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                                                                    EXHIBIT 10.2

                         P.F. CHANG'S CHINA BISTRO, INC.
                              AMENDED AND RESTATED
                             1998 STOCK OPTION PLAN

      1.    ESTABLISHMENT, PURPOSE AND TERM OF PLAN.

         1.1 ESTABLISHMENT. The P.F. Chang's China Bistro, Inc. 1998 Stock
Option Plan (the "PLAN") originally established effective as of the effective
date of the initial registration by the Company of its Stock under Section 12 of
the Exchange Act (the "EFFECTIVE DATE"), is hereby amended and restated
effective as of October 5, 2004.

         1.2 PURPOSE. The purpose of the Plan is to advance the interests of the
Participating Company Group and its stockholders by providing an incentive to
attract, retain and reward persons performing services for the Participating
Company Group and by motivating such persons to contribute to the growth and
profitability of the Participating Company Group.

         1.3 TERM OF PLAN. The Plan shall continue in effect until the earlier
of its termination by the Board or the date on which all of the shares of Stock
available for issuance under the Plan have been issued and all restrictions on
such shares under the terms of the Plan and the agreements evidencing Options
granted under the Plan have lapsed. However, all Incentive Stock Options shall
be granted, if at all, within ten (10) years from the earlier of the date the
Plan is adopted by the Board or the date the Plan is duly approved by the
stockholders of the Company.

      2.    DEFINITIONS AND CONSTRUCTION.

         2.1 DEFINITIONS. Whenever used herein, the following terms shall have
their respective meanings set forth below:

            (a) "BOARD" means the Board of Directors of the Company. If one or
more Committees have been appointed by the Board to administer the Plan, "BOARD"
also means such Committee(s).

            (b) "CODE" means the Internal Revenue Code of 1986, as amended, and
any applicable regulations promulgated thereunder.

            (c) "COMMITTEE" means the Compensation Committee or other committee
of the Board duly appointed to administer the Plan and having such powers as
shall be specified by the Board. Unless the powers of the Committee have been
specifically limited, the Committee shall have all of the powers of the Board
granted herein, including, without limitation, the power to amend or terminate
the Plan at any time, subject to the terms of the Plan and any applicable
limitations imposed by law.

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            (d) "COMPANY" means P.F. Chang's China Bistro, Inc., a Delaware
corporation, or any successor corporation thereto.

            (e) "CONSULTANT" means any person, including an advisor, engaged by
a Participating Company to render services other than as an Employee or a
Director.

            (f) "DIRECTOR" means a member of the Board or of the board of
directors of any other Participating Company.

            (g) "DISABILITY" means the permanent and total disability of the
Optionee within the meaning of Section 22(e)(3) of the Code.

            (h) "EMPLOYEE" means any person treated as an employee (including an
Officer or a Director who is also treated as an employee) in the records of a
Participating Company and, with respect to any Incentive Stock Option granted to
such person, who is an employee for purposes of Section 422 of the Code;
provided, however, that neither service as a Director nor payment of a
director's fee shall be sufficient to constitute employment for purposes of the
Plan. The Company shall determine in good faith and in the exercise of its
discretion whether an individual has become or has ceased to be an Employee and
the effective date of such individual's employment or termination of employment,
as the case may be. For purposes of an individual's rights, if any, under the
Plan as of the time of the Company's determination, all such determinations by
the Company shall be final, binding and conclusive, notwithstanding that the
Company or any governmental agency subsequently makes a contrary determination.

            (i) "EXCHANGE ACT" means the Securities Exchange Act of 1934, as
amended.

            (j) "FAIR MARKET VALUE" means, as of any date, the value of a share
of Stock or other property as determined by the Board, in its sole discretion,
or by the Company, in its sole discretion, if such determination is expressly
allocated to the Company herein, subject to the following:

                  (i) If, on such date, there is a public market for the Stock,
the Fair Market Value of a share of Stock shall be the closing price of a share
of Stock (or the mean of the closing bid and asked prices of a share of Stock if
the Stock is so quoted instead) as quoted on the Nasdaq National Market, the
Nasdaq Small-Cap Market or such other national or regional securities exchange
or market system constituting the primary market for the Stock, as reported in
the Wall Street Journal or such other source as the Company deems reliable. If
the relevant date does not fall on a day on which the Stock has traded on such
securities exchange or market system, the date on which the Fair Market Value
shall be established shall be the last day on which the Stock was so traded
prior to the relevant date, or such other appropriate day as shall be determined
by the Board, in its sole discretion.

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                        (ii) If, on such date, there is no public market for the
Stock, the Fair Market Value of a share of Stock shall be as determined by the
Board without regard to any restriction other than a restriction which, by its
terms, will never lapse.

            (k) "INCENTIVE STOCK OPTION" means an Option intended to be (as set
forth in the Option Agreement) and which qualifies as an incentive stock option
within the meaning of Section 422(b) of the Code.

            (l) "INSIDER" means an Officer or a Director of the Company or any
other person whose transactions in Stock are subject to Section 16 of the
Exchange Act.

            (m) "NONEMPLOYEE DIRECTOR" means a Director of the Company who is
not an Employee.

            (n) "NONEMPLOYEE DIRECTOR OPTION" means a right to purchase Stock
(subject to adjustment as provided in Section 4.2) granted to a Nonemployee
Director pursuant to the terms and conditions of the Plan. Nonemployee Director
Options shall be Nonstatutory Stock Options and shall be either an Initial
Option or an Annual Option as described in Section 7.

0            (o) "NONSTATUTORY STOCK OPTION" means an Option not intended to be
(as set forth in the Option Agreement) or which does not qualify as an Incentive
Stock Option.

            (p) "OFFICER" means any person designated by the Board as an officer
of the Company.

            (q) "OPTION" means a right to purchase Stock (subject to adjustment
as provided in Section 4.2) pursuant to the terms and conditions of the Plan,
including a Nonemployee Director Option. An Option may be either an Incentive
Stock Option or a Nonstatutory Stock Option.

            (r) "OPTION AGREEMENT" means a written agreement between the Company
and an Optionee setting forth the terms, conditions and restrictions of the
Option granted to the Optionee and any shares acquired upon the exercise
thereof.

            (s) "OPTIONEE" means a person who has been granted one or more
Options.

            (t) "PARENT CORPORATION" means any present or future "parent
corporation" of the Company, as defined in Section 424(e) of the Code.

            (u) "PARTICIPATING COMPANY" means the Company or any Parent
Corporation or Subsidiary Corporation.

            (v) "PARTICIPATING COMPANY GROUP" means, at any point in time, all
corporations collectively which are then Participating Companies.

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            (w) "PRIOR PLANS" means the Company's 1996 Stock Option Plan and
1997 Restaurant Management Stock Option Plan.

            (x) "RULE 16b-3" means Rule 16b-3 under the Exchange Act, as amended
from time to time, or any successor rule or regulation.

            (y) "SECTION 162(m)" means Section 162(m) of the Code.

            (z) "SECURITIES ACT" means the Securities Act of 1933, as amended.

            (aa) "SERVICE" means an Optionee's employment or service with the
Participating Company Group, whether in the capacity of an Employee, a Director
or a Consultant. An Optionee's Service shall not be deemed to have terminated
merely because of a change in the capacity in which the Optionee renders Service
to the Participating Company Group or a change in the Participating Company for
which the Optionee renders such Service, provided that there is no interruption
or termination of the Optionee's Service. Furthermore, an Optionee's Service
with the Participating Company Group shall not be deemed to have terminated if
the Optionee takes any military leave, sick leave, or other bona fide leave of
absence approved by the Company; provided, however, that if any such leave
exceeds ninety (90) days, on the ninety-first (91st) day of such leave any
Incentive Stock Option held by the Optionee shall cease to be treated as an
Incentive Stock Option and instead shall be treated thereafter as a Nonstatutory
Stock Option unless the Optionee's right to return to Service with the
Participating Company Group is guaranteed by statute or contract.
Notwithstanding the foregoing, unless otherwise designated by the Company or
required by law, a leave of absence shall not be treated as Service for purposes
of determining vesting under the Optionee's Option Agreement. An Optionee's
Service shall be deemed to have terminated either upon an actual termination of
Service or upon the corporation for which the Optionee performs Service ceasing
to be a Participating Company. Subject to the foregoing, the Company, in its
sole discretion, shall determine whether an Optionee's Service has terminated
and the effective date of such termination.

            (bb) "STOCK" means the common stock of the Company, as adjusted from
time to time in accordance with Section 4.2.

            (cc) "SUBSIDIARY CORPORATION" means any present or future
"subsidiary corporation" of the Company, as defined in Section 424(f) of the
Code.

            (dd) "TEN PERCENT OWNER OPTIONEE" means an Optionee who, at the time
an Option is granted to the Optionee, owns stock possessing more than ten
percent (10%) of the total combined voting power of all classes of stock of a
Participating Company within the meaning of Section 422(b)(6) of the Code.

         2.2 CONSTRUCTION. Captions and titles contained herein are for
convenience only and shall not affect the meaning or interpretation of any
provision of the Plan. Except when

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otherwise indicated by the context, the singular shall include the plural and
the plural shall include the singular. Use of the term "or" is not intended to
be exclusive, unless the context clearly requires otherwise.

      3.    ADMINISTRATION.

         3.1 ADMINISTRATION BY THE BOARD. The Plan shall be administered by the
Board. All questions of interpretation of the Plan or of any Option shall be
determined by the Board, and such determinations shall be final and binding upon
all persons having an interest in the Plan or such Option. Any Officer of a
Participating Company shall have the authority to act on behalf of the Company
with respect to any matter, right, obligation, determination or election which
is the responsibility of or which is allocated to the Company herein, provided
the Officer has apparent authority with respect to such matter, right,
obligation, determination or election.

         3.2 ADMINISTRATION WITH RESPECT TO INSIDERS. With respect to
participation by Insiders in the Plan, at any time that any class of equity
security of the Company is registered pursuant to Section 12 of the Exchange
Act, the Plan shall be administered in compliance with the requirements, if any,
of Rule 16b-3.

         3.3 COMMITTEE COMPLYING WITH SECTION 162(m). If a Participating Company
is a "publicly held corporation" within the meaning of Section 162(m), the Board
may establish a Committee of "outside directors" within the meaning of Section
162(m) to approve the grant of any Option which might reasonably be anticipated
to result in the payment of employee remuneration that would otherwise exceed
the limit on employee remuneration deductible for income tax purposes pursuant
to Section 162(m).

         3.4 POWERS OF THE BOARD. In addition to any other powers set forth in
the Plan and subject to the provisions of the Plan, the Board shall have the
full and final power and authority, in its sole discretion:

            (a) to determine the persons to whom, and the time or times at
which, Options shall be granted and the number of shares of Stock to be subject
to each Option;

            (b) to designate Options as Incentive Stock Options or Nonstatutory
Stock Options;

            (c) to determine the Fair Market Value of shares of Stock or other
property;

            (d) to determine the terms, conditions and restrictions applicable
to each Option (which need not be identical) and any shares acquired upon the
exercise thereof, including, without limitation, (i) the exercise price of the
Option, (ii) the method of payment for shares purchased upon the exercise of the
Option, (iii) the method for satisfaction of any tax withholding obligation
arising in connection with the Option or such shares, including by the
withholding or delivery of shares of stock, (iv) the timing, terms and
conditions of the

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exercisability of the Option or the vesting of any shares acquired upon the
exercise thereof, (v) the time of the expiration of the Option, (vi) the effect
of the Optionee's termination of Service with the Participating Company Group on
any of the foregoing, and (vii) all other terms, conditions and restrictions
applicable to the Option or such shares not inconsistent with the terms of the
Plan;

            (e) to approve one or more forms of Option Agreement;

            (f) to amend, modify, extend, cancel, renew, or grant a new Option
in substitution for, any Option or to waive any restrictions or conditions
applicable to any Option or any shares acquired upon the exercise thereof,
provided, however, that the Board shall not have the power to amend the exercise
price of an Option or grant a new Option in substitution for any Option solely
to change the exercise price of the original Option without the approval of a
majority of the Company's stockholders;

            (g) to accelerate, continue, extend or defer the exercisability of
any Option or the vesting of any shares acquired upon the exercise thereof,
including with respect to the period following an Optionee's termination of
Service with the Participating Company Group;

            (h) to prescribe, amend or rescind rules, guidelines and policies
relating to the Plan, or to adopt supplements to, or alternative versions of,
the Plan, including, without limitation, as the Board deems necessary or
desirable to comply with the laws of, or to accommodate the tax policy or custom
of, foreign jurisdictions whose citizens may be granted Options; and

            (i) to correct any defect, supply any omission or reconcile any
inconsistency in the Plan or any Option Agreement and to make all other
determinations and take such other actions with respect to the Plan or any
Option as the Board may deem advisable to the extent consistent with the Plan
and applicable law.

      4.    SHARES SUBJECT TO PLAN.

         4.1 MAXIMUM NUMBER OF SHARES ISSUABLE. Subject to adjustment as
provided in Section 4.2, the maximum aggregate number of shares of Stock that
may be issued under the Plan shall be Three Million Three Hundred Sixty Thousand
(3,360,000). The share reserve shall consist of authorized but unissued or
reacquired shares of Stock or any combination thereof. Notwithstanding the
foregoing, the share reserve, determined at any time, shall be reduced by the
number of shares subject to outstanding options granted pursuant to the Prior
Plans (the "PRIOR PLAN OPTIONS"). If an outstanding Option for any reason
expires or is terminated or canceled, or if shares of Stock acquired, subject to
repurchase, upon the exercise of an Option are repurchased by the Company, the
shares of Stock allocable to the unexercised portion of such Option or such
repurchased shares of Stock shall again be available for issuance under the
Plan.

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         4.2 ADJUSTMENTS FOR CHANGES IN CAPITAL STRUCTURE. In the event of any
stock dividend, stock split, reverse stock split, recapitalization, combination,
reclassification or similar change in the capital structure of the Company,
appropriate adjustments shall be made in the number and class of shares subject
to the Plan and to any outstanding Options, in the share limit set forth in
Section 3.4(h), in the Section 162(m) Grant Limit set forth in Section 5.4, to
the automatic Nonemployee Director Option grant provisions set forth in Section
7.1 and in the exercise price per share of any outstanding Options. If a
majority of the shares which are of the same class as the shares that are
subject to outstanding Options are exchanged for, converted into, or otherwise
become (whether or not pursuant to an Ownership Change Event, as defined in
Section 9.1) shares of another corporation (the "NEW SHARES"), the Board may
unilaterally amend the outstanding Options to provide that such Options are
exercisable for New Shares. In the event of any such amendment, the number of
shares subject to, and the exercise price per share of, the outstanding Options
shall be adjusted in a fair and equitable manner as determined by the Board, in
its sole discretion. Notwithstanding the foregoing, any fractional share
resulting from an adjustment pursuant to this Section 4.2 shall be rounded up or
down to the nearest whole number, as determined by the Board, and in no event
may the exercise price of any Option be decreased to an amount less than the par
value, if any, of the stock subject to the Option. The adjustments determined by
the Board pursuant to this Section 4.2 shall be final, binding and conclusive.

      5.    ELIGIBILITY AND OPTION LIMITATIONS.

         5.1 PERSONS ELIGIBLE FOR OPTIONS. Options may be granted only to
Employees, Consultants and Directors. For purposes of the foregoing sentence,
"Employees", "Consultants" and "Directors" shall include prospective Employees,
prospective Consultants and prospective Directors to whom Options are granted in
connection with written offers of employment or other service relationship with
the Participating Company Group. Eligible persons may be granted more than one
(1) Option.

         5.2 OPTION GRANT RESTRICTIONS. Any person who is not an Employee on the
effective date of the grant of an Option to such person may be granted only a
Nonstatutory Stock Option. An Incentive Stock Option granted to a prospective
Employee upon the condition that such person become an Employee shall be deemed
granted effective on the date such person commences Service as an Employee with
a Participating Company, with an exercise price determined as of such date in
accordance with Section 6.1. A Nonemployee Director Option may be granted only
to a person who at the time of grant is a Nonemployee Director.

         5.3 FAIR MARKET VALUE LIMITATION. To the extent that options designated
as Incentive Stock Options (granted under all stock option plans of the
Participating Company Group, including the Plan) become exercisable by an
Optionee for the first time during any calendar year for stock having an
aggregate Fair Market Value greater than One Hundred Thousand Dollars
($100,000), the portion of such options which exceeds such amount shall be
treated as Nonstatutory Stock Options. For purposes of this Section 5.3, options
designated as Incentive Stock Options shall be taken into account in the order
in which they were granted, and the Fair Market Value of stock shall be
determined as of the time the option with respect to such

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stock is granted. If the Code is amended to provide for a different limitation
from that set forth in this Section 5.3, such different limitation shall be
deemed incorporated herein effective as of the date and with respect to such
Options as required or permitted by such amendment to the Code. If an Option is
treated as an Incentive Stock Option in part and as a Nonstatutory Stock Option
in part by reason of the limitation set forth in this Section 5.3, the Optionee
may designate which portion of such Option the Optionee is exercising. In the
absence of such designation, the Optionee shall be deemed to have exercised the
Incentive Stock Option portion of the Option first. Separate certificates
representing each such portion shall be issued upon the exercise of the Option.

         5.4 SECTION 162(m) GRANT LIMIT. Subject to adjustment as provided in
Section 4.2, at any such time as a Participating Company is a "publicly held
corporation" within the meaning of Section 162(m), no Employee shall be granted
one or more Options within any fiscal year of the Company which in the aggregate
are for the purchase of more than One Hundred Fifty Thousand (150,000) shares of
Stock (the "SECTION 162(m) GRANT LIMIT"). An Option which is canceled in the
same fiscal year of the Company in which it was granted shall continue to be
counted against the Section 162(m) Grant Limit for such period.

      6.    TERMS AND CONDITIONS OF OPTIONS.

            Options shall be evidenced by Option Agreements specifying the
number of shares of Stock covered thereby, in such form as the Board shall from
time to time establish. No Option or purported Option shall be a valid and
binding obligation of the Company unless evidenced by a fully executed Option
Agreement. Option Agreements may incorporate all or any of the terms of the Plan
by reference and, except as otherwise set forth in Section 7 with respect to
Nonemployee Director Options, shall comply with and be subject to the following
terms and conditions:

         6.1 EXERCISE PRICE. The exercise price for each Option shall be
established in the sole discretion of the Board; provided, however, that (a) the
exercise price per share for an Incentive Stock Option or a Nonstatutory Stock
Option shall be not less than the Fair Market Value of a share of stock on the
effective date of grant of the Option, and (b) no Incentive Stock Option granted
to a Ten Percent Owner Optionee shall have an exercise price per share less than
one hundred ten percent (110%) of the Fair Market Value of a share of Stock on
the effective date of grant of the Option. Notwithstanding the foregoing, an
Option (whether an Incentive Stock Option or a Nonstatutory Stock Option) may be
granted with an exercise price lower than the minimum exercise price set forth
above if such Option is granted pursuant to an assumption or substitution for
another option in a manner qualifying under the provisions of Section 424(a) of
the Code.

         6.2 EXERCISE PERIOD. Options shall be exercisable at such time or
times, or upon such event or events, and subject to such terms, conditions,
performance criteria, and restrictions as shall be determined by the Board and
set forth in the Option Agreement evidencing such Option; provided, however,
that (a) no Incentive Stock Option shall be exercisable after the expiration of
ten (10) years after the effective date of grant of such Option,

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(b) no Incentive Stock Option granted to a Ten Percent Owner Optionee shall be
exercisable after the expiration of five (5) years after the effective date of
grant of such Option, and (c) no Option granted to a prospective Employee,
prospective Consultant or prospective Director may become exercisable prior to
the date on which such person commences Service with a Participating Company.
Subject to the foregoing, unless otherwise specified by the Board in the grant
of an Option, any Option granted hereunder shall have a term of ten (10) years
from the effective date of the grant of the Option.

      6.3   PAYMENT OF EXERCISE PRICE.

            (a) FORMS OF CONSIDERATION AUTHORIZED. Except as otherwise provided
below, payment of the exercise price for the number of shares of Stock being
purchased pursuant to any Option shall be made (i) in cash, by check, or cash
equivalent, (ii) by tender to the Company of shares of Stock owned by the
Optionee having a Fair Market Value (as determined by the Company without regard
to any restrictions on transferability applicable to such stock by reason of
federal or state securities laws or agreements with an underwriter for the
Company) not less than the exercise price, (iii) by the assignment of the
proceeds of a sale or loan with respect to some or all of the shares being
acquired upon the exercise of the Option (including, without limitation, through
an exercise complying with the provisions of Regulation T as promulgated from
time to time by the Board of Governors of the Federal Reserve System) (a
"CASHLESS EXERCISE"), (iv) provided that the Optionee is an Employee, an not an
Officer (unless otherwise not prohibited by law, including without limitation,
any regulation promulgated by the Board of Governors of the Federal Reserve
System) and in the Company's sole and absolute discretion at the time the Option
is exercised, by delivery of the Optionee's promissory note in a form approved
by the Company for the aggregate exercise price, provided that, if the Company
is incorporated in the State of Delaware, the Participant shall pay in cash that
portion of the aggregate exercise price not less than the par value of the
shares being acquired, (v) by such other consideration as may be approved by the
Board from time to time to the extent permitted by applicable law, or (vi) by
any combination thereof. The Board may at any time or from time to time, by
adoption of or by amendment to the standard forms of Option Agreement described
in Section 8, or by other means, grant Options which do not permit all of the
foregoing forms of consideration to be used in payment of the exercise price or
which otherwise restrict one or more forms of consideration.

            (b) TENDER OF STOCK. Notwithstanding the foregoing, an Option may
not be exercised by tender to the Company of shares of Stock to the extent such
tender of Stock would constitute a violation of the provisions of any law,
regulation or agreement restricting the redemption of the Company's stock.
Unless otherwise provided by the Board, an Option may not be exercised by tender
to the Company of shares of Stock unless such shares either have been owned by
the Optionee for more than six (6) months or were not acquired, directly or
indirectly, from the Company.

            (c) CASHLESS EXERCISE. The Company reserves, at any and all times,
the right, in the Company's sole and absolute discretion, to establish, decline
to approve or

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terminate any program or procedures for the exercise of Options by means of a
Cashless Exercise.

            (d) PAYMENT BY PROMISSORY NOTE. No promissory note shall be
permitted if the exercise of an Option using a promissory note would be a
violation of any law. Any permitted promissory note shall be on such terms as
the Board shall determine at the time the Option is granted. The Board shall
have the authority to permit or require the Optionee to secure any promissory
note used to exercise an Option with the shares of Stock acquired upon the
exercise of the Option or with other collateral acceptable to the Company.
Unless otherwise provided by the Board, if the Company at any time is subject to
the regulations promulgated by the Board of Governors of the Federal Reserve
System or any other governmental entity affecting the extension of credit in
connection with the Company's securities, any promissory note shall comply with
such applicable regulations, and the Optionee shall pay the unpaid principal and
accrued interest, if any, to the extent necessary to comply with such applicable
regulations.

         6.4 TAX WITHHOLDING. The Company shall have the right, but not the
obligation, to deduct from the shares of Stock issuable upon the exercise of an
Option, or to accept from the Optionee the tender of, a number of whole shares
of Stock having a Fair Market Value, as determined by the Company, equal to all
or any part of the federal, state, local and foreign taxes, if any, required by
law to be withheld by the Participating Company Group with respect to such
Option or the shares acquired upon the exercise thereof. Alternatively or in
addition, in its sole discretion, the Company shall have the right to require
the Optionee, through payroll withholding, cash payment or otherwise, including
by means of a Cashless Exercise, to make adequate provision for any such tax
withholding obligations of the Participating Company Group arising in connection
with the Option or the shares acquired upon the exercise thereof. The Company
shall have no obligation to deliver shares of Stock until the Participating
Company Group's tax withholding obligations have been satisfied by the Optionee.

         6.5 EFFECT OF TERMINATION OF SERVICE.

            (a) OPTION EXERCISABILITY. Subject to earlier termination of the
Option as otherwise provided herein, an Option shall be exercisable after an
Optionee's termination of Service as follows:

                        (i) DISABILITY. If the Optionee's Service with the
Participating Company Group is terminated because of the Disability of the
Optionee, the Option, to the extent unexercised and exercisable on the date on
which the Optionee's Service terminated, may be exercised by the Optionee (or
the Optionee's guardian or legal representative) at any time prior to the
expiration of twelve (12) months (or such longer or shorter period of time as
determined by the Board, in its sole discretion) after the date on which the
Optionee's Service terminated, but in any event no later than the date of
expiration of the Option's term as set forth in the Option Agreement evidencing
such Option (the "OPTION EXPIRATION DATE").

                        (ii) DEATH. If the Optionee's Service with the
Participating Company Group is terminated because of the death of the Optionee,
the Option, to the extent

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unexercised and exercisable on the date on which the Optionee's Service
terminated, may be exercised by the Optionee's legal representative or other
person who acquired the right to exercise the Option by reason of the Optionee's
death at any time prior to the expiration of twelve (12) months (or such longer
or shorter period of time as determined by the Board, in its sole discretion)
after the date on which the Optionee's Service terminated, but in any event no
later than the Option Expiration Date. The Optionee's Service shall be deemed to
have terminated on account of death if the Optionee dies within three (3) months
after the Optionee's termination of Service.

                        (iii) OTHER TERMINATION OF SERVICE. If the Optionee's
Service with the Participating Company Group terminates for any reason, except
Disability, death or Cause, as provided in Section 6.5(d) below, the Option, to
the extent unexercised and exercisable by the Optionee on the date on which the
Optionee's Service terminated, may be exercised by the Optionee within three (3)
months (or such longer or shorter period of time as determined by the Board, in
its sole discretion) after the date on which the Optionee's Service terminated,
but in any event no later than the Option Expiration Date.

            (b) EXTENSION IF EXERCISE PREVENTED BY LAW. Notwithstanding the
foregoing, if the exercise of an Option within the applicable time periods set
forth in Section 6.5(a) is prevented by the provisions of Section 12 below, the
Option shall remain exercisable until three (3) months after the date the
Optionee is notified by the Company that the Option is exercisable, but in any
event no later than the Option Expiration Date.

            (c) EXTENSION IF OPTIONEE SUBJECT TO SECTION 16(b). Notwithstanding
the foregoing, if a sale within the applicable time periods set forth in Section
6.5(a) of shares acquired upon the exercise of the Option would subject the
Optionee to suit under Section 16(b) of the Exchange Act, the Option shall
remain exercisable until the earliest to occur of (i) the tenth (10th) day
following the date on which a sale of such shares by the Optionee would no
longer be subject to such suit, (ii) the one hundred and ninetieth (190th) day
after the Optionee's termination of Service, or (iii) the Option Expiration
Date.

            (d) TERMINATION FOR CAUSE. Except as otherwise provided in a
contract of employment or service between a Participating Company and an
Optionee, and notwithstanding any other provision of the Plan to the contrary,
if the Optionee's Service with the Participating Company Group is terminated for
Cause as defined below, the Option shall terminate and cease to be exercisable
immediately upon such termination of Service. For purposes of this Section
6.5(d), "CAUSE" shall mean any of the following: (1) the Optionee's theft,
dishonesty, or falsification of any Participating Company documents or records;
(2) the Optionee's improper use or disclosure of a Participating Company's
confidential or proprietary information; (3) any action by the Optionee which
has a detrimental effect on a Participating Company's reputation or business;
(4) the Optionee's failure or inability to perform any reasonable assigned
duties after written notice from the Participating Company Group of, and a
reasonable opportunity to cure, such failure or inability; (5) any material
breach by the Optionee of any agreement of employment or service between the
Optionee and the Participating Company Group, which breach is not cured pursuant
to the terms of such agreement; or (6) the Optionee's

                                       11
<PAGE>

conviction (including any plea of guilty or nolo contendere) of any criminal act
which impairs the Optionee's ability to perform his or her duties with the
Participating Company Group. A determination by the Board that the Optionee was
terminated for Cause shall be final and binding upon the Optionee for all
purposes and shall not be subject to review by any governmental agency or court
of law.

                                       12
<PAGE>

      7.    TERMS AND CONDITIONS OF NONEMPLOYEE DIRECTOR OPTIONS.

         Nonemployee Director Options shall be evidenced by Option Agreements
specifying the number of shares of Stock covered thereby, in such form as the
Board shall from time to time establish. Such Option Agreements may incorporate
all or any of the terms of the Plan by reference and shall comply with and be
subject to the following terms and conditions:

         7.1 AUTOMATIC GRANT. Subject to the execution by a Nonemployee Director
of an appropriate Option Agreement, Nonemployee Director Options shall be
granted automatically and without further action of the Board, as follows:

            (a) INITIAL OPTION. Each person who first becomes a Nonemployee
Director on or after the Effective Date shall be granted on the date such person
first becomes a Nonemployee Director a Nonemployee Director Option to purchase
thirty thousand (30,000) shares of Stock (an "INITIAL OPTION"); provided,
however, that an Initial Option shall not be granted to a Director who
previously did not qualify as a Nonemployee Director but subsequently becomes a
Nonemployee Director as a result of the termination of his or her status as an
Employee.

            (b) ANNUAL OPTION. Each Nonemployee Director (including any Director
who previously did not qualify as a Nonemployee Director but who subsequently
becomes a Nonemployee Director) shall be granted on the date immediately
following each annual meeting of the stockholders of the Company which occurs on
or after the Effective Date (an "ANNUAL MEETING") a Nonemployee Director Option
to purchase fifteen thousand (15,000) shares of Stock (an "ANNUAL OPTION");
provided, however, that a Nonemployee Director granted an Initial Option on the
date of an Annual Meeting shall not be granted an Annual Option pursuant to this
Section on the date immediately following the same Annual Meeting.

            (c) RIGHT TO DECLINE NONEMPLOYEE DIRECTOR OPTION. Notwithstanding
the foregoing, any person may elect not to receive a Nonemployee Director Option
by delivering written notice of such election to the Board no later than the day
prior to the date such Nonemployee Director Option would otherwise be granted. A
person so declining a Nonemployee Director Option shall receive no payment or
other consideration in lieu of such declined Nonemployee Director Option. A
person who has declined a Nonemployee Director Option may revoke such election
by delivering written notice of such revocation to the Board no later than the
day prior to the date such Nonemployee Director Option would be granted pursuant
to Section 7.1(a) or (b), as the case may be.

         7.2 EXERCISE PRICE. The exercise price per share of Stock subject to a
Nonemployee Director Option shall be the Fair Market Value of a share of Stock
on the date the Nonemployee Director Option is granted.

         7.3 EXERCISE PERIOD. Each Nonemployee Director Option shall terminate
and cease to be exercisable on the date ten (10) years after the date of grant
of the Nonemployee

                                       13
<PAGE>

Director Option unless earlier terminated pursuant to the terms of the Plan or
the Option Agreement.

         7.4 RIGHT TO EXERCISE NONEMPLOYEE DIRECTOR OPTIONS. Except as otherwise
provided in an Option Agreement:

            (a) INITIAL OPTION. One-fifth (1/5) of the shares subject to an
Initial Option shall become vested and exercisable on the first anniversary of
the date on which such Initial Option was granted, and the remaining shares
shall vest in equal monthly installments over the following 48 months, provided
that the Optionee's Service has not terminated prior to the relevant date.

            (b) ANNUAL OPTION. One hundred percent (100%) of the shares subject
to an Annual Option shall be vested and exercisable on the date on which such
Annual Option was granted.

         7.5 EFFECT OF TERMINATION OF SERVICE ON NONEMPLOYEE DIRECTOR OPTIONS.

            (a) OPTION EXERCISABILITY. Subject to earlier termination of the
Nonemployee Director Option as otherwise provided herein, a Nonemployee Director
Option shall be exercisable after an Optionee's termination of Service as
follows:

                  (i) DISABILITY. If the Optionee's Service with the
Participating Company Group is terminated because of the Disability of the
Optionee, the Nonemployee Director Option, to the extent unexercised and
exercisable on the date on which the Optionee's Service terminated, may be
exercised by the Optionee (or the Optionee's guardian or legal representative)
at any time prior to the expiration of twelve (12) months after the date on
which the Optionee's Service terminated, but in any event no later than the date
of expiration of the Option Expiration Date.

                  (ii) DEATH. If the Optionee's Service with the Participating
Company Group is terminated because of the death of the Optionee, the
Nonemployee Director Option, to the extent unexercised and exercisable on the
date on which the Optionee's Service terminated, may be exercised by the
Optionee's legal representative or other person who acquired the right to
exercise the Nonemployee Director Option by reason of the Optionee's death at
any time prior to the expiration of twelve (12) months after the date on which
the Optionee's Service terminated, but in any event no later than the Option
Expiration Date. The Optionee's Service shall be deemed to have terminated on
account of death if the Optionee dies within six (6) months after the Optionee's
termination of Service.

                  (iii) OTHER TERMINATION OF SERVICE. If the Optionee's Service
with the Participating Company Group terminates for any reason, except
Disability or death, the Nonemployee Director Option, to the extent unexercised
and exercisable by the Optionee on the date on which the Optionee's Service
terminated, may be exercised by the Optionee within six

                                       14
<PAGE>

(6) months after the date on which the Optionee's Service terminated, but in any
event no later than the Option Expiration Date.

            (b) EXTENSION IF EXERCISE PREVENTED BY LAW. Notwithstanding the
foregoing, if the exercise of a Nonemployee Director Option within the
applicable time periods set forth in Section 7.5(a) is prevented by the
provisions of Section 12 below, the Nonemployee Director Option shall remain
exercisable until three (3) months after the date the Optionee is notified by
the Company that the Nonemployee Director Option is exercisable, but in any
event no later than the Option Expiration Date.

            (c) EXTENSION IF OPTIONEE SUBJECT TO SECTION 16(b). Notwithstanding
the foregoing, if a sale within the applicable time periods set forth in Section
7.5(a) of shares acquired upon the exercise of the Nonemployee Director Option
would subject the Optionee to suit under Section 16(b) of the Exchange Act, the
Nonemployee Director Option shall remain exercisable until the earliest to occur
of (i) the tenth (10th) day following the date on which a sale of such shares by
the Optionee would no longer be subject to such suit, (ii) the one hundred and
ninetieth (190th) day after the Optionee's termination of Service, or (iii) the
Option Expiration Date.

      8.    STANDARD FORMS OF OPTION AGREEMENT.

            8.1 INCENTIVE STOCK OPTIONS. Unless otherwise provided by the
Board at the time the Option is granted, an Option designated as an "Incentive
Stock Option" shall comply with and be subject to the terms and conditions set
forth in the appropriate form of Incentive Stock Option Agreement adopted by the
Board concurrently with its adoption of the Plan and as amended from time to
time.

            8.2 NONSTATUTORY STOCK OPTIONS (OTHER THAN NONEMPLOYEE DIRECTOR
OPTION). Unless otherwise provided by the Board at the time the Option is
granted, an Option designated as a "Nonstatutory Stock Option" (other than a
Nonemployee Director Option) shall comply with and be subject to the terms and
conditions set forth in the appropriate form of Nonstatutory Stock Option
Agreement adopted by the Board concurrently with its adoption of the Plan and as
amended from time to time.

            8.3 NONEMPLOYEE DIRECTOR OPTION. Each Nonemployee Director Option
shall comply with and be subject to the terms and conditions set forth in the
appropriate form of Nonstatutory Stock Option Agreement (Nonemployee Director
Option) adopted by the Board concurrently with its adoption of the Plan and as
amended from time to time.

            8.4 AUTHORITY TO VARY TERMS. The Board shall have the authority from
time to time to vary the terms of any of the standard forms of Option Agreement
described in this Section 8 either in connection with the grant or amendment of
an individual Option or in connection with the authorization of a new standard
form or forms; provided, however, that the terms and conditions of any such new,
revised or amended standard form or forms of Option Agreement are not
inconsistent with the terms of the Plan.

                                       15
<PAGE>

      9.    CHANGE IN CONTROL.

            9.1 DEFINITIONS. Except as otherwise determined by the Board and set
forth in an Option Agreement, the following terms shall have their respective
meanings set forth below:

            (a) An "OWNERSHIP CHANGE EVENT" shall be deemed to have occurred if
any of the following occurs with respect to the Company:

                  (i) the direct or indirect sale or exchange in a single or
series of related transactions by the stockholders of the Company of more than
fifty percent (50%) of the voting stock of the Company;

                  (ii) a merger or consolidation in which the Company is a
party;

                  (iii) the sale, exchange, or transfer of all or substantially
all of the assets of the Company; or

                  (iv) a liquidation or dissolution of the Company.

            (b) A "CHANGE IN CONTROL" shall mean an Ownership Change Event or a
series of related Ownership Change Events (collectively, the "TRANSACTION")
wherein the stockholders of the Company immediately before the Transaction do
not retain immediately after the Transaction, in substantially the same
proportions as their ownership of shares of the Company's voting stock
immediately before the Transaction, direct or indirect beneficial ownership of
more than fifty percent (50%) of the total combined voting power of the
outstanding voting stock of the Company or the corporation or corporations to
which the assets of the Company were transferred (the "TRANSFEREE
CORPORATION(S)"), as the case may be. For purposes of the preceding sentence,
indirect beneficial ownership shall include, without limitation, an interest
resulting from ownership of the voting stock of one or more corporations which,
as a result of the Transaction, own the Company or the Transferee
Corporation(s), as the case may be, either directly or through one or more
subsidiary corporations. The Board shall have the right to determine whether
multiple sales or exchanges of the voting stock of the Company or multiple
Ownership Change Events are related, and its determination shall be final,
binding and conclusive.

            9.2 EFFECT OF CHANGE IN CONTROL ON OPTIONS. In the event of a Change
in Control, each holder of an unexercisable or unvested outstanding Option shall
be credited with an additional two (2) years of Service as of the date ten (10)
days prior to the date of the Change in Control, solely for the purpose of
determining the number of exercisable and vested shares of Stock subject to the
Option. The exercise or vesting of any Option that was permissible solely by
reason of this Section shall be conditioned upon the consummation of the Change
in Control. In addition, the surviving, continuing, successor, or purchasing
corporation or parent corporation thereof, as the case may be (the "ACQUIRING
CORPORATION"), may either assume the Company's rights and obligations under
outstanding Options or substitute for outstanding Options

                                       16
<PAGE>

substantially equivalent options for the Acquiring Corporation's stock. For
purposes of this Section 9.2, an Option shall be deemed assumed if, following
the Change in Control, the Option confers the right to purchase in accordance
with its terms and conditions, for each share of Stock subject to the Option
immediately prior to the Change in Control, the consideration (whether stock,
cash or other securities or property) to which a holder of a share of Stock on
the effective date of the Change in Control was entitled. Any Options which are
neither assumed or substituted for by the Acquiring Corporation in connection
with the Change in Control nor exercised as of the date of the Change in Control
shall terminate and cease to be outstanding effective as of the date of the
Change in Control. Notwithstanding the foregoing, if the corporation the stock
of which is subject to the outstanding Options immediately prior to an Ownership
Change Event described in Section 9.1(a)(i) constituting a Change in Control is
the surviving or continuing corporation and immediately after such Ownership
Change Event less than fifty percent (50%) of the total combined voting power of
its voting stock is held by another corporation or by other corporations that
are members of an affiliated group within the meaning of Section 1504(a) of the
Code without regard to the provisions of Section 1504(b) of the Code, the
outstanding Options shall not terminate unless the Board otherwise provides in
its sole discretion.

            9.3 NOTICE. The Company shall provide notice of a Change in Control
to all holders of outstanding Options at least ten (10) days prior to the
consummation of the Change in Control. The Company's notice shall summarize the
principal terms of the Change in Control, including, without limitation, whether
the Acquiring Corporation is assuming the outstanding Options or substituting
equivalent options therefor.

      10.   PROVISION OF INFORMATION.

            Each Optionee shall be given access to information concerning the
Company equivalent to that information generally made available to the Company's
common stockholders.

      11.   TRANSFERABILITY OF OPTIONS.

            During the lifetime of the Optionee, an Option shall be exercisable
only by the Optionee or the Optionee's guardian or legal representative. No
Option shall be assignable or transferable by the Optionee, except by will or by
the laws of descent and distribution. Notwithstanding the foregoing, a
Nonstatutory Stock Option shall be assignable or transferable to the extent
permitted by the Board and set forth in the Option Agreement evidencing such
Option.

      12.   COMPLIANCE WITH SECURITIES LAW.

            The grant of Options and the issuance of shares of Stock upon
exercise of Options shall be subject to compliance with all applicable
requirements of federal, state or foreign law with respect to such securities.
Options may not be exercised if the issuance of shares of Stock upon exercise
would constitute a violation of any applicable federal, state or foreign
securities laws or other law or regulations or the requirements of any stock
exchange or market system upon which the Stock may then be listed. In addition,
no Option may be exercised unless (a) a

                                       17
<PAGE>

registration statement under the Securities Act shall at the time of exercise of
the Option be in effect with respect to the shares issuable upon exercise of the
Option or (b) in the opinion of legal counsel to the Company, the shares
issuable upon exercise of the Option may be issued in accordance with the terms
of an applicable exemption from the registration requirements of the Securities
Act. The inability of the Company to obtain from any regulatory body having
jurisdiction the authority, if any, deemed by the Company's legal counsel to be
necessary to the lawful issuance and sale of any shares hereunder shall relieve
the Company of any liability in respect of the failure to issue or sell such
shares as to which such requisite authority shall not have been obtained. As a
condition to the exercise of any Option, the Company may require the Optionee to
satisfy any qualifications that may be necessary or appropriate, to evidence
compliance with any applicable law or regulation and to make any representation
or warranty with respect thereto as may be requested by the Company.

      13.   INDEMNIFICATION.

            In addition to such other rights of indemnification as they may have
as members of the Board or Officers or Employees of the Participating Company
Group, members of the Board and any Officers or Employees of the Participating
Company Group to whom authority to act for the Board or the Company is delegated
shall be indemnified by the Company against all reasonable expenses, including
attorneys' fees, actually and necessarily incurred in connection with the
defense of any action, suit or proceeding, or in connection with any appeal
therein, to which they or any of them may be a party by reason of any action
taken or failure to act under or in connection with the Plan, or any right
granted hereunder, and against all amounts paid by them in settlement thereof
(provided such settlement is approved by independent legal counsel selected by
the Company) or paid by them in satisfaction of a judgment in any such action,
suit or proceeding, except in relation to matters as to which it shall be
adjudged in such action, suit or proceeding that such person is liable for gross
negligence, bad faith or intentional misconduct in duties; provided, however,
that within sixty (60) days after the institution of such action, suit or
proceeding, such person shall offer to the Company, in writing, the opportunity
at its own expense to handle and defend the same.

      14.   TERMINATION OR AMENDMENT OF PLAN.

            The Board may terminate or amend the Plan at any time. However,
subject to changes in applicable law, regulations or rules that would permit
otherwise, without the approval of the Company's stockholders, there shall be
(a) no increase in the maximum aggregate number of shares of Stock that may be
issued under the Plan (except by operation of the provisions of Section 4.2),
(b) no change in the class of persons eligible to receive Incentive Stock
Options, and (c) no other amendment of the Plan that would require approval of
the Company's stockholders under any applicable law, regulation or rule. In any
event, no termination or amendment of the Plan may adversely affect any then
outstanding Option or any unexercised portion thereof, without the consent of
the Optionee, unless such termination or amendment is required to enable an
Option designated as an Incentive Stock Option to qualify as an Incentive Stock
Option or is necessary to comply with any applicable law, regulation or rule.

                                       18
<PAGE>

      IN WITNESS WHEREOF, the undersigned Secretary of the Company certifies
that the foregoing P.F. Chang's China Bistro, Inc. Amended and Restated 1998
Stock Option Plan was duly adopted by the Board on __________, 2004.

                                                       /s/ Kristina C. Cashman
                                                       -------------------------
                                                       Kristina C. Cashman

                                       19
<PAGE>

                              SHARE RESERVE HISTORY

December 3, 1998         Board and stockholders approve Plan, with an initial
                         reserve of 280,000 (post-split) shares.

March 24, 2000           Board approves amendment to Plan to increase share
                         reserve by 400,000, from 280,000 to 680,000

April 26, 2000           Stockholders approve amendment to Plan to increase
                         share reserve by 400,000, from 280,000 to 680,000

December 12, 2001        Board approves amendment to Plan to increase share
                         reserve by 500,000, from 680,000 to 1,180,000

April 3, 2002            Stockholders approve amendment to Plan to increase
                         share reserve by 500,000, from 680,000 to 1,180,000

May 1, 2002              Board declares a 1:1 dividend which has the effect of
                         doubling the share reserve, from 1,180,000 to 2,360,000

March 26, 2004           Board approves amendment to Plan to increase share
                         reserve by 1,000,000, from 2,360,000 to 3,360,000

April 23, 2004           Stockholders approve amendment to Plan to increase
                         share reserve by 1,000,000, from 2,360,000 to 3,360,000

October 5, 2004          Board approves amendment to Plan to restrict the use
                         promissory notes when exercising stock options to
                         non-officer employees

                                       20
<PAGE>
                         P.F. CHANG'S CHINA BISTRO, INC.
                       NONSTATUTORY STOCK OPTION AGREEMENT
                             (NONEMPLOYEE DIRECTOR)

         THIS NONSTATUTORY STOCK OPTION AGREEMENT (the "OPTION AGREEMENT") is
made and entered into as of the Date of Option Grant by and between P.F. Chang's
China Bistro, Inc. and ___________________________ (the "OPTIONEE").

         The Company has granted to the Optionee pursuant to the P.F. Chang's
China Bistro, Inc. 1998 Stock Option Plan (the "PLAN") an option to purchase
certain shares of Stock, upon the terms and conditions set forth in this Option
Agreement (the "OPTION").

         1.   DEFINITIONS AND CONSTRUCTION.

              1.1. DEFINITIONS. Whenever used herein, the following terms shall
have their respective meanings set forth below:

                   (a) "DATE OF OPTION GRANT" means ___________________ , 199 __
..

                   (b) "NUMBER OF OPTION SHARES" means __________________ shares
of Stock, as adjusted from time to time pursuant to Section 9.

                   (c) "EXERCISE PRICE" means $ ______________ per share of
Stock, as adjusted from time to time pursuant to Section 9.

                   (d) "OPTION EXPIRATION DATE" means the date ten (10) years
after the Date of Option Grant.

                   (e) "VESTED RATIO" means, on any relevant date, the ratio
determined as follows:

<TABLE>
<CAPTION>
                                                              Vested Ratio
                                                              ------------

<S>                                                           <C>
              Prior to Initial Vesting Date                         0

              On Initial Vesting Date, provided the
              Optionee's Service has not terminated
              prior to such date                                  1/5

              Plus:

              For each full month of the Optionee's
              continuous Service from the Initial
              Vesting Date until the Vested Ratio
              equals 1/1, an additional                           1/60
</TABLE>

                                       1
<PAGE>
                   (f) "BOARD" means the Board of Directors of the Company. If
one or more Committees have been appointed by the Board to administer the Plan,
"Board" shall also mean such Committee(s).

                   (g) "CODE" means the Internal Revenue Code of 1986, as
amended, and any applicable regulations promulgated thereunder.

                   (h) "COMMITTEE" means the Compensation Committee or other
committee of the Board duly appointed to administer the Plan and having such
powers as shall be specified by the Board. Unless the powers of the Committee
have been specifically limited, the Committee shall have all of the powers of
the Board granted in the Plan, including, without limitation, the power to amend
or terminate the Plan at any time, subject to the terms of the Plan and any
applicable limitations imposed by law.

                   (i) "COMPANY" means P.F. Chang's China Bistro, Inc., a
Delaware corporation, or any successor corporation thereto.

                   (j) "CONSULTANT" means any person, including an advisor,
engaged by a Participating Company to render services other than as an Employee
or a Director.

                   (k) "DIRECTOR" means a member of the Board or of the board of
directors of any other Participating Company.

                   (l) "DISABILITY" means the permanent and total disability of
the Optionee within the meaning of Section 22(e)(3) of the Code.

                   (m) "EMPLOYEE" means any person treated as an employee
(including an officer or a Director who is also treated as an employee) in the
records of a Participating Company and who is an employee for purposes of
Section 422 of the Code; provided, however, that neither service as a Director
nor payment of a director's fee shall be sufficient to constitute employment for
this purpose. The Company shall determine in good faith and in the exercise of
its discretion whether an individual has become or has ceased to be an Employee
and the effective date of such individual's employment or termination of
employment, as the case may be. For purposes of an individual's rights, if any,
under the Plan as of the time of the Company's determination, all such
determinations by the Company shall be final, binding and conclusive,
notwithstanding that the Company or any governmental agency subsequently makes a
contrary determination.

                   (n) "EXCHANGE ACT" means the Securities Exchange Act of 1934,
as amended.

                   (o) "FAIR MARKET VALUE" means, as of any date, the value of a
share of stock or other property as determined by the Board, in its sole
discretion, or by the Company, in its sole discretion, if such determination is
expressly allocated to the Company herein, subject to the following:

                                       2
<PAGE>
                        (i)  If, on such date, there is a public market for the
Stock, the Fair Market Value of a share of Stock shall be the closing price of a
share of Stock (or the mean of the closing bid and asked prices of a share of
Stock if the Stock is so quoted instead) as quoted on the Nasdaq National
Market, the Nasdaq Small-Cap Market or such other national or regional
securities exchange or market system constituting the primary market for the
Stock, as reported in the Wall Street Journal or such other source as the
Company deems reliable. If the relevant date does not fall on a day on which the
Stock has traded on such securities exchange or market system, the date on which
the Fair Market Value shall be established shall be the last day on which the
Stock was so traded prior to the relevant date, or such other appropriate day as
shall be determined by the Board, in its sole discretion.

                        (ii) If, on such date, there is no public market for the
Stock, the Fair Market Value of a share of Stock shall be as determined by the
Board without regard to any restriction other than a restriction which, by its
terms, will never lapse.

                   (p)  "PARENT CORPORATION" means any present or future "parent
corporation" of the Company, as defined in Section 424(e) of the Code.

                   (q)  "PARTICIPATING COMPANY" means the Company or any Parent
Corporation or Subsidiary Corporation.

                   (r)  "PARTICIPATING COMPANY GROUP" means, at any point in
time, all corporations collectively which are then Participating Companies.

                   (s)  "SECURITIES ACT" means the Securities Act of 1933, as
amended.

                   (t)  "SERVICE" means the Optionee's employment or service
with the Participating Company Group, whether in the capacity of an Employee, a
Director or a Consultant. The Optionee's Service shall not be deemed to have
terminated merely because of a change in the capacity in which the Optionee
renders Service to the Participating Company Group or a change in the
Participating Company for which the Optionee renders such Service, provided that
there is no interruption or termination of the Optionee's Service.
Notwithstanding the foregoing, unless otherwise designated by the Company or
required by law, a leave of absence shall not be treated as Service for purposes
of determining the Vested Ratio. The Optionee's Service shall be deemed to have
terminated either upon an actual termination of Service or upon the corporation
for which the Optionee performs Service ceasing to be a Participating Company.
Subject to the foregoing, the Company, in its sole discretion, shall determine
whether the Optionee's Service has terminated and the effective date of such
termination.

                   (u)  "STOCK" means the common stock of the Company, as
adjusted from time to time in accordance with Section 9.

                   (v)  "SUBSIDIARY CORPORATION" means any present or future
"subsidiary corporation" of the Company, as defined in Section 424(f) of the
Code.

                                       3
<PAGE>
              1.2. CONSTRUCTION. Captions and titles contained herein are for
convenience only and shall not affect the meaning or interpretation of any
provision of this Option Agreement. Except when otherwise indicated by the
context, the singular shall include the plural and the plural shall include the
singular. Use of the term "or" is not intended to be exclusive, unless the
context clearly requires otherwise.

         2.   TAX STATUS OF OPTION.

         This Option is intended to be a nonstatutory stock option and shall not
be treated as an incentive stock option within the meaning of Section 422(b) of
the Code.

         3.   ADMINISTRATION.

         All questions of interpretation concerning this Option Agreement shall
be determined by the Board. All determinations by the Board shall be final and
binding upon all persons having an interest in the Option. Any officer of a
Participating Company shall have the authority to act on behalf of the Company
with respect to any matter, right, obligation, or election which is the
responsibility of or which is allocated to the Company herein, provided the
officer has apparent authority with respect to such matter, right, obligation,
or election.

         4.   EXERCISE OF THE OPTION.

              4.1. RIGHT TO EXERCISE. Except as otherwise provided herein, the
Option shall be exercisable on and after the Date of Option Grant and prior to
the termination of the Option (as provided in Section 6) in an amount not to
exceed the Number of Option Shares multiplied by the Vested Ratio less the
number of shares previously acquired upon exercise of the Option. In no event
shall the Option be exercisable for more shares than the Number of Option
Shares.

              4.2. METHOD OF EXERCISE. Exercise of the Option shall be by
written notice to the Company which must state the election to exercise the
Option, the number of whole shares of Stock for which the Option is being
exercised and such other representations and agreements as to the Optionee's
investment intent with respect to such shares as may be required pursuant to the
provisions of this Option Agreement. The written notice must be signed by the
Optionee and must be delivered to the Chief Financial Officer of the Company, or
other authorized representative of the Participating Company Group, prior to the
termination of the Option as set forth in Section 6, accompanied by full payment
of the aggregate Exercise Price for the number of shares of Stock being
purchased and the tax withholding obligations, if any, as provided in Section
4.4. The Option shall be deemed to be exercised upon receipt by the Company of
such written notice, the aggregate Exercise Price, and tax withholding
obligations, if any.

              4.3. PAYMENT OF EXERCISE PRICE.

                   (a) FORMS OF CONSIDERATION AUTHORIZED. Except as otherwise
provided below, payment of the aggregate Exercise Price for the number of shares
of Stock for which the Option is being exercised shall be made (i) in cash or
cash equivalent, (ii) by tender to the Company of whole shares of Stock owned by
the Optionee having a Fair Market Value (as determined by the Company without
regard to any restrictions on transferability applicable to

                                       4
<PAGE>
such stock by reason of federal or state securities laws or agreements with an
underwriter for the Company) not less than the aggregate Exercise Price, (iii)
by means of a Cashless Exercise, as defined in Section 4.3(c), or (iv) by any
combination of the foregoing.

                   (b) TENDER OF STOCK. Notwithstanding the foregoing, the
Option may not be exercised by tender to the Company of shares of Stock to the
extent such tender of Stock would constitute a violation of the provisions of
any law, regulation or agreement restricting the redemption of the Company's
stock. The Option may not be exercised by tender to the Company of shares of
Stock unless such shares either have been owned by the Optionee for more than
six (6) months or were not acquired, directly or indirectly, from the Company.

                   (c) CASHLESS EXERCISE. A "CASHLESS EXERCISE" means the
assignment in a form acceptable to the Company of the proceeds of a sale or loan
with respect to some or all of the shares of Stock acquired upon the exercise of
the Option pursuant to a program or procedure approved by the Company
(including, without limitation, through an exercise complying with the
provisions of Regulation T as promulgated from time to time by the Board of
Governors of the Federal Reserve System). The Company reserves, at any and all
times, the right, in the Company's sole and absolute discretion, to decline to
approve or terminate any such program or procedure.

              4.4. TAX WITHHOLDING. At the time the Option is exercised, in
whole or in part, or at any time thereafter as requested by the Company, the
Optionee hereby authorizes withholding from payroll and any other amounts
payable to the Optionee, and otherwise agrees to make adequate provision for
(including by means of a Cashless Exercise to the extent permitted by the
Company), any sums required to satisfy the federal, state, local and foreign tax
withholding obligations of the Participating Company Group, if any, which arise
in connection with the Option, including, without limitation, obligations
arising upon (i) the exercise, in whole or in part, of the Option, (ii) the
transfer, in whole or in part, of any shares acquired upon exercise of the
Option, (iii) the operation of any law or regulation providing for the
imputation of interest, or (iv) the lapsing of any restriction with respect to
any shares acquired upon exercise of the Option. The Optionee is cautioned that
the Option is not exercisable unless the tax withholding obligations of the
Participating Company Group are satisfied. Accordingly, the Optionee may not be
able to exercise the Option when desired even though the Option is vested, and
the Company shall have no obligation to issue a certificate for such shares.

              4.5. CERTIFICATE REGISTRATION. Except in the event the Exercise
Price is paid by means of a Cashless Exercise, the certificate for the shares as
to which the Option is exercised shall be registered in the name of the
Optionee, or, if applicable, in the names of the heirs of the Optionee.

              4.6. RESTRICTIONS ON GRANT OF THE OPTION AND ISSUANCE OF SHARES.
The grant of the Option and the issuance of shares of Stock upon exercise of the
Option shall be subject to compliance with all applicable requirements of
federal, state or foreign law with respect to such securities. The Option may
not be exercised if the issuance of shares of Stock upon exercise would
constitute a violation of any applicable federal, state or foreign securities
laws or other law or regulations or the requirements of any stock exchange or
market system upon which the Stock

                                       5
<PAGE>
may then be listed. In addition, the Option may not be exercised unless (i) a
registration statement under the Securities Act shall at the time of exercise of
the Option be in effect with respect to the shares issuable upon exercise of the
Option or (ii) in the opinion of legal counsel to the Company, the shares
issuable upon exercise of the Option may be issued in accordance with the terms
of an applicable exemption from the registration requirements of the Securities
Act. THE OPTIONEE IS CAUTIONED THAT THE OPTION MAY NOT BE EXERCISED UNLESS THE
FOREGOING CONDITIONS ARE SATISFIED. ACCORDINGLY, THE OPTIONEE MAY NOT BE ABLE TO
EXERCISE THE OPTION WHEN DESIRED EVEN THOUGH THE OPTION IS VESTED. Questions
concerning this restriction should be directed to the Chief Financial Officer of
the Company. The inability of the Company to obtain from any regulatory body
having jurisdiction the authority, if any, deemed by the Company's legal counsel
to be necessary to the lawful issuance and sale of any shares subject to the
Option shall relieve the Company of any liability in respect of the failure to
issue or sell such shares as to which such requisite authority shall not have
been obtained. As a condition to the exercise of the Option, the Company may
require the Optionee to satisfy any qualifications that may be necessary or
appropriate, to evidence compliance with any applicable law or regulation and to
make any representation or warranty with respect thereto as may be requested by
the Company.

              4.7. FRACTIONAL SHARES. The Company shall not be required to issue
fractional shares upon the exercise of the Option.

         5.   NONTRANSFERABILITY OF THE OPTION.

         The Option may be exercised during the lifetime of the Optionee only by
the Optionee or the Optionee's guardian or legal representative and may not be
assigned or transferred in any manner except by will or by the laws of descent
and distribution. Following the death of the Optionee, the Option, to the extent
provided in Section 7, may be exercised by the Optionee's legal representative
or by any person empowered to do so under the deceased Optionee's will or under
the then applicable laws of descent and distribution.

         6.   TERMINATION OF THE OPTION.

         The Option shall terminate and may no longer be exercised on the first
to occur of (a) the Option Expiration Date, (b) the last date for exercising the
Option following termination of the Optionee's Service as described in Section
7, or (c) a Change in Control to the extent provided in Section 8.

                                       6
<PAGE>
         7.   EFFECT OF TERMINATION OF SERVICE.

              7.1. OPTION EXERCISABILITY.

                   (a) DISABILITY. If the Optionee's Service with the
Participating Company Group is terminated because of the Disability of the
Optionee, the Option, to the extent unexercised and exercisable on the date on
which the Optionee's Service terminated, may be exercised by the Optionee (or
the Optionee's guardian or legal representative) at any time prior to the
expiration of twelve (12) months after the date on which the Optionee's Service
terminated, but in any event no later than the Option Expiration Date.

                   (b) DEATH. If the Optionee's Service with the Participating
Company Group is terminated because of the death of the Optionee, the Option, to
the extent unexercised and exercisable on the date on which the Optionee's
Service terminated, may be exercised by the Optionee's legal representative or
other person who acquired the right to exercise the Option by reason of the
Optionee's death at any time prior to the expiration of twelve (12) months after
the date on which the Optionee's Service terminated, but in any event no later
than the Option Expiration Date. The Optionee's Service shall be deemed to have
terminated on account of death if the Optionee dies within six (6) months after
the Optionee's termination of Service.

                   (c) OTHER TERMINATION OF SERVICE. If the Optionee's Service
with the Participating Company Group terminates for any reason, except
Disability or death, the Option, to the extent unexercised and exercisable by
the Optionee on the date on which the Optionee's Service terminated, may be
exercised by the Optionee within six (6) months (or such other longer period of
time as determined by the Board, in its sole discretion) after the date on which
the Optionee's Service terminated, but in any event no later than the Option
Expiration Date.

              7.2. EXTENSION IF EXERCISE PREVENTED BY LAW. Notwithstanding the
foregoing, if the exercise of the Option within the applicable time periods set
forth in Section 7.1 is prevented by the provisions of Section 4.6, the Option
shall remain exercisable until three (3) months after the date the Optionee is
notified by the Company that the Option is exercisable, but in any event no
later than the Option Expiration Date.

              7.3. EXTENSION IF OPTIONEE SUBJECT TO SECTION 16(b).
Notwithstanding the foregoing, if a sale within the applicable time periods set
forth in Section 7.1 of shares acquired upon the exercise of the Option would
subject the Optionee to suit under Section 16(b) of the Exchange Act, the Option
shall remain exercisable until the earliest to occur of (i) the tenth (10th) day
following the date on which a sale of such shares by the Optionee would no
longer be subject to such suit, (ii) the one hundred and ninetieth (190th) day
after the Optionee's termination of Service, or (iii) the Option Expiration
Date.

         8.   CHANGE IN CONTROL.

              8.1. DEFINITIONS.

                   (a) An "OWNERSHIP CHANGE EVENT" shall be deemed to have
occurred if any of the following occurs with respect to the Company:

                                       7
<PAGE>
                        (i)   the direct or indirect sale or exchange in a
single or series of related transactions by the stockholders of the Company of
more than fifty percent (50%) of the voting stock of the Company;

                        (ii)  a merger or consolidation in which the Company is
a party;

                        (iii) the sale, exchange, or transfer of all or
substantially all of the assets of the Company; or

                        (iv)  a liquidation or dissolution of the Company.

                   (b)  A "CHANGE IN CONTROL" shall mean an Ownership Change
Event or a series of related Ownership Change Events (collectively, the
"TRANSACTION") wherein the stockholders of the Company immediately before the
Transaction do not retain immediately after the Transaction, in substantially
the same proportions as their ownership of shares of the Company's voting stock
immediately before the Transaction, direct or indirect beneficial ownership of
more than fifty percent (50%) of the total combined voting power of the
outstanding voting stock of the Company or the corporation or corporations to
which the assets of the Company were transferred (the "TRANSFEREE
CORPORATION(S)"), as the case may be. For purposes of the preceding sentence,
indirect beneficial ownership shall include, without limitation, an interest
resulting from ownership of the voting stock of one or more corporations which,
as a result of the Transaction, own the Company or the Transferee
Corporation(s), as the case may be, either directly or through one or more
subsidiary corporations. The Board shall have the right to determine whether
multiple sales or exchanges of the voting stock of the Company or multiple
Ownership Change Events are related, and its determination shall be final,
binding and conclusive.

              8.2. EFFECT OF CHANGE IN CONTROL ON OPTION. In the event of a
Change in Control, the Optionee shall be credited with an additional two (2)
years of Service as of the date ten (10) days prior to the date of the Change in
Control, solely for purposes of determining the Vested Ratio. Any exercise or
vesting of the Option that was permissible solely by reason of this Section 8.2
shall be conditioned upon the consummation of the Change in Control. In
addition, the surviving, continuing, successor, or purchasing corporation or
parent corporation thereof, as the case may be (the "ACQUIRING CORPORATION"),
may either assume the Company's rights and obligations under the Option or
substitute for the Option a substantially equivalent option for the Acquiring
Corporation's stock. For purposes of this Section 8.2, the Option shall be
deemed assumed if, following the Change in Control, the Option confers the right
to purchase in accordance with its terms and conditions, for each share of Stock
subject to the Option immediately prior to the Change in Control, the
consideration (whether stock, cash or other securities or property) to which a
holder of a share of Stock on the effective date of the Change in Control was
entitled. The Option shall terminate and cease to be outstanding effective as of
the date of the Change in Control to the extent that the Option is neither
assumed or substituted for by the Acquiring Corporation in connection with the
Change in Control nor exercised as of the date of the Change in Control.
Notwithstanding the foregoing, if the corporation the stock of which is subject
to the Option immediately prior to an Ownership Change Event described in
Section 8.1(a)(i) constituting a Change in Control is the surviving or
continuing corporation and

                                       8
<PAGE>
immediately after any such event less than fifty percent (50%) of the total
combined voting power of its voting stock is held by another corporation or by
other corporations that are members of an affiliated group within the meaning of
Section 1504(a) of the Code without regard to the provisions of Section 1504(b)
of the Code, the Option shall not terminate unless the Board otherwise provides
in its sole discretion.

              8.3. NOTICE. The Company shall provide notice of a Change in
Control to the Optionee at least ten (10) days prior to the consummation of a
Change in Control. The Company's notice shall summarize the principal terms of
the Change in Control, including, without limitation, whether the Acquiring
Corporation is assuming the Option or substituting an equivalent option
therefor.

         9.   ADJUSTMENTS FOR CHANGES IN CAPITAL STRUCTURE.

         In the event of any stock dividend, stock split, reverse stock split,
recapitalization, combination, reclassification, or similar change in the
capital structure of the Company, appropriate adjustments shall be made in the
number, Exercise Price and class of shares of stock subject to the Option. If a
majority of the shares which are of the same class as the shares that are
subject to the Option are exchanged for, converted into, or otherwise become
(whether or not pursuant to an Ownership Change Event) shares of another
corporation (the "NEW SHARES"), the Board may unilaterally amend the Option to
provide that the Option is exercisable for New Shares. In the event of any such
amendment, the Number of Option Shares and the Exercise Price shall be adjusted
in a fair and equitable manner, as determined by the Board, in its sole
discretion. Notwithstanding the foregoing, any fractional share resulting from
an adjustment pursuant to this Section 9 shall be rounded up or down to the
nearest whole number, as determined by the Board, and in no event may the
Exercise Price be decreased to an amount less than the par value, if any, of the
stock subject to the Option. The adjustments determined by the Board pursuant to
this Section 9 shall be final, binding and conclusive.

         10.  RIGHTS AS A STOCKHOLDER.

         The Optionee shall have no rights as a stockholder with respect to any
shares covered by the Option until the date of the issuance of a certificate for
the shares for which the Option has been exercised (as evidenced by the
appropriate entry on the books of the Company or of a duly authorized transfer
agent of the Company). No adjustment shall be made for dividends, distributions
or other rights for which the record date is prior to the date such certificate
is issued, except as provided in Section 9.

                                       9
<PAGE>
         11.  LEGENDS.

         The Company may at any time place legends referencing any applicable
federal, state or foreign securities law restrictions on all certificates
representing shares of stock subject to the provisions of this Option Agreement.
The Optionee shall, at the request of the Company, promptly present to the
Company any and all certificates representing shares acquired pursuant to the
Option in the possession of the Optionee in order to carry out the provisions of
this Section.

         12.  BINDING EFFECT.

         Subject to the restrictions on transfer set forth herein, this Option
Agreement shall inure to the benefit of and be binding upon the parties hereto
and their respective heirs, executors, administrators, successors and assigns.

         13.  TERMINATION OR AMENDMENT.

         The Board may terminate or amend the Plan or the Option at any time;
provided, however, that except as provided in Section 8.2 in connection with a
Change in Control, no such termination or amendment may adversely affect the
Option or any unexercised portion hereof without the consent of the Optionee
unless such termination or amendment is necessary to comply with any applicable
law or government regulation. No amendment or addition to this Option Agreement
shall be effective unless in writing.

         14.  NOTICES.

         Any notice required or permitted hereunder shall be given in writing
and shall be deemed effectively given (except to the extent that this Option
Agreement provides for effectiveness only upon actual receipt of such notice)
upon personal delivery or upon deposit in the United States Post Office, by
registered or certified mail, with postage and fees prepaid, addressed to the
other party at the address of such party as set forth below that party's
signature or at such other address as such party may designate in writing from
time to time to the other party.

