the Trust
Fund and, concurrently therewith, the
Certificate Registrar has signed,
countersigned and delivered to the Depositor,
in exchange therefor, Certificates in such
authorized denominations representing
such Fractional Undivided Interests as the
Depositor has requested. The Trustee
agrees that it will hold the Mortgage Loans
and such other assets as may from
time to time be delivered to it segregated
on the books of the Trustee in trust
for the benefit of the
Certificateholders.
(b) The Depositor, concurrently with the execution and delivery
hereof,
does hereby transfer, assign, set over and
otherwise convey in trust to the
Trustee without recourse all the right,
title and interest of the Depositor in
and to the Mortgage Loans and the other
assets of REMIC I for the benefit of the
holders of REMIC I Interests. The Trustee
acknowledges receipt of such assets
and declares that it holds and will hold
the same in trust for the exclusive use
and benefit of the holders of the REMIC I
Interests.
(c) The Depositor, concurrently with the execution and delivery
hereof,
does hereby transfer, assign, set over and
otherwise convey in trust to the
Trustee without recourse all the right,
title and interest of the Depositor in
and to the REMIC I Regular Interests and
the other assets of REMIC II for the
benefit of the holders of the REMIC II
Interests. The Trustee acknowledges
receipt of the REMIC I Regular Interests
(which are uncertificated) and the
other assets of REMIC II and declares that
it holds and will hold the same in
trust for the exclusive use and benefit of
the holders of the REMIC II
Interests.
(d) The Depositor, concurrently with the execution and delivery
hereof,
does hereby transfer, assign, set over and
otherwise convey in trust to the
Trustee without recourse all the right,
title and interest of the Depositor in
and to the REMIC II Regular Interests and
the other assets of REMIC II for the
benefit of the holders of the REMIC III
Certificates. The Trustee acknowledges
receipt of the REMIC II Regular Interests
(which are uncertificated) and the
other assets of REMIC II and declares that
it holds and will hold the same in
trust for the exclusive use and benefit of
the holders of the REMIC III
Certificates.
Section 2.06 Representations and Warranties
Concerning the Depositor.
The Depositor hereby represents and warrants to the Trustee, the
Master
Servicer and the Securities Administrator
as follows:
(i) the Depositor (a) is a corporation duly organized, validly
existing and in good standing under the
laws of the State of Delaware and (b) is
qualified and in good standing as a foreign
corporation to do business in each
jurisdiction where such qualification is
necessary, except where the failure so
to qualify would not reasonably be expected
to have a material adverse effect on
the Depositor's business as presently
conducted or on the Depositor's ability to
enter into this Agreement and to consummate
the transactions contemplated
hereby;
(ii) the Depositor has full corporate power to own its
property, to carry on its business as
presently conducted and to enter into and
perform its obligations under this
Agreement;
(iii) the execution and delivery by the Depositor of this
Agreement have been duly authorized by all
necessary corporate action on the
part of the Depositor; and neither the
execution and delivery of this Agreement,
nor the consummation of the transactions
herein contemplated, nor compliance
with the provisions hereof, will conflict
with or result in a breach of, or
constitute a default under, any of the
provisions of any law, governmental rule,
regulation, judgment, decree or order
binding on the Depositor or its properties
or the articles of incorporation or by-laws
of the Depositor, except those
conflicts, breaches or defaults which would
not reasonably be expected to have a
material adverse effect on the Depositor's
ability to enter into this Agreement
and to consummate the transactions
contemplated hereby;
(iv) the execution, delivery and performance by the Depositor
of this Agreement and the consummation of
the transactions contemplated hereby
do not require the consent or approval of,
the giving of notice to, the
registration with, or the taking of any
other action in respect of, any state,
federal or other governmental authority or
agency, except those consents,
approvals, notices, registrations or other
actions as have already been
obtained, given or made;
(v) this Agreement has been duly executed and delivered by the
Depositor and, assuming due authorization,
execution and delivery by the other
parties hereto, constitutes a valid and
binding obligation of the Depositor
enforceable against it in accordance with
its terms (subject to applicable
bankruptcy and insolvency laws and other
similar laws affecting the enforcement
of the rights of creditors generally);
(vi) there are no actions, suits or proceedings pending or, to
the knowledge of the Depositor, threatened
against the Depositor, before or by
any court, administrative agency,
arbitrator or governmental body (i) with
respect to any of the transactions
contemplated by this Agreement or (ii) with
respect to any other matter which in the
judgment of the Depositor will be
determined adversely to the Depositor and
will if determined adversely to the
Depositor materially and adversely affect
the Depositor's ability to enter into
this Agreement or perform its obligations
under this Agreement; and the
Depositor is not in default with respect to
any order of any court,
administrative agency, arbitrator or
governmental body so as to materially and
adversely affect the transactions
contemplated by this Agreement; and
(vii) immediately prior to the transfer and assignment to the
Trustee, each Mortgage Note and each
Mortgage were not subject to an assignment
or pledge, and the Depositor had good and
marketable title to and was the sole
owner thereof and had full right to
transfer and sell such Mortgage Loan to the
Trustee free and clear of any encumbrance,
equity, lien, pledge, charge, claim
or security interest.
<PAGE>
ARTICLE III
Administration and Servicing of Mortgage Loans
Section 3.01 Master Servicer.
The Master Servicer shall, from and after the Closing Date,
supervise,
monitor and oversee the obligation of the
Servicers to service and administer
their respective Mortgage Loans in
accordance with the terms of the applicable
Servicing Agreements and shall have full
power and authority to do any and all
things which it may deem necessary or
desirable in connection with such master
servicing and administration. In performing
its obligations hereunder, the
Master Servicer shall act in a manner
consistent with Accepted Master Servicing
Practices. Furthermore, the Master Servicer
shall oversee and consult with each
Servicer as necessary from time-to-time to
carry out the Master Servicer's
obligations hereunder, shall receive,
review and evaluate all reports,
information and other data provided to the
Master Servicer by each Servicer and
shall cause each Servicer to perform and
observe the covenants, obligations and
conditions to be performed or observed by
such Servicer under its applicable
Servicing Agreement. The Master Servicer
shall independently and separately
monitor each Servicer's servicing
activities with respect to each related
Mortgage Loan, reconcile the results of
such monitoring with such information
provided in the previous sentence on a
monthly basis and coordinate corrective
adjustments to the Servicers' and Master
Servicer's records, and based on such
reconciled and corrected information, the
Master Servicer shall provide such
information to the Securities Administrator
as shall be necessary in order for
it to prepare the statements specified in
Section 6.04, and prepare any other
information and statements required to be
forwarded by the Master Servicer
hereunder. The Master Servicer shall
reconcile the results of its Mortgage Loan
monitoring with the actual remittances of
the Servicers pursuant to the
applicable Servicing Agreements.
The Trustee shall furnish the Servicers and the Master Servicer
with
any powers of attorney and other documents
in form as provided to it necessary
or appropriate to enable the Servicers and
the Master Servicer to service and
administer the related Mortgage Loans and
REO Property.
The Trustee shall provide access to the records and documentation
in
possession of the Trustee regarding the
related Mortgage Loans and REO Property
and the servicing thereof to the
Certificateholders, the FDIC, and the
supervisory agents and examiners of the
FDIC, such access being afforded only
upon reasonable prior written request and
during normal business hours at the
office of the Trustee; provided, however,
that, unless otherwise required by
law, the Trustee shall not be required to
provide access to such records and
documentation if the provision thereof
would violate the legal right to privacy
of any Mortgagor. The Trustee shall allow
representatives of the above entities
to photocopy any of the records and
documentation and shall provide equipment
for that purpose at a charge that covers
the Trustee's actual costs.
The Trustee shall execute and deliver to the related Servicer and
the
Master Servicer any court pleadings,
requests for trustee's sale or other
documents necessary or desirable to (i) the
foreclosure or trustee's sale with
respect to a Mortgaged Property; (ii) any
legal action brought to obtain
judgment against any Mortgagor on the
Mortgage Note or Security Instrument;
(iii) obtain a deficiency judgment against
the Mortgagor; or (iv) enforce any
other rights or remedies provided by the
Mortgage Note or Security Instrument or
otherwise available at law or equity.
Section 3.02 REMIC-Related Covenants.
For as long as each REMIC shall exist, the Trustee and the
Securities
Administrator shall act in accordance
herewith to assure continuing treatment of
such REMIC as a REMIC, and the Trustee and
the Securities Administrator shall
comply with any directions of the
Depositor, the related Servicer or the Master
Servicer to assure such continuing
treatment. In particular, the Trustee shall
not (a) sell or permit the sale of all or
any portion of the Mortgage Loans or
of any investment of deposits in an Account
unless such sale is as a result of a
repurchase of the Mortgage Loans pursuant
to this Agreement or the Trustee has
received a REMIC Opinion addressed to the
Trustee prepared at the expense of the
Trust Fund; and (b) other than with respect
to a substitution pursuant to the
Mortgage Loan Purchase Agreement or Section
2.04 of this Agreement, as
applicable, accept any contribution to any
REMIC after the Startup Day without
receipt of a REMIC Opinion addressed to the
Trustee .
Section 3.03 Monitoring of Servicers.
(a) The Master Servicer shall be responsible for reporting to
the
Trustee and the Depositor the compliance by
each Servicer with its duties under
the related Servicing Agreement. In the
review of each Servicer's activities,
the Master Servicer may rely upon an
officer's certificate of the Servicer (or
similar document signed by an officer of
the Servicer) with regard to such
Servicer's compliance with the terms of its
Servicing Agreement. In the event
that the Master Servicer, in its judgment,
determines that a Servicer should be
terminated in accordance with its Servicing
Agreement, or that a notice should
be sent pursuant to such Servicing
Agreement with respect to the occurrence of
an event that, unless cured, would
constitute grounds for such termination, the
Master Servicer shall notify the Depositor
and the Trustee thereof and the
Master Servicer shall issue such notice or
take such other action as it deems
appropriate.
(b) The Master Servicer, for the benefit of the Trustee and the
Certificateholders, shall enforce the
obligations of each Servicer under the
related Servicing Agreement, and shall, in
the event that a Servicer fails to
perform its obligations in accordance with
the related Servicing Agreement,
subject to the preceding paragraph,
terminate the rights and obligations of such
Servicer thereunder and act as servicer of
the related Mortgage Loans or to
cause the Trustee to enter into a new
Servicing Agreement with a successor
Servicer selected by the Master Servicer;
provided, however, it is understood
and acknowledged by the parties hereto that
there will be a period of transition
(not to exceed 90 days) before the actual
servicing functions can be fully
transferred to such successor Servicer.
Such enforcement, including, without
limitation, the legal prosecution of
claims, termination of Servicing Agreements
and the pursuit of other appropriate
remedies, shall be in such form and carried
out to such an extent and at such time as
the Master Servicer in its good faith
business judgment, would require were it
the owner of the related Mortgage
Loans. The Master Servicer shall pay the
costs of such enforcement at its own
expense, provided that the Master Servicer
shall not be required to prosecute or
defend any legal action except to the
extent that the Master Servicer shall have
received reasonable indemnity for its costs
and expenses in pursuing such
action.