                                       10
<PAGE>
         15.  INTEGRATED AGREEMENT.

         This Option Agreement constitutes the entire understanding and
agreement of the Optionee and the Participating Company Group with respect to
the subject matter contained herein, and there are no agreements,
understandings, restrictions, representations, or warranties among the Optionee
and the Participating Company Group with respect to such subject matter other
than those as set forth or provided for herein. To the extent contemplated
herein, the provisions of this Option Agreement shall survive any exercise of
the Option and shall remain in full force and effect.

         16.  APPLICABLE LAW.

         This Option Agreement shall be governed by the laws of the State of
Delaware as such laws are applied to agreements between Delaware residents
entered into and to be performed entirely within the State of Delaware.

                                            P.F. CHANG'S CHINA BISTRO, INC.

                                            By: ________________________________

                                            Title: _____________________________

                                            Address: ___________________________
                                                     ___________________________

         The Optionee represents that the Optionee is familiar with the terms
and provisions of this Option Agreement, and hereby accepts the Option subject
to all of the terms and provisions thereof. The Optionee hereby agrees to accept
as binding, conclusive and final all decisions or interpretations of the Board
upon any questions arising under this Option Agreement.

                                            OPTIONEE

Date:_____________________________          ____________________________________

                                            Optionee Address:

                                            ____________________________________

                                            ____________________________________

                                       11
<PAGE>
                         P.F. CHANG'S CHINA BISTRO, INC.
                       NONSTATUTORY STOCK OPTION AGREEMENT

         THIS NONSTATUTORY STOCK OPTION AGREEMENT (the "OPTION AGREEMENT") is
made and entered into as of the Date of Option Grant by and between P.F. Chang's
China Bistro, Inc. and ___________________________ (the "OPTIONEE").

         The Company has granted to the Optionee pursuant to the P.F. Chang's
China Bistro, Inc. 1998 Stock Option Plan (the "PLAN") an option to purchase
certain shares of Stock, upon the terms and conditions set forth in this Option
Agreement (the "OPTION").

         1.   DEFINITIONS AND CONSTRUCTION.

              1.1. DEFINITIONS. Whenever used herein, the following terms shall
have their respective meanings set forth below:

                   (a) "DATE OF OPTION GRANT" means ___________________ ,
199 __ .

                   (b) "NUMBER OF OPTION SHARES" means __________________ shares
of Stock, as adjusted from time to time pursuant to Section 9.

                   (c) "EXERCISE PRICE" means $ ______________ per share of
Stock, as adjusted from time to time pursuant to Section 9.

                   (d) "OPTION EXPIRATION DATE" means the date ten (10) years
after the Date of Option Grant.

                   (e) "VESTED RATIO" means, on any relevant date, the ratio
determined as follows:

<TABLE>
<CAPTION>
                                                               Vested Ratio
                                                               ------------

<S>                                                            <C>
              Prior to Initial Vesting Date                          0

              On Initial Vesting Date, provided the
              Optionee's Service has not terminated
              prior to such date                                   1/5

              Plus:

              For each full month of the Optionee's
              continuous Service from the Initial
              Vesting Date until the Vested Ratio
              equals 1/1, an additional                           1/60
</TABLE>

                                       1
<PAGE>
                   (f) "BOARD" means the Board of Directors of the Company. If
one or more Committees have been appointed by the Board to administer the Plan,
"Board" shall also mean such Committee(s).

                   (g) "CAUSE" means any of the following: (i) the Optionee's
theft, dishonesty, or falsification of any Participating Company documents or
records; (ii) the Optionee's improper use or disclosure of a Participating
Company's confidential or proprietary information; (iii) any action by the
Optionee which has a detrimental effect on a Participating Company's reputation
or business; (iv) the Optionee's failure or inability to perform any reasonable
assigned duties after written notice from the Participating Company Group of,
and a reasonable opportunity to cure, such failure or inability; (v) any
material breach by the Optionee of any agreement of employment or service
between the Optionee and the Participating Company Group, which breach is not
cured pursuant to the terms of such agreement; or (vi) the Optionee's conviction
(including any plea of guilty or nolo contendere) of any criminal act which
impairs the Optionee's ability to perform his or her duties with the
Participating Company Group. A determination by the Board that the Optionee was
terminated for Cause shall be final and binding upon the Optionee for all
purposes and shall not be subject to review by any governmental agency or court
of law.

                   (h) "CODE" means the Internal Revenue Code of 1986, as
amended, and any applicable regulations promulgated thereunder.

                   (i) "COMMITTEE" means the Compensation Committee or other
committee of the Board duly appointed to administer the Plan and having such
powers as shall be specified by the Board. Unless the powers of the Committee
have been specifically limited, the Committee shall have all of the powers of
the Board granted in the Plan, including, without limitation, the power to amend
or terminate the Plan at any time, subject to the terms of the Plan and any
applicable limitations imposed by law.

                   (j) "COMPANY" means P.F. Chang's China Bistro, Inc., a
Delaware corporation, or any successor corporation thereto.

                   (k) "CONSULTANT" means any person, including an advisor,
engaged by a Participating Company to render services other than as an Employee
or a Director.

                   (l) "DIRECTOR" means a member of the Board or of the board of
directors of any other Participating Company.

                   (m) "DISABILITY" means the permanent and total disability of
the Optionee within the meaning of Section 22(e)(3) of the Code.

                   (n) "EMPLOYEE" means any person treated as an employee
(including an officer or a Director who is also treated as an employee) in the
records of a Participating Company and who is an employee for purposes of
Section 422 of the Code; provided, however, that neither service as a Director
nor payment of a director's fee shall be sufficient to constitute employment for
this purpose. The Company shall determine in good faith and in the exercise of
its discretion whether an individual has become or has ceased to be an Employee
and the

                                       2
<PAGE>
effective date of such individual's employment or termination of employment, as
the case may be. For purposes of an individual's rights, if any, under the Plan
as of the time of the Company's determination, all such determinations by the
Company shall be final, binding and conclusive, notwithstanding that the Company
or any governmental agency subsequently makes a contrary determination.

                   (o)  "EXCHANGE ACT" means the Securities Exchange Act of
1934, as amended.

                   (p)  "FAIR MARKET VALUE" means, as of any date, the value of
a share of stock or other property as determined by the Board, in its sole
discretion, or by the Company, in its sole discretion, if such determination is
expressly allocated to the Company herein, subject to the following:

                        (i)  If, on such date, there is a public market for the
Stock, the Fair Market Value of a share of Stock shall be the closing price of a
share of Stock (or the mean of the closing bid and asked prices of a share of
Stock if the Stock is so quoted instead) as quoted on the Nasdaq National
Market, the Nasdaq Small-Cap Market or such other national or regional
securities exchange or market system constituting the primary market for the
Stock, as reported in the Wall Street Journal or such other source as the
Company deems reliable. If the relevant date does not fall on a day on which the
Stock has traded on such securities exchange or market system, the date on which
the Fair Market Value shall be established shall be the last day on which the
Stock was so traded prior to the relevant date, or such other appropriate day as
shall be determined by the Board, in its sole discretion.

                        (ii) If, on such date, there is no public market for the
Stock, the Fair Market Value of a share of Stock shall be as determined by the
Board without regard to any restriction other than a restriction which, by its
terms, will never lapse.

                   (q)  "PARENT CORPORATION" means any present or future "parent
corporation" of the Company, as defined in Section 424(e) of the Code.

                   (r)  "PARTICIPATING COMPANY" means the Company or any Parent
Corporation or Subsidiary Corporation.

                   (s)  "PARTICIPATING COMPANY GROUP" means, at any point in
time, all corporations collectively which are then Participating Companies.

                   (t)  "SECURITIES ACT" means the Securities Act of 1933, as
amended.

                   (u)  "SERVICE" means the Optionee's employment or service
with the Participating Company Group, whether in the capacity of an Employee, a
Director or a Consultant. The Optionee's Service shall not be deemed to have
terminated merely because of a change in the capacity in which the Optionee
renders Service to the Participating Company Group or a change in the
Participating Company for which the Optionee renders such Service, provided that
there is no interruption or termination of the Optionee's Service.
Notwithstanding the foregoing, unless otherwise designated by the Company or
required by law, a leave of

                                       3
<PAGE>
absence shall not be treated as Service for purposes of determining the Vested
Ratio. The Optionee's Service shall be deemed to have terminated either upon an
actual termination of Service or upon the corporation for which the Optionee
performs Service ceasing to be a Participating Company. Subject to the
foregoing, the Company, in its sole discretion, shall determine whether the
Optionee's Service has terminated and the effective date of such termination.

                   (v) "STOCK" means the common stock of the Company, as
adjusted from time to time in accordance with Section 9.

                   (w) "SUBSIDIARY CORPORATION" means any present or future
"subsidiary corporation" of the Company, as defined in Section 424(f) of the
Code.

              1.2. CONSTRUCTION. Captions and titles contained herein are for
convenience only and shall not affect the meaning or interpretation of any
provision of this Option Agreement. Except when otherwise indicated by the
context, the singular shall include the plural and the plural shall include the
singular. Use of the term "or" is not intended to be exclusive, unless the
context clearly requires otherwise.

         2.   TAX STATUS OF OPTION.

         This Option is intended to be a nonstatutory stock option and shall not
be treated as an incentive stock option within the meaning of Section 422(b) of
the Code.

         3.   ADMINISTRATION.

         All questions of interpretation concerning this Option Agreement shall
be determined by the Board. All determinations by the Board shall be final and
binding upon all persons having an interest in the Option. Any officer of a
Participating Company shall have the authority to act on behalf of the Company
with respect to any matter, right, obligation, or election which is the
responsibility of or which is allocated to the Company herein, provided the
officer has apparent authority with respect to such matter, right, obligation,
or election.

         4.   EXERCISE OF THE OPTION.

              4.1. RIGHT TO EXERCISE. Except as otherwise provided herein, the
Option shall be exercisable on and after the Date of Option Grant and prior to
the termination of the Option (as provided in Section 6) in an amount not to
exceed the Number of Option Shares multiplied by the Vested Ratio less the
number of shares previously acquired upon exercise of the Option. In no event
shall the Option be exercisable for more shares than the Number of Option
Shares.

              4.2. METHOD OF EXERCISE. Exercise of the Option shall be by
written notice to the Company which must state the election to exercise the
Option, the number of whole shares of Stock for which the Option is being
exercised and such other representations and agreements as to the Optionee's
investment intent with respect to such shares as may be required pursuant to the
provisions of this Option Agreement. The written notice must be signed by the
Optionee and must be delivered to the Chief Financial Officer of the Company, or
other authorized

                                       4
<PAGE>
representative of the Participating Company Group, prior to the termination of
the Option as set forth in Section 6, accompanied by full payment of the
aggregate Exercise Price for the number of shares of Stock being purchased and
the tax withholding obligations, if any, as provided in Section 4.4. The Option
shall be deemed to be exercised upon receipt by the Company of such written
notice, the aggregate Exercise Price, and tax withholding obligations, if any.

              4.3. PAYMENT OF EXERCISE PRICE.

                   (a) FORMS OF CONSIDERATION AUTHORIZED. Except as otherwise
provided below, payment of the aggregate Exercise Price for the number of shares
of Stock for which the Option is being exercised shall be made (i) in cash or
cash equivalent, (ii) by tender to the Company of whole shares of Stock owned by
the Optionee having a Fair Market Value (as determined by the Company without
regard to any restrictions on transferability applicable to such stock by reason
of federal or state securities laws or agreements with an underwriter for the
Company) not less than the aggregate Exercise Price, (iii) by means of a
Cashless Exercise, as defined in Section 4.3(c), or (iv) by any combination of
the foregoing.

                   (b) TENDER OF STOCK. Notwithstanding the foregoing, the
Option may not be exercised by tender to the Company of shares of Stock to the
extent such tender of Stock would constitute a violation of the provisions of
any law, regulation or agreement restricting the redemption of the Company's
stock. The Option may not be exercised by tender to the Company of shares of
Stock unless such shares either have been owned by the Optionee for more than
six (6) months or were not acquired, directly or indirectly, from the Company.

                   (c) CASHLESS EXERCISE. A "CASHLESS EXERCISE" means the
assignment in a form acceptable to the Company of the proceeds of a sale or loan
with respect to some or all of the shares of Stock acquired upon the exercise of
the Option pursuant to a program or procedure approved by the Company
(including, without limitation, through an exercise complying with the
provisions of Regulation T as promulgated from time to time by the Board of
Governors of the Federal Reserve System). The Company reserves, at any and all
times, the right, in the Company's sole and absolute discretion, to decline to
approve or terminate any such program or procedure.

              4.4. TAX WITHHOLDING. At the time the Option is exercised, in
whole or in part, or at any time thereafter as requested by the Company, the
Optionee hereby authorizes withholding from payroll and any other amounts
payable to the Optionee, and otherwise agrees to make adequate provision for
(including by means of a Cashless Exercise to the extent permitted by the
Company), any sums required to satisfy the federal, state, local and foreign tax
withholding obligations of the Participating Company Group, if any, which arise
in connection with the Option, including, without limitation, obligations
arising upon (i) the exercise, in whole or in part, of the Option, (ii) the
transfer, in whole or in part, of any shares acquired upon exercise of the
Option, (iii) the operation of any law or regulation providing for the
imputation of interest, or (iv) the lapsing of any restriction with respect to
any shares acquired upon exercise of the Option. The Optionee is cautioned that
the Option is not exercisable unless the tax withholding obligations of the
Participating Company Group are satisfied. Accordingly, the

                                       5
<PAGE>
Optionee may not be able to exercise the Option when desired even though the
Option is vested, and the Company shall have no obligation to issue a
certificate for such shares.

              4.5. CERTIFICATE REGISTRATION. Except in the event the Exercise
Price is paid by means of a Cashless Exercise, the certificate for the shares as
to which the Option is exercised shall be registered in the name of the
Optionee, or, if applicable, in the names of the heirs of the Optionee.

              4.6. RESTRICTIONS ON GRANT OF THE OPTION AND ISSUANCE OF SHARES.
The grant of the Option and the issuance of shares of Stock upon exercise of the
Option shall be subject to compliance with all applicable requirements of
federal, state or foreign law with respect to such securities. The Option may
not be exercised if the issuance of shares of Stock upon exercise would
constitute a violation of any applicable federal, state or foreign securities
laws or other law or regulations or the requirements of any stock exchange or
market system upon which the Stock may then be listed. In addition, the Option
may not be exercised unless (i) a registration statement under the Securities
Act shall at the time of exercise of the Option be in effect with respect to the
shares issuable upon exercise of the Option or (ii) in the opinion of legal
counsel to the Company, the shares issuable upon exercise of the Option may be
issued in accordance with the terms of an applicable exemption from the
registration requirements of the Securities Act. THE OPTIONEE IS CAUTIONED THAT
THE OPTION MAY NOT BE EXERCISED UNLESS THE FOREGOING CONDITIONS ARE SATISFIED.
ACCORDINGLY, THE OPTIONEE MAY NOT BE ABLE TO EXERCISE THE OPTION WHEN DESIRED
EVEN THOUGH THE OPTION IS VESTED. Questions concerning this restriction should
be directed to the Chief Financial Officer of the Company. The inability of the
Company to obtain from any regulatory body having jurisdiction the authority, if
any, deemed by the Company's legal counsel to be necessary to the lawful
issuance and sale of any shares subject to the Option shall relieve the Company
of any liability in respect of the failure to issue or sell such shares as to
which such requisite authority shall not have been obtained. As a condition to
the exercise of the Option, the Company may require the Optionee to satisfy any
qualifications that may be necessary or appropriate, to evidence compliance with
any applicable law or regulation and to make any representation or warranty with
respect thereto as may be requested by the Company.

              4.7. FRACTIONAL SHARES. The Company shall not be required to issue
fractional shares upon the exercise of the Option.

         5.   NONTRANSFERABILITY OF THE OPTION.

         The Option may be exercised during the lifetime of the Optionee only by
the Optionee or the Optionee's guardian or legal representative and may not be
assigned or transferred in any manner except by will or by the laws of descent
and distribution. Following the death of the Optionee, the Option, to the extent
provided in Section 7, may be exercised by the Optionee's legal representative
or by any person empowered to do so under the deceased Optionee's will or under
the then applicable laws of descent and distribution.

         6.   TERMINATION OF THE OPTION.

                                       6
<PAGE>
         The Option shall terminate and may no longer be exercised on the first
to occur of (a) the Option Expiration Date, (b) the last date for exercising the
Option following termination of the Optionee's Service as described in Section
7, or (c) a Change in Control to the extent provided in Section 8.

         7.   EFFECT OF TERMINATION OF SERVICE.

              7.1. OPTION EXERCISABILITY.

                   (a) DISABILITY. If the Optionee's Service with the
Participating Company Group is terminated because of the Disability of the
Optionee, the Option, to the extent unexercised and exercisable on the date on
which the Optionee's Service terminated, may be exercised by the Optionee (or
the Optionee's guardian or legal representative) at any time prior to the
expiration of twelve (12) months after the date on which the Optionee's Service
terminated, but in any event no later than the Option Expiration Date.

                   (b) DEATH. If the Optionee's Service with the Participating
Company Group is terminated because of the death of the Optionee, the Option, to
the extent unexercised and exercisable on the date on which the Optionee's
Service terminated, may be exercised by the Optionee's legal representative or
other person who acquired the right to exercise the Option by reason of the
Optionee's death at any time prior to the expiration of twelve (12) months after
the date on which the Optionee's Service terminated, but in any event no later
than the Option Expiration Date. The Optionee's Service shall be deemed to have
terminated on account of death if the Optionee dies within three (3) months
after the Optionee's termination of Service.

                   (c) OTHER TERMINATION OF SERVICE. If the Optionee's Service
with the Participating Company Group terminates for any reason, except
Disability, death, or Cause, the Option, to the extent unexercised and
exercisable by the Optionee on the date on which the Optionee's Service
terminated, may be exercised by the Optionee within three (3) months (or such
other longer period of time as determined by the Board, in its sole discretion)
after the date on which the Optionee's Service terminated, but in any event no
later than the Option Expiration Date.

              7.2. EXTENSION IF EXERCISE PREVENTED BY LAW. Notwithstanding the
foregoing, if the exercise of the Option within the applicable time periods set
forth in Section 7.1 is prevented by the provisions of Section 4.6, the Option
shall remain exercisable until three (3) months after the date the Optionee is
notified by the Company that the Option is exercisable, but in any event no
later than the Option Expiration Date.

              7.3. EXTENSION IF OPTIONEE SUBJECT TO SECTION 16(b).
Notwithstanding the foregoing, if a sale within the applicable time periods set
forth in Section 7.1 of shares acquired upon the exercise of the Option would
subject the Optionee to suit under Section 16(b) of the Exchange Act, the Option
shall remain exercisable until the earliest to occur of (i) the tenth (10th) day
following the date on which a sale of such shares by the Optionee would no
longer be subject to such suit, (ii) the one hundred and ninetieth (190th) day
after the Optionee's termination of Service, or (iii) the Option Expiration
Date.

                                       7
<PAGE>
              7.4. TERMINATION FOR CAUSE. Except as otherwise provided in a
contract of employment or service between a Participating Company and the
Optionee, and notwithstanding any other provision of this Option Agreement to
the contrary, if the Optionee's Service with the Participating Company Group is
terminated for Cause, the Option shall terminate and cease to be exercisable
immediately upon such termination of Service.

         8.   CHANGE IN CONTROL.

              8.1. DEFINITIONS.

                   (a)  An "OWNERSHIP CHANGE EVENT" shall be deemed to have
occurred if any of the following occurs with respect to the Company:

                        (i)   the direct or indirect sale or exchange in a
single or series of related transactions by the stockholders of the Company of
more than fifty percent (50%) of the voting stock of the Company;

                        (ii)  a merger or consolidation in which the Company is
a party;

                        (iii) the sale, exchange, or transfer of all or
substantially all of the assets of the Company; or

                        (iv)  a liquidation or dissolution of the Company.

                   (b)  A "CHANGE IN CONTROL" shall mean an Ownership Change
Event or a series of related Ownership Change Events (collectively, the
"TRANSACTION") wherein the stockholders of the Company immediately before the
Transaction do not retain immediately after the Transaction, in substantially
the same proportions as their ownership of shares of the Company's voting stock
immediately before the Transaction, direct or indirect beneficial ownership of
more than fifty percent (50%) of the total combined voting power of the
outstanding voting stock of the Company or the corporation or corporations to
which the assets of the Company were transferred (the "TRANSFEREE
CORPORATION(S)"), as the case may be. For purposes of the preceding sentence,
indirect beneficial ownership shall include, without limitation, an interest
resulting from ownership of the voting stock of one or more corporations which,
as a result of the Transaction, own the Company or the Transferee
Corporation(s), as the case may be, either directly or through one or more
subsidiary corporations. The Board shall have the right to determine whether
multiple sales or exchanges of the voting stock of the Company or multiple
Ownership Change Events are related, and its determination shall be final,
binding and conclusive.

              8.2. EFFECT OF CHANGE IN CONTROL ON OPTION. In the event of a
Change in Control, the Optionee shall be credited with an additional two (2)
years of Service as of the date ten (10) days prior to the date of the Change in
Control, solely for purposes of determining the Vested Ratio. Any exercise or
vesting of the Option that was permissible solely by reason of this Section 8.2
shall be conditioned upon the consummation of the Change in Control. In
addition, the surviving, continuing, successor, or purchasing corporation or
parent corporation thereof, as the case may be (the "ACQUIRING CORPORATION"),
may either assume the Company's rights and

                                       8
<PAGE>
obligations under the Option or substitute for the Option a substantially
equivalent option for the Acquiring Corporation's stock. For purposes of this
Section 8.2, the Option shall be deemed assumed if, following the Change in
Control, the Option confers the right to purchase in accordance with its terms
and conditions, for each share of Stock subject to the Option immediately prior
to the Change in Control, the consideration (whether stock, cash or other
securities or property) to which a holder of a share of Stock on the effective
date of the Change in Control was entitled. The Option shall terminate and cease
to be outstanding effective as of the date of the Change in Control to the
extent that the Option is neither assumed or substituted for by the Acquiring
Corporation in connection with the Change in Control nor exercised as of the
date of the Change in Control. Notwithstanding the foregoing, if the corporation
the stock of which is subject to the Option immediately prior to an Ownership
Change Event described in Section 8.1(a)(i) constituting a Change in Control is
the surviving or continuing corporation and immediately after any such event
less than fifty percent (50%) of the total combined voting power of its voting
stock is held by another corporation or by other corporations that are members
of an affiliated group within the meaning of Section 1504(a) of the Code without
regard to the provisions of Section 1504(b) of the Code, the Option shall not
terminate unless the Board otherwise provides in its sole discretion.

              8.3. NOTICE. The Company shall provide notice of a Change in
Control to the Optionee at least ten (10) days prior to the consummation of a
Change in Control. The Company's notice shall summarize the principal terms of
the Change in Control, including, without limitation, whether the Acquiring
Corporation is assuming the Option or substituting an equivalent option
therefor.

         9.   ADJUSTMENTS FOR CHANGES IN CAPITAL STRUCTURE.

         In the event of any stock dividend, stock split, reverse stock split,
recapitalization, combination, reclassification, or similar change in the
capital structure of the Company, appropriate adjustments shall be made in the
number, Exercise Price and class of shares of stock subject to the Option. If a
majority of the shares which are of the same class as the shares that are
subject to the Option are exchanged for, converted into, or otherwise become
(whether or not pursuant to an Ownership Change Event) shares of another
corporation (the "NEW SHARES"), the Board may unilaterally amend the Option to
provide that the Option is exercisable for New Shares. In the event of any such
amendment, the Number of Option Shares and the Exercise Price shall be adjusted
in a fair and equitable manner, as determined by the Board, in its sole
discretion. Notwithstanding the foregoing, any fractional share resulting from
an adjustment pursuant to this Section 9 shall be rounded up or down to the
nearest whole number, as determined by the Board, and in no event may the
Exercise Price be decreased to an amount less than the par value, if any, of the
stock subject to the Option. The adjustments determined by the Board pursuant to
this Section 9 shall be final, binding and conclusive.

         10.  RIGHTS AS A STOCKHOLDER, EMPLOYEE OR CONSULTANT.

         The Optionee shall have no rights as a stockholder with respect to any
shares covered by the Option until the date of the issuance of a certificate for
the shares for which the Option has been exercised (as evidenced by the
appropriate entry on the books of the Company or of a duly

                                       9
<PAGE>
authorized transfer agent of the Company). No adjustment shall be made for
dividends, distributions or other rights for which the record date is prior to
the date such certificate is issued, except as provided in Section 9. If the
Optionee is an Employee, the Optionee understands and acknowledges that, except
as otherwise provided in a separate, written employment agreement between a
Participating Company and the Optionee, the Optionee's employment is "at will"
and is for no specified term. Nothing in this Option Agreement shall confer upon
the Optionee, whether an Employee or Consultant, any right to continue in the
Service of a Participating Company or interfere in any way with any right of the
Participating Company Group to terminate the Optionee's Service as an Employee
or Consultant, as the case may be, at any time.

         11.  LEGENDS.

         The Company may at any time place legends referencing any applicable
federal, state or foreign securities law restrictions on all certificates
representing shares of stock subject to the provisions of this Option Agreement.
The Optionee shall, at the request of the Company, promptly present to the
Company any and all certificates representing shares acquired pursuant to the
Option in the possession of the Optionee in order to carry out the provisions of
this Section.

         12.  BINDING EFFECT.

         Subject to the restrictions on transfer set forth herein, this Option
Agreement shall inure to the benefit of and be binding upon the parties hereto
and their respective heirs, executors, administrators, successors and assigns.

         13.  TERMINATION OR AMENDMENT.

         The Board may terminate or amend the Plan or the Option at any time;
provided, however, that except as provided in Section 8.2 in connection with a
Change in Control, no such termination or amendment may adversely affect the
Option or any unexercised portion hereof without the consent of the Optionee
unless such termination or amendment is necessary to comply with any applicable
law or government regulation. No amendment or addition to this Option Agreement
shall be effective unless in writing.

         14.  NOTICES.

         Any notice required or permitted hereunder shall be given in writing
and shall be deemed effectively given (except to the extent that this Option
Agreement provides for effectiveness only upon actual receipt of such notice)
upon personal delivery or upon deposit in the United States Post Office, by
registered or certified mail, with postage and fees prepaid, addressed to the
other party at the address of such party as set forth below that party's
signature or at such other address as such party may designate in writing from
time to time to the other party.

         15.  INTEGRATED AGREEMENT.

         This Option Agreement constitutes the entire understanding and
agreement of the Optionee and the Participating Company Group with respect to
the subject matter contained

                                       10
<PAGE>
herein, and there are no agreements, understandings, restrictions,
representations, or warranties among the Optionee and the Participating Company
Group with respect to such subject matter other than those as set forth or
provided for herein. To the extent contemplated herein, the provisions of this
Option Agreement shall survive any exercise of the Option and shall remain in
full force and effect.

         16.  APPLICABLE LAW.

         This Option Agreement shall be governed by the laws of the State of
Delaware as such laws are applied to agreements between Delaware residents
entered into and to be performed entirely within the State of Delaware.

                                            P.F. CHANG'S CHINA BISTRO, INC.

                                            By: ________________________________

                                            Title: _____________________________

                                            Address: ___________________________
                                                     ___________________________

         The Optionee represents that the Optionee is familiar with the terms
and provisions of this Option Agreement, and hereby accepts the Option subject
to all of the terms and provisions thereof. The Optionee hereby agrees to accept
as binding, conclusive and final all decisions or interpretations of the Board
upon any questions arising under this Option Agreement.

                                            OPTIONEE

Date:_____________________________          ____________________________________

                                            Optionee Address:

                                            ____________________________________

                                            ____________________________________

                                       11
<PAGE>
                         P.F. CHANG'S CHINA BISTRO, INC.
                        INCENTIVE STOCK OPTION AGREEMENT

         THIS INCENTIVE STOCK OPTION AGREEMENT (the "OPTION AGREEMENT") is made
and entered into as of the Date of Option Grant by and between P.F. Chang's
China Bistro, Inc. and ___________________________ (the "OPTIONEE").

         The Company has granted to the Optionee pursuant to the P.F. Chang's
China Bistro, Inc. 1998 Stock Option Plan (the "PLAN") an option to purchase
certain shares of Stock, upon the terms and conditions set forth in this Option
Agreement (the "OPTION").

         1.   DEFINITIONS AND CONSTRUCTION.

              1.1. DEFINITIONS. Whenever used herein, the following terms shall
have their respective meanings set forth below:

                   (a) "DATE OF OPTION GRANT" means ___________________ ,
199 __ .

                   (b) "NUMBER OF OPTION SHARES" means __________________ shares
of Stock, as adjusted from time to time pursuant to Section 9.

                   (c) "EXERCISE PRICE" means $ ______________ per share of
Stock, as adjusted from time to time pursuant to Section 9.

                   (d) "OPTION EXPIRATION DATE" means the date ten (10) years
after the Date of Option Grant.

                   (e) "VESTED RATIO" means, on any relevant date, the ratio
determined as follows:

<TABLE>
<CAPTION>
                                                             Vested Ratio
                                                             ------------

<S>                                                          <C>
              Prior to Initial Vesting Date                        0

              On Initial Vesting Date, provided the
              Optionee's Service has not terminated
              prior to such date                                 1/5

              Plus:

              For each full month of the Optionee's
              continuous Service from the Initial
              Vesting Date until the Vested Ratio
              equals 1/1, an additional                         1/60
</TABLE>

                                       1
<PAGE>
                   (f) "BOARD" means the Board of Directors of the Company. If
one or more Committees have been appointed by the Board to administer the Plan,
"Board" shall also mean such Committee(s).

                   (g) "CAUSE" means any of the following: (i) the Optionee's
theft, dishonesty, or falsification of any Participating Company documents or
records; (ii) the Optionee's improper use or disclosure of a Participating
Company's confidential or proprietary information; (iii) any action by the
Optionee which has a detrimental effect on a Participating Company's reputation
or business; (iv) the Optionee's failure or inability to perform any reasonable
assigned duties after written notice from the Participating Company Group of,
and a reasonable opportunity to cure, such failure or inability; (v) any
material breach by the Optionee of any agreement of employment or service
between the Optionee and the Participating Company Group, which breach is not
cured pursuant to the terms of such agreement; or (vi) the Optionee's conviction
(including any plea of guilty or nolo contendere) of any criminal act which
impairs the Optionee's ability to perform his or her duties with the
Participating Company Group. A determination by the Board that the Optionee was
terminated for Cause shall be final and binding upon the Optionee for all
purposes and shall not be subject to review by any governmental agency or court
of law.

                   (h) "CODE" means the Internal Revenue Code of 1986, as
amended, and any applicable regulations promulgated thereunder.

                   (i) "COMMITTEE" means the Compensation Committee or other
committee of the Board duly appointed to administer the Plan and having such
powers as shall be specified by the Board. Unless the powers of the Committee
have been specifically limited, the Committee shall have all of the powers of
the Board granted in the Plan, including, without limitation, the power to amend
or terminate the Plan at any time, subject to the terms of the Plan and any
applicable limitations imposed by law.

                   (j) "COMPANY" means P.F. Chang's China Bistro, Inc., a
Delaware corporation, or any successor corporation thereto.

                   (k) "CONSULTANT" means any person, including an advisor,
engaged by a Participating Company to render services other than as an Employee
or a Director.

                   (l) "DIRECTOR" means a member of the Board or of the board of
directors of any other Participating Company.

                   (m) "DISABILITY" means the permanent and total disability of
the Optionee within the meaning of Section 22(e)(3) of the Code.

                   (n) "EMPLOYEE" means any person treated as an employee
(including an officer or a Director who is also treated as an employee) in the
records of a Participating Company and who is an employee for purposes of
Section 422 of the Code; provided, however, that neither service as a Director
nor payment of a director's fee shall be sufficient to constitute employment for
this purpose. The Company shall determine in good faith and in the exercise of
its discretion whether an individual has become or has ceased to be an Employee
and the

                                       2
<PAGE>
effective date of such individual's employment or termination of employment, as
the case may be. For purposes of an individual's rights, if any, under the Plan
as of the time of the Company's determination, all such determinations by the
Company shall be final, binding and conclusive, notwithstanding that the Company
or any governmental agency subsequently makes a contrary determination.

                   (o)  "EXCHANGE ACT" means the Securities Exchange Act of
1934, as amended.

                   (p)  "FAIR MARKET VALUE" means, as of any date, the value of
a share of stock or other property as determined by the Board, in its sole
discretion, or by the Company, in its sole discretion, if such determination is
expressly allocated to the Company herein, subject to the following:

                        (i)  If, on such date, there is a public market for the
Stock, the Fair Market Value of a share of Stock shall be the closing price of a
share of Stock (or the mean of the closing bid and asked prices of a share of
Stock if the Stock is so quoted instead) as quoted on the Nasdaq National
Market, the Nasdaq Small-Cap Market or such other national or regional
securities exchange or market system constituting the primary market for the
Stock, as reported in the Wall Street Journal or such other source as the
Company deems reliable. If the relevant date does not fall on a day on which the
Stock has traded on such securities exchange or market system, the date on which
the Fair Market Value shall be established shall be the last day on which the
Stock was so traded prior to the relevant date, or such other appropriate day as
shall be determined by the Board, in its sole discretion.

                        (ii) If, on such date, there is no public market for the
Stock, the Fair Market Value of a share of Stock shall be as determined by the
Board without regard to any restriction other than a restriction which, by its
terms, will never lapse.

                   (q)  "INCENTIVE STOCK OPTION" means an Option intended to be
(to the extent set forth in this Option Agreement) and which qualifies as an
incentive stock option within the meaning of Section 422(b) of the Code.

                   (r)  "NONSTATUTORY STOCK OPTION" means an Option which does
not qualify as an Incentive Stock Option.

                   (s)  "PARENT CORPORATION" means any present or future "parent
corporation" of the Company, as defined in Section 424(e) of the Code.

                   (t)  "PARTICIPATING COMPANY" means the Company or any Parent
Corporation or Subsidiary Corporation.

                   (u)  "PARTICIPATING COMPANY GROUP" means, at any point in
time, all corporations collectively which are then Participating Companies.

                   (v)  "SECURITIES ACT" means the Securities Act of 1933, as
amended.

                                       3
<PAGE>
                   (w)  "SERVICE" means the Optionee's employment or service
with the Participating Company Group, whether in the capacity of an Employee, a
Director or a Consultant. The Optionee's Service shall not be deemed to have
terminated merely because of a change in the capacity in which the Optionee
renders Service to the Participating Company Group or a change in the
Participating Company for which the Optionee renders such Service, provided that
there is no interruption or termination of the Optionee's Service. Furthermore,
the Optionee's Service with the Participating Company Group shall not be deemed
to have terminated if the Optionee takes any military leave, sick leave, or
other bona fide leave of absence approved by the Company; provided, however,
that if any such leave exceeds ninety (90) days, on the ninety-first (91st) day
of such leave any Incentive Stock Option held by the Optionee shall cease to be
treated as an Incentive Stock Option and instead shall be treated thereafter as
a Nonstatutory Stock Option unless the Optionee's right to return to Service
with the Participating Company Group is guaranteed by statute or contract.
Notwithstanding the foregoing, unless otherwise designated by the Company or
required by law, a leave of absence shall not be treated as Service for purposes
of determining the Vested Ratio. The Optionee's Service shall be deemed to have
terminated either upon an actual termination of Service or upon the corporation
for which the Optionee performs Service ceasing to be a Participating Company.
Subject to the foregoing, the Company, in its sole discretion, shall determine
whether the Optionee's Service has terminated and the effective date of such
termination. (NOTE: If the Option is exercised more than three (3) months after
the date on which the Optionee ceased to be an Employee (other than by reason of
death or Disability), the Option will be treated as a Nonstatutory Stock Option
and not as an incentive stock option to the extent required by Section 422 of
the Code.)

                   (x)  "STOCK" means the common stock of the Company, as
adjusted from time to time in accordance with Section 9.

                   (y)  "SUBSIDIARY CORPORATION" means any present or future
"subsidiary corporation" of the Company, as defined in Section 424(f) of the
Code.

              1.2. CONSTRUCTION. Captions and titles contained herein are for
convenience only and shall not affect the meaning or interpretation of any
provision of this Option Agreement. Except when otherwise indicated by the
context, the singular shall include the plural and the plural shall include the
singular. Use of the term "or" is not intended to be exclusive, unless the
context clearly requires otherwise.

         2.   TAX STATUS OF OPTION.

         This Option is intended to be an Incentive Stock Option, but the
Company does not represent or warrant that this Option qualifies as such. The
Optionee should consult with the Optionee's own tax advisor regarding the tax
effects of this Option and the requirements necessary to obtain favorable income
tax treatment under Section 422 of the Code, including, but not limited to,
holding period requirements. (NOTE: If the aggregate Exercise Price of the
Option (that is, the Exercise Price multiplied by the Number of Option Shares)
plus the aggregate exercise price of any other Incentive Stock Options held by
the Optionee (whether granted pursuant to the Plan or any other stock option
plan of the Participating Company Group) is

                                       4
<PAGE>
greater than One Hundred Thousand Dollars ($100,000), the Optionee should
contact the Chief Financial Officer of the Company to ascertain whether the
entire Option qualifies as an Incentive Stock Option.)

         3.   ADMINISTRATION.

         All questions of interpretation concerning this Option Agreement shall
be determined by the Board. All determinations by the Board shall be final and
binding upon all persons having an interest in the Option. Any officer of a
Participating Company shall have the authority to act on behalf of the Company
with respect to any matter, right, obligation, or election which is the
responsibility of or which is allocated to the Company herein, provided the
officer has apparent authority with respect to such matter, right, obligation,
or election.

         4.   EXERCISE OF THE OPTION.

              4.1. RIGHT TO EXERCISE. Except as otherwise provided herein, the
Option shall be exercisable on and after the Date of Option Grant and prior to
the termination of the Option (as provided in Section 6) in an amount not to
exceed the Number of Option Shares multiplied by the Vested Ratio less the
number of shares previously acquired upon exercise of the Option. In no event
shall the Option be exercisable for more shares than the Number of Option
Shares.

              4.2. METHOD OF EXERCISE. Exercise of the Option shall be by
written notice to the Company which must state the election to exercise the
Option, the number of whole shares of Stock for which the Option is being
exercised and such other representations and agreements as to the Optionee's
investment intent with respect to such shares as may be required pursuant to the
provisions of this Option Agreement. The written notice must be signed by the
Optionee and must be delivered to the Chief Financial Officer of the Company, or
other authorized representative of the Participating Company Group, prior to the
termination of the Option as set forth in Section 6, accompanied by full payment
of the aggregate Exercise Price for the number of shares of Stock being
purchased and the tax withholding obligations, if any, as provided in Section
4.4. The Option shall be deemed to be exercised upon receipt by the Company of
such written notice, the aggregate Exercise Price, and tax withholding
obligations, if any.

              4.3. PAYMENT OF EXERCISE PRICE.

                   (a) FORMS OF CONSIDERATION AUTHORIZED. Except as otherwise
provided below, payment of the aggregate Exercise Price for the number of shares
of Stock for which the Option is being exercised shall be made (i) in cash or
cash equivalent, (ii) by tender to the Company of whole shares of Stock owned by
the Optionee having a Fair Market Value (as determined by the Company without
regard to any restrictions on transferability applicable to such stock by reason
of federal or state securities laws or agreements with an underwriter for the
Company) not less than the aggregate Exercise Price, (iii) by means of a
Cashless Exercise, as defined in Section 4.3(c), or (iv) by any combination of
the foregoing.

                   (b) TENDER OF STOCK. Notwithstanding the foregoing, the
Option may not be exercised by tender to the Company of shares of Stock to the
extent such tender of Stock would constitute a violation of the provisions of
any law, regulation or agreement restricting the

                                       5
<PAGE>
redemption of the Company's stock. The Option may not be exercised by tender to
the Company of shares of Stock unless such shares either have been owned by the
Optionee for more than six (6) months or were not acquired, directly or
indirectly, from the Company.

                   (c) CASHLESS EXERCISE. A "CASHLESS EXERCISE" means the
assignment in a form acceptable to the Company of the proceeds of a sale or loan
with respect to some or all of the shares of Stock acquired upon the exercise of
the Option pursuant to a program or procedure approved by the Company
(including, without limitation, through an exercise complying with the
provisions of Regulation T as promulgated from time to time by the Board of
Governors of the Federal Reserve System). The Company reserves, at any and all
times, the right, in the Company's sole and absolute discretion, to decline to
approve or terminate any such program or procedure.

              4.4. TAX WITHHOLDING. At the time the Option is exercised, in
whole or in part, or at any time thereafter as requested by the Company, the
Optionee hereby authorizes withholding from payroll and any other amounts
payable to the Optionee, and otherwise agrees to make adequate provision for
(including by means of a Cashless Exercise to the extent permitted by the
Company), any sums required to satisfy the federal, state, local and foreign tax
withholding obligations of the Participating Company Group, if any, which arise
in connection with the Option, including, without limitation, obligations
arising upon (i) the exercise, in whole or in part, of the Option, (ii) the
transfer, in whole or in part, of any shares acquired upon exercise of the
Option, (iii) the operation of any law or regulation providing for the
imputation of interest, or (iv) the lapsing of any restriction with respect to
any shares acquired upon exercise of the Option. The Optionee is cautioned that
the Option is not exercisable unless the tax withholding obligations of the
Participating Company Group are satisfied. Accordingly, the Optionee may not be
able to exercise the Option when desired even though the Option is vested, and
the Company shall have no obligation to issue a certificate for such shares.

              4.5. CERTIFICATE REGISTRATION. Except in the event the Exercise
Price is paid by means of a Cashless Exercise, the certificate for the shares as
to which the Option is exercised shall be registered in the name of the
Optionee, or, if applicable, in the names of the heirs of the Optionee.

              4.6. RESTRICTIONS ON GRANT OF THE OPTION AND ISSUANCE OF SHARES.
The grant of the Option and the issuance of shares of Stock upon exercise of the
Option shall be subject to compliance with all applicable requirements of
federal, state or foreign law with respect to such securities. The Option may
not be exercised if the issuance of shares of Stock upon exercise would
constitute a violation of any applicable federal, state or foreign securities
laws or other law or regulations or the requirements of any stock exchange or
market system upon which the Stock may then be listed. In addition, the Option
may not be exercised unless (i) a registration statement under the Securities
Act shall at the time of exercise of the Option be in effect with respect to the
shares issuable upon exercise of the Option or (ii) in the opinion of legal
counsel to the Company, the shares issuable upon exercise of the Option may be
issued in accordance with the terms of an applicable exemption from the
registration requirements of the Securities Act. THE OPTIONEE IS CAUTIONED THAT
THE OPTION MAY NOT BE EXERCISED UNLESS THE FOREGOING CONDITIONS ARE SATISFIED.
ACCORDINGLY, THE

                                       6
<PAGE>
OPTIONEE MAY NOT BE ABLE TO EXERCISE THE OPTION WHEN DESIRED EVEN THOUGH THE
OPTION IS VESTED. Questions concerning this restriction should be directed to
the Chief Financial Officer of the Company. The inability of the Company to
obtain from any regulatory body having jurisdiction the authority, if any,
deemed by the Company's legal counsel to be necessary to the lawful issuance and
sale of any shares subject to the Option shall relieve the Company of any
liability in respect of the failure to issue or sell such shares as to which
such requisite authority shall not have been obtained. As a condition to the
exercise of the Option, the Company may require the Optionee to satisfy any
qualifications that may be necessary or appropriate, to evidence compliance with
any applicable law or regulation and to make any representation or warranty with
respect thereto as may be requested by the Company.

              4.7. FRACTIONAL SHARES. The Company shall not be required to issue
fractional shares upon the exercise of the Option.

         5.   NONTRANSFERABILITY OF THE OPTION.

         The Option may be exercised during the lifetime of the Optionee only by
the Optionee or the Optionee's guardian or legal representative and may not be
assigned or transferred in any manner except by will or by the laws of descent
and distribution. Following the death of the Optionee, the Option, to the extent
provided in Section 7, may be exercised by the Optionee's legal representative
or by any person empowered to do so under the deceased Optionee's will or under
the then applicable laws of descent and distribution.

         6.   TERMINATION OF THE OPTION.

         The Option shall terminate and may no longer be exercised on the first
to occur of (a) the Option Expiration Date, (b) the last date for exercising the
Option following termination of the Optionee's Service as described in Section
7, or (c) a Change in Control to the extent provided in Section 8.

         7.   EFFECT OF TERMINATION OF SERVICE.

              7.1. OPTION EXERCISABILITY.

                   (a) DISABILITY. If the Optionee's Service with the
Participating Company Group is terminated because of the Disability of the
Optionee, the Option, to the extent unexercised and exercisable on the date on
which the Optionee's Service terminated, may be exercised by the Optionee (or
the Optionee's guardian or legal representative) at any time prior to the
expiration of twelve (12) months after the date on which the Optionee's Service
terminated, but in any event no later than the Option Expiration Date.

                   (b) DEATH. If the Optionee's Service with the Participating
Company Group is terminated because of the death of the Optionee, the Option, to
the extent unexercised and exercisable on the date on which the Optionee's
Service terminated, may be exercised by the Optionee's legal representative or
other person who acquired the right to exercise the Option by reason of the
Optionee's death at any time prior to the expiration of twelve (12) months after
the date on which the Optionee's Service terminated, but in any event no later
than the Option

                                       7
<PAGE>
Expiration Date. The Optionee's Service shall be deemed to have terminated on
account of death if the Optionee dies within three (3) months after the
Optionee's termination of Service.

                   (c) OTHER TERMINATION OF SERVICE. If the Optionee's Service
with the Participating Company Group terminates for any reason, except
Disability, death, or Cause, the Option, to the extent unexercised and
exercisable by the Optionee on the date on which the Optionee's Service
terminated, may be exercised by the Optionee within three (3) months (or such
other longer period of time as determined by the Board, in its sole discretion)
after the date on which the Optionee's Service terminated, but in any event no
later than the Option Expiration Date.

              7.2. EXTENSION IF EXERCISE PREVENTED BY LAW. Notwithstanding the
foregoing, if the exercise of the Option within the applicable time periods set
forth in Section 7.1 is prevented by the provisions of Section 4.6, the Option
shall remain exercisable until three (3) months after the date the Optionee is
notified by the Company that the Option is exercisable, but in any event no
later than the Option Expiration Date. The Company makes no representation as to
the tax consequences of any such delayed exercise. The Optionee should consult
with the Optionee's own tax advisor as to the tax consequences to the Optionee
of any such delayed exercise.

              7.3. EXTENSION IF OPTIONEE SUBJECT TO SECTION 16(b).
Notwithstanding the foregoing, if a sale within the applicable time periods set
forth in Section 7.1 of shares acquired upon the exercise of the Option would
subject the Optionee to suit under Section 16(b) of the Exchange Act, the Option
shall remain exercisable until the earliest to occur of (i) the tenth (10th) day
following the date on which a sale of such shares by the Optionee would no
longer be subject to such suit, (ii) the one hundred and ninetieth (190th) day
after the Optionee's termination of Service, or (iii) the Option Expiration
Date. The Company makes no representation as to the tax consequences of any such
delayed exercise. The Optionee should consult with the Optionee's own tax
advisors as to the tax consequences to the Optionee of any such delayed
exercise.

              7.4. TERMINATION FOR CAUSE. Except as otherwise provided in a
contract of employment or service between a Participating Company and the
Optionee, and notwithstanding any other provision of this Option Agreement to
the contrary, if the Optionee's Service with the Participating Company Group is
terminated for Cause, the Option shall terminate and cease to be exercisable
immediately upon such termination of Service.

         8.   CHANGE IN CONTROL.

              8.1. DEFINITIONS.

                   (a)  An "OWNERSHIP CHANGE EVENT" shall be deemed to have
occurred if any of the following occurs with respect to the Company:

                        (i)  the direct or indirect sale or exchange in a single
or series of related transactions by the stockholders of the Company of more
than fifty percent (50%) of the voting stock of the Company;

                                       8
<PAGE>
                        (ii)  a merger or consolidation in which the Company is
a party;

                        (iii) the sale, exchange, or transfer of all or
substantially all of the assets of the Company; or

                        (iv)  a liquidation or dissolution of the Company.

                   (b)  A "CHANGE IN CONTROL" shall mean an Ownership Change
Event or a series of related Ownership Change Events (collectively, the
"TRANSACTION") wherein the stockholders of the Company immediately before the
Transaction do not retain immediately after the Transaction, in substantially
the same proportions as their ownership of shares of the Company's voting stock
immediately before the Transaction, direct or indirect beneficial ownership of
more than fifty percent (50%) of the total combined voting power of the
outstanding voting stock of the Company or the corporation or corporations to
which the assets of the Company were transferred (the "TRANSFEREE
CORPORATION(S)"), as the case may be. For purposes of the preceding sentence,
indirect beneficial ownership shall include, without limitation, an interest
resulting from ownership of the voting stock of one or more corporations which,
as a result of the Transaction, own the Company or the Transferee
Corporation(s), as the case may be, either directly or through one or more
subsidiary corporations. The Board shall have the right to determine whether
multiple sales or exchanges of the voting stock of the Company or multiple
Ownership Change Events are related, and its determination shall be final,
binding and conclusive.

              8.2. EFFECT OF CHANGE IN CONTROL ON OPTION. In the event of a
Change in Control, the Optionee shall be credited with an additional two (2)
years of Service as of the date ten (10) days prior to the date of the Change in
Control, solely for purposes of determining the Vested Ratio. Any exercise or
vesting of the Option that was permissible solely by reason of this Section 8.2
shall be conditioned upon the consummation of the Change in Control. In
addition, the surviving, continuing, successor, or purchasing corporation or
parent corporation thereof, as the case may be (the "ACQUIRING CORPORATION"),
may either assume the Company's rights and obligations under the Option or
substitute for the Option a substantially equivalent option for the Acquiring
Corporation's stock. For purposes of this Section 8.2, the Option shall be
deemed assumed if, following the Change in Control, the Option confers the right
to purchase in accordance with its terms and conditions, for each share of Stock
subject to the Option immediately prior to the Change in Control, the
consideration (whether stock, cash or other securities or property) to which a
holder of a share of Stock on the effective date of the Change in Control was
entitled. The Option shall terminate and cease to be outstanding effective as of
the date of the Change in Control to the extent that the Option is neither
assumed or substituted for by the Acquiring Corporation in connection with the
Change in Control nor exercised as of the date of the Change in Control.
Notwithstanding the foregoing, if the corporation the stock of which is subject
to the Option immediately prior to an Ownership Change Event described in
Section 8.1(a)(i) constituting a Change in Control is the surviving or
continuing corporation and immediately after any such event less than fifty
percent (50%) of the total combined voting power of its voting stock is held by
another corporation or by other corporations that are members of an affiliated
group within the meaning of Section 1504(a) of the Code without

                                       9
<PAGE>
regard to the provisions of Section 1504(b) of the Code, the Option shall not
terminate unless the Board otherwise provides in its sole discretion.

              8.3. NOTICE. The Company shall provide notice of a Change in
Control to the Optionee at least ten (10) days prior to the consummation of a
Change in Control. The Company's notice shall summarize the principal terms of
the Change in Control, including, without limitation, whether the Acquiring
Corporation is assuming the Option or substituting an equivalent option
therefor.

              8.4. FAIR MARKET VALUE LIMITATION. Should the exercisability of
this Option be accelerated in connection with a Change in Control in accordance
with Section 8.2, then to the extent that the aggregate Fair Market Value of the
shares of Stock with respect to which the Optionee may exercise the Option for
the first time during the calendar year of such acceleration, when added to the
aggregate Fair Market Value of the shares subject to any other options
designated as Incentive Stock Options granted to the Optionee under all stock
option plans of the Participating Company Group prior to the Date of Option
Grant with respect to which such options are exercisable for the first time
during the same calendar year, exceeds One Hundred Thousand Dollars ($100,000)
(or such other limit, if any, imposed by Section 422 of the Code), the portion
of the Option which exceeds such amount shall be treated as a Nonstatutory Stock
Option. For purposes of the preceding sentence, options designated as Incentive
Stock Options shall be taken into account in the order in which they were
granted, and the Fair Market Value of shares of stock shall be determined as of
the time the option with respect to such shares is granted.

         9.   ADJUSTMENTS FOR CHANGES IN CAPITAL STRUCTURE.

         In the event of any stock dividend, stock split, reverse stock split,
recapitalization, combination, reclassification, or similar change in the
capital structure of the Company, appropriate adjustments shall be made in the
number, Exercise Price and class of shares of stock subject to the Option. If a
majority of the shares which are of the same class as the shares that are
subject to the Option are exchanged for, converted into, or otherwise become
(whether or not pursuant to an Ownership Change Event) shares of another
corporation (the "NEW SHARES"), the Board may unilaterally amend the Option to
provide that the Option is exercisable for New Shares. In the event of any such
amendment, the Number of Option Shares and the Exercise Price shall be adjusted
in a fair and equitable manner, as determined by the Board, in its sole
discretion. Notwithstanding the foregoing, any fractional share resulting from
an adjustment pursuant to this Section 9 shall be rounded up or down to the
nearest whole number, as determined by the Board, and in no event may the
Exercise Price be decreased to an amount less than the par value, if any, of the
stock subject to the Option. The adjustments determined by the Board pursuant to
this Section 9 shall be final, binding and conclusive.

         10.  RIGHTS AS A STOCKHOLDER, EMPLOYEE OR CONSULTANT.

         The Optionee shall have no rights as a stockholder with respect to any
shares covered by the Option until the date of the issuance of a certificate for
the shares for which the Option has been exercised (as evidenced by the
appropriate entry on the books of the Company or of a duly authorized transfer
agent of the Company). No adjustment shall be made for dividends,

                                       10
<PAGE>
distributions or other rights for which the record date is prior to the date
such certificate is issued, except as provided in Section 9. If the Optionee is
an Employee, the Optionee understands and acknowledges that, except as otherwise
provided in a separate, written employment agreement between a Participating
Company and the Optionee, the Optionee's employment is "at will" and is for no
specified term. Nothing in this Option Agreement shall confer upon the Optionee,
whether an Employee or Consultant, any right to continue in the Service of a
Participating Company or interfere in any way with any right of the
Participating Company Group to terminate the Optionee's Service as an Employee
or Consultant, as the case may be, at any time.

         11.  NOTICE OF SALES UPON DISQUALIFYING DISPOSITION.

         The Optionee shall dispose of the shares acquired pursuant to the
Option only in accordance with the provisions of this Option Agreement. In
addition, the Optionee shall promptly notify the Chief Financial Officer of the
Company if the Optionee disposes of any of the shares acquired pursuant to the
Option within one (1) year after the date the Optionee exercises all or part of
the Option or within two (2) years after the Date of Option Grant and shall
provide the Company with a description of the terms and circumstances of such
disposition. Until such time as the Optionee disposes of such shares in a manner
consistent with the provisions of this Option Agreement, unless otherwise
expressly authorized by the Company, the Optionee shall hold all shares acquired
pursuant to the Option in the Optionee's name (and not in the name of any
nominee) for the one-year period immediately after the exercise of the Option
and the two-year period immediately after Date of Option Grant. At any time
during the one-year or two-year periods set forth above, the Company may place a
legend on any certificate representing shares acquired pursuant to the Option
requesting the transfer agent for the Company's stock to notify the Company of
any such transfers. The obligation of the Optionee to notify the Company of any
such transfer shall continue notwithstanding that a legend has been placed on
the certificate pursuant to the preceding sentence.

         12.  LEGENDS.

         The Company may at any time place legends referencing any applicable
federal, state or foreign securities law restrictions on all certificates
representing shares of stock subject to the provisions of this Option Agreement.
The Optionee shall, at the request of the Company, promptly present to the
Company any and all certificates representing shares acquired pursuant to the
Option in the possession of the Optionee in order to carry out the provisions of
this Section.

         13.  BINDING EFFECT.

         Subject to the restrictions on transfer set forth herein, this Option
Agreement shall inure to the benefit of and be binding upon the parties hereto
and their respective heirs, executors, administrators, successors and assigns.

         14.  TERMINATION OR AMENDMENT.

         The Board may terminate or amend the Plan or the Option at any time;
provided, however, that except as provided in Section 8.2 in connection with a
Change in Control, no such

                                       11
<PAGE>
termination or amendment may adversely affect the Option or any unexercised
portion hereof without the consent of the Optionee unless such termination or
amendment is necessary to comply with any applicable law or government
regulation or is required to enable the Option to qualify as an Incentive Stock
Option. No amendment or addition to this Option Agreement shall be effective
unless in writing.

         15.  NOTICES.

         Any notice required or permitted hereunder shall be given in writing
and shall be deemed effectively given (except to the extent that this Option
Agreement provides for effectiveness only upon actual receipt of such notice)
upon personal delivery or upon deposit in the United States Post Office, by
registered or certified mail, with postage and fees prepaid, addressed to the
other party at the address of such party as set forth below that party's
signature or at such other address as such party may designate in writing from
time to time to the other party.

         16.  INTEGRATED AGREEMENT.

         This Option Agreement constitutes the entire understanding and
agreement of the Optionee and the Participating Company Group with respect to
the subject matter contained herein, and there are no agreements,
understandings, restrictions, representations, or warranties among the Optionee
and the Participating Company Group with respect to such subject matter other
than those as set forth or provided for herein. To the extent contemplated
herein, the provisions of this Option Agreement shall survive any exercise of
the Option and shall remain in full force and effect.

         17.  APPLICABLE LAW.

         This Option Agreement shall be governed by the laws of the State of
Delaware as such laws are applied to agreements between Delaware residents
entered into and to be performed entirely within the State of Delaware.

                                            P.F. CHANG'S CHINA BISTRO, INC.

                                            By: ________________________________

                                            Title: _____________________________

                                            Address: ___________________________
                                                     ___________________________

                                       12
<PAGE>
         The Optionee represents that the Optionee is familiar with the terms
and provisions of this Option Agreement, and hereby accepts the Option subject
to all of the terms and provisions thereof. The Optionee hereby agrees to accept
as binding, conclusive and final all decisions or interpretations of the Board
upon any questions arising under this Option Agreement.

                                            OPTIONEE

Date:______________________________         ____________________________________

                                            Optionee Address:

                                            ____________________________________

                                            ____________________________________

                                       13Exhibit 4.1

MORTGAGE ASSET SECURITIZATION TRANSACTIONS, INC.,

Depositor

WELLS FARGO BANK, N.A.,

Master Servicer, Trust Administrator and Custodian

WACHOVIA BANK, NATIONAL ASSOCIATION,

Trustee

and

U.S. BANK NATIONAL ASSOCIATION,

Custodian

POOLING AND SERVICING AGREEMENT

Dated as of September 1, 2004

 

 

MASTR SEASONED SECURITIZATION TRUST 2004-1

MORTGAGE PASS-THROUGH CERTIFICATES, SERIES 2004-1

 

	 
	 	 	 
	

	 

 

TABLE OF CONTENTS

 

	
ARTICLE I DEFINITIONS
	 	
6

	 	 	 	 
	
Section 1.01
	
Definitions
	 	
6

	
Section 1.02
	
Certain Calculations
	 	
52

	 	 	 	 
	
ARTICLE II CONVEYANCE OF MORTGAGE LOANS; REPRESENTATIONS AND WARRANTIES
	 	
52

	 	 	 	 
	
Section 2.01
	
Conveyance of Mortgage Loans
	 	
52

	
Section 2.02
	
Acceptance by Trustee of the Mortgage Loans
	 	
55

	
Section 2.03
	
Remedies for Breaches of Representations and Warranties
	 	
56

	
Section 2.04
	
Representations and Warranties of the Depositor as to the Mortgage Loans
	 	
59

	
Section 2.05
	
[Reserved]
	 	
59

	
Section 2.06
	
Execution and Delivery of Certificates
	 	
59

	
Section 2.07
	
REMIC Matters
	 	
59

	
Section 2.08
	
Covenants of the Master Servicer
	 	
59

	
Section 2.09
	
Representations and Warranties of the Master Servicer
	 	
60

	
Section 2.10
	
Representations and Warranties of the Custodians.
	 	
61

	 	 	 	 
	
ARTICLE III ADMINISTRATION AND MASTER SERVICING OF MORTGAGE LOANS
	 	
62

	 	 	 	 
	
Section 3.01
	
Master Servicing of Mortgage Loans
	 	
62

	
Section 3.02
	
Monitoring of Servicers
	 	
63

	
Section 3.03
	
[Reserved]
	 	
65

	
Section 3.04
	
Rights of the Depositor and the Trustee in Respect of the Master Servicer
	 	
65

	
Section 3.05
	
Trustee to Act as Master Servicer
	 	
65

	
Section 3.06
	
Protected Accounts
	 	
66

	
Section 3.07
	
Collection of Mortgage Loan Payments; Collection Account; Distribution Account
	 	
66

	
Section 3.08
	
Collection of Taxes, Assessments and Similar Items; Escrow Accounts
	 	
69

	
Section 3.09
	
Access to Certain Documentation and Information Regarding the Mortgage Loans
	 	
69

	
Section 3.10
	
Permitted Withdrawals from the Collection Account and Distribution Account
	 	
70

	
Section 3.11
	
Maintenance of Hazard Insurance; Maintenance of Primary Insurance Policies
	 	
72

	
Section 3.12
	
Presentment of Claims and Collection of Proceeds
	 	
72

	
Section 3.13
	
Maintenance of the Primary Insurance Policies
	 	
73

	
Section 3.14
	
Realization upon Defaulted Mortgage Loans
	 	
73

	
Section 3.15
	
REO Property
	 	
73

	  
	 	-i- 	 
	

	 

 

	
Section 3.16
	
Due-on-Sale Clauses; Assumption Agreements
	 	
75

	
Section 3.17
	
Trustee to Cooperate; Release of Mortgage Files
	 	
75

	
Section 3.18
	
Documents, Records and Funds in Possession of Master Servicer and Custodians to Be Held for the Trustee
	 	
75

	
Section 3.19
	
Master Servicing Compensation
	 	
76

	
Section 3.20
	
Access to Certain Documentation
	 	
76

	
Section 3.21
	
Annual Statement as to Compliance
	 	
76

	
Section 3.22
	
Annual Independent Public Accountants’ Servicing Statement; Financial Statements
	 	
77

	
Section 3.23
	
Errors and Omissions Insurance; Fidelity Bonds
	 	
77

	
Section 3.24
	
Master Servicer to Remit Prepayment Penalties to the Transferor
	 	
77

	 	 	 	 
	
ARTICLE IV DISTRIBUTIONS AND SERVICING ADVANCES
	 	
78

	 	 	 	 
	
Section 4.01
	
Advances
	 	
78

	
Section 4.02
	
Priorities of Distribution
	 	
78

	
Section 4.03
	
Allocation of Realized Losses
	 	
87

	
Section 4.04
	
Distribution Date Statements to Certificateholders
	 	
90

	
Section 4.05
	
Lower-Tier REMIC Distributions and Allocation of Realized Losses
	 	
93

	 	 	 	 
	
ARTICLE V THE CERTIFICATES
	 	
97

	 	 	 	 
	
Section 5.01
	
The Certificates
	 	
97

	
Section 5.02
	
Certificate Register; Registration of Transfer and Exchange of Certificates
	 	
98

	
Section 5.03
	
Mutilated, Destroyed, Lost or Stolen Certificates
	 	
103

	
Section 5.04
	
Persons Deemed Owners
	 	
104

	
Section 5.05
	
Access to List of Certificateholders’ Names and Addresses
	 	
104

	
Section 5.06
	
Maintenance of Office or Agency
	 	
104

	 	 	 	 
	
ARTICLE VI THE DEPOSITOR, THE MASTER SERVICER AND THE CUSTODIANS
	 	
104

	 	 	 	 
	
Section 6.01
	
Respective Liabilities of the Depositor, the Master Servicer and the Custodians
	 	
104

	
Section 6.02
	
Merger or Consolidation of the Depositor, the Master Servicer and the Custodians
	 	
105

	
Section 6.03
	
Limitation on Liability of the Depositor, the Master Servicer, the Custodians and Others
	 	
105

	
Section 6.04
	
Limitation on Resignation of Master Servicer
	 	
106

	
Section 6.05
	
Sale and Assignment of Master Servicing Rights
	 	
106

	
Section 6.06
	
Fees of the Custodians
	 	
107

	 	 	 	 
	
ARTICLE VII DEFAULT
	 	
107

	 	 	 	 
	
Section 7.01
	
Events of Default
	 	
107

	
Section 7.02
	
Trustee to Act; Appointment of Successor
	 	
109

	  
	 	-ii- 	 
	

	 

 

	
Section 7.03
	
Notification to Certificateholders
	 	
110

	 	 	 	 
	
ARTICLE VIII CONCERNING THE TRUSTEE
	 	
110

	 	 	 	 
	
Section 8.01
	
Duties of Trustee
	 	
110

	
Section 8.02
	
Certain Matters Affecting the Trustee
	 	
112

	
Section 8.03
	
Trustee Not Liable for Certificates or Mortgage Loans
	 	
113

	
Section 8.04
	
Trustee May Own Certificates
	 	
114

	
Section 8.05
	
Trustee’s Fees and Expenses
	 	
114

	
Section 8.06
	
Eligibility Requirements for Trustee
	 	
114

	
Section 8.07
	
Resignation and Removal of Trustee
	 	
115

	
Section 8.08
	
Successor Trustee
	 	
115

	
Section 8.09
	
Merger or Consolidation of Trustee
	 	
116

	
Section 8.10
	
Appointment of Co-Trustee or Separate Trustee
	 	
116

	 	 	 	 
	
ARTICLE IX CONCERNING THE TRUST ADMINISTRATOR AND THE MASTER SERVICER
	 	
118

	 	 	 	 
	
Section 9.01
	
Duties of Trust Administrator
	 	
118

	
Section 9.02
	
Certain Matters Affecting the Trust Administrator
	 	
119

	
Section 9.03
	
Trust Administrator Not Liable for Certificates or Mortgage Loans
	 	
120

	
Section 9.04
	
Trust Administrator May Own Certificates
	 	
121

	
Section 9.05
	
Trust Administrator’s Fees and Expenses
	 	
121

	
Section 9.06
	
Eligibility Requirements for Trust Administrator
	 	
121

	
Section 9.07
	
Resignation and Removal of Trust Administrator
	 	
122

	
Section 9.08
	
Successor Trust Administrator
	 	
123

	
Section 9.09
	
Merger or Consolidation of Trust Administrator
	 	
123

	
Section 9.10
	
[Reserved]
	 	
124

	
Section 9.11
	
Tax Matters
	 	
124

	
Section 9.12
	
Periodic Filings
	 	
126

	
Section 9.13
	
[Reserved]
	 	
128

	
Section 9.14
	
[Reserved]
	 	
128

	 	 	 	 
	
ARTICLE X TERMINATION
	 	
129

	 	 	 	 
	
Section 10.01
	
Termination upon Liquidation or Purchase of All Mortgage Loans
	 	
129

	
Section 10.02
	
Final Distribution on the Certificates
	 	
130

	
Section 10.03
	
Additional Termination Requirements
	 	
131

	 	 	 	 
	
ARTICLE XI MISCELLANEOUS PROVISIONS
	 	
132

	 	 	 	 
	
Section 11.01
	
Amendment
	 	
132

	
Section 11.02
	
Recordation of Agreement; Counterparts
	 	
134

	
Section 11.03
	
Governing Law
	 	
134

	
Section 11.04
	
Intention of Parties
	 	
134

	
Section 11.05
	
Notices
	 	
135

	  
	 	 -iii-	 
	

	 

 

	
Section 11.06
	
Severability of Provisions
	 	
136

	
Section 11.07
	
Assignment
	 	
136

	
Section 11.08
	
Limitation on Rights of Certificateholders
	 	
136

	
Section 11.09
	
Inspection and Audit Rights
	 	
137

	
Section 11.10
	
Certificates Nonassessable and Fully Paid
	 	
137

	  
	 	 -iv-	 
	

	 

 

SCHEDULES

	
Schedule I
	
Mortgage Loan Schedule

	
Schedule II:
	
Targeted Aggregate Principal Balances 

EXHIBITS

	
Exhibit A:
	
Form of Senior Certificate

	
Exhibit B:
	
Form of Class PO Certificate

	
Exhibit C:
	
Form of Class A-X Certificate

	
Exhibit D:
	
Form of Residual Certificate

	
Exhibit E:
	
Form of Subordinate Certificate

	
Exhibit F:
	
Form of Reverse of Certificates

	
Exhibit G:
	
Form of Initial Certification of Custodian

	
Exhibit H:
	
Form of Final Certification of Custodian

	
Exhibit I:
	
Transfer Affidavit

	
Exhibit J:
	
Form of Transferor Certificate

	
Exhibit K:
	
Form of Investment Letter (Non Rule 144A)

	
Exhibit L:
	
Form of Rule 144A Letter

	
Exhibit M:
	
Form of Request for Release

	
Exhibit N:
	
Form of Certification to be Provided with Form 10-K

	
 

	 	-v- 	 
	

	

 

THIS POOLING AND SERVICING AGREEMENT, dated as of September 1, 2004, among MORTGAGE ASSET SECURITIZATION TRANSACTIONS, INC., a Delaware corporation, as depositor (the “Depositor”), WELLS FARGO BANK, N.A., a national banking association (“Wells Fargo”), as master servicer (in such capacity, the “Master Servicer”), as trust administrator (in such capacity, the “Trust Administrator”), and as a custodian (in such capacity, a “Custodian”), WACHOVIA BANK, NATIONAL ASSOCIATION, a national banking association, as trustee (in such capacity, the “Trustee”) and U.S. BANK NATIONAL ASSOCIATION, a national banking association (“U.S. Bank”) as a custodian (in such capacity, a “Custodian”).