(c) To the extent that the costs and expenses of the Master
Servicer
related to any termination of a Servicer,
appointment of a successor Servicer,
appointment of a successor Servicer or the
transfer and assumption of servicing
by the Master Servicer with respect to any
Servicing Agreement (including,
without limitation, (i) all legal costs and
expenses and all due diligence costs
and expenses associated with an evaluation
of the potential termination of the
Servicer as a result of an event of default
by such Servicer and (ii) all costs
and expenses associated with the complete
transfer of servicing, including all
servicing files and all servicing data and
the completion, correction or
manipulation of such servicing data as may
be required by the successor servicer
to correct any errors or insufficiencies in
the servicing data or otherwise to
enable the successor servicer to service
the Mortgage Loans in accordance with
the related Servicing Agreement) are not
fully and timely reimbursed by the
terminated Servicer, the Master Servicer
shall be entitled to reimbursement of
such costs and expenses from the Master
Servicer Collection Account.
(d) The Master Servicer shall require each Servicer to comply with
the
remittance requirements and other
obligations set forth in the related Servicing
Agreements.
(e) If the Master Servicer acts as Servicer, it will not assume
liability for the representations and
warranties of the Servicer, if any, that
it replaces.
Section 3.04 Fidelity Bond.
The Master Servicer, at its expense, shall maintain in effect a
blanket
fidelity bond and an errors and omissions
insurance policy, affording coverage
with respect to all directors, officers,
employees and other Persons acting on
such Master Servicer's behalf, and covering
errors and omissions in the
performance of the Master Servicer's
obligations hereunder. The errors and
omissions insurance policy and the fidelity
bond shall be in such form and
amount generally acceptable for entities
serving as master servicers or
trustees.
Section 3.05 Power to Act; Procedures.
The Master Servicer shall master service the Mortgage Loans and
shall
have full power and authority, subject to
the REMIC Provisions and the
provisions of Article X hereof, to do any
and all things that it may deem
necessary or desirable in connection with
the master servicing and
administration of the Mortgage Loans,
including but not limited to the power and
authority (i) to execute and deliver, on
behalf of the Certificateholders and
the Trustee, customary consents or waivers
and other instruments and documents,
(ii) to consent to transfers of any
Mortgaged Property and assumptions of the
Mortgage Notes and related Mortgages, (iii)
to collect any Insurance Proceeds
and Liquidation Proceeds, and (iv) to
effectuate foreclosure or other conversion
of the ownership of the Mortgaged Property
securing any Mortgage Loan, in each
case, in accordance with the provisions of
this Agreement and the related
Servicing Agreement, as applicable;
provided, however, that the Master Servicer
shall not (and, consistent with its
responsibilities under Section 3.03, shall
not permit any Servicer to) knowingly or
intentionally take any action, or fail
to take (or fail to cause to be taken) any
action reasonably within its control
and the scope of duties more specifically
set forth herein, that, under the
REMIC Provisions, if taken or not taken, as
the case may be, would cause any
REMIC to fail to qualify as a REMIC or
result in the imposition of a tax upon
the Trust Fund (including but not limited
to the tax on prohibited transactions
as defined in Section 860F(a)(2) of the
Code and the tax on contributions to a
REMIC set forth in Section 860G(d) of the
Code) unless the Master Servicer has
received an Opinion of Counsel (but not at
the expense of the Master Servicer)
to the effect that the contemplated action
would not cause any REMIC to fail to
qualify as a REMIC or result in the
imposition of a tax upon any REMIC. The
Trustee shall furnish the Master Servicer,
upon written request from a Servicing
Officer, with any powers of attorney
empowering the Master Servicer or any
Servicer to execute and deliver instruments
of satisfaction or cancellation, or
of partial or full release or discharge,
and to foreclose upon or otherwise
liquidate Mortgaged Property, and to
appeal, prosecute or defend in any court
action relating to the Mortgage Loans or
the Mortgaged Property, in accordance
with the applicable Servicing Agreement and
this Agreement, and the Trustee
shall execute and deliver such other
documents, as the Master Servicer may
request, to enable the Master Servicer to
master service and administer the
Mortgage Loans and carry out its duties
hereunder, in each case in accordance
with Accepted Master Servicing Practices
(and the Trustee shall have no
liability for misuse of any such powers of
attorney by the Master Servicer or
any Servicer). If the Master Servicer or
the Trustee has been advised that it is
likely that the laws of the state in which
action is to be taken prohibit such
action if taken in the name of the Trustee
or that the Trustee would be
adversely affected under the "doing
business" or tax laws of such state if such
action is taken in its name, the Master
Servicer shall join with the Trustee in
the appointment of a co-trustee pursuant to
Section 9.11 hereof. In the
performance of its duties hereunder, the
Master Servicer shall be an independent
contractor and shall not, except in those
instances where it is taking action in
the name of the Trustee, be deemed to be
the agent of the Trustee.
Section 3.06 Due-on-Sale Clauses; Assumption
Agreements.
To the extent provided in the applicable Servicing Agreement, to
the
extent Mortgage Loans contain enforceable
due-on-sale clauses, the Master
Servicer shall cause the Servicers to
enforce such clauses in accordance with
the applicable Servicing Agreement. If
applicable law prohibits the enforcement
of a due-on-sale clause or such clause is
otherwise not enforced in accordance
with the applicable Servicing Agreement,
and, as a consequence, a Mortgage Loan
is assumed, the original Mortgagor may be
released from liability in accordance
with the applicable Servicing
Agreement.
Section 3.07 Release of Mortgage Files.
(a) Upon becoming aware of the payment in full of any Mortgage
Loan, or
the receipt by any Servicer of a
notification that payment in full has been
escrowed in a manner customary for such
purposes for payment to
Certificateholders on the next Distribution
Date, the Servicer will, if required
under the applicable Servicing Agreement
(or if the Servicer does not, the
Master Servicer may), promptly furnish to
the Custodian, on behalf of the
Trustee, two copies of a certification
substantially in the form of Exhibit D
hereto signed by a Servicing Officer or in
a mutually agreeable electronic
format which will, in lieu of a signature
on its face, originate from a
Servicing Officer (which certification
shall include a statement to the effect
that all amounts received in connection
with such payment that are required to
be deposited in the Protected Account
maintained by the applicable Servicer
pursuant to Section 4.01 or by the
applicable Servicer pursuant to its Servicing
Agreement have been or will be so
deposited) and shall request that the
Custodian, on behalf of the Trustee,
deliver to the applicable Servicer the
related Mortgage File. Upon receipt of such
certification and request, the
Custodian, on behalf of the Trustee, shall
promptly release the related Mortgage
File to the applicable Servicer and the
Trustee and Custodian shall have no
further responsibility with regard to such
Mortgage File. Upon any such payment
in full, each Servicer is authorized, to
give, as agent for the Trustee, as the
mortgagee under the Mortgage that secured
the Mortgage Loan, an instrument of
satisfaction (or assignment of mortgage
without recourse) regarding the
Mortgaged Property subject to the Mortgage,
which instrument of satisfaction or
assignment, as the case may be, shall be
delivered to the Person or Persons
entitled thereto against receipt therefor
of such payment, it being understood
and agreed that no expenses incurred in
connection with such instrument of
satisfaction or assignment, as the case may
be, shall be chargeable to the
Protected Account.
(b) From time to time and as appropriate for the servicing or
foreclosure of any Mortgage Loan and in
accordance with the applicable Servicing
Agreement, the Trustee shall execute such
documents as shall be prepared and
furnished to the Trustee by a Servicer or
the Master Servicer (in form
reasonably acceptable to the Trustee) and
as are necessary to the prosecution of
any such proceedings. The Custodian, on
behalf of the Trustee, shall, upon the
request of a Servicer or the Master
Servicer, and delivery to the Custodian, on
behalf of the Trustee, of two copies of a
request for release signed by a
Servicing Officer substantially in the form
of Exhibit D (or in a mutually
agreeable electronic format which will, in
lieu of a signature on its face,
originate from a Servicing Officer),
release the related Mortgage File held in
its possession or control to the Servicer
or the Master Servicer, as applicable.
Such trust receipt shall obligate the
Servicer or the Master Servicer to return
the Mortgage File to the Custodian on
behalf of the Trustee, when the need
therefor by the Servicer or the Master
Servicer no longer exists unless the
Mortgage Loan shall be liquidated, in which
case, upon receipt of a certificate
of a Servicing Officer similar to that
hereinabove specified, the Mortgage File
shall be released by the Custodian, on
behalf of the Trustee, to the Servicer or
the Master Servicer.
Section 3.08 Documents, Records and Funds in
Possession of Master Servicer To Be Held for Trustee.
(a) The Master Servicer and each Servicer (to the extent required
by
the related Servicing Agreement) shall
transmit to the Trustee or Custodian such
documents and instruments coming into the
possession of the Master Servicer or
such Servicer from time to time as are
required by the terms hereof, or in the
case of the Servicers, the applicable
Servicing Agreement, to be delivered to
the Trustee or Custodian. Any funds
received by the Master Servicer or by a
Servicer in respect of any Mortgage Loan or
which otherwise are collected by the
Master Servicer or by a Servicer as
Liquidation Proceeds or Insurance Proceeds
in respect of any Mortgage Loan shall be
held for the benefit of the Trustee and
the Certificateholders subject to the
Master Servicer's right to retain or
withdraw from the Master Servicer
Collection Account the Master Servicing
Compensation and other amounts provided in
this Agreement, and to the right of
each Servicer to retain its Servicing Fee
and other amounts as provided in the
applicable Servicing Agreement. The Master
Servicer shall, and (to the extent
provided in the applicable Servicing
Agreement) shall cause each Servicer to,
provide access to information and
documentation regarding the Mortgage Loans to
the Trustee, its agents and accountants at
any time upon reasonable request and
during normal business hours, and to
Certificateholders that are savings and
loan associations, banks or insurance
companies, the Office of Thrift
Supervision, the FDIC and the supervisory
agents and examiners of such Office
and Corporation or examiners of any other
federal or state banking or insurance
regulatory authority if so required by
applicable regulations of the Office of
Thrift Supervision or other regulatory
authority, such access to be afforded
without charge but only upon reasonable
request in writing and during normal
business hours at the offices of the Master
Servicer designated by it. In
fulfilling such a request the Master
Servicer shall not be responsible for
determining the sufficiency of such
information.
(b) All Mortgage Files and funds collected or held by, or under
the
control of, the Master Servicer, in respect
of any Mortgage Loans, whether from
the collection of principal and interest
payments or from Liquidation Proceeds
or Insurance Proceeds, shall be held by the
Master Servicer for and on behalf of
the Trustee and the Certificateholders and
shall be and remain the sole and
exclusive property of the Trustee;
provided, however, that the Master Servicer
and each Servicer shall be entitled to
setoff against, and deduct from, any such
funds any amounts that are properly due and
payable to the Master Servicer or
such Servicer under this Agreement or the
applicable Servicing Agreement.
Section 3.09 Standard Hazard Insurance and Flood
Insurance Policies.
(a) For each Mortgage Loan, the Master Servicer shall enforce
any
obligation of the Servicers under the
related Servicing Agreements to maintain
or cause to be maintained standard fire and
casualty insurance and, where
applicable, flood insurance, all in
accordance with the provisions of the
related Servicing Agreements. It is
understood and agreed that such insurance
shall be with insurers meeting the
eligibility requirements set forth in the
applicable Servicing Agreement and that no
earthquake or other additional
insurance is to be required of any
Mortgagor or to be maintained on property
acquired in respect of a defaulted loan,
other than pursuant to such applicable
laws and regulations as shall at any time
be in force and as shall require such
additional insurance.
(b) Pursuant to Section 4.01 and 4.02, any amounts collected by
the
Servicers or the Master Servicer, or by any
Servicer, under any insurance
policies (other than amounts to be applied
to the restoration or repair of the
property subject to the related Mortgage or
released to the Mortgagor in
accordance with the applicable Servicing
Agreement) shall be deposited into the
Master Servicer Collection Account, subject
to withdrawal pursuant to Section
4.02 and 4.03. Any cost incurred by the
Master Servicer or any Servicer in
maintaining any such insurance if the
Mortgagor defaults in its obligation to do
so shall be added to the amount owing under
the Mortgage Loan where the terms of
the Mortgage Loan so permit; provided,
however, that the addition of any such
cost shall not be taken into account for
purposes of calculating the
distributions to be made to
Certificateholders and shall be recoverable by the
Master Servicer or such Servicer pursuant
to Section 4.02 and 4.03.
Section 3.10 Presentment of Claims and Collection of
Proceeds.
The Master Servicer shall (to the extent provided in the
applicable
Servicing Agreement) cause the related
Servicer to prepare and present on behalf
of the Trustee and the Certificateholders
all claims under the Insurance
Policies and take such actions (including
the negotiation, settlement,
compromise or enforcement of the insured's
claim) as shall be necessary to
realize recovery under such policies. Any
proceeds disbursed to the Master
Servicer (or disbursed to a Servicer and
remitted to the Master Servicer) in
respect of such policies, bonds or
contracts shall be promptly deposited in the
Master Servicer Collection Account upon
receipt, except that any amounts
realized that are to be applied to the
repair or restoration of the related
Mortgaged Property as a condition precedent
to the presentation of claims on the
related Mortgage Loan to the insurer under
any applicable Insurance Policy need
not be so deposited (or remitted).
Section 3.11 Maintenance of the Primary Mortgage
Insurance Policies.
(a) The Master Servicer shall not take, or permit any Servicer (to
the
extent such action is prohibited under the
applicable Servicing Agreement) to
take, any action that would result in
noncoverage under any applicable Primary
Mortgage Insurance Policy of any loss
which, but for the actions of the Master
Servicer or such Servicer, would have been
covered thereunder. The Master
Servicer shall use its best reasonable
efforts to cause each Servicer (to the
extent required under the related Servicing
Agreement) to keep in force and
effect (to the extent that the Mortgage
Loan requires the Mortgagor to maintain
such insurance), primary mortgage insurance
applicable to each Mortgage Loan in
accordance with the provisions of this
Agreement and the related Servicing
Agreement, as applicable. The Master
Servicer shall not, and shall not permit
any Servicer (to the extent required under
the related Servicing Agreement) to,
cancel or refuse to renew any such Primary
Mortgage Insurance Policy that is in
effect at the date of the initial issuance
of the Mortgage Note and is required
to be kept in force hereunder except in
accordance with the provisions of this
Agreement and the related Servicing
Agreement, as applicable.
(b) The Master Servicer agrees to present, or to cause each
Servicer
(to the extent required under the related
Servicing Agreement) to present, on
behalf of the Trustee and the
Certificateholders, claims to the insurer under
any Primary Mortgage Insurance Policies
and, in this regard, to take such
reasonable action as shall be necessary to
permit recovery under any Primary
Mortgage Insurance Policies respecting
defaulted Mortgage Loans. Pursuant to
Section 4.01 and 4.02, any amounts
collected by the Master Servicer or any
Servicer under any Primary Mortgage
Insurance Policies shall be deposited in the
Master Servicer Collection Account, subject
to withdrawal pursuant to Sections
4.02 and 4.03.
Section 3.12 Trustee to Retain Possession of Certain
Insurance Policies and Documents.
The Trustee (or the Custodian, as directed by the Trustee),
shall
retain possession and custody of the
originals (to the extent available) of any
Primary Mortgage Insurance Policies, or
certificate of insurance if applicable,
and any certificates of renewal as to the
foregoing as may be issued from time
to time as contemplated by this Agreement.
Until all amounts distributable in
respect of the Certificates have been
distributed in full and the Master
Servicer otherwise has fulfilled its
obligations under this Agreement, the
Trustee (or its Custodian, if any, as
directed by the Trustee) shall also retain
possession and custody of each Mortgage
File in accordance with and subject to
the terms and conditions of this Agreement.
The Master Servicer shall promptly
deliver or cause to be delivered to the
Trustee (or the Custodian, as directed
by the Trustee), upon the execution or
receipt thereof the originals of any
Primary Mortgage Insurance Policies, any
certificates of renewal, and such other
documents or instruments that constitute
portions of the Mortgage File that come
into the possession of the Master Servicer
from time to time.
Section 3.13 Realization Upon Defaulted Mortgage
Loans.
The Master Servicer shall cause each Servicer (to the extent
required
under the related Servicing Agreement) to
foreclose upon, repossess or otherwise
comparably convert the ownership of
Mortgaged Properties securing such of the
Mortgage Loans as come into and continue in
default and as to which no
satisfactory arrangements can be made for
collection of delinquent payments, all
in accordance with the applicable Servicing
Agreement.
Section 3.14 Compensation for the Master Servicer.
The Master Servicer will be entitled to all income and gain
realized
from any investment of funds in the
Distribution Account and the Master Servicer
Collection Account, pursuant to Article IV,
for the performance of its
activities hereunder. Servicing
compensation in the form of assumption fees, if
any, late payment charges, as collected, if
any, or otherwise (but not including
any prepayment premium or penalty) shall be
retained by the applicable Servicer
and shall not be deposited in the Protected
Account. The Master Servicer shall
be required to pay all expenses incurred by
it in connection with its activities
hereunder and shall not be entitled to
reimbursement therefor except as provided
in this Agreement.
Section 3.15 REO Property.
(a) In the event the Trust Fund acquires ownership of any REO
Property
in respect of any related Mortgage Loan,
the deed or certificate of sale shall
be issued to the Trustee, or to its
nominee, on behalf of the related
Certificateholders. The Master Servicer
shall, to the extent provided in the
applicable Servicing Agreement, cause the
applicable Servicer to sell any REO
Property as expeditiously as possible and
in accordance with the provisions of
this Agreement and the related Servicing
Agreement, as applicable. Pursuant to
its efforts to sell such REO Property, the
Master Servicer shall cause the
applicable Servicer to protect and
conserve, such REO Property in the manner and
to the extent required by the applicable
Servicing Agreement, in accordance with
the REMIC Provisions and in a manner that
does not result in a tax on "net
income from foreclosure property" or cause
such REO Property to fail to qualify
as "foreclosure property" within the
meaning of Section 860G(a)(8) of the Code.
(b) The Master Servicer shall, to the extent required by the
related
Servicing Agreement, cause the applicable
Servicer to deposit all funds
collected and received in connection with
the operation of any REO Property in
the Protected Account.
(c) The Master Servicer and the applicable Servicer, upon the
final
disposition of any REO Property, shall be
entitled to reimbursement for any
related unreimbursed Monthly Advances and
other unreimbursed advances as well as
any unpaid Servicing Fees from Liquidation
Proceeds received in connection with
the final disposition of such REO Property;
provided, that any such unreimbursed
Monthly Advances as well as any unpaid
Servicing Fees may be reimbursed or paid,
as the case may be, prior to final
disposition, out of any net rental income or
other net amounts derived from such REO
Property.
(d) To the extent provided in the related Servicing Agreement,
the
Liquidation Proceeds from the final
disposition of the REO Property, net of any
payment to the Master Servicer and the
applicable Servicer as provided above
shall be deposited in the Protected Account
on or prior to the Determination
Date in the month following receipt thereof
and be remitted by wire transfer in
immediately available funds to the Master
Servicer for deposit into the related
Master Servicer Collection Account on the
next succeeding Servicer Remittance
Date.
Section 3.16 Annual Officer's Certificate as to
Compliance.
(a) The Master Servicer shall deliver to the Trustee and the
Rating
Agencies on or before March 1 of each year,
commencing on March 1, 2006, an
Officer's Certificate, certifying that with
respect to the period ending
December 31 of the prior year: (i) such
Servicing Officer has reviewed the
activities of such Master Servicer during
the preceding calendar year or portion
thereof and its performance under this
Agreement, (ii) to the best of such
Servicing Officer's knowledge, based on
such review, such Master Servicer has
performed and fulfilled its duties,
responsibilities and obligations under this
Agreement in all material respects
throughout such year, or, if there has been a
default in the fulfillment of any such
duties, responsibilities or obligations,
specifying each such default known to such
Servicing Officer and the nature and
status thereof, (iii) nothing has come to
the attention of such Servicing
Officer to lead such Servicing Officer to
believe that any Servicer has failed
to perform any of its duties,
responsibilities and obligations under its
Servicing Agreement in all material
respects throughout such year, or, if there
has been a material default in the
performance or fulfillment of any such
duties, responsibilities or obligations,
specifying each such default known to
such Servicing Officer and the nature and
status thereof.
(b) Copies of such statements shall be provided to any
Certificateholder upon request, by the
Master Servicer or by the Trustee at the
Master Servicer's expense if the Master
Servicer failed to provide such copies
(unless (i) the Master Servicer shall have
failed to provide the Trustee with
such statement or (ii) the Trustee shall be
unaware of the Master Servicer's
failure to provide such statement).
Section 3.17 Annual Independent Accountant's
Servicing Report.
If the Master Servicer has, during the course of any fiscal
year,
directly serviced any of the Mortgage
Loans, then the Master Servicer at its
expense shall cause a nationally recognized
firm of independent certified public
accountants to furnish a statement to the
Trustee, the Rating Agencies and the
Depositor on or before March 1 of each
year, commencing on March 1, 2006 to the
effect that, with respect to the most
recently ended fiscal year, such firm has
examined certain records and documents
relating to the Master Servicer's
performance of its servicing obligations
under this Agreement and pooling and
servicing and trust agreements in material
respects similar to this Agreement
and to each other and that, on the basis of
such examination conducted
substantially in compliance with the audit
program for mortgages serviced for
Freddie Mac or the Uniform Single
Attestation Program for Mortgage Bankers, such
firm is of the opinion that the Master
Servicer's activities have been conducted
in compliance with this Agreement, or that
such examination has disclosed no
material items of noncompliance except for
(i) such exceptions as such firm
believes to be immaterial, (ii) such other
exceptions as are set forth in such
statement and (iii) such exceptions that
the Uniform Single Attestation Program
for Mortgage Bankers or the Audit Program
for Mortgages Serviced by Freddie Mac
requires it to report. Copies of such
statements shall be provided to any
Certificateholder upon request by the
Master Servicer, or by the Trustee at the
expense of the Master Servicer if the
Master Servicer shall fail to provide such
copies. If such report discloses exceptions
that are material, the Master
Servicer shall advise the Trustee whether
such exceptions have been or are
susceptible of cure, and will take prompt
action to do so.