W I T N E S S E T H T H A T

In consideration of the mutual agreements herein contained, the parties hereto agree as follows:

PRELIMINARY STATEMENT

Lower-Tier REMIC

As provided herein, the Trustee will make an election to treat the segregated pool of assets consisting of the Mortgage Loans and certain other related assets subject to this Agreement as a real estate mortgage investment conduit (a “REMIC”) for federal income tax purposes, and such segregated pool of assets will be designated as the “Lower-Tier REMIC.” The Class A-LR Certificates will represent the sole class of “residual interests” in the Lower-Tier REMIC for purposes of the REMIC Provisions under federal income tax law. The following table irrevocably sets forth the designation, the Uncertificated Lower-Tier REMIC Pass-Through Rate, the initial Uncertificated Principal Balance, and solely for purposes of satisfying Treasury regulation Section 1.860G-1(a)(4)(iii), the “latest possible maturity date” for each of the Lower-Tier REMIC Regular Interests. None of the Lower-Tier REMIC Regular Interests will be certificated. 

	 	
Uncertificated Lower-Tier REMIC
	 	 
	
Designation
	
Pass-Through Rate
	
Initial Uncertificated

Principal Balance
	
Latest Possible Maturity Date(1)

	
LT-1
	
(2)
	
$138,691,734.71
	
August 2017

	
LT-IO1
	
0.01%
	
(3)
	
August 2017

	
LT-2SUBC
	
6.50%
	
$1,168.39
	
August 2032

	
LT-2
	
6.50%
	
$463,018,225.14
	
August 2032

	
LT-IO2
	
(2)
	
(3)
	
August 2032

	
LT-PO2
	
0.00%
	
$3,989,934.00
	
August 2032

	
LT-3SUBHY
	
(2)
	
$1,057.81
	
October 2032

	
LT-3SUBC
	
(2)
	
$105.79
	
October 2032

	
LT-3
	
(2)
	
$42,321,440.45
	
October 2032

	
LT-4SUBHY
	
(2)
	
$1,957.19
	
October 2032

	
LT-4SUBC
	
(2)
	
$195.74
	
October 2032

	
LT-4
	
(2)
	
$78,259,771.35
	
October 2032

______________

	(1)	Solely for purposes of Section 1.860G-1(a)(4)(iii) of the Treasury regulations, the Distribution Date that is Distribution Date following the latest maturity date of any related Mortgage Loan has been designated as the “latest possible maturity date” for each Lower-Tier REMIC Regular Interest.

 

	  
	 	 	 
	

	 

	(2)	Calculated in accordance with the definition of “Uncertificated Lower-Tier REMIC Pass-Through Rate” herein.

	(3)	Calculated in accordance with the definition of “Uncertificated Notional Amount” herein.

Upper-Tier REMIC

As provided herein, the Trustee will make an election to treat the segregated pool of assets consisting of the Lower-Tier REMIC Regular Interests subject to this Agreement as a REMIC for federal income tax purposes, and such segregated pool of assets will be designated as the “Upper-Tier REMIC.” The Class A-UR Certificates will represent the sole class of “residual interests” in the Upper-Tier REMIC for purposes of the REMIC Provisions under federal income tax law. The following table irrevocably sets forth the designation, the initial Pass-Through Rate, the initial Class Principal Balance, and solely for purposes of satisfying Treasury regulation Section 1.860G-1(a)(4)(iii), the “latest possible maturity date” for each Class of Certificates. 

 

	 	 	
Initial Class Principal Balance or Notional Amount
	 	
Initial Pass-Through Rate
	 	
Minimum Denomination
	 	
Integral Multiples

in Excess of Minimum
	 	
Latest Possible Maturity Date(1)
	 
	
Class 1-A-1
	 	
$
	
137,304,000
	 	 	
(2
	
)
	
$
	
25,000
	 	
$
	
1
	 	 	
August 2017
	 
	
Class 2-A-1
	 	
$
	
202,458,499
	 	 	
8.0000
	
%
	
$
	
25,000
	 	
$
	
1
	 	 	
August 2032
	 
	
Class 2-A-2
	 	
$
	
50,000,000
	 	 	
5.5000
	
%
	
$
	
25,000
	 	
$
	
1
	 	 	
August 2032
	 
	
Class 2-A-3
	 	
$
	
50,000,000
	 	 	
5.2500
	
%
	
$
	
25,000
	 	
$
	
1
	 	 	
August 2032
	 
	
Class 2-A-4
	 	
$
	
127,458,501
	 	 	
5.0000
	
%
	
$
	
25,000
	 	
$
	
1
	 	 	
August 2032
	 
	
Class 2-A-5
	 	
$
	
20,927,000
	 	 	
6.5000
	
%
	
$
	
25,000
	 	
$
	
1
	 	 	
August 2032
	 
	
Class 2-A-6
	 	
$
	
500,000
	 	 	
6.5000
	
%
	
$
	
1,000
	 	
$
	
1
	 	 	
August 2032
	 
	
Class 3-A-1
	 	
$
	
41,159,000
	 	 	
(3
	
)
	
$
	
25,000
	 	
$
	
1
	 	 	
October 2032
	 
	
Class 4-A-1
	 	
$
	
72,304,000
	 	 	
(4
	
)
	
$
	
25,000
	 	
$
	1	 	 	
October 2032
	 
	
Class 4-A-2
	 	
$
	
3,805,000
	 	 	
(4
	
)
	
$
	
25,000
	 	
$
	
1
	 	 	
October 2032
	 
	
Class A-X
	 		
(5
	
)
	 	
6.5000
	
%
	
$
	
100,000
	
 
	$	
1
	 	 	
August 2032
	 
	
Class PO
	 	
$
	
3,989,934
	 	 	
(6
	
)
	
$
	
25,000
	
 
	 	
N/A
	 	 	
August 2032
	 
	
Class A-LR
	 	
$
	
50
	 	 	
(2
	
)
	
$
	
50
	 	
 
	

N/A

	 	 	
October 2032
	 
	
Class A-UR
	 	
$
	
50
	 	 	
(2
	
)
	
$
	
50
	 	
 
	

N/A

	 	 	
October 2032
	 
	
Class 15-B-1
	 	
$
	
555,000
	 	 	
(2
	
)
	
$
	
25,000
	 	
$
	
1
	 	 	
August 2017
	 
	
Class 15-B-2
	 	
$
	
277,000
	 	 	
(2
	
)
	
$
	
25,000
	 	
$
	
1
	 	 	
August 2017
	 
	
Class 15-B-3
	 	
$
	
208,000
	 	 	
(2
	
)
	
$
	
25,000
	 	
$
	
1
	 	 	
August 2017
	 
	
Class 30-B-1
	 	
$
	
8,873,000
	 	 	
6.5000
	
%
	
$
	
25,000
	 	
$
	
1
	 	 	
August 2032
	 
	
Class 30-B-2
	 	
$
	
934,000
	 	 	
6.5000
	
%
	
$
	
25,000
	 	
$
	1	 	 	
August 2032
	 
	
Class 30-B-3
	 	
$
	
700,000
	 	 	
6.5000
	
%
	
$
	
25,000
	 	
$
	1	 	 	
August 2032
	 
	
Class HY-B-1
	 	
$
	
2,351,000
	 	 	
(7
	
)
	
$
	
25,000
	 	
$
	1	 	 	
October 2032
	 
	
Class HY-B-2
	 	
$
	
483,000
	 	 	
(7
	
)
	
$
	
25,000
	 	
$
	
1
	 	 	
October 2032
	 
	
Class HY-B-3
	 	
$
	
181,000
	 	 	
(7
	
)
	
$
	
25,000
	 	
$
	
1
	 	 	
October 2032
	 
	
Class 15-B-4
	 	
$
	
139,000
	 	 	
(2
	
)
	
$
	
25,000
	 	
$
	
1
	 	 	
August 2017
	 
	
Class 15-B-5
	 	
$
	
69,000
	 	 	
(2
	
)
	
$
	
25,000
	 	
$
	
1
	 	 	
August 2017
	 
	
Class 15-B-6
	 	
$
	
139,634
	 	 	
(2
	
)
	
$
	
25,000
	 	
$
	
1
	 	 	
August 2017
	 
	
Class C-B-4
	 	
$
	
588,000
	 	 	
(8
	
)
	
$
	
25,000
	 	
$
	
1
	 	 	
October 2032
	 
	
Class C-B-5
	 	
$
	
294,000
	 	 	
(8
	
)
	
$
	
25,000
	 	
$
	
1
	 	 	
October 2032
	 
	
Class C-B-6
	 	
$
	
587,921
	 	 	
(8
	
)
	
$
	
25,000
	 	
$
	
1
	 	 	
October 2032
	 

	  
	 	-2-	 
	

	 

______________

	(1)	Solely for purposes of Section 1.860G-1(a)(4)(iii) of the Treasury regulations, the Distribution Date that is Distribution Date following the latest maturity date of any related Mortgage Loan has been designated as the “latest possible maturity date” for each such Class of Certificates.

	(2)	Interest will accrue on the Class 1-A-1, Class A-LR, Class A-UR, Class 15-B-1, Class 15-B-2, Class 15-B-3, Class 15-B-4, Class 15-B-5 and Class 15-B-6 Certificates at a per annum rate equal to the excess of (x) the weighted average of the Mortgage Rates on the Mortgage Loans in Loan Group 1 as of the first day of the month immediately prior to the month in which the relevant Distribution Date occurs (after taking into account scheduled payments of principal on that date) over (y) the weighted average Servicing Fee Rate as of such date on the Mortgage Loans in Loan Group 1, subject to adjustment for prepayments in full received and distributed prior to that Distribution Date minus 0.01%. The per annum Pass-Through Rate on the Class 1-A-1, Class A-LR, Class A-UR, Class 15-B-1, Class 15-B-2, Class 15-B-3, Class 15-B-4, Class 15-B-5 and Class 15-B-6 Certificates for the first Interest Accrual Period is 6.2587%. For federal income tax purposes, the equivalent of the foregoing shall be expressed as the weighted average of the Lower-Tier REMIC Pass-Through Rate on Lower-Tier REMIC Regular Interest LT-1, weighted on the basis of the Uncertificated Principal Balance of such Lower-Tier REMIC Regular Interest.

	(3)	Interest will accrue on the Class 3-A-1 Certificates at a per annum rate equal to the excess of (x) the weighted average of the Mortgage Rates on the Mortgage Loans in Loan Group 3 as of the first day of the month immediately prior to the month in which the relevant Distribution Date occurs (after taking into account scheduled payments of principal on that date) over (y) the weighted average Servicing Fee Rate as of such date on the Mortgage Loans in Loan Group 3, subject to adjustment for prepayments in full received and distributed prior to that Distribution Date. The per annum Pass-Through Rate on the Class 3-A-1 Certificates for the first Interest Accrual Period is 4.7047%. For federal income tax purposes, the equivalent of the foregoing shall be expressed as the weighted average of the Lower-Tier REMIC Pass-Through Rate on Lower-Tier REMIC Regular Interest LT-3, weighted on the basis of the Uncertificated Principal Balance of such Lower-Tier REMIC Regular Interest.

	(4)	Interest will accrue on the Class 4-A-1 and Class 4-A-2 Certificates at a per annum rate equal to the excess of (x) the weighted average of the Mortgage Rates on the Mortgage Loans in Loan Group 4 as of the first day of the month immediately prior to the month in which the relevant Distribution Date occurs (after taking into account scheduled payments of principal on that date) over (y) the weighted average Servicing Fee Rate as of such date on the Loans in Loan Group 4, subject to adjustment for prepayments in full received and distributed prior to that Distribution Date. The per annum Pass-Through Rate on the Class 4-A-1 and Class 4-A-2 Certificates for the first Interest Accrual Period is 5.2613%. For federal income tax purposes, the equivalent of the foregoing shall be expressed as the weighted average of the Lower-Tier REMIC Pass-Through Rate on Lower-Tier REMIC Regular Interest LT-4, weighted on the basis of the Uncertificated Principal Balance of such Lower-Tier REMIC Regular Interest.

	(5)	The Class A-X Certificates are interest only certificates, will not be entitled to distributions in respect of principal and will bear interest on the Class A-X Notional Amount (initially $22,101,782) as described in this Agreement. For federal income tax purposes, the Class A-X Certificates will not have a Pass-Through Rate, but will be entitled to 100% of amounts distributed on Lower-Tier REMIC Regular Interest LT-IO1 and Lower-Tier REMIC Regular Interest LT-IO2.

	(6)	The Class PO Certificates are principal-only certificates and will not be entitled to distributions in respect of interest. 

	  
	 	-3-	 
	

	 

	(7)	Interest will accrue on the Class HY-B-1, Class HY-B-2 and Class HY-B-3 Certificates at a per annum rate equal to the weighted average of (i) for Loan Group 3, a per annum rate equal to the excess of (x) the weighted average of the Mortgage Rates on the Mortgage Loans in Loan Group 3 as of the first day of the month immediately prior to the month in which the relevant Distribution Date occurs (after taking into account scheduled payments of principal on that date) over (y) the weighted average Servicing Fee Rate as of such date on the Mortgage Loans in Loan Group 3, subject to adjustment for prepayments in full received and distributed prior to that Distribution Date, and (ii) for Loan Group 4, a per annum rate equal to the excess of (x) the weighted average of the Mortgage Rates on the Mortgage Loans in Loan Group 4 as of the first day of the month immediately prior to the month in which the relevant Distribution Date occurs (after taking into account scheduled payments of principal on that date) over (y) the weighted average Servicing Fee Rate as of such date on the Mortgage Loans in Loan Group 4, subject to adjustment for prepayments in full received and distributed prior to that Distribution Date, weighted in proportion to the results of subtracting from the principal balance of each Loan Group the principal balance of the related Senior Certificates. The per annum Pass-Through Rate on the Class HY-B-1, Class HY-B-2 and Class HY-B-3 Certificates for the first Interest Accrual Period will be 5.0660%. For federal income tax purposes, the equivalent of the foregoing shall be expressed as the weighted average of the Lower-Tier REMIC Pass-Through Rate on Lower-Tier REMIC Regular Interest LT-3SUBHY and Lower-Tier REMIC Regular Interest LT-4SUBHY, weighted on the basis of the Uncertificated Principal Balance of each such Lower-Tier REMIC Regular Interest.

	(8)	Interest will accrue on the Class C-B-4, Class C-B-5 and Class C-B-6 Certificates at a per annum rate equal to the weighted average of (i) for the Group 2 Portion (as defined in this Agreement), weighted by 6.5000% per annum and (ii) for the Group 3/4 Portion (as defined in this Agreement), the weighted average of the rate described in footnote (6) above. The per annum Pass-Through Rate on the Class C-B-4, Class C-B-5 and Class C-B-6 Certificates for the first Interest Accrual Period will be 6.2058%. For federal income tax purposes, the equivalent of the foregoing shall be expressed as the weighted average of the Lower-Tier REMIC Pass-Through Rate on Lower-Tier REMIC Regular Interest LT-2SUBC, Lower-Tier REMIC Regular Interest LT-3SUBC and Lower-Tier REMIC Regular Interest LT-4SUBC, weighted on the basis of the Uncertificated Principal Balance of each such Lower-Tier REMIC Regular Interest.

Set forth below are designations of Classes of Certificates to the categories used herein:

	
Book-Entry Certificates
	
All Classes of Offered Certificates other than the Physical Certificates.

 

	
ERISA-Restricted Certificates
	
The Residual Certificates and the Private Certificates, and any Certificates that do not satisfy the applicable ratings requirement under the Underwriter’s Exemption.

 

	
Group 1 Certificates
	
The Class 1-A-1, Class A-LR and Class A-UR Certificates.

 

	
Group 2 Certificates
	
The Class 2-A-1, Class 2-A-2, Class 2-A-3 Class 2-A-4, Class 2-A-5 and Class 2-A-6 Certificates.

 

	
Group 3 Certificates
	
The Class 3-A-1 Certificates.

 

	
Group 4 Certificates
	
The Class 4-A-1 and Class 4-A-2 Certificates.

 

	
Group 15-B Subordinate

Certificates
	
 

The Class 15-B-1, Class 15-B-2, Class 15-B-3, Class 15-B-4, Class 15-B-5 and Class 15-B-6 Certificates.

 

	

Group 30-B Subordinate

Certificates
	
 

The Class 30-B-1, Class 30-B-2 and Class 30-B-3 Certificates.

 

	  
	 	-4-	 
	

	 

	
Group HY-B Subordinate

Certificates
	
 

The Class HY-B-1, Class HY-B-2 and Class HY-B-3 Certificates.

 

	

Group C-B Subordinate
Certificates
	
 

The Class C-B-4, Class C-B-5 and Class C-B-6 Certificates.

 

	
Interest Only Certificates
	
The Class A-X Certificates. 

 

	
Offered Certificates
	
All Classes of Certificates other than the Private Certificates.

 

	
Physical Certificates
	
The Private Certificates and the Residual Certificates.

 

	
Principal Only Certificates
	
The Class PO Certificates.

 

	
Private Certificates
	
The Class 15-B-4, Class 15-B-5, Class 15-B-6 Certificates and the Group C-B Subordinate Certificates.

 

	
Rating Agencies
	
Fitch and S&P.

 

	
Regular Certificates
	
All Classes of Certificates, other than the Residual Certificates.

 

	
Residual Certificates
	
The Class A-LR and Class A-UR Certificates.

 

	
Senior Certificates
	
The Group 1, Group 2, Group 3 and Group 4 Certificates.

 

	
Subordinate Certificates
	
The Group 15-B Subordinate, Group 30-B Subordinate, Group HY-B Subordinate and Group C-B Subordinate Certificates.

 

Defined terms and provisions herein relating to statistical rating agencies not designated above as Rating Agencies shall be of no force or effect.

	  
	 	-5-	 
	

	 

 

ARTICLE I

 

DEFINITIONS

Section 1.01 Definitions.

Whenever used in this Agreement, the following words and phrases, unless the context otherwise requires, shall have the following meanings:

ABN AMRO: ABN AMRO Mortgage Group, Inc., and its successors and assigns, in its capacity as Servicer of the ABN AMRO Mortgage Loans.

ABN AMRO Mortgage Loans: The Mortgage Loans for which ABN AMRO is listed as “Servicer” on the Mortgage Loan Schedule.

ABN AMRO Servicing Agreement: Solely with respect to the ABN AMRO Mortgage Loans, the Master Loan Purchase and Servicing Agreement, dated as of May 1, 2004, between the Transferor, as purchaser, and ABN AMRO, as seller and as servicer, as the same may be amended from time to time. 

Account Property: All amounts and investments held from time to time in a Securities Account (whether in the form of deposit accounts, physical property, book-entry securities, uncertificated securities, securities entitlements, investment property or otherwise), and all proceeds of the foregoing.

Accrued Certificate Interest: With respect to any Distribution Date and any interest bearing Class, the sum of (i) one month’s interest accrued during the related Interest Accrual Period at the Pass-Through Rate for such Class on the related Certificate Principal Balance or Notional Amount, as applicable, subject to reduction as provided in Section 4.02(b) plus (ii) any Class Unpaid Interest Amounts for such Class.

Adjustable Rate Mortgage Loan: Each of the Mortgage Loans identified in the Mortgage Loan Schedule as having a Mortgage Rate that is subject to adjustment.

Adjustment Date: With respect to each Adjustable Rate Mortgage Loan, the first day of the month in which the Mortgage Rate of an Adjustable Rate Mortgage Loan changes pursuant to the related Mortgage Note. The first Adjustment Date following the Cut-off Date as to each Adjustable Rate Mortgage Loan is set forth in the Mortgage Loan Schedule.

Advance: An advance of principal or interest required to be made by the applicable Servicer pursuant to the related Servicing Agreement or required to be made by the Master Servicer with respect to any Distribution Date pursuant to Section 4.01.

Affiliate: When used with reference to a specified Person that (i) directly or indirectly controls or is controlled by or is under common control with the specified Person, (ii) is an officer of, partner in or trustee of, or serves in a similar capacity with respect to, the specified Person or of which the specified Person is an officer, partner or trustee, or with respect 

	  
	 	-6-	 
	

	 

 

to which the specified Person serves in a similar capacity, or (iii) directly or indirectly is the beneficial owner of 10% or more of any class of equity securities of the specified Person or of which the specified Person is directly or indirectly the owner of 10% or more of any class of equity securities.

 

Aggregate Pool Principal Balance: As to any Distribution Date, the aggregate of the Scheduled Principal Balances of the Mortgage Loans which were Outstanding Mortgage Loans on the Due Date in the month preceding the month of such Distribution Date.

Aggregate Subordinate Percentage: (A) With respect to the Group 15-B Subordinate Certificates and any Distribution Date, the sum of the Certificate Principal Balances of the Group 15-B Subordinate Certificates immediately prior to such Distribution Date divided by the aggregate of the Scheduled Principal Balances of the Group 1 Loans, (B) with respect to the Group 30-B Subordinate, Group C-B Subordinate, Class HY-B-1, Class HY-B-2 and Class HY-B-3 Certificates and any Distribution Date on and prior to the Distribution Date on which the Group C-B Subordinate Certificates have been reduced to zero, the sum of the Certificate Principal Balances of the Group 30-B Subordinate, Group C-B Subordinate, Class HY-B-1, Class HY-B-2 and Class HY-B-3 Certificates immediately prior to such Distribution Date divided by the aggregate of the Scheduled Principal Balances of the Group 2 Mortgage Loans (net of the PO Percentage of the Scheduled Principal Balance of each Discount Mortgage Loan), Group 3 Mortgage Loans and Group 4 Mortgage Loans, (C) with respect to the Group 30-B Subordinate Certificates and any Distribution Date after the Distribution Date on which the Certificate Principal Balances of the Group C-B Subordinate Certificates have been reduced to zero, the sum of the Certificate Principal Balances of the Group 30-B Subordinate Certificates immediately prior to such Distribution Date divided by the aggregate of the Scheduled Principal Balances of the Group 2 Mortgage Loans (net of the PO Percentage of the Scheduled Principal Balance of each Discount Mortgage Loan) and (D) with respect to the Class HY-B-1, Class HY-B-2 and Class HY-B-3 Certificates and any Distribution Date after the Distribution Date on which the Certificate Principal Balances of the Group C-B Subordinate Certificates have been reduced to zero, the sum of the Certificate Principal Balances of the Class HY-B-1, Class HY-B-2 and Class HY-B-3 Certificates immediately prior to such Distribution Date divided by the aggregate of the Scheduled Principal Balances of the Group 3 and Group 4 Mortgage Loans.

Agreement: This Pooling and Servicing Agreement and all amendments or supplements hereto.

Allocable Share: (A) With respect to any Distribution Date and any Class of Group 15-B Subordinate Certificates, the portion of the Subordinate Optimal Principal Amount allocable to such Class, equal to the product of the Subordinate Optimal Principal Amount for Loan Group 1 on such Distribution Date and a fraction, the numerator of which is the related Certificate Principal Balance of that Class and the denominator of which is the aggregate of the Certificate Principal Balances of the Group 15-B Subordinate Certificates; provided that no Class of Group 15-B Subordinate Certificates will be entitled on any Distribution Date to receive distributions pursuant to clauses (5), (6) and (7) of the definition of Subordinate Optimal Principal Amount with respect to Loan Group 1 unless the Class Prepayment Distribution Trigger for that Class is satisfied for that Distribution Date; if the Class Prepayment Distribution 

	  
	 	-7-	 
	

	 

 

Trigger is not satisfied for an outstanding Class of Group 15-B Subordinate Certificates, those amounts will be distributable to the remaining Classes of Group 15-B Subordinate Certificates for which the Class Prepayment Distribution Trigger is satisfied, pro rata, according to Certificate Principal Balance; 

 

(B) with respect to any Distribution Date and any of the Class 30-B-1, Class 30-B-2 and Class 30-B-3 Certificates, the portion of the Subordinate Optimal Principal Amount allocable to such Class, equal to the product of the Subordinate Optimal Principal Amount for Loan Group 2 on such Distribution Date and a fraction, the numerator of which is the related Certificate Principal Balance of that Class and the denominator of which is the aggregate of the Certificate Principal Balances of the Class 30-B-1, Class 30-B-2 and Class 30-B-3 Certificates and the Group 2 Portion; provided that no such Class of Certificates will be entitled on any Distribution Date to receive distributions pursuant to clauses (5), (6) and (7) of the definition of Subordinate Optimal Principal Amount with respect to Loan Group 2 unless the Class Prepayment Distribution Trigger for that Class is satisfied for that Distribution Date; if the Class Prepayment Distribution Trigger is not satisfied for an outstanding Class 30-B-1, Class 30-B-2 or Class 30-B-3 Certificates, those amounts will be distributable to the remaining Classes of such Subordinate Certificates for which the Class Prepayment Distribution Trigger is satisfied, pro rata, according to Certificate Principal Balance;

(C) with respect to any Distribution Date and any of the Class HY-B-1, Class HY-B-2 and Class HY-B-3 Certificates, the portion of the Subordinate Optimal Principal Amount allocable to such Class, equal to the product of the Subordinate Optimal Principal Amount for Loan Group 3 and Loan Group 4 in the aggregate on such Distribution Date and a fraction, the numerator of which is the related Certificate Principal Balance of that Class and the denominator of which is the sum of the aggregate of the Certificate Principal Balances of the Class HY-B-1, Class HY-B-2 and Class HY-B-3 Certificates and the Group 3/4 Portion; provided that no such class of Certificates will be entitled on any Distribution Date to receive distributions pursuant to clauses (5), (6) and (7) of the definition of Subordinate Optimal Principal Amount with respect to Loan Group 3 or Loan Group 4 unless the Class Prepayment Distribution Trigger for that Class is satisfied for that Distribution Date; if the Class Prepayment Distribution Trigger is not satisfied for an outstanding Class HY-B-1, Class HY-B-2 or Class HY-B-3 Certificates, those amounts will be distributable to the remaining Classes of such Subordinate Certificates for which the Class Prepayment Distribution Trigger is satisfied, pro rata, according to Certificate Principal Balance; and

(D) with respect to any Distribution Date and any of the Class C-B-4, Class C-B-5 and Class C-B-6 Certificates, the portion of the Subordinate Optimal Principal Amount allocable to such Class, equal to the sum of (I) the product of the Subordinate Optimal Principal Amount for Loan Group 2 on such Distribution Date and a fraction, the numerator of which is the Group 2 Portion and the denominator of which is the sum of the Group 2 Portion and the Certificate Principal Balances of the Class 30-B-1, Class 30-B-2 and Class 30-B-3 Certificates and (II) the product of the Subordinate Optimal Principal Amount for Loan Group 3 and Loan Group 4 on such Distribution Date and a fraction, the numerator of which is the Group 3/4 Portion and the denominator of which is the sum of the Group 3/4 Portion and the Certificate 

	  
	 	-8-	 
	

	 

 

Principal Balances of the Class HY-B-1, Class HY-B-2 and Class HY-B-3 Certificates and a fraction, the numerator of which is the related Certificate Principal Balance of that Class and the denominator of which is the aggregate of the Certificate Principal Balances of the Class C-B-4, Class C-B-5 and Class C-B-6 Certificates; provided that no Class of such Subordinate Certificates will be entitled on any Distribution Date to receive distributions pursuant to clauses (5), (6) and (7) of the definition of Subordinate Optimal Principal Amount with respect to Loan Group 2, Loan Group 3 or Loan Group 4 unless the Class Prepayment Distribution Trigger for that Class is satisfied for that Distribution Date; if the Class Prepayment Distribution Trigger is not satisfied for any outstanding Class C-B-4, Class C-B-5 and Class C-B-6 Certificates, those amounts will be distributable to the remaining Classes of such Subordinate Certificates for which the Class Prepayment Distribution Trigger is satisfied, pro rata, according to Certificate Principal Balance.

Amount Available for Group 2 Principal: As to any Distribution Date, Group 2 Available Funds for such Distribution Date reduced by the aggregate amount distributable on such Distribution Date in respect of interest on the Group 2 Certificates pursuant to Section 4.02(a) priority first sub-clause (B).

Amount Held for Future Distribution: As to any related Distribution Date and any Mortgage Loan or Loan Group, the aggregate amount held in the Collection Account at the close of business on the related Servicer Remittance Date with respect to such Mortgage Loan or Loan Group on account of (i) Principal Prepayments received after the related Prepayment Period, and Liquidation Proceeds and Insurance Proceeds received in the month of such Distribution Date and (ii) all Scheduled Payments due after the related Due Date.

Apportioned Subordinate Principal Distribution Amount: (A) With respect to the Class HY-B-1, Class HY-B-2 and Class HY-B-3 Certificates and any Distribution Date, the product of (i) the aggregate Subordinate Principal Distribution Amount for such Certificates and (ii) the applicable Apportionment Fraction; and (B) with respect to the Class C-B-4, Class C-B-5 and Class C-B-6 Certificates and any Distribution Date, the product of (i) the aggregate Subordinate Principal Distribution Amount for such certificates (net of amounts applied from the Subordinate Principal Distribution Amount for the Class C-B-4, Class C-B-5 and Class C-B-6 Certificates to pay any Class PO Deffered Amount) and (ii) the applicable Apportionment Fraction.

Apportionment Fraction: (A) With respect to the Class HY-B-1, Class HY-B-2 and Class HY-B-3 Certificates, and in the event that the Certificate Principal Balances of the Senior Certificates of Certificate Group 3 or Certificate Group 4 have been reduced to zero, a fraction the numerator of which is equal to the Subordinate Optimal Principal Amount for the Group whose Senior Certificates have been reduced to zero and the denominator of which is equal to the sum of the Subordinate Optimal Principal Amounts with respect to both of such Groups and (B) with respect to the Class C-B-4, Class C-B-5 and Class C-B-6 Certificates, and in the event that the Certificate Principal Balances of the Senior Certificates of Certificate Group 2, Certificate Group 3 or Certificate Group 4 have been reduced to zero, a fraction the numerator of which is equal to the Subordinate Optimal Principal Amount for the Group whose Senior 

	  
	 	-9-	 
	

	 

 

Certificates have been reduced to zero and the denominator of which is equal to the sum of the Subordinate Optimal Principal Amounts with respect to each of such Groups.

Appraised Value: With respect to any Mortgage Loan, the Appraised Value of the related Mortgaged Property shall be: (i) with respect to a Mortgage Loan other than a Refinancing Mortgage Loan, the lesser of (a) the value of the Mortgaged Property based upon the appraisal made at the time of the origination of such Mortgage Loan and (b) the sales price of the Mortgaged Property at the time of the origination of such Mortgage Loan; and (ii) with respect to a Refinancing Mortgage Loan, the value of the Mortgaged Property based upon the appraisal made at the time of the origination of such Refinancing Mortgage Loan as modified by an updated appraisal.

Assignment: An individual assignment of a Mortgage, notice of transfer or equivalent instrument in recordable form, sufficient under the laws of the jurisdiction wherein the related Mortgaged Property is located to reflect of record the sale or transfer of the Mortgage Loan.

Assignment Agreements: The following Assignment, Assumption and Recognition Agreements, each dated as of September 30, 2004, whereby certain Servicing Agreements solely with respect to the related Mortgage Loans were assigned to the Depositor for the benefit of the Certificateholders:

(a)  The Assignment, Assumption and Recognition Agreement among ABN AMRO as servicer, the Transferor and the Depositor;

(b)  The Assignment, Assumption and Recognition Agreement among Bank of America, as servicer, the Transferor and the Depositor;

(c)  The Assignment, Assumption and Recognition Agreement among Cendant as servicer, the Transferor and the Depositor;

(d)  The Assignment, Assumption and Recognition Agreement among CitiMortgage as servicer, the Transferor and the Depositor;

(e)  The Assignment, Assumption and Recognition Agreement among CMMC as servicer, the Transferor and the Depositor;

(f)  The Assignment, Assumption and Recognition Agreement among Countrywide as servicer, the Transferor and the Depositor;

(g)  The Assignment, Assumption and Recognition Agreement among Everhome as servicer, the Transferor and the Depositor;

(h)  The Assignment, Assumption and Recognition Agreement among GMACM, as servicer, the Transferor and the Depositor;

	  
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(i)  The Assignment, Assumption and Recognition Agreement among HSBC, as servicer, the Transferor and the Depositor;

(j)  The Assignment, Assumption and Recognition Agreement among National City, as servicer, the Transferor and the Depositor;

(k)  The Assignment, Assumption and Recognition Agreement among Sun Trust, as servicer, the Transferor and the Depositor;

(l)  The Assignment, Assumption and Recognition Agreement among Wells Fargo as servicer, the Transferor and the Depositor; and 

(m)  The Assignment, Assumption and Recognition Agreement among WMBFA, as servicer, the Transferor and the Depositor.

Assignment of Proprietary Lease: With respect to a Cooperative Loan, the assignment or mortgage of the related Proprietary Lease from the Mortgagor to the originator of the Cooperative Loan.

Bank of America: Bank of America, N.A., and its successors and assigns, in its capacity as Servicer of the Bank of America Mortgage Loans.

Bank of America Mortgage Loans: The Mortgage Loans for which Bank of America is listed as “Servicer” on the Mortgage Loan Schedule.

Bank of America Servicing Agreement: Solely with respect to the Bank of America Mortgage Loans, the Flow Mortgage Loan Sale and Servicing Agreement, dated as of August 1, 2002, as amended by Amendment Two, dated as of November 15, 2002, each between the Transferor and Bank of America, and as the same may be amended further from time to time.

Bankruptcy Code: The United States Bankruptcy Reform Act of 1978, as amended.

Bankruptcy Loss: With respect to any Mortgage Loan, a Deficient Valuation or Debt Service Reduction as reported by the applicable Servicer to the Master Servicer.

Book-Entry Certificates: As specified in the Preliminary Statement.

Business Day: Any day other than (i) a Saturday or a Sunday or (ii) a day on which banking institutions in the City of New York, New York, Minnesota, Maryland, or any city in which the Corporate Trust Office of the Trustee or Trust Administrator is located are authorized or obligated by law or executive order to be closed.

Cendant: Cendant Mortgage Corporation, and its successors and assigns, in its capacity as Servicer of the Cendant Mortgage Loans.

	  
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Cendant Mortgage Loans: The Mortgage Loans for which Cendant is listed as “Servicer” on the Mortgage Loan Schedule.

Cendant Servicing Agreement: Solely with respect to the Cendant Mortgage Loans, the Amended and Restated Mortgage Loan Flow Purchase, Sale and Servicing Agreement, dated as of November 1, 2003, between the Transferor, as purchaser, and Cendant, as seller and as servicer, and as the same may be amended further from time to time.

Certificate: Any one of the Certificates executed by the Trust Administrator on behalf of the Trust and authenticated by the Trust Administrator in substantially the forms attached hereto as Exhibits A through F.

Certificate Group: Any of the Group 1 Certificates, the Group 2 Certificates, the Group 3 Certificates or the Group 4 Certificates, as applicable.

Certificate Owner: With respect to a Book-Entry Certificate, the Person who is the beneficial owner of such Book-Entry Certificate.

Certificate Principal Balance: With respect to any Certificate (other than the Interest Only Certificates) at any date, the maximum dollar amount of principal to which the Holder thereof is then entitled hereunder, such amount being equal to the Denomination thereof minus the sum of (i) all distributions of principal previously made with respect thereto, (ii) all Realized Losses allocated thereto and (iii) in the case of any Subordinate Certificates, all other reductions in Certificate Principal Balance previously allocated thereto pursuant to Section 4.03; provided, however, that pursuant to Section 4.03(d), the Class Principal Balance of a Class of Certificates may be increased up to the amount of Realized Losses previously allocated to such Class, in the event that there is a Recovery on a related Mortgage Loan, and the Certificate Principal Balance of any individual Certificate of such Class will be increased by its pro rata share of the increase to such Class; provided, further, that, with respect to the Class 2-A-5 Certificates and any Distribution Date prior to the Class 2-A-5 Accretion Termination Date, the Class Principal Balance of the Class 2-A-5 Certificates will be increased by the Class 2-A-5 Accrual Amount for such Distribution Date and the Certificate Principal Balance of any individual Class 2-A-5 Certificate will be increased by its pro rata share of such Class 2-A-5 Accrual Amount.

Certificate Register: The register maintained pursuant to Section 5.02 hereof.

Certificateholder or Holder: The person in whose name a Certificate is registered in the Certificate Register, except that, solely for the purpose of giving any consent pursuant to this Agreement, any Certificate registered in the name of the Master Servicer or the Depositor or any affiliate of the Master Servicer or the Depositor, as applicable, shall be deemed not to be Outstanding and the Percentage Interest evidenced thereby shall not be taken into account in determining whether the requisite amount of Percentage Interests necessary to effect such consent has been obtained; provided, however, that if any such Person (including the Master Servicer or the Depositor) owns 100% of the Percentage Interests evidenced by a Class of Certificates, such Certificates shall be deemed to be Outstanding for purposes of any provision hereof that requires 

	  
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the consent of the Holders of Certificates of a particular Class as a condition to the taking of any action hereunder. The Trust Administrator is entitled to rely conclusively on a certification of the Master Servicer or the Depositor or any affiliate of the Master Servicer or the Depositor, as applicable, in determining which Certificates are registered in the name of an affiliate of the Master Servicer or the Depositor.

Certification: As specified in Section 9.12(d).

CitiMortgage: CitiMortgage, Inc., and its successors and assigns, in its capacity as Servicer of the CitiMortgage Mortgage Loans.

CitiMortgage Mortgage Loans: The Mortgage Loans for which CitiMortgage is listed as “Servicer” on the Mortgage Loan Schedule.

CitiMortgage Servicing Agreement: Solely with respect to the CitiMortgage Mortgage Loans, the Master Loan Purchase and Servicing Agreement, dated as of May 30, 2003, as amended by Amendment Number One, dated as of July 14, 2003, and as further amended by Amendment Number Two, dated as of October 1, 2003, each between the Transferor, as purchaser, and CitiMortgage, as seller and as servicer, and as the same may be amended further from time to time.

Class: All Certificates bearing the same class designation as set forth in the Preliminary Statement.

Class 2-A-5 Accretion Termination Date: The earlier to occur of: (i) the Distribution Date following the Distribution Date on which the aggregate Class Principal Balances of the Class 2-A-1, Class 2-A-2, Class 2-A-3, Class 2-A-4 and Class 2-A-6 Certificates are reduced to zero and (ii) the Distribution Date following the related Cross-Over Date.

Class 2-A-5 Accrual Amount: As specified in subpart (B) of Section 4.02(a) priority first.

Class Interest Shortfall: As to any Distribution Date and any interest-bearing Class, the amount by which the amount described in clause (i) of the definition of “Accrued Certificate Interest” for such Class exceeds the amount of interest actually distributed on such Class on such Distribution Date.

Class PO Deferred Amount: With respect to Loan Group 2 and any Distribution Date on or prior to the related Cross-Over Date, the sum of (1) the applicable PO Percentage of the principal portion of Realized Losses on each Discount Mortgage Loan allocated to the Class PO Certificates on that date and (2) all amounts previously allocated to the Class PO Certificates in respect of those losses and not distributed to the Class PO Certificates on prior Distribution Dates. After the related Cross-Over Date, the Class PO Deferred Amount shall be zero.

Class PO Principal Distribution Amount: With respect to Loan Group 2 and any Distribution Date, the sum of:

	  
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(1)  the applicable PO Percentage of all scheduled monthly payments of principal due on each Group 2 Mortgage Loan on the related Due Date after taking into account any Deficient Valuation or Debt Service Reduction;

(2)  the applicable PO Percentage of the principal portion of the Scheduled Principal Balance of each Group 2 Mortgage Loan that was repurchased by the Transferor or another person with respect to that Distribution Date;

(3)  the applicable PO Percentage of any Substitution Adjustment Amounts received in respect of Group 2 Mortgage Loans with respect to that Distribution Date;

(4)  the applicable PO Percentage of the amount of Insurance Proceeds or Liquidation Proceeds allocable to principal received on Group 2 Mortgage Loans in the prior calendar month with respect to a Mortgage Loan that is not a Liquidated Loan;

(5)  with respect to each Group 2 Mortgage Loan that became a Liquidated Loan during the prior calendar month, the lesser of:

(a)  the applicable PO Percentage of the Scheduled Principal Balance of that Group 2 Mortgage Loan; and

(b)  the applicable PO Percentage of the amount of the Insurance Proceeds or Liquidation Proceeds allocable to principal received with respect to that Group 2 Mortgage Loan during the prior calendar month; and

(6)  the applicable PO Percentage of:

(a)  Principal Prepayments in Full received in respect of Group 2 Mortgage Loans during the related Prepayment Period; 

(b)  partial principal prepayments in respect of the Group 2 Mortgage Loans applied during the related Prepayment Period; and

(c)  Recoveries received in respect of Group 2 Mortgage Loans during the calendar month prior to such Distribution Date, but in no event to exceed the Class PO Deferred Amount for such Distribution Date;

provided, however, that if a Deficient Valuation or Debt Service Reduction is sustained with respect to a Discount Mortgage Loan that is not a Liquidated Loan, the Class PO Principal Distribution Amount will be reduced on the related Distribution Date by the applicable PO Percentage of the principal portion of the Deficient Valuation or Debt Service Reduction in respect of the Group 2 Mortgage Loans.

 

Class Prepayment Distribution Trigger: (A) With respect to a Class of Group 15-B Subordinate Certificates and any Distribution Date, if either (i) the Fractional Interest for such Class for such date equals or exceeds the Fractional Interest for such Class calculated as of the date of issuance of the Certificates, or (ii) that Class of Group 15-B Subordinate Certificates is 

	  
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the only Class of Group 15-B Subordinate Certificates then outstanding, (B) with respect to any of the Class 30-B-1, Class 30-B-2 and Class 30-B-3 Certificates and any Distribution Date, if either (i) the Fractional Interest for such Class for such date equals or exceeds the Fractional Interest for such Class calculated as of the date of issuance of the Certificates, or (ii) that Class of such Subordinate Certificates is the only class of such Subordinate Certificates then outstanding, (C) with respect to any of the Class HY-B-1, Class HY-B-2 and Class HY-B-3 Certificates and any Distribution Date, if either (i) the Fractional Interest for such Class for such date equals or exceeds the Fractional Interest for such Class calculated as of the date of issuance of the Certificates, or (ii) that Class is the only Class of such Subordinate Certificates then outstanding and (D) with respect to any of the Class C-B-4, Class C-B-5 and Class C-B-6 Certificates and any Distribution Date, if either (i) the Fractional Interest for such Class for such date equals or exceeds the Fractional Interest for such Class calculated as of the date of issuance of the Certificates, or (ii) that Class of such Subordinate Certificates is the only Class of such Subordinate Certificates then outstanding.

Class Principal Balance: With respect to any Class (other than a Class of Interest Only Certificates) and as to any date of determination, the aggregate of the Certificate Principal Balances of all Certificates of such Class as of such date.

Class Unpaid Interest Amounts: As to any Distribution Date and any interest-bearing Class, the amount by which the aggregate Class Interest Shortfalls for such Class on prior Distribution Dates exceeds the amount distributed on such Class on prior Distribution Dates pursuant to clause (ii) of the definition of “Accrued Certificate Interest” for such Class.

Clean-up Call Mortgage Loan Price: With respect to each Mortgage Loan (not including REO Properties) to be purchased pursuant to Section 10.01(a), the greater of (x) the Par Call Price for such Mortgage Loan and (y) the Fair Market Value Call Price for such Mortgage Loan.

Clean-up Call REO Property Price: With respect to each REO Property to be purchased pursuant to Section 10.01(a), the lesser of (x) the appraised value of such REO Property as determined by the higher of two appraisals completed by two independent appraisers selected by the Master Servicer at the expense of the Master Servicer and (y) the unpaid principal balance of each Mortgage Loan related to such REO Property plus accrued and unpaid interest thereon at the applicable Net Mortgage Rate.

Closing Date: September 30, 2004.

CMMC: Chase Manhattan Mortgage Corporation, a national banking association, and its successors and assigns, in its capacity as Servicer of the CMMC Mortgage Loans.

CMMC Mortgage Loans: The Mortgage Loans for which CMMC is listed as “Servicer” on the Mortgage Loan Schedule.

CMMC Servicing Agreement: Solely with respect to the CMMC Mortgage Loans, the Flow Mortgage Loan Purchase, Warranties and Servicing Agreement, dated as of 

	  
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February 1, 2004, between the Transferor, as purchaser, and CMMC, as seller and as servicer, as the same may be amended from time to time.

Code: The Internal Revenue Code of 1986, including any successor or amendatory provisions.

Collection Account: The separate Eligible Account or Accounts created and maintained by the Master Servicer pursuant to Section 3.07 with a depository institution in the name of the Master Servicer for the benefit of the Trustee on behalf of Certificateholders and designated “Wells Fargo Bank, N.A., for the benefit of Wachovia Bank, National Association in trust for the registered Holders of MASTR Seasoned Securitization Trust 2004-1, Mortgage Pass-Through Certificates Series 2004-1.” The Collection Account may be deemed to be a sub-account of the Distribution Account.

Colonial: Colonial Savings, F.A., and its successors and assigns, in its capacity as Servicer of the Colonial Mortgage Loans

Colonial Mortgage Loans: The Mortgage Loans for which Colonial is listed as “Servicer” on the Mortgage Loan Schedule.

Colonial Servicing Agreement: The Wells Fargo Guide.

Compensating Interest: With respect to any Distribution Date and any Servicer, the amount required to be paid by such Servicer under the related Servicing Agreement in connection with Prepayment Interest Shortfalls that occur on Mortgage Loans serviced by such Servicer for the related Distribution Date. With respect to any Distribution Date and the Master Servicer, an amount required to be paid by the Master Servicer pursuant to this Agreement in connection with Prepayment Interest Shortfalls that occur on the Wells Fargo Guide Mortgage Loans, as a result of a prepayment in full, for the related Distribution Date.

Control: The meaning specified in Section 8-106 of the Relevant UCC.

Cooperative Corporation: With respect to any Cooperative Loan, the cooperative apartment corporation that holds legal title to the related Cooperative Property and grants occupancy rights to units therein to stockholders through Proprietary Leases or similar arrangements.

Cooperative Lien Search: A search for (a) federal tax liens, mechanics’ liens, lis pendens, judgments of record or otherwise against (i) the Cooperative Corporation and (ii) the seller of the Cooperative Unit, (b) filings of Financing Statements and (c) the deed of the Cooperative Property into the Cooperative Corporation.

Cooperative Loan: A Mortgage Loan that is secured by a first lien on and a perfected security interest in Cooperative Shares and the related Proprietary Lease granting exclusive rights to occupy the related Cooperative Unit in the building owned by the related Cooperative Corporation.

	  
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Cooperative Property: With respect to any Cooperative Loan, all real property and improvements thereto and rights therein and thereto owned by a Cooperative Corporation including without limitation the land, separate dwelling units and all common elements.

Cooperative Shares: With respect to any Cooperative Loan, the shares of stock issued by a Cooperative Corporation and allocated to a Cooperative Unit and represented by stock certificates.

Cooperative Unit: With respect to any Cooperative Loan, a specific unit in a Cooperative Property.

Corporate Trust Office: With respect to the Trustee, the designated office of the Trustee at which at any particular time its corporate trust business with respect to this Agreement shall be administered, which office at the date of the execution of this Agreement is located at 401 South Tryon Street, 12th Floor, NC 1179, Charlotte, North Carolina 28288-1179, Attention: Corporate Trust Services MASTR Seasoned Securitization Trust 2004-1, which is the address to which appropriate notices to and correspondence with the Trustee should be directed.

With respect to the Trust Administrator, the designated office of the Trust Administrator at which at any particular time its corporate trust business with respect to this Agreement shall be administered, which office at the date of the execution of this Agreement is located for certificate transfer purposes at Sixth Street and Marquette Avenue, Minneapolis, Minnesota 55479, Attention: Corporate Trust Services—MSSTR 2004-1, and for all other purposes at 9062 Old Annapolis Road, Columbia, Maryland 21045, Attention: Corporate Trust Services—MSSTR 2004-1.

Countrywide: Countrywide Home Loans, Inc., and its successors and assigns, in its capacity as Servicer of the Countrywide Mortgage Loans.

Countrywide Mortgage Loans: The Mortgage Loans for which Countrywide is listed as “Servicer” on the Mortgage Loan Schedule.

Countrywide Servicing Agreement: Solely with respect to the Countrywide Mortgage Loans, the Mortgage Loan Purchase and Servicing Agreement, dated as of February 25, 2003, as amended by Amendment One, dated as of August 1, 2003, as further amended by Amendment Two, dated as of August 1, 2003, and as further amended by Amendment 3, dated as of November 1, 2003, each between the Transferor, as purchaser, and Countrywide, as seller and as servicer, and as the same may be amended from time to time.

Cross-Over Date: (A) With respect to Group 1, the Distribution Date on which the Certificate Principal Balances of the Group 15-B Subordinate Certificates have been reduced to zero, (B) with respect to Group 2, the Distribution Date on which the Certificate Principal Balances of the Class 30-B-1, Class 30-B-2, Class 30-B-3, Class C-B-4, Class C-B-5 and Class C-B-6 Certificates have been reduced to zero and (C) with respect to Group 3 and Group 4, the Distribution Date on which the Certificate Principal Balances of the Class HY-B-1, Class HY-B-

	  
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2, Class HY-B-3, Class C-B-4, Class C-B-5 and Class C-B-6 Certificates have been reduced to zero.

Custodian: Wells Fargo, and any successor thereto, with respect to those Mortgage Loans for which Wells Fargo is listed under the heading “Custodian” in the Mortgage Loan Schedule, and which were not acquired by the Transferor from ABN AMRO. U.S. Bank, and any successor thereto, with respect to those Mortgage Loans for which U.S. Bank is listed under the heading “Custodian” in the Mortgage Loan Schedule and which were acquired by the Transferor from ABN AMRO.

Cut-off Date: September 1, 2004.

Cut-off Date Principal Balance: As to any Mortgage Loan, the Scheduled Principal Balance thereof as of the close of business on the Cut-off Date.

Debt Service Reduction: With respect to any Mortgage Loan, a reduction by a court of competent jurisdiction in a proceeding under the Bankruptcy Code in the Scheduled Payment for such Mortgage Loan which became final and non-appealable, except such a reduction resulting from a Deficient Valuation or any reduction that results in a permanent forgiveness of principal.

Defective Mortgage Loan: Any Mortgage Loan that is required to be repurchased in accordance with Section 2.02 or 2.03.

Deficient Valuation: With respect to any Mortgage Loan, a valuation by a court of competent jurisdiction of the Mortgaged Property in an amount less than the then outstanding indebtedness under the Mortgage Loan, or any reduction in the amount of principal to be paid in connection with any Scheduled Payment that results in a permanent forgiveness of principal, which valuation or reduction results from an order of such court which is final and non appealable in a proceeding under the Bankruptcy Code.

Definitive Certificates: Any Certificate evidenced by a Physical Certificate and any Certificate issued in lieu of a Book-Entry Certificate pursuant to Section 5.02(e).

Deleted Mortgage Loan: As defined in Section 2.03 hereof.

Denomination: With respect to each Certificate, the amount set forth on the face thereof as the “Initial Certificate Principal Balance of this Certificate” or the “Initial Notional Amount of this Certificate” or, if neither of the foregoing, the Percentage Interest appearing on the face thereof.

Depositor: Mortgage Asset Securitization Transactions, Inc., a Delaware corporation, or its successor in interest.

Depository: The initial Depository shall be The Depository Trust Company, the nominee of which is CEDE & Co., as the registered Holder of the Book-Entry Certificates. The 

	  
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Depository shall at all times be a “clearing corporation” as defined in Section 8-102(3) of the Uniform Commercial Code of the State of New York.

Depository Participant: A broker, dealer, bank or other financial institution or other Person for whom from time to time a Depository effects Book-Entry transfers and pledges of securities deposited with the Depository.

Determination Date: The date on which a Servicer is required to determine the amount it is required to advance pursuant to the applicable Servicing Agreement.

Discount Mortgage Loan: Any Group 2 Mortgage Loan with a Net Rate as of the Cut-off Date less than the Required Coupon.

Distribution Account: The separate Eligible Account created and maintained by the Trust Administrator pursuant to Section 3.07 in the name of the Trust Administrator for the benefit of the Certificateholders and designated “Wells Fargo Bank, N.A., in trust for registered Holders of MASTR Seasoned Securitization Trust 2004-1, Mortgage Pass-Through Certificates, Series 2004-1.” Funds in the Distribution Account shall be held in trust for the Certificateholders for the uses and purposes set forth in this Agreement. 

Distribution Account Deposit Date: As to any Distribution Date, one Business Day prior to such Distribution Date.

Distribution Date: The 25th day of each calendar month after the initial issuance of the Certificates, or if such 25th day is not a Business Day, the next succeeding Business Day, commencing in October 2004.

Distribution Date Statement: The statement delivered to the Certificateholders pursuant to Section 4.04.

Due Date: With respect to any Distribution Date, the first day of the month in which the related Distribution Date occurs.

Eligible Account: Any of (i) an account or accounts maintained with a federal or state chartered depository institution or trust company the short-term unsecured debt obligations of which (or, in the case of a depository institution or trust company that is the principal subsidiary of a holding company, the debt obligations of such holding company) have the highest short term ratings of each Rating Agency at the time any amounts are held on deposit therein, or (ii) an account or accounts in a depository institution or trust company in which such accounts are insured by the FDIC (to the limits established by the FDIC) and the uninsured deposits in which accounts are otherwise secured such that, as evidenced by an Opinion of Counsel delivered to the Trust Administrator and to each Rating Agency, the Certificateholders have a claim with respect to the funds in such account or a perfected first priority security interest against any collateral (which shall be limited to Permitted Investments) securing such funds that is superior to claims of any other depositors or creditors of the depository institution or trust company in which such account is maintained, or (iii) a non-interest bearing segregated trust 

	  
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account or accounts maintained with (a) the trust department of a federal or state chartered depository institution or (b) a trust company, acting in its fiduciary capacity or (iv) any other account acceptable to each Rating Agency, as stated by each such Rating Agency in writing. Eligible Accounts may bear interest, and may include, if otherwise qualified under this definition, accounts maintained with the Trust Administrator.

Eligible Substitute Mortgage Loan: With respect to a Mortgage Loan substituted by the Transferor for a Deleted Mortgage Loan, a Mortgage Loan which must, on the date of such substitution, (i) have a Scheduled Principal Balance, after deduction of the principal portion of the Scheduled Payment due in the month of substitution (or, in the case of a substitution of more than one mortgage loan for a Deleted Mortgage Loan, an aggregate principal balance), not in excess of, and not more than 10% less than the Scheduled Principal Balance of the Deleted Mortgage Loan; (ii) be accruing interest at a rate no lower than and not more than 1% per annum higher than, that of the Deleted Mortgage Loan; (iii) have a Loan-to-Value Ratio no higher than that of the Deleted Mortgage Loan; (iv) have a remaining term to maturity no greater than (and not more than one year less than that of) the Deleted Mortgage Loan; (v) comply with each representation and warranty set forth in Section 6 of the Mortgage Loan Purchase Agreement; (vi) be the same credit grade category as the Deleted Mortgage Loan; (vii) have the same prepayment penalty term; (viii) not be a Cooperative Loan unless the Deleted Mortgage Loan was a Cooperative Loan; (ix) if the Mortgage Loan is an Adjustable Rate Mortgage Loan, have a Maximum Mortgage Rate not less than the Maximum Mortgage Rate on the Deleted Mortgage Loan; (x) if the Mortgage Loan is an Adjustable Rate Mortgage Loan, have a Minimum Mortgage Rate not less than the Minimum Mortgage Rate of the Deleted Mortgage Loan; (xi) if the Mortgage Loan is an Adjustable Rate Mortgage Loan, have a Gross Margin equal to the Gross Margin of the Deleted Mortgage Loan; and (xii) if the Mortgage Loan is an Adjustable Rate Mortgage Loan, have a next Adjustment Date not more than two months later than the next Adjustment Date on the Deleted Mortgage Loan. 

ERISA: The Employee Retirement Income Security Act of 1974, as amended.

ERISA Qualifying Underwriting: A best efforts or firm commitment underwriting or private placement that meets the requirements (without regard to the ratings requirements) of an Underwriter’s Exemption.

ERISA-Restricted Certificate: As specified in the Preliminary Statement.

Escrow Account: The Eligible Account or Accounts established and maintained pursuant to Section 3.08 hereof.

Everhome: Everhome Mortgage Company, formerly known as Alliance Mortgage Company, and its successors and assigns, in its capacity as Servicer of the Everhome Mortgage Loans.

Everhome Mortgage Loans: The Mortgage Loans for which Everhome is listed as “Servicer” on the Mortgage Loan Schedule.

	  
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Everhome Servicing Agreement: The Master Loan Purchase and Servicing Agreement, dated as of August 1, 2003, as amended by Amendment One, dated as of December 1, 2003, each between the Transferor and Everhome, and as the same may be amended from time to time; provided, however, the Everhome Servicing Agreement shall not include that certain Contract Assignment, dated March 1, 2004, between Everhome and Everbank, a federal savings association.

Excess Interest Amount: For any Distribution Date, an amount equal to the product of (i) the Excess Interest Rate divided by 12 and (ii) the Group 1 Pool Principal Balance.

Excess Interest Rate: A per annum rate equal to 0.01%.

Excess Proceeds: With respect to any Liquidated Loan, the amount, if any, by which the sum of any Liquidation Proceeds of such Mortgage Loan received in the calendar month in which such Mortgage Loan became a Liquidated Loan, exceeds (i) the Scheduled Principal Balance of such Liquidated Loan as of the Due Date in the month in which such Mortgage Loan became a Liquidated Loan plus (ii) accrued interest at the Mortgage Rate from the Due Date as to which interest was last paid or advanced (and not reimbursed) to Certificateholders up to the Due Date applicable to the Distribution Date immediately following the calendar month during which such liquidation occurred.

Exchange Act: The Securities Exchange Act of 1934, as amended from time to time.

Fair Market Value Call Price: With respect to each Mortgage Loan (not including REO Properties) to be purchased pursuant to Section 10.01(a), the fair market value of such Mortgage Loan (to be determined pursuant to a bid procedure set forth in Section 10.01(b)) plus accrued and unpaid interest thereon at the applicable Net Mortgage Rate. 

Fair Market Value Excess: With respect to each Mortgage Loan to be purchased pursuant to Section 10.01(a), the excess, if any, of the Fair Market Value Call Price for such Mortgage Loan, over the Par Call Price for such Mortgage Loan. Any Fair Market Value Excess will not become part of the related Group Available Funds, but shall instead be distributed directly to the Holders of the Class A-LR Certificates pursuant to Section 4.02(g).

Fannie Mae: Fannie Mae, a federally chartered and privately owned corporation organized and existing under the Federal National Mortgage Association Charter Act, or any successor thereto.

FDIC: The Federal Deposit Insurance Corporation, or any successor thereto.

Final Certification: With respect to each Custodian, the certification required to be delivered by such Custodian not later than 90 days after the Closing Date to the Depositor, the Trustee and the Transferor in the form annexed hereto as Exhibit H pursuant to Section 2.02 of this Agreement.

	  
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Financing Statement: A financing statement in the form of a UCC-1 or UCC-3, as applicable, filed pursuant to the Uniform Commercial Code to perfect a security interest in the Cooperative Shares and Pledge Instruments.

FIRREA: The Financial Institutions Reform, Recovery, and Enforcement Act of 1989.

Fitch: Fitch, Inc., or any successor thereto. If Fitch is designated as a Rating Agency in the Preliminary Statement, for purposes of Section 11.05(b), the address for notices to Fitch shall be One State Street Plaza, New York, NY 10004, Attention: MBS Monitoring MASTR Seasoned Securitization Trust 2004-1, or such other address as Fitch may hereafter furnish to each party to this Agreement.

Fractional Interest: (A) with respect to any Distribution Date and each of the Group 15-B Subordinate Certificates, a fraction (expressed as a percentage), the numerator of which is the Certificate Principal Balance of such Class and each Class of Group 15-B Subordinate Certificates subordinate to such Class, if any, and the denominator of which is the aggregate Scheduled Principal Balance of the Group 1 Mortgage Loans, (B) with respect to any Distribution Date and each of the Class 30-B-1, Class 30-B-2 and Class 30-B-3 Certificates, a fraction (expressed as a percentage), the numerator of which is the Certificate Principal Balance of such Class and each Class of such Subordinate Certificates subordinate to such Class, if any, plus the Group 2 Portion and the denominator of which is the aggregate Scheduled Principal Balance of the Group 2 Mortgage Loans (net of the PO Percentage of the Scheduled Principal Balance of each Discount Mortgage Loan), (C) with respect to any Distribution Date and each of the Class HY-B-1, Class HY-B-2 and Class HY-B-3 Certificates, a fraction (expressed as a percentage), the numerator of which is the Certificate Principal Balance of such Class and each Class of such Subordinate Certificates subordinate to such Class, if any, plus the Group 3/4 Portion and the denominator of which is the aggregate Scheduled Principal Balance of the Group 3 and Group 4 Mortgage Loans, and (D) with respect to any Distribution Date and each of the Class C-B-4, Class C-B-5 and Class C-B-6 Certificates, a fraction (expressed as a percentage), the numerator of which is the Certificate Principal Balance of such Class and each Class of such Subordinate Certificates subordinate to such Class, if any, and the denominator of which is the aggregate Scheduled Principal Balance of the Group 2 Mortgage Loans (net of the PO Percentage of the Scheduled Principal Balance of each Discount Mortgage Loan), Group 3 Mortgage Loans and Group 4 Mortgage Loans.

Freddie Mac: Freddie Mac, a corporate instrumentality of the United States created and existing under Title III of the Emergency Home Finance Act of 1970, as amended, or any successor thereto.

GMACM: GMAC Mortgage Corporation, a Pennsylvania corporation, and its successors and assigns, in its capacity as Servicer of certain of the Mortgage Loans.

GMACM Mortgage Loans: The Mortgage Loans for which GMACM is listed as “Servicer” on the Mortgage Loan Schedule.

	  
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GMACM Servicing Agreement: The Servicing Agreement, dated as of November 1, 2001, as amended by Amendment Number One, dated as of January 1, 2003, each between the Transferor and GMACM, and as the same may be amended from time to time.

Gross Margin: With respect to each Adjustable Rate Mortgage Loan, the fixed percentage set forth in the related Mortgage Note that is added to the Index on each Adjustment Date in accordance with the terms of the related Mortgage Note used to determine the Mortgage Rate for such Adjustable Rate Mortgage Loan.

Group 1 Available Funds: As to any Distribution Date, the sum of (a) the aggregate amount held in the Collection Account at the close of business on the related Servicer Remittance Date and, without duplication, on deposit in the Distribution Account at the close of business on the related Distribution Account Deposit Date, attributable to the Group 1 Mortgage Loans net of (i) the Amount Held for Future Distribution related to the Group 1 Mortgage Loans, (ii) amounts related to the Group 1 Mortgage Loans permitted to be withdrawn from the Collection Account pursuant to clauses (i)-(viii) inclusive and clauses (ix)(a) (iii), (ix)(b), (x) and (xi) of Section 3.10(a), (iii) after giving effect to all amounts deposited to the Distribution Account from the Collection Account, amounts related to the Group 1 Mortgage Loans permitted to be withdrawn from the Distribution Account pursuant to clauses (i)-(iv) inclusive of Section 3.10(b), and (iv) any Fair Market Value Excess, (b) the amount of any Advances related to the Group 1 Mortgage Loans and (c) in connection with Defective Mortgage Loans in Loan Group 1, the aggregate of the Purchase Prices and Substitution Adjustment Amounts deposited on the related Distribution Account Deposit Date.

Group 1 Certificates: As specified in the Preliminary Statement.

Group 1 Mortgage Loans: Those Mortgage Loans identified on the Mortgage Loan Schedule as Group 1 Mortgage Loans.

Group 1 Pool Principal Balance: As to any Distribution Date, the aggregate of the Scheduled Principal Balances of the Group 1 Mortgage Loans which were Outstanding Mortgage Loans on the Due Date in the month preceding the month of such Distribution Date.

Group 1 Subordinate Amount: As to any Distribution Date, the excess of (i) the aggregate Scheduled Principal Balance of the Group 1 Mortgage Loans over (ii) the sum of the Class Principal Balances of the Group 1 Certificates.

Group 2 Available Funds: As to any Distribution Date, the sum of (a) the aggregate amount held in the Collection Account at the close of business on the related Servicer Remittance Date and, without duplication, on deposit in the Distribution Account at the close of business on the related Distribution Account Deposit Date, attributable to the Group 2 Mortgage Loans net of (i) the Amount Held for Future Distribution related to the Group 2 Mortgage Loans, (ii) amounts related to the Group 2 Mortgage Loans permitted to be withdrawn from the Collection Account pursuant to clauses (i)-(viii) inclusive and clauses (ix)(a)(ii) and (iii), (ix)(b), (x) and (xi) of Section 3.10(a), (iii) after giving effect to all amounts deposited to the Distribution Account from the Collection Account, amounts related to the Group 2 Mortgage Loans permitted 

	  
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to be withdrawn from the Distribution Account pursuant to clauses (i)-(iv) inclusive of Section 3.10(b), and (iv) any Fair Market Value Excess, (b) the amount of any Advances related to the Group 2 Mortgage Loans and (c) in connection with Defective Mortgage Loans in Loan Group 2, the aggregate of the Purchase Prices and Substitution Adjustment Amounts deposited on the related Distribution Account Deposit Date.

Group 2 Certificates: As specified in the Preliminary Statement.

Group 2 Mortgage Loans: Those Mortgage Loans identified on the Mortgage Loan Schedule as Group 2 Mortgage Loans.

Group 2 Pool Principal Balance: As to any Distribution Date, the aggregate of the Scheduled Principal Balances of the Group 2 Mortgage Loans which were Outstanding Mortgage Loans on the Due Date in the month preceding the month of such Distribution Date.

Group 2 Portion: With respect to any date of determination, the portion of the Certificate Principal Balance of Class C-B-4, Class C-B-5 and Class C-B-6 Certificates related to Loan Group 2, which shall be equal to the excess of the Scheduled Principal Balance of the Group 2 Mortgage Loans over the sum of the Certificate Principal Balances of the Senior Certificates related to Loan Group 2 and the Certificate Principal Balances of the Class 30-B-1, Class 30-B-2 and Class 30-B-3 Certificates as of such date of determination.

Group 2 Subordinate Amount: As to any Distribution Date, the excess of (i) the aggregate Scheduled Principal Balance of the Group 2 Mortgage Loans (net of the PO Percentage of each Group 2 Mortgage Loan) over (ii) the sum of the Class Principal Balances of the Group 2 Certificates.