Section 3.18 Reports Filed with Securities and
Exchange Commission.
Within 15 days after each Distribution Date, the Securities
Administrator shall, in accordance with
industry standards, file with the
Commission via the Electronic Data
Gathering and Retrieval System ("EDGAR"), a
Form 8-K (or other comparable Form
containing the same or comparable information
or other information mutually agreed upon)
with a copy of the statement to the
Certificateholders for such Distribution
Date as an exhibit thereto. Prior to
January 30 in any year, the Securities
Administrator shall, in accordance with
industry standards and only if instructed
by the Depositor, file a Form 15
Suspension Notice with respect to the Trust
Fund, if applicable. Prior to (i)
March 15, 2006 and (ii) unless and until a
Form 15 Suspension Notice shall have
been filed, prior to March 15 of each year
thereafter, the Master Servicer shall
provide the Securities Administrator with a
Master Servicer Certification,
together with a copy of the annual
independent accountant's servicing report and
annual statement of compliance of each
Servicer, in each case, required to be
delivered pursuant to the related Servicing
Agreement, and, if applicable, the
annual independent accountant's servicing
report and annual statement of
compliance to be delivered by the Master
Servicer pursuant to Sections 3.16 and
3.17. Prior to (i) March 31, 2006, or such
earlier filing date as may be
required by the Commission, and (ii) unless
and until a Form 15 Suspension
Notice shall have been filed, March 31 of
each year thereafter, or such earlier
filing date as may be required by the
Commission, the Securities Administrator
shall file a Form 10-K, in substance
conforming to industry standards, with
respect to the Trust. Such Form 10-K shall
include the Master Servicer
Certification and other documentation
provided by the Master Servicer pursuant
to the second preceding sentence. The
Depositor hereby grants to the Securities
Administrator a limited power of attorney
to execute and file each such document
on behalf of the Depositor. Such power of
attorney shall continue until either
the earlier of (i) receipt by the
Securities Administrator from the Depositor of
written termination of such power of
attorney and (ii) the termination of the
Trust Fund. The Depositor agrees to
promptly furnish to the Securities
Administrator, from time to time upon
request, such further information, reports
and financial statements within its control
related to this Agreement and the
Mortgage Loans as the Securities
Administrator reasonably deems appropriate to
prepare and file all necessary reports with
the Commission. The Securities
Administrator shall have no responsibility
to file any items other than those
specified in this Section 3.18; provided,
however, the Securities Administrator
will cooperate with the Depositor in
connection with any additional filings with
respect to the Trust Fund as the Depositor
deems necessary under the Securities
Exchange Act of 1934, as amended (the
"Exchange Act"). Fees and expenses
incurred by the Securities Administrator in
connection with this Section 3.18
shall not be reimbursable from the Trust
Fund.
Section 3.19 UCC.
The Depositor shall inform the Trustee in writing of any
Uniform
Commercial Code financing statements that
were filed on the Closing Date in
connection with the Trust with stamped
recorded copies of such financing
statements to be delivered to the Trustee
promptly upon receipt by the
Depositor. The Trustee agrees to monitor
and notify the Depositor if any
continuation statements for such Uniform
Commercial Code financing statements
need to be filed. If directed by the
Depositor in writing, the Trustee will file
any such continuation statements solely at
the expense of the Depositor. The
Depositor shall file any financing
statements or amendments thereto required by
any change in the Uniform Commercial
Code.
Section 3.20 Optional Purchase of Defaulted Mortgage
Loans.
(a) With respect to any Mortgage Loan which as of the first day of
a
Fiscal Quarter is delinquent in payment by
90 days or more or is an REO
Property, the Company shall have the right
to purchase such Mortgage Loan from
the Trust at a price equal to the
Repurchase Price; provided however (i) that
such Mortgage Loan is still 90 days or more
delinquent or is an REO Property as
of the date of such purchase and (ii) this
purchase option, if not theretofore
exercised, shall terminate on the date
prior to the last day of the related
Fiscal Quarter. This purchase option, if
not exercised, shall not be thereafter
reinstated unless the delinquency is cured
and the Mortgage Loan thereafter
again becomes 90 days or more delinquent or
becomes an REO Property, in which
case the option shall again become
exercisable as of the first day of the
related Fiscal Quarter.
(b) If at any time the Company remits to the Master Servicer a
payment
for deposit in the Master Servicer
Collection Account covering the amount of the
Repurchase Price for such a Mortgage Loan,
and the Company provides to the
Trustee a certification signed by a
Servicing Officer stating that the amount of
such payment has been deposited in the
Master Servicer Collection Account, then
the Trustee shall execute the assignment of
such Mortgage Loan to the Company at
the request of the Company without
recourse, representation or warranty and the
Company shall succeed to all of the
Trustee's right, title and interest in and
to such Mortgage Loan, and all security and
documents relative thereto. Such
assignment shall be an assignment outright
and not for security. The Company
will thereupon own such Mortgage, and all
such security and documents, free of
any further obligation to the Trustee or
the Certificateholders with respect
thereto.
<PAGE>
ARTICLE IV
Accounts
Section 4.01 Protected Accounts.
(a) The Master Servicer shall enforce the obligation of each
Servicer
to establish and maintain a Protected
Account in accordance with the applicable
Servicing Agreement, with records to be
kept with respect thereto on a Mortgage
Loan by Mortgage Loan basis, into which
accounts shall be deposited within 48
hours (or as of such other time specified
in the related Servicing Agreement) of
receipt, all collections of principal and
interest on any Mortgage Loan and any
REO Property received by a Servicer,
including Principal Prepayments, Insurance
Proceeds, Liquidation Proceeds, and
advances made from the Servicer's own funds
(less servicing compensation as permitted
by the applicable Servicing Agreement
in the case of any Servicer) and all other
amounts to be deposited in the
Protected Account. The Servicer is hereby
authorized to make withdrawals from
and deposits to the related Protected
Account for purposes required or permitted
by this Agreement. To the extent provided
in the related Servicing Agreement,
the Protected Account shall be held by a
Designated Depository Institution and
segregated on the books of such institution
in the name of the Trustee for the
benefit of Certificateholders.
(b) To the extent provided in the related Servicing Agreement,
amounts
on deposit in a Protected Account may be
invested in Permitted Investments in
the name of the Trustee for the benefit of
Certificateholders and, except as
provided in the preceding paragraph, not
commingled with any other funds. Such
Permitted Investments shall mature, or
shall be subject to redemption or
withdrawal, no later than the date on which
such funds are required to be
withdrawn for deposit in the Master
Servicer Collection Account, and shall be
held until required for such deposit. The
income earned from Permitted
Investments made pursuant to this Section
4.01 shall be paid to the related
Servicer under the applicable Servicing
Agreement, and the risk of loss of
moneys required to be distributed to the
Certificateholders resulting from such
investments shall be borne by and be the
risk of the related Servicer. The
related Servicer (to the extent provided in
the Servicing Agreement) shall
deposit the amount of any such loss in the
Protected Account within two Business
Days of receipt of notification of such
loss but not later than the second
Business Day prior to the Distribution Date
on which the moneys so invested are
required to be distributed to the
Certificateholders.
(c) To the extent provided in the related Servicing Agreement
and
subject to this Article IV, on or before
each Servicer Remittance Date, the
related Servicer shall withdraw or shall
cause to be withdrawn from its
Protected Accounts and shall immediately
deposit or cause to be deposited in the
Master Servicer Collection Account amounts
representing the following
collections and payments (other than with
respect to principal of or interest on
the Mortgage Loans due on or before the
Cut-off Date) with respect to each Loan
Group:
(i) Scheduled Payments on the Mortgage Loans received or any
related portion thereof advanced by such
Servicer pursuant to its Servicing
Agreement which were due on or before the
related Due Date, net of the amount
thereof comprising its Servicing Fee or any
fees with respect to any lender-paid
primary mortgage insurance policy;
(ii) Full Principal Prepayments and any Liquidation Proceeds
received by such Servicer with respect to
the Mortgage Loans in the related
Prepayment Period, with interest to the
date of prepayment or liquidation, net
of the amount thereof comprising its
Servicing Fee;
(iii) Partial Principal Prepayments received by such Servicer
for the Mortgage Loans in the related
Prepayment Period; and
(iv) Any amount to be used as a Monthly Advance.
(d) Withdrawals may be made from an Account only to make
remittances as
provided in Section 4.01(c), 4.02 and 4.03;
to reimburse the Master Servicer or
a Servicer for Monthly Advances which have
been recovered by subsequent
collections from the related Mortgagor; to
remove amounts deposited in error; to
remove fees, charges or other such amounts
deposited on a temporary basis; or to
clear and terminate the account at the
termination of this Agreement in
accordance with Section 10.01. As provided
in Sections 4.01(a) and 4.02(b)
certain amounts otherwise due to the
Servicers may be retained by them and need
not be deposited in the Master Servicer
Collection Account.
Section 4.02 Master Servicer Collection Account.
(a) The Master Servicer shall establish and maintain in the name of
the
Trustee, for the benefit of the
Certificateholders, the Master Servicer
Collection Account as a segregated trust
account or accounts. The Master
Servicer Collection Account shall be an
Eligible Account. The Master Servicer
will deposit in the Master Servicer
Collection Account as identified by the
Master Servicer and as received by the
Master Servicer, the following amounts:
(i) Any amounts withdrawn from a Protected Account;
(ii) Any Monthly Advance and any Compensating Interest
Payments;
(iii) Any Insurance Proceeds or Net Liquidation Proceeds
received by or on behalf of the Master
Servicer or which were not deposited in a
Protected Account;
(iv) Any amounts required to be deposited with respect to
losses on investments of deposits in an
Account; and
(v) Any other amounts received by or on behalf of the Master
Servicer and required to be deposited in
the Master Servicer Collection Account
pursuant to this Agreement.
(b) All amounts deposited to the Master Servicer Collection
Account
shall be held by the Master Servicer in the
name of the Trustee in trust for the
benefit of the Certificateholders in
accordance with the terms and provisions of
this Agreement. The requirements for
crediting the Master Servicer Collection
Account or the Distribution Account shall
be exclusive, it being understood and
agreed that, without limiting the
generality of the foregoing, payments in the
nature of (i) prepayment or late payment
charges or assumption, tax service,
statement account or payoff, substitution,
satisfaction, release and other like
fees and charges and (ii) the items
enumerated in Subsections 4.05(a)(i), (ii),
(iii), (iv), (vi), (vii), (viii), (ix) and
(x), need not be credited by the
Master Servicer or the related Servicer to
the Distribution Account or the
Master Servicer Collection Account, as
applicable. In the event that the Master
Servicer shall deposit or cause to be
deposited to the Distribution Account any
amount not required to be credited thereto,
the Trustee, upon receipt of a
written request therefor signed by a
Servicing Officer of the Master Servicer,
shall promptly transfer such amount to the
Master Servicer, any provision herein
to the contrary notwithstanding.
(c) The amount at any time credited to the Master Servicer
Collection
Account may be invested, in the name of the
Trustee, or its nominee, for the
benefit of the Certificateholders, in
Permitted Investments as directed by
Master Servicer. All Permitted Investments
shall mature or be subject to
redemption or withdrawal on or before, and
shall be held until, the next
succeeding Distribution Account Deposit
Date. Any and all investment earnings on
amounts on deposit in the Master Servicer
Collection Account from time to time
shall be for the account of the Master
Servicer. The Master Servicer from time
to time shall be permitted to withdraw or
receive distribution of any and all
investment earnings from the Master
Servicer Collection Account. The risk of
loss of moneys required to be distributed
to the Certificateholders resulting
from such investments shall be borne by and
be the risk of the Master Servicer.
The Master Servicer shall deposit the
amount of any such loss in the Master
Servicer Collection Account within two
Business Days of receipt of notification
of such loss but not later than the second
Business Day prior to the
Distribution Date on which the moneys so
invested are required to be distributed
to the Certificateholders.
Section 4.03 Permitted Withdrawals and Transfers from
the Master Servicer Collection Account.
(a) The Master Servicer will, from time to time on demand of a
Servicer
or the Securities Administrator, make or
cause to be made such withdrawals or
transfers from the Master Servicer
Collection Account as the Master Servicer has
designated for such transfer or withdrawal
pursuant to this Agreement and the
related Servicing Agreement. The Master
Servicer may clear and terminate the
Master Servicer Collection Account pursuant
to Section 10.01 and remove amounts
from time to time deposited in error.
(b) On an ongoing basis, the Master Servicer shall withdraw from
the
Master Servicer Collection Account (i) any
expenses, costs and liabilities
recoverable by the Trustee, the Master
Servicer or the Securities Administrator
or the Custodian pursuant to Sections 3.03,
7.04 and 9.05 and (ii) any amounts
payable to the Master Servicer as set forth
in Section 3.14; provided, however,
that the Master Servicer shall be obligated
to pay from its own funds any
amounts which it is required to pay under
Section 7.03(a).
(c) In addition, on or before each Distribution Account Deposit
Date,
the Master Servicer shall deposit in the
Distribution Account (or remit to the
Trustee for deposit therein) any Monthly
Advances required to be made by the
Master Servicer with respect to the
Mortgage Loans.
(d) No later than 3:00 p.m. New York time on each Distribution
Account
Deposit Date, the Master Servicer will
transfer all Available Funds on deposit
in the Master Servicer Collection Account
with respect to the related
Distribution Date to the Trustee for
deposit in the Distribution Account.
Section 4.04 Distribution Account.
(a) The Paying Agent shall establish and maintain in the name of
the
Paying Agent, for the benefit of the
Certificateholders, the Distribution
Account as a segregated trust account or
accounts.
(b) All amounts deposited to the Distribution Account shall be held
by
the Paying Agent in the name of the Paying
Agent in trust for the benefit of the
Certificateholders in accordance with the
terms and provisions of this
Agreement.
(c) The Paying Agent shall deposit in the Distribution Account
the
Repurchase Price with respect to any
Mortgage Loans purchased by the Seller
pursuant to the Mortgage Loan Purchase
Agreement or Sections 2.02 or 2.03
hereof, any amounts which are to be treated
pursuant to Section 2.04 of this
Agreement as the payment of a Repurchase
Price in connection with the tender of
a Substitute Mortgage Loan by the Seller,
the Repurchase Price with respect to
any Mortgage Loans purchased by the Company
pursuant to Section 3.20, and all
proceeds of any Mortgage Loans or property
acquired with respect thereto
repurchased by the Depositor or its
designee pursuant to Section 10.01;
(d) The Distribution Account shall constitute a trust account of
the
Trust Fund segregated on the books of the
Paying Agent and held by the Paying
Agent in trust in its Corporate Trust
Office, and the Distribution Account and
the funds deposited therein shall not be
subject to, and shall be protected
from, all claims, liens, and encumbrances
of any creditors or depositors of the
Paying Agent or the Master Servicer
(whether made directly, or indirectly
through a liquidator or receiver of the
Paying Agent or the Master Servicer).
The Distribution Account shall be an
Eligible Account. The amount at any time
credited to the Distribution Account shall
be (i) held in cash and fully insured
by the FDIC to the maximum coverage
provided thereby or (ii) invested in the
name of the Paying Agent, in such Permitted
Investments as may be selected by
the Master Servicer or deposited in demand
deposits with such depository
institutions as may be selected by the
Master Servicer, provided that time
deposits of such depository institutions
would be a Permitted Investment. All
Permitted Investments shall mature or be
subject to redemption or withdrawal on
or before, and shall be held until, the
next succeeding Distribution Date if the
obligor for such Permitted Investment is
the Paying Agent or, if such obligor is
any other Person, the Business Day
preceding such Distribution Date. All
investment earnings on amounts on deposit
in the Distribution Account or benefit
from funds uninvested therein from time to
time shall be for the account of the
Master Servicer. The Master Servicer shall
be permitted to withdraw or receive
distribution of any and all investment
earnings from the Distribution Account on
each Distribution Date. If there is any
loss on a Permitted Investment or demand
deposit, the Master Servicer shall remit
the amount of the loss to the Paying
Agent who shall deposit such amount in the
Distribution Account. With respect to
the Distribution Account and the funds
deposited therein, the Paying Agent shall
take such action as may be necessary to
ensure that the Certificateholders shall
be entitled to the priorities afforded to
such a trust account (in addition to a
claim against the estate of the Paying
Agent) as provided by 12 U.S.C. ss.
92a(e), and applicable regulations pursuant
thereto, if applicable, or any
applicable comparable state statute
applicable to state chartered banking
corporations.
Section 4.05 Permitted Withdrawals and Transfers from
the Distribution Account.
(a) The Paying Agent will, from time to time on demand of the
Master
Servicer or the Securities Administrator,
make or cause to be made such
withdrawals or transfers from the
Distribution Account as the Master Servicer
has designated for such transfer or
withdrawal pursuant to this Agreement and
the Servicing Agreements or as the
Securities Administrator has instructed
hereunder for the following purposes
(limited in the case of amounts due the
Master Servicer to those not withdrawn from
the Master Servicer Collection
Account in accordance with the terms of
this Agreement):
(i) to reimburse the Master Servicer or any Servicer for any
Monthly Advance of its own funds, the right
of the Master Servicer or a Servicer
to reimbursement pursuant to this subclause
(i) being limited to amounts
received on a particular Mortgage Loan
(including, for this purpose, the
Repurchase Price therefor, Insurance
Proceeds and Liquidation Proceeds) which
represent late payments or recoveries of
the principal of or interest on such
Mortgage Loan respecting which such Monthly
Advance was made;
(ii) to reimburse the Master Servicer or any Servicer from
Insurance Proceeds or Liquidation Proceeds
relating to a particular Mortgage
Loan for amounts expended by the Master
Servicer or such Servicer in good faith
in connection with the restoration of the
related Mortgaged Property which was
damaged by an Uninsured Cause or in
connection with the liquidation of such
Mortgage Loan;
(iii) to reimburse the Master Servicer or any Servicer from
Insurance Proceeds relating to a particular
Mortgage Loan for insured expenses
incurred with respect to such Mortgage Loan
and to reimburse the Master Servicer
or such Servicer from Liquidation Proceeds
from a particular Mortgage Loan for
Liquidation Expenses incurred with respect
to such Mortgage Loan; provided that
the Master Servicer shall not be entitled
to reimbursement for Liquidation
Expenses with respect to a Mortgage Loan to
the extent that (i) any amounts with
respect to such Mortgage Loan were paid as
Excess Liquidation Proceeds pursuant
to clause (viii) of this Subsection 4.05
(a) to the Master Servicer; and (ii)
such Liquidation Expenses were not included
in the computation of such Excess
Liquidation Proceeds;
(iv) to reimburse the Master Servicer or any Servicer for
advances of funds (other than Monthly
Advances) made with respect to the
Mortgage Loans, and the right to
reimbursement pursuant to this subclause being
limited to amounts received on the related
Mortgage Loan (including, for this
purpose, the Repurchase Price therefor,
Insurance Proceeds and Liquidation
Proceeds) which represent late recoveries
of the payments for which such
advances were made;
(v) to reimburse the Master Servicer or any Servicer for any
Monthly Advance or advance, after a
Realized Loss has been allocated with
respect to the related Mortgage Loan if the
Monthly Advance or advance has not
been reimbursed pursuant to clauses (i) and
(iv);
(vi) to pay the Master Servicer as set forth in Section 3.14;
(vii) to reimburse the Master Servicer for expenses, costs and
liabilities incurred by and reimbursable to
it pursuant to Sections 3.03 and
7.04(c) and (d);
(viii) to pay to the Master Servicer, as additional servicing
compensation, any Excess Liquidation
Proceeds to the extent not retained by the
related Servicer;
(ix) to reimburse or pay any Servicer any such amounts as are
due thereto under the applicable Servicing
Agreement and have not been retained
by or paid to the Servicer, to the extent
provided in the related Servicing
Agreement;
(x) to reimburse the Trustee, the Securities Administrator or
the Custodian for expenses, costs and
liabilities incurred by or reimbursable to
it pursuant to this Agreement;
(xi) to remove amounts deposited in error; and
(xii) to clear and terminate the Distribution Account pursuant
to Section 10.01.
(b) The Master Servicer shall keep and maintain separate
accounting, on
a Mortgage Loan by Mortgage Loan basis, for
the purpose of accounting for any
reimbursement from the Distribution Account
pursuant to subclauses (i) through
(iv) or with respect to any such amounts
which would have been covered by such
subclauses had the amounts not been
retained by the Master Servicer without
being deposited in the Distribution Account
under Section 4.02(b).
(c) On each Distribution Date, the Paying Agent shall distribute
the
Available Funds to the extent on deposit in
the Distribution Account for each
Loan Group to the Holders of the
Certificates in accordance with distribution
instructions provided to it by the
Securities Administrator no later than two
Business Days prior to such Distribution
Date and determined by the Securities
Administrator in accordance with Section
6.01.
<PAGE>
ARTICLE V
Certificates
Section 5.01 Certificates.
(a) The Depository, the Depositor and the Trustee have entered into
a
Depository Agreement dated as of the
Closing Date (the "Depository Agreement").