Group 3 Available Funds: As to any Distribution Date, the sum of (a) the aggregate amount held in the Collection Account at the close of business on the related Servicer Remittance Date and, without duplication, on deposit in the Distribution Account at the close of business on the related Distribution Account Deposit Date, attributable to the Group 3 Mortgage Loans net of (i) the Amount Held for Future Distribution related to the Group 3 Mortgage Loans, (ii) amounts related to the Group 3 Mortgage Loans permitted to be withdrawn from the Collection Account pursuant to clauses (i)-(viii) inclusive and clauses (ix)(a)(iii), (ix)(b), (x) and (xi) of Section 3.10(a), (iii) after giving effect to all amounts deposited to the Distribution Account from the Collection Account, amounts related to the Group 3 Mortgage Loans permitted to be withdrawn from the Distribution Account pursuant to clauses (i)-(iv) inclusive of Section 3.10(b), and (iv) any Fair Market Value Excess, (b) the amount of any Advances related to the Group 3 Mortgage Loans and (c) in connection with Defective Mortgage Loans in Loan Group 3, the aggregate of the Purchase Prices and Substitution Adjustment Amounts deposited on the related Distribution Account Deposit Date.

Group 3 Certificates: As specified in the Preliminary Statement.

Group 3 Mortgage Loans: Those Mortgage Loans identified on the Mortgage Loan Schedule as Group 3 Mortgage Loans.

	  
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Group 3 Pool Principal Balance: As to any Distribution Date, the aggregate of the Scheduled Principal Balances of the Group 3 Mortgage Loans which were Outstanding Mortgage Loans on the Due Date in the month preceding the month of such Distribution Date.

Group 3 Subordinate Amount: As to any Distribution Date, the excess of (i) the aggregate Scheduled Principal Balance of the Group 3 Mortgage Loans over (ii) the sum of the Class Principal Balances of the Group 3 Certificates.

Group 3/4 Portion: With respect to any date of determination, the portion of the Certificate Principal Balance of the Class C-B-4, Class C-B-5 and Class C-B-6 Certificates related to Loan Group 3 and Loan Group 4, which shall be equal to the excess of the Scheduled Principal Balance of the Mortgage Loans in Loan Group 3 and Loan Group 4 over the sum of the Certificate Principal Balances of the Senior Certificates related to Loan Group 3 and Loan Group 4 and the Certificate Principal Balances of the Class HY-B-1, Class HY-B-2 and Class HY-B-3 Certificates as of such date of determination.

Group 4 Available Funds: As to any Distribution Date, the sum of (a) the aggregate amount held in the Collection Account at the close of business on the related Servicer Remittance Date and, without duplication, on deposit in the Distribution Account at the close of business of the related Distribution Account Deposit Date, attributable to the Group 4 Mortgage Loans net of (i) the Amount Held for Future Distribution related to the Group 4 Mortgage Loans, (ii) amounts related to the Group 4 Mortgage Loans permitted to be withdrawn from the Collection Account pursuant to clauses (i)-(viii) inclusive and clauses (ix)(a)(iii), (ix)(b), (x) and (xi) of Section 3.10(a), (iii) after giving effect to all amounts deposited to the Distribution Account from the Collection Account, amounts related to the Group 4 Mortgage Loans permitted to be withdrawn from the Distribution Account pursuant to clauses (i)-(iv) inclusive of Section 3.10(b), and (iv) any Fair Market Value Excess, (b) the amount of any Advances related to the Group 4 Mortgage Loans and (c) in connection with Defective Mortgage Loans in Loan Group 4, the aggregate of the Purchase Prices and Substitution Adjustment Amounts deposited on the related Distribution Account Deposit Date.

Group 4 Subordinate Amount: As to any Distribution Date, the excess of (i) the aggregate Scheduled Principal Balance of the Group 4 Mortgage Loans over (ii) the sum of the Class Principal Balances of the Group 4 Certificates.

Group 15-B Subordinate Certificates: As specified in the Preliminary Statement.

Group 30-B Subordinate Certificates: As specified in the Preliminary Statement.

Group Available Funds: Any of the Group 1 Available Funds, Group 2 Available Funds, Group 3 Available Funds or Group 4 Available Funds, as applicable.

Group C-B Subordinate Certificates: As specified in the Preliminary Statement.

Group HY-B Subordinate Certificates: As specified in the Preliminary Statement.

	  
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Group Pool Principal Balance: Any of the Group 1 Pool Principal Balance, Group 2 Pool Principal Balance, Group 3 Pool Principal Balance or Group 4 Pool Principal Balance, as applicable.

Group Subordinate Amount: Any of the Group 1 Subordinate Amount, Group 2 Subordinate Amount, Group 3 Subordinate Amount or Group 4 Subordinate Amount, as applicable.

Hibernia: Hibernia National Bank, and its successors and assigns, in its capacity as Servicer of the Hibernia Mortgage Loans.

Hibernia Mortgage Loans: The Mortgage Loans for which Hibernia is listed as “Servicer” on the Mortgage Loan Schedule.

Hibernia Servicing Agreement: The Wells Fargo Guide.

HSBC: HSBC Mortgage Corporation (USA), and its successors and assigns, in its capacity as Servicer of the HSBC Mortgage Loans.

HSBC Mortgage Loans: The Mortgage Loans for which HSBC is listed as “Servicer” on the Mortgage Loan Schedule.

HSBC Servicing Agreement: The Master Loan Purchase and Servicing Agreement, dated as of June 1, 2002, as amended by Amendment Number One, dated as of November 15, 2002, as further amended by Amendment Number One, dated as of March 1, 2003, as further amended by Amendment Number Two, dated as of June 1, 2002, as further amended by Amendment Number Three, dated as of November 1, 2003, as further amended by Amendment Number Four, dated as of March 1, 2004, and as further amended by Amendment Number Five, dated as of June 1, 2002, each between the Transferor and HSBC, and as the same may be amended from time to time.

Huntington: The Huntington Mortgage Company, and its successors and assigns, in its capacity as Servicer of the Huntington Mortgage Loans.

Huntington Mortgage Loans: The Mortgage Loans for which Huntington is listed as “Servicer” on the Mortgage Loan Schedule.

Huntington Servicing Agreement: The Wells Fargo Guide.

HUD: The United States Department of Housing and Urban Development or any successor thereto.

Index: As of any Adjustment Date, the index applicable to the determination of the Mortgage Rate on each Adjustable Rate Mortgage Loan, as set forth on the Mortgage Loan Schedule.

	  
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Indirect Participant: A broker, dealer, bank or other financial institution or other Person that clears through or maintains a custodial relationship with a Depository Participant.

Initial Certification: With respect to each Custodian, the certification required to be executed by such Custodian and delivered on the Closing Date to the Depositor and the Trustee in the form annexed hereto as Exhibit G pursuant to Section 2.02 of this Agreement.

Insolvency Proceeding: With respect to any Person: (i) any case, action, or proceeding with respect to such Person before any court or other governmental authority relating to bankruptcy, reorganization, insolvency, liquidation, receivership, dissolution, winding up, or relief of debtors; or (ii) any general assignment for the benefit of creditors, composition, marshaling of assets for creditors, or other, similar arrangement in respect of the creditors generally of such Person or any substantial portion of such Person’s creditors, in any case undertaken under federal, state or foreign law, including the Bankruptcy Code.

Insurance Policy: With respect to any Mortgage Loan included in the Trust Fund, any insurance policy, including all riders and endorsements thereto in effect, including any replacement policy or policies for any Insurance Policies.

Insurance Proceeds: Proceeds paid by an insurer pursuant to any Insurance Policy, in each case other than any amount included in such Insurance Proceeds in respect of Insured Expenses, to the extent such proceeds are not applied to the restoration of the related Mortgaged Property or released to the borrower in accordance with the applicable Servicer’s normal servicing procedures. 

Insured Expenses: Expenses covered by an Insurance Policy or any other insurance policy with respect to the Mortgage Loans.

Interest Accrual Period: With respect to each Class of Certificates and each Lower-Tier REMIC Regular Interest,and any Distribution Date, the period from and including the first day of the month immediately preceding the month in which such Distribution Date occurs, commencing September 1, 2004, to and including the last day of such immediately preceding month, on the basis of a 360-day year consisting of twelve 30-day months.

Interest Only Certificates: The Class A-X Certificates.

Latest Possible Maturity Date: The Distribution Date following the maturity date of the Mortgage Loan having the latest scheduled maturity date as of the Cut-off Date.

Lender-Paid Mortgage Insurance Amount: With respect to any Lender-Paid Mortgage Insurance Loan, the interest portion of each Scheduled Payment that is paid by the related Mortgagor that will be used to pay the monthly premium of the “lender-paid” Primary Insurance Policy on such Lender-Paid Mortgage Insurance Loan, which is calculated by multiplying the Scheduled Principal Balance as of the related date of determination on such Lender-Paid Mortgage Insurance Loan by the applicable Lender-Paid Mortgage Insurance Rate.

	  
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Lender-Paid Mortgage Insurance Loan: Each of the Mortgage Loans identified on the Mortgage Loan Schedule as having a Lender-Paid Mortgage Insurance Rate.

Lender-Paid Mortgage Insurance Rate: With respect to any Lender-Paid Mortgage Insurance Loan, a per annum rate equal to the percentage indicated on the Mortgage Loan Schedule under the heading “Lender-Paid Mortgage Insurance Rate.”

Liquidated Loan: With respect to any Distribution Date, a defaulted Mortgage Loan (including any REO Property) which was liquidated in the calendar month preceding the month of such Distribution Date and as to which the applicable Servicer or the Master Servicer, as the case may be, has determined (in accordance with the applicable Servicing Agreement and this Agreement) that it has received all amounts it expects to receive in connection with the liquidation of such Mortgage Loan, including the final disposition of an REO Property.

Liquidation Proceeds: Amounts, including Insurance Proceeds, received in connection with the partial or complete liquidation of defaulted Mortgage Loans, whether through trustee’s sale, foreclosure sale or otherwise or amounts received in connection with any condemnation or partial release of a Mortgaged Property and any other proceeds received in connection with an REO Property, less the sum of related unreimbursed Servicing Fees, Servicing Advances and Advances.

Loan Group: Any of Loan Group 1, Loan Group 2, Loan Group 3, or Loan Group 4, as applicable.

Loan-to-Value Ratio: With respect to any Mortgage Loan and as to any date of determination, the fraction (expressed as a percentage) the numerator of which is the principal balance of the related Mortgage Loan at such date of determination and the denominator of which is the Appraised Value of the related Mortgaged Property.

Loss Allocation Limitation: As defined in Section 4.03(c) hereof.

Lost Mortgage Note: Any Mortgage Note the original of which was permanently lost or destroyed and has not been replaced.

Lower-Tier REMIC: As specified in the Preliminary Statement.

Lower-Tier REMIC Regular Interests: As specified in the Preliminary Statement.

Lower-Tier REMIC Group C-B Subordinated Balance Ratio: The ratio among the Uncertificated Principal Balances of each of the Lower-Tier REMIC Regular Interests ending with the designation “SUBC,” equal to the ratio among, with respect to each such Lower-Tier REMIC Regular Interest, the excess of (x) the aggregate Scheduled Principal Balance of the Mortgage Loans in the related Loan Group over (y) the aggregate Certificate Principal Balance of the Senior Certificates, Group HY-B Subordinate Certificates and Group 30-B Subordinate Certificates in the related Certificate Group.

	  
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Lower-Tier REMIC Group HY-B Subordinated Balance Ratio: The ratio among the Uncertificated Principal Balances of each of the Lower-Tier REMIC Regular Interests ending with the designation “SUBHY,” equal to the ratio among, with respect to each such Lower-Tier REMIC Regular Interest, the excess of (x) the aggregate Scheduled Principal Balance of the Mortgage Loans in the related Loan Group over (y) the aggregate Certificate Principal Balance of the Senior Certificates and Group C-B Subordinate Certificates in the related Certificate Group.

Majority in Interest: As to any Class of Regular Certificates, the Holders of Certificates of such Class evidencing, in the aggregate, at least 51% of the Percentage Interests evidenced by all Certificates of such Class.

Master Servicer: Wells Fargo Bank, N.A., a national banking association, and its successors and assigns, in its capacity as Master Servicer hereunder.

Master Servicer Event of Termination: As defined in Section 7.01 hereof.

Master Servicing Compensation: All investment earnings on amounts on deposit in the Collection Account and the Distribution Account.

Master Servicing Officer: Any officer of the Master Servicer involved in, or responsible for, the administration and master servicing of the Mortgage Loans.

Maximum Mortgage Rate: With respect to each Adjustable Rate Mortgage Loan, the percentage set forth in the related Mortgage Note as the maximum Mortgage Rate thereunder.

Minimum Mortgage Rate: With respect to each Adjustable Rate Mortgage Loan, the percentage set forth in the related Mortgage Note as the minimum Mortgage Rate thereunder.

Moody’s: Moody’s Investors Service, Inc., or any successor thereto. If Moody’s is designated as a Rating Agency in the Preliminary Statement, for purposes of Section 11.05(b), the address for notices to Moody’s shall be Moody’s Investors Service, Inc., 99 Church Street, New York, New York 10007, Attention: Residential Mortgage Monitoring Group, or such other address as Moody’s may hereafter furnish to each other party to this Agreement.

Mortgage: The mortgage, deed of trust or other instrument creating a first lien on an estate in fee simple or leasehold interest in real property securing a Mortgage Note.

Mortgage File: The mortgage documents listed in Section 2.01 hereof pertaining to a particular Mortgage Loan and any additional documents delivered to the related Custodian to be added to the Mortgage File pursuant to this Agreement.

Mortgage Loan Purchase Agreement: The Mortgage Loan Purchase Agreement, dated as of September 30, 2004, between the Transferor and the Depositor.

 

Mortgage Loan Schedule: The list of Mortgage Loans (as from time to time amended by the related Custodian to reflect the addition of Eligible Substitute Mortgage Loans and the deletion of Deleted Mortgage Loans pursuant to the provisions of this Agreement) 

	  
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transferred to the Trustee as part of the Trust Fund and from time to time subject to this Agreement, attached hereto as Schedule I, setting forth the following information with respect to each Mortgage Loan: (1) the Mortgage Loan identifying number; (2) the Mortgagor’s first and last name; (3) the street address of the Mortgaged Property including the city, state and zip code; (4) the original principal balance of the Mortgage Loan; (5) the Scheduled Principal Balance of the Mortgage Loan as of the close of business on the Cut-off Date; (6) the unpaid principal balance of the Mortgage Loan as of the close of business on the Cut-off Date; (7) the last scheduled Due Date on which a Scheduled Payment was applied to the Scheduled Principal Balance; (8) the last Due Date on which a Scheduled Payment was actually applied to the unpaid principal balance; (9) the Mortgage Rate in effect immediately following origination; (10) the Mortgage Rate in effect immediately following the Cut-off Date (if different from (9)); (11) the amount of the Scheduled Payment at origination; (12) the amount of the Scheduled Payment as of the Cut-off Date (if different from (11)); (13) a code indicating whether the Mortgaged Property is owner occupied, a second home or an investor property; (14) a code indicating whether the Mortgaged Property is a single family residence, a two-family residence, a three-family residence, a four-family residence, a planned unit development, a condominium or a cooperative unit; (15) a code indicating the loan purpose (i.e., purchase, rate/term refinance, cash out refinance); (16) the stated maturity date; (17) the original months to maturity; (18) the remaining months to maturity from the Cut-off Date based on the original amortization schedule and, if different, the remaining months to maturity expressed in the same manner but based on the actual amortization schedule; (19) the origination date of the Mortgage Loan; (20) the Loan-to-Value Ratio at origination; (21) the date on which the first Scheduled Payment was due on the Mortgage Loan after the origination date; (22) a code indicating the documentation style of the Mortgage Loan; (23) [reserved]; (24) the Servicing Fee Rate; (25) a code indicating whether the Mortgage Loan is subject to a prepayment penalty and, if so, the term of such prepayment penalty; (26) the credit score (or mortgage score) of the Mortgagor; (27) [reserved]; (28) [reserved]; (29) a code indicating whether the Mortgage Loan is a Group 1 Mortgage Loan, Group 2 Mortgage Loan, Group 3 Mortgage Loan or Group 4 Mortgage Loan; (30) the date on which the Loan was transferred to the Transferor; (31) the initial Servicer; (32) a code indicating the applicable Custodian; (33) [reserved]; (34) a code indicating whether the Mortgage Loan is a Cooperative Loan; (35) [reserved]; (36) with respect to each Adjustable Rate Mortgage Loan, the first Adjustment Date; (37) with respect to each Adjustable Rate Mortgage Loan, the Gross Margin; (38) with respect to each Adjustable Rate Mortgage Loan, the Maximum Mortgage Rate under the terms of the Mortgage Note; (39) with respect to each Adjustable Rate Mortgage Loan, the Minimum Mortgage Rate under the terms of the Mortgage Note; (40) with respect to each Adjustable Rate Mortgage Loan, the Periodic Rate Cap; (41) with respect to each Adjustable Rate Mortgage Loan, the first Adjustment Date immediately following the Cut-off Date; and (42) with respect to each Adjustable Rate Mortgage Loan, the Index and (42) a code indicating whether the Mortgage Loan is an Adjustable Rate Mortgage Loan or a fixed rate Mortgage Loan.

	  
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Mortgage Loan: Such of the mortgage loans and cooperative loans transferred and assigned to the Trustee pursuant to the provisions hereof as from time to time are held as a part of the Trust Fund (including any REO Property), the mortgage loans so held being identified in the Mortgage Loan Schedule, notwithstanding foreclosure or other acquisition of title of the related Mortgaged Property. With respect to each Mortgage Loan that is a Cooperative Loan, if any, “Mortgage Loan” shall include, but not be limited to, the related Mortgage Note, Security Agreement, Assignment of Proprietary Lease, Recognition Agreement, Cooperative Shares and Proprietary Lease and, with respect to each Mortgage Loan other than a Cooperative Loan, “Mortgage Loan” shall include, but not be limited to the related Mortgages and the related Mortgage Notes.

Mortgage Note: The original executed note or other evidence of the indebtedness of a Mortgagor under a Mortgage Loan.

Mortgage Rate: The annual rate of interest borne by a Mortgage Note from time to time, which rate with respect to each Adjustable Rate Mortgage Loan (A) as of any date of determination until the first Adjustment Date following the Cut-off Date shall be the rate set forth in the Mortgage Loan Schedule as the Mortgage Rate in effect immediately following the Cut-off Date and (B) as of any date of determination thereafter shall be the rate as adjusted on the most recent Adjustment Date equal to the sum, rounded to the nearest 0.125% as provided in the Mortgage Note, of the Index, as most recently available as of a date prior to the Adjustment Date as set forth in the related Mortgage Note, plus the related Gross Margin; provided that the Mortgage Rate on such Adjustable Rate Mortgage Loan on any Adjustment Date shall never be more than the lesser of (i) the sum of the Mortgage Rate in effect immediately prior to the Adjustment Date plus the related Periodic Rate Cap, if any, and (ii) the related Maximum Mortgage Rate, and shall never be less than the greater of (i) the Mortgage Rate in effect immediately prior to the Adjustment Date less the Periodic Rate Cap, if any, and (ii) the related Minimum Mortgage Rate. With respect to each Mortgage Loan that becomes an REO Property, as of any date of determination, the annual rate determined in accordance with the immediately preceding sentence as of the date such Mortgage Loan became an REO Property.

Mortgaged Property: The underlying real property securing a Mortgage Loan or, with respect to a Cooperative Loan, the related Cooperative Shares and Proprietary Lease.

Mortgagor: The obligor(s) on a Mortgage Note.

National City: National City Mortgage Co., an Ohio corporation, and its successors and assigns, in its capacity as Servicer of the National City Mortgage Loans to the Transferor.

National City Mortgage Loans: The Mortgage Loans for which National City is listed as “Servicer” on the Mortgage Loan Schedule.

National City Servicing Agreement: Solely with respect to the National City Mortgage Loans, the Second Amended and Restated Master Seller’s Warranties and Servicing 

	  
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Agreement, dated as of October 1, 2001, as amended and restated through and including May 1, 2004, between the Transferor and National City, as the same may be amended from time to time.

 

Net Mortgage Rate: As to each Mortgage Loan, and at any time, the per annum rate equal to the Mortgage Rate less (i) the related Servicing Fee Rate and (ii) if applicable, the Lender-Paid Mortgage Insurance Rate. For purposes of determining whether any Eligible Substitute Mortgage Loan is a Discount Mortgage Loan or a Non-Discount Mortgage Loan and for purposes of calculating the applicable PO Percentage and applicable Non-PO Percentage, each Eligible Substitute Mortgage Loan shall be deemed to have a Net Mortgage Rate equal to the Net Mortgage Rate of the Deleted Mortgage Loan for which it is substituted.

Net Prepayment Interest Shortfalls: As to any Distribution Date and Loan Group, the amount by which the aggregate of Prepayment Interest Shortfalls for that Loan Group during the related Prepayment Period exceeds the amount of Compensating Interest available to such Loan Group for such Distribution Date.

Non-Discount Mortgage Loan: Any Group 2 Mortgage Loan having a Net Mortgage Rate as of the Cut off Date equal to or in excess of the Required Coupon for Loan Group 2.

Non-PO Percentage: With respect to any Group 1, Group 3 or Group 4 Mortgage Loan, 100%, and with respect to any Group 2 Mortgage Loan:

(1)  with respect to any Discount Mortgage Loan, the fraction, expressed as a percentage, equal to Net Mortgage Rate divided by the Required Coupon; and

(2)  with respect to any Non-Discount Mortgage Loan, 100%.

Non-PO Recoveries: With respect to Recoveries and any Distribution Date, an amount equal to the excess, if any, of (i) the amount of Recoveries over (ii) the amount of the aggregate of the PO Recoveries for that Distribution Date.

Nonrecoverable Advance: Any portion of an Advance previously made or proposed to be made by the applicable Servicer or the Master Servicer, as the case may be, that, in the good faith judgment of the applicable Servicer or the Master Servicer, will not be ultimately recoverable by the applicable Servicer or the Master Servicer from the related Mortgagor, related Liquidation Proceeds or otherwise.

Notice of Final Distribution: The notice to be provided pursuant to Section 10.02 to the effect that final distribution on any of the Certificates shall be made only upon presentation and surrender thereof.

Notional Amount: With respect to any Distribution Date and the Class A-X Certificates, the sum of (i) an amount equal to the product of (A) the aggregate Scheduled Principal Balance of the outstanding Non-Discount Mortgage Loans and (B) a fraction, (x) the numerator of which is equal to the weighted average of the Stripped Interest Rates for the Non-

	  
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Discount Mortgage Loans and (y) the denominator of which is equal to 6.500% and (ii) an amount equal to the Excess Interest Amount for that Distribution Date divided by 6.500% and multiplied by 12. The Notional Amount of the Class A-X Certificates for the first Interest Accrual Period is $22,101,782. For federal income tax purposes, the Class A-X Certificates will not have a Notional Amount but will be entitled to 100% of amounts distributed on Lower-Tier REMIC Regular Interest LT-IO1 and Lower-Tier REMIC Regular Interest LT-IO2.

 

Offered Certificates: As specified in the Preliminary Statement.

Officer’s Certificate: A certificate (i) signed by the Chairman of the Board, the Vice Chairman of the Board, the President, a Managing Director, a Vice President (however denominated), an Assistant Vice President, the Treasurer, the Secretary, or one of the Assistant Treasurers or Assistant Secretaries of the Depositor or the Master Servicer, or (ii) if provided for in this Agreement, signed by a Master Servicing Officer, as the case may be, and delivered to the Depositor, the Trustee and the Trust Administrator, as the case may be, as required by this Agreement.

Opinion of Counsel: A written opinion of counsel, who may be counsel for the Depositor or the Master Servicer, including in house counsel, reasonably acceptable to the Trustee or the Trust Administrator, as applicable; provided, however, that, with respect to the interpretation or application of the REMIC Provisions, such counsel must (i) in fact be independent of the Depositor and the Master Servicer, (ii) not have any direct financial interest in the Depositor or the Master Servicer or in any affiliate of either, and (iii) not be connected with the Depositor or the Master Servicer as an officer, employee, promoter, underwriter, trustee, partner, director or person performing similar functions.

Optional Termination: The purchase of the Mortgage Loans pursuant to Section 10.01(a) hereof.

Original Subordinate Principal Balance: (A) With respect to the Group 15-B Subordinate Certificates, the aggregate of the Certificate Principal Balances of the Group 15-B Subordinate Certificates as of the date of issuance of the Certificates, (B) with respect to the Group 30-B Subordinate Certificates, the aggregate of the Certificate Principal Balances of the Group 30-B Subordinate Certificates as of the date of issuance of the Certificates, (C) with respect to the Group HY-B Subordinate Certificates, the aggregate of the Certificate Principal Balances of the Group HY-B Subordinate Certificates as of the date of issuance of the Certificates and (D) with respect to the Group C-B Subordinate Certificates, the aggregate of the Certificate Principal Balances of the Group C-B Subordinate Certificates as of the date of issuance of the Certificates.

OTS: The Office of Thrift Supervision.

Outstanding: With respect to the Certificates as of any date of determination, all Certificates theretofore executed and authenticated under this Agreement except:

	  
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(a)  Certificates theretofore canceled by the Trust Administrator or delivered to the Trust Administrator for cancellation; and

(b)  Certificates in exchange for which or in lieu of which other Certificates have been executed and delivered by the Trust Administrator pursuant to this Agreement.

Outstanding Mortgage Loan: As of any Due Date, a Mortgage Loan with a Scheduled Principal Balance greater than zero that was not the subject of a Principal Prepayment in Full prior to such Due Date and that did not become a Liquidated Loan prior to such Due Date.

Ownership Interest: As to any Residual Certificate, any ownership interest in such Certificate including any interest in such Certificate as the Holder thereof and any other interest therein, whether direct or indirect, legal or beneficial.

Par Call Price: With respect to each Mortgage Loan (not including REO Properties) to be purchased pursuant to Section 10.01(a), 100% of the unpaid principal balance of such Mortgage Loan, plus accrued and unpaid interest thereon at the applicable Net Mortgage Rate.

Pass-Through Rate: For any interest bearing Class of Certificates, the per annum rate set forth or calculated in the manner described in the Preliminary Statement. 

Percentage Interest: As to any Certificate, the percentage interest evidenced thereby in distributions required to be made on the related Class, such percentage interest being set forth on the face thereof or equal to the percentage obtained by dividing the Denomination of such Certificate by the aggregate of the Denominations of all Certificates of the same Class. 

Periodic Rate Cap: With respect to each Adjustable Rate Mortgage Loan and any Adjustment Date therefor, the fixed percentage set forth in the related Mortgage Note, which is the maximum amount by which the Mortgage Rate for such Adjustable Rate Mortgage Loan may increase or decrease (without regard to the Maximum Mortgage Rate or the Minimum Mortgage Rate) on such Adjustment Date from the Mortgage Rate in effect immediately prior to such Adjustment Date.

Permitted Investments: At any time, any one or more of the following obligations and securities:

(a)  obligations of the United States or any agency thereof, provided such obligations are backed by the full faith and credit of the United States;

(b)  general obligations of or obligations guaranteed by any state of the United States or the District of Columbia receiving the highest long-term debt rating of each Rating Agency, or such lower rating as will not result in the downgrading or withdrawal of the ratings then assigned to the Certificates by either Rating Agency;

(c)  commercial or finance company paper which is then receiving the highest commercial or finance company paper rating of each Rating Agency, or such lower rating 

	  
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as will not result in the downgrading or withdrawal of the ratings then assigned to the Certificates by either Rating Agency;

 

(d)  certificates of deposit, demand or time deposits, or bankers’ acceptances issued by any depository institution or trust company incorporated under the laws of the United States or of any state thereof and subject to supervision and examination by federal and/or state banking authorities, provided that the commercial paper and/or long term unsecured debt obligations of such depository institution or trust company are then rated in one of the two highest long-term and the highest short-term ratings of each Rating Agency for such securities, or such lower ratings as will not result in the downgrading or withdrawal of the rating then assigned to the Certificates by either Rating Agency;

(e)  demand or time deposits or certificates of deposit issued by any bank or trust company or savings institution to the extent that such deposits are fully insured by the FDIC and are then rated in the highest long-term and the highest short-term ratings of each Rating Agency for such securities, or such lower ratings as will not result in the downgrading or withdrawal of the ratings then assigned to the Certificates by either Rating Agency;

(f)  guaranteed reinvestment agreements issued by any bank, insurance company or other corporation containing, at the time of the issuance of such agreements, such terms and conditions as will not result in the downgrading or withdrawal of the rating then assigned to the Certificates by either Rating Agency;

(g)  repurchase obligations with respect to any security described in clauses (a) and (b) above, in either case entered into with a depository institution or trust company (acting as principal) described in clause (d) above;

(h)  securities (other than stripped bonds, stripped coupons or instruments sold at a purchase price in excess of 115% of the face amount thereof) bearing interest or sold at a discount issued by any corporation incorporated under the laws of the United States or any state thereof which, at the time of such investment, have the highest rating of each Rating Agency, or such lower rating as will not result in the downgrading or withdrawal of the rating then assigned to the Certificates by either Rating Agency, as evidenced by a signed writing delivered by each Rating Agency;

(i)  units of a taxable money market portfolio having the highest rating assigned by each Rating Agency and restricted to obligations issued or guaranteed by the United States of America or entities whose obligations are backed by the full faith and credit of the United States of America and repurchase agreements collateralized by such obligations;

(j)  any mutual fund, money market fund, common trust fund or other pooled investment vehicle, the assets of which are limited to instruments that otherwise would constitute Permitted Investments hereunder, including any such fund that is managed by 

	  
	 	-35-	 
	

	 

the Trust Administrator or Master Servicer or any affiliate of the Trust Administrator or Master Servicer or for which the Trust Administrator or Master Servicer or any affiliate of the Trust Administrator or Master Servicer acts as an adviser as long as such fund is rated in at least the highest rating category by each Rating Agency (if so rated by such Rating Agency); and

(k)  such other investments bearing interest or sold at a discount acceptable to each Rating Agency as will not result in the downgrading or withdrawal of the rating then assigned to the Certificates by either Rating Agency, as evidenced by a signed writing delivered by each Rating Agency; 

provided that no such instrument shall be a Permitted Investment if such instrument evidences the right to receive interest only payments with respect to the obligations underlying such instrument.

Permitted Transferee: Any Person other than (i) the United States, any State or political subdivision thereof, or any agency or instrumentality of any of the foregoing, (ii) a foreign government, international organization or any agency or instrumentality of either of the foregoing, (iii) an organization (except certain farmers’ cooperatives described in section 521 of the Code) which is exempt from tax imposed by Chapter 1 of the Code (including the tax imposed by section 511 of the Code on unrelated business taxable income) on any excess inclusions (as defined in section 860E(c)(l) of the Code) with respect to any Residual Certificate, (iv) rural electric and telephone cooperatives described in section 1381(a)(2)(C) of the Code, (v) a Person that is not a citizen or resident of the United States, a corporation, partnership (except as provided in applicable Treasury Regulations), or other entity created or organized in or under the laws of the United States, any state thereof or the District of Columbia, 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 Persons described in this clause (v) have the authority to control all substantial decisions of the Trust (or, to the extent provided in applicable Treasury Regulations, certain trusts in existence on August 20, 1996 which are eligible to elect to be treated as United States persons) unless such Person has furnished the transferor and the Trust Administrator with a duly completed Internal Revenue Service Form W-8ECI or any applicable successor form, (vi) any Person with respect to whom income on any Residual Certificate is attributable to a foreign permanent establishment or fixed base, within the meaning of an applicable income tax treaty, of such Person or any other Person and (vii) any other Person so designated by the Depositor based upon an Opinion of Counsel that the Transfer of an Ownership Interest in a Residual Certificate to such Person may cause any REMIC hereunder to fail to qualify as a REMIC at any time that the Certificates are outstanding. The terms “United States,” “State” and “international organization” shall have the meanings set forth in section 7701 of the Code or successor provisions. A corporation will not be treated as an instrumentality of the United States or of any State or political subdivision thereof for these purposes if all of its activities are subject to tax and, with the exception of Freddie Mac, a majority of its board of directors is not selected by such government unit.

	  
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Person: Any individual, corporation, partnership, limited liability company, joint venture, association, joint-stock company, trust, unincorporated organization or government, or any agency or political subdivision thereof.

Physical Certificate: As specified in the Preliminary Statement.

Pledge Instruments: With respect to each Cooperative Loan, the Stock Power, the Assignment of Proprietary Lease and the Security Agreement.

PO Percentage: With respect to any Discount Mortgage Loan, 100% minus the Non-PO Percentage for that Discount Mortgage Loan. With respect to any Non-Discount Mortgage Loan, 0%.

PO Recovery: With respect to Recoveries on Discount Mortgage Loans, any Distribution Date and the Class PO Certificates, an amount equal to the lesser of (a) the PO Percentage of each Recovery on a Discount Mortgage Loan and (b) the Class PO Deferred Amount for that Distribution Date.

Prepayment Interest Shortfall: (i) With respect to any Distribution Date and each Mortgage Loan (other than a Loan serviced by Bank of America, Countrywide, Colonial, Hibernia, Huntington, U.S. Bank Home Mortgage or WMBFA) with respect to which a Principal Prepayment has occurred during the month preceding such Distribution Date, the difference between (a) one month’s interest at the Net Mortgage Rate on such Principal Prepayment and (b) the amount of interest at the Net Mortgage Rate actually received with respect to the Mortgage Loan and Principal Prepayment; (ii) with respect to any Distribution Date and each Mortgage Loan serviced by Bank of America, WMBFA, Colonial, Hibernia, Huntington or U.S. Bank Home Mortgage, with respect to which a Principal Prepayment in Full has occurred during the month preceding such Distribution Date, the difference between (a) one month’s interest at the Net Mortgage Rate on such Principal Prepayment in Full and (b) the amount of interest at the Net Mortgage Rate actually received with respect to the Mortgage Loan and Principal Prepayment in Full; and (iii) with respect to any Distribution Date and each Mortgage Loan serviced by Countrywide Home Loans, Inc. with respect to which a Principal Prepayment has occurred during the month preceding such Distribution Date on any day other than Due Date for such Mortgage Loan, the difference between (a) one month’s interest at the Net Mortgage Rate on such Principal Prepayment and (b) the amount of interest at the Net Mortgage Rate actually received with respect to the Mortgage Loan and Principal Prepayment.

Prepayment Period: As to any Distribution Date, and with respect to any Principal Prepayment of a Mortgage Loan, the calendar month preceding the month in which such Distribution Date occurs.

Primary Insurance Policy: Each policy of primary mortgage guaranty insurance or any replacement policy therefor with respect to any Mortgage Loan.

Principal Only Certificates: As specified in the Preliminary Statement.

	  
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Principal Prepayment: Any payment of principal by a Mortgagor on a Mortgage Loan that is received in advance of its scheduled Due Date and is not accompanied by an amount representing scheduled interest due on any date or dates in any month or months subsequent to the month of prepayment. Partial Principal Prepayments will be applied by the applicable Servicers in accordance with the terms of the related Servicing Agreements and in accordance with the terms of the related Mortgage Note, and to the extent the Mortgage Note does not provide otherwise, shall be applied in the Prepayment Period preceding the receipt thereof.

Principal Prepayment in Full: Any Principal Prepayment made by a Mortgagor of the entire principal balance of a Mortgage Loan.

Private Certificate: As specified in the Preliminary Statement.

Proprietary Lease: The lease on a Cooperative Unit evidencing the possessory interest of the owner of the Cooperative Shares in such Cooperative Unit.

Prospectus Supplement: The Prospectus Supplement dated September 30, 2004 relating to the Offered 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. Each Protected Account shall be an Eligible Account. 

Purchase Price: With respect to any Mortgage Loan required to be purchased by the Transferor under the circumstances and in the manner provided in Section 2.02 and Section 2.03 hereof, an amount equal to (a) the sum of (i) 100% of the unpaid principal balance of the Mortgage Loan on the date of such purchase, (ii) accrued and unpaid interest thereon at the applicable Mortgage Rate from the date through which interest was last paid by the Mortgagor or the applicable Servicer or the Master Servicer, as the case may be, made an Advance in respect thereof (which was not reimbursed) to the Due Date in the month in which the Purchase Price is to be distributed to Certificateholders and (iii) in the event that such Mortgage Loan is repurchased by the Transferor due to a breach of the Transferor's representations and warranties relating to applicable predatory and abusive lending laws, any costs and damages incurred by the Trust in connection with a violation of a predatory or abusive lending law with respect to such Mortgage Loan, less (b) any Amounts Held for Future Distribution related to such Mortgage Loan with respect to the Distribution Date in the month in which the Purchase Price is to be distributed to Certificateholders.

Qualified Insurer: A mortgage guaranty insurance company duly qualified as such under the laws of the state of its principal place of business and each state having jurisdiction over such insurer in connection with the insurance policy issued by such insurer, duly authorized and licensed in such states to transact a mortgage guaranty insurance business in such states and to write the insurance provided by the insurance policy issued by it, approved as a Fannie Mae approved mortgage insurer and having a claims paying ability rating of at least “AA” or equivalent rating by a nationally recognized statistical rating organization. Any replacement 

	  
	 	-38-	 
	

	 

 

insurer with respect to a Mortgage Loan must have at least as high a claims paying ability rating as the insurer it replaces had on the Closing Date.

 

Qualified Mortgage Insurer: Any mortgage insurer that is Fannie Mae and Freddie Mac approved.

Rating Agency: Each of the Rating Agencies specified in the Preliminary Statement. If any such organization or a successor is no longer in existence, “Rating Agency” shall be such nationally recognized statistical rating organization, or other comparable Person, as is designated by the Depositor, notice of which designation shall be given to the Trustee and the Trust Administrator. References herein to a given rating category of a Rating Agency shall mean such rating category without giving effect to any modifiers.

Realized Loss: With respect to each Mortgage Loan that is a Liquidated Loan, an amount (not less than zero or more than the Scheduled Principal Balance of the Mortgage Loan) as of the date of such liquidation, equal to (i) the unpaid principal balance of the Liquidated Loan as of the date of such liquidation, plus (ii) interest at the Net Mortgage Rate from the Due Date as to which interest was last paid or advanced (and not reimbursed) to Certificateholders up to the Due Date in the month in which Liquidation Proceeds are required to be distributed on the Scheduled Principal Balance of such Liquidated Loan from time to time, minus (iii) the Liquidation Proceeds and Insurance Proceeds, if any, received during the month in which such liquidation occurred, to the extent applied as recoveries of interest at the Net Mortgage Rate and to principal of the Liquidated Loan. With respect to each Mortgage Loan which has become the subject of a Deficient Valuation, if the principal amount due under the related Mortgage Note has been reduced, the difference between the principal balance of the Mortgage Loan outstanding immediately prior to such Deficient Valuation and the principal balance of the Mortgage Loan as reduced by the Deficient Valuation.

Recognition Agreement: An agreement among a Cooperative Corporation, a lender and a Mortgagor with respect to a Cooperative Loan whereby such parties (i) acknowledge that such lender may make, or intends to make, such Cooperative Loan and (ii) make certain agreements with respect to such Cooperative Loan.

Record Date: With respect to any Distribution Date and the Certificates, the close of business on the last Business Day of the month preceding the month in which such Distribution Date occurs.

Recovery: With respect to any Distribution Date and any Mortgage Loan, an amount, net of any reimbursable expenses, received in respect of principal on such Mortgage Loan during the calendar month prior to that Distribution Date which has previously been allocated as a Realized Loss to a Class of Certificates.

Refinancing Mortgage Loan: Any Mortgage Loan originated in connection with the refinancing of an existing mortgage loan.

Regular Certificates: As specified in the Preliminary Statement.

	  
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Relevant UCC: The Uniform Commercial Code as in effect in the applicable jurisdiction.

Relief Act: The Servicemembers Civil Relief Act, as amended or any comparable state statute (including the comparable provisions under the California Military and Veterans Code, as amended).

Relief Act Reductions: With respect to any Distribution Date and any Mortgage Loan as to which there has been a reduction in the amount of interest collectible thereon for the most recently ended calendar month as a result of the application of the Relief Act, the amount, if any, by which (i) interest collectible on such Mortgage Loan for the most recently ended calendar month is less than (ii) interest accrued thereon for such month pursuant to the Mortgage Note.

REMIC: A “real estate mortgage investment conduit” within the meaning of section 860D of the Code.

REMIC Change of Law: Any proposed, temporary or final regulation, revenue ruling, revenue procedure or other official announcement or interpretation relating to REMICs and the REMIC Provisions issued after the Closing Date.

REMIC Provisions: Provisions of the federal income tax law relating to real estate mortgage investment conduits, which appear at sections 860A through 860G of Subchapter M of Chapter 1 of the Code, and related provisions, and regulations promulgated thereunder, as the foregoing may be in effect from time to time as well as provisions of applicable state laws.

REO Property: A Mortgaged Property acquired by the Trust Fund through foreclosure, deed-in-lieu of foreclosure, repossession or otherwise in connection with a defaulted Mortgage Loan.

Required Coupon: 6.500% per annum.

Required Insurance Policy: With respect to any Mortgage Loan, any insurance policy that is required to be maintained from time to time under the applicable Servicing Agreement.

Residual Certificates: As specified in the Preliminary Statement.

Residual Interests: As specified in the Preliminary Statement.

Responsible Officer: When used with respect to the Trustee or the Trust Administrator, any Director, any Managing Director, any Associate, any Vice President, any Assistant Vice President, the Secretary, any Assistant Secretary, any Trust Officer or any other officer of the Trustee or Trust Administrator, as applicable, customarily performing functions similar to those performed by any of the above designated officers having direct responsibility for the administration of this Agreement and also to whom, with respect to a particular matter, such matter is referred because of such officer’s knowledge of and familiarity with the particular subject.

	  
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Restricted Classes: As defined in Section 4.02(d).

S&P: Standard and Poor’s Ratings Services, a division of The McGraw-Hill Companies, Inc., or any successor thereto. If S&P is designated as a Rating Agency in the Preliminary Statement, for purposes of Section 11.05(b), the address for notices to S&P shall be Standard and Poor’s Ratings Services, a division of The McGraw-Hill Companies, Inc., 55 Water Street, New York, New York 10041, Attention: Residential Mortgage Monitoring Group, or such other address as S&P may hereafter furnish to each other party to this Agreement.

Scheduled Payment: The scheduled monthly payment on a Mortgage Loan due on any Due Date allocable to principal and/or interest on such Mortgage Loan which, unless otherwise specified herein, shall give effect to any related Debt Service Reduction and any Deficient Valuation that affects the amount of the monthly payment due on such Mortgage Loan.

Scheduled Principal Balance: As to any Mortgage Loan and any Distribution Date, the unpaid principal balance of such Mortgage Loan as of such Due Date in the month preceding the month in which such Distribution Date occurs, as specified in the amortization schedule at the time relating thereto (before any adjustment to such amortization schedule by reason of any moratorium or similar waiver or grace period) after giving effect to any previous partial Principal Prepayments and Liquidation Proceeds allocable to principal received during the Prepayment Period for the prior Distribution Date (other than with respect to any Liquidated Loan), and to the payment of principal due on such Due Date and irrespective of any delinquency in payment by the related Mortgagor.

Securities Act: The Securities Act of 1933, as amended.

Security Agreement: With respect to a Cooperative Loan, the agreement or mortgage creating a security interest in favor of the originator of the Cooperative Loan in the related Cooperative Shares.

Security Entitlement: As specified in Section 8-102(a)(17) of the Relevant UCC.

Senior Certificates: As specified in the Preliminary Statement.

Senior Final Distribution Date: With respect to Certificate Group 1, Certificate Group 2, Certificate Group 3 and Certificate Group 4, the Distribution Date on which the respective Class Principal Balances of the Senior Certificates in each such Group have each been reduced to zero.

 

Senior Optimal Principal Amount: For any Distribution Date and any Loan Group, the sum for all Mortgage Loans in such Loan Group of the applicable Non-PO Percentage of (i) the Senior Percentage of: (a) the principal portion of each Scheduled Payment (after giving effect to any reductions thereof caused by any Debt Service Reductions or Deficient Valuations) due on each such Mortgage Loan on the related Due Date, (b) the principal portion of the Purchase Price of each such Mortgage Loan that was repurchased by the Transferor as of such Distribution Date, (c) the Substitution Adjustment Amount in connection with any Deleted 

	  
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Mortgage Loan related to such Loan Group received with respect to such Distribution Date and (d) any Liquidation Proceeds (including Insurance Proceeds) allocable to recoveries of principal of Mortgage Loans related to such Loan Group that are not yet Liquidated Loans received during the calendar month preceding the month of such Distribution Date, (ii) with respect to each such Mortgage Loan that became a Liquidated Loan during the calendar month preceding the month of such Distribution Date, the lesser of (a) the Senior Percentage of the applicable Non-PO Percentage of the Scheduled Principal Balance of such Mortgage Loan, or (b) the Senior Prepayment Percentage of the applicable Non-PO Percentage of the amount of the Liquidation Proceeds allocable to principal received with respect to such Mortgage Loan, (iii) the Senior Prepayment Percentage of the applicable Non-PO Percentage of the sum of (a) all Principal Prepayments in Full received on the Mortgage Loans of such Loan Group during the related Prepayment Period and (b) all partial Principal Prepayments on the Mortgage Loans of such Loan Group applied during the related Prepayment Period, and (iv) with respect to any Distribution Date prior to the Cross-Over Date only, the Senior Prepayment Percentage of the applicable Non-PO Percentage of the Recoveries for such Loan Group received during the calendar month prior to that Distribution Date; provided, however, that if a Bankruptcy Loss is sustained with respect to such Mortgage Loan that is not a Liquidated Loan, the Senior Optimal Principal Amount will be reduced on the related Distribution Date by the Senior Percentage of the principal portion of such Bankruptcy Loss.

Senior Percentage: with respect to any Certificate Group and any Distribution Date, the lesser of 100% and the percentage obtained by dividing the aggregate Certificate Principal Balances of all Senior Certificates (other than the Principal Only Certificates and the Interest Only Certificates) of such Certificate Group immediately preceding that Distribution Date by the applicable Non-PO Percentage of the Scheduled Principal Balance of the Loans in that Loan Group for that Distribution Date.

Senior Prepayment Percentage: With respect to any Certificate Group, and for any Distribution Date during the five years beginning on the first Distribution Date, 100%. The Senior Prepayment Percentage for any Certificate Group and any Distribution Date occurring on or after the fifth anniversary of the first Distribution Date will, except as provided herein, be as follows: for any Distribution Date in the first year thereafter, the Senior Percentage for such Certificate Group plus 70% of the related Subordinate Percentage for such Certificate Group for such Distribution Date; for any Distribution Date in the second year thereafter, the Senior Percentage for such Certificate Group plus 60% of the related Subordinate Percentage for such Certificate Group for such Distribution Date; for any Distribution Date in the third year thereafter, the Senior Percentage for such Certificate Group plus 40% of the related Subordinate Percentage for such Certificate Group for such Distribution Date; for any Distribution Date in the fourth year thereafter, the Senior Percentage for such Certificate Group plus 20% of the related Subordinate Percentage for such Certificate Group for such Distribution Date; and for any Distribution Date thereafter, the Senior Percentage for such Certificate Group for such Distribution Date; provided, however, that on any Distribution Date if the Senior Percentage for any Certificate Group exceeds the initial Senior Percentage for that Certificate Group, the Senior Prepayment Percentage for such Certificate Group for such Distribution Date will once again equal 100%. Notwithstanding the foregoing, no decrease in the Senior Prepayment Percentage

	  
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for any Certificate Group will occur unless both of the related Senior Step Down Conditions are satisfied; provided, however, that if on any Distribution Date the Senior Prepayment Percentage is not permitted to decrease because one or both of the related Senior Step Down Conditions are not satisfied, such Senior Step Down Conditions shall be tested on each succeeding Distribution Date and if both Senior Step Down Conditions are satisfied the Senior Prepayment Percentage for that Certificate Group shall decrease; and provided, further, that upon the occurrence of a decrease in the Senior Prepayment Percentage for any Certificate Group during one of the periods described in the definition of “Senior Step Down Conditions,” such decrease shall remain in effect for the remainder of such period.

 

Senior Step Down Conditions: With respect to Group 1 as of the last day of the month preceding the applicable Distribution Date as to which any decrease in the Senior Prepayment Percentage for Group 1 applies, (i) the aggregate Scheduled Principal Balance of the Group 1 Mortgage Loans delinquent 60 days or more (including Mortgage Loans in bankruptcy or foreclosure and any related REO Properties), as a percentage of the aggregate Class Principal Balance of the Group 15-B Subordinate Certificates on such Distribution Date, does not exceed 50% and (ii) cumulative Realized Losses with respect to the Group 1 Mortgage Loans do not exceed (a) with respect to any Distribution Date from the fifth anniversary of, and prior to the sixth anniversary of, the first Distribution Date, 30% of the Original Subordinate Principal Balance of the Group 15-B Subordinate Certificates, (b) with respect to any Distribution Date from the sixth and prior to the seventh anniversary of the first Distribution Date, 35% of the Original Subordinate Principal Balance of the Group 15-B Subordinate Certificates, (c) with respect to any Distribution Date from the seventh and prior to the eighth anniversary of the first Distribution Date, 40% of the Original Subordinate Principal Balance of the Group 15-B Subordinate Certificates, (d) with respect to any Distribution Date from the eighth and prior to the ninth anniversary of the first Distribution Date, 45% of the Original Subordinate Principal Balance of the Group 15-B Subordinate Certificates and (e) with respect to any Distribution Date on or after the ninth anniversary of the first Distribution Date, 50% of the Original Subordinate Principal Balance of the Group 15-B Subordinate Certificates.

With respect to any Distribution Date prior to the Distribution Date on which the Certificate Principal Balances of the Class C-B-4, Class C-B-5 and Class C-B-6 Certificates have been reduced to zero and Group 2, Group 3 and Group 4, as of the last day of the month preceding the applicable Distribution Date as to which any decrease in the Senior Prepayment Percentages for each such Certificate Group applies, (i) the aggregate Scheduled Principal Balance of all Mortgage Loans in Loan Group 2, Loan Group 3 and Loan Group 4 delinquent 60 days or more (including Mortgage Loans in bankruptcy or foreclosure and any REO Properties), as a percentage of the aggregate Class Principal Balance of the Group 30-B Subordinate Certificates, Group HY-B Subordinate Certificates and Group C-B Subordinate Certificates on such Distribution Date, does not exceed 50% and (ii) cumulative Realized Losses with respect to the Mortgage Loans in Loan Group 2, Loan Group 3, and Loan Group 4 do not exceed (a) with respect to any Distribution Date from the fifth and prior to the sixth anniversary of the first Distribution Date, 30% of the Original Subordinate Principal Balance of the Group 30-B Subordinate Certificates, Group HY-B Subordinate Certificates and Group C-B Subordinate Certificates, (b) with respect to any Distribution Date from the sixth and prior to the seventh 

	  
	 	-43-	 
	

	 

 

anniversary of the first Distribution Date, 35% of the Original Subordinate Principal Balance of the Group 30-B Subordinate Certificates, Group HY-B Subordinate Certificates and Group C-B Subordinate Certificates, (c) with respect to any Distribution Date from the seventh and prior to the eighth anniversary of the first Distribution Date, 40% of the Original Subordinate Principal Balance of the Group 30-B Subordinate Certificates, Group HY-B Subordinate Certificates and Group C-B Subordinate Certificates, (d) with respect to any Distribution Date from the eighth and prior to the ninth anniversary of the first Distribution Date, 45% of the Original Subordinate Principal Balance of the Group 30-B Subordinate Certificates, Group HY-B Subordinate Certificates and Group C-B Subordinate Certificates and (e) with respect to any Distribution Date on or after the ninth anniversary of the first Distribution Date, 50% of the Original Subordinate Principal Balance of the Group 30-B Subordinate Certificates, Group HY-B Subordinate Certificates and Group C-B Subordinate Certificates.

With respect to any Distribution Date on and after the Distribution Date on which the Certificate Principal Balances of the Class C-B-4, Class C-B-5 and Class C-B-6 Certificates have been reduced to zero and Group 2, as of the last day of the month preceding the applicable Distribution Date as to which any decrease in the Senior Prepayment Percentage for Group 2 applies, (i) the aggregate Scheduled Principal Balance of all Group 2 Mortgage Loans delinquent 60 days or more (including Mortgage Loans in bankruptcy or foreclosure and any REO Properties), as a percentage of the aggregate Class Principal Balance of the Group 30-B Subordinate Certificates on such Distribution Date, does not exceed 50% and (ii) cumulative Realized Losses with respect to the Group 2 Mortgage Loans do not exceed (a) with respect to any Distribution Date from the fifth and prior to the sixth anniversary of the first Distribution Date, 30% of the Original Subordinate Principal Balance of the Group 30-B Subordinate Certificates, (b) with respect to any Distribution Date from the sixth and prior to the seventh anniversary of the first Distribution Date, 35% of the Original Subordinate Principal Balance of the Group 30-B Subordinate Certificates, (c) with respect to any Distribution Date from the seventh and prior to the eighth anniversary of the first Distribution Date, 40% of the Original Subordinate Principal Balance of the Group 30-B Subordinate Certificates, (d) with respect to any Distribution Date from the eighth and prior to the ninth anniversary of the first Distribution Date, 45% of the Original Subordinate Principal Balance of the Group 30-B Subordinate Certificates and (e) with respect to any Distribution Date on or after the ninth anniversary of the first Distribution Date, 50% of the Original Subordinate Principal Balance of the Group 30-B Subordinate Certificates.

With respect to any Distribution Date on and after the Distribution Date on which the Certificate Principal Balances of the Class C-B-4, Class C-B-5 and Class C-B-6 Certificates have been reduced to zero and Group 3 and Group 4, as of the last day of the month preceding the applicable Distribution Date as to which any decrease in the Senior Prepayment Percentages for each such Certificate Group applies, (i) the aggregate Scheduled Principal Balance of all Mortgage Loans in Loan Group 3 and Loan Group 4 delinquent 60 days or more (including Mortgage Loans in bankruptcy or foreclosure and any REO Properties), as a percentage of the aggregate Class Principal Balance of the Group HY-B Subordinate Certificates on such Distribution Date, does not exceed 50% and (ii) cumulative Realized Losses with respect to the Mortgage Loans in Loan Group 3 and Loan Group 4 do not exceed (a) with respect to any 

	  
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Distribution Date from the fifth and prior to the sixth anniversary of the first Distribution Date, 30% of the Original Subordinate Principal Balance of the Group HY-B Subordinate Certificates, (b) with respect to any Distribution Date from the sixth and prior to the seventh anniversary of the first Distribution Date, 35% of the Original Subordinate Principal Balance of the Group HY-B Subordinate Certificates, (c) with respect to any Distribution Date from the seventh and prior to the eighth anniversary of the first Distribution Date, 40% of the Original Subordinate Principal Balance of the Group HY-B Subordinate Certificates, (d) with respect to any Distribution Date from the eighth and prior to the ninth anniversary of the first Distribution Date, 45% of the Original Subordinate Principal Balance of the Group HY-B Subordinate Certificates and (e) with respect to any Distribution Date on or after the ninth anniversary of the first Distribution Date, 50% of the Original Subordinate Principal Balance of the Group HY-B Subordinate Certificates.

 

Notwithstanding the preceding paragraphs, if (x) on or before the Distribution Date in September 2007, the Aggregate Subordinate Percentage is at least 200% of the Aggregate Subordinate Percentage as of the Closing Date, the delinquency test set forth above is satisfied and cumulative Realized Losses do not exceed 20% of the Original Subordinate Principal Balance, the related Senior Prepayment Percentage will equal the related Senior Percentage for that Distribution Date plus 50% of the amount equal to 100% minus the related Senior Percentage for that Distribution Date and (y) after the Distribution Date in September 2007, the Aggregate Subordinate Percentage is at least 200% of the Aggregate Subordinate Percentage as of the Closing Date, the delinquency test set forth above is satisfied and cumulative Realized Losses do not exceed 30% of the Original Subordinate Principal Balance, the related Senior Prepayment Percentage will equal the Senior Percentage.

Servicer: Each of ABN AMRO, Bank of America, Cendant, CitiMortgage, CMMC, Colonial, Countrywide, Everhome, GMACM, Hibernia, HSBC, Huntington, National City, SunTrust, U.S. Bank Home Mortgage, Wells Fargo, and WMBFA, as applicable.

Servicer Remittance Date: With respect to any Servicer and any Distribution Date, the 18th day of each calendar month, or if such 18th day is not a Business Day, either the immediately preceding Business Day or the immediately succeeding Business Day, as specified in the related Servicing Agreement.

Servicing Advances: All customary, reasonable and necessary “out of pocket” costs and expenses incurred in the performance by the Master Servicer of its master servicing obligations or the applicable Servicer, as the case may be, of its servicing obligations, including, but not limited to, the cost of (i) the preservation, restoration and protection of a Mortgaged Property, (ii) any expenses reimbursable to the Master Servicer or the applicable Servicer, as the case may be, pursuant to Section 3.11 and any enforcement or judicial proceedings, including foreclosures, (iii) the management and liquidation of any REO Property and (iv) compliance with the obligations under Section 3.09.

Servicing Agreements:

(a)    the ABN AMRO Servicing Agreement;

	  
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(b)    the Bank of America Servicing Agreement;

(c)    the Cendant Servicing Agreement;

(d)    the CitiMortgage Servicing Agreement;

(e)    the CMMC Servicing Agreement;

(f)     the Colonial Servicing Agreement;

(g)    the Countrywide Servicing Agreement;

(h)    the Everhome Servicing Agreement;

(i)     the GMACM Servicing Agreement;

(j)     the Hibernia Servicing Agreement

(k)    the HSBC Servicing Agreement,

(l)     the Huntington Servicing Agreement

(m)   the National City Servicing Agreement;

(n)   the SunTrust Servicing Agreement;

(o)   the U.S. Bank Home Mortgage Servicing Agreement;

(p)   the Wells Fargo Servicing Agreement;

(q)   the WMBFA Servicing Agreement; and

(r)    the Assignment Agreements.

Servicing Fee: As to each Mortgage Loan and any Distribution Date, an amount payable out of each full payment of interest received on such Mortgage Loan and equal to one twelfth of the Servicing Fee Rate multiplied by the Scheduled Principal Balance of such Mortgage Loan as of the Due Date in the month immediately preceding the month in which such Distribution Date occurs (after giving effect to any Scheduled Payments due on such Mortgage Loan on such Due Date), subject to reduction for any Compensating Interest payments required to be made by the applicable Servicer.

Servicing Fee Rate: With respect to each Mortgage Loan, the per annum rate set forth on the Mortgage Loan Schedule.

Stock Power: With respect to a Cooperative Loan, an assignment of the stock certificate or an assignment of the Cooperative Shares issued by the Cooperative Corporation.

	  
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Stripped Interest Rate: With respect to each Non-Discount Mortgage Loan, the excess of the Net Mortgage Rate for such Mortgage Loan over the Required Coupon.

Subordinate Certificates: As specified in the Preliminary Statement.

Subordinate Optimal Principal Amount: For any Distribution Date and Loan Group, the sum for each Mortgage Loan in such Loan Group of (i) the related Subordinate Percentage of the applicable Non-PO Percentage of: (a) the principal portion of each Scheduled Payment (after giving effect to any reductions thereof caused by any Debt Service Reductions or Deficient Valuations) due on each such Mortgage Loan on the related Due Date, (b) the principal portion of the Purchase Price of each such Mortgage Loan that was repurchased by the Transferor as of such Distribution Date, (c) any Substitution Adjustment Amounts in connection with any Deleted Mortgage Loan related to such Loan Group received with respect to such Distribution Date and (d) any Liquidation Proceeds (including Insurance Proceeds) allocable to recoveries of principal of Mortgage Loans related to such Loan Group that are not yet Liquidated Loans received during the calendar month preceding the month of such Distribution Date, (ii) with respect to each such Mortgage Loan that became a Liquidated Loan during the calendar month preceding the month of such Distribution Date, the portion of the applicable Non-PO Percentage of the amount of the Liquidation Proceeds allocable to principal received with respect to such Mortgage Loan that was not included in clause (ii) of the definition of “Senior Optimal Principal Amount” with respect to such Distribution Date, (iii) the Subordinate Prepayment Percentage of the applicable Non-PO Percentage of the sum of (A) all Principal Prepayments in Full received on the Mortgage Loans of such Loan Group during the related Prepayment Period and (B) all partial Principal Prepayments on the Mortgage Loans of such Loan Group applied during the related Prepayment Period, and (iv) with respect to any Distribution Date prior to the related Cross-Over Date only, the Subordinate Prepayment Percentage of the Non-PO Recoveries for such Loan Group for such Distribution Date; provided, however, that if a Bankruptcy Loss is sustained with respect to a Mortgage Loan in such Loan Group that is not a Liquidated Loan, the related Subordinate Optimal Principal Amount will be reduced on the related Distribution Date by the Subordinate Percentage of the principal portion of such Bankruptcy Loss.

Subordinate Percentage: As to any Distribution Date and any Certificate Group, 100% minus the Senior Percentage for such Certificate Group for such Distribution Date.

Subordinate Prepayment Percentage: As to any Distribution Date and any Certificate Group, 100% minus the Senior Prepayment Percentage for such Certificate Group for such Distribution Date, except that, on any Distribution Date after the Senior Final Distribution Date, the Subordinate Prepayment Percentage for each Certificate Group will equal 100%.

Subordinate Principal Distribution Amount: With respect to the Group 15-B Subordinate Certificates, the aggregate amount which would be payable as principal on the Group 15-B Subordinate Certificates from Group 1 Available Funds, after application of Group 1 Available Funds, (i) to make payments on the Group 1 Certificates and the Class A-X Certificates in accordance with Section 4.02(a) items first and second and (ii) to make payments of Accrued Certificate Interest to the Group 15-B Subordinate Certificates in accordance with Section 4.02(a) item fourth.

	  
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With respect to the Group 30-B Subordinate Certificates, the aggregate amount which would be payable as principal on the Group 30-B Subordinate Certificates from Group 2 Available Funds after application of Group 2 Available Funds (i) to make payments on (A) the Group 2 Certificates in accordance with Section 4.02(a) items first, second and third, (B) the Class PO Certificates in accordance with Section 4.02(a) items second and third and (C) the Class A-X Certificates in accordance with Section 4.02(a) item first, and in each case, in accordance with  Section 4.02(e) and (ii) to make payments of Accrued Certificate Interest to the Group 30-B Subordinate Certificates in accordance with Section 4.02(a) item fifth.

 

With respect to the Group HY-B Subordinate Certificates, the aggregate amount which would be payable as principal on the Group HY-B Subordinate Certificates from Group 3 Available Funds and Group 4 Available Funds in the aggregate, after application of Group 3 Available Funds and Group 4 Available Funds in the aggregate (i) to make payments on the Group 3 Certificates and Group 4 Certificates, in accordance with Section 4.02(a) items first and second and Section 4.02(e) and (ii) to make payments of Accrued Certificate Interest to the Group HY-B Subordinate Certificates in accordance with Section 4.02(a) item sixth.

With respect to the Group C-B Subordinate Certificates, the aggregate amount which would be payable as principal on the Group HY-B Subordinate Certificates from Group 2 Available Funds, Group 3 Available Funds and Group 4 Available Funds in the aggregate, after application of Group 2 Available Funds, Group 3 Available Funds and Group 4 Available Funds in the aggregate (i) to make payments on the Group 2 Certificates, Group 3 Certificates and Group 4 Certificates, in accordance with Section 4.02(a) items first and second and Section 4.02(e) and (ii) to make payments of Accrued Certificate Interest to the Group C-B Subordinate Certificates in accordance with Section 4.02(a) item seventh.

Substitution Adjustment Amount: The meaning ascribed to such term pursuant to Section 2.03.

SunTrust: SunTrust Mortgage, Inc., and its successors and assigns, in its capacity as Servicer of the SunTrust Mortgage Loans.

SunTrust Mortgage Loans: The Mortgage Loans for which SunTrust is listed as “Servicer” on the Mortgage Loan Schedule.

SunTrust Servicing Agreement: The Purchase, Warranties and Servicing Agreement, dated as of January 1, 2002, as amended by Amendment Number One, dated as of November 15, 2002, as further amended by Amendment Number Two, dated as of May 27, 2003, as further amended by Amendment Number Three, dated as of September 4, 2003, and as further amended by Amendment Number Four, dated as of February 1, 2004, each between the Transferor and SunTrust, and as the same may be amended from time to time.

Targeted Aggregate Principal Balance: With respect to any Distribution Date, the dollar amount set forth in the corresponding column under the heading “Targeted Aggregate Pricipal Balances” on Schedule II attached hereto.

	  
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Tax Matters Person: In the case of each REMIC created by this Agreement, the person designated as “tax matters person” in the manner provided under Treasury Regulations Section 1.860F-4(d) and Treasury Regulations Section 301.6231(a)(7)-1 for such REMIC.

Transfer: Any direct or indirect transfer or sale of any Ownership Interest in a Residual Certificate.

Transferor: UBS Real Estate Securities Inc., a Delaware corporation, seller of the Mortgage Loans to the Depositor pursuant to the Mortgage Loan Purchase Agreement.

Trust: As defined in Section 2.01(c).

Trust Administrator: Wells Fargo Bank, N.A., a national banking association, and its successors and assigns, in its capacity as Trust Administrator hereunder.

Trust Fund: The corpus of the trust created hereunder consisting of: (a) the Mortgage Loan Purchase Agreement and the Servicing Agreements (other than those rights under the Servicing Agreements that do not relate to servicing of the Mortgage Loans) including, without limitation, the representations and warranties made by each Servicer and the Transferor); (b) the Mortgage Loans and all interest and principal received on or with respect thereto after the Cut-off Date to the extent not applied in computing the Cut-off Date Principal Balance thereof; (c) the Collection Account and the Distribution Account and all amounts deposited therein pursuant to the applicable provisions of this Agreement (other than, in the case of the Collection Account, any prepayment penalties deposited therein which shall be retained by the Transferor); (d) property that secured a Mortgage Loan and has been acquired by foreclosure, deed-in-lieu of foreclosure or otherwise; and (e) all proceeds of the conversion, voluntary or involuntary, of any of the foregoing.

Trustee: Wachovia Bank, National Association, a national banking association, and its successors and, if a successor trustee is appointed hereunder, such successor.

Uncertificated Lower-Tier REMIC Pass-Through Rate: With respect to Lower-Tier REMIC Regular Interest LT-IO1, Lower-Tier REMIC Regular Interest LT-2, and Lower-Tier REMIC Regular Interest LT-2SUBC, the rate specified in the Preliminary Statement. With respect to Lower-Tier REMIC Regular Interest LT-1, the weighted average of the Mortgage Rates on the Mortgage Loans in Loan Group 1 as of the first day of the month immediately prior to the month in which the relevant Distribution Date occurs (after taking into account scheduled payments of principal on that date) over (y) the weighted average Servicing Fee Rate as of such date on the Mortgage Loans in Loan Group 1, subject to adjustment for Principal Prepayments in Full received and distributed prior to that Distribution Date minus 0.01%. With respect to Lower-Tier REMIC Regular Interest LT-IO2, the weighted average of, the excess, if any, of (x) the excess of the Mortgage Rate on each Loan in Loan Group 2 as of the first day of the month immediately prior to the month in which the relevant Distribution Date occurs (after taking into account scheduled payments of principal on that date) over the weighted average Servicing Fee Rate as of such date on the Mortgage Loans in Loan Group 2, subject to adjustment for Principal Prepayments in Full received and distributed prior to that Distribution Date over (y) 6.50%. With 

	  
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respect to Lower-Tier REMIC Regular Interest LT-PO2, 0.00%. With respect to Lower-Tier REMIC Regular Interest LT-3, Lower-Tier REMIC Regular Interest LT-3SUBHY and Lower-Tier REMIC Regular Interest LT-3SUBC, the weighted average of the Mortgage Rates on the Mortgage Loans in Loan Group 3 as of the first day of the month immediately prior to the month in which the relevant Distribution Date occurs (after taking into account scheduled payments of principal on that date) over (y) the weighted average Servicing Fee Rate as of such date on the Mortgage Loans in Loan Group 3, subject to adjustment for Principal Prepayments in Full received and distributed prior to that Distribution Date. With respect to Lower-Tier REMIC Regular Interest LT-4, Lower-Tier REMIC Regular Interest LT-4SUBHY and Lower-Tier REMIC Regular Interest LT-4SUBC, the weighted average of the Mortgage Rates on the Mortgage Loans in Loan Group 4 as of the first day of the month immediately prior to the month in which the relevant Distribution Date occurs (after taking into account scheduled payments of principal on that date) over (y) the weighted average Servicing Fee Rate as of such date on the Mortgage Loans in Loan Group 4, subject to adjustment for Principal Prepayments in Full received and distributed prior to that Distribution Date.

Uncertificated Notional Amount: With respect to any Distribution Date and Lower-Tier REMIC Regular Interest LT-IO1, the aggregate Scheduled Principal Balance of the Group 1 Mortgage Loans. With respect to any Distribution Date and Lower-Tier REMIC Regular Interest LT-IO2, the aggregate Scheduled Principal Balance of the Group 2 Mortgage Loans.

Uncertificated Principal Balance: With respect to each Lower-Tier REMIC Regular Interest (other than Lower-Tier REMIC Regular Interest LT-IO1 and Lower-Tier REMIC Regular Interest LT-IO2), the amount of such Lower-Tier REMIC Regular Interest outstanding as of any date of determination. As of the Closing Date, the Uncertificated Principal Balance of each Lower-Tier REMIC Regular Interest shall equal the amount set forth in the Preliminary Statement hereto as its initial Uncertificated Principal Balance. On each Distribution Date, the Uncertificated Principal Balance of each Lower-Tier REMIC Regular Interest shall be reduced by all distributions of principal made on such REMIC Regular Interest on such Distribution Date pursuant to Section 4.02 and, if and to the extent necessary and appropriate, shall be further reduced on such Distribution Date by Realized Losses as provided in Section 4.03. The Uncertificated Principal Balance of each REMIC Regular Interest that has an Uncertificated Principal Balance shall never be less than zero. 

Undercollateralized Group: With respect to any Distribution Date, any Certificate Group with respect to which, on such Distribution Date, the aggregate Class Principal Balance of the Senior Certificates (other than the Class PO Certificates) related to such Certificate Group (after giving effect to distributions to be made on such Distribution Date) is greater than the Group Pool Principal Balance of the related Loan Group.

Underwriter’s Exemption: Prohibited Transaction Exemption 2002-41, 67 Fed. Reg. 54487 (2002), as amended (or any successor thereto), or any substantially similar administrative exemption granted by the U.S. Department of Labor.

U.S. Bank: U.S. Bank National Association, a national banking association, and its successors and assigns, in its capacity as a Custodian.

	  
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U.S. Bank Home Mortgage: U.S. Bank Home Mortgage and its successors and assigns in its capacity as Servicer of the U.S. Bank Home Mortgage Mortgage Loans.

U.S. Bank Home Mortgage Mortgage Loans : The Mortgage Loans for which U.S. Bank Home Mortgage is listed as “Servicer” on the Mortgage Loan Schedule.

U.S. Bank Home Mortgage Servicing Agreement: The Wells Fargo Guide.

Voting Rights: The portion of the voting rights of all of the Certificates which is allocated to any Certificate. As of any date of determination, (a) the Interest Only Certificates will be entitled to 1% in the aggregate of all Voting Rights (such Voting Rights to be allocated among the Holders of Certificates of each such Class in accordance with their respective Percentage Interests), and (b) the remaining Voting Rights (and the Voting Rights allocated to the Interest Only Certificates if there are no Interest Only Certificates) shall be allocated among Holders of the remaining Classes of Certificates in proportion to the Certificate Principal Balances of their respective Certificates on such date.

Wells Fargo: Wells Fargo Bank, N.A., in its capacity as Master Servicer, Trust Administrator or a Custodian, or as Servicer of the Wells Fargo Serviced Mortgage Loans, as the case may be, hereunder.

Wells Fargo Guide: The Wells Fargo Conduit and Norwest Conduit Servicing Guide dated January 1997, as amended July 2001.

Wells Fargo Guide Mortgage Loans: Those Mortgage Loans that are serviced by the Wells Fargo Guide Servicers.

Wells Fargo Guide Servicers: Colonial, Hibernia, Huntington, U.S. Bank Home Mortgage and WMBFA.

Wells Fargo Serviced Mortgage Loans: The Mortgage Loans for which Wells Fargo is listed as “Servicer” on the Mortgage Loan Schedule.

Wells Fargo Servicing Agreement: Solely with respect to the Wells Fargo Serviced Mortgage Loans, the Seller’s Warranties and Servicing Agreement, dated as of July 1, 2002, between the Transferor and Wells Fargo (f/k/a Wells Fargo Home Mortgage, Inc.), as amended by the First Addendum, dated as of January 1, 2003, and as the same may be further amended from time to time, and any assignments and conveyances relating to the Wells Fargo Serviced Mortgage Loans.

WMBFA: Washington Mutual Bank, FA, and its successors and assigns, in its capacity as Servicer of the WMBFA Mortgage Loans.

WMBFA Mortgage Loans: The Mortgage Loans for which WMBFA is listed as “Servicer” on the Mortgage Loan Schedule.

	  
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WMBFA Servicing Agreement: Solely with respect to the WMBFA Mortgage Loans, the Wells Fargo Guide and the Servicer’s Acknowledgment, dated as of September 30, 2004, among WMBFA, the Transferor, the Depositor, the Trustee and the Master Servicer.

 

Section 1.02 Certain Calculations. 

Unless otherwise specified herein, for purposes of determining amounts with respect to the Certificates and the rights and obligations of the parties hereto, all calculations of interest (other than as provided in the Mortgage Loan documents) provided for herein shall be made on the basis of a 360-day year consisting of twelve 30 day months.

ARTICLE II

 

CONVEYANCE OF MORTGAGE LOANS;

REPRESENTATIONS AND WARRANTIES

 

Section 2.01 Conveyance of Mortgage Loans. 

(a)    The Depositor, concurrently with the execution and delivery hereof, hereby sells, transfers, assigns, sets over and otherwise conveys to the Trustee for the benefit of the Certificateholders, without recourse, all the right, title and interest of the Depositor in and to the Trust Fund. In connection with the foregoing assignments, the Depositor has caused each Servicer to enter into the related Assignment Agreement. 

(b)    In connection with the transfer and assignment set forth in clause (a) above, the Depositor has delivered or caused to be delivered to the applicable Custodian, on behalf of the Trustee, for the benefit of the Certificateholders the following documents or instruments with respect to each Mortgage Loan that is not a Cooperative Loan so assigned:

(i)     the original Mortgage Note endorsed by manual or facsimile signature in blank in the following form: “Pay to the order of ___________ without recourse,” with all intervening endorsements showing a complete chain of endorsement from the originator to the Person endorsing the Mortgage Note (each such endorsement being sufficient to transfer all right, title and interest of the party so endorsing, as noteholder or assignee thereof, in and to that Mortgage Note); or, with respect to any Lost Mortgage Note, a lost note affidavit from the related originator or the Transferor stating that the original Mortgage Note was lost or destroyed, together with a copy of such Mortgage Note;

(ii)    except as provided below, the original recorded Mortgage or a copy of such Mortgage certified by the related originator as being a true and complete copy of the Mortgage;

(iii)   a duly executed assignment of the Mortgage (which may be included in a blanket assignment or assignments), endorsed with the assignee’s name in blank, together with, except as provided below, all interim recorded assignments of such mortgage (each 

	  
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such assignment, when duly and validly completed, to be in recordable form and sufficient to effect the assignment of and transfer to the assignee thereof, under the Mortgage to which the assignment relates); provided that, if the related Mortgage has not been returned from the applicable public recording office, such assignment of the Mortgage may exclude the information to be provided by the recording office;

 

(iv)   the original or copies of each assumption, modification, written assurance or substitution agreement, if any; and

(v)    except as provided below, the original or duplicate original lender’s title policy and all riders thereto.

In connection with the transfer and assignment set forth in clause (a) above, the Depositor has delivered or caused to be delivered to the applicable Custodian, on behalf of the Trustee, for the benefit of the Certificateholders the following documents or instruments with respect to each Cooperative Loan so assigned:

(i)     the Cooperative Shares, together with the Stock Power in blank; 

(ii)    the executed Security Agreement; 

(iii)   the executed Proprietary Lease and the Assignment of Proprietary Lease to the originator of the Cooperative Loan; 

(iv)   the executed Recognition Agreement; 

(v)    copies of the original UCC financing statement, and any continuation statements, filed by the originator of such Cooperative Loan as secured party, each with evidence of recording thereof, evidencing the interest of the originator under the Security Agreement and the Assignment of Proprietary Lease;

(vi)   copies of the filed UCC assignments or amendments of the security interest referenced in clause (v) above showing an unbroken chain of title from the originator to the Trust, each with evidence of recording thereof, evidencing the interest of the assignee under the Security Agreement and the Assignment of Proprietary Lease;

(vii)          an executed assignment of the interest of the originator in the Security Agreement, the Assignment of Proprietary Lease and the Recognition Agreement, showing an unbroken chain of title from the originator to the Trust; and

(viii)          for any Cooperative Loan that has been modified or amended, the original instrument or instruments effecting such modification or amendment.

 

If in connection with any Mortgage Loan the Depositor cannot deliver (a) the original recorded Mortgage, (b) all interim recorded assignments or (c) the lender’s title policy (together with all riders thereto) satisfying the requirements of clause (ii), (iii) or (v) above, respectively, concurrently with the execution and delivery hereof because such document or 

	  
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documents have not been returned from the applicable public recording office in the case of clause (ii) or (iii) above, or because the title policy has not been delivered to either the applicable Custodian or the Depositor by the applicable title insurer in the case of clause (v) above, the Depositor shall promptly deliver to the applicable Custodian, in the case of clause (ii) or (iii) above, such original Mortgage or such interim assignment, as the case may be, with evidence of recording indicated thereon upon receipt thereof from the public recording office, or a copy thereof, certified, if appropriate, by the relevant recording office, but in no event shall any such delivery of the original Mortgage and each such interim assignment or a copy thereof, certified, if appropriate, by the relevant recording office, be made later than one year following the Closing Date, or, in the case of clause (v) above, no later than 120 days following the Closing Date; provided, however, in the event the Depositor is unable to deliver by such date each Mortgage and each such interim assignment by reason of the fact that any such documents have not been returned by the appropriate recording office, or, in the case of each such interim assignment, because the related Mortgage has not been returned by the appropriate recording office, the Depositor shall deliver such documents to the applicable Custodian as promptly as possible upon receipt thereof and, in any event, within 720 days following the Closing Date. The Depositor shall forward or cause to be forwarded to the applicable Custodian (a) from time to time additional original documents evidencing an assumption or modification of a Mortgage Loan and (b) any other documents required to be delivered by the Depositor to the applicable Custodian. In the event that the original Mortgage is not delivered and in connection with the payment in full of the related Mortgage Loan and the public recording office requires the presentation of a “lost instruments affidavit and indemnity” or any equivalent document, because only a copy of the Mortgage can be delivered with the instrument of satisfaction or reconveyance, the applicable Custodian shall execute and deliver or cause to be executed and delivered such a document to the public recording office. In the case where a public recording office retains the original recorded Mortgage or in the case where a Mortgage is lost after recordation in a public recording office, the Depositor shall deliver or cause to be delivered to the applicable Custodian a copy of such Mortgage certified by such public recording office to be a true and complete copy of the original recorded Mortgage.

In the case of Mortgage Loans that have been prepaid in full as of the Closing Date, the Depositor, in lieu of delivering the above documents to the Master Servicer on behalf of the Trustee, will deposit in the Collection Account the portion of such payment that is required to be deposited in the Collection Account pursuant to Section 3.07 hereof.

(c)    The Depositor does hereby establish, pursuant to the further provisions of this Agreement and the laws of the State of New York, an express trust (the “Trust”) to be known, for convenience, as “MASTR Seasoned Securitization Trust 2004-1” and Wachovia Bank, National Association is hereby appointed as Trustee in accordance with the provisions of this Agreement.

(d)    [Reserved].

	  
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Section 2.02 Acceptance by Trustee of the Mortgage Loans. 

The Trust Administrator, on behalf of the Custodian, acknowledges receipt of the documents identified in the Initial Certification issued by it in the form annexed hereto as Exhibit G and declares that it holds and will hold such related documents and the other documents delivered to it constituting the Mortgage Files, and each such Custodian and Trustee together declare that it holds or will hold such other assets as are included in the Trust Fund, in trust for the exclusive use and benefit of all present and future Certificateholders. Each Custodian acknowledges that it will maintain possession of the Mortgage Notes held by it in the State of Minnesota, with respect to Wells Fargo, and the State of Arizona, with respect to U.S. Bank, unless otherwise permitted by the Rating Agencies and the Trustee. 

Each Custodian agrees to execute and deliver on the Closing Date to the Depositor and the Trustee an Initial Certification in the form annexed hereto as Exhibit G. Based on its review and examination, and only as to the documents identified in such Initial Certification, each Custodian acknowledges, subject to any applicable exceptions noted on Exhibit G, that such documents appear regular on their face and relate to such Mortgage Loan. Neither Custodian shall be under any duty or obligation to (i) inspect, review or examine said documents, instruments, certificates or other papers to determine that the same are genuine, enforceable or appropriate for the represented purpose or that they have actually been recorded in the real estate records or that they are other than what they purport to be on their face or (ii) determine whether the Mortgage File should include any of the documents specified in Section 2.01(b)(iv) unless the Mortgage Loan Schedule indicates that such documents are applicable.

Not later than 90 days after the Closing Date, each Custodian shall deliver to the Depositor, the Trustee and the Transferor a Final Certification in the form annexed hereto as Exhibit H, with any applicable exceptions noted thereon. Each Custodian shall make available, upon request of any Certificateholder, a copy of any exceptions noted on the Initial Certification or the Final Certification. Each Custodian shall make available, upon request of the Trustee, the identity of the originator for any Mortgage Loan with a material exception.

If, in the course of such review, either Custodian finds any document constituting a part of a related Mortgage File which does not meet the requirements of Section 2.01, such Custodian shall list such as an exception in the Final Certification; provided, however, that such Custodian shall not make any determination as to whether (i) any endorsement is sufficient to transfer all right, title and interest of the party so endorsing, as noteholder or assignee thereof, in and to that Mortgage Note, (ii) any assignment is in recordable form or is sufficient to effect the assignment of and transfer to the assignee thereof under the mortgage to which the assignment relates or (iii) the Mortgage File should include any of the documents specified in Section 2.01(b)(iv) unless the Mortgage Loan Schedule indicates that such documents are applicable. 

 

Upon receiving each Final Certification from the applicable Custodian, the Trustee shall notify the Transferor of any document defects listed as exceptions in each such Final Certification and the Trustee shall request that the Transferor promptly correct or cure such document defects, and if the Transferor fails to correct or cure the defect within ninety (90) days of the earlier of its discovery or its receipt of written notice from the Trustee, and such defect 

	  
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materially and adversely affects the interests of the Certificateholders in the related Mortgage Loan, the Trustee shall enforce the obligations of the Transferor under the Mortgage Loan Purchase Agreement to repurchase the affected Mortgage Loan from the Trustee at the Purchase Price, if and to the extent that the Transferor is obligated to do so under the Mortgage Loan Purchase Agreement. Notwithstanding anything herein to the contrary, a document defect will be deemed not to materially and adversely affect the interests of the Certificateholders in the related Mortgage Loan unless such defect materially interferes with the applicable Servicer’s ability to foreclose on the related Mortgaged Property. Any such purchase of a Mortgage Loan shall not be effected prior to the delivery to the applicable Custodian of a Request for Release substantially in the form of Exhibit M. The Purchase Price for any such Mortgage Loan shall be deposited in the Collection Account on or prior to the Distribution Account Deposit Date for the Distribution Date in the month following the month of repurchase and, upon receipt of such deposit, the Master Servicer shall instruct the applicable Custodian to release, and the applicable Custodian shall release, the related Mortgage File to the Transferor and the Trustee shall execute and deliver at the Transferor’s written request such instruments of transfer or assignment prepared by the Transferor, in each case without recourse, representation or warranty, as shall be necessary to vest in the Transferor, or a designee, the Trustee’s interest in any Mortgage Loan released pursuant hereto. Pursuant to the Mortgage Loan Purchase Agreement, the Transferor shall promptly reimburse the Master Servicer and the Trustee for any expenses reasonably incurred by the Master Servicer or the Trustee in respect of enforcing such repurchase by the Transferor.

Each Custodian shall retain possession and custody of each related Mortgage File in accordance with and subject to the terms and conditions set forth herein. Pursuant to the terms of the related Servicing Agreement, the Master Servicer shall cause each of the related Servicers to promptly deliver to the related Custodian who shall thereupon promptly deposit within each Mortgage File, upon the execution or receipt thereof, the originals of such other documents or instruments constituting the Mortgage File as come into the possession of the related Servicers from time to time.

It is understood and agreed that the obligations of the Transferor set forth in the Mortgage Loan Purchase Agreement to purchase any Mortgage Loan which does not meet the requirements of Section 2.01 above or substitute for the related Mortgage Loan an Eligible Substitute Mortgage Loan shall constitute the sole remedies respecting such defect available to the Trustee, the Master Servicer, the Depositor and any Certificateholder.

 

Section 2.03 Remedies for Breaches of Representations and Warranties. 

Upon discovery by any of the parties hereto of a breach of a representation or warranty made by the Transferor pursuant to the Mortgage Loan Purchase Agreement that materially and adversely affects the interests of the Certificateholders in any Mortgage Loan, the party discovering such breach shall give prompt notice thereof to the other parties. A breach which causes a Mortgage Loan not to constitute a “qualified mortgage” within the meaning of Section 860G(a)(3) of the Code, will be deemed automatically to materially and adversely affect the interests of the Certificateholders in such Mortgage Loan. Upon receiving notice of a breach, the Trustee shall in turn notify the Transferor of such breach. The Trustee shall enforce the obligations of the Transferor under the Mortgage Loan Purchase Agreement to correct or cure 

	  
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any such breach of a representation or warranty made therein, and if the Transferor 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 Transferor’s obligations under the Mortgage Loan Purchase Agreement to (i) purchase such Mortgage Loan at the Purchase Price or (ii) substitute for the related Mortgage Loan an Eligible Substitute Mortgage Loan. In each case, such Mortgage Loan (a “Deleted Mortgage Loan”) will be removed from the Trust Fund.

 

Pursuant to the Mortgage Loan Purchase Agreement, within ninety (90) days of the earlier of the Transferor’s discovery or its receipt of written notice from any party of a breach of any representation or warranty made pursuant to Section 6 of the Mortgage Loan Purchase Agreement which materially and adversely affects the interest of the Certificateholders in any Mortgage Loan, it shall cure such breach in all material respects, and if such breach is not so cured, shall, (i) if such ninety (90) day period expires prior to the second anniversary of the Closing Date, remove such Deleted Mortgage Loan from the Trust Fund and substitute in its place an Eligible Substitute Mortgage Loan or Loans into the Trust Fund, in the manner and subject to the conditions set forth in this Section or (ii) repurchase the affected Mortgage Loan or Mortgage Loans from the Trustee at the Purchase Price in the manner set forth below. Pursuant to the Mortgage Loan Purchase Agreement, the Transferor shall promptly reimburse the Master Servicer and the Trustee for any expenses reasonably incurred by the Master Servicer or the Trustee in respect of enforcing the remedies for such breach by the Transferor.

With respect to any Eligible Substitute Mortgage Loan or Loans, pursuant to the Mortgage Loan Purchase Agreement, the Transferor shall deliver to the related Custodian on behalf of the Trustee for the benefit of the Certificateholders the Mortgage Note, the Mortgage, the related assignment of the Mortgage, and such other documents and agreements as are required by Section 2.01, with the Mortgage Note endorsed and the Mortgage assigned as required by Section 2.01. No substitution is permitted to be made on any day in any calendar month after the Determination Date for such month.

With respect to substitutions made by the Transferor, Scheduled Payments due with respect to Eligible Substitute Mortgage Loans in the month of substitution shall not be part of the Trust Fund and will be remitted to the Transferor on the next succeeding Distribution Date. For the month of substitution, distributions to Certificateholders will include the Scheduled Payment due on any Deleted Mortgage Loan for such month and thereafter the Transferor shall be entitled to retain all amounts received in respect of such Deleted Mortgage Loan. The related Custodian shall amend the Mortgage Loan Schedule for the benefit of the Certificateholders to reflect the removal of such Deleted Mortgage Loan and the substitution of the Eligible Substitute Mortgage Loan or Loans and the related Custodian shall deliver the amended Mortgage Loan Schedule to the Trustee. Upon such substitution, the Eligible Substitute Mortgage Loan or Loans shall be subject to the terms of this Agreement in all respects, and the Transferor shall be deemed to have made with respect to such Eligible Substitute Mortgage Loan or Loans, as of the date of substitution, the representations and warranties made pursuant to the Mortgage Loan Purchase Agreement with respect to such Mortgage Loan. Upon any such substitution and the deposit to the Collection Account of the amount required to be 

	  
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deposited therein in connection with such substitution as described in the following paragraph, the applicable Custodian shall release the Mortgage File held for the benefit of the Certificateholders relating to such Deleted Mortgage Loan to the Transferor and shall execute and deliver or cause the Trustee to execute and deliver at the Transferor’s direction such instruments of transfer or assignment prepared by the Transferor, without recourse, representation or warranty, as shall be necessary to vest title in the Transferor or its designee, as applicable, the Trustee’s interest in any Deleted Mortgage Loan substituted for pursuant to this Section 2.03.

 

For any month in which the Transferor substitutes one or more Eligible Substitute Mortgage Loans for one or more Deleted Mortgage Loans, the Master Servicer will determine the amount (if any) by which the aggregate principal balance of all such Eligible Substitute Mortgage Loans as of the date of substitution is less than the aggregate Scheduled Principal Balance of all such Deleted Mortgage Loans (after application of the scheduled principal portion of the Scheduled Payments due in the month of substitution). Pursuant to the Mortgage Loan Purchase Agreement, the amount of such shortage (the “Substitution Adjustment Amount”) plus an amount equal to the aggregate of any unreimbursed Advances with respect to such Deleted Mortgage Loans shall be remitted by the Transferor to the Master Servicer, and the Master Servicer shall deposit such amounts received from the Transferor into the Collection Account on or before the Distribution Account Deposit Date for the Distribution Date in the month succeeding the calendar month during which the related Mortgage Loan became required to be purchased or replaced hereunder.

In the event that the Transferor shall have repurchased a Mortgage Loan, the Purchase Price therefor shall be deposited in the Collection Account pursuant to Section 3.07 on or before the Distribution Account Deposit Date for the Distribution Date in the month following the month during which the Transferor became obligated hereunder to repurchase or replace such Mortgage Loan and upon such deposit of the Purchase Price and receipt of a Request for Release in the form of Exhibit M hereto, the related Custodian shall release the related Mortgage File held for the benefit of the Certificateholders to the Transferor, and the Trustee shall execute and deliver at the Transferor’s direction such instruments of transfer or assignment prepared by the Transferor, in each case without recourse, representation or warranty, as shall be necessary to transfer title from the Trustee. It is understood and agreed that the obligation under the Mortgage Loan Purchase Agreement of the Transferor to cure, repurchase or replace any Mortgage Loan as to which a breach has occurred and is continuing shall constitute the sole remedies against the Transferor respecting such matters available to Certificateholders, the Master Servicer, the Depositor, the Trust Administrator or the Trustee on their behalf.

The provisions of this Section 2.03 shall survive the conveyance and assignment of the Mortgage Files to the Trustee and the delivery of the respective Mortgage Files to the related Custodian for the benefit of the Trustee and the Certificateholders.

	  
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Section 2.04 Representations and Warranties of the Depositor as to the Mortgage Loans. 

The Depositor hereby represents and warrants to the Trustee, the Trust Administrator and the Master Servicer with respect to each Mortgage Loan as of the date hereof or such other date set forth herein that as of the Closing Date, and following the transfer of the Mortgage Loans to it by the Transferor, the Depositor had good title to the Mortgage Loans and the Mortgage Notes were subject to no offsets, liens, defenses or counterclaims.

It is understood and agreed that the representations and warranties set forth in this Section 2.04 shall survive delivery of the Mortgage Files to the Custodians. Upon discovery by the Depositor, the Master Servicer, the Trust Administrator or the Trustee of a breach of any of the foregoing representations and warranties set forth in this Section 2.04 (referred to herein as a “breach”), which breach materially and adversely affects the interest of the Certificateholders, the party discovering such breach shall give prompt written notice to the other parties hereto and to each Rating Agency.

 

Section 2.05 [Reserved].

 

Section 2.06 Execution and Delivery of Certificates. 

The Trustee acknowledges the transfer and assignment to it of the Trust Fund and acknowledges the issuance of the Lower-Tier REMIC Regular Interests as described in the Preliminary Statement and the Class A-LR and Class A-UR Certificates and, concurrently with such transfer and assignment, the Trust Administrator, on its behalf, has executed, authenticated and delivered to or upon the order of the Depositor, the Certificates in authorized denominations evidencing directly or indirectly the entire ownership of the Trust Fund. The Trustee agrees to hold the Trust Fund and the Lower-Tier REMIC Regular Interests and to exercise the rights referred to above for the benefit of all present and future Holders of the Certificates and to perform the duties set forth in this Agreement to the best of its ability, to the end that the interests of the Holders of the Certificates may be adequately and effectively protected.

 

Section 2.07 REMIC Matters. 

The Preliminary Statement sets forth the designations as “regular interests” or “residual interests” and “latest possible maturity date” for federal income tax purposes of all interests created hereby. The “Startup Day” for purposes of the REMIC Provisions shall be the Closing Date. Each REMIC’s fiscal year shall be the calendar year.

 

Section 2.08 Covenants of the Master Servicer. 

The Master Servicer hereby covenants to the Depositor and the Trustee as follows:

(a)    subject to Section 3.01, the Master Servicer shall cause each Servicer to perform its obligations under the applicable Servicing Agreement; and

	  
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(b)    no written information, certificate of an officer, statement furnished in writing or written report delivered to the Depositor, any affiliate of the Depositor or the Trustee and prepared by the Master Servicer pursuant to this Agreement will contain any untrue statement of a material fact or omit to state a material fact necessary to make such information, certificate, statement or report not misleading at the time provided.

 

Section 2.09 Representations and Warranties of the Master Servicer. 

The Master Servicer hereby represents and warrants to the Depositor, the Trustee and each Custodian, as of the Closing Date, or if so specified herein, as of the Cut-off Date:

(a)    The Master Servicer is duly organized as a national banking association and is validly existing and in good standing under the laws of the United States of America and is duly authorized and qualified to transact any and all business contemplated by this Agreement to be conducted by the Master Servicer in any state in which a Mortgaged Property is located or is otherwise not required under applicable law to effect such qualification and, in any event, is in compliance with the doing business laws of any such state, to master service the Mortgage Loans in accordance with the terms of this Agreement and to perform any of its other obligations under this Agreement in accordance with the terms hereof.

(b)    The Master Servicer has the full power and authority to master service each Mortgage Loan, and to execute, deliver and perform, and to enter into and consummate the transactions contemplated by this Agreement and has duly authorized by all necessary action on the part of the Master Servicer the execution, delivery and performance of this Agreement; and this Agreement, assuming the due authorization, execution and delivery hereof by the other parties hereto, constitutes a legal, valid and binding obligation of the Master Servicer, enforceable against the Master Servicer in accordance with its terms, except that (i) the enforceability hereof may be limited by bankruptcy, insolvency, moratorium, receivership and other similar laws relating to creditors’ rights generally and (ii) the remedy of specific performance and injunctive and other forms of equitable relief may be subject to equitable defenses and to the discretion of the court before which any proceeding therefor may be brought.

(c)    The execution and delivery of this Agreement by the Master Servicer, and the master servicing of the Mortgage Loans by the Master Servicer under this Agreement, the consummation of any other of the transactions contemplated by this Agreement, and the fulfillment of or compliance with the terms hereof are in the ordinary course of business of the Master Servicer and will not (i) result in a material breach of any term or provision of the articles of incorporation or by-laws of the Master Servicer, (ii) materially conflict with, result in a material breach, violation or acceleration of, or result in a material default under, the terms of any other material agreement or instrument to which the Master Servicer is a party or by which it may be bound, or (iii) constitute a material violation of any statute, order or regulation applicable to the Master Servicer of any court, regulatory body, administrative agency or governmental body having jurisdiction over the Master Servicer; and the Master Servicer is not in breach or violation of any material indenture or other material agreement or instrument, or in violation of any statute, order or regulation of any court, regulatory body, administrative agency or governmental body 

	  
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having jurisdiction over it which breach or violation may materially impair the Master Servicer’s ability to perform or meet any of its obligations under this Agreement.

 

(d)    The Master Servicer or an affiliate thereof is an approved servicer of conventional mortgage loans for Fannie Mae or Freddie Mac and is a mortgagee approved by the Secretary of Housing and Urban Development pursuant to Sections 203 and 211 of the National Housing Act.

(e)    No litigation is pending or, to the knowledge of the Master Servicer, threatened against the Master Servicer that would materially and adversely affect the execution, delivery or enforceability of this Agreement or the ability of the Master Servicer to master service the Mortgage Loans or to perform any of its other obligations under this Agreement in accordance with the terms thereof.

(f)    No consent, approval, authorization or, to the knowledge of the Master Servicer, order of any court or governmental agency or body is required for the execution, delivery and performance by the Master Servicer of, or compliance by the Master Servicer with, this Agreement or the consummation of the transactions contemplated thereby, or if any such consent, approval, authorization or order is required, the Master Servicer has obtained the same.

 

Section 2.10 Representations and Warranties of the Custodians. 

Each Custodian, severally and not jointly, hereby represents and warrants to the Depositor, the Master Servicer, the Trust Administrator and the Trustee, as of the Closing Date, or if so specified herein, as of the Cut-off Date:

(a)    Such Custodian is duly organized as a national banking association and is validly existing and in good standing under the laws of the United States of America and is duly authorized and qualified to transact any and all business contemplated by this Agreement to be conducted by such Custodian in any state in which a Mortgaged Property is located or is otherwise not required under applicable law to effect such qualification and, in any event, is in compliance with the doing business laws of any such state, to the extent necessary to perform any of its obligations under this Agreement in accordance with the terms thereof.

(b)    Such Custodian has the full power and authority to execute, deliver and perform, and to enter into and consummate the transactions contemplated by this Agreement and has duly authorized by all necessary action on the part of such Custodian the execution, delivery and performance of this Agreement; and this Agreement, assuming the due authorization, execution and delivery thereof by the other parties thereto, constitutes a legal, valid and binding obligation of such Custodian, enforceable against such Custodian in accordance with its terms, except that (i) the enforceability thereof may be limited by bankruptcy, insolvency, moratorium, receivership and other similar laws relating to creditors’ rights generally and (ii) the remedy of specific performance and injunctive and other forms of equitable relief may be subject to equitable defenses and to the discretion of the court before which any proceeding therefor may be brought.

	  
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(c)    The execution and delivery of this Agreement by such Custodian, the consummation of any other of the transactions contemplated by this Agreement, and the fulfillment of or compliance with the terms thereof are in the ordinary course of business of such Custodian and will not (i) result in a material breach of any term or provision of the articles of incorporation or by-laws of such Custodian, (ii) materially conflict with, result in a material breach, violation or acceleration of, or result in a material default under, the terms of any other material agreement or instrument to which such Custodian is a party or by which it may be bound, or (iii) constitute a material violation of any statute, order or regulation applicable to such Custodian of any court, regulatory body, administrative agency or governmental body having jurisdiction over such Custodian; and such Custodian is not in breach or violation of any material indenture or other material agreement or instrument, or in violation of any statute, order or regulation of any court, regulatory body, administrative agency or governmental body having jurisdiction over it which breach or violation may materially impair such Custodian’s ability to perform or meet any of its obligations under this Agreement.

(d)    No litigation is pending or, to the knowledge of such Custodian, threatened against such Custodian that would materially and adversely affect the execution, delivery or enforceability of this Agreement or the ability of such Custodian to perform any of its obligations under this Agreement in accordance with the terms thereof.

(e)    No consent, approval, authorization or order of any court or governmental agency or body is required for the execution, delivery and performance by such Custodian of, or compliance by such Custodian with, this Agreement or the consummation of the transactions contemplated thereby, or if any such consent, approval, authorization or order is required, such Custodian has obtained the same.

ARTICLE III

 

ADMINISTRATION AND MASTER

SERVICING OF MORTGAGE LOANS

 

Section 3.01 Master Servicing of Mortgage Loans. 

For and on behalf of the Certificateholders, the Master Servicer shall supervise, monitor and oversee the obligation of the Servicers to service and administer their respective Mortgage Loans in accordance with the terms of the applicable Servicing Agreement and shall have full power and authority to do any and all things which it may deem necessary or desirable in connection with such master servicing and administration. In performing its obligations hereunder, the Master Servicer shall act in a manner consistent with this Agreement, subject to the prior two sentences, and with customary and usual standards of practice of prudent mortgage loan master servicers. Furthermore, the Master Servicer shall oversee and consult with each Servicer as necessary from time to time to carry out the Master Servicer’s obligations hereunder, shall receive, review and evaluate all reports, information and other data provided to the Master Servicer by each Servicer and shall cause each Servicer to perform and observe the covenants, obligations and conditions to be performed or observed by such Servicer under the applicable Servicing Agreement. The Master Servicer shall independently and separately monitor each 

	  
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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, prepare the statements specified in Section 4.04 and any other information and statements required hereunder. The Master Servicer shall reconcile the results of its Mortgage Loan monitoring with the actual remittances of the Servicers to the Collection Account pursuant to the applicable Servicing Agreements.

 

In accordance with the standards of the preceding paragraph and to the extent the related Servicer does not make such advance, the Master Servicer shall advance or cause to be advanced funds as necessary for the purpose of effecting the payment of taxes and assessments on the Mortgaged Properties, which advances shall be reimbursable in the first instance from related collections from the Mortgagors pursuant to Section 3.07, and further as provided in Section 3.08. The costs incurred by the Master Servicer, if any, in effecting the timely payment of taxes and assessments on the Mortgaged Properties and related insurance premiums shall not, for the purpose of calculating monthly distributions to the Certificateholders, be added to the Scheduled Principal Balances of the related Mortgage Loans, notwithstanding that the terms of such Mortgage Loans so permit.

Not later than the Closing Date, the Master Servicer shall notify the Wells Fargo Guide Servicers that they are now servicing the Wells Fargo Guide Mortgage Loans on behalf of the Master Servicer and the Trustee for the benefit of the Certificateholders. Such notice shall also provide that, upon the occurrence of an Event of Default under this Agreement and the termination of the Master Servicer hereunder the Wells Fargo Guide Servicers shall, upon receipt of notice of such termination from the Master Servicer, the Trustee or the successor master servicer, service and administer the Wells Fargo Guide Mortgage Loans for the benefit of the Trustee and the successor master servicer and remit all amounts collected with respect to the Wells Fargo Guide Mortgage Loans in accordance with the instructions provided by the Trustee or the successor master servicer. The Master Servicer shall instruct the Wells Fargo Guide Servicers to provide all remittances, reports, information and other data or correspondence with respect to each related Wells Fargo Guide Mortgage Loan to the Master Servicer in accordance with instructions to be provided by the Master Servicer.

 

Section 3.02 Monitoring of Servicers. 

(a)    The Master Servicer shall be responsible for reporting to the Trustee, the Trust Administrator and the Depositor the compliance by each Servicer with its duties under the related Servicing Agreement. In the review of each Servicer’s activities, the Master Servicer may rely upon an officer’s certificate of the Servicer with regard to such Servicer’s compliance with the terms of its Servicing Agreement. In the event that the Master Servicer, in its judgment, determines that a Servicer should be terminated in accordance with its Servicing Agreement, or that a notice should be sent pursuant to such Servicing Agreement with respect to the occurrence of an event that, unless cured, would constitute grounds for such termination, the Master Servicer shall notify the Depositor, the Trust Administrator and the Trustee thereof and the Master Servicer shall issue such notice or take such other action as it deems appropriate.

	  
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(b)    The Master Servicer, for the benefit of the Trustee, the Trust Administrator 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 successor Servicer of the related Mortgage Loans or 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 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 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 Agreement.

(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.

(f)    If a Servicer fails to make its required payment of Compensating Interest on any Distribution Date, the Master Servicer will be required to make such payment of Compensating Interest to the same extent that such Servicer was required to make such payment of Compensating Interest. With respect to the Wells Fargo Guide Mortgage Loans, the Master Servicer shall make Compensating Interest payments in connection with Prepayment Interest Shortfalls that occur due to Principal Prepayments in Full on such Mortgage Loans.

	  
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Section 3.03 [Reserved].

 

Section 3.04 Rights of the Depositor and the Trustee in Respect of the Master Servicer. 

The Depositor may, but is not obligated to, enforce the obligations of the Master Servicer hereunder and may, but is not obligated to, perform, or cause a designee to perform, any defaulted obligation of the Master Servicer hereunder and in connection with any such defaulted obligation to exercise the related rights of the Master Servicer hereunder; provided that the Master Servicer shall not be relieved of any of its obligations hereunder by virtue of such performance by the Depositor or its designee. Neither the Trustee nor the Depositor shall have any responsibility or liability for any action or failure to act by the Master Servicer or any Servicer nor shall the Trustee or the Depositor be obligated to supervise the performance of the Master Servicer hereunder or any Servicer under any Servicing Agreement or otherwise.

 

Section 3.05 Trustee to Act as Master Servicer. 

In the event that the Master Servicer shall for any reason no longer be the Master Servicer hereunder (including by reason of a Master Servicer Event of Termination), the Trustee or its successor shall in accordance with Section 7.02 thereupon assume all of the rights and obligations of the Master Servicer hereunder arising thereafter (except that the Trustee shall not be (i) liable for losses of the predecessor Master Servicer pursuant to Section 3.07 hereof or any acts or omissions of the predecessor Master Servicer hereunder), (ii) obligated to make Advances if it is prohibited from doing so by applicable law, (iii) obligated to effectuate repurchases or substitutions of Mortgage Loans hereunder including, but not limited to, repurchases or substitutions of Mortgage Loans pursuant to Section 2.02 or 2.03 hereof, (iv) responsible for expenses of the Master Servicer pursuant to Section 2.03 hereof or (v) deemed to have made any representations and warranties of the Master Servicer pursuant to Section 2.09 hereunder). Any such assumption shall be subject to Section 7.02 hereof. If the Master Servicer shall for any reason no longer be the Master Servicer (including by reason of any Master Servicer Event of Termination), the Trustee or its successor may, but shall not be obligated to, succeed to any rights and obligations of the Master Servicer under each subservicing agreement.

The Master Servicer shall, upon request of the Trustee, but at the expense of the Master Servicer, deliver to the assuming party all documents and records relating to each subservicing agreement or substitute subservicing agreement and the Mortgage Loans then being serviced thereunder and an accounting of amounts collected or held by it and otherwise use its best efforts to effect the orderly and efficient transfer of each subservicing agreement or substitute subservicing agreement to the assuming party.

The Trustee or successor master servicer shall be entitled to be reimbursed from the Master Servicer for all costs associated with the transfer of master servicing from the Master Servicer, including, without limitation, any costs or expenses associated with the complete transfer of all master servicing data and the completion, correction or manipulation of such master servicing data as may be required by the Trustee or successor master servicer to correct 

	  
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any errors or insufficiencies in the master servicing data or otherwise to enable the Trustee or successor master servicer to master service the Mortgage Loans properly and effectively.

If the Master Servicer does not pay such reimbursement within thirty (30) days of its receipt of an invoice therefor, such reimbursement shall be an expense of the Trust and the Trustee shall be entitled to such reimbursement from amounts on deposit in the Distribution Account pursuant to Section 3.10(b)(iv); provided that the Master Servicer shall reimburse the Trust for any such expense incurred by the Trust.

 

Section 3.06 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 or amounts received with respect to any REO Property, 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 Master Servicer is hereby authorized to make withdrawals from and deposits to the related Protected Account for purposes required or permitted by this Agreement.

(b)    In accordance with the terms of the applicable Servicing Agreement, amounts on deposit in a Protected Account shall be invested by the applicable Servicer in Permitted Investments. The income earned from investments made pursuant to this Section 3.06 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.

 

Section 3.07 Collection of Mortgage Loan Payments; Collection Account; Distribution Account. 

(a)    The Master Servicer shall enforce the obligation of the Servicers to collect all payments called for under the terms and provisions of the Mortgage Loans to the extent such procedures shall be consistent with the applicable Servicing Agreement and the terms and provisions of any related Required Insurance Policy.

(b)    The Master Servicer shall establish and maintain a Collection Account, which account may be deemed to be a sub-account of the Distribution Account, into which the Master Servicer shall deposit or cause to be deposited within two Business Days of receipt, except as otherwise specifically provided herein, the following payments and collections remitted

	  
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by the Servicers or received by it in respect of Mortgage Loans subsequent to the Cut-off Date (other than in respect of principal and interest due on the Mortgage Loans on or before the Cut-off Date) and the following amounts required to be deposited hereunder:

(i)     all payments on account of principal on the Mortgage Loans, including Principal Prepayments;

(ii)    all payments on account of interest on the Mortgage Loans, net of the related Servicing Fee;

(iii)   all Liquidation Proceeds (including Insurance Proceeds), other than proceeds to be applied to the restoration or repair of the Mortgaged Property or released to the Mortgagor in accordance with the applicable Servicer’s or Master Servicer’s normal servicing procedures, and all Recoveries;

(iv)   any amount required to be deposited by the Master Servicer pursuant to Section 3.07(e) in connection with any losses on Permitted Investments;

(v)    any amounts required to be deposited by the Master Servicer pursuant to Section 2.01(d), Section 3.15(b) and 3.15(d), and in respect of net monthly rental income from REO Property pursuant to Section 3.15 hereof;

(vi)   all Substitution Adjustment Amounts;

(vii)          all Advances made by the Master Servicer pursuant to Section 4.01;

(viii)         any prepayment penalties received from any Servicer;

(ix)    any Compensating Interest payments;

(x)     any amounts deposited by the Master Servicer in connection with a deductible clause in any blanket hazard insurance policy in respect of the Mortgage Loans;

(xi)    all proceeds of any primary mortgage guaranty insurance policy in respect of the Mortgage Loans; and

(xii)   any other amounts required to be deposited hereunder.

In the event that the Master Servicer shall deposit into the Collection Account any amount not required to be deposited, it may at any time withdraw such amount from the Collection Account, any provision herein to the contrary notwithstanding. The Master Servicer shall maintain adequate records with respect to all withdrawals made pursuant to this Section. All funds deposited in the Collection Account shall be held in trust for the Certificateholders until withdrawn in accordance with Section 3.10.

(c)    [Reserved].

	  
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(d)    The Trust Administrator shall establish and maintain, on behalf of the Certificateholders, the Distribution Account. The Trust Administrator shall, promptly upon receipt but no later than on the Distribution Account Deposit Date, deposit in the Distribution Account and retain therein the following:

(i)     the aggregate amount remitted by the Master Servicer to the Trust Administrator pursuant to Section 3.10(a)(ix)(a);

(ii)    any amount deposited by the Master Servicer pursuant to Section 3.07(e) in connection with any losses on Permitted Investments; and

(iii)   any other amounts described hereunder which are required to be deposited in the Distribution Account.

In the event that the Master Servicer shall remit any amount not required to be remitted, it may at any time direct the Trust Administrator in writing to withdraw such amount from the Distribution Account, any provision herein to the contrary notwithstanding. Such direction may be accomplished by delivering an Officer’s Certificate to the Trust Administrator which describes the amounts deposited in error in the Distribution Account. All funds deposited in the Distribution Account shall be held by the Trust Administrator in trust for the Certificateholders until disbursed in accordance with this Agreement or withdrawn in accordance with Section 3.10. In no event shall the Trust Administrator incur liability for withdrawals from the Distribution Account at the direction of the Master Servicer.

(e)    Each institution at which the Collection Account or Distribution Account is maintained shall invest the funds on deposit in the Collection Account or Distribution Account as directed in writing by the Master Servicer, in Permitted Investments. Funds invested in the Collection Account shall mature not later than the Business Day next preceding the related Distribution Account Deposit Date (except that if such Permitted Investment is an obligation of or is managed by the institution that maintains such account, then such Permitted Investment shall mature not later than such Distribution Account Deposit Date). The Trust Administrator shall either (i) hold funds on deposit in the Distribution Account uninvested in a trust or deposit account of the Trust Administrator with no liability for interest or other compensation thereon, except as otherwise agreed in writing with the Master Servicer, or (ii) invest funds on deposit in the Distribution Account in Permitted Investments as directed by the Master Servicer, which Permitted Investments shall mature not later than the Business Day next preceding the Distribution Date (except that if such Permitted Investment is an obligation of or is managed by the institution that maintains such fund or account, then such Permitted Investment shall mature not later than such Distribution Date). Permitted Investments in respect of the Collection Account or the Distribution Account shall not be sold or disposed of prior to their maturity. All such Permitted Investments shall be made in the name of the Trustee, for the benefit of the Certificateholders. All income and gain net of any losses realized from any such investment of funds on deposit in the Collection Account shall be for the benefit of the Master Servicer as master servicing compensation and shall be remitted to it monthly as provided herein. The amount of any realized losses in the Collection Account incurred in any such account in respect of any such investments shall promptly be deposited by the Master Servicer (from its own funds 

	  
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without any right of reimbursement) in the Collection Account or paid to the Trust Administrator by wire transfer of immediately available funds for deposit into the Distribution Account. All income and gain (net of any losses realized from any such investment of funds on deposit in the Distribution Account) shall be for the benefit of the Master Servicer as additional compensation and shall be remitted to it monthly as provided herein. The amount of any realized losses in the Distribution Account incurred in any such account in respect of any such investments shall promptly be deposited by the Master Servicer in the Distribution Account. The Trust Administrator shall not be liable for the amount of any loss incurred in respect of any investment or lack of investment of funds held in the Collection Account (except to the extent the Trust Administrator is the obligor and has defaulted thereon) or the Distribution Account and made in accordance with this Section 3.07. In the absence of written instructions by the Master Servicer, as to the investment of funds held in the Collection Account or Distribution Account, such funds on deposit therein shall remain uninvested.

 

(f)    The Master Servicer shall give notice to the Trustee, the Trust Administrator, each Rating Agency and the Depositor of any proposed change of the location of the Collection Account prior to any change thereof. The Trust Administrator shall give notice to the Trustee, the Master Servicer, each Rating Agency and the Depositor of any proposed change of the location of the Distribution Account prior to any change thereof.

(g)    Each of the Collection Account and Distribution Account shall at all times be an Eligible Account, provided that the Collection Account may be deemed to be a sub-account of the Distribution Account. If at any time either the Collection Account or the Distribution Account ceases to be an Eligible Account, the Master Servicer or the Trust Administrator, as applicable, shall immediately establish and maintain a new Collection Account or Distribution Account, as applicable, that is an Eligible Account, and shall immediately transfer all funds on deposit in the former Collection Account or Distribution Account, as applicable, to the new Collection Account or Distribution Account, as applicable.

 

Section 3.08 Collection of Taxes, Assessments and Similar Items; Escrow Accounts. 

To the extent required by the related Servicing Agreement and by the related Mortgage Note and not violative of current law, the Master Servicer shall require each Servicer to establish and maintain one or more accounts (each, an “Escrow Account”) and deposit and retain therein all collections from the Mortgagors (or advances by such Servicer) for the payment of taxes, assessments, hazard insurance premiums or comparable items for the account of the Mortgagors. Nothing herein shall require the Master Servicer to compel a Servicer to establish an Escrow Account in violation of applicable law.

 

Section 3.09 Access to Certain Documentation and Information Regarding the Mortgage Loans. 

The Master Servicer and each Custodian shall afford and the Master Servicer shall require the Servicers to afford the Depositor, the Trustee and Trust Administrator and their respective agents or representatives reasonable access to all records and documentation regarding 

	  
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the Mortgage Loans and all accounts, insurance information and other matters relating to this Agreement or the Servicing Agreement, such access being afforded without charge, but only upon reasonable request and during normal business hours at the office designated by the Master Servicer, the applicable Servicer or the related Custodian, to the extent set forth in the applicable Servicing Agreement.

 

Upon reasonable advance notice in writing, the Master Servicer and each Custodian will provide or the Master Servicer shall require the Servicers, to the extent set forth in the applicable Servicing Agreement, to provide to each Certificateholder which is a savings and loan association, bank or insurance company certain reports and reasonable access to information and documentation regarding the Mortgage Loans sufficient to permit such Certificateholder to comply with applicable regulations of the OTS or other regulatory authorities with respect to investment in the Certificates; provided that the Master Servicer, the applicable Servicer or the related Custodian shall be entitled to be reimbursed by each such Certificateholder for actual expenses incurred by the Master Servicer, the applicable Servicer or the related Custodian in providing such reports and access.

 

Section 3.10 Permitted Withdrawals from the Collection Account and Distribution Account. 

(a)    The Master Servicer may from time to time make withdrawals from the Collection Account for the following purposes:

(i)     to pay to the Servicers (to the extent not previously retained by them), the servicing compensation to which they are entitled pursuant to Section 3.19, and to pay to the Master Servicer, earnings on or investment income with respect to funds in or credited to the Collection Account;

(ii)    to reimburse each of the Servicers or the Master Servicer for unreimbursed Advances made by it, such right of reimbursement pursuant to this subclause (ii) being limited to amounts received on the Mortgage Loan(s) in respect of which any such Advance was made;

(iii)   to reimburse the Servicers or the Master Servicer for any Nonrecoverable Advance previously made;

(iv)   to reimburse the Servicers or the Master Servicer for Insured Expenses from the related Insurance Proceeds;

(v)    to reimburse the Servicers or the Master Servicer for (a) unreimbursed Servicing Advances, the Servicers’ or the Master Servicer’s right to reimbursement pursuant to this clause (a) with respect to any Mortgage Loan being limited to amounts received on such Mortgage Loan(s) which represent late recoveries of the payments for which such advances were made pursuant to Section 3.01 or Section 3.06 and (b) for unpaid Servicing Fees as provided in Section 3.15 hereof;

	  
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(vi)   to pay to the purchaser, with respect to each Mortgage Loan or property acquired in respect thereof that has been purchased pursuant to Section 2.02 or 2.03, all amounts received thereon after the date of such purchase;

(vii)          to reimburse the Master Servicer or the Depositor for expenses or indemnities incurred by any of them and reimbursable pursuant to Section 6.03 hereof;

(viii)         to withdraw any amount deposited in the Collection Account and not required to be deposited therein;

(ix)    on or prior to the Distribution Account Deposit Date, to (a) withdraw (i) an amount equal to the related Group 1 Available Funds, Group 2 Available Funds, Group 3 Available Funds and Group 4 Available Funds for such Distribution Date, (ii) any PO Recoveries received during the calendar month prior to that Distribution Date and (iii) on or after the Cross-Over Date only, any Recoveries received during the calendar month prior to that Distribution Date, and remit by wire transfer of immediately available funds such amounts to the Trust Administrator for deposit in the Distribution Account, and (b) withdraw any prepayment penalties received from any Servicer and remit by wire transfer of immediately available funds such amounts to the Transferor pursuant to Section 3.24;

(x)     to reimburse the Master Servicer for any costs or expenses incurred by it and reimbursable pursuant to Section 3.02; and

(xi)    to clear and terminate the Collection Account upon termination of this Agreement pursuant to Section 10.01 hereof.

The Master Servicer shall keep and maintain separate accounting, on a Mortgage Loan by Mortgage Loan basis, for the purpose of justifying any withdrawal from the Collection Account pursuant to such subclauses (i), (ii), (iv), (v) and (vi). Prior to making any withdrawal from the Collection Account pursuant to subclause (iii), the Master Servicer shall deliver to the Trust Administrator an Officer’s Certificate of a Master Servicing Officer indicating the amount of any previous Advance determined by the Master Servicer to be a Nonrecoverable Advance and identifying the related Mortgage Loans(s), and their respective portions of such Nonrecoverable Advance.

(b)    The Trust Administrator shall withdraw funds from the Distribution Account for distributions to Certificateholders, in the manner specified in this Agreement (and withhold from the amounts so withdrawn, the amount of any taxes that it is authorized to withhold pursuant to the last paragraph of Section 9.11). In addition, the Trust Administrator may from time to time make withdrawals from the Distribution Account for the following purposes:

(i)     to pay to the Master Servicer the earnings on or investment income, if any, on funds in or credited to the Distribution Account;

	  
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(ii)    to withdraw and return to the Master Servicer, any amount deposited in the Distribution Account and not required to be deposited therein in accordance with Section 3.07(d);

(iii)   to withdraw any indemnity, expense or other reimbursement owed to it, the Master Servicer or the Trustee pursuant to this Agreement, including, without limitation, Section 3.05, Section 7.02, Section 8.05 and Section 9.05; and

(iv)   to clear and terminate the Distribution Account upon termination of the Agreement pursuant to Section 10.01 hereof.

 

Section 3.11 Maintenance of Hazard Insurance; Maintenance of Primary 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 Sections 3.07 and 3.08, any amounts collected by 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 Collection Account, subject to withdrawal pursuant to Sections 3.07 and 3.08. 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 Sections 3.07 and 3.08.

 

Section 3.12 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 Collection Account upon receipt, except that any amounts realized that are to be applied to the repair or restoration of the related Mortgaged 

	  
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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 3.13 Maintenance of the Primary 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 Insurance Policy of any loss which, but for the actions of such Master Servicer or Servicer, would have been covered thereunder. The Master Servicer shall use its best reasonable efforts to cause each Servicer (to the extent required under the related Servicing Agreement) to keep in force and effect (to the extent that the Mortgage Loan requires the Mortgagor to maintain such insurance), primary mortgage insurance applicable to each Mortgage Loan in accordance with the provisions of this Agreement and the related Servicing Agreement, as applicable. The Master Servicer shall not, and shall not permit any Servicer (to the extent required under the related Servicing Agreement) to, cancel or refuse to renew any such Primary 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 Insurance Policies and, in this regard, to take such reasonable action as shall be necessary to permit recovery under any Primary Insurance Policies respecting defaulted Mortgage Loans. Pursuant to Sections 3.07 and 3.08, any amounts collected by the Master Servicer or any Servicer under any Primary Mortgage Insurance Policies shall be deposited in the Collection Account, subject to withdrawal pursuant to Sections 3.07 and 3.08.

 

Section 3.14 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 3.15 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 

	  
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conserve such REO Property in the manner and to the extent required by the applicable Servicing Agreement, subject to the REMIC Provisions.

 

(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)    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 Collection Account.

In the event that the Trust Fund acquires any Mortgaged Property as aforesaid or otherwise in connection with a default or imminent default on a Mortgage Loan, the Master Servicer shall enforce the obligation of the related Servicer to dispose of such Mortgaged Property prior to the close of the third calendar year after the year in which the Trust Fund acquires such Mortgaged Property unless the Servicer shall have applied for and received an extension of such period from the Internal Revenue Service, in which case the Trust Fund may continue to hold such Mortgaged Property for the period of such extension. Notwithstanding any other provision of this Agreement, no Mortgaged Property acquired by the Trust Fund shall be rented (or allowed to continue to be rented) or otherwise used for the production of income by or on behalf of the Trust Fund in such a manner or pursuant to any terms that would (i) cause such Mortgaged Property to fail to qualify as “foreclosure property” within the meaning of Section 860G(a)(8) of the Code or (ii) subject any REMIC hereunder to the imposition of any federal, state or local income taxes on the income earned from such Mortgaged Property under Section 860G(c) of the Code or otherwise, unless the Master Servicer or related Servicer, as applicable, has agreed to indemnify and hold harmless the Trust Fund with respect to the imposition of any such taxes.

In the event of a default on a Mortgage Loan one or more of whose obligor is not a United States Person, as that term is defined in Section 7701(a)(30) of the Code, in connection with any foreclosure or acquisition of a deed in lieu of foreclosure (together, “foreclosure”) in respect of such Mortgage Loan, the Master Servicer will cause the applicable Servicer to comply with the provisions of Treasury Regulation Section 1.1445 2(d)(3) (or any successor thereto) necessary to assure that no withholding tax obligation arises with respect to the proceeds of such foreclosure except to the extent, if any, that proceeds of such foreclosure are required to be remitted to the obligors on such Mortgage Loan.

	  
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Section 3.16 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 3.17 Trustee to Cooperate; Release of Mortgage Files. 

Upon (i) the payment in full of any Mortgage Loan, or the receipt by the Master Servicer of a notification that payment in full will be escrowed in a manner customary for such purposes or (ii) otherwise in connection with the servicing of any Mortgage Loan, the Master Servicer shall, upon receipt of notification from the related Servicer pursuant to the applicable Servicing Agreement which notification shall state that such payment in full has been deposited in the Collection Account or has otherwise been escrowed in a manner customary for such purposes, instruct the related Custodian to, and the related Custodian shall, release the related Mortgage File to the related Servicer. Upon notification, the Trustee shall at the related Custodian’s direction execute and deliver to the related Custodian the request for reconveyance, deed of reconveyance or release or satisfaction of mortgage or such instrument releasing the lien of the Mortgage in each case provided by the related Custodian, together with the Mortgage Note with written evidence of cancellation thereon. Expenses incurred in connection with any instrument of satisfaction or deed of reconveyance shall be chargeable to the related Mortgagor.

If the Master Servicer or any related Servicer at any time seeks to initiate a foreclosure proceeding in respect of any Mortgaged Property as authorized by this Agreement or the Servicing Agreement, the Master Servicer or any related Servicer shall deliver or cause to be delivered to the Trustee, for signature, as appropriate, any court pleadings, requests for trustee’s sale or other documents necessary to effectuate such foreclosure or any legal action brought to obtain judgment against the Mortgagor on the Mortgage Note or the Mortgage or to obtain a deficiency judgment or to enforce any other remedies or rights provided by the Mortgage Note or the Mortgage or otherwise available at law or in equity.

Section 3.18 Documents, Records and Funds in Possession of Master Servicer and Custodians to Be Held for the Trustee. 

Notwithstanding any other provisions of this Agreement, the Master Servicer shall forward to the related Custodian with an instruction to, and the related Custodian shall, place within the Mortgage File and the Master Servicer shall cause each Servicer to transmit to the related Custodian as required by this Agreement and the related Servicing Agreement all documents and instruments in respect of a Mortgage Loan coming into the possession of the Master Servicer or related Servicer from time to time and shall account fully to the Trustee for any funds received by the Master Servicer or related Servicer or which otherwise are collected by the Master Servicer, or related Servicer as Liquidation Proceeds or Insurance Proceeds in respect 

	  
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of any Mortgage Loan. All Mortgage Files and funds collected or held by, or under the control of, the Master Servicer, the related Servicer or the related Custodian in respect of any Mortgage Loans, whether from the collection of principal and interest payments or from Liquidation Proceeds, including but not limited to, any funds on deposit in the Collection Account or any Protected Account, shall be held by the Master Servicer, the related Servicer or the related Custodian for and on behalf of the Trustee and shall be and remain the sole and exclusive property of the Trust, subject to the applicable provisions of this Agreement and the related Servicing Agreement. Each of the Master Servicer and the Custodians also agrees that it shall not create, incur or subject any Mortgage File or any funds that are deposited in the Collection Account, Distribution Account or any Escrow Account, or any funds that otherwise are or may become due or payable to the Trustee for the benefit of the Certificateholders, to any claim, lien, security interest, judgment, levy, writ of attachment or other encumbrance, or assert by legal action or otherwise any claim or right of setoff against any Mortgage File or any funds collected on, or in connection with, a Mortgage Loan, except, however, that the Master Servicer shall be entitled to set off against and deduct from any such funds any amounts that are properly due and payable to the Master Servicer under this Agreement.

 

Section 3.19 Master Servicing Compensation. 

As compensation for its activities hereunder, the Master Servicer shall be entitled to retain or withdraw from the Collection Account an amount equal to all investment income gained on amounts held in the Collection Account. The Trust Administrator will remit to the Master Servicer all investment income earned on amounts held in the Distribution Account.

 

Section 3.20 Access to Certain Documentation. 

The Master Servicer and each Custodian shall provide and the Master Servicer shall cause each Servicer to provide in accordance with the related Servicing Agreement to the OTS and the FDIC and to comparable regulatory authorities supervising Holders of Subordinate Certificates and the examiners and supervisory agents of the OTS, the FDIC and such other authorities, access to the documentation regarding the Mortgage Loans required by applicable regulations of the OTS and the FDIC. Such access shall be afforded without charge, but only upon reasonable and prior written request and during normal business hours at the offices designated by the Master Servicer, the related Custodian and the related Servicer. Nothing in this Section shall limit the obligation of the Master Servicer, the related Custodian and the related Servicer to observe any applicable law prohibiting disclosure of information regarding the Mortgagors and the failure of the Master Servicer, the related Custodian or the related Servicer to provide access as provided in this Section as a result of such obligation shall not constitute a breach of this Agreement. In fulfilling such requests, the Master Servicer and the related Custodian shall not be responsible to determine the sufficiency of such information.

 

Section 3.21 Annual Statement as to Compliance. 

The Master Servicer shall deliver to the Depositor, each Rating Agency, the Trust Administrator and the Trustee on or before March 15th of each year, commencing with March 15, 2005, an Officer’s Certificate, signed by two officers of the Master Servicer, stating, as to the 

	  
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signers thereof, that (i) a review of the activities of the Master Servicer during the preceding calendar year and of the performance of the Master Servicer under this Agreement has been made under such officers’ supervision and (ii) to the best of such officers’ knowledge, based on such review, the Master Servicer has fulfilled all its obligations under this Agreement throughout such year, or, if there has been a default in the fulfillment of any such obligation, specifying each such default known to such officer and the nature and status thereof.

 

Section 3.22 Annual Independent Public Accountants’ Servicing Statement; Financial Statements. 

On or before March 15th of each year, commencing with March 15, 2005, if the Master Servicer has in its capacity as Master Servicer, during the course of any fiscal year, directly serviced any Mortgage Loan, then at its expense shall cause a nationally or regionally recognized firm of independent public accountants (who may also render other services to the Master Servicer, the Depositor, the Trust Administrator, the Trustee or any affiliate thereof) which is a member of the American Institute of Certified Public Accountants to furnish a statement to the Trustee, the Trust Administrator and the Depositor to the effect that such firm has examined certain documents and records relating to the servicing of the Mortgage Loans under this Agreement or of mortgage loans under pooling and servicing agreements substantially similar to this Agreement (such statement to have attached thereto a schedule setting forth the pooling and servicing agreements covered thereby) and that, on the basis of such examination, conducted substantially in compliance with the Uniform Single Attestation Program for Mortgage Bankers or the Audit Program for Mortgages serviced for Fannie Mae and Freddie Mac, such servicing has been conducted in compliance with such pooling and servicing agreements except for such significant exceptions or errors in records that, in the opinion of such firm, the Uniform Single Attestation Program for Mortgage Bankers or the Audit Program for Mortgages serviced for Fannie Mae and Freddie Mac requires it to report. Copies of such statement shall be provided by the Trust Administrator to any Certificateholder upon request at the Master Servicer’s expense, provided such statement is delivered by the Master Servicer to the Trust Administrator.

 

Section 3.23 Errors and Omissions Insurance; Fidelity Bonds. 

The Master Servicer shall for so long as it acts as Master Servicer under this Agreement, obtain and maintain in force (a) a policy or policies of insurance covering errors and omissions in the performance of its obligations as Master Servicer hereunder and (b) a fidelity bond in respect of its officers, employees and agents. Each such policy or policies shall be in such form and such amount generally acceptable for entities serving as master servicer. In the event that any such policy or bond ceases to be in effect, the Master Servicer shall obtain a comparable replacement policy or bond from an insurer or issuer, meeting the requirements set forth above as of the date of such replacement.

 

Section 3.24 Master Servicer to Remit Prepayment Penalties to the Transferor.

On or prior to each Distribution Account Deposit Date, the Master Servicer shall withdraw any amounts in the Collection Account attributable to prepayment penalties deposited 

	  
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therein by any Servicer, and remit by wire transfer of immediately available funds such amounts to the Transferor in accordance with the instructions of the Transferor.

ARTICLE IV

 

DISTRIBUTIONS AND SERVICING ADVANCES

 

Section 4.01 Advances. 

The Master Servicer shall deposit in the Distribution Account not later than the Distribution Account Deposit Date immediately preceding the related Distribution Date an Advance in an amount equal to the difference between (x) with respect to each Scheduled Payment due on a Mortgage Loan that is delinquent (other than as a result of a Relief Act Reduction) and for which the related Servicer was required to make an Advance pursuant to the related Servicing Agreement and (y) amounts deposited in the Collection Account to be used for Advances with respect to such Mortgage Loan, except to the extent the Master Servicer determines any such Advance to be a Nonrecoverable Advance. Subject to the foregoing, the Master Servicer shall continue to make such Advances for so long as the related Servicer is required to do so under the related Servicing Agreement. If applicable, on the Distribution Account Deposit Date, the Master Servicer shall deliver an Officer’s Certificate to the Trust Administrator stating that the Master Servicer elects not to make an Advance in a stated amount and detailing the reason(s) it deems the Advance to be a Nonrecoverable Advance. Any amounts deposited by the Master Servicer pursuant to this Section 4.01 shall be net of the Servicing Fee, if applicable, for the related Mortgage Loans.

 

Section 4.02 Priorities of Distribution. 