Except for the Residual Certificates, the
Private Certificates and the
Individual Certificates and as provided in
Subsection 5.01(b), the Certificates
shall at all times remain registered in the
name of the Depository or its
nominee and at all times: (i) registration
of such Certificates may not be
transferred by the Certificate Registrar
except to a successor to the
Depository; (ii) ownership and transfers of
registration of such Certificates on
the books of the Depository shall be
governed by applicable rules established by
the Depository; (iii) the Depository may
collect its usual and customary fees,
charges and expenses from its Depository
Participants; (iv) the Certificate
Registrar shall deal with the Depository as
representative of such Certificate
Owners of the respective Class of
Certificates for purposes of exercising the
rights of Certificateholders under this
Agreement, and requests and directions
for and votes of such representative shall
not be deemed to be inconsistent if
they are made with respect to different
Certificate Owners; and (v) the
Certificate Registrar may rely and shall be
fully protected in relying upon
information furnished by the Depository
with respect to its Depository
Participants.
The Residual Certificates and the Private Certificates are
initially
Physical Certificates. If at any time the
Holders of all of the Certificates of
one or more such Classes request that the
Certificate Registrar cause such Class
to become Global Certificates, the
Certificate Registrar and the Depositor will
take such action as may be reasonably
required to cause the Depository to accept
such Class or Classes for trading if it may
legally be so traded.
All transfers by Certificate Owners of such respective Classes
of
Book-Entry Certificates and any Global
Certificates shall be made in accordance
with the procedures established by the
Depository Participant or brokerage firm
representing such Certificate Owners. Each
Depository Participant shall only
transfer Book-Entry Certificates of
Certificate Owners it represents or of
brokerage firms for which it acts as agent
in accordance with the Depository's
normal procedures.
(b) If (i)(A) the Depositor advises the Certificate Registrar
in
writing that the Depository is no longer
willing or able to properly discharge
its responsibilities as Depository and (B)
the Certificate Registrar or the
Depositor is unable to locate a qualified
successor within 30 days or (ii) the
Depositor at its option advises the
Certificate Registrar in writing that it
elects to terminate the book-entry system
through the Depository, the
Certificate Registrar, as agent of the
Depositor, shall request that the
Depository notify all Certificate Owners of
the occurrence of any such event and
of the availability of definitive, fully
registered Certificates to Certificate
Owners requesting the same. Upon surrender
to the Certificate Registrar, as
agent of the Depositor, of the Certificates
by the Depository, accompanied by
registration instructions from the
Depository for registration, the Certificate
Registrar shall issue the definitive
Certificates. Neither the Depositor nor the
Certificate Registrar shall be liable for
any delay in delivery of any
instructions required under this section
and may conclusively rely on, and shall
be protected in relying on, such
instructions.
In addition, if an Event of Default has occurred and is
continuing,
each Certificate Owner materially adversely
affected thereby may at its option
request a definitive Certificate evidencing
such Certificate Owner's Fractional
Undivided Interest in the related Class of
Certificates. In order to make such
request, such Certificate Owner shall,
subject to the rules and procedures of
the Depository, provide the Depository or
the related Depository Participant
with directions for the Certificate
Registrar to exchange or cause the exchange
of the Certificate Owner's interest in such
Class of Certificates for an
equivalent Fractional Undivided Interest in
fully registered definitive form.
Upon receipt by the Certificate Registrar
of instructions from the Depository
directing the Certificate Registrar to
effect such exchange (such instructions
to contain information regarding the Class
of Certificates and the Current
Principal Amount being exchanged, the
Depository Participant account to be
debited with the decrease, the registered
holder of and delivery instructions
for the definitive Certificate, and any
other information reasonably required by
the Certificate Registrar), (i) the
Certificate Registrar shall instruct the
Depository to reduce the related Depository
Participant's account by the
aggregate Current Principal Amount of the
definitive Certificate, (ii) the
Certificate Registrar shall execute,
authenticate and deliver, in accordance
with the registration and delivery
instructions provided by the Depository, a
definitive Certificate evidencing such
Certificate Owner's Fractional Undivided
Interest in such Class of Certificates and
(iii) the Certificate Registrar shall
execute and authenticate a new Book-Entry
Certificate reflecting the reduction
in the Current Principal Amount of such
Class of Certificates by the amount of
the definitive Certificates.
(c) (i) REMIC I will be evidenced by (x) the REMIC I Regular
Interests,
which will be uncertificated and
non-transferable and are hereby designated as
the "regular interests" in REMIC I and have
the initial principal amounts and
accrue interest at the Pass-Through Rates
equal to those set forth in this
Section 5.01(c)(i) and (y) the Class R-I
Certificates, which are hereby
designated as representing the sole class
of "residual interests" in REMIC I.
The REMIC I Regular Interests and the Class
R-I Certificates will have the
following designations, initial principal
amounts and Pass-Through Rates:
<TABLE>
<CAPTION>
REMIC I Interest
Initial Principal Amount Pass-Through Rate
Related Loan Group
<S>
<C>
<C>
<C>
I-A
$
877.03
(1)
Loan Group I
I-B
$
14,377.95
(2)
Loan Group I
II-A
$ 3,049.55
(1)
Loan Group II
II-B
$
49,991.35
(3)
Loan Group II
ZZZ
$643,624,630.32
(1)
Loan Group I and Loan Group II
Class R-I
$
50.00
(2)
Loan Group I
</TABLE>
(1) The weighted average of the Net Rates
of the Mortgage Loans, weighted on the
basis of the respective Scheduled Principal
Balances of each such Mortgage Loan
as of the beginning of the Due Period
immediately preceding the related
Distribution Date.
(2) The weighted average of the Net Rates
of the Group I Mortgage Loans,
weighted on the basis of the respective
Scheduled Principal Balances of each
such Mortgage Loan as of the beginning of
the Due Period immediately preceding
the related Distribution Date.
(3) The weighted average of the Net Rates
of the Group II Mortgage Loans,
weighted on the basis of the respective
Scheduled Principal Balances of each
such Mortgage Loan as of the beginning of
the Due Period immediately preceding
the related Distribution Date.
Distributions of principal shall be deemed to be made from
amounts
received on the Mortgage Loans to the REMIC
I Regular Interests, first, so as to
keep the Uncertificated Principal Balance
of each REMIC I Regular Interest
ending with the designation "B" equal to
0.01% of the aggregate Scheduled
Principal Balance of the Mortgage Loans in
the related Loan Group; second, to
each REMIC I Regular Interest ending with
the designation "A," so that the
Uncertificated Principal Balance of each
such REMIC I Regular Interest is equal
to 0.01% of the excess of (x) the aggregate
Scheduled Principal Balance of the
Mortgage Loans in the related Loan Group
over (y) the Current Principal Amount
of the Senior Certificates (other than the
Interest Only Certificates) in the
related Certificate Group (except that if
any such excess is a larger number
than in the preceding distribution period,
the least amount of principal shall
be distributed to such REMIC I Regular
Interests such that the REMIC I
Subordinated Balance Ratio is maintained);
and third, any remaining principal to
REMIC I Regular Interest ZZZ. Realized
Losses on the Mortgage Loans shall be
applied after all distributions have been
made on each Distribution Date, first,
so as to keep the Uncertificated Principal
Balance of each REMIC I Regular
Interest ending with the designation "B"
equal to 0.01% of the aggregate
Scheduled Principal Balance of the Mortgage
Loans in the related Loan Group;
second, to each REMIC I Regular Interest
ending with the designation "A," so
that the Uncertificated Principal Balance
of each such REMIC I Regular Interest
is equal to 0.01% of the excess of (x) the
aggregate Scheduled Principal Balance
of the Mortgage Loans in the related Loan
Group over (y) the Current Principal
Amount of the Senior Certificates (other
than the Interest Only Certificates) in
the related Certificate Group (except that
if any such excess is a larger number
than in the preceding distribution period,
the least amount of Realized Losses
shall be applied to such REMIC I Regular
Interests such that the REMIC I
Subordinated Balance Ratio is maintained);
and third, any remaining Realized
Losses on the Mortgage Loans shall be
allocated to REMIC I Regular Interest ZZZ.
The aggregate amount of any Net Interest Shortfalls for any
Distribution Date shall be allocated to
accrued interest payable to REMIC I
Regular Interest I-A, REMIC I Regular
Interest I-B, REMIC I Regular Interest
I-A, REMIC II Regular Interest I-B and
REMIC I Regular Interest ZZZ, PRO RATA,
based on, and to the extent of, one month's
interest at the then applicable
respective Pass-Through Rates on the
respective Uncertificated Principal
Balances of each such REMIC I Regular
Interest.
(ii) REMIC II will be evidenced by (x) the REMIC II Regular
Interests,
which will be uncertificated and
non-transferable and are hereby designated as
the "regular interests" in REMIC II and
have the initial principal amounts and
accrue interest at the Pass-Through Rates
equal to those set forth in this
Section 5.01(c)(ii) and (y) the Class R-II
Certificates, which are hereby
designated as representing the sole class
of "residual interests" in REMIC II.
The REMIC II Regular Interests and the Class R-II Certificates
will
have the following designations, initial
principal amounts and Pass-Through
Rates:
<TABLE>
<CAPTION>
REMIC II Interest
Initial Principal Amount Pass-Through Rate
Related Loan Group
<S>
<C>
<C>
<C>
I-A-1
$ 135,009,000.00
(1)
Loan Group I
II-A-1
$ 444,418,000.00
(2)
Loan Group II
II-A-2
$
25,000,000.00
(2)
Loan Group II
R-II
$
50.00
(1)
Loan Group I
R-III
$
50.00
(1)
Loan Group I
B-1
$ 7,079,000.00
(3)
Loan Group I and Loan Group II
B-2
$ 6,759,000.00
(3)
Loan Group I and Loan Group II
B-3
$ 7,403,000.00
(3)
Loan Group I and Loan Group II
B-4
$ 6,436,000.00
(3)
Loan Group I and Loan Group II
B-5
$ 3,541,000.00
(3)
Loan Group I and Loan Group II
B-6
$ 3,540,000.00
(3)
Loan Group I and Loan Group II
B-7
$ 2,575,000.00
(3)
Loan Group I and Loan Group II
B-8
$ 1,932,826.20
(3)
Loan Group I and Loan Group II
</TABLE>
------------------
(1) A variable
Pass-Through Rate equal to the weighted average of the
Pass-Through Rate on REMIC I Regular Interest I-B, weighted on
the
basis of the Uncertificated Principal Balance of such REMIC I
Regular
Interest immediately preceding the related Distribution Date.
(2) A variable
Pass-Through Rate equal to the weighted average of the
Pass-Through Rate on REMIC I Regular Interest II-B, weighted on
the
basis of the Uncertificated Principal Balance of such REMIC I
Regular
Interest immediately preceding the related Distribution Date.
(3) A variable
Pass-Through Rate equal to the weighted average of the
Pass-Through Rates on REMIC I Regular Interests I-A and II-A,
weighted
on the basis of the Uncertificated Principal Balances of each
such
REMIC I Regular
Interest immediately preceding the related Distribution
Date, provided that for purposes of such weighted average, the
Pass-Through Rate of each such REMIC I Regular Interest shall
be
subject to a cap and a floor equal to the Pass-Through Rate of
the
REMIC I Regular Interest from the related Loan Group ending with
the
designation "B".
Principal shall be payable to, and shortfalls, losses and
prepayments
are allocable to, the REMIC II Regular
Interests as such amounts are payable and
allocable to the Corresponding
Certificates. Interest shall be payable to the
REMIC II Regular Interests at the
Pass-Through Rate for each such REMIC II
Regular Interest on each such REMIC II
Regular Interest's Uncertificated
Principal Balance.
(iii) The Classes of the Certificates shall have the following
designations, initial principal amounts and
Pass-Through Rates:
<TABLE>
<CAPTION>
DESIGNATION
INITIAL PRINCIPAL AMOUNT
PASS-THROUGH RATE
<S>
<C>
<C>
I-A-1
$
135,009,000.00
(1)
II-A-1
$
444,418,000.00
(2)
II-X
$
(3)
(4)
II-A-2
$
25,000,000.00
(5)
R-I
$
50.00
(6)
R-II
$
50.00
(6)
R-III
$
50.00
(6)
B-1
$
7,079,000.00
(7)
B-2
$
6,759,000.00
(7)
B-3
$
7,403,000.00
(7)
B-4
$
6,436,000.00
(7)
B-5
$
3,541,000.00
(7)
B-6
$
3,540,000.00
(7)
B-7
$
2,575,000.00
(7)
B-8
$
1,932,826.20
(7)
</TABLE>
(1) The Class I-A-1 Certificates will bear interest at a
variable
Pass-Through Rate equal to the weighted
average of the Net Rates of the Group I
Mortgage Loans, weighted on the basis of
the respective Scheduled Principal
Balances of each such Mortgage Loan as of
the beginning of the Due Period
immediately preceding the related
Distribution Date; provided that, for federal
income tax purposes the Class I-A-1
Certificates will bear interest at a rate
equivalent to the foregoing, expressed as
the weighted average of the
Pass-Through Rate on REMIC II Regular
Interest I-A-1, weighted on the basis of
the Uncertificated Principal Balance of
such REMIC II Regular Interest
immediately preceding the related
Distribution Date. The Pass-Through Rate with
respect to the first Interest Accrual
Period is approximately 5.320% per annum.
(2) The Class II-A-1 Certificates will bear interest at a
variable
Pass-Through Rate equal to the weighted
average of the Net Rates of the Group II
Mortgage Loans, weighted on the basis of
the respective Scheduled Principal
Balances of each such Mortgage Loan as of
the beginning of the Due Period
immediately preceding the related
Distribution Date; provided that, for federal
income tax purposes the Class II-A-1
Certificates will bear interest at a rate
equivalent to the foregoing, expressed as
the weighted average of the
Pass-Through Rate on REMIC II Regular
Interest II-A-1, weighted on the basis of
the Uncertificated Principal Balance of
such REMIC II Regular Interest
immediately preceding the related
Distribution Date. The Pass-Through Rate with
respect to the first Interest Accrual
Period is approximately 5.139% per annum.
(3) As described in the definition of Notional Amount herein.
(4) On or prior to the Distribution Date in March 2010, the Class
II-X
Certificates will bear interest at a fixed
Pass-Through Rate equal to 0.139% per
annum. After the Distribution Date in March
2010, the Class II-X Certificates
will not bear any interest.
(5) On or prior to the Distribution Date in March 2010, the
Class
II-A-2 Certificates will bear interest at a
variable Pass-Through Rate equal to
the weighted average of the Net Rates of
the Group II Mortgage Loans, weighted
on the basis of the respective Scheduled
Principal Balances of each such
Mortgage Loan as of the beginning of the
Due Period immediately preceding the
related Distribution Date, minus 0.139% per
annum; provided that, on or prior to
such Distribution Date, for federal income
tax purposes the Class II-A-2
Certificates will bear interest at a rate
equivalent to the foregoing, expressed
as the weighted average of the Pass-Through
Rate on REMIC II Regular Interest
II-A-2, weighted on the basis of the
Uncertificated Principal Balance of such
REMIC II Regular Interest immediately
preceding the related Distribution Date
minus 0.139% per annum. After the
Distribution Date in March 2010, the Class
II-A-2 Certificates will bear interest at a
variable Pass-Through Rate equal to
the weighted average of the Net Rates of
the Group II Mortgage Loans, weighted
on the basis of the respective Scheduled
Principal Balances of each such
Mortgage Loan as of the beginning of the
Due Period immediately preceding the
related Distribution Date; provided that
after such Distribution Date, for
federal income tax purposes the Class
II-A-2 Certificates will bear interest at
a rate equivalent to the foregoing,
expressed as the weighted average of the
Pass-Through Rate on REMIC II Regular
Interest II-A-2, weighted on the basis of
the Uncertificated Principal Balance of
such REMIC II Regular Interest
immediately preceding the related
Distribution Date. The Pass-Through Rate with
respect to the first Interest Accrual
Period is approximately 5.000% per annum.
(6) The Class R-I, Class R-II and Class R-III Certificates will
bear
interest at a variable Pass-Through Rate
equal to the weighted average of the
Net Rates of the Group I Mortgage Loans,
weighted on the basis of the respective
Scheduled Principal Balances of each such
Mortgage Loan as of the beginning of
the Due Period immediately preceding the
related Distribution Date. The
Pass-Through Rate with respect to the first
Interest Accrual Period is
approximately 5.320% per annum.
(7) The Class B-1, Class B-2, Class B-3, Class B-4, Class B-5,
Class
B-6, Class B-7 and Class B-8 Certificates
will each bear interest at a variable
Pass-Through Rate equal to the weighted
average of the weighted average of the
Net Rates of the Mortgage Loans in each
Loan Group, weighted in proportion to
the results of subtracting from the
aggregate Scheduled Principal Balance of the
Mortgage Loans of each Loan Group, the
aggregate Current Principal Amount of the
related Class or Classes of Senior
Certificates; provided that, for federal
income tax purposes such Certificates will
bear interest at a rate equivalent to
the foregoing, expressed as the weighted
average of the Pass-Through Rates on
REMIC II Regular Interests B-1, B-2, B-3,
B-4, B-5, B-6, B-7 and B-8, weighted
on the basis of the Uncertificated
Principal Balance of each such REMIC II
Regular Interest immediately preceding the
related Distribution Date. The
Pass-Through Rate with respect to the first
Interest Accrual Period is
approximately 5.179% per annum.
(d) For purposes of Section 1.860G-1(a)(4)(iii) of the Treasury
regulations, the Distribution Date
immediately following the maturity date for
the Mortgage Loan with the latest maturity
date in the Trust Fund has been
designated as the "latest possible maturity
date" for the REMIC I Regular
Interests, REMIC II Regular Interests and
the Certificates.
(e) With respect to each Distribution Date, each Class of
Certificates
shall accrue interest during the related
Interest Accrual Period. With respect
to each Distribution Date and each such
Class of Certificates, interest shall be
calculated, on the basis of a 360-day year
comprised of twelve 30-day months,
based upon the respective Pass-Through Rate
set forth, or determined as
provided, above and the Current Principal
Amount (or Notional Amount in the case
of the Interest Only Certificates) of such
Class applicable to such Distribution
Date.
(f) The Certificates shall be substantially in the forms set forth
in
Exhibits A-1, A-2 and A-3. On original
issuance, the Certificate Registrar shall
sign, countersign and shall deliver them at
the direction of the Depositor.
Pending the preparation of definitive
Certificates of any Class, the Certificate
Registrar may countersign temporary
Certificates that are printed, lithographed
or typewritten, in authorized denominations
for Certificates of such Class,
substantially of the tenor of the
definitive Certificates in lieu of which they
are issued and with such appropriate
insertions, omissions, substitutions and
other variations as the officers or
authorized signatories executing such
Certificates may determine, as evidenced by
their execution of such
Certificates. If temporary Certificates are
issued, the Depositor will cause
definitive Certificates to be prepared
without unreasonable delay. After the
preparation of definitive Certificates, the
temporary Certificates shall be
exchangeable for definitive Certificates
upon surrender of the temporary
Certificates at the office of the
Certificate Registrar, without charge to the
Holder. Upon surrender for cancellation of
any one or more temporary
Certificates, the Certificate Registrar
shall sign and countersign and deliver
in exchange therefor a like aggregate
principal amount, in authorized
denominations for such Class, of definitive
Certificates of the same Class.
Until so exchanged, such temporary
Certificates shall in all respects be
entitled to the same benefits as definitive
Certificates.
(g) Each Class of Book-Entry Certificates will be registered as
a
single Certificate of such Class held by a
nominee of the Depository or the DTC
Custodian, and beneficial interests will be
held by investors through the
book-entry facilities of the Depository in
minimum denominations of (i) in the
case of the Senior Certificates (other than
the Residual Certificates), $1,000
and in each case increments of $1.00 in
excess thereof, and (ii) in the case of
the Offered Subordinate Certificates,
$25,000 and increments of $1.00 in excess
thereof, except that one Certificate of
each such Class may be issued in a
different amount so that the sum of the
denominations of all outstanding
Certificates of such Class shall equal the
Current Principal Amount of such
Class on the Closing Date. On the Closing
Date, the Certificate Registrar shall
execute and countersign Physical
Certificates all in an aggregate principal
amount that shall equal the Current
Principal Amount of such Class on the
Closing Date. The Private Certificates
shall be issued in certificated
fully-registered form in minimum dollar
denominations of $25,000 and integral
multiples of $1.00 in excess thereof,
except that one Private Certificate of
each Class may be issued in a different
amount so that the sum of the
denominations of all outstanding Private
Certificates of such Class shall equal
the Current Principal Amount of such Class
on the Closing Date. The Residual
Certificates shall each be issued in
certificated fully-registered form, each,
in the denomination of $50. Each Class of
Global Certificates, if any, shall be
issued in fully registered form in minimum
dollar denominations of $50,000 and
integral multiples of $1.00 in excess
thereof, except that one Certificate of
each Class may be in a different
denomination so that the sum of the
denominations of all outstanding
Certificates of such Class shall equal the
Current Principal Amount of such Class on
the Closing Date. On the Closing Date,
the Certificate Registrar shall execute and
countersign (i) in the case of each
Class of Offered Certificates, the
Certificate in the entire Current Principal
Amount of the respective Class and (ii) in
the case of each Class of Private
Certificates, Individual Certificates all
in an aggregate principal amount that
shall equal the Current Principal Amount of
each such respective Class on the
Closing Date. The Certificates referred to
in clause (i) and if at any time
there are to be Global Certificates, the
Global Certificates shall be delivered
by the Depositor to the Depository or
pursuant to the Depository's instructions,
shall be delivered by the Depositor on
behalf of the Depository to and deposited
with the DTC Custodian. The Certificate
Registrar shall sign the Certificates by
facsimile or manual signature and
countersign them by manual signature on behalf
of the Trustee by one or more authorized
signatories, each of whom shall be
Responsible Officers of the Certificate
Registrar or its agent. A Certificate
bearing the manual and facsimile signatures
of individuals who were the
authorized signatories of the Certificate
Registrar or its agent at the time of
issuance shall bind the Certificate
Registrar, notwithstanding that such
individuals or any of them have ceased to
hold such positions prior to the
delivery of such Certificate.