(a)    On each Distribution Date, the Trust Administrator shall withdraw the Group 1 Available Funds, Group 2 Available Funds, Group 3 Available Funds and Group 4 Available Funds (to the extent on deposit in the Distribution Account) from the Distribution Account and, pursuant to written instruction received from the Master Servicer as set forth in Section 4.04(a), upon which it may conclusively rely, apply such funds, first to distributions in respect of the Lower-Tier REMIC Regular Interests, as provided in Section 4.05, and then to distributions on the Certificates in the following order and priority and, in each case, to the extent of Group 1 Available Funds, Group 2 Available Funds, Group 3 Available Funds and Group 4 Available Funds, subject to adjustment in accordance with Sections 4.02(b), 4.02(d) and 4.02(e):

With respect to the Group 1 Certificates from the Group 1 Available Funds; with respect to the Group 2 Certificates from the Group 2 Available Funds; with respect to the Group 3 Certificates from the Group 3 Available Funds; with respect to the Group 4 Certificates from the Group 4 Available Funds; with respect to the Class A-X Certificates from the Group 1 Available Funds and Group 2 Available Funds; with respect to the Class PO Certificates, from the Group 2 Available Funds; with respect to the Group 15-B Subordinate Certificate from the Group 1 Available Funds; with respect to the Group 30-B Subordinate Certificates from the Group 2 Available Funds; with respect to the Group HY-B Subordinate Certificates from the Group 3 Available Funds and Group 4 Available 

	  
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Funds and with respect to the Group C-B Subordinate Certificates from the Group 2 Available Funds, Group 3 Available Funds and Group 4 Available Funds, as follows:

 

first, concurrently,

(A)    from the Group 1 Available Funds, (1) to each Class of Group 1 Certificates, pro rata based on the Accrued Certificate Interest of each such Class, an amount allocable to interest equal to the related Accrued Certificate Interest for that Distribution Date; and to (2) the Class A-X Certificates, the Excess Interest Amount for that Distribution Date;

(B)    from the Group 2 Available Funds, to each Class of Group 2 Certificates and the Class A-X Certificates, pro rata based on the Accrued Certificate Interest of each such Class, an amount allocable to interest equal to the related Accrued Certificate Interest for that Distribution Date; provided, however, that for purposes of the distributions pursuant to this clause (B), the Accrued Certificate Interest for the Class A-X Certificates shall be calculated solely on the basis of that portion of the Class A-X Notional Amount attributable to the Group 2 Mortgage Loans; provided, further, that prior to the Class 2-A-5 Accretion Termination Date, an amount equal to the amount that would otherwise be distributable in respect of Accrued Certificate Interest to the Class 2-A-5 Certificates pursuant to this provision (the “Class 2-A-5 Accrual Amount”) will instead be distributed as principal in accordance with Section 4.02(c);

(C)    from the Group 3 Available Funds, the Class 3-A-1 Certificates, an amount allocable to interest equal to the related Accrued Certificate Interest for that Distribution Date; and

(D)    from the Group 4 Available Funds, to each Class of Group 4 Certificates, pro rata based on the Accrued Certificate Interest of each such Class, an amount allocable to interest equal to the related Accrued Certificate Interest for that Distribution Date;

in the case of each of clause (A), (B), (C) and (D) of this paragraph, any shortfall shall be allocated among such Classes in the related paragraph in proportion to the amount of the Accrued Certificate Interest that would have been distributed in the absence of such shortfall; and

second, concurrently,

(A)    to the extent of remaining Group 1 Available Funds, to the Group 1 Certificates up to the amount of the Senior Optimal Principal Amount for Loan Group 1 for such Distribution Date, as follows:

(1)    first, to the Class A-LR and Class A-UR Certificates, pro rata based on Class Principal Balances, until their respective Class Principal Balances are reduced to zero; and

	  
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(2)    second, to the Class 1-A-1 Certificates, until its Class Principal Balance is reduced to zero;

(B)   to the extent of remaining Group 2 Available Funds, to the Group 2 Certificates and the Class PO Certificates, concurrently, as follows:

(1)    the Senior Optimal Principal Amount for Loan Group 2 for such Distribution Date, as follows:

(a)    first, to the Class 2-A-1, Class 2-A-2, Class 2-A-3 and Class 2-A-4 Certificates, pro rata, based on Class Principal Balances, and then to the Class 2-A-6 Certificates until the aggregate Class Principal Balances of the Class 2-A-1, Class 2-A-2, Class 2-A-3, Class 2-A-4 and Class 2-A-6 Certificates is reduced to the Targeted Aggregate Principal Balance for such Distribution Date;

(b)    second, to the Class 2-A-5 Certificates, until its Class Principal Balance is reduced to zero;

(c)     third, to the Class 2-A-1, Class 2-A-2, Class 2-A-3 and Class 2-A-4 Certificates, pro rata, based on Class Principal Balances, until their respective Class Principal Balances are reduced to zero; and

(d)     fourth, to the Class 2-A-6 Certificates, until its Class Principal Balance is reduced to zero; 

(2)    to the Class PO Certificates, an amount allocable to principal equal to the Class PO Principal Distribution Amount until the Class Principal Balance of the Class PO Certificates is reduced to zero; and

(C)   to the extent of remaining Group 3 Available Funds, to the Class 3-A-1 Certificates, the Senior Optimal Principal Amount for Loan Group 3 for such Distribution Date, until its Class Principal Balance is reduced to zero; and 

(D)   to the extent of remaining Group 4 Available Funds, to the Class 4-A-1 and Class 4-A-2 Certificates, pro rata, based on Class Principal Balances, the Senior Optimal Principal Amount for Loan Group 4 for such Distribution Date, until their respective Class Principal Balances are reduced to zero;

third, only on any Distribution Date prior to the related Cross-Over Date, to the Class PO Certificates (x) first, any PO Recoveries for that Distribution Date related to Loan Group 2 up to the Class PO Deferred Amount for that Distribution Date; and (y) second, from the remaining Group 2 Available Funds, up to the remaining Class PO Deferred Amount (after 

	  
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giving effect to subclause (x) above) for that Distribution Date; provided, however, that (1) on any Distribution Date, the aggregate of distributions pursuant to subclause (y) of this priority third of the Class PO Deferred Amounts shall not exceed the Subordinate Optimal Principal Amount for the Group 30-B Subordinate Certificates and the Group 2 Portion for such Distribution Date; (2) any distribution to the Class PO Certificates pursuant to this priority third shall not reduce the Class Principal Balance of the Class PO Certificates; and (3) no distribution shall be made in respect of any such Class PO Deferred Amounts on or after the related Cross-Over Date;

 

fourth, to the Group 15-B Subordinate Certificates from the remaining Group 1 Available Funds, subject to Section 4.02(b) and 4.02(d), in the following order of priority:

(A)    to the Class 15-B-1 Certificates, (1) an amount allocable to interest equal to the Accrued Certificate Interest for such Class for such Distribution Date; and (2) an amount allocable to principal equal to its Allocable Share for such Distribution Date until the Class Principal Balance of such Class is reduced to zero;

(B)    to the Class 15-B-2 Certificates, (1) an amount allocable to interest equal to the Accrued Certificate Interest for such Class for such Distribution Date; and (2) an amount allocable to principal equal to its Allocable Share for such Distribution Date until the Class Principal Balance of such Class is reduced to zero;

(C)    to the Class 15-B-3 Certificates, (1) an amount allocable to interest equal to the Accrued Certificate Interest for such Class for such Distribution Date; and (2) an amount allocable to principal equal to its Allocable Share for such Distribution Date until the Class Principal Balance of such Class is reduced to zero;

(D)    to the Class 15-B-4 Certificates, (1) an amount allocable to interest equal to the Accrued Certificate Interest for such Class for such Distribution Date; and (2) an amount allocable to principal equal to its Allocable Share for such Distribution Date until the Class Principal Balance of such Class is reduced to zero;

(E)    to the Class 15-B-5 Certificates, (1) an amount allocable to interest equal to the Accrued Certificate Interest for such Class for such Distribution Date; and (2) an amount allocable to principal equal to its Allocable Share for such Distribution Date until the Class Principal Balance of such Class is reduced to zero; and

(F)    to the Class 15-B-6 Certificates, (1) an amount allocable to interest equal to the Accrued Certificate Interest for such Class for such Distribution Date; and (2) an amount allocable to principal equal to its Allocable Share for such  

 

	  
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Distribution Date until the Class Principal Balance of such Class is reduced to zero;

 

fifth, to the Group 30-B Subordinate Certificates from the remaining Group 2 Available Funds, subject to Section 4.02(b) and 4.02(d), in the following order of priority:

(A)    to the Class 30-B-1 Certificates, (1) an amount allocable to interest equal to the Accrued Certificate Interest for such Class for such Distribution Date; and (2) an amount allocable to principal equal to its Allocable Share for such Distribution Date until the Class Principal Balance of such Class is reduced to zero;

(B)    to the Class 30-B-2 Certificates, (1) an amount allocable to interest equal to the Accrued Certificate Interest for such Class for such Distribution Date; and (2) an amount allocable to principal equal to its Allocable Share for such Distribution Date until the Class Principal Balance of such Class is reduced to zero; and

(C)    to the Class 30-B-3 Certificates, (1) an amount allocable to interest equal to the Accrued Certificate Interest for such Class for such Distribution Date; and (2) an amount allocable to principal equal to its Allocable Share for such Distribution Date until the Class Principal Balance of such Class is reduced to zero;

sixth, to the Group HY-B Subordinate Certificates from the remaining Group 3 Available Funds and Group 4 Available Funds, in the aggregate, subject to Section 4.02(b) and 4.02(d), in the following order of priority:

(A)    to the Class HY-B-1 Certificates, (1) an amount allocable to interest equal to the Accrued Certificate Interest for such Class for such Distribution Date; and (2) an amount allocable to principal equal to its Allocable Share for such Distribution Date until the Class Principal Balance of such Class is reduced to zero;

(B)    to the Class HY-B-2 Certificates, (1) an amount allocable to interest equal to the Accrued Certificate Interest for such Class for such Distribution Date; and (2) an amount allocable to principal equal to its Allocable Share for such Distribution Date until the Class Principal Balance of such Class is reduced to zero; and

(C)    to the Class HY-B-3 Certificates, (1) an amount allocable to interest equal to the Accrued Certificate Interest for such Class for such Distribution Date; and (2) an amount allocable to principal equal to its Allocable Share for such Distribution Date until the Class Principal Balance of such Class is reduced to zero; 

 

	  
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seventh, to the Group C-B Subordinate Certificates from the remaining Group 2 Available Funds, Group 3 Available Funds and Group 4 Available Funds, in the aggregate, subject to Section 4.02(b) and 4.02(d), in the following order and priority: 

(A)    to the Class C-B-4 Certificates, (1) an amount allocable to interest equal to the Accrued Certificate Interest for such Class for such Distribution Date; and (2) an amount allocable to principal equal to its Allocable Share for such Distribution Date until the Class Principal Balance of such Class is reduced to zero; 

(B)    to the Class C-B-5 Certificates, (1) an amount allocable to interest equal to the Accrued Certificate Interest for such Class for such Distribution Date; and (2) an amount allocable to principal equal to its Allocable Share for such Distribution Date until the Class Principal Balance of such Class is reduced to zero; and 

(C)    to the Class C-B-6 Certificates, (1) an amount allocable to interest equal to the Accrued Certificate Interest for such Class for such Distribution Date; and (2) an amount allocable to principal equal to its Allocable Share for such Distribution Date until the Class Principal Balance of such Class is reduced to zero; and

eighth, to the Class A-LR or Class A-UR Certificates, as applicable, any remaining portion (which is expected to be zero) of the Group 1 Available Funds, Group 2 Available Funds, Group 3 Available Funds and Group 4 Available Funds in the Lower-Tier REMIC or the Upper-Tier REMIC for that Distribution Date.

On any Distribution Date, to the extent the Amount Available for Group 2 Principal is insufficient to make the full distribution required to be made pursuant to priority second sub-clause (B) of this Section 4.02(a), (x) the amount distributable on the Class PO Certificates in respect of principal pursuant to such clause Class shall be equal to the product of (1) the Amount Available for Group 2 Principal and (2) a fraction, the numerator of which is the Class PO Principal Distribution Amount for Loan Group 2 and the denominator of which is the sum of the Class PO Principal Distribution Amount Class and the Senior Optimal Principal Amount Class and (y) the amount distributable on the Group 2 Certificates in respect of principal shall be equal to the product of (1) the Amount Available for Group 2 Principal and (2) a fraction, the numerator of which is the Senior Optimal Principal Amount for Loan Group 2 and the denominator of which is the sum of the Senior Optimal Principal Amount for Loan Group 2 and the Class PO Principal Distribution Amount.

(b)    On each Distribution Date, the amount referred to in clause (i) of the definition of Accrued Certificate Interest for each Class of Certificates (other than the Principal Only Certificates) shall be reduced by (i) the related Class’s pro rata share of Net Prepayment Interest Shortfalls with respect to the Mortgage Loans in the related Loan Group or Loan Groups, based on such Class’ Accrued Certificate Interest for such Distribution Date without taking into account such Net Prepayment Interest Shortfalls and (ii) the related Class’s pro rata share (based 

	  
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on such Class’ pro rata share without taking into account any such reduction) of each Relief Act Reduction incurred on a Mortgage Loan in the related Loan Group or Loan Groups, during the calendar month preceding the month of such Distribution Date. For purposes of calculating the reduction in the amount referred to in clause (i) of the definition of Accrued Certificate Interest for the Class A-X Certificates, such reduction shall be based on the amount of interest accruing on the portion of the Class A-X Notional Amount derived from Loan Group 2. For purposes of calculating the reduction in the amount referred to in clause (i) of the definition of Accrued Certificate Interest for each of the Class HY-B-1, Class HY-B-2, Class HY-B-3, Class C-B-4, Class C-B-5 and Class C-B-6 Certificates, such reduction shall be based upon the amount of interest accruing for each related Loan Group on such Class’ proportionate share, based on Class Principal Balance, of the related Group Subordinate Amount for that Distribution Date.

 

(c)     On each Distribution Date occurring prior to the Class 2-A-5 Accretion Termination Date, the Class 2-A-5 Accrual Amount, if any, will be distributed as principal, as follows:

(i)      first, to the Class 2-A-1, Class 2-A-2, Class 2-A-3 and Class 2-A-4 Certificates, pro rata, based on Class Principal Balances, then to the Class 2-A-6 Certificates, until the aggregate Class Principal Balances of such Classes are reduced to the Targeted Aggregate Principal Balance for such Distribution Date; and 

(ii)    second, to the Class 2-A-5 Certificates, until its Class Principal Balance is reduced to zero.

(d)    Notwithstanding the priority and allocation contained in Section 4.02(a), if with respect to any Class of Subordinate Certificates on any Distribution Date, such Class has not satisfied the related Class Prepayment Distribution Trigger, no distribution of amounts pursuant to clauses (ii) and (iii) of the definition of the Subordinate Optimal Principal Amount will be made to any such Classes (the “Restricted Classes”) and the amount of such amounts pursuant to clauses (ii) and (iii) of the definition of the applicable Subordinate Optimal Principal Amount otherwise distributable to the Restricted Classes shall be distributed to any Classes of related Subordinate Certificates, which are not Restricted Classes pro rata based on their respective Class Principal Balances immediately prior to such Distribution Date. The calculation of any amount to be distributed under this Section 4.02(d) shall be made by the Master Servicer. 

(e)    On each Distribution Date, after application of Group 2 Available Funds, Group 3 Available Funds and Group 4 Available Funds in accordance with Section 4.02(a) items first and second, the Trust Administrator shall effect cross-collateralization among Certificate Group 2, Certificate Group 3 and Certificate Group 4, as follows:

(i)     Subject to Section 4.02(b), to the extent any Accrued Certificate Interest with respect to any Class of Group 2, Group 3 or Group 4 Certificates remains unpaid after application of Group 2 Available Funds, Group 3 Available Funds and Group 4 Available Funds in accordance with Section 4.02(a) items first and second, Available Funds for each of such Loan Groups otherwise payable to the Group C-B Subordinate Certificates after payments on the related Senior Certificates (other than the Class PO 

	  
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Certificates) shall be applied to cover such unpaid Accrued Certificate Interest, and shall be applied pro rata based on the amounts of such unpaid Accrued Certificate Interest to the extent there are insufficient funds to pay such amounts in full.

 

(ii)    Subject to Section 4.02(b), to the extent any Accrued Certificate Interest with respect to any Class of Group 3 or Group 4 Certificates remains unpaid after application of Group 3 Available Funds and Group 4 Available Funds in accordance with Section 4.02(a) items first and second, Available Funds for each of such Loan Groups otherwise payable to the Group HY-B Subordinate Certificates after payments on the related Senior Certificates shall be applied to cover such unpaid Accrued Certificate Interest, and shall be applied pro rata based on the amounts of such unpaid Accrued Certificate Interest to the extent there are insufficient funds to pay such amounts in full. 

(iii)   Prior to the related Cross-Over Date, to the extent any Class PO Deferred Amount has not been paid from PO Recoveries and any other Group 2 Available Funds, then following any payments to the Group 2 Senior Certificates pursuant to clause (i) above, amounts that would otherwise constitute the Subordinate Principal Distribution Amount for the related Subordinate Certificates shall be applied to pay any such unpaid Class PO Deferred Amount. 

(iv)   If on any Distribution Date, either Certificate Group 3 or Certificate Group 4 is an Undercollateralized Group, the available Subordinate Principal Distribution Amount for the Group HY-B Subordinate Certificates shall be paid to such Undercollateralized Group as principal to the Senior Certificates of such Undercollateralized Group in accordance with the priorities set forth in Section 4.02(a) until the aggregate Class Principal Balance of the Senior Certificates of such Undercollateralized Group equals the related Group Pool Principal Balance. 

(v)    If on any Distribution Date, one of Certificate Group 2, Certificate Group 3 or Certificate Group 4 is an Undercollateralized Group, the available Subordinate Principal Distribution Amount for the Group C-B Subordinate Certificates shall be paid to such Undercollateralized Group as principal to the Senior Certificates of such Undercollateralized Group in accordance with the priorities set forth in Section 4.02(a) until the aggregate Class Principal Balance of the Senior Certificates of such Undercollateralized Group equals the related Group Pool Principal Balance (net of the applicable PO Percentage of the Scheduled Principal Balance of each Discount Mortgage Loan in such Loan Group, if any). If more than one of such Certificate Groups is an Undercollateralized Group, the available Subordinate Principal Distribution Amount for the related Subordinate Certificates shall be distributed between such Undercollateralized Groups pro rata according to Group Pool Principal Balances.

(vi)   On or after the date on which the Class Principal Balances of all of the Senior Certificates in Certificate Group 2, Certificate Group 3 or Certificate Group 4 have been reduced to zero, amounts otherwise distributable as principal on the related Subordinate Certificates, up to the applicable Apportioned Subordinate Principal Distribution Amount, shall be paid pro rata as principal to the remaining Senior 

	  
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Certificates of such other Certificate Group or Groups in accordance with the priorities set forth in Section 4.02(a), provided that on such Distribution Date (a) the Aggregate Subordinate Percentage for the related Subordinate Certificates for such Distribution Date is less than twice the initial Aggregate Subordinate Percentage for the related Subordinate Certificates or (b) the average outstanding principal balance of the Mortgage Loans in Loan Group 2, Loan Group 3 and Loan Group 4 delinquent 60 days or more over the last six months (including Mortgage Loans in bankruptcy or foreclosure and REO Properties) as a percentage of the related Group Subordinate Amount is greater than or equal to 50%.

 

(vii)          On each related Distribution Date, after making distributions to the Senior Certificates as described in paragraphs (iii) - (vi) above, if the aggregate Class Principal Balance of the Senior Certificates and Subordinate Certificates related to Loan Group 2 or the aggregate Class Principal Balance of the Senior Certificates and the Subordinate Certificates related Loan Group 3 and Loan Group 4, in the aggregate, exceed the aggregate Scheduled Principal Balance of the Mortgage Loans in the related Loan Group or Loan Groups, as applicable, any funds otherwise payable to the Class C-B-4, Class C-B-5 and Class C-B-6 Certificates are required to be applied to payment of the Class HY-B-1 and Class 30-B-1 Certificates as follows: (i) first, to cover any Accrued Certificate Interest on such Certificates remaining unpaid and (ii) to pay principal to such Certificates up to the amount by which the related Loan Group or Loan Groups, as applicable, are undercollateralized.

(viii)         On each related Distribution Date, after making distributions to the Senior Certificates and the Class HY-B-1 and Class 30-B-1 Certificates in paragraphs (iii) - (vii) above, if the aggregate Class Principal Balance of the Senior Certificates and Subordinate Certificates related to Loan Group 2 or the aggregate Class Principal Balance of the Senior Certificates and the Subordinate Certificates related Loan Group 3 and Loan Group 4, in the aggregate, exceed the aggregate Scheduled Principal Balance of the Mortgage Loans in the related Loan Group or Loan Groups, as applicable, any funds otherwise payable to the Class C-B-4, Class C-B-5 and Class C-B-6 Certificates are required to be applied to payment of the Class HY-B-2 and Class 30-B-2 Certificates as follows: (i) first, to cover any Accrued Certificate Interest on such Certificates remaining unpaid and (ii) to pay principal to such Certificates up to the amount by which the related Loan Group or Loan Groups, as applicable, are undercollateralized.

(ix)   On each related Distribution Date, after making distributions to the Senior Certificates, Class HY-B-1, Class HY-B-2, Class 30-B-1 and Class 30-B-2 Certificates as described in the paragraph (iii) - (viii) above, if the aggregate Class Principal Balance of the Senior Certificates and Subordinate Certificates related to Loan Group 2 or the aggregate Class Principal Balance of the Senior Certificates and the Subordinate Certificates related Loan Group 3 and Loan Group 4, in the aggregate, exceed the aggregate Scheduled Principal Balance of the Mortgage Loans in the related Loan Group or Loan Groups, as applicable, any funds otherwise payable to the Class C-B-4, Class C-B-5 and Class C-B-6 Certificates are required to be applied to payment of the Class HY-B-3 and Class 30-B-3 Certificates as follows: (i) first, to cover any Accrued Certificate 

	  
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Interest on such Certificates remaining unpaid and (ii) to pay principal to such Certificates up to the amount by which the related Loan Group or Loan Groups, as applicable, are undercollateralized.

 

(x)     Any application of the Subordinate Principal Distribution Amount for the related Subordinate Certificates pursuant to the preceding paragraphs (iii) - (ix) will reduce distributions of such amount in reverse order of priority pursuant to the priorities set forth in Section 4.02(a) items fourth, fifth, sixth, seventh and eighth.

(f)    [reserved]

(g)    In the event that the Mortgage Loans are purchased at the Master Servicer's election pursuant to Section 10.01(a), the Trust Administrator shall remit the amount of any Fair Market Value Excess by wire transfer of immediately available funds to the holders of the Class A-LR Certificates in accordance with the instructions of the holders of the Class A-LR Certificates.

 

Section 4.03 Allocation of Realized Losses. 

(a)    On or prior to each Distribution Date, the Master Servicer shall determine the total amount of Realized Losses and the allocation of such total amount as set forth below. Realized Losses occurring on the Mortgage Loans shall be allocated as follows:

(i)     the applicable PO Percentage of any Realized Loss on any Discount Mortgage Loan shall be allocated to the Class PO Certificates until the Class Principal Balance of the Class PO Certificates is reduced to zero; 

(ii)    prior to the related Cross-Over Date, 

(A)    the applicable Non-PO Percentage of any Realized Loss with respect to any Group 1 Mortgage Loan shall be allocated to the Group 15-B Subordinate Certificates in reverse order of their respective numerical Class designations (beginning with the Class of Group 15-B Subordinate Certificates then outstanding with the highest numerical Class designation) until the respective Class Principal Balance of each such Class is reduced to zero; 

(B)    until the Class Principal Balances of the Class C-B-6, Class C-B-5 and Class C-B-4 Certificates have been reduced to zero, the applicable Non-PO Percentage of any Realized Loss with respect to any Mortgage Loan in Loan Group 2, Loan Group 3 or Loan Group 4 shall be allocated among the outstanding Classes of the Group C-B Subordinate Certificates in reverse order of their respective numerical Class designations (beginning with the Class of Group C-B Subordinate Certificates then outstanding with the highest numerical Class designation) until the respective Class Principal Balance of each such Class is reduced to zero; and

	  
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(C)    once the Class Principal Balances of the Class C-B-4, Class C-B-5 and Class C-B-6 Certificates have been reduced to zero, (1) the applicable Non-PO Percentage of any Realized Loss on a Group 2 Mortgage Loan will be allocated among the outstanding Classes of Group 30-B Subordinate Certificates in reverse order of their respective numerical Class designations (beginning with the Class of Group 30-B Subordinate Certificates then outstanding with the highest numerical Class designation) until the respective Class Principal Balance of each such Class is reduced to zero and (2) the applicable Non-PO Percentage of any Realized Loss on a Group 3 or Group 4 Mortgage Loan will be allocated among the outstanding Classes of Group HY-B Subordinate Certificates in reverse order of their respective numerical Class designations (beginning with the Class of Group HY-B Subordinate Certificates then outstanding with the highest numerical Class designation) until the respective Class Principal Balance of each such Class is reduced to zero; and

(iii)          On and after the related Cross-Over Date, the applicable Non-PO Percentage of any Realized Loss on a Mortgage Loan in any Loan Group will be allocated among the outstanding Classes of the related Senior Certificates (other than the Principal Only and Interest Only Certificates), pro rata, based on Class Principal Balance of the Certificate Group related to the Mortgage Loan that incurred the Realized Loss, until the Class Principal Balance of each such Class has been reduced to zero; provided, however that any such Realized Loss incurred on a Group 4 Mortgage Loan will be allocated to the Class 4-A-2 Certificates until the Class Principal Balance thereof has been reduced to zero and then to the Class 4-A-1 Certificates until the Class Principal Balance thereof has been reduced to zero;

(b)          (A)  The Class Principal Balance of the Class of Group 15-B Subordinate Certificates then outstanding with the highest numerical Class designation shall be reduced on each Distribution Date by the amount, if any, by which the aggregate of the Class Principal Balances of all outstanding Classes of Group 1 Certificates (after giving effect to the distribution of principal and the allocation of Realized Losses with respect to the Group 1 Mortgage Loans) exceeds the Group 1 Pool Principal Balance for the following Distribution Date, less any Deficient Valuations; 

(B)  As of any Distribution Date on and after the date on which the aggregate Class Principal Balances of the Class C-B-4, Class C-B-5 and Class C-B-6 Certificates have been reduced to zero, the Class Principal Balance of the Class of Group 30-B Subordinate Certificates then outstanding with the highest numerical Class designation shall be reduced on each such Distribution Date by the amount, if any, by which the aggregate of the Class Principal Balances of all outstanding Classes of Group 2 Certificates (after giving effect to the distribution of principal and the allocation of Realized Losses with respect to the Group 2 Mortgage Loans) exceeds the Group 2 Pool Principal Balance for the following Distribution Date, less any Deficient Valuations;

	  
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(C)  As of any Distribution Date on and after the date on which the aggregate Class Principal Balances of the Class C-B-4, Class C-B-5 and Class C-B-6 Certificates have been reduced to zero, the Class Principal Balance of the Group HY-B Subordinate Certificates then outstanding with the highest numerical Class designation shall be reduced on each such Distribution Date by the amount, if any, by which the sum of the Class Principal Balances of all outstanding Classes of Group 3 and Group 4 Certificates (after giving effect to the distribution of principal and the allocation of Realized Losses with respect to the related Mortgage Loans) exceeds the Group 3 Pool Principal Balance and the Group 4 Pool Principal Balance, in the aggregate, for the following Distribution Date, less any Deficient Valuations; and

(D)  As of any Distribution Date on and after the date on which the aggregate Class Principal Balances of the Group C-B Subordinate Certificates have been reduced to zero, the Class Principal Balance of the Group C-B Subordinate Certificates then outstanding with the highest numerical Class designation shall be reduced on each such Distribution Date by the amount, if any, by which the sum of the Class Principal Balances of all outstanding Classes of Group 2, Group 3 and Group 4 Certificates (after giving effect to the distribution of principal and the allocation of Realized Losses with respect to the related Mortgage Loans) exceeds the Group 2 Pool Principal Balance, Group 3 Pool Principal Balance and Group 4 Pool Principal Balance, in the aggregate, for the following Distribution Date, less any Deficient Valuations;

(c)    Any allocation of Realized Losses to a Certificate or any reduction in the Certificate Principal Balance of a Certificate, pursuant to Section 4.03(a) or (b) above shall be accomplished by reducing the Certificate Principal Balance thereof, as applicable, immediately following the distributions made on the related Distribution Date in accordance with the definition of “Certificate Principal Balance” herein; provided that (A) no Realized Loss with respect to Loan Group 1 shall be allocated to reduce the Certificate Principal Balance of Class 1-A-1 Certificates to the extent that such allocation would reduce the Certificate Principal Balance of Class 1-A-1 Certificates as of such Distribution Date to an amount less than the Group 1 Pool Principal Balance for the following Distribution Date minus any related Deficient Valuations, (B) no Realized Loss with respect to Loan Group 2 shall be allocated to reduce the Certificate Principal Balance of a Senior Certificate in Certificate Group 2 to the extent that such allocation would reduce the aggregate Certificate Principal Balance of all of the Group 2 Certificates as of such Distribution Date to an amount less than the Group 2 Pool Principal Balance for the following Distribution Date minus any related Deficient Valuations and minus the PO Percentage of any Discount Mortgage Loans, (C) no Realized Loss with respect to Loan Group 3 shall be allocated to reduce the Certificate Principal Balance of a Group 3 Senior Certificate to the extent that such allocation would reduce the aggregate Certificate Principal Balance of all of the Group 3 Certificates as of such Distribution Date to an amount less than the Group 3 Pool Principal Balance for the following Distribution Date minus any related Deficient Valuations) , and (D) no Realized Loss with respect to Loan Group 4 shall be allocated to reduce the Certificate Principal Balance of a Group 4 Senior Certificate to the extent that such allocation 

	  
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would reduce the aggregate Certificate Principal Balance of all of the Group 4 Certificates to an amount less than the Group 4 Pool Principal Balance for the following Distribution Date minus any related Deficient Valuations (in each case, such limitation, the “Loss Allocation Limitation”).

(d)    Prior to the related Cross-Over Date, with respect to any Non-PO Recoveries received during the calendar month prior to a Distribution Date with respect to any Mortgage Loans, the Class Principal Balance of one or more Classes of Certificates that have previously had Realized Losses allocated, will be increased, as follows:

(i)      first, up to the amount of the Non-PO Recoveries with respect to any Loan Group, the Class Principal Balance of each Class of Senior Certificates (other than the Class PO Certificates and Interest Only Certificates) in the Certificate Group corresponding to such Loan Group will be increased, pro rata, up to the amount of the excess, if any, of (x) unrecovered Realized Losses previously allocated to each such Class, if any over (y) amounts previously applied to the increase of the Class Principal Balance of such Class pursuant to this Section 4.03(d)(i); and

(ii)    second, (A) up to the amount of the Non-PO Recoveries remaining after allocation pursuant to the preceding clause (i), the Class Principal Balance of each Class of related Subordinate Certificates, in order of seniority, will be increased, by the amount of the excess, if any, of (x) unrecovered Realized Losses previously allocated to each such Class, if any, over (y) amounts previously applied to the increase of the Class Principal Balance of such Class pursuant to this Section 4.03(d)(ii).

(e)    With respect to any Distribution Date on or after the related Cross-Over Date, the Trust Administrator shall distribute the amount of any Recovery on a Mortgage Loan received during the calendar month prior to that Distribution Date as follows:

(i)     first, to the Class PO Certificates, the PO Percentage of any Recovery on any Mortgage Loan; and

(ii)   second, to the Classes of Senior Certificates (other than the Class PO Certificates and Interest Only Certificates) of the Certificate Group corresponding to the Loan Group of the Mortgage Loan for which the Recovery was received, pro rata, the amount of the Recovery remaining after distribution pursuant to the preceding clause (i);

provided, however, that any distribution to a Class of Certificates pursuant to this Section 4.03(e) shall not reduce the Class Principal Balance of such Class.

 

Section 4.04 Distribution Date Statements to Certificateholders. 

(a)    On each Distribution Date, the Trust Administrator shall make available to each Certificateholder, the Depositor, the Trustee and any other interested parties a statement based in part on information provided by each Servicer setting forth the following information with respect to the related distribution (in the case of information furnished pursuant to (i) and (ii) below, the amounts shall be expressed as a dollar amount per one thousand)

	  
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(i)     the amount thereof allocable to principal, separately identifying the aggregate amount of any Principal Prepayments and Liquidation Proceeds included therein;

(ii)    the amount thereof allocable to interest, any unpaid Class Interest Shortfall included in such distribution and any remaining unpaid Class Interest Shortfall after giving effect to such distribution;

(iii)   if the distribution to the Holders of such Class of Certificates is less than the full amount that would be distributable to such Holders if there were sufficient funds available therefor, the amount of the shortfall and the allocation thereof as between principal and interest;

(iv)   the Certificate Principal Balance as a dollar amount per minimum denomination Certificate and the Class Principal Balance or Notional Amount of each Class of Certificates, after giving effect to the distribution of principal on such Distribution Date;

(v)    the Group Pool Principal Balance for each Loan Group on such Distribution Date;

(vi)   the Senior Percentage and Subordinate Percentage for each Certificate Group for the following Distribution Date;

(vii)          the aggregate amount of the Servicing Fees with respect to such Distribution Date;

(viii)        the Pass-Through Rate for each such Class of Certificates with respect to such Distribution Date;

(ix)   the amount of Advances included in the distribution on such Distribution Date and the aggregate amount of Advances outstanding as of the close of business on such Distribution Date;

(x)    the number and aggregate principal amounts of Mortgage Loans (A) delinquent (exclusive of Mortgage Loans in foreclosure) (1) 1 to 30 days (2) 31 to 60 days (3) 61 to 90 days and (4) 91 or more days and (B) in foreclosure and delinquent (1) 1 to 30 days (2) 31 to 60 days (3) 61 to 90 days and (4) 91 or more days, as of the close of business on the last day of the calendar month preceding such Distribution Date;

(xi)   with respect to any Mortgage Loan that became an REO Property during the preceding calendar month, the loan number and Scheduled Principal Balance of such Mortgage Loan as of the close of business on the last Business Day of the calendar month preceding such Distribution Date and the date of acquisition thereof;

	  
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(xii)            the total number and principal balance of any REO Properties (and market value, if available) as of the close of business on the last Business Day of the calendar month preceding such Distribution Date;

(xiii)          the Senior Prepayment Percentage for each Certificate Group; and

(xiv)          the aggregate amount of Realized Losses, by Loan Group, on Mortgage Loans incurred during the preceding calendar month.

(b)    The Trust Administrator’s responsibility for disbursing the above information to the Master Servicer, the Trustee, Depositor, Certificateholders and other interested parties is limited to the availability, timeliness and the accuracy of the information provided by each Servicer. The Trust Administrator will make a copy of each statement provided pursuant to this Section 4.04 (and, at its option, any additional files containing the same information in an alternative format) available each month to Certificateholders and other interested parties, and other parties to this Agreement via the Trust Administrator’s internet website located at “www.ctslink.com”. Assistance in using the internet website can be obtained by calling the Trust Administrator’s customer service desk at (301) 815-6600. Parties that are unable to use the above distribution method are entitled to have a paper copy mailed to them via first class mail by calling the customer service desk and indicating such. The Trust Administrator shall have the right to change the way the Distribution Date Statement is distributed in order to make such distribution more convenient and/or more accessible and the Trust Administrator shall provide timely and adequate notification to the Certificateholders and the parties to this Agreement regarding any such changes.

The Trust Administrator shall also be entitled to rely on but shall not be responsible for the content or accuracy of any information provided by third parties (including the Servicers) for purposes of preparing the Distribution Date Statement and may affix thereto any disclaimer it deems appropriate in its reasonable discretion (without suggesting liability on the part of any other party hereto).

As a condition to access the Trust Administrator’s internet website, the Trust Administrator may require registration and the acceptance of a disclaimer. The Trust Administrator will not be liable for the dissemination of information in accordance with this Agreement.

(c)    Within a reasonable period of time after the end of each calendar year, the Trust Administrator shall cause to be furnished upon request to each Person who at any time during the calendar year was a Certificateholder, a statement containing the information set forth in clauses (a)(i), (a)(ii) and (a)(vii) of this Section 4.04 aggregated for such calendar year or applicable portion thereof during which such Person was a Certificateholder. Such obligation of the Trust Administrator shall be deemed to have been satisfied to the extent that substantially comparable information shall be provided by the Trust Administrator pursuant to any requirements of the Code as from time to time in effect.

	  
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Section 4.05 Lower-Tier REMIC Distributions and Allocation of Realized Losses. 

(A)    On each Distribution Date, the following amounts, in the following order of priority, shall be distributed by the Lower-Tier REMIC to the Upper-Tier REMIC on account of the Lower-Tier REMIC Regular Interests or withdrawn from the Distribution Account and distributed to the Holders of the Class A-LR Certificates, as the case may be:

With respect to the Group 1 Mortgage Loans:

 

(1)    to the Holders of Lower-Tier REMIC Regular Interest LT-1 and Lower-Tier REMIC Regular Interest LT-IO1 in an amount equal to (A) interest accrued for each such Lower-Tier REMIC Regular Interest at the Uncertificated Lower-Tier REMIC Pass-Through Rate for such Distribution Date, plus (B) any amounts in respect thereof remaining unpaid from previous Distribution Dates; and

(2)    to the Holders of Lower-Tier REMIC Regular Interest LT-1, in an amount equal to the remainder of the Amount Available for such Distribution Date after the distributions made pursuant to clause (1) above, allocated as follows:

(a)        to the Holders of REMIC I Regular Interest I-LT1, until the Uncertificated Balance of REMIC I Regular Interest I-LT1 is reduced to zero; and

(b)        any remaining amount to the Holders of the Class A-LR Certificates;    

With respect to the Group 2 Mortgage Loans:

(1)    to the Holders of Lower-Tier REMIC Regular Interest LT-2SUBC, Lower-Tier REMIC Regular Interest LT-2, Lower-Tier REMIC Regular Interest LT-IO2, on a pro rata basis, in an amount equal to (A) interest accrued for each such Lower-Tier REMIC Regular Interest at the Uncertificated Lower-Tier REMIC Pass-Through Rate for such Distribution Date, plus (B) any amounts in respect thereof remaining unpaid from previous Distribution Dates; and 

(2)    to the Holders of Lower-Tier REMIC Regular Interest LT-PO2, the Class PO Distribution Amount, and 

(3)    to the Holders of Lower-Tier REMIC Regular Interest LT-2SUBC and Lower-Tier REMIC Regular Interest LT-2 in an amount equal to the remainder of the Amount Available for such Distribution Date after the distributions made pursuant to clause (1) and (2) above, allocated as follows:

	  
	 	-93-	 
	

	 

 

(a)    to such holders, such that distributions of principal shall be deemed to be made to the Lower-Tier REMIC Regular Interests first, to Lower-Tier REMIC Regular Interest LT-2SUBC, so that the Uncertificated Principal Balance of such Lower-Tier REMIC Regular Interest is equal to 0.10% of the excess of (x) the aggregate Scheduled Principal Balance of the Group 2 Mortgage over (y) the current aggregate Certificate Principal Balance Group 2 Senior Certificates and Group 30-B Subordinate Certificates (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 Lower-Tier REMIC Regular Interest LT-2SUBC such that the Lower-Tier REMIC Group C-B Subordinated Balance Ratio is maintained); and second, any remaining principal to Lower-Tier REMIC Regular Interest LT-2 until the Uncertificated Principal Balance of Lower-Tier REMIC Regular Interest LT-2 is reduced to zero, and

(b)    any remaining amount to the Holders of the Class A-LR Certificates;    

With respect to the Group 3 Mortgage Loans:

(1)    to the Holders of Lower-Tier REMIC Regular Interest LT-3SUBHY, Lower-Tier REMIC Regular Interest LT-3SUBC and Lower-Tier REMIC Regular Interest LT-3, on a pro rata basis, in an amount equal to (A) interest accrued for each such Lower-Tier REMIC Regular Interest at the Uncertificated Lower-Tier REMIC Pass-Through Rate for such Distribution Date, plus (B) any amounts in respect thereof remaining unpaid from previous Distribution Dates; and 

(2)    to the Holders of Lower-Tier REMIC Regular Interest LT-3SUBHY, Lower-Tier REMIC Regular Interest LT-3SUBC and Lower-Tier REMIC Regular Interest LT-3 in an amount equal to the remainder of the Amount Available for such Distribution Date after the distributions made pursuant to clause (1) above, allocated as follows:

(a)    to such holders, such that distributions of principal shall be deemed to be made to Lower-Tier REMIC Regular Interest LT-3SUBHY, so that the Uncertificated Principal Balance of such Lower-Tier REMIC Regular Interest is equal to 0.10% of the excess of (x) the aggregate Scheduled Principal Balance of the Group 3 Mortgage over (y) the current aggregate Certificate Principal Balance Group 3 Senior Certificates and the portion of the Group 3 Mortgage Loans allocated to the Group C-B Certificates (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 Lower-Tier REMIC Regular Interest LT-3SUBHY such that the Lower-Tier REMIC Group HY-B Subordinated Balance Ratio is maintained); 

 

(b)    to such holders, such that distributions of principal shall be deemed to be made to Lower-Tier REMIC Regular Interest LT-3SUBC, so that the Uncertificated Principal Balance of such Lower-Tier REMIC Regular Interest is equal to 0.10% of the excess of (x) the aggregate Scheduled Principal Balance of the Group 3 Mortgage over (y) the current aggregate Certificate Principal Balance Group 3 Senior Certificates and the portion of the Group 3 Mortgage Loans 

	  
	 	-94-	 
	

	 

 

allocated to the Group HY-B Certificates (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 Lower-Tier REMIC Regular Interest LT-3SUBC such that the Lower-Tier REMIC Group C-B Subordinated Balance Ratio is maintained); 

 

(c)    to such holders, any remaining principal to Lower-Tier REMIC Regular Interest LT-3 until the Uncertificated Principal Balance of Lower-Tier REMIC Regular Interest LT-3 is reduced to zero,  and

 

(d)    any remaining amount to the Holders of the Class A-LR Certificates;    

With respect to the Group 4 Mortgage Loans:

(1)    to the Holders of Lower-Tier REMIC Regular Interest LT-4SUBHY, Lower-Tier REMIC Regular Interest LT-4SUBC and Lower-Tier REMIC Regular Interest LT-4, on a pro rata basis, in an amount equal to (A) interest accrued for each such Lower-Tier REMIC Regular Interest at the Uncertificated Lower-Tier REMIC Pass-Through Rate for such Distribution Date, plus (B) any amounts in respect thereof remaining unpaid from previous Distribution Dates; and 

(2)    to the Holders of Lower-Tier REMIC Regular Interest LT-4SUBHY, Lower-Tier REMIC Regular Interest LT-4SUBC and Lower-Tier REMIC Regular Interest LT-4 in an amount equal to the remainder of the Amount Available for such Distribution Date after the distributions made pursuant to clause (1) above, allocated as follows:

(a)    to such holders, such that distributions of principal shall be deemed to be made to Lower-Tier REMIC Regular Interest LT-4SUBHY, so that the Uncertificated Principal Balance of such Lower-Tier REMIC Regular Interest is equal to 0.10% of the excess of (x) the aggregate Scheduled Principal Balance of the Group 4 Mortgage over (y) the current aggregate Certificate Principal Balance Group 4 Senior Certificates and the portion of the Group 4 Mortgage Loans allocated to the Group C-B Certificates (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 Lower-Tier REMIC Regular Interest LT-4SUBHY such that the Lower-Tier REMIC Group HY-B Subordinated Balance Ratio is maintained); 

(b)    to such holders, such that distributions of principal shall be deemed to be made to Lower-Tier REMIC Regular Interest LT-4SUBC, so that the Uncertificated Principal Balance of such Lower-Tier REMIC Regular Interest is equal to 0.10% of the excess of (x) the aggregate Scheduled Principal Balance of the Group 4 Mortgage over (y) the current aggregate Certificate Principal Balance Group 4 Senior Certificates and the portion of the Group 4 Mortgage Loans allocated to the Group HY-B Certificates (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 Lower-Tier REMIC Regular Interest LT-4SUBC such that the Lower-Tier 

	  
	 	-95-	 
	

	 

REMIC Group C-B Subordinated Balance Ratio is maintained);  

 

(c)    to such holders, any remaining principal to Lower-Tier REMIC Regular Interest LT-4 until the Uncertificated Principal Balance of Lower-Tier REMIC Regular Interest LT-4 is reduced to zero, and

(d)    any remaining amount to the Holders of the Class A-LR Certificates;    

(B)    Realized Losses on the Mortgage Loans shall be allocated as follows:

(1)    Realized Losses on the Group 1 Mortgage Loans shall be applied after all distributions have been made on each Distribution Date and shall be allocated to Lower-Tier REMIC Regular Interest LT-1, until the Certificate Principal Balance is reduced to zero;

(2)    Realized Losses on the Group 2 Mortgage Loans shall be applied after all distributions have been made on each Distribution Date, first, to Lower-Tier REMIC Regular Interest LT-2SUBC, so that the Uncertificated Principal Balance of such Lower-Tier REMIC Regular Interest is equal to 0.10% of the excess of (x) the aggregate Scheduled Principal Balance of the Group 2 Mortgage over (y) the current aggregate Certificate Principal Balance Group 2 Senior Certificates and Group 30-B Subordinate Certificates (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 Lower-Tier REMIC Regular Interest LT-2SUBC such that the Lower-Tier REMIC Group C-B Subordinated Balance Ratio is maintained); and second, any remaining Realized Losses shall be allocated to Lower-Tier REMIC Regular Interest LT-2 until the Uncertificated Principal Balance of Lower-Tier REMIC Regular Interest LT-2 is reduced to zero (except that if a Realized Loss is recognized with respect to a Discount Mortgage Loan in Loan Group 2, the applicable portion of such Realized Loss will be allocated to Lower-Tier REMIC Regular Interest LT-PO2);

(3)    Realized Losses on the Group 3 Mortgage Loans shall be applied after all distributions have been made on each Distribution Date:

 (a)    to Lower-Tier REMIC Regular Interest LT-3SUBHY, so that the Uncertificated Principal Balance of such Lower-Tier REMIC Regular Interest is equal to 0.10% of the excess of (x) the aggregate Scheduled Principal Balance of the Group 3 Mortgage over (y) the current aggregate Certificate Principal Balance Group 3 Senior Certificates and the portion of the Group 3 Mortgage Loans allocated to the Group C-B Certificates (except that if any such excess is a larger number than in the preceding distribution period, the least amount of Realized Losses shall be distributed to Lower-Tier REMIC Regular Interest LT-3SUBHY such that the Lower-Tier REMIC Group HY-B Subordinated Balance Ratio is maintained); 

 (b)    to Lower-Tier REMIC Regular Interest LT-3SUBC, so that the Uncertificated Principal Balance of such Lower-Tier REMIC Regular Interest is equal to 0.10% of the excess of (x) the aggregate Scheduled Principal Balance of the Group 3     

	  
	 	-96-	 
	

	 

Mortgage over (y) the current aggregate Certificate Principal Balance Group 3 Senior Certificates and the portion of the Group 3 Mortgage Loans allocated to the Group HY-B Certificates (except that if any such excess is a larger number than in the preceding distribution period, the least amount of Realized Losses shall be distributed to Lower-Tier REMIC Regular Interest LT-3SUBC such that the Lower-Tier REMIC Group C-B Subordinated Balance Ratio is maintained); and

 

(c)    any remaining Realized Losses shall be allocated to Lower-Tier REMIC Regular Interest LT-3 until the Uncertificated Principal Balance of Lower-Tier REMIC Regular Interest LT-3 is reduced to zero; 

(4)    Realized Losses on the Group 4 Mortgage Loans shall be applied after all distributions have been made on each Distribution Date:

 (a)    to Lower-Tier REMIC Regular Interest LT-4SUBHY, so that the Uncertificated Principal Balance of such Lower-Tier REMIC Regular Interest is equal to 0.10% of the excess of (x) the aggregate Scheduled Principal Balance of the Group 4 Mortgage over (y) the current aggregate Certificate Principal Balance Group 4 Senior Certificates and the portion of the Group 4 Mortgage Loans allocated to the Group C-B Certificates (except that if any such excess is a larger number than in the preceding distribution period, the least amount of Realized Losses shall be distributed to Lower-Tier REMIC Regular Interest LT-4SUBHY such that the Lower-Tier REMIC Group HY-B Subordinated Balance Ratio is maintained); 

(b)    to Lower-Tier REMIC Regular Interest LT-4SUBC, so that the Uncertificated Principal Balance of such Lower-Tier REMIC Regular Interest is equal to 0.10% of the excess of (x) the aggregate Scheduled Principal Balance of the Group 4 Mortgage over (y) the current aggregate Certificate Principal Balance Group 4 Senior Certificates and the portion of the Group 4 Mortgage Loans allocated to the Group HY-B Certificates (except that if any such excess is a larger number than in the preceding distribution period, the least amount of Realized Losses shall be distributed to Lower-Tier REMIC Regular Interest LT-4SUBC such that the Lower-Tier REMIC Group C-B Subordinated Balance Ratio is maintained); and then, any remaining Realized Losses shall be allocated to Lower-Tier REMIC Regular Interest LT-4 until the Uncertificated Principal Balance of Lower-Tier REMIC Regular Interest LT-4 is reduced to zero; and

 

(c)     any remaining Realized Losses shall be allocated to Lower-Tier REMIC Regular Interest LT-4 until the Uncertificated Principal Balance of Lower-Tier REMIC Regular Interest LT-4 is reduced to zero; 

ARTICLE V

 

THE CERTIFICATES

 

Section 5.01 The Certificates. 

The Certificates shall be substantially in the forms attached hereto as Exhibit A through F. The Certificates shall be issuable in registered form, in the minimum denominations, integral multiples in excess thereof (except that one Certificate in each Class may be issued in a 

	  
	 	-97-	 
	

	 

 

different amount which must be in excess of the applicable minimum denomination) and aggregate denominations per Class set forth in the Preliminary Statement.

Subject to Section 10.02 hereof respecting the final distribution on the Certificates, on each Distribution Date the Trust Administrator shall make distributions to each Certificateholder of record on the preceding Record Date either (x) by wire transfer in immediately available funds to the account of such holder at a bank or other entity having appropriate facilities therefor, if such Holder has so notified the Trust Administrator in writing at least five Business Days prior to the related Record Date or (y) by check mailed by first class mail to such Certificateholder at the address of such holder appearing in the Certificate Register.

The Certificates shall be executed by manual or facsimile signature on behalf of the Trust Administrator by an authorized officer. Certificates bearing the manual or facsimile signatures of individuals who were, at the time when such signatures were affixed, authorized to sign on behalf of the Trust Administrator shall bind the Trust Administrator, notwithstanding that such individuals or any of them have ceased to be so authorized prior to the countersignature and delivery of such Certificates or did not hold such offices at the date of such Certificate. No Certificate shall be entitled to any benefit under this Agreement, or be valid for any purpose, unless countersigned by the Trust Administrator by manual signature, 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 shall be dated the date of their countersignature. On the Closing Date, the Trust Administrator shall countersign the Certificates to be issued at the direction of the Depositor, or any affiliate thereof.

The Depositor shall provide, or cause to be provided, to the Trust Administrator on a continuous basis, an adequate inventory of Certificates to facilitate transfers.

 

Section 5.02 Certificate Register; Registration of Transfer and Exchange of Certificates. 

(a)    The Trust Administrator shall maintain, or cause to be maintained in accordance with the provisions of Section 5.06 hereof, a Certificate Register for the Trust Fund in which, subject to the provisions of subsections (b) and (c) below and to such reasonable regulations as it may prescribe, the Trust Administrator shall provide for the registration of Certificates and of transfers and exchanges of Certificates as herein provided. Upon surrender for registration of transfer of any Certificate, the Trust Administrator shall execute and deliver, in the name of the designated transferee or transferees, one or more new Certificates of the same Class and aggregate Percentage Interest.

At the option of a Certificateholder, Certificates may be exchanged for other Certificates of the same Class in authorized denominations and evidencing the same aggregate Percentage Interest upon surrender of the Certificates to be exchanged at the office or agency of the Trust Administrator. Whenever any Certificates are so surrendered for exchange, the Trust Administrator shall execute, authenticate, and deliver the Certificates which the Certificateholder making the exchange is entitled to receive. Every Certificate presented or surrendered for registration of transfer or exchange shall be accompanied by a written instrument of transfer in 

	  
	 	-98-	 
	

	 

 

form satisfactory to the Trust Administrator duly executed by the holder thereof or his attorney duly authorized in writing.

 

No service charge to the Certificateholders shall be made for any registration of transfer or exchange of Certificates, but payment of a sum sufficient to cover any tax or governmental charge that may be imposed in connection with any transfer or exchange of Certificates may be required by the Trust Administrator.

All Certificates surrendered for registration of transfer or exchange shall be canceled and subsequently destroyed by the Trust Administrator in accordance with the Trust Administrator’s customary procedures.

(b)    No transfer of a Private Certificate shall be made unless such transfer is made pursuant to an effective registration statement under the Securities Act and any applicable state securities laws or is exempt from the registration requirements under said Act and such state securities laws. In the event that a transfer is to be made in reliance upon an exemption from the Securities Act and such laws, in order to assure compliance with the Securities Act and such laws, the Certificateholder desiring to effect such transfer and such Certificateholder’s prospective transferee (other than the Depositor or an affiliate of the Depositor) shall each certify to the Trust Administrator in writing the facts surrounding the transfer in substantially the forms set forth in Exhibit J (the “Transferor Certificate”) and (i) deliver a letter in substantially the form of either Exhibit K (the “Investment Letter”) or Exhibit L (the “Rule 144A Letter”) or (ii) there shall be delivered to the Trust Administrator at the expense of the transferor an Opinion of Counsel that such transfer may be made pursuant to an exemption from the Securities Act. The Depositor shall provide to any Holder of a Private Certificate and any prospective transferee designated by any such Holder, information regarding the related Certificates and the Mortgage Loans and such other information as shall be necessary to satisfy the condition to eligibility set forth in Rule 144A(d)(4) for transfer of any such Certificate without registration thereof under the Securities Act pursuant to the registration exemption provided by Rule 144A. The Trust Administrator and the Master Servicer shall cooperate with the Depositor, in accordance with the Depositor’s request, in providing the Rule 144A information referenced in the preceding sentence, including providing to the Depositor, to the extent in its possession, such information regarding the Certificates, the Mortgage Loans and other matters regarding the Trust Fund as the Depositor shall reasonably request to meet its obligation under the preceding sentence. Each Holder of a Private Certificate desiring to effect such transfer shall, and does hereby agree to, indemnify the Trustee, the Trust Administrator, the Depositor, and the Master Servicer against any liability that may result if the transfer is not so exempt or is not made in accordance with such federal and state laws.

 

No transfer of an ERISA-Restricted Certificate shall be made (other than to the Depositor or an affiliate of the Depositor) unless the Trust Administrator shall have received in accordance with Exhibit K or Exhibit L (in the event such Certificate is a Private Certificate) or paragraph 13 of Exhibit I (in the event such Certificate is a Residual Certificate), in form and substance satisfactory to such Trust Administrator (i) a representation that such transferee is not an employee benefit plan or other retirement arrangement subject to Section 406 of ERISA and/or Section 4975 of the Code, or a person acting for, on behalf of or with the assets of, any 

	  
	 	-99-	 
	

	 

 

such plan or arrangement, (ii) in the case of a Private Certificate which is the subject of an ERISA-Qualifying Underwriting, if the purchaser is an insurance company, a representation that the purchaser is an insurance company which is purchasing such Certificates with funds contained in an “insurance company general account” (as such term is defined in Section V(e) of Prohibited Transaction Class Exemption 95-60 (“PTCE 95-60”)) and that the purchase and holding of such Certificates are covered under Sections I and III of PTCE 95-60 or (iii) an Opinion of Counsel satisfactory to the Trust Administrator, which Opinion of Counsel shall not be an expense of the Trustee, the Trust Administrator, the Depositor, the Transferor, the Master Servicer or the Trust Fund, addressed to the Trust Administrator to the effect that the purchase or holding of such ERISA-Restricted Certificate will not result in non-exempt prohibited transactions under Section 406 of ERISA and/or Section 4975 of the Code and will not subject the Trustee, the Trust Administrator, the Depositor, the Transferor or the Master Servicer to any obligation or liability (including obligations or liabilities under ERISA or Section 4975 of the Code) in addition to those expressly undertaken in this Agreement. For purposes of the preceding sentence, with respect to an ERISA-Restricted Certificate that is not a Private Certificate or a Residual Certificate, in the event the representation letter referred to in the preceding sentence is not so furnished, such representation shall be deemed to have been made to the Trust Administrator by the transferee’s (including an initial acquirer’s) acceptance of the ERISA-Restricted Certificates. Notwithstanding anything else to the contrary herein, any purported transfer of an ERISA-Restricted Certificate, to or on behalf of an employee benefit plan or other retirement arrangement subject to ERISA or the Code in violation of the above restrictions shall be void and of no effect.

Each beneficial owner of a Subordinate Certificate (other than a Private Certificate or any interest therein will be deemed to have represented, by virtue of its acquisition or holding of that certificate or interest therein, that either (i) it is not a plan investor, (ii) it has acquired and is holding such certificates in reliance on Prohibited Transaction Exemption 2002-41, as amended, (“Underwriter’s Exemption”), and that it understands that there are certain conditions to the availability of the Underwriter’s Exemption, including that such certificates must be rated, at the time of purchase, not lower than “BBB-” (or its equivalent) by Fitch or S&P or (iii)(1) it is an insurance company, (2) the source of funds used to acquire or hold the certificate or interest therein is an “insurance company general account,” as such term is defined in PTCE 95-60, and (3) the conditions in Sections I and III of PTCE 95-60 have been satisfied.

To the extent permitted under applicable law (including, but not limited to, ERISA), the Trust Administrator shall be under no liability to any Person for any registration of transfer of any ERISA-Restricted Certificate that is in fact not permitted by this Section 5.02(b) or for making any payments due on such Certificate to the Holder thereof or taking any other action with respect to such Holder under the provisions of this Agreement so long as the transfer was registered by the Trust Administrator in accordance with the foregoing requirements.

(c)    Each Person who has or who acquires any Ownership Interest in a Residual Certificate shall be deemed by the acceptance or acquisition of such Ownership Interest to have agreed to be bound by the following provisions, and the rights of each Person acquiring 

	  
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any Ownership Interest in a Residual Certificate are expressly subject to the following provisions:

 

(i)     Each Person holding or acquiring any Ownership Interest in a Residual Certificate shall be a Permitted Transferee and shall promptly notify the Trust Administrator of any change or impending change in its status as a Permitted Transferee.

(ii)    No Ownership Interest in a Residual Certificate may be registered on the Closing Date or thereafter transferred, and the Trust Administrator shall not register the Transfer of any Residual Certificate unless, in addition to the certificates required to be delivered to the Trust Administrator under subparagraph (b) above, the Trust Administrator shall have been furnished with an affidavit (a “Transfer Affidavit”) of the initial owner or the proposed transferee (other than the Depositor of an affiliate thereof) in the form attached hereto as Exhibit I.

(iii)   Each Person holding or acquiring any Ownership Interest in a Residual Certificate shall agree (A) to obtain a Transfer Affidavit from any other Person to whom such Person attempts to Transfer its Ownership Interest in a Residual Certificate, (B) to obtain a Transfer Affidavit from any Person for whom such Person is acting as nominee, trustee or agent in connection with any Transfer of a Residual Certificate and (C) not to Transfer its Ownership Interest in a Residual Certificate or to cause the Transfer of an Ownership Interest in a Residual Certificate to any other Person if it has actual knowledge that such Person is not a Permitted Transferee.

(iv)    Any attempted or purported Transfer of any Ownership Interest in a Residual Certificate in violation of the provisions of this Section 5.02(c) shall be absolutely null and void and shall vest no rights in the purported Transferee. If any purported transferee shall become a Holder of a Residual Certificate in violation of the provisions of this Section 5.02(c), then the last preceding Permitted Transferee shall be restored to all rights as Holder thereof retroactive to the date of registration of Transfer of such Residual Certificate. The Trust Administrator shall be under no liability to any Person for any registration of Transfer of a Residual Certificate that is in fact not permitted by Section 5.02(b) and this Section 5.02(c) or for making any payments due on such Certificate to the Holder thereof or taking any other action with respect to such Holder under the provisions of this Agreement so long as the Transfer was registered after receipt of the related Transfer Affidavit, Transferor Certificate and either the Rule 144A Letter or the Investment Letter. The Trust Administrator shall be entitled but not obligated to recover from any Holder of a Residual Certificate that was in fact not a Permitted Transferee at the time it became a Holder or, at such subsequent time as it became other than a Permitted Transferee, all payments made on such Residual Certificate at and after either such time. Any such payments so recovered by the Trust Administrator shall be paid and delivered by the Trust Administrator to the last preceding Permitted Transferee of such Certificate.

(v)    The Depositor shall use its best efforts to make available, upon receipt of written request from the Trust Administrator, all information necessary to compute any 

	  
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tax imposed under Section 860E(e) of the Code as a result of a Transfer of an Ownership Interest in a Residual Certificate to any Holder who is not a Permitted Transferee.

The restrictions on Transfers of a Residual Certificate set forth in this Section 5.02(c) shall cease to apply (and the applicable portions of the legend on a Residual Certificate may be deleted) with respect to Transfers occurring after delivery to the Trust Administrator of an Opinion of Counsel, which Opinion of Counsel shall not be an expense of the Trust Fund, the Trustee, the Trust Administrator, the Transferor or the Master Servicer, to the effect that the elimination of such restrictions will not cause any REMIC hereunder to fail to qualify as a REMIC at any time that the Certificates are outstanding or result in the imposition of any tax on the Trust Fund, a Certificateholder or another Person. Each Person holding or acquiring any Ownership Interest in a Residual Certificate hereby consents to any amendment of this Agreement which, based on an Opinion of Counsel furnished to the Trust Administrator, is reasonably necessary (a) to ensure that the record ownership of, or any beneficial interest in, a Residual Certificate is not transferred, directly or indirectly, to a Person that is not a Permitted Transferee and (b) to provide for a means to compel the Transfer of a Residual Certificate which is held by a Person that is not a Permitted Transferee to a Holder that is a Permitted Transferee.

(d)    The preparation and delivery of all certificates and opinions referred to above in this Section 5.02 in connection with transfer shall be at the expense of the parties to such transfers.

(e)    Except as provided below, the Book-Entry Certificates shall at all times remain registered in the name of the Depository or its nominee and at all times: (i) registration of the Certificates may not be transferred by the Trust Administrator except to another Depository; (ii) the Depository shall maintain Book-Entry records with respect to the Certificate Owners and with respect to ownership and transfers of such Book-Entry Certificates; (iii) ownership and transfers of registration of the Book-Entry Certificates on the books of the Depository shall be governed by applicable rules established by the Depository; (iv) the Depository may collect its usual and customary fees, charges and expenses from its Depository Participants; (v) the Trust Administrator shall deal with the Depository as representative of the Certificate Owners of the Book-Entry Certificates for purposes of exercising the rights of Holders 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 (vi) the Trust Administrator may conclusively rely and shall be fully protected in relying upon information furnished by the Depository with respect to its Depository Participants and furnished by the Depository Participants with respect to indirect participating firms and persons shown on the books of such indirect participating firms as direct or indirect Certificate Owners.

All transfers by Certificate Owners of Book-Entry Certificates shall be made in accordance with the procedures established by the Depository Participant or brokerage firm representing such Certificate Owner. 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.

	  
	 	-102-	 
	

	 

If (x) (i) the Depository or the Depositor advises the Trust Administrator in writing that the Depository is no longer willing, qualified or able to properly discharge its responsibilities as Depository, and (ii) the Depositor is unable to locate a qualified successor, (y) the Depositor notifies the Trust Administrator in writing, with the consent of the applicable Depository Participants, that it elects to terminate the book-entry system through the Depository or (z) after the occurrence of a Master Servicer Event of Termination, Certificate Owners representing at least 51% of the Certificate Principal Balance of the Book-Entry Certificates together advise the Trust Administrator and the Depository through the Depository Participants in writing that the continuation of a Book-Entry system through the Depository is no longer in the best interests of the Certificate Owners and the Depository Participants consent to the termination, the Trust Administrator, upon receipt of notice of such event, shall notify all Certificate Owners, through the Depository, of the occurrence of any such event and of the availability of definitive, fully-registered Certificates (the “Definitive Certificates”) to Certificate Owners requesting the same. Upon surrender to the Trust Administrator of the related Class of Certificates by the Depository, accompanied by the instructions from the Depository for registration, the Trust Administrator shall issue the Definitive Certificates. None of the Master Servicer, the Depositor nor the Trust Administrator shall be liable for any delay in delivery of such instruction and each may conclusively rely on, and shall be protected in relying on, such instructions. The Depositor shall provide the Trust Administrator with an adequate inventory of certificates to facilitate the issuance and transfer of Definitive Certificates. Upon the issuance of Definitive Certificates all references herein to obligations imposed upon or to be performed by the Depository shall be deemed to be imposed upon and performed by the Trust Administrator, to the extent applicable with respect to such Definitive Certificates and the Trust Administrator shall recognize the Holders of the Definitive Certificates as Certificateholders hereunder; provided that the Trust Administrator shall not by virtue of its assumption of such obligations become liable to any party for any act or failure to act of the Depository.

 

Section 5.03 Mutilated, Destroyed, Lost or Stolen Certificates. 

If (a) any mutilated Certificate is surrendered to the Trust Administrator, or the Trust Administrator receives evidence to its satisfaction of the destruction, loss or theft of any Certificate and (b) there is delivered to the Master Servicer and the Trust Administrator such security or indemnity as may be required by them to save each of them harmless, then, in the absence of notice to the Trust Administrator that such Certificate has been acquired by a bona fide purchaser, the Trust Administrator shall execute, countersign and deliver, in exchange for or in lieu of any such mutilated, destroyed, lost or stolen Certificate, a new Certificate of like Class, tenor and Percentage Interest. In connection with the issuance of any new Certificate under this Section 5.03, the Trust Administrator may require the payment of a sum sufficient to cover any tax or other governmental charge that may be imposed in relation thereto and any other expenses (including the fees and expenses of the Trust Administrator and its counsel) connected therewith. Any replacement Certificate issued pursuant to this Section 5.03 shall constitute complete and indefeasible evidence of ownership, as if originally issued, whether or not the lost, stolen or destroyed Certificate shall be found at any time.

	  
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Section 5.04 Persons Deemed Owners. 

The Master Servicer, the Trustee, the Trust Administrator and any agent of the Master Servicer, the Trust Administrator or the Trustee may treat the Person in whose name any Certificate is registered as the owner of such Certificate for the purpose of receiving distributions as provided in this Agreement and for all other purposes whatsoever, and none of the Master Servicer, the Trust Administrator, the Trustee nor any agent of the Master Servicer, the Trust Administrator or the Trustee shall be affected by any notice to the contrary.

 

Section 5.05 Access to List of Certificateholders’ Names and Addresses. 

If three or more Certificateholders (a) request such information in writing from the Trust Administrator, (b) state that such Certificateholders desire to communicate with other Certificateholders with respect to their rights under this Agreement or under the Certificates, and (c) provide a copy of the communication which such Certificateholders propose to transmit, or if the Depositor or Master Servicer shall request such information in writing from the Trust Administrator, then the Trust Administrator shall, within ten Business Days after the receipt of such request, provide the Depositor, the Master Servicer or such Certificateholders at such recipients’ expense the most recent list of the Certificateholders of such Trust Fund held by the Trust Administrator, if any. The Depositor and every Certificateholder, by receiving and holding a Certificate, agree that the Trust Administrator shall not be held accountable by reason of the disclosure of any such information as to the list of the Certificateholders hereunder, regardless of the source from which such information was derived.

 

Section 5.06 Maintenance of Office or Agency. 

Certificates may be surrendered for registration of transfer or exchange at Corporate Trust Office of the Trust Administrator. The Trust Administrator will give prompt written notice to the Certificateholders of any change in such location of any such office or agency.

ARTICLE VI

 

THE DEPOSITOR, THE MASTER SERVICER AND THE CUSTODIANS

 

Section 6.01 Respective Liabilities of the Depositor, the Master Servicer and the Custodians. 

The Depositor, the Master Servicer and the Custodians shall each be liable in accordance herewith only to the extent of the obligations specifically and respectively imposed upon and undertaken by them herein.

	  
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Section 6.02 Merger or Consolidation of the Depositor, the Master Servicer and the Custodians. 

The Depositor, the Master Servicer and the Custodians will each keep in full effect its existence, rights and franchises as a corporation or limited partnership, as the case may be, under the laws of the United States or under the laws of one of the states thereof and will each obtain and preserve its qualification to do business as a foreign corporation or legal entity, as the case may be, in each jurisdiction in which such qualification is or shall be necessary to protect the validity and enforceability of this Agreement, or any of the Mortgage Loans and to perform its respective duties under this Agreement.

Any Person into which the Depositor, the Master Servicer or either Custodian may be merged or consolidated, or any Person resulting from any merger or consolidation to which the Depositor, the Master Servicer or either Custodian shall be a party, or any Person succeeding to the business of the Depositor, the Master Servicer or either Custodian, shall be the successor of the Depositor, the Master Servicer or either Custodian, as the case may be, hereunder, without the execution or filing of any paper or any further act on the part of any of the parties hereto, anything herein to the contrary notwithstanding; provided, however, that the successor or surviving Person to the Master Servicer shall be qualified to service mortgage loans on behalf of Fannie Mae or Freddie Mac.

 

Section 6.03 Limitation on Liability of the Depositor, the Master Servicer, the Custodians and Others. 

None of the Depositor, the Master Servicer, the Custodians or any of the directors, officers, employees or agents of the Depositor, the Master Servicer or the Custodians shall be under any liability to the Trust for any action taken or for refraining from the taking of any action in good faith pursuant to this Agreement, or for errors in judgment; provided, however, that this provision shall not protect the Depositor, the Master Servicer, the Custodians or any such Person against any breach of representations or warranties made by it herein or protect the Depositor, the Master Servicer, the Custodians or any such Person from any liability which would otherwise be imposed by reason of willful misfeasance, bad faith or negligence in the performance of duties hereunder or by reason of reckless disregard of obligations and duties hereunder. The Depositor, the Master Servicer, the Custodians and any director, officer, employee or agent of the Depositor, the Master Servicer or either Custodian may rely in good faith on any document of any kind prima facie properly executed and submitted by any Person respecting any matters arising hereunder. The Depositor, the Master Servicer, the Custodians and any director, officer, employee or agent of the Depositor, the Master Servicer or either Custodian shall be indemnified by the Trust Fund and held harmless against any loss, liability or expense incurred in connection with (i) any audit, controversy or judicial proceeding relating to a governmental taxing authority, (ii) the performance of its duties and obligations and the exercise of its rights under this Agreement or the Certificates which constitute “unanticipated expenses incurred by the REMIC” within the meaning of the REMIC Provisions, or (iii) any legal action relating to this Agreement or the Certificates, other than any loss, liability or expense related to any specific Mortgage Loan or Mortgage Loans (except as any such loss, liability or expense shall be otherwise reimbursable pursuant to this Agreement) and any loss, liability or expense incurred by reason of willful 

	  
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misfeasance, bad faith or negligence in the performance of duties hereunder or by reason of reckless disregard of obligations and duties hereunder. None of the Depositor, the Master Servicer and the Custodians shall be under any obligation to appear in, prosecute or defend any legal action that is not incidental to its respective duties hereunder and which in its opinion may involve it in any expense or liability; provided, however, that any of the Depositor, the Master Servicer or either Custodian may in its discretion undertake any such action that it may deem necessary or desirable in respect of this Agreement and the rights and duties of the parties hereto and interests of the Trustee, the Trust Administrator and the Certificateholders hereunder. In such event, the legal expenses and costs of such action and any liability resulting therefrom shall be expenses, costs and liabilities of the Trust Fund, and the Depositor, the Custodians and the Master Servicer shall be entitled to be reimbursed therefor out of the Collection Account.

 

Section 6.04 Limitation on Resignation of Master Servicer. 

The Master Servicer shall not resign from the obligations and duties hereby imposed on it except (a) upon appointment of a successor master servicer and receipt by the Trustee of a letter from each Rating Agency that such a resignation and appointment will not result in a downgrading of the rating of any of the Certificates, or (b) upon determination that its duties hereunder are no longer permissible under applicable law, or (c) pursuant to Section 6.05. Any such determination under clause (b) permitting the resignation of the Master Servicer shall be evidenced by an Opinion of Counsel to such effect delivered to the Trustee. No such resignation shall become effective until the Trustee or a successor master servicer shall have assumed the Master Servicer’s responsibilities, duties, liabilities and obligations hereunder.

 

Section 6.05 Sale and Assignment of Master Servicing Rights. 

The Master Servicer may sell, assign or delegate its rights, duties and obligations as Master Servicer under this Agreement in their entirety; provided, however, that: (i) the purchaser or transferee accepting such sale, assignment and delegation (a) shall be a Person qualified to service mortgage loans for Fannie Mae or Freddie Mac, (b) shall have a net worth of not less than $50,000,000 (unless otherwise approved by each Rating Agency pursuant to clause (ii) below) or (c) shall execute and deliver to the Trustee an agreement, in form and substance reasonably satisfactory to the Trustee, which contains an assumption by such Person of the due and punctual performance and observance of each covenant and condition to be performed or observed by it as master servicer under this Agreement, from and after the effective date of such assumption agreement or delegation; (ii) each Rating Agency shall be given prior written notice of the identity of the proposed successor to the Master Servicer and shall confirm in writing to the Master Servicer and the Trustee that any such sale, assignment or delegation would not result in a withdrawal or a downgrading of the rating on any Class of Certificates in effect immediately prior to such sale, assignment; and (iii) the Master Servicer shall deliver to the Trustee an Officer’s Certificate and an Opinion of Independent Counsel, each stating that all conditions precedent to such action under this Agreement have been fulfilled and such action is permitted by and complies with the terms of this Agreement. No such sale, assignment or delegation shall affect any liability of the Master Servicer arising prior to the effective date thereof.

	  
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Section 6.06 Fees of the Custodians. 

Each of the Custodians shall be compensated as separately agreed in writing with the Master Servicer.

ARTICLE VII

 

DEFAULT

 

Section 7.01 Events of Default. 

“Master Servicer Event of Termination,” wherever used herein, means any one of the following events:

(i)     The Master Servicer fails to cause to be deposited in the Distribution Account any amount so required to be deposited pursuant to this Agreement, and such failure continues unremedied for a period of one Business Day; or

(ii)    The Master Servicer fails to observe or perform in any material respect any other material covenants and agreements set forth in this Agreement to be performed by it, which covenants and agreements materially affect the rights of Certificateholders, and such failure continues unremedied for a period of 60 days after the date on which written notice of such failure, properly requiring the same to be remedied, shall have been given to the Master Servicer by the Trustee or to the Master Servicer and the Trustee or the Trust Administrator by the Holders of Certificates evidencing Voting Rights aggregating not less than 25% of the Certificates; or

(iii)   There is entered against the Master Servicer a decree or order by a court or agency or supervisory authority having jurisdiction in the premises for the appointment of a conservator, receiver or liquidator in any insolvency, readjustment of debt, marshaling of assets and liabilities or similar proceedings, or for the winding up or liquidation of its affairs, and the continuance of any such decree or order is unstayed and in effect for a period of 60 consecutive days, or an involuntary case is commenced against the Master Servicer under any applicable insolvency or reorganization statute and the petition is not dismissed within 60 days after the commencement of the case; or

(iv)   The Master Servicer consents to the appointment of a conservator or receiver or liquidator in any insolvency, readjustment of debt, marshaling of assets and liabilities or similar proceedings of or relating to the Master Servicer or substantially all of its property; or the Master Servicer admits in writing its inability to pay its debts generally as they become due, files a petition to take advantage of any applicable insolvency or reorganization statute, makes an assignment for the benefit of its creditors, or voluntarily suspends payment of its obligations; or

	  
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(v)    The Master Servicer assigns or delegates its duties or rights under this Agreement in contravention of the provisions permitting such assignment or delegation under Section 6.05.

In each and every such case, so long as such Master Servicer Event of Termination with respect to the Master Servicer shall not have been remedied, the Trustee may, and (i) at the direction of the Holders of Certificates evidencing Voting Rights aggregating not less than 25% of the Certificates or (ii) if such Master Servicer Event of Termination is related to a failure by the Master Servicer to make any Advance required to be made by it pursuant to the terms of this Agreement, the Trustee shall, in each case by notice in writing to the Master Servicer, with a copy to the Rating Agencies, terminate all of the rights and obligations (but not the liabilities accruing prior to the date of termination) of the Master Servicer under this Agreement and in and to the Mortgage Loans and/or the REO Property serviced by the Master Servicer and the proceeds thereof. Upon the receipt by the Master Servicer of such written notice, all authority and power of the Master Servicer under this Agreement, whether with respect to the Certificates, the Mortgage Loans, the Servicing Agreements, REO Property or under any other related agreements (but only to the extent that such other agreements relate to the Mortgage Loans or related REO Property) shall, subject to Section 7.02, automatically and without further action pass to and be vested in the Trustee pursuant to this Section 7.01; and, without limitation, the Trustee is hereby authorized and empowered to execute and deliver, on behalf of the Master Servicer as attorney-in-fact or otherwise, any and all documents and other instruments and to do or accomplish all other acts or things necessary or appropriate to effect the purposes of such notice of termination, whether to complete the transfer and endorsement or assignment of the Mortgage Loans and related documents, or otherwise. The Master Servicer agrees to cooperate with the Trustee in effecting the termination of the Master Servicer’s rights and obligations hereunder, including, without limitation, the transfer to the Trustee of (i) the Mortgage Files and all other property and amounts which are then or should be part of the Trust or which thereafter become part of the Trust; and (ii) originals or copies of all documents of the Master Servicer reasonably requested by the Trustee to enable it to assume the Master Servicer’s duties thereunder. In addition to any other amounts which are then, or, notwithstanding the termination of its activities under this Agreement, may become payable to the Master Servicer under this Agreement, the Master Servicer shall be entitled to receive, out of any amount received on account of a Mortgage Loan or related REO Property, that portion of such payments which it would have received as reimbursement under this Agreement if notice of termination had not been given. The termination of the rights and obligations of the Master Servicer shall not affect any obligations incurred by the Master Servicer prior to such termination.

Notwithstanding any termination of the activities of the Master Servicer hereunder, the Master Servicer shall be entitled to receive, out of any late collection of a Scheduled Payment on a Mortgage Loan which was due prior to the notice terminating such Master Servicer’s rights and obligations as Master Servicer hereunder and received after such notice, that portion thereof to which such Master Servicer would have been entitled pursuant to Sections 3.10(a)(i) through (xi), and any other amounts payable to such Master Servicer hereunder the entitlement to which arose prior to the termination of its activities hereunder.

	  
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Section 7.02 Trustee to Act; Appointment of Successor. 

On and after the time the Master Servicer receives a notice of termination pursuant to Section 7.01 hereof, the Trustee shall, subject to and to the extent provided in Section 3.05, be the successor to the Master Servicer in its capacity as Master Servicer under this Agreement and the transactions set forth or provided for herein and shall be subject to all the responsibilities, duties, liabilities and limitations on liabilities relating thereto placed on the Master Servicer by the terms and provisions hereof and applicable law including the obligation to make Advances pursuant to Section 4.01. As compensation therefor, the Trustee shall be entitled to investment income on all funds to which the Master Servicer would have been entitled in the Collection Account or Distribution Account if the Master Servicer had continued to act hereunder. Notwithstanding the foregoing, if the Trustee has become the successor to the Master Servicer in accordance with Section 7.01 hereof, the Trustee may, if it shall be unwilling to so act, or shall, if it is prohibited by applicable law from making Advances pursuant to Section 4.01 hereof or if it is otherwise unable to so act, or if it has been requested in writing by Holders of Certificates evidencing not less than 25% of the Voting Rights evidenced by the Certificates to do so, appoint, or petition a court of competent jurisdiction to appoint, any established mortgage loan servicing institution the appointment of which does not adversely affect the then current rating of the Certificates by each Rating Agency as the successor to the Master Servicer hereunder in the assumption of all or any part of the responsibilities, duties or liabilities of the Master Servicer hereunder. Any successor to the Master Servicer shall be an institution which is a Fannie Mae and Freddie Mac approved seller/servicer in good standing, which has a net worth of at least $15,000,000, and which is willing to master service the Mortgage Loans and executes and delivers to the Depositor and the Trustee an agreement accepting such delegation and assignment, which contains an assumption by such Person of the rights, powers, duties, responsibilities, obligations and liabilities of the Master Servicer (other than liabilities of the Master Servicer under Section 6.03 hereof incurred prior to termination of the Master Servicer under Section 7.01), with like effect as if originally named as a party to this Agreement; and provided further that each Rating Agency acknowledges that its rating of the Certificates in effect immediately prior to such assignment and delegation will not be qualified or reduced, without regard to the guaranty provided by the Policies, as a result of such assignment and delegation. Pending appointment of a successor to the Master Servicer hereunder, the Trustee, unless the Trustee is prohibited by law from so acting, shall, subject to Section 3.05 hereof, act in such capacity as hereinabove provided. In connection with such appointment and assumption, the Trustee may make such arrangements for the compensation of such successor master servicer out of payments on Mortgage Loans as it and such successor master servicer shall agree; provided, however, that no such compensation shall be in excess of the compensation permitted the Master Servicer hereunder. The Trustee and such successor master servicer shall take such action, consistent with this Agreement, as shall be necessary to effectuate any such succession. Neither the Trustee nor any other successor master servicer shall be deemed to be in default hereunder by reason of any failure to make, or any delay in making, any distribution hereunder or any portion thereof or any failure to perform, or any delay in performing, any duties or responsibilities hereunder, in either case caused by the failure of the Master Servicer to deliver or provide, or any delay in delivering or providing, any cash, information, documents or records to it.

	  
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Any successor master servicer as Master Servicer shall give notice to the Servicers of such change of master servicer and shall, during the term of its service as master servicer enforce the requirement of the Servicers to maintain in force the policy or policies pursuant to Section 3.11.

The Trustee or successor master servicer shall be entitled to be reimbursed from the Master Servicer for all costs associated with the transfer of master servicing from the predecessor master servicer, including, without limitation, any costs or expenses (including but not limited to personnel time) associated with the complete transfer of all master servicing data and the completion, correction or manipulation of such master servicing data as may be required by the Trustee or successor master servicer to correct any errors or insufficiencies in the master servicing data or otherwise to enable the Trustee or successor master servicer to master service the Mortgage Loans properly and effectively. If the Master Servicer does not pay such reimbursement within thirty (30) days of its receipt of an invoice therefor, such reimbursement shall be an expense of the Trust and the Trustee shall be entitled to withdraw such reimbursement from amounts on deposit in the Distribution Account pursuant to Section 3.10(b)(iii); provided that the Master Servicer shall reimburse the Trust for any such expense incurred by the Trust.

 

Section 7.03 Notification to Certificateholders. 

(a)    Upon any termination of or appointment of a successor to the Master Servicer, the Trustee (or the Trust Administrator on its behalf) shall give prompt written notice thereof to Certificateholders and to each Rating Agency.

(b)    Within 60 days after the occurrence of any Master Servicer Event of Termination, the Trustee or the Trust Administrator shall transmit by mail to all Certificateholders notice of each such Master Servicer Event of Termination hereunder actually known to a Responsible Officer of the Trustee or the Trust Administrator, unless such Master Servicer Event of Termination shall have been cured or waived.

ARTICLE VIII

 

CONCERNING THE TRUSTEE

 

Section 8.01 Duties of Trustee. 

The Trustee, prior to the occurrence of a Master Servicer Event of Termination and after the curing or waiver of all Master Servicer Events of Termination that may have occurred, shall undertake to perform such duties and only such duties as are specifically set forth in this Agreement. In case a Master Servicer Event of Termination has occurred and remains uncured or unwaived, the Trustee shall exercise such of the rights and powers vested in it by this Agreement, and use the same degree of care and skill in their exercise as a prudent person would exercise or use under the circumstances in the conduct of such person’s own affairs, but only until such time as a successor Master Servicer shall have been appointed hereunder.

	  
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The Trustee, upon receipt of all resolutions, certificates, statements, opinions, reports, documents, orders or other instruments furnished to the Trustee that are specifically required to be furnished pursuant to any provision of this Agreement shall examine them to determine whether they are in the form required by this Agreement to the extent that forms of such documents have been provided to the Trustee; provided, however, that the Trustee shall not be responsible for the accuracy or content of any such resolution, certificate, statement, opinion, report, document, order or other instrument. If any such instrument is found not to conform in any material respect to the requirements of this Agreement, the Trustee shall notify the Certificateholders of such non-conforming instrument in the event the Trustee, after so requesting, does not receive a satisfactorily corrected instrument.

No provision of this Agreement shall be construed to relieve the Trustee from liability for its own negligent action, its own negligent failure to act or its own willful misconduct; provided, however, that:

(i)     unless a Master Servicer Event of Termination of which a Responsible Officer of the Trustee has actual knowledge shall have occurred and be continuing, the duties and obligations of the Trustee shall be determined solely by the express provisions of this Agreement, the Trustee shall not be liable except for the performance of such duties and obligations as are specifically set forth in this Agreement, no implied covenants or obligations shall be read into this Agreement against the Trustee and the Trustee may conclusively rely, as to the truth of the statements and the correctness of the opinions expressed therein, upon any certificates or opinions furnished to the Trustee and conforming to the requirements of this Agreement which it believed in good faith to be genuine and to have been duly executed by the proper authorities respecting any matters arising hereunder;

(ii)    the Trustee shall not be liable for an error of judgment made in good faith by a Responsible Officer or Responsible Officers of the Trustee, unless it shall be conclusively determined by a court of competent jurisdiction, such determination no longer subject to appeal, that the Trustee was negligent in ascertaining the pertinent facts;

(iii)   the Trustee shall not be liable with respect to any action taken, suffered or omitted to be taken by it in good faith in accordance with the direction of Holders of Certificates evidencing not less than 25% of the Voting Rights of Certificates relating to the time, method and place of conducting any proceeding for any remedy available to the Trustee, or exercising or omitting to exercise any trust or power conferred upon the Trustee under this Agreement; and

(iv)   The Trustee shall not be accountable, shall have no liability and makes no representation as to any acts or omissions hereunder of the Master Servicer until such time as the Trustee may be required to act as Master Servicer pursuant to Section 7.02 and thereupon only for the acts or omissions of the Trustee as successor Master Servicer.

	  
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Section 8.02 Certain Matters Affecting the Trustee. 

Except as otherwise provided in Section 8.01:

(i)     the Trustee may request and conclusively rely upon and shall be fully protected in acting or refraining from acting upon any resolution, Officer’s Certificate, certificate of auditors or any other certificate, statement, instrument, opinion, report, notice, request, consent, order, appraisal, bond or other paper or document believed by it to be genuine and to have been signed or presented by the proper party or parties and the Trustee shall have no responsibility to ascertain or confirm the genuineness of any signature of any such party or parties;

(ii)    the Trustee may consult with counsel, financial advisers or accountants and the advice of any such counsel, financial advisers or accountants and any advice or Opinion of Counsel shall be full and complete authorization and protection in respect of any action taken or suffered or omitted by it hereunder in good faith and in accordance with such advice or Opinion of Counsel;

(iii)   the Trustee shall not be liable for any action taken, suffered or omitted by it in good faith and believed by it to be authorized or within the discretion or rights or powers conferred upon it by this Agreement;

(iv)   prior to the occurrence of a Master Servicer Event of Termination and after the curing or waiver of all Master Servicer Events of Termination which may have occurred, the Trustee shall not be bound to make any investigation into the facts or matters stated in any resolution, certificate, statement, instrument, opinion, report, notice, request, consent, order, approval, bond or other paper or document, unless requested in writing so to do by Holders of Certificates evidencing not less than 25% of the Voting Rights allocated to each Class of Certificates; provided, however, that if the payment within a reasonable time to the Trustee of the costs, expenses or liabilities likely to be incurred by it in the making of such investigation is, in the opinion of the Trustee, not reasonably assured to the Trustee by the security afforded to it by the terms of this Agreement, the Trustee may require reasonable indemnity against such expense or liability as a condition to so proceeding. The reasonable expense of every such examination shall be paid by the Master Servicer or, if paid by the Trustee, shall be reimbursed by the Master Servicer upon demand. Nothing in this clause (iv) shall derogate from the obligation of the Master Servicer to observe any applicable law prohibiting disclosure of information regarding the Mortgagors;

(v)    the Trustee may execute any of the trusts or powers hereunder or perform any duties hereunder either directly or by or through agents or attorneys or a custodian and the Trustee shall not be responsible for any misconduct or negligence on the part of any such agent, attorney or custodian appointed by the Trustee with due care;

(vi)   the Trustee shall not be required to risk or expend its own funds or otherwise incur any financial liability in the performance of any of its duties or in the 

	  
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exercise of any of its rights or powers hereunder if it shall have reasonable grounds for believing that repayment of such funds or adequate indemnity against such risk or liability is not assured to it, and none of the provisions contained in this Agreement shall in any event require the Trustee to perform, or be responsible for the manner of performance of, any of the obligations of the Master Servicer under this Agreement, except during such time, if any, as the Trustee shall be the successor to, and be vested with the rights, duties, powers and privileges of, the Master Servicer in accordance with the terms of this Agreement;

 

(vii)         the Trustee shall not be liable for any loss on any investment of funds pursuant to this Agreement (other than as issuer of the investment security);

(viii)        the Trustee shall not be deemed to have knowledge of a Master Servicer Event of Termination until a Responsible Officer of the Trustee obtains actual knowledge of such failure or the Trustee receives written notice of such failure from the Master Servicer or the holders of Certificates evidencing not less than 25% of the Voting Rights of Certificates. In the absence of such receipt of such notice, the Trustee may conclusively assume that there is no Master Servicer Event of Termination;

(ix)   the Trustee shall be under no obligation to exercise any of the trusts, rights or powers vested in it by this Agreement or to institute, conduct or defend any litigation hereunder or in relation hereto at the request, order or direction of any of the Certificateholders, pursuant to the provisions of this Agreement, unless such Certificateholders shall have offered to the Trustee reasonable security or indemnity satisfactory to the Trustee against the costs, expenses and liabilities which may be incurred therein or thereby.

The Trustee shall have no duty (A) to see to any recording, filing, or depositing of this Agreement or any agreement referred to herein or any financing statement or continuation statement evidencing a security interest, or to see to the maintenance of any such recording or filing or depositing or to any rerecording, refiling or redepositing thereof, (B) to see to the provision of any insurance or (C) to see to the payment or discharge of any tax, assessment, or other governmental charge or any lien or encumbrance of any kind owing with respect to, assessed or levied against, any part of the Trust Fund other than from funds available in the Distribution Account.

 

Section 8.03 Trustee Not Liable for Certificates or Mortgage Loans. 

The recitals contained herein and in the Certificates shall be taken as the statements of the Depositor, and the Trustee assumes no responsibility for their correctness. The Trustee makes no representations as to the validity or sufficiency of this Agreement or of the Certificates or of any Mortgage Loan or related document. The Trustee shall not be accountable for the use or application by the Depositor or the Master Servicer of any funds paid to the Depositor or the Master Servicer in respect of the Mortgage Loans or deposited in or withdrawn from the Collection Account or the Distribution Account by the Depositor, the Master Servicer or the Trust Administrator.

	  
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Section 8.04 Trustee May Own Certificates. 

The Trustee in its individual or any other capacity may become the owner or pledgee of Certificates and may transact business with the parties hereto and their Affiliates with the same rights as it would have if it were not the Trustee.

 

Section 8.05 Trustee’s Fees and Expenses. 

The Trustee shall be compensated as separately agreed with the Master Servicer. The Trustee and any director, officer, employee, agent or “control person” within the meaning of the Securities Act of 1933, as amended, and the Securities Exchange of 1934, as amended (“Control Person”), of the Trustee shall be indemnified by the Trust and held harmless against any loss, liability or expense (including reasonable attorney’s fees) (i) incurred in connection with any claim or legal action relating to (a) this Agreement, (b) the Mortgage Loans or (c) the Certificates, (ii) incurred in connection with the performance of any of the Trustee’s duties hereunder, other than any loss, liability or expense (x) incurred by reason of willful misfeasance, bad faith or negligence in the performance of any of the Trustee’s duties hereunder or (y) which would not constitute an “unanticipated expense incurred by the REMIC” within the meaning of Treasury Regulations Section 1.860G-1(b)(3)(ii) and (iii) incurred by reason of any action of the Trustee taken at the direction of the Certificateholders. Such indemnity shall survive the termination of this Agreement or the resignation or removal of the Trustee hereunder. Without limiting the foregoing, and except for any such expense, disbursement or advance as may arise from the Trustee’s negligence, bad faith or willful misconduct, or which would not be an “unanticipated expense” within the meaning of the second preceding sentence, the Trustee shall be reimbursed by the Trust for all reasonable expenses, disbursements and advances incurred or made by the Trustee in accordance with any of the provisions of this Agreement with respect to: (A) the reasonable compensation and the expenses and disbursements of its counsel not associated with the closing of the issuance of the Certificates, (B) the reasonable compensation, expenses and disbursements of any accountant, engineer, appraiser or other agent that is not regularly employed by the Trustee, to the extent that the Trustee must engage such Persons to perform acts or services hereunder and (C) printing and engraving expenses in connection with preparing any Definitive Certificates. The Trust shall fulfill its obligations under this paragraph from amounts on deposit from time to time in the Distribution Account.

 

Section 8.06 Eligibility Requirements for Trustee. 

The Trustee hereunder shall at all times be a corporation or association organized and doing business under the laws the United States of America or any state thereof, authorized under such laws to exercise corporate trust powers, having a combined capital and surplus of at least $50,000,000, subject to supervision or examination by federal or state authority and with a credit rating of at least investment grade. If such corporation or association publishes reports of condition at least annually, pursuant to law or to the requirements of the aforesaid supervising or examining authority, then for the purposes of this Section 8.06 the combined capital and surplus of such corporation or association shall be deemed to be its combined capital and surplus as set forth in its most recent report of condition so published. In case at any time the Trustee shall cease to be eligible in accordance with the provisions of this Section 8.06, the Trustee shall 

	  
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resign immediately in the manner and with the effect specified in Section 8.07 hereof. The entity serving as Trustee may have normal banking and trust relationships with the Depositor and its affiliates or the Master Servicer and its affiliates; provided, however, that such entity cannot be an affiliate of the Master Servicer other than the Trustee in its role as successor to the Master Servicer.

 

Section 8.07 Resignation and Removal of Trustee. 

The Trustee may at any time resign and be discharged from the trusts hereby created by giving written notice of resignation to the Depositor and the Master Servicer and each Rating Agency not less than 60 days before the date specified in such notice when, subject to Section 8.08, such resignation is to take effect, and acceptance by a successor trustee in accordance with Section 8.08 meeting the qualifications set forth in Section 8.06. If no successor trustee meeting such qualifications shall have been so appointed by the Depositor and have accepted appointment within 30 days after the giving of such notice of resignation, the resigning Trustee may petition any court of competent jurisdiction for the appointment of a successor trustee.

If at any time the Trustee shall cease to be eligible in accordance with the provisions of Section 8.06 hereof and shall fail to resign after written request thereto by the Depositor, or if at any time the Trustee shall become incapable of acting, or shall be adjudged as bankrupt or insolvent, or a receiver of the Trustee or of its property shall be appointed, or any public officer shall take charge or control of the Trustee or of its property or affairs for the purpose of rehabilitation, conservation or liquidation, or a tax is imposed with respect to the Trust Fund by any state in which the Trustee or the Trust Fund is located and the imposition of such tax would be avoided by the appointment of a different trustee, then the Depositor or the Master Servicer may remove the Trustee and appoint a successor trustee by written instrument, in triplicate, one copy of which instrument shall be delivered to the Trustee so removed, one copy of which shall be delivered to the Master Servicer and one copy to the successor trustee. 

The Holders of Certificates entitled to at least 51% of the Voting Rights may at any time remove the Trustee and appoint a successor trustee by written instrument or instruments, in triplicate, signed by such Holders or their attorneys-in-fact duly authorized, one complete set of which instruments shall be delivered by the successor Trustee to the Master Servicer, one complete set to the Trustee so removed and one complete set to the successor so appointed. Notice of any removal of the Trustee shall be given to each Rating Agency by the successor trustee.

Any resignation or removal of the Trustee and appointment of a successor trustee pursuant to any of the provisions of this Section 8.07 shall become effective upon acceptance by the successor trustee of appointment as provided in Section 8.08 hereof.

 

Section 8.08 Successor Trustee. 

Any successor trustee appointed as provided in Section 8.07 hereof shall execute, acknowledge and deliver to the Depositor and to its predecessor trustee and the Master Servicer 

	  
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an instrument accepting such appointment hereunder and thereupon the resignation or removal of the predecessor trustee shall become effective and such successor trustee, without any further act, deed or conveyance, shall become fully vested with all the rights, powers, duties and obligations of its predecessor hereunder, with the like effect as if originally named as trustee herein. The Depositor, the Master Servicer and the predecessor trustee shall execute and deliver such instruments and do such other things as may reasonably be required for more fully and certainly vesting and confirming in the successor trustee all such rights, powers, duties, and obligations.

 

No successor trustee shall accept appointment as provided in this Section 8.08 unless at the time of such acceptance such successor trustee shall be eligible under the provisions of Section 8.06 hereof and its appointment shall not adversely affect the then current rating of the Certificates, as confirmed in writing by each Rating Agency.

Upon acceptance by a successor trustee of appointment as provided in this Section 8.08, the Depositor shall mail notice of the succession of such trustee hereunder to all Holders of Certificates. If the Depositor fails to mail such notice within 10 days after acceptance by the successor trustee of appointment, the successor trustee shall cause such notice to be mailed at the expense of the Depositor.

 

Section 8.09 Merger or Consolidation of Trustee. 

Any corporation or other entity into which the Trustee may be merged or converted or with which it may be consolidated or any corporation or other entity resulting from any merger, conversion or consolidation to which the Trustee shall be a party, or any corporation or other entity succeeding to the business of the Trustee, shall be the successor of the Trustee hereunder, provided that such corporation or other entity shall be eligible under the provisions of Section 8.06 hereof, without the execution or filing of any paper or further act on the part of any of the parties hereto, anything herein to the contrary notwithstanding.

 

Section 8.10 Appointment of Co-Trustee or Separate Trustee. 

Notwithstanding any other provisions of this Agreement, at any time, for the purpose of meeting any legal requirements of any jurisdiction in which any part of the Trust Fund or property securing any Mortgage Note may at the time be located, the Master Servicer and the Trustee acting jointly shall have the power and shall execute and deliver all instruments to appoint one or more Persons approved by the Trustee to act as co-trustee or co-trustees jointly with the Trustee, or separate trustee or separate trustees, of all or any part of the Trust Fund, and to vest in such Person or Persons, in such capacity and for the benefit of the Certificateholders, such title to the Trust Fund or any part thereof, whichever is applicable, and, subject to the other provisions of this Section 8.10, such powers, duties, obligations, rights and trusts as the Master Servicer and the Trustee may consider necessary or desirable. If the Master Servicer shall not have joined in such appointment within 15 days after the receipt by it of a request to do so, or in the case a Master Servicer Event of Termination shall have occurred and be continuing, the Trustee alone shall have the power to make such appointment. No co-trustee or separate trustee hereunder shall be required to meet the terms of eligibility as a successor trustee under Section 

	  
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8.06 and no notice to Certificateholders of the appointment of any co-trustee or separate trustee shall be required under Section 8.08.

 

Every separate trustee and co-trustee shall, to the extent permitted by law, be appointed and act subject to the following provisions and conditions:

(i)     To the extent necessary to effectuate the purposes of this Section 8.10, all rights, powers, duties and obligations conferred or imposed upon the Trustee, except for the obligation of the Trustee (as successor master servicer) under this Agreement to advance funds on behalf of the Master Servicer, shall be conferred or imposed upon and exercised or performed by the Trustee and such separate trustee or co-trustee jointly (it being understood that such separate trustee or co-trustee is not authorized to act separately without the Trustee joining in such act), except to the extent that under any law of any jurisdiction in which any particular act or acts are to be performed (whether as Trustee hereunder or as successor to the Master Servicer hereunder), the Trustee shall be incompetent or unqualified to perform such act or acts, in which event such rights, powers, duties and obligations (including the holding of title to the applicable Trust Fund or any portion thereof in any such jurisdiction) shall be exercised and performed singly by such separate trustee or co-trustee, but solely at the direction of the Trustee;

(ii)    No trustee hereunder shall be held personally liable by reason of any act or omission of any other trustee hereunder and such appointment shall not, and shall not be deemed to, constitute any such separate trustee or co-trustee as agent of the Trustee; and

(iii)   The Trustee may at any time accept the resignation of or remove any separate trustee or co-trustee.

Any notice, request or other writing given to the Trustee shall be deemed to have been given to each of the separate trustees and co-trustees, when and as effectively as if given to each of them. Every instrument appointing any separate trustee or co-trustee shall refer to this Agreement and the conditions of this Article VIII. Each separate trustee and co-trustee, upon its acceptance of the trusts conferred, shall be vested with the estates or property specified in its instrument of appointment, either jointly with the Trustee or separately, as may be provided therein, subject to all the provisions of this Agreement, specifically including every provision of this Agreement relating to the conduct of, affecting the liability of, or affording protection to, the Trustee. Every such instrument shall be filed with the Trustee and a copy thereof given to the Master Servicer and the Depositor.

Any separate trustee or co-trustee may, at any time, constitute the Trustee its agent or attorney-in-fact, with full power and authority, to the extent not prohibited by law, to do any lawful act under or in respect of this Agreement on its behalf and in its name. If any separate trustee or co-trustee shall die, become incapable of acting, resign or be removed, all of its estates, properties, rights, remedies and trusts shall vest in and be exercised by the Trustee, to the extent permitted by law, without the appointment of a new or successor trustee.

	  
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ARTICLE IX

 

CONCERNING THE TRUST ADMINISTRATOR AND THE MASTER SERVICER

 

Section 9.01 Duties of Trust Administrator. 

The Trust Administrator shall undertake to perform such duties and only such duties as are specifically set forth in this Agreement. 

The Trust Administrator, upon receipt of all resolutions, certificates, statements, opinions, reports, documents, orders or other instruments furnished to the Trust Administrator that are specifically required to be furnished pursuant to any provision of this Agreement shall examine them to determine whether they are in the form required by this Agreement; provided, however, that the Trust Administrator shall not be responsible for the accuracy or content of any such resolution, certificate, statement, opinion, report, document, order or other instrument. If any such instrument is found not to conform in any material respect to the requirements of this Agreement, the Trust Administrator shall notify the Certificateholders of such non-conforming instrument in the event the Trust Administrator, after so requesting, does not receive a satisfactorily corrected instrument.

No provision of this Agreement shall be construed to relieve the Trust Administrator from liability for its own negligent action, its own negligent failure to act or its own willful misconduct; provided, however, that:

(i)     the duties and obligations of the Trust Administrator shall be determined solely by the express provisions of this Agreement, the Trust Administrator shall not be liable except for the performance of such duties and obligations as are specifically set forth in this Agreement, no implied covenants or obligations shall be read into this Agreement against the Trust Administrator and the Trust Administrator may conclusively rely, as to the truth of the statements and the correctness of the opinions expressed therein, upon any certificates or opinions furnished to the Trust Administrator and conforming to the requirements of this Agreement which it believed in good faith to be genuine and to have been duly executed by the proper authorities respecting any matters arising hereunder;

(ii)    the Trust Administrator shall not be liable for an error of judgment made in good faith by a Responsible Officer or Responsible Officers of the Trust Administrator, unless it shall be conclusively determined by a court of competent jurisdiction, such determination no longer subject to appeal, that the Trust Administrator was negligent in ascertaining the pertinent facts;

(iii)   the Trust Administrator shall not be liable with respect to any action taken, suffered or omitted to be taken by it in good faith in accordance with the direction of Holders of Certificates evidencing not less than 25% of the Voting Rights of Certificates relating to the time, method and place of conducting any proceeding for any remedy 

	  
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available to the Trust Administrator, or exercising or omitting to exercise any trust or power conferred upon the Trust Administrator under this Agreement; and

(iv)   The Trust Administrator shall not be accountable, shall have no liability and makes no representation as to any acts or omissions hereunder of the Master Servicer or the Trustee.

 

Section 9.02 Certain Matters Affecting the Trust Administrator. 

Except as otherwise provided in Section 9.01:

(i)     the Trust Administrator may request and conclusively rely upon and shall be fully protected in acting or refraining from acting upon any resolution, Officer’s Certificate, certificate of auditors or any other certificate, statement, instrument, opinion, report, notice, request, consent, order, appraisal, bond or other paper or document believed by it to be genuine and to have been signed or presented by the proper party or parties and the Trust Administrator shall have no responsibility to ascertain or confirm the genuineness of any signature of any such party or parties;

(ii)    the Trust Administrator may consult with counsel, financial advisers or accountants and the advice of any such counsel, financial advisers or accountants and any advice or Opinion of Counsel shall be full and complete authorization and protection in respect of any action taken or suffered or omitted by it hereunder in good faith and in accordance with such advice or Opinion of Counsel;

(iii)   the Trust Administrator shall not be liable for any action taken, suffered or omitted by it in good faith and believed by it to be authorized or within the discretion or rights or powers conferred upon it by this Agreement;

(iv)   the Trust Administrator shall not be bound to make any investigation into the facts or matters stated in any resolution, certificate, statement, instrument, opinion, report, notice, request, consent, order, approval, bond or other paper or document, unless requested in writing so to do by Holders of Certificates evidencing not less than 25% of the Voting Rights allocated to each Class of Certificates; provided, however, that if the payment within a reasonable time to the Trust Administrator of the costs, expenses or liabilities likely to be incurred by it in the making of such investigation is, in the opinion of the Trust Administrator, not reasonably assured to the Trust Administrator by the security afforded to it by the terms of this Agreement, the Trust Administrator may require reasonable indemnity against such expense or liability as a condition to so proceeding. Nothing in this clause (iv) shall derogate from the obligation of the Master Servicer to observe any applicable law prohibiting disclosure of information regarding the Mortgagors;

(v)    the Trust Administrator may execute any of the trusts or powers hereunder or perform any duties hereunder either directly or by or through agents or attorneys or a custodian and the Trust Administrator shall not be responsible for any misconduct or 

	  
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negligence on the part of any such agent, attorney or custodian appointed by the Trust Administrator with due care;

 

(vi)   the Trust Administrator shall not be required to risk or expend its own funds or otherwise incur any financial liability in the performance of any of its duties or in the exercise of any of its rights or powers hereunder if it shall have reasonable grounds for believing that repayment of such funds or adequate indemnity against such risk or liability is not assured to it, and none of the provisions contained in this Agreement shall in any event require the Trust Administrator to perform, or be responsible for the manner of performance of, any of the obligations of the Master Servicer under this Agreement, except during such time, if any, as the Trust Administrator shall be the successor to, and be vested with the rights, duties, powers and privileges of, the Master Servicer in accordance with the terms of this Agreement;

(vii)         [reserved];

(viii)        [reserved];

(ix)   the Trust Administrator shall be under no obligation to exercise any of the trusts, rights or powers vested in it by this Agreement or to institute, conduct or defend any litigation hereunder or in relation hereto at the request, order or direction of any of the Certificateholders, pursuant to the provisions of this Agreement, unless such Certificateholders shall have offered to the Trust Administrator reasonable security or indemnity satisfactory to the Trust Administrator against the costs, expenses and liabilities which may be incurred therein or thereby.

The Trust Administrator shall have no duty (A) to see to any recording, filing, or depositing of this Agreement or any agreement referred to herein or any financing statement or continuation statement evidencing a security interest, or to see to the maintenance of any such recording or filing or depositing or to any rerecording, refiling or redepositing thereof, (B) to see to the provision of any insurance or (C) to see to the payment or discharge of any tax, assessment, or other governmental charge or any lien or encumbrance of any kind owing with respect to, assessed or levied against, any part of the Trust Fund other than from funds available in the Distribution Account.

 

Section 9.03 Trust Administrator Not Liable for Certificates or Mortgage Loans.

The recitals contained herein and in the Certificates shall be taken as the statements of the Depositor and the Trust Administrator assumes no responsibility for their correctness. The Trust Administrator makes no representations as to the validity or sufficiency of this Agreement or of the Certificates or of any Mortgage Loan or related document other than with respect to the Trust Administrator’s execution and authentication of the Certificates. The Trust Administrator shall not be accountable for the use or application by the Depositor or the Master Servicer of any funds paid to the Depositor or the Master Servicer in respect of the Mortgage Loans or deposited in or withdrawn from the Collection Account by the Depositor or the Master Servicer.

	  
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Section 9.04 Trust Administrator May Own Certificates. 

The Trust Administrator in its individual or any other capacity may become the owner or pledgee of Certificates and may transact business with the parties hereto and their Affiliates with the same rights as it would have if it were not the Trust Administrator.

 

Section 9.05 Trust Administrator’s Fees and Expenses. 

The Trust Administrator shall be compensated by the Master Servicer as separately agreed with the Master Servicer. The Trust Administrator and any director, officer, employee, agent or “control person” within the meaning of the Securities Act of 1933, as amended, and the Securities Exchange of 1934, as amended (“Control Person”), of the Trust Administrator shall be indemnified by the Trust and held harmless against any loss, liability or expense (including reasonable attorney’s fees) (i) incurred in connection with any claim or legal action relating to (a) this Agreement, (b) the Mortgage Loans or (c) the Certificates, other than any loss, liability or expense incurred by reason of willful misfeasance, bad faith or negligence in the performance of any of the Trust Administrator’s duties or the exercise of its rights hereunder, (ii) incurred in connection with the performance of any of the Trust Administrator’s duties hereunder, other than any loss, liability or expense (x) incurred by reason of willful misfeasance, bad faith or negligence in the performance of any of the Trust Administrator’s duties hereunder or (y) which would not constitute an “unanticipated expense incurred by the REMIC” within the meaning of Treasury Regulations Section 1.860G-1(b)(3)(ii), or (iii) incurred by reason of any action of the Trust Administrator taken at the direction of the Certificateholders. Such indemnity shall survive the termination of this Agreement or the resignation or removal of the Trust Administrator hereunder. Without limiting the foregoing, and except for any such expense, disbursement or advance as may arise from the Trust Administrator’s negligence, bad faith or willful misconduct, or which would not be an “unanticipated expense” within the meaning of the second preceding sentence, the Trust Administrator shall be reimbursed by the Trust for all reasonable expenses, disbursements and advances incurred or made by the Trust Administrator in accordance with any of the provisions of this Agreement with respect to: (A) the reasonable compensation and the expenses and disbursements of its counsel not associated with the closing of the issuance of the Certificates, (B) the reasonable compensation, expenses and disbursements of any accountant, engineer, appraiser or other agent that is not regularly employed by the Trust Administrator, to the extent that the Trust Administrator must engage such Persons to perform acts or services hereunder and (C) printing and engraving expenses in connection with preparing any Definitive Certificates. The Trust shall fulfill its obligations under this paragraph from amounts on deposit from time to time in the Distribution Account.

 

Section 9.06 Eligibility Requirements for Trust Administrator. 

The Trust Administrator hereunder shall at all times be a corporation or association organized and doing business under the laws the United States of America or any state thereof, authorized under such laws to exercise corporate trust powers, having a combined capital and surplus of at least $50,000,000, subject to supervision or examination by federal or state authority and with a credit rating of at least investment grade. If such corporation or association publishes reports of condition at least annually, pursuant to law or to the 

	  
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requirements of the aforesaid supervising or examining authority, then for the purposes of this Section 9.06 the combined capital and surplus of such corporation or association shall be deemed to be its combined capital and surplus as set forth in its most recent report of condition so published. In case at any time the Trust Administrator shall cease to be eligible in accordance with the provisions of this Section 9.06, the Trust Administrator shall resign immediately in the manner and with the effect specified in Section 9.07 hereof. The entity serving as Trust Administrator may have normal banking and trust relationships with the Depositor and its affiliates or the Trustee and its affiliates.

 

Section 9.07 Resignation and Removal of Trust Administrator. 

The Trust Administrator may at any time resign by giving written notice of resignation to the Depositor and the Trustee and each Rating Agency not less than 60 days before the date specified in such notice when, subject to Section 9.08, such resignation is to take effect, and acceptance by a successor trust administrator in accordance with Section 9.08 meeting the qualifications set forth in Section 9.06. If no successor trust administrator meeting such qualifications shall have been so appointed by the Depositor or the Trustee and have accepted appointment within 30 days after the giving of such notice of resignation, the resigning Trust Administrator may petition any court of competent jurisdiction for the appointment of a successor trust administrator.

If at any time the Trust Administrator shall cease to be eligible in accordance with the provisions of Section 9.06 hereof and shall fail to resign after written request thereto by the Depositor, or if at any time the Trust Administrator shall become incapable of acting, or shall be adjudged as bankrupt or insolvent, or a receiver of the Trust Administrator or of its property shall be appointed, or any public officer shall take charge or control of the Trust Administrator or of its property or affairs for the purpose of rehabilitation, conservation or liquidation, or a tax is imposed with respect to the Trust Fund by any state in which the Trust Administrator or the Trust Fund is located and the imposition of such tax would be avoided by the appointment of a different Trust Administrator, then the Depositor or the Trustee may remove the Trust Administrator and appoint a successor trust administrator by written instrument, in triplicate, one copy of which instrument shall be delivered to the Trust Administrator so removed, one copy of which shall be delivered to the Master Servicer and one copy to the successor trust administrator. 

The Trust Administrator (i) may not be a Master Servicer, Servicer, the Depositor or an affiliate of the Depositor unless the Trust Administrator is in an institutional trust department, (ii) must be authorized to exercise corporate trust powers under the laws of its jurisdiction of organization, and (iii) must be rated at least “A/F1” by Fitch, if Fitch is a Rating Agency, or the equivalent rating by S&P or Moody's (or such other rating acceptable to Fitch pursuant to a rating confirmation). If no successor trust administrator shall have been appointed and shall have accepted appointment within 60 days after Wells Fargo Bank, National Association, as Trust Administrator, ceases to be the trust administrator pursuant to this Section 9.07, then the Trustee shall perform the duties of the Trust Administrator pursuant to this Agreement. The Trustee shall notify the Rating Agencies of any change of Trust Administrator.

	  
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The Holders of Certificates entitled to at least 51% of the Voting Rights may at any time remove the Trust Administrator and appoint a successor trust administrator by written instrument or instruments, in triplicate, signed by such Holders or their attorneys-in-fact duly authorized, one complete set of which instruments shall be delivered by the successor Trust Administrator to the Trustee, one complete set to the Trust Administrator so removed and one complete set to the successor so appointed. Notice of any removal of the Trust Administrator shall be given to each Rating Agency by the successor trust administrator.

Any resignation or removal of the Trust Administrator and appointment of a successor trust administrator pursuant to any of the provisions of this Section 9.07 shall become effective upon acceptance by the successor trust administrator of appointment as provided in Section 9.08 hereof.

 

Section 9.08 Successor Trust Administrator. 

Any successor trust administrator appointed as provided in Section 9.07 hereof shall execute, acknowledge and deliver to the Depositor and to its predecessor trust administrator and the Trustee an instrument accepting such appointment hereunder and thereupon the resignation or removal of the predecessor trust administrator shall become effective and such successor trust administrator, without any further act, deed or conveyance, shall become fully vested with all the rights, powers, duties and obligations of its predecessor hereunder, with the like effect as if originally named as trust administrator herein. The Depositor, the Trustee, the Master Servicer and the predecessor trust administrator shall execute and deliver such instruments and do such other things as may reasonably be required for more fully and certainly vesting and confirming in the successor trust administrator all such rights, powers, duties, and obligations.

No successor trust administrator shall accept appointment as provided in this Section 9.08 unless at the time of such acceptance such successor trust administrator shall be eligible under the provisions of Section 9.06 hereof and its appointment shall not adversely affect the then current rating of the Certificates, as confirmed in writing by each Rating Agency.

Upon acceptance by a successor trust administrator of appointment as provided in this Section 9.08, the Depositor shall mail notice of the succession of such trust administrator hereunder to all Holders of Certificates. If the Depositor fails to mail such notice within 10 days after acceptance by the successor trust administrator of appointment, the successor trust administrator shall cause such notice to be mailed at the expense of the Depositor.

 

Section 9.09 Merger or Consolidation of Trust Administrator. 

Any corporation or other entity into which the Trust Administrator may be merged or converted or with which it may be consolidated or any corporation or other entity resulting from any merger, conversion or consolidation to which the Trust Administrator shall be a party, or any corporation or other entity succeeding to the business of the Trust Administrator, shall be the successor of the Trust Administrator hereunder, provided that such corporation or other entity shall be eligible under the provisions of Section 9.06 hereof, without the execution or filing of 

	  
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any paper or further act on the part of any of the parties hereto, anything herein to the contrary notwithstanding.

 

Section 9.10 [Reserved].

 

Section 9.11 Tax Matters.

It is intended that the assets with respect to which any REMIC election is to be made, as set forth in the Preliminary Statement, shall constitute, and that the conduct of matters relating to such assets shall be such as to qualify such assets as, a “real estate mortgage investment conduit” as defined in and in accordance with the REMIC Provisions. In furtherance of such intention, the Master Servicer covenants and agrees that it shall act as agent (and the Master Servicer is hereby appointed to act as agent) on behalf of such REMIC and that in such capacity it shall: 

(a)    prepare, submit to the Trustee for execution, and file, or cause to be prepared and filed, in a timely manner, a U.S. Real Estate Mortgage Investment Conduit (REMIC) Income Tax Return (Form 1066 or any successor form adopted by the Internal Revenue Service) and prepare and file or cause to be prepared and filed with the Internal Revenue Service and applicable state or local tax authorities income tax or information returns for each taxable year with respect to such REMIC, containing such information and at the times and in the manner as may be required by the Code or state or local tax laws, regulations, or rules, and furnish or cause to be furnished to Certificateholders the schedules, statements or information at such times and in such manner as may be required thereby, including without limitation, the calculation of any original issue discount using the Prepayment Assumption; 

(b)    apply for an Employee Identification Number from the Internal Revenue Service via Form SS-4 or other acceptable method for such REMIC and within thirty days of the Closing Date, furnish or cause to be furnished to the Internal Revenue Service, on Form 8811 or as otherwise may be required by the Code, the name, title, address, and telephone number of the person that the holders of the Certificates may contact for tax information relating thereto, together with such additional information as may be required by such Form, and update such information at the time or times in the manner required by the Code; 

(c)    make or cause to be made elections that such assets be treated as a REMIC on the federal tax return for its first taxable year (and, if necessary, under applicable state law); 

(d)    provide information necessary for the computation of tax imposed on the transfer of a Residual Certificate to a Person that is not a Permitted Transferee described in clauses (i)-(iv) of the definition thereof, or an agent (including a broker, nominee or other middleman) of a non-Permitted Transferee (the reasonable cost of computing and furnishing such information may be charged to the Person liable for such tax); 

(e)    to the extent that they are under its control, conduct matters relating to such assets at all times that any Certificates are outstanding so as to maintain the status as a REMIC under the REMIC Provisions;

	  
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(f)    not knowingly or intentionally take any action or omit to take any action that would cause the termination of the REMIC status; 

(g)    not permit the creation of any interests in such REMIC other than the Certificates; 

(h)    not receive any amount representing a fee or other compensation for services (except as otherwise permitted by this Agreement); 

(i)     receive any income attributable to any asset which is neither a “qualified mortgage” nor a “permitted investment” within the meaning of the REMIC Provisions; 

(j)     not receive any contributions to such REMIC after the Startup Day that would be subject to tax under Section 860G(d) of the Code; 

(k)    not dispose of any assets of such REMIC at a gain if such disposition would be a “prohibited transaction” within the meaning of Section 860F(a)(2) of the Code; 

(l)     pay, from the sources specified in the last paragraph of this Section 9.11, the amount of any federal or state tax, including prohibited transaction taxes as described below, imposed on such REMIC prior to its termination when and as the same shall be due and payable (but such obligation shall not prevent the Master Servicer or any other appropriate Person from contesting any such tax in appropriate proceedings and shall not prevent the Master Servicer from causing the withholding of payment of such tax, if permitted by law, pending the outcome of such proceedings); 

(m)    ensure that federal, state or local income tax or information returns shall be signed by the Trustee or such other Person as may be required to sign such returns by the Code or state or local laws, regulations or rules; and 

(n)    maintain records relating to such REMIC, including but not limited to the income, expenses, assets and liabilities thereof and the adjusted basis of the assets determined at such intervals as may be required by the Code, as may be necessary to prepare the foregoing returns, schedules, statements or information. 

The Holder of the largest Percentage Interest of the Class A-LR Certificates shall act as “tax matters person” within the meaning of Treasury Regulations Section 1.860F-4(d) for the Lower-Tier REMIC and the Holder of the largest Percentage Interest of the Class A-UR Certificates shall act as “tax matters person” within the meaning of Treasury Regulations Section 1.860F-4(d) for the Upper-Tier REMIC created pursuant to this Agreement. The Master Servicer is hereby designated as agent of such Class A-LR or Class A-UR Certificateholder for such purposes (or if the Master Servicer is not so permitted, such Holder shall be the tax matters person in accordance with the REMIC Provisions). In such capacity, the Master Servicer shall, as and when necessary and appropriate, represent the related REMIC in any administrative or judicial proceedings relating to an examination or audit by any governmental taxing authority, request an administrative adjustment as to any taxable year of such REMIC, enter into settlement 

	  
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agreements with any governmental taxing agency, extend any statute of limitations relating to any tax item of such REMIC, and otherwise act on behalf of such REMIC in relation to any tax matter or controversy involving it.

 

In order to enable the Master Servicer to perform its duties as set forth herein, the Depositor shall provide, or cause to be provided, to the Master Servicer within ten (10) days after the Closing Date all information or data that the Master Servicer requests in writing and determines to be relevant for tax purposes to the valuations and offering prices of the Certificates, including, without limitation, the price, yield, prepayment assumption and projected cash flows of the Certificates and the Mortgage Loans. Thereafter, the Depositor shall provide to the Master Servicer promptly upon written request therefor, any such additional information or data that the Master Servicer may, from time to time, reasonably request in order to enable the Master Servicer to perform its duties as set forth herein. The Depositor hereby indemnifies the Master Servicer for any losses, liabilities, damages, claims or expenses of the Master Servicer arising from any errors or miscalculations of the Master Servicer that result from any failure of the Depositor to provide, or to cause to be provided, accurate information or data to the Master Servicer on a timely basis.

In the event that any tax is imposed on “prohibited transactions” of any REMIC hereunder as defined in Section 860F(a)(2) of the Code, on the “net income from foreclosure property” of such REMIC as defined in Section 860G(c) of the Code, on any contribution to such REMIC after the Startup Day pursuant to Section 860G(d) of the Code, or any other tax is imposed, if not paid as otherwise provided for herein, such tax shall be paid by (i) the Master Servicer, the Trustee or the Trust Administrator, respectively, if any such other tax arises out of or results from a breach by the Master Servicer, the Trustee or the Trust Administrator, respectively, of any of its obligations under this Agreement, (ii) the Transferor, if any such tax arises out of or results from the Transferor’s obligation to repurchase a Mortgage Loan pursuant to Section 2.02 or 2.03 or (iii) in all other cases, or in the event that the Trustee, the Trust Administrator, the Master Servicer or the Transferor fails to honor its obligations under the preceding clause (i), (ii) or (iii), any such tax will be paid with amounts otherwise to be distributed to the Certificateholders, as provided in Section 3.10(b).

 

Section 9.12 Periodic Filings. 

(a)    With respect to each Distribution Date, prior to the issuance of the related monthly statement to Certificateholders pursuant to Section 4.04 (each, a “Distribution Date Statement”), the Master Servicer shall confirm that it has received all distribution and/or servicing information required to be provided to the Master Servicer by each Servicer for inclusion in such Distribution Date Statement. In the event the Master Servicer determines that any such information has not been provided as required or is materially incorrect, the Master Servicer shall immediately notify the applicable Servicer and use its reasonable best efforts to cause the Servicer to provide or correct, as the case may be, such information promptly (but in any event in time to permit the Master Servicer to distribute the Distribution Date Statement at the time required in this Agreement).

	  
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(b)    Promptly upon receipt by the Master Servicer of (i) any officer’s certificate relating to any Servicer’s annual compliance with the terms of the applicable Servicing Agreement, (ii) any report of any Servicer’s independent public accountants relating to the Servicer’s compliance with servicing standards, as required under the applicable Servicing Agreement, and (iii) any report of the Master Servicer’s independent public accountants required pursuant to Section 3.22, the Master Servicer shall review such officer’s certificate and reports. As part of the Form 10-K required to be filed pursuant to paragraph (c) of this Section 9.12, the Master Servicer shall include each such annual statement of compliance (as well as any annual statement of compliance of the Master Servicer required pursuant to Section 3.21), and each such accountant’s report, as well as a report of any significant deficiencies relating to any Servicer’s performance of its obligations under the applicable Servicing Agreement.

(c)    The Master Servicer shall reasonably cooperate with the Depositor to enable the Trust to satisfy its reporting requirements under the Exchange Act. The Master Servicer shall prepare on behalf of the Trust any Forms 8-K (or other comparable required Form containing the same or comparable information or other information mutually agreed upon) and 10-K customary for similar securities as required by the Exchange Act and the rules and regulations promulgated thereunder, and the Master Servicer shall sign and file (via the Securities and Exchange Commission’s Electronic Data Gathering and Retrieval System) such forms on behalf of the Trust.

(d)    Each Form 8-K shall be filed by the Master Servicer within 15 days after each Distribution Date and shall include a copy of the statement to Certificateholders for such Distribution Date as an exhibit thereto. Prior to March 30th of each year beginning in 2005 (or such earlier date as may be required by the Exchange Act and the rules and regulations promulgated thereunder), the Master Servicer shall file a Form 10-K, in substance as required by applicable law or applicable Securities and Exchange Commission staff’s interpretations. Such Form 10-K shall include as exhibits the annual statements of compliance, the accountant’s reports and any report of significant deficiencies relating to the Servicer’s performance of its obligations under the applicable Servicing Agreement described in paragraph (b) of this Section 9.12, in each case to the extent they have been timely delivered to the Master Servicer. If they are not so timely delivered, the Master Servicer shall notify the Depositor and upon direction from the Depositor, file a Form 12b-25 including such documents as exhibits within fifteen (15) calendar days after March 30th of such year. The Master Servicer shall have no liability with respect to any failure to properly prepare or file such periodic reports resulting from or relating to the Master Servicer’s inability or failure to obtain any information not resulting from its own negligence, bad faith or willful misconduct. Each Form 10-K shall also include a certification in the form attached hereto as Exhibit N or in such other form as may be required by Rules 13a-14 and 15d-14 under the Exchange Act, as applicable, and any directives or interpretations thereof by the Securities and Exchange Commission (the “Certification”), which certification shall be signed by a Master Servicing Officer.

(e)    Upon any filing with the Securities and Exchange Commission, the Master Servicer shall promptly deliver to the Depositor a copy of such executed report, statement or information.

	  
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(f)    The Master Servicer shall file a Form 15 Suspension Notification with respect to the Trust on or prior to January 30, 2005 unless specifically directed in writing not to do so by the Depositor.

 

Section 9.13 [Reserved]

 

Section 9.14 [Reserved]

	  
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ARTICLE X

 

TERMINATION

 

Section 10.01 Termination upon Liquidation or Purchase of All Mortgage Loans. 

(a)    The obligations and responsibilities of the Depositor, the Master Servicer, the Trust Administrator and the Trustee created hereby with respect to the Trust Fund shall terminate upon the earlier of (i) the purchase, in accordance with this Section 10.01, of all Mortgage Loans (and REO Properties) remaining in the Trust Fund at the price equal to the sum of (x) the aggregate Clean-up Call Mortgage Loan Price for all the Mortgage Loans and (y) the aggregate Clean-up Call REO Property Price for all the REO Properties, and (ii) the later of (x) the maturity or other liquidation (or any Advance with respect thereto) of the last Mortgage Loan remaining in the Trust Fund and the disposition of all REO Property and (y) the distribution to the Holders of the Certificates of all amounts required to be distributed to them pursuant to this Agreement. In no event shall the trusts created hereby continue beyond the earlier of (i) the expiration of 21 years from the death of the survivor of the descendants of Joseph P. Kennedy, the late Ambassador of the United States to the Court of St. James’s, living on the date hereof and (ii) the Latest Possible Maturity Date. The right of the Master Servicer to elect to exercise its termination rights pursuant to this clause (a) shall be conditioned upon the Aggregate Pool Principal Balance, at the time of any such repurchase, aggregating less than one percent (1%) of the aggregate Cut-off Date Principal Balance of the Mortgage Loans.

(b)    Within two (2) Business Days after the Master Servicer has elected to exercise its termination rights pursuant to Section 10.01(a), the Master Servicer shall deliver a bid notice for the Mortgage Loans and the REO Properties to UBS Securities LLC and at least two other institutions that are regular purchasers and/or sellers in the secondary market of residential whole Mortgage Loans. The bid notice shall specify the Mortgage Loans and the REO Properties that are being sold, and identify the aggregate Clean-up Call REO Property Price required to be paid for the REO Properties and the other information necessary for the bidders to make bids. The Master Servicer shall also be entitled to submit a bid for the Mortgage Loans and the REO Properties. All bids must be submitted to the Master Servicer on a date determined by the Master Servicer, which date shall be set forth in the bid notice. Only cash bids may be accepted. With respect to the Mortgage Loans to be purchased, if one or more bids that exceed the aggregate Par Call Price are received, the Fair Market Value Call Price for the Mortgage Loans shall be equal to the price bid by the highest bidder, and such bidder shall complete the purchase of the Mortgage Loans and the REO Properties from the Trust Fund at the aggregate Clean-up Call Mortgage Loan Price for the Mortgage Loans and the aggregate Clean-up Call REO Property Price for the REO Properties before the final Distribution Date. With respect to the Mortgage Loans to be purchased, if fewer than three bids are received or no bid exceeds the aggregate of the Par Call Price for the Mortgage Loans, the Fair Market Value Call Price shall be zero and the Master Servicer shall complete the purchase of the Mortgage Loans and the REO Properties from the Trust Fund at the aggregate Clean-up Call Mortgage Loan Price for the Mortgage Loans and the aggregate Clean-up Call REO Property Price for the REO Properties before the final Distribution Date.

	  
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Section 10.02 Final Distribution on the Certificates. 

If on any Determination Date, the Master Servicer determines that there are no Outstanding Mortgage Loans and no other funds or assets in the Trust Fund other than the funds in the Collection Account, the Master Servicer shall direct the Trust Administrator promptly to send a final distribution notice to each Certificateholder. If the Master Servicer elects to exercise its termination rights pursuant to clause (a) of Section 10.01, at least 5 days prior to the date notice is to be mailed to the affected Certificateholders, the Master Servicer shall notify the Depositor and the Trust Administrator of the date the Master Servicer intends to exercise its termination rights.

Notice of any termination of the Trust Fund, or of the exercise of the Master Servicer’s termination rights, specifying the Distribution Date on which related Certificateholders may surrender their Certificates for payment of the final distribution and cancellation, shall be given promptly by the Trust Administrator by letter to related Certificateholders mailed not earlier than the 15th day of the month preceding the month of such final distribution and not later than the 5th day of the month of such final distribution. Any such notice shall specify (a) the Distribution Date upon which final distribution on the related Certificates will be made upon presentation and surrender of such Certificates at the office therein designated, (b) the location of the office or agency at which such presentation and surrender must be made, and (c) that the Record Date otherwise applicable to such Distribution Date is not applicable, distributions being made only upon presentation and surrender of the related Certificates at the office therein specified. The Trust Administrator will give such notice to each Rating Agency at the time such notice is given to related Certificateholders.

Upon presentation and surrender of the related Certificates, the Trust Administrator shall cause to be distributed to the Certificateholders of each related Class, in the order set forth in Section 4.02 hereof, on the final Distribution Date, in proportion to their respective Percentage Interests, with respect to Certificateholders of the same Class, an amount equal to (i) as to each Class of Regular Certificates, the Certificate Principal Balance thereof plus (a) accrued interest thereon (or on their Notional Amount, if applicable) in the case of an interest bearing Certificate and (b) any applicable PO Deferred Amounts in the case of the Class PO Certificates, and (ii) as to the Residual Certificates, the amount, if any, which remains on deposit in the Distribution Account (other than the amounts retained to meet claims) after application pursuant to clause (i) above.

In the event that any affected Certificateholders shall not surrender Certificates for cancellation within six months after the date specified in the above-mentioned written notice, the Trust Administrator shall give a second written notice to the remaining Certificateholders to surrender their Certificates for cancellation and receive the final distribution with respect thereto. If within six months after the second notice all the applicable Certificates shall not have been surrendered for cancellation, the Trust Administrator may take reasonable steps, or may appoint an agent to take reasonable steps, to contact the remaining Certificateholders concerning surrender of their Certificates, and the cost thereof shall be paid out of the funds and other assets of the Master REMIC which remain subject hereto and the Class A-LR and Class A-UR Certificateholders as the beneficial owner of the residual interest issued by the REMICs created under this Agreement shall be entitled to all unclaimed funds and other assets of each related REMIC created under this Agreement, which remain subject hereto, and Certificateholders who have not surrendered Certificates shall look only to such Class A-LR and Class A-UR Certificateholders with respect to any such unclaimed funds and other assets.

	  
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Section 10.03 Additional Termination Requirements. 

(a)    In the event of the purchase pursuant to Section 10.01, the Lower-Tier REMIC shall be terminated in accordance with the following additional requirements, unless the Trust Administrator has been supplied with an Opinion of Counsel, at the expense of the Master Servicer, to the effect that the failure to comply with the requirements of this Section 10.03(a) will not (i) result in the imposition of taxes on “prohibited transactions” as defined in section 860F of the Code on any REMIC created under this Agreement, or (ii) cause any such REMIC to fail to qualify as a REMIC at any time that any Certificates are outstanding:

(i)     The notice given by the Master Servicer under Section 10.02 shall provide that such notice constitutes the adoption of a plan of complete liquidation of the Lower-Tier REMIC as of the date of such notice (or, if earlier, the date on which the first such notice is mailed to Certificateholders). The Master Servicer shall also specify such date in a statement attached to the final tax return of each REMIC created under this Agreement; and

(ii)    At or after the time of adoption of such a plan of complete liquidation and at or prior to the final Distribution Date, the Trust Administrator shall sell all of the assets of the Lower-Tier REMIC to the purchaser specified in Section 10.01 for cash at the purchase price specified in Section 10.01 and shall distribute such cash within 90 days of such adoption in the manner specified in Section 10.02.

(b)    Upon the purchase pursuant to Section 10.01, if no other REMIC would remain outstanding following such purchase, each remaining REMIC shall be terminated in accordance with the following additional requirements, unless the Trust Administrator has been supplied with an Opinion of Counsel, at the expense of the Master Servicer, to the effect that the failure to comply with the requirements of this Section 10.03(b) will not (i) result in the imposition of taxes on “prohibited transactions” as defined in section 860F of the Code on any REMIC created under this Agreement, or (ii) cause any such REMIC to fail to qualify as a REMIC at any time that any Certificates are outstanding:

(i)     The notice given by the Master Servicer under Section 10.02 shall provide that such notice constitutes the adoption of a plan of complete liquidation of each remaining REMIC as of the date of such notice (or, if earlier, the date on which the first such notice is mailed to Certificateholders). The Master Servicer shall also specify such date in a statement attached to the final tax return of each remaining REMIC; and 

(ii)    At or after the time of adoption of any such plan of complete liquidation for each such remaining REMIC and at or prior to the final Distribution Date of the Lower-Tier REMIC, the Trust Administrator shall sell all of the assets of each such remaining REMIC for cash.

	  
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(c)    By its acceptance of a Residual Certificate, the Holder thereof hereby agrees to adopt such a plan of complete liquidation and to take such other action in connection therewith as may be reasonably required to liquidate and otherwise terminate any REMIC created pursuant to this Agreement.

ARTICLE XI

 

MISCELLANEOUS PROVISIONS

 

Section 11.01 Amendment. 

This Agreement may be amended from time to time by the Depositor, the Master Servicer, the Custodians, the Trust Administrator and the Trustee without the consent of any of the Certificateholders (i) to cure any ambiguity or mistake, (ii) to correct any defective provision herein or to supplement any provision herein which may be inconsistent with any other provision herein or in the Prospectus Supplement, (iii) to add to the duties of the Depositor, the Trustee, the Trust Administrator, the Custodians or the Master Servicer, (iv) to add any other provisions with respect to matters or questions arising hereunder or (v) to modify, alter, amend, add to or rescind any of the terms or provisions contained in this Agreement; provided that any action pursuant to clause (iv) or (v) above shall not, as evidenced by an Opinion of Counsel addressed to the Trust Administrator (which Opinion of Counsel shall be an expense of the party requesting the amendment, or if the Trust Administrator requests the amendment, the Trust Fund), adversely affect in any material respect the interests of any Certificateholder; provided, however, that the amendment shall not be deemed to adversely affect in any material respect the interests of the Certificateholders if the Person requesting the amendment obtains a letter from each Rating Agency stating that the amendment would not result in the downgrading or withdrawal of the respective ratings then assigned to the Certificates; it being understood and agreed that any such letter in and of itself will not represent a determination as to the materiality of any such amendment and will represent a determination only as to the credit issues affecting any such rating. The Trust Administrator, the Trustee, the Depositor, the Custodians and the Master Servicer also may at any time and from time to time amend this Agreement without the consent of the Certificateholders to modify, eliminate or add to any of its provisions to such extent as shall be necessary or helpful to (i) maintain the qualification of any REMIC created under this Agreement as a REMIC under the Code, (ii) avoid or minimize the risk of the imposition of any tax on any REMIC pursuant to the Code that would be a claim at any time prior to the final redemption of the Certificates or (iii) comply with any other requirements of the Code, provided that the Trust Administrator has been provided an Opinion of Counsel addressed to the Trust Administrator and the Master Servicer, which opinion shall be an expense of the party requesting such opinion but in any case shall not be an expense of the Trustee, the Trust Administrator or the Trust Fund, to the effect that such action is necessary or helpful to, as applicable, (i) maintain such qualification, (ii) avoid or minimize the risk of the imposition of such a tax or (iii) comply with any such requirements of the Code.