(h) No Certificate shall be entitled to any benefit under this
Agreement, or be valid for any purpose,
unless there appears on such Certificate
the manually executed countersignature of
the Certificate Registrar or its
agent, and such countersignature upon any
Certificate shall be conclusive
evidence, and the only evidence, that such
Certificate has been duly executed
and delivered hereunder. All Certificates
issued on the Closing Date shall be
dated the Closing Date. All Certificates
issued thereafter shall be dated the
date of their countersignature.
(i) The Closing Date is hereby designated as the "startup" day of
each
REMIC within the meaning of Section
860G(a)(9) of the Code.
(j) For federal income tax purposes, each REMIC shall have a tax
year
that is a calendar year and shall report
income on an accrual basis.
(k) The Trustee on behalf of the Trust shall cause each REMIC to
timely
elect to be treated as a REMIC under
Section 860D of the Code. Any
inconsistencies or ambiguities in this
Agreement or in the administration of any
Trust established hereby shall be resolved
in a manner that preserves the
validity of such elections.
(l) The following legend shall be placed on the Residual
Certificates,
whether upon original issuance or upon
issuance of any other Certificate of any
such Class in exchange therefor or upon
transfer thereof:
THIS CERTIFICATE MAY NOT BE ACQUIRED DIRECTLY OR INDIRECTLY
BY, OR ON BEHALF OF, AN EMPLOYEE BENEFIT PLAN OR OTHER
RETIREMENT
ARRANGEMENT WHICH IS SUBJECT TO TITLE I OF THE EMPLOYEE
RETIREMENT
INCOME SECURITY ACT OF 1974, AS AMENDED, OR SECTION 4975 OF THE
INTERNAL REVENUE CODE OF 1986, AS AMENDED, UNLESS THE PROPOSED
TRANSFEREE PROVIDES THE TRUSTEE WITH AN OPINION OF COUNSEL
ADDRESSED TO
THE DEPOSITOR, TRUSTEE, CERTIFICATE REGISTRAR, MASTER SERVICER
AND
SECURITIES ADMINISTRATOR AND ON WHICH THEY MAY RELY THAT IS
SATISFACTORY TO THE TRUSTEE THAT THE PURCHASE OF CERTIFICATES ON
BEHALF
OF SUCH PERSON WILL NOT RESULT IN OR CONSTITUTE A NONEXEMPT
PROHIBITED
TRANSACTION, IS PERMISSIBLE UNDER APPLICABLE LAW AND WILL NOT GIVE
RISE
TO ANY ADDITIONAL OBLIGATIONS ON THE PART OF THE DEPOSITOR, THE
MASTER
SERVICER, THE SECURITIES ADMINISTRATOR, CERTIFICATE REGISTRAR OR
THE
TRUSTEE.
The following legend shall be placed upon
the Private Certificates, whether upon
original issuance or upon issuance of any
other Certificate of any such Class in
exchange therefor or upon transfer
thereof:
THIS CERTIFICATE MAY NOT BE ACQUIRED DIRECTLY OR INDIRECTLY BY, OR
ON
BEHALF OF, AN EMPLOYEE BENEFIT PLAN OR
OTHER RETIREMENT ARRANGEMENT WHICH IS
SUBJECT TO TITLE I OF THE EMPLOYEE
RETIREMENT INCOME SECURITY ACT OF 1974, AS
AMENDED, OR SECTION 4975 OF THE INTERNAL
REVENUE CODE OF 1986, AS AMENDED,
UNLESS THE TRANSFEREE CERTIFIES OR
REPRESENTS THAT THE PROPOSED TRANSFER AND
HOLDING OF A CERTIFICATE AND THE SERVICING,
MANAGEMENT AND OPERATION OF THE
TRUST AND ITS ASSETS: (I) WILL NOT RESULT
IN ANY PROHIBITED TRANSACTION WHICH IS
NOT COVERED UNDER AN INDIVIDUAL OR CLASS
PROHIBITED TRANSACTION EXEMPTION,
INCLUDING, BUT NOT LIMITED TO, PROHIBITED
TRANSACTION EXEMPTION ("PTE") 84-14,
PTE 91-38, PTE 90-1, PTE 95-60 OR PTE 96-23
AND (II) WILL NOT GIVE RISE TO ANY
ADDITIONAL OBLIGATIONS ON THE PART OF THE
DEPOSITOR, THE SECURITIES
ADMINISTRATOR, THE CERTIFICATE REGISTRAR,
THE MASTER SERVICER OR THE TRUSTEE,
WHICH WILL BE DEEMED REPRESENTED BY AN
OWNER OF A BOOK-ENTRY CERTIFICATE OR A
GLOBAL CERTIFICATE OR UNLESS THE OPINION
SPECIFIED IN SECTION 5.07 OF THE
AGREEMENT IS PROVIDED.
Section 5.02 Registration of Transfer and Exchange of
Certificates.
(a) The Certificate Registrar shall maintain at its Corporate
Trust
Office a Certificate Register in which,
subject to such reasonable regulations
as it may prescribe, the Certificate
Registrar shall provide for the
registration of Certificates and of
transfers and exchanges of Certificates as
herein provided.
(b) Subject to Subsection 5.01(a) and, in the case of any
Global
Certificate or Physical Certificate upon
the satisfaction of the conditions set
forth below, upon surrender for
registration of transfer of any Certificate at
any office or agency of the Certificate
Registrar maintained for such purpose,
the Certificate Registrar shall sign,
countersign and shall deliver, in the name
of the designated transferee or
transferees, a new Certificate of a like Class
and aggregate Fractional Undivided
Interest, but bearing a different number.
(c) By acceptance of an Individual Certificate, whether upon
original
issuance or subsequent transfer, each
holder of such a Certificate acknowledges
the restrictions on the transfer of such
Certificate set forth in the Securities
Legend and agrees that it will transfer
such a Certificate only as provided
herein. In addition to the provisions of
Subsection 5.02(h), the following
restrictions shall apply with respect to
the transfer and registration of
transfer of an Individual Certificate to a
transferee that takes delivery in the
form of an Individual Certificate:
(i) The Certificate Registrar shall register the transfer of
an Individual Certificate if the requested
transfer is being made to a
transferee who has provided the Certificate
Registrar with a Rule 144A
Certificate or comparable evidence as to
its QIB status.
(ii) The Certificate Registrar shall register the transfer of
any Individual Certificate if (x) the
transferor has advised the Certificate
Registrar in writing that the Certificate
is being transferred to an
Institutional Accredited Investor; and (y)
prior to the transfer the transferee
furnishes to the Certificate Registrar an
Investment Letter (and the Certificate
Registrar shall be fully protected in so
doing), provided that, if based upon an
Opinion of Counsel addressed to the
Certificate Registrar to the effect that the
delivery of (x) and (y) above are not
sufficient to confirm that the proposed
transfer is being made pursuant to an
exemption from, or in a transaction not
subject to, the registration requirements
of the Securities Act and other
applicable laws, the Certificate Registrar
shall as a condition of the
registration of any such transfer require
the transferor to furnish such other
certifications, legal opinions or other
information prior to registering the
transfer of an Individual Certificate as
shall be set forth in such Opinion of
Counsel.
(d) Subject to Subsection 5.02(h), so long as a Global Certificate
of
such Class is outstanding and is held by or
on behalf of the Depository,
transfers of beneficial interests in such
Global Certificate, or transfers by
holders of Individual Certificates of such
Class to transferees that take
delivery in the form of beneficial
interests in the Global Certificate, may be
made only in accordance with this
Subsection 5.02(d) and in accordance with the
rules of the Depository:
(i) In the case of a beneficial interest in the Global
Certificate being transferred to an
Institutional Accredited Investor, such
transferee shall be required to take
delivery in the form of an Individual
Certificate or Certificates and the
Certificate Registrar shall register such
transfer only upon compliance with the
provisions of Subsection 5.02(c)(ii).
(ii) In the case of a beneficial interest in a Class of Global
Certificates being transferred to a
transferee that takes delivery in the form
of an Individual Certificate or
Certificates of such Class, except as set forth
in clause (i) above, the Certificate
Registrar shall register such transfer only
upon compliance with the provisions of
Subsection 5.02(c)(i).
(iii) In the case of an Individual Certificate of a Class
being transferred to a transferee that
takes delivery in the form of a
beneficial interest in a Global Certificate
of such Class, the Certificate
Registrar shall register such transfer if
the transferee has provided the
Certificate Registrar with a Rule 144A
Certificate or comparable evidence as to
its QIB status.
(iv) No restrictions shall apply with respect to the transfer
or registration of transfer of a beneficial
interest in the Global Certificate
of a Class to a transferee that takes
delivery in the form of a beneficial
interest in the Global Certificate of such
Class; provided that each such
transferee shall be deemed to have made
such representations and warranties
contained in the Rule 144A Certificate as
are sufficient to establish that it is
a QIB.
(e) Subject to Subsection 5.02(h), an exchange of a beneficial
interest
in a Global Certificate of a Class for an
Individual Certificate or Certificates
of such Class, an exchange of an Individual
Certificate or Certificates of a
Class for a beneficial interest in the
Global Certificate of such Class and an
exchange of an Individual Certificate or
Certificates of a Class for another
Individual Certificate or Certificates of
such Class (in each case, whether or
not such exchange is made in anticipation
of subsequent transfer, and, in the
case of the Global Certificate of such
Class, so long as such Certificate is
outstanding and is held by or on behalf of
the Depository) may be made only in
accordance with this Subsection 5.02(e) and
in accordance with the rules of the
Depository:
(i) A holder of a beneficial interest in a Global Certificate
of a Class may at any time exchange such
beneficial interest for an Individual
Certificate or Certificates of such
Class.
(ii) A holder of an Individual Certificate or Certificates of
a Class may exchange such Certificate or
Certificates for a beneficial interest
in the Global Certificate of such Class if
such holder furnishes to the
Certificate Registrar a Rule 144A
Certificate or comparable evidence as to its
QIB status.
(iii) A holder of an Individual Certificate of a Class may
exchange such Certificate for an equal
aggregate principal amount of Individual
Certificates of such Class in different
authorized denominations without any
certification.
(f) (i) Upon acceptance for exchange or transfer of an
Individual
Certificate of a Class for a beneficial
interest in a Global Certificate of such
Class as provided herein, the Trustee shall
cancel such Individual Certificate
and shall (or shall request the Depository
to) endorse on the schedule affixed
to the applicable Global Certificate (or on
a continuation of such schedule
affixed to the Global Certificate and made
a part thereof) or otherwise make in
its books and records an appropriate
notation evidencing the date of such
exchange or transfer and an increase in the
certificate balance of the Global
Certificate equal to the certificate
balance of such Individual Certificate
exchanged or transferred therefor.
(ii) Upon ac