	  
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Section 9.12 of this Agreement may also be amended by the Depositor, the Master Servicer, the Trust Administrator and the Trustee without the consent of any of the Certificateholders, and without the need for any Opinions of Counsel or Rating Agency confirmation, in the event that new guidelines or procedures are issued by the Securities and Exchange Commission with respect to the preparation and filing of the Form 10-K and the Certification required to be attached thereto as referenced in Section 9.12(d).

This Agreement may also be amended from time to time by the Depositor, the Master Servicer, the Custodians, the Trust Administrator and the Trustee with the consent of the Holders of a Majority in Interest of each Class of Certificates affected thereby for the purpose of adding any provisions to or changing in any manner or eliminating any of the provisions of this Agreement or of modifying in any manner the rights of the Holders of Certificates; provided, however, that no such amendment shall (i) reduce in any manner the amount of, or delay the timing of, payments required to be distributed on any Certificate without the consent of the Holder of such Certificate, (ii) adversely affect in any material respect the interests of the Holders of any Class of Certificates in a manner other than as described in the preceding clause (i), without the consent of the Holders of Certificates of such Class evidencing, as to such Class, Percentage Interests aggregating 66% or (iii) reduce the aforesaid percentages of Certificates the Holders of which are required to consent to any such amendment, without the consent of the Holders of all such Certificates then outstanding.

Notwithstanding any contrary provision of this Agreement, the Trust Administrator shall not consent to any amendment to this Agreement (other than pursuant to the second preceding paragraph) unless it shall have first received an Opinion of Counsel addressed to the Trust Administrator, which opinion shall not be an expense of the Trust Administrator or the Trust Fund, to the effect that such amendment is permitted hereunder and will not cause the imposition of any tax under the REMIC Provisions on any REMIC or the Certificateholders or cause any REMIC created under this Agreement to fail to qualify as a REMIC at any time that any Certificates are outstanding.

Promptly after the execution of any amendment to this Agreement requiring the consent of Certificateholders, the Trust Administrator shall furnish written notification of the substance or a copy of such amendment to each Certificateholder and each Rating Agency.

It shall not be necessary for the consent of Certificateholders under this Section to approve the particular form of any proposed amendment, but it shall be sufficient if such consent shall approve the substance thereof. The manner of obtaining such consents and of evidencing the authorization of the execution thereof by Certificateholders shall be subject to such reasonable regulations as the Trust Administrator may prescribe.

Nothing in this Agreement shall require the Trust Administrator to enter into an amendment without receiving an Opinion of Counsel (which Opinion shall not be an expense of the Trust Administrator or the Trust Fund), satisfactory to the Trust Administrator that (i) such amendment is permitted and is not prohibited by this Agreement and that all requirements for amending this Agreement have been complied with; and (ii) either (A) the amendment does not adversely affect in any material respect the interests of any Certificateholder or (B) the 

	  
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conclusion set forth in the immediately preceding clause (A) is not required to be reached pursuant to this Section 11.01.

 

Section 11.02 Recordation of Agreement; Counterparts. 

This Agreement (or an abstract hereof, if acceptable to the applicable recording office) is subject to recordation in all appropriate public offices for real property records in all the towns or other comparable jurisdictions in which any or all of the Mortgaged Properties are situated, and in any other appropriate public office or elsewhere, such recordation to be effected by the Master Servicer at the expense of the Trust on direction by the Trust Administrator (acting at the written direction of a Majority in Interest of the Certificateholders), but only upon direction accompanied by an Opinion of Counsel to the effect that such recordation materially and beneficially affects the interests of the Certificateholders.

For the purpose of facilitating the recordation of this Agreement as herein provided and for other purposes, this Agreement may be executed simultaneously in any number of counterparts, each of which counterparts shall be deemed to be an original, and such counterparts shall constitute but one and the same instrument.

 

Section 11.03 Governing Law. 

THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE SUBSTANTIVE LAWS OF THE STATE OF NEW YORK APPLICABLE TO AGREEMENTS MADE AND TO BE PERFORMED IN THE STATE OF NEW YORK AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HERETO AND THE CERTIFICATEHOLDERS SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.

 

Section 11.04 Intention of Parties. 

It is the express intent of the parties hereto that the conveyance of the Trust Fund by the Depositor to the Trustee be, and be construed as, an absolute sale thereof to the Trustee. It is, further, not the intention of the parties that such conveyance be deemed a pledge thereof by the Depositor to the Trustee. However, in the event that, notwithstanding the intent of the parties, such assets are held to be the property of the Depositor, or if for any other reason this Agreement is held or deemed to create a security interest in such assets, then (i) this Agreement shall be deemed to be a security agreement within the meaning of the Uniform Commercial Code of the State of New York and (ii) the conveyance provided for in this Agreement shall be deemed to be an assignment and a grant by the Depositor to the Trustee, for the benefit of the Certificateholders, of a security interest in all of the assets that constitute the Trust Fund, whether now owned or hereafter acquired.

The Depositor for the benefit of the Certificateholders shall, to the extent consistent with this Agreement, take such actions as may be necessary to ensure that, if this Agreement were deemed to create a security interest in the Trust Fund, such security interest would be deemed to be a perfected security interest of first priority under applicable law and will 

	  
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be maintained as such throughout the term of the Agreement. The Depositor shall arrange for filing any Uniform Commercial Code continuation statements in connection with any security interest granted or assigned to the Trustee for the benefit of the Certificateholder.

 

Section 11.05 Notices. 

(a)    The Trust Administrator shall use its best efforts to promptly provide notice to each Rating Agency with respect to each of the following of which it has actual knowledge:

(i)     Any material change or amendment to this Agreement;

(ii)    The occurrence of any Master Servicer Event of Termination that has not been cured;

(iii)   The resignation or termination of the Master Servicer, either Custodian, the Trust Administrator or the Trustee and the appointment of any successor;

(iv)   The repurchase or substitution of Mortgage Loans pursuant to Section 2.03; and

(v)    The final payment to Certificateholders.

In addition, the Master Servicer shall promptly furnish to each Rating Agency copies of the following:

(i)     Each annual statement as to compliance described in Section 3.21;

(ii)    Each annual independent public accountants’ servicing report described in Section 3.22; and

(iii)   Any notice of a purchase of a Mortgage Loan pursuant to Section 2.02 or 2.03.

(b)    All directions, demands and notices hereunder shall be in writing and shall be deemed to have been duly given when delivered to (a) in the case of the Depositor, Mortgage Asset Securitization Transactions, Inc., 1285 Avenue of the Americas, New York, New York 10019, Attention: General Counsel, (b) in the case of the Master Servicer, Wells Fargo Bank, N.A., 9062 Old Annapolis Road, Columbia, Maryland 21045, or such other address as the Master Servicer may hereafter furnish to each other party to this Agreement in writing, and in the case of Wells Fargo in its capacity as Custodian, Wells Fargo Bank, N.A., 1015 10th Avenue Southeast, Minneapolis, Minnesota 55414 (c) in the case of the Trustee, the Corporate Trust Office, or such other address as the Trustee may hereafter furnish to each other party to this Agreement in writing, (d) in the case of the Rating Agencies, the address specified therefor in the definition corresponding to the name of such Rating Agency, (e) in the case of U.S. Bank, U.S. Bank National Association, EP-MN-WS3D, 60 Livingston Avenue, St. Paul, Minnesota 55107-2292, or such other address as U.S. Bank National Association may hereafter furnish to each other 

	  
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party to this Agreement in writing and (f) in the case of the Trust Administrator, the Corporate Trust Office, or such other address as the Trust Administrator may hereafter furnish to each other party to this Agreement in writing,. Notices to Certificateholders shall be deemed given when mailed, first class postage prepaid, to their respective addresses appearing in the Certificate Register.

 

Section 11.06 Severability of Provisions. 

If any one or more of the covenants, agreements, provisions or terms of this Agreement shall be for any reason whatsoever held invalid, then such covenants, agreements, provisions or terms shall be deemed severable from the remaining covenants, agreements, provisions or terms of this Agreement and shall in no way affect the validity or enforceability of the other provisions of this Agreement or of the Certificates or the rights of the Holders thereof.

 

Section 11.07 Assignment. 

Notwithstanding anything to the contrary contained herein, except as provided in Section 6.02 and this Section 11.07, this Agreement may not be assigned by the Master Servicer without the prior written consent of the Trustee and Depositor. Pursuant to Section 6.05, the Master Servicer shall be permitted to pledge its rights as servicer hereunder to a lender, provided that no such pledge shall permit the termination of the Master Servicer as Master Servicer unless a successor servicer meeting the requirements of Sections 6.04 and 7.02 hereunder shall have assumed the rights and obligations of the Master Servicer hereunder.

 

Section 11.08 Limitation on Rights of Certificateholders. 

The death or incapacity of any Certificateholder shall not operate to terminate this Agreement or the trust created hereby, nor entitle such Certificateholder’s legal representative or heirs to claim an accounting or to take any action or commence any proceeding in any court for a petition or winding up of the trust created hereby, or otherwise affect the rights, obligations and liabilities of the parties hereto or any of them.

No Certificateholder shall have any right to vote (except as provided herein) or in any manner otherwise control the operation and management of the Trust Fund, or the obligations of the parties hereto, nor shall anything herein set forth or contained in the terms of the Certificates be construed so as to constitute the Certificateholders from time to time as partners or members of an association; nor shall any Certificateholder be under any liability to any third party by reason of any action taken by the parties to this Agreement pursuant to any provision hereof.

 

No Certificateholder shall have any right by virtue or by availing itself of any provisions of this Agreement to institute any suit, action or proceeding in equity or at law upon or under or with respect to this Agreement, unless such Holder previously shall have given to the Trustee or the Trust Administrator a written notice of a Master Servicer Event of Termination and of the continuance thereof, as herein provided, and unless the Holders of Certificates evidencing not less than 25% of the Voting Rights evidenced by the Certificates shall also have 

	  
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made written request to the Trustee or the Trust Administrator to institute such action, suit or proceeding in its own name as Trustee or Trust Administrator hereunder and shall have offered to the Trust Administrator such reasonable indemnity as it may require against the costs, expenses, and liabilities to be incurred therein or thereby, and the Trustee or the Trust Administrator, for 60 days after its receipt of such notice, request and offer of indemnity shall have neglected or refused to institute any such action, suit or proceeding; it being understood and intended, and being expressly covenanted by each Certificateholder with every other Certificateholder and the Trustee or the Trust Administrator, that no one or more Holders of Certificates shall have any right in any manner whatever by virtue or by availing itself or themselves of any provisions of this Agreement to affect, disturb or prejudice the rights of the Holders of any other of the Certificates, or to obtain or seek to obtain priority over or preference to any other such Holder or to enforce any right under this Agreement, except in the manner herein provided and for the common benefit of all Certificateholders. For the protection and enforcement of the provisions of this Section 11.08, each and every Certificateholder and the Trustee and the Trust Administrator shall be entitled to such relief as can be given either at law or in equity.

 

Section 11.09 Inspection and Audit Rights. 

The Master Servicer agrees that, on reasonable prior notice, it will permit and will cause each Servicer to permit any representative of the Depositor or the Trustee during the Master Servicer’s or Servicer’s, as the case may be, normal business hours, to examine all the books of account, records, reports and other papers of the Master Servicer or the Servicer, as the case may be, relating to the Mortgage Loans, to make copies and extracts therefrom, to cause such books to be audited by independent certified public accountants selected by the Depositor or the Trustee and to discuss its affairs, finances and accounts relating to the Mortgage Loans with its officers, employees and independent public accountants (and by this provision the Master Servicer or the Servicer, as the case may be, hereby authorize said accountants to discuss with such representative such affairs, finances and accounts), all at such reasonable times and as often as may be reasonably requested. Any out-of-pocket expense incident to the exercise by the Depositor or the Trustee of any right under this Section 11.09 shall be borne by the party requesting such inspection; all other such expenses shall be borne by the Master Servicer or the related Servicer.

 

Section 11.10 Certificates Nonassessable and Fully Paid. 

It is the intention of the Depositor that Certificateholders shall not be personally liable for obligations of the Trust Fund, that the interests in the Trust Fund represented by the Certificates shall be nonassessable for any reason whatsoever, and that the Certificates, upon due authentication thereof by the Trustee pursuant to this Agreement, are and shall be deemed fully paid.

	  
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IN WITNESS WHEREOF, the Depositor, the Trustee, the Trust Administrator, the Master Servicer, and the Custodians have caused their names to be signed hereto by their respective officers thereunto duly authorized as of the day and year first above written.

	 	
MORTGAGE ASSET SECURITIZATION TRANSACTIONS, INC., as Depositor

	 	 	 
	 	 	 
	 	
By:
	  /s/  Peter Ma
	 	 	
Name: Peter Ma

	 	 	
Title: Director

	 	 	 
	 	
By:
	  /s/ Chris Paternoster
	 	 	
Name: Chris Paternoster

	 	 	
Title: Director

	 	 	 
	 	
U.S. BANK NATIONAL ASSOCIATION, as Custodian

	 	 	 
	 	 	 
	 	
By:
	  /s/ Saah Kemayah
	 	 	
Name:  Saah Kemayah

	 	 	
Title:  Vice President

	 	 	 
	 	 	 
	 	
WACHOVIA BANK, NATIONAL ASSOCIATION, as Trustee

	 	 	 
	 	 	 
	 	
By:
	  /s/ Patricia O'Neill-Manella
	 	 	
Name:  Patricia O'Neill-Manella

	 	 	
Title:  Vice President

	 	 	 
	 	 	 
	 	
WELLS FARGO BANK, N.A., as Master Servicer, Trust Administrator and a Custodian

	 	 	 
	 	 	 
	 	
By:
	  /s/ Peter A. Gobell
	 	 	
Name: Peter A. Gobell

	 	 	
Title:  Vice President

	 	 	 

	

	 	-138-	 
	

	

 

	
STATE OF NEW YORK
	
)
	 
	 	
)
	
ss.:

	
COUNTY OF NEW YORK
	
)
	 

On the __ day of September, 2004 before me, a notary public in and for said State, personally appeared __________________ known to me to be a Director of Mortgage Asset Securitization Transactions, Inc., one of the corporations that executed the within instrument, and also known to me to be the person who executed it on behalf of such corporation, and acknowledged to me that such corporation executed the within instrument.

IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official seal the day and year in this certificate first above written.

	 	 	 
	 	 	
Notary Public

	 	 	 
	 	 	 
	
[SEAL]
	 	 
	 	 	 
	
My commission expires:
	 	 
	 	 	 
	 	 	 
	 	 	 

	  
	 	 	 
	

	 

 

	
STATE OF NEW YORK
	
)
	 
	 	
)
	
ss.:

	
COUNTY OF NEW YORK
	
)
	 

On the __ day of September, 2004 before me, a notary public in and for said State, personally appeared ______________ known to me to be a Director of Mortgage Asset Securitization Transactions, Inc., one of the corporations that executed the within instrument, and also known to me to be the person who executed it on behalf of such corporation, and acknowledged to me that such corporation executed the within instrument.

IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official seal the day and year in this certificate first above written.

	 	 	 
	 	 	
Notary Public

	 	 	 
	 	 	 
	
[SEAL]
	 	 
	 	 	 
	
My commission expires:
	 	 
	 	 	 
	 	 	 
	 	 	 

	  
	 	 	 
	

	 

 

	
STATE OF NEW YORK
	
)
	 
	 	
)
	
ss.:

	
COUNTY OF NEW YORK
	
)
	 

On the __ day of September, 2004 before me, a notary public in and for said State, personally appeared ___________________ known to me to be a Director of UBS Real Estate Securities Inc., one of the corporations that executed the within instrument, and also known to me to be the person who executed it on behalf of such corporation, and acknowledged to me that such corporation executed the within instrument.

IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official seal the day and year in this certificate first above written.

	 	 	 
	 	 	
Notary Public

	 	 	 
	 	 	 
	
[SEAL]
	 	 
	 	 	 
	
My commission expires:
	 	 
	 	 	 
	 	 	 
	 	 	 

	  
	 	 	 
	

	 

 

	
STATE OF NEW YORK
	
)
	 
	 	
)
	
ss.:

	
COUNTY OF NEW YORK
	
)
	 

On the __ day of September, 2004 before me, a notary public in and for said State, personally appeared __________________ known to me to be a Director of UBS Real Estate Securities Inc., one of the corporations that executed the within instrument, and also known to me to be the person who executed it on behalf of such corporation, and acknowledged to me that such corporation executed the within instrument.

IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official seal the day and year in this certificate first above written.

	 	 	 
	 	 	
Notary Public

	 	 	 
	 	 	 
	
[SEAL]
	 	 
	 	 	 
	
My commission expires:
	 	 
	 	 	 
	 	 	 
	 	 	 

	  
	 	 	 
	

	 

 

	
STATE OF NEW YORK
	
)
	 
	 	
)
	
ss.:

	
COUNTY OF NEW YORK
	
)
	 

On the __ day of September, 2004 before me, a notary public in and for said State, personally appeared ____________________ known to me to be a ______________ of Wells Fargo Bank, N.A., one of the corporations that executed the within instrument, and also known to me to be the person who executed it on behalf of such corporation, and acknowledged to me that such corporation executed the within instrument.

IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official seal the day and year in this certificate first above written.

	 	 	 
	 	 	
Notary Public

	 	 	 
	 	 	 
	
[SEAL]
	 	 
	 	 	 
	
My commission expires:
	 	 
	 	 	 
	 	 	 
	 	 	 

	  
	 	 	 
	

	 

 

	
STATE OF NEW YORK
	
)
	 
	 	
)
	
ss.:

	
COUNTY OF NEW YORK
	
)
	 

On the __ day of September, 2004 before me, a notary public in and for said State, personally appeared _______________ and _______________ known to me to be a _______________ and _______________ of U.S. Bank National Association, one of the corporations that executed the within instrument, and also known to me to be the person who executed it on behalf of such corporation, and acknowledged to me that such corporation executed the within instrument.

IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official seal the day and year in this certificate first above written.

	 	 	 
	 	 	
Notary Public

	 	 	 
	 	 	 
	
[SEAL]
	 	 
	 	 	 
	
My commission expires:
	 	 
	 	 	 
	 	 	 
	 	 	 

	  
	 	 	 
	

	 

	
STATE OF NEW YORK
	
)
	 
	 	
)
	
ss.:

	
COUNTY OF NEW YORK
	
)
	 

On the __ day of September, 2004 before me, a notary public in and for said State, personally appeared _______________ and _______________ known to me to be a _______________ and _______________ of Wachovia Bank, National Association, one of the corporations that executed the within instrument, and also known to me to be the person who executed it on behalf of such corporation, and acknowledged to me that such corporation executed the within instrument.

IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official seal the day and year in this certificate first above written.

	 	 	 
	 	 	
Notary Public

	 	 	 
	 	 	 
	
[SEAL]
	 	 
	 	 	 
	
My commission expires:
	 	 
	 	 	 
	 	 	 
	 	 	 

	

	 	 	 
	

	

SCHEDULE I

Mortgage Loan Schedule

 

 

[To be provided by the Depositor upon request]

 

	

	 	 	 
	

	

 

SCHEDULE II

Targeted Aggregate Principal Balances

	
Distribution Date
	
Targeted Aggregate 

Principal Balances ($)

	
October 25, 2004
	
421,288,376.92

	
November 25, 2004
	
412,331,868.10

	
December 25, 2004
	
403,544,209.32

	
January 25, 2005
	
394,922,197.45

	
February 25, 2005
	
386,462,689.34

	
March 25, 2005
	
378,162,600.64

	
April 25, 2005
	
370,018,904.77

	
May 25, 2005
	
362,028,631.80

	
June 25, 2005
	
354,188,867.40

	
July 25, 2005
	
346,496,751.81

	
August 25, 2005
	
338,949,478.84

	
September 25, 2005
	
331,544,294.81

	
October 25, 2005
	
324,278,497.66

	
November 25, 2005
	
317,149,435.91

	
December 25, 2005
	
310,154,507.74

	
January 25, 2006
	
303,291,160.10

	
February 25, 2006
	
296,556,887.74

	
March 25, 2006
	
289,949,232.35

	
April 25, 2006
	
283,465,781.69

	
May 25, 2006
	
277,104,168.71

	
June 25, 2006
	
270,862,070.74

	
July 25, 2006
	
264,737,208.61

	
August 25, 2006
	
258,727,345.87

	
September 25, 2006
	
252,830,288.02

	
October 25, 2006
	
247,043,881.65

	
November 25, 2006
	
241,366,013.75

	
December 25, 2006
	
235,794,610.91

	
January 25, 2007
	
230,327,638.60

	
February 25, 2007
	
224,963,100.44

	
March 25, 2007
	
219,699,037.46

	
April 25, 2007
	
214,533,527.46

	
May 25, 2007
	
209,464,684.27

	
June 25, 2007
	
204,490,657.10

	
July 25, 2007
	
199,609,629.87

	
August 25, 2007
	
194,819,820.56

	
September 25, 2007
	
190,119,480.60

	
October 25, 2007
	
185,506,894.20

	
November 25, 2007
	
180,980,377.78

	
December 25, 2007
	
176,743,102.93

	
January 25, 2008
	
172,584,266.26

	  
	 	 	 
	

	 

 

	
Distribution Date
	
Targeted Aggregate 

Principal Balances ($)

	
February 25, 2008
	
168,502,357.77

	
March 25, 2008
	
164,495,895.78

	
April 25, 2008
	
160,563,426.38

	
May 25, 2008
	
156,703,522.96

	
June 25, 2008
	
152,914,785.64

	
July 25, 2008
	
149,195,840.81

	
August 25, 2008
	
145,545,340.64

	
September 25, 2008
	
141,961,962.55

	
October 25, 2008
	
138,444,408.80

	
November 25, 2008
	
134,991,405.98

	
December 25, 2008
	
131,601,704.59

	
January 25, 2009
	
128,274,078.55

	
February 25, 2009
	
125,007,324.80

	
March 25, 2009
	
121,800,262.84

	
April 25, 2009
	
118,651,734.33

	
May 25, 2009
	
115,560,602.65

	
June 25, 2009
	
112,525,752.53

	
July 25, 2009
	
109,546,089.61

	
August 25, 2009
	
106,620,540.07

	
September 25, 2009
	
103,748,050.25

	
October 25, 2009
	
100,927,586.23

	
November 25, 2009
	
98,158,133.53

	
December 25, 2009
	
95,438,696.69

	
January 25, 2010
	
92,768,298.92

	
February 25, 2010
	
90,145,981.80

	
March 25, 2010
	
87,570,804.84

	
April 25, 2010
	
85,041,845.24

	
May 25, 2010
	
82,558,197.50

	
June 25, 2010
	
80,118,973.11

	
July 25, 2010
	
77,723,300.25

	
August 25, 2010
	
75,370,323.45

	
September 25, 2010
	
73,059,203.29

	
October 25, 2010
	
70,789,116.09

	
November 25, 2010
	
68,559,253.65

	
December 25, 2010
	
66,368,822.92

	
January 25, 2011
	
64,217,045.74

	
February 25, 2011
	
62,103,158.53

	
March 25, 2011
	
60,026,412.06

	
April 25, 2011
	
57,986,071.14

	
May 25, 2011
	
55,981,414.38

	  
	 	III-2 	 
	

	 

 

	
Distribution Date
	
Targeted Aggregate 

Principal Balances ($)

	
June 25, 2011
	
54,011,733.92

	
July 25, 2011
	
52,076,335.18

	
August 25, 2011
	
50,174,536.59

	
September 25, 2011
	
48,305,669.40

	
October 25, 2011
	
46,469,077.37

	
November 25, 2011
	
44,664,116.58

	
December 25, 2011
	
42,890,155.19

	
January 25, 2012
	
41,146,573.19

	
February 25, 2012
	
39,432,762.21

	
March 25, 2012
	
37,748,125.27

	
April 25, 2012
	
36,092,076.59

	
May 25, 2012
	
34,464,041.38

	
June 25, 2012
	
32,863,455.60

	
July 25, 2012
	
31,289,765.80

	
August 25, 2012
	
29,742,428.88

	
September 25, 2012
	
28,220,911.92

	
October 25, 2012
	
26,724,691.99

	
November 25, 2012
	
25,253,255.96

	
December 25, 2012
	
23,806,100.29

	
January 25, 2013
	
22,382,730.87

	
February 25, 2013
	
20,982,662.85

	
March 25, 2013
	
19,605,420.46

	
April 25, 2013
	
18,250,536.82

	
May 25, 2013
	
16,917,553.79

	
June 25, 2013
	
15,606,021.80

	
July 25, 2013
	
14,315,499.68

	
August 25, 2013
	
13,045,554.53

	
September 25, 2013
	
11,795,761.52

	
October 25, 2013
	
10,565,703.77

	
November 25, 2013
	
9,354,972.20

	
December 25, 2013
	
8,163,165.35

	
January 25, 2014
	
6,989,889.28

	
February 25, 2014
	
5,834,757.39

	
March 25, 2014
	
4,697,390.31

	
April 25, 2014
	
3,577,415.73

	
May 25, 2014
	
2,474,468.29

	
June 25, 2014
	
1,388,189.47

	
July 25, 2014
	
318,227.40

	
August 25, 2014
	
0.00

	  
	 	 III-3	 
	

	 

 

EXHIBIT A

(FORM OF SENIOR CERTIFICATE)

Unless this certificate is presented by an authorized representative of The Depository Trust Company, a New York corporation (“DTC”), to Issuer or its agent for registration of transfer, exchange, or payment, and any certificate issued is registered in the name of Cede & Co. or in such other name as is requested by an authorized representative of DTC (and any payment is made to Cede & Co. or to such other entity as is requested by an authorized representative of DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the registered owner hereof, Cede & Co., has an interest herein.

FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A “REGULAR INTEREST” IN A “REAL ESTATE MORTGAGE INVESTMENT CONDUIT,” AS THOSE TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE “CODE”).

 

	
Certificate No.:
	
[1]

	 	 
	
Cut-off Date:
	
September 1, 2004

	 	 
	
First Distribution Date:
	
October 25, 2004 

	 	 
	
Last Scheduled Distribution Date:
	
_______________

	 	 
	
Pass-Through Rate:
	
[________]%

[Variable in accordance with the Agreement]

	 	 
	
[Initial Certificate Principal Balance of this Certificate (“Denomination”):]
	
$[____________]

	 	 
	
[Initial Certificate Principal Balances of all Certificates of this Class:]
	
$[____________]

	 	 
	
CUSIP:
	
[_____________]

	
	 	A-1 	 
	

	 

 

MORTGAGE ASSET SECURITIZATION TRANSACTIONS, INC.

MASTR SEASONED SECURITIZATION TRUST 2004-1

Mortgage Pass-Through Certificates, Series 2004-1

Class [____]-A-[___]

evidencing a percentage interest in the distributions allocable to the Certificates of the above-referenced Class with respect to a Trust Fund consisting primarily of four pools of conventional mortgage loans secured by first liens on one- to four-family residential properties (the “Mortgage Loans”) 

Mortgage Asset Securitization Transactions, Inc., as Depositor

Principal in respect of this Certificate is distributable monthly as set forth herein. Accordingly, the Certificate Principal Balance at any time may be less than the Certificate Principal Balance as set forth herein. This Certificate does not evidence an obligation of, or an interest in, and is not guaranteed by the Depositor, UBS Real Estate Securities Inc., the Master Servicer, the Trust Administrator, the Custodians or the Trustee referred to below or any of their respective affiliates. Neither this Certificate nor the Mortgage Loans are guaranteed or insured by any governmental agency or instrumentality.

This certifies that CEDE & CO. is the registered owner of the Percentage Interest evidenced by this Certificate in certain monthly distributions with respect to a Trust Fund consisting primarily of the Mortgage Loans deposited by Mortgage Asset Securitization Transactions, Inc. (the “Depositor”). The Trust Fund was created pursuant to a Pooling and Servicing Agreement dated as of the Cut-off Date specified above (the “Agreement”) among the Depositor, Wells Fargo Bank, N.A., as master servicer (in such capacity, the “Master Servicer”), as trust administrator (in such capacity, the “Trust Administrator”) and as a custodian (in such capacity, a “Custodian”), Wachovia Bank, National Association, as trustee (the “Trustee”) and U.S. Bank National Association as a custodian (in such capacity, a “Custodian”). Distributions on this Certificate will be made primarily from collections on the applicable Mortgage Loans pursuant to the terms of the Agreement. To the extent not defined herein, the capitalized terms used herein have the meanings assigned in the Agreement. This Certificate is issued under and is subject to the terms, provisions and conditions of the Agreement, to which Agreement the Holder of this Certificate by virtue of the acceptance hereof assents and by which such Holder is bound.

Reference is hereby made to the further provisions of this Certificate set forth on the reverse hereof, which further provisions shall for all purposes have the same effect as if set forth at this place.

This Certificate shall not be entitled to any benefit under the Agreement or be valid for any purpose unless manually countersigned by an authorized signatory of the Trust Administrator.

	
	 	 	 
	

	 

IN WITNESS WHEREOF, the Trust Administrator has caused this Certificate to be duly executed.

Dated: September ___, 2004

	 	
WELLS FARGO BANK, N.A.

	 	
as Trust Administrator

	 	 	 
	 	 	 
	 	
By:
	 
	 	 	
Authorized Officer

CERTIFICATE OF AUTHENTICATION

This is one of the Class _-A-_ Certificates referred to in the within-mentioned Agreement.

	 	
WELLS FARGO BANK, N.A.

	 	
as Trust Administrator

	 	 	 
	 	 	 
	 	
By:
	 
	 	 	
Authorized Signatory

	
	 	 	 
	

	 

 

EXHIBIT B

(FORM OF CLASS PO CERTIFICATE)

Unless this certificate is presented by an authorized representative of The Depository Trust Company, a New York corporation (“DTC”), to Issuer or its agent for registration of transfer, exchange, or payment, and any certificate issued is registered in the name of Cede & Co. or in such other name as is requested by an authorized representative of DTC (and any payment is made to Cede & Co. or to such other entity as is requested by an authorized representative of DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the registered owner hereof, Cede & Co., has an interest herein.

FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A “REGULAR INTEREST” IN A “REAL ESTATE MORTGAGE INVESTMENT CONDUIT,” AS THOSE TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE “CODE”).

THIS CERTIFICATE IS A PRINCIPAL ONLY CERTIFICATE AND IS NOT ENTITLED TO ANY DISTRIBUTIONS IN RESPECT OF INTEREST.

	
Certificate No.:
	
[1]

	 	 
	
Cut-off Date:
	
September 1, 2004

	 	 
	
First Distribution Date:
	
October 25, 2004

	 	 
	
Last Scheduled Distribution Date:
	
______________

	 	 
	
Initial Certificate Principal Balance of this Certificate (“Denomination”):
	
$[______]

	 	 
	
Initial Certificate Principal Balances of all Certificates of this Class:
	
$[__________]

	 	 
	
CUSIP:
	
[_____________]

	
	 	B-1 	 
	

	 

MORTGAGE ASSET SECURITIZATION TRANSACTIONS, INC.

MASTR SEASONED SECURITIZATION TRUST 2004-1

Mortgage Pass-Through Certificates, Series 2004-1

Class PO

evidencing a percentage interest in the distributions allocable to the Certificates of the above-referenced Class with respect to a Trust Fund consisting primarily of seven pools of conventional mortgage loans secured by first liens on one- to four-family residential properties (the “Mortgage Loans”)

Mortgage Asset Securitization Transactions, Inc., as Depositor

Principal in respect of this Certificate is distributable monthly as set forth herein. Accordingly, the Certificate Principal Balance at any time may be less than the Certificate Principal Balance as set forth herein. This Certificate does not evidence an obligation of, or an interest in, and is not guaranteed by the Depositor, the Transferor, the Master Servicer, the Trust Administrator, the Custodians or the Trustee referred to below or any of their respective affiliates. Neither this Certificate nor the Mortgage Loans are guaranteed or insured by any governmental agency or instrumentality.

This certifies that CEDE & CO. is the registered owner of the Percentage Interest evidenced by this Certificate in certain monthly distributions with respect to a Trust Fund consisting primarily of the Mortgage Loans deposited by Mortgage Asset Securitization Transactions, Inc. (the “Depositor”). The Trust Fund was created pursuant to a Pooling and Servicing Agreement dated as of the Cut-off Date specified above (the “Agreement”) among the Depositor, Wells Fargo Bank, N.A. as master servicer (in such capacity, the “Master Servicer”), as trust administrator (in such capacity, the “Trust Administrator”) and as a custodian (in such capacity, a “Custodian”), Wachovia Bank, National Association, as trustee (in such capacity, the “Trustee”) and U.S. Bank National Association as a custodian (in such capacity, a “Custodian”). Distributions on this Certificate will be made primarily from collections on the applicable Mortgage Loans pursuant to the terms of the Agreement. To the extent not defined herein, the capitalized terms used herein have the meanings assigned in the Agreement. This Certificate is issued under and is subject to the terms, provisions and conditions of the Agreement, to which Agreement the Holder of this Certificate by virtue of the acceptance hereof assents and by which such Holder is bound.

Reference is hereby made to the further provisions of this Certificate set forth on the reverse hereof, which further provisions shall for all purposes have the same effect as if set forth at this place.

This Certificate shall not be entitled to any benefit under the Agreement or be valid for any purpose unless manually countersigned by an authorized signatory of the Trust Administrator.

	
	 	B-2 	 
	

	 

 

 IN WITNESS WHEREOF, the Trust Administrator has caused this Certificate to be duly executed.

Dated: September 30, 2004

	 	
WELLS FARGO BANK, N.A.

	 	
as Trust Administrator

	 	 	 
	 	 	 
	 	
By:
	 
	 	 	
Authorized Officer

CERTIFICATE OF AUTHENTICATION

  This is one of the Class PO Certificates referred to in the within-mentioned Agreement.

	 	
WELLS FARGO BANK, N.A.

	 	
as Trust Administrator

	 	 	 
	 	 	 
	 	
By:
	 
	 	 	
Authorized Signatory

	
	 	 B-3	 
	

	

EXHIBIT C

(FORM OF CLASS A-X CERTIFICATE)

Unless this certificate is presented by an authorized representative of The Depository Trust Company, a New York corporation (“DTC”), to Issuer or its agent for registration of transfer, exchange, or payment, and any certificate issued is registered in the name of Cede & Co. or in such other name as is requested by an authorized representative of DTC (and any payment is made to Cede & Co. or to such other entity as is requested by an authorized representative of DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the registered owner hereof, Cede & Co., has an interest herein.

FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A “REGULAR INTEREST” IN A “REAL ESTATE MORTGAGE INVESTMENT CONDUIT,” AS THOSE TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE “CODE”).

THIS CERTIFICATE HAS NO PRINCIPAL BALANCE AND IS NOT ENTITLED TO ANY DISTRIBUTIONS IN RESPECT OF PRINCIPAL.

	
Certificate No.:
	
[1]

	 	 
	
Cut-off Date:
	
September 1, 2004

	 	 
	
First Distribution Date:
	
October 25, 2004

	 	 
	
Last Scheduled Distribution Date:
	
________________

	 	 
	
Pass-Through Rate:
	
[__________]%

	 	 
	
Initial Notional Amount of this Certificate (“Denomination”):
	
$[_______]

	 	 
	
Initial Notional Amount of all Certificates of this Class:
	
$[_________]

	 	 
	
CUSIP:
	
[_____________]

	
	 	 C-1	 
	

	 

MORTGAGE ASSET SECURITIZATION TRANSACTIONS, INC.

MASTR SEASONED SECURITIZATION TRUST 2004-1

Mortgage Pass-Through Certificates, Series 2004-1

Class A-X

evidencing a percentage interest in the distributions allocable to the Certificates of the above-referenced Class with respect to a Trust Fund consisting primarily of four pools of conventional mortgage loans secured by first liens on one- to four-family residential properties (the “Mortgage Loans”) 

Mortgage Asset Securitization Transactions, Inc., as Depositor

This Certificate does not evidence an obligation of, or an interest in, and is not guaranteed by the Depositor, UBS Real Estate Securities Inc., the Master Servicer, the Trust Administrator, the Custodians or the Trustee referred to below or any of their respective affiliates. Neither this Certificate nor the Mortgage Loans are guaranteed or insured by any governmental agency or instrumentality.

This certifies that CEDE & CO. is the registered owner of the Percentage Interest evidenced by this Certificate in certain monthly distributions with respect to a Trust Fund consisting primarily of the Mortgage Loans deposited by Mortgage Asset Securitization Transactions, Inc. (the “Depositor”). The Trust Fund was created pursuant to a Pooling and Servicing Agreement dated as of the Cut-off Date specified above (the “Agreement”) among the Depositor, Wells Fargo Bank, N.A., as master servicer (in such capacity, the “Master Servicer”), as trust administrator (in such capacity, the “Trust Administrator”) and as a custodian (in such capacity, a “Custodian”), Wachovia Bank, National Association, as trustee (in such capacity, the “Trustee”) and U.S. Bank National Association, as a custodian (in such capacity, a “Custodian”). Distributions on this Certificate will be made primarily from collections on the applicable Mortgage Loans pursuant to the terms of the Agreement. To the extent not defined herein, the capitalized terms used herein have the meanings assigned in the Agreement. This Certificate is issued under and is subject to the terms, provisions and conditions of the Agreement, to which Agreement the Holder of this Certificate by virtue of the acceptance hereof assents and by which such Holder is bound.

Reference is hereby made to the further provisions of this Certificate set forth on the reverse hereof, which further provisions shall for all purposes have the same effect as if set forth at this place.

This Certificate shall not be entitled to any benefit under the Agreement or be valid for any purpose unless manually countersigned by an authorized signatory of the Trust Administrator.

	
	 	 C-2	 
	

	 

 

 IN WITNESS WHEREOF, the Trust Administrator has caused this Certificate to be duly executed.

Dated: September ___, 2004

	 	
WELLS FARGO BANK, N.A.

	 	
as Trust Administrator

	 	 	 
	 	 	 
	 	
By:
	 
	 	 	
Authorized Officer

CERTIFICATE OF AUTHENTICATION

  This is one of the Class A-X Certificates referred to in the within-mentioned Agreement.

	 	
WELLS FARGO BANK, N.A.

	 	
as Trust Administrator

	 	 	 
	 	 	 
	 	
By:
	 
	 	 	
Authorized Signatory

	
	 	C-3	 
	

	

 

EXHIBIT D

(FORM OF RESIDUAL CERTIFICATE)

FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A “RESIDUAL INTEREST” IN A “REAL ESTATE MORTGAGE INVESTMENT CONDUIT,” AS THOSE TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE “CODE”). TRANSFERS OF THIS CERTIFICATE TO ANY PERSON WHO IS NOT A PERMITTED TRANSFEREE, AS SET FORTH IN SECTION 5.02(C) OF THE AGREEMENT IS PROHIBITED.

NEITHER THIS CERTIFICATE NOR ANY INTEREST HEREIN MAY BE TRANSFERRED UNLESS THE PROPOSED TRANSFEREE DELIVERS TO THE TRUST ADMINISTRATOR A TRANSFER AFFIDAVIT IN ACCORDANCE WITH THE PROVISIONS OF THE AGREEMENT REFERRED TO HEREIN.

THE HOLDER OF THIS CERTIFICATE BY ITS ACCEPTANCE HEREOF AGREES NOT TO OFFER, SELL OR OTHERWISE TRANSFER SUCH CERTIFICATE EXCEPT IN ACCORDANCE WITH ALL APPLICABLE STATE SECURITIES LAWS AND (A) PURSUANT TO A REGISTRATION STATEMENT WHICH HAS BEEN DECLARED EFFECTIVE UNDER THE ACT, (B) FOR SO LONG AS THIS CERTIFICATE IS ELIGIBLE FOR RESALE PURSUANT TO RULE 144A UNDER THE ACT (“RULE 144A”), TO A PERSON WHO THE SELLER REASONABLY BELIEVES IS A “QUALIFIED INSTITUTIONAL BUYER” AS DEFINED IN RULE 144A IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A, (C) TO AN INSTITUTIONAL “ACCREDITED INVESTOR” WITHIN THE MEANING OF RULE 501 (A)(1), (2), (3) OR (7) OF REGULATION D UNDER THE ACT IN A TRANSACTION EXEMPT FROM THE REGISTRATION REQUIREMENTS UNDER THE ACT, OR (D) PURSUANT TO ANOTHER AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE ACT, SUBJECT IN EACH OF THE FOREGOING CASES TO THE COMPLETION AND DELIVERY BY THE TRANSFEROR TO THE TRUST ADMINISTRATOR OF A CERTIFICATE OF TRANSFER IN THE FORM ATTACHED TO THE AGREEMENT.

NEITHER THIS CERTIFICATE NOR ANY INTEREST HEREIN MAY BE TRANSFERRED UNLESS THE TRANSFEREE DELIVERS TO THE TRUST ADMINISTRATOR EITHER A REPRESENTATION LETTER TO THE EFFECT THAT SUCH TRANSFEREE IS NOT AN EMPLOYEE BENEFIT PLAN OR OTHER RETIREMENT ARRANGEMENT SUBJECT TO TITLE I OF THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED (“ERISA”), OR SECTION 4975 OF THE CODE, OR DELIVERS TO THE TRUST ADMINISTRATOR A REPRESENTATION LETTER OR OPINION OF COUNSEL IN ACCORDANCE WITH THE PROVISIONS OF THE AGREEMENT HEREIN. NOTWITHSTANDING ANYTHING ELSE TO THE CONTRARY HEREIN, ANY PURPORTED TRANSFER OF THIS CERTIFICATE TO OR ON BEHALF OF AN EMPLOYEE BENEFIT PLAN OR OTHER RETIREMENT ARRANGEMENT SUBJECT TO ERISA OR THE CODE SHALL BE VOID AND OF NO EFFECT.

	
	 	D-1 	 
	

	 

 

	
Certificate No.:
	
1

	 	 
	
Cut-off Date:
	
September 1, 2004

	 	 
	
First Distribution Date:
	
October 25, 2004

	 	 
	
Last Scheduled Distribution Date:
	
[______________]

	 	 
	
Pass-Through Rate:
	
[_____________]%

	 	 
	
Initial Certificate Principal Balance of this Certificate (“Denomination”):
	
[$_______]

	 	 
	
Initial Certificate Principal Balances of all Certificates of this Class:
	
[$_____]

	 	 
	
CUSIP:
	
[____________]

	
	 	D-2 	 
	

	 

 

MORTGAGE ASSET SECURITIZATION TRANSACTIONS, INC.

MASTR SEASONED SECURITIZATION TRUST 2004-1

Mortgage Pass-Through Certificates, Series 2004-1 

Class A-[__]R

evidencing a percentage interest in the distributions allocable to the Certificates of the above-referenced Class with respect to a Trust Fund consisting primarily of four pools of conventional mortgage loans secured by first liens on one- to four-family residential properties (the “Mortgage Loans”) 

Mortgage Asset Securitization Transactions, Inc., as Depositor

Principal in respect of this Certificate is distributable monthly as set forth herein. Accordingly, the Certificate Principal Balance at any time may be less than the Certificate Principal Balance as set forth herein. This Certificate does not evidence an obligation of, or an interest in, and is not guaranteed by the Depositor, UBS Real Estate Securities Inc., the Master Servicer, the Trust Administrator, the Custodians or the Trustee referred to below or any of their respective affiliates. Neither this Certificate nor the Mortgage Loans are guaranteed or insured by any governmental agency or instrumentality.

 

This certifies that UBS Securities LLC is the registered owner of the Percentage Interest evidenced by this Certificate in certain monthly distributions with respect to a Trust Fund consisting primarily of the Mortgage Loans deposited by Mortgage Asset Securitization Transactions, Inc. (the “Depositor”). The Trust Fund was created pursuant to a Pooling and Servicing Agreement dated as of the Cut-off Date specified above (the “Agreement”) among the Depositor, Wells Fargo Bank, N.A., as master servicer (in such capacity, the “Master Servicer”), as trust administrator (in such capacity, the “Trust Administrator”) and as a custodian (in such capacity, a “Custodian”), Wachovia Bank, National Association, as trustee (in such capacity, the “Trustee”) and U.S. Bank National Association, as a custodian (in such capacity, a “Custodian”). Distributions on this Certificate will be made primarily from collections on the applicable Mortgage Loans pursuant to the terms of the Agreement. To the extent not defined herein, the capitalized terms used herein have the meanings assigned in the Agreement. This Certificate is issued under and is subject to the terms, provisions and conditions of the Agreement, to which Agreement the Holder of this Certificate by virtue of the acceptance hereof assents and by which such Holder is bound.

 

Any distribution of the proceeds of any remaining assets of the Trust Fund will be made only upon presentment and surrender of this Class A-[_]R Certificate at the Corporate Trust Office of the Trust Administrator.

 

No transfer of a Class A-[_]R Certificate shall be made unless the Trust Administrator shall have received: (i) a representation letter from the transferee of such Certificate, acceptable to and in form and substance satisfactory to the Trust Administrator, to the effect that such transferee is not an employee benefit plan or other retirement arrangement subject to Section 406 

	 
	 	 D-3	 
	

	 

of ERISA and/or Section 4975 of the Code, or a person acting for, on behalf or with the assets of, any such plan or arrangement, (ii) if the purchaser is an insurance company, a representation that the purchaser is an insurance company which is purchasing such Class A-[_]R Certificate with funds contained in an “insurance company general account” (as such term is defined in Section V(e) of Prohibited Transaction Class Exemption 95-60 (“PTCE 95-60”)) and the purchase and holding of such Class A-[_]R Certificate is covered under Sections I and III of PTCE 95-60, or (iii) an Opinion of Counsel satisfactory to the Trust Administrator to the effect that the purchase or holding of such Class A-[_]R Certificate will not result in prohibited transactions under Section 406 of ERISA and/or Section 4975 of the Code and will not subject the Trustee, the Transferor, the Depositor, the Master Servicer or the Trust Administrator to any obligation in addition to those undertaken in the Agreement, which Opinion of Counsel shall not be an expense of such parties, the applicable Servicer or the Trust Fund. (Such representations shall be deemed to have been made to the Trust Administrator by the Transferee’s acceptance of a Class A-[_]R Certificate and by a beneficial owner’s acceptance of its interest in a Class A-[_]R Certificate.) Notwithstanding anything else to the contrary herein, any purported transfer of a Class A-[_]R Certificate to or on behalf of an employee benefit plan or other retirement arrangement subject to ERISA or the Code without the Opinion of Counsel satisfactory to the Trust Administrator as described above shall be void and of no effect.

 

Each Holder of this Class A-[_]R Certificate will be deemed to have agreed to be bound by the restrictions of the Agreement, including but not limited to the restrictions that (i) each person holding or acquiring any Ownership Interest in this Class A-[_]R Certificate must be a Permitted Transferee, (ii) no Ownership Interest in this Class A-[_]R Certificate may be transferred without delivery to the Trust Administrator of (a) a transfer affidavit of the proposed transferee and (b) a transfer certificate of the transferor, each of such documents to be in the form described in the Agreement, (iii) each person holding or acquiring any Ownership Interest in this Class A-[_]R Certificate must agree to require a transfer affidavit and to deliver a transfer certificate to the Trust Administrator as required pursuant to the Agreement, (iv) each person holding or acquiring an Ownership Interest in this Class A-[_]R Certificate must agree not to transfer an Ownership Interest in this Class A-[_]R Certificate if it has actual knowledge that the proposed transferee is not a Permitted Transferee and (v) any attempted or purported transfer of any Ownership Interest in this Class A-[_]R Certificate in violation of such restrictions will be absolutely null and void and will vest no rights in the purported transferee.

 

Reference is hereby made to the further provisions of this Certificate set forth on the reverse hereof, which further provisions shall for all purposes have the same effect as if set forth at this place.

 

This Certificate shall not be entitled to any benefit under the Agreement or be valid for any purpose unless manually countersigned by an authorized signatory of the Trust Administrator.

	
	 	 D-4	 
	

	 

 IN WITNESS WHEREOF, the Trust Administrator has caused this Certificate to be duly executed.

Dated: September ___, 2004

	 	
WELLS FARGO BANK, N.A.

	 	
as Trust Administrator

	 	 	 
	 	 	 
	 	
By:
	 
	 	 	
Authorized Officer

CERTIFICATE OF AUTHENTICATION

  This is one of the Class _-A-_ Certificates referred to in the within-mentioned Agreement.

	 	
WELLS FARGO BANK, N.A.

	 	
as Trust Administrator

	 	 	 
	 	 	 
	 	
By:
	 
	 	 	
Authorized Signatory

	
	 	D-5 	 
	

	

 

EXHIBIT E

(FORM OF CLASS B CERTIFICATE)

[For Classes 15-B-1, 15-B-2, 15-B-3, 30-B-1, 30-B-2, 30-B-3, HY-B-1, HY-B-2, HY-B-3,] Unless this certificate is presented by an authorized representative of The Depository Trust Company, a New York corporation (“DTC”), to Issuer or its agent for registration of transfer, exchange, or payment, and any certificate issued is registered in the name of Cede & Co. or in such other name as is requested by an authorized representative of DTC (and any payment is made to Cede & Co. or to such other entity as is requested by an authorized representative of DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the registered owner hereof, Cede & Co., has an interest herein.

FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A “REGULAR INTEREST” IN A “REAL ESTATE MORTGAGE INVESTMENT CONDUIT,” AS THOSE TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE “CODE”).

THIS CERTIFICATE IS SUBORDINATED IN RIGHT OF PAYMENT TO CERTAIN CERTIFICATES AS DESCRIBED IN THE AGREEMENT REFERRED TO HEREIN.

[For Classes 15-B-4, 15-B-5, 15-B-6, C-B-4, C-B-5 and C-B-6 only] [THIS CERTIFICATE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”). ANY RESALE OR TRANSFER OF THIS CERTIFICATE WITHOUT REGISTRATION THEREOF UNDER THE ACT MAY ONLY BE MADE IN A TRANSACTION EXEMPTED FROM THE REGISTRATION REQUIREMENTS OF THE ACT AND IN ACCORDANCE WITH THE PROVISIONS OF THE AGREEMENT REFERRED TO HEREIN.]

[For Classes 15-B-4, 15-B-5, 15-B-6, C-B-4, C-B-5 and C-B-6 Only] [THE HOLDER OF THIS CERTIFICATE BY ITS ACCEPTANCE HEREOF AGREES NOT TO OFFER, SELL OR OTHERWISE TRANSFER SUCH CERTIFICATE EXCEPT IN ACCORDANCE WITH ALL APPLICABLE STATE SECURITIES LAWS AND (A) PURSUANT TO A REGISTRATION STATEMENT WHICH HAS BEEN DECLARED EFFECTIVE UNDER THE ACT, (B) FOR SO LONG AS THIS CERTIFICATE IS ELIGIBLE FOR RESALE PURSUANT TO RULE 144A UNDER THE ACT (“RULE 144A”), TO A PERSON WHO THE SELLER REASONABLY BELIEVES IS A “QUALIFIED INSTITUTIONAL BUYER” AS DEFINED IN RULE 144A IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A, (C) TO AN INSTITUTIONAL “ACCREDITED INVESTOR” WITHIN THE MEANING OF RULE 501 (A)(1), (2), (3) OR (7) OF REGULATION D UNDER THE ACT IN A TRANSACTION EXEMPT FROM THE REGISTRATION REQUIREMENTS UNDER THE ACT, OR (D) PURSUANT TO ANOTHER AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE ACT, SUBJECT IN EACH OF THE FOREGOING CASES TO THE COMPLETION AND DELIVERY BY THE TRANSFEROR TO THE TRUST ADMINISTRATOR OF A CERTIFICATE OF TRANSFER IN THE FORM APPEARING ON THE LAST PAGE OF THIS CERTIFICATE.]

	
	 	 E-1	 
	

	 

 

NEITHER THIS CERTIFICATE NOR ANY INTEREST HEREIN MAY BE TRANSFERRED OTHER THAN IN COMPLIANCE WITH SECTION 5.02(B) OF THE POOLING AND SERVICING AGREEMENT.

	
Certificate No.:
	
[1]

	 	 
	
Cut-off Date:
	
September 1, 2004

	 	 
	
First Distribution Date:
	
October 25, 2004

	 	 
	
Last Scheduled Distribution Date:
	
[_____________]

	 	 
	
Pass-Through Rate:
	
Variable in accordance with the Agreement

	 	 
	
Initial Certificate Principal Balance of this Certificate (“Denomination”):
	
$[______]

	 	 
	
Initial Certificate Principal Balances of all Certificates of this Class:
	
$[___________]

	 	 
	
CUSIP:
	
[___________]

	
	 	E-2 	 
	

	 

 

MORTGAGE ASSET SECURITIZATION TRANSACTIONS, INC.

MASTR SEASONED SECURITIZATION TRUST 2004-1

Mortgage Pass-Through Certificates, Series 2004-1

Class [__]-B-[__] 

evidencing a percentage interest in the distributions allocable to the Certificates of the above-referenced Class with respect to a Trust Fund consisting primarily of four pools of conventional mortgage loans secured by first liens on one- to four-family residential properties (the “Mortgage Loans”) 

Mortgage Asset Securitization Transactions, Inc., as Depositor

Principal in respect of this Certificate is distributable monthly as set forth herein. Accordingly, the Certificate Principal Balance at any time may be less than the Certificate Principal Balance as set forth herein. This Certificate does not evidence an obligation of, or an interest in, and is not guaranteed by the Depositor, UBS Real Estate Securities Inc., the Master Servicer, the Trust Administrator, the Custodians or the Trustee referred to below or any of their respective affiliates. Neither this Certificate nor the Mortgage Loans are guaranteed or insured by any governmental agency or instrumentality.

This certifies that [CEDE & CO.] [UBS Securities LLC] is the registered owner of the Percentage Interest evidenced by this Certificate in certain monthly distributions with respect to a Trust Fund consisting primarily of the Mortgage Loans deposited by Mortgage Asset Securitization Transactions, Inc. (the “Depositor”). The Trust Fund was created pursuant to a Pooling and Servicing Agreement dated as of the Cut-off Date specified above (the “Agreement”) among the Depositor, Wells Fargo Bank, N.A., as master servicer (in such capacity, the “Master Servicer”), as trust administrator (in such capacity, the “Trust Administrator”) and as a custodian (in such capacity, a “Custodian”), Wachovia Bank, National Association, as trustee (in such capacity, the “Trustee”) and U.S. Bank National Association, as a custodian (in such capacity, a “Custodian”). Distributions on this Certificate will be made primarily from collections on the applicable Mortgage Loans pursuant to the terms of the Agreement. To the extent not defined herein, the capitalized terms used herein have the meanings assigned in the Agreement. This Certificate is issued under and is subject to the terms, provisions and conditions of the Agreement, to which Agreement the Holder of this Certificate by virtue of the acceptance hereof assents and by which such Holder is bound.

[For Classes 15-B-4, 15-B-5, 15-B-6, 30-B-4, 30-B-5 and 30-B-6 only] [No transfer of a Certificate of this Class shall be made unless such transfer is made pursuant to an effective registration statement under the Securities Act and any applicable state securities laws or is exempt from the registration requirements under said Act and such laws. In the event that a transfer is to be made in reliance upon an exemption from the Securities Act and such laws, in order to assure compliance with the Securities Act and such laws, the Certificateholder desiring to effect such transfer and such Certificateholder’s prospective transferee shall each certify to the Trust Administrator in writing the facts surrounding the transfer. In the event that such a transfer 

	
	 	 E-3	 
	

	 

 

is to be made within three years from the date of the initial issuance of Certificates pursuant hereto, there shall also be delivered (except in the case of a transfer pursuant to Rule 144A of the Securities Act) to the Trust Administrator an Opinion of Counsel that such transfer may be made pursuant to an exemption from the Securities Act and such state securities laws, which Opinion of Counsel shall not be obtained at the expense of the Trustee, the Master Servicer, the Trust Administrator or the Depositor. The Holder hereof desiring to effect such transfer shall, and does hereby agree to, indemnify the Trustee and the Trust Administrator and the Depositor against any liability that may result if the transfer is not so exempt or is not made in accordance with such federal and state laws.]

 

No transfer of a Certificate shall be made other than in compliance with section 5.02(b) of the Pooling and Servicing Agreement.

Reference is hereby made to the further provisions of this Certificate set forth on the reverse hereof, which further provisions shall for all purposes have the same effect as if set forth at this place.

This Certificate shall not be entitled to any benefit under the Agreement or be valid for any purpose unless manually countersigned by an authorized signatory of the Trust Administrator.

	
	 	E-4 	 
	

	 

 IN WITNESS WHEREOF, the Trust Administrator has caused this Certificate to be duly executed.

Dated: September ___, 2004

	 	
WELLS FARGO BANK, N.A.

	 	
as Trust Administrator

	 	 	 
	 	 	 
	 	
By:
	 
	 	 	
Authorized Officer

CERTIFICATE OF AUTHENTICATION

  This is one of the Class _-A-_ Certificates referred to in the within-mentioned Agreement.

	 	
WELLS FARGO BANK, N.A.

	 	
as Trust Administrator

	 	 	 
	 	 	 
	 	
By:
	 
	 	 	
Authorized Signatory

	
	 	E-5 	 
	

	

 

EXHIBIT F

(Form of Reverse of Certificates)

MORTGAGE ASSET SECURITIZATION TRANSACTIONS, INC.

 

MASTR SEASONED SECURITIZATION TRUST 2004-1

 

Mortgage Pass-Through Certificates, Series 2004-1

 

This Certificate is one of a duly authorized issue of Certificates designated as Mortgage Asset Securitization Transactions, Inc. MASTR Seasoned Securitization Trust 2004-1, Mortgage Pass-Through Certificates, of the Series specified on the face hereof (herein collectively called the “Certificates”), and representing a beneficial ownership interest in the Trust Fund created by the Agreement.

 

The Certificateholder, by its acceptance of this Certificate, agrees that it will look solely to the funds on deposit in the Distribution Account for payment hereunder and that the Trust Administrator is not liable to the Certificateholders for any amount payable under this Certificate or the Agreement or, except as expressly provided in the Agreement, subject to any liability under the Agreement.

 

This Certificate does not purport to summarize the Agreement and reference is made to the Agreement for the interests, rights and limitations of rights, benefits, obligations and duties evidenced thereby, and the rights, duties and immunities of the Trust Administrator.

 

Pursuant to the terms of the Agreement, a distribution will be made on the 25th day of each month or, if such 25th day is not a Business Day, the Business Day immediately following (the “Distribution Date”), commencing on the first Distribution Date specified on the face hereof, to the Person in whose name this Certificate is registered at the close of business on the applicable Record Date in an amount equal to the product of the Percentage Interest evidenced by this Certificate and the amount required to be distributed to Holders of Certificates of the Class to which this Certificate belongs on such Distribution Date pursuant to the Agreement. The Record Date applicable to each Distribution Date is the last Business Day of the month immediately preceding the month in which the related Distribution Date occurs.

 

Distributions on this Certificate shall be made by wire transfer of immediately available funds to the account of the Holder hereof at a bank or other entity having appropriate facilities therefor, if such Certificateholder shall have so notified the Trust Administrator in writing at least five Business Days prior to the related Record Date and such Certificateholder shall satisfy the conditions to receive such form of payment set forth in the Agreement, or, if not, by check mailed by first class mail to the address of such Certificateholder appearing in the Certificate Register. The final distribution on each Certificate will be made in like manner, but only upon presentment and surrender of such Certificate at the Corporate Trust Office of the Trust Administrator or such other location specified in the notice to Certificateholders of such final distribution.

	
	 	F-1 	 
	

	 

 

The Agreement permits, with certain exceptions therein provided, the amendment thereof and the modification of the rights and obligations of the Trust Administrator and the rights of the Certificateholders under the Agreement at any time by the Depositor, the Master Servicer, the Trust Administrator, the Custodians and the Trustee with the consent of the Holders of Certificates affected by such amendment evidencing the requisite Percentage Interest, as provided in the Agreement. Any such consent by the Holder of this Certificate shall be conclusive and binding on such Holder and upon all future Holders of this Certificate and of any Certificate issued upon the transfer hereof or in exchange therefor or in lieu hereof whether or not notation of such consent is made upon this Certificate. The Agreement also permits the amendment thereof, in certain limited circumstances, without the consent of the Holders of any of the Certificates.

 

As provided in the Agreement and subject to certain limitations therein set forth, the transfer of this Certificate is registrable in the Certificate Register of the Trust Administrator upon surrender of this Certificate for registration of transfer at the offices that the Trust Administrator designates for such purposes, accompanied by a written instrument of transfer in form satisfactory to the Trust Administrator and the Certificate Registrar duly executed by the holder hereof or such holder’s attorney duly authorized in writing, and thereupon one or more new Certificates of the same Class in authorized denominations and evidencing the same aggregate Percentage Interest in the Trust Fund will be issued to the designated transferee or transferees.

 

The Certificates are issuable only as registered Certificates without coupons in denominations specified in the Agreement. As provided in the Agreement and subject to certain limitations therein set forth, Certificates are exchangeable for new Certificates of the same Class in authorized denominations and evidencing the same aggregate Percentage Interest, as requested by the Holder surrendering the same.

 

No service charge will be made for any such registration of transfer or exchange, but the Trust Administrator may require payment of a sum sufficient to cover any tax or other governmental charge payable in connection therewith.

 

The Depositor, the Master Servicer, the Trust Administrator and the Trustee and any agent of the Depositor, the Master Servicer, the Trust Administrator or the Trustee may treat the Person in whose name this Certificate is registered as the owner hereof for all purposes, and neither the Depositor, the Master Servicer, the Trust Administrator, the Trustee, nor any such agent shall be affected by any notice to the contrary.

 

On any Distribution Date on which the Pool Principal Balance is less than 5% of the aggregate Cut-off Date Principal Balances of the Mortgage Loans, the Master Servicer will have the option to repurchase, in whole, from the Trust Fund all remaining Mortgage Loans and all property acquired in respect of the Mortgage Loans at a purchase price determined as provided in the Agreement. In the event that no such optional termination occurs, the obligations and responsibilities created by the Agreement will terminate upon the later of the maturity or other liquidation (or any advance with respect thereto) of the last Mortgage Loan remaining in the Trust Fund or the disposition of all property in respect thereof and the distribution to Certificateholders of all amounts required to be distributed pursuant to the Agreement. In no 

	
	 	F-2 	 
	

	 

 

event, however, will the trust created by the Agreement continue beyond the expiration of 21 years from the death of the last survivor of the descendants living at the date of the Agreement of a certain person named in the Agreement.

 

Any term used herein that is defined in the Agreement shall have the meaning assigned in the Agreement, and nothing herein shall be deemed inconsistent with that meaning.

	 
	 	F-3 	 
	

	 

ASSIGNMENT

FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and transfer(s) unto

 

 

(Please print or typewrite name and address including postal zip code of assignee)

the Percentage Interest evidenced by the within Certificate and hereby authorizes the transfer of registration of such Percentage Interest to assignee on the Certificate Register of the Trust Fund.

I (We) further direct the Trust Administrator to issue a new Certificate of a like denomination and Class, to the above named assignee and deliver such Certificate to the following address:

 

 

Dated: 

	 	 
	 	
Signature by or on behalf of assignor

DISTRIBUTION INSTRUCTIONS

The assignee should include the following for purposes of distribution:

Distributions shall be made, by wire transfer or otherwise, in immediately available funds to

 

 
for the account of ______________________________________________________________, account number ______________, or, if mailed by check, to __________________________. Statements should be mailed to.

 

 

This information is provided by, ______________________________________________________ the assignee named above, or ______________________________________________, as its agent.

	
	 	F-4 	 
	

	 

	
STATE OF
	
)
	 
	 	
)
	
ss.:

	
COUNTY OF
	
)
	 

On the day of _______, 200_   before me, a notary public in and for said State, personally appeared ___________________________________, known to me who, being by me duly sworn, did depose and say that he executed the foregoing instrument.

	 	 
	 	
Notary Public

[Notarial Seal]

	
	 	F-5 	 
	

	

 

EXHIBIT G

FORM OF INITIAL CERTIFICATION OF CUSTODIAN

[September ___, 2004]

Mortgage Asset Securitization Transactions, Inc.

1285 Avenue of the Americas

New York, NY 10019

Wachovia Bank, National Association, as trustee

401 South Tryon Street

Charlotte, North Carolina 28288-1179

	 	Re:	Pooling and Servicing Agreement among Mortgage Asset Securitization Transactions, Inc., as depositor, Wells Fargo Bank, N.A., as master servicer, as trust administrator and as a custodian and Wachovia Bank, National Association, as trustee and U.S. Bank National Association, as a custodian, in connection with MASTR Seasoned Securitization Trust 2004-1, Mortgage Pass-Through Certificates, Series 2004-1.

Gentlemen:

In accordance with Section 2.02 of the above-captioned Pooling and Servicing Agreement (the “Pooling and Servicing Agreement”), the undersigned, as a Custodian acting on behalf of the Trustee with respect to the related Mortgage Loans, hereby certifies that, as to each related Mortgage Loan listed in the Mortgage Loan Schedule (other than any related Mortgage Loan paid in full or any related Mortgage Loan listed on the attached schedule) it has received:

(i)     (a) the original Mortgage Note or (b) with respect to any Lost Mortgage Note, a lost note affidavit from the Depositor stating that the original Mortgage Note was lost or destroyed; and

(ii)    a duly executed assignment of the Mortgage (which may be included in a blanket assignment or assignments).

Based on its review and examination and only as to the foregoing documents, such documents appear regular on their face and related to such Mortgage Loan.

The Custodian has made no independent examination of any documents contained in each related Mortgage File beyond the review specifically required in the Pooling and Servicing Agreement. The Custodian makes no representations as to: (i) the validity, legality, sufficiency, enforceability or genuineness of any of the documents contained in each related Mortgage File of any of the related Mortgage Loans identified on the Mortgage Loan Schedule, or (ii) the collectability, insurability, effectiveness or suitability of any such Mortgage Loan.

	 
	 	G-1 	 
	

	 

Capitalized words and phrases used herein shall have the respective meanings assigned to them in the Pooling and Servicing Agreement.

	 	
[NAME OF CUSTODIAN],

	 	
as Custodian

	 	 	 
	 	 	 
	 	
By:
	 
	 	
Name:
	 
	 	
Title:
	 

	
	 	 G-2	 
	

	

 

EXHIBIT H

FORM OF FINAL CERTIFICATION OF CUSTODIAN

[September ___, 2004]

Wachovia Bank, National Association, as trustee

401 South Tryon Street

Charlotte, North Carolina 28288-1179

 

UBS Real Estate Securities Inc.

1285 Avenue of the Americas

11th Floor

New York, NY 10019

Mortgage Asset Securitization Transactions, Inc.

1285 Avenue of the Americas

11th Floor

New York, NY 10019

	 	Re:	Pooling and Servicing Agreement among Mortgage Asset Securitization Transactions, Inc., as depositor, Wells Fargo Bank, N.A., as master servicer, as trust administrator and as a custodian, Wachovia Bank, National Association, as trustee and U.S. Bank National Association, as a custodian, in connection with MSSTR 2004-1, Mortgage Pass-Through Certificates, Series 2004-1.

Gentlemen:

In accordance with Section 2.02 of the above-captioned Pooling and Servicing Agreement (the “Pooling and Servicing Agreement”), the undersigned, as a Custodian acting on behalf of the Trustee with respect to the related Mortgage Loans, hereby certifies that, as to each related Mortgage Loan listed in the Mortgage Loan Schedule (other than any related Mortgage Loan paid in full or any related Mortgage Loan listed on the attached schedule) it has received:

(a) with respect to each such Mortgage Loan that is not a Cooperative Mortgage Loan,

	
	 	H-1 	 
	

	 

 

(i)     the original Mortgage Note endorsed by manual or facsimile signature in blank in the following form: “Pay to the order of ___________ without recourse,” with all intervening endorsements showing a complete chain of endorsement from the originator to the Person endorsing the Mortgage Note (each such endorsement being sufficient to transfer all right, title and interest of the party so endorsing, as noteholder or assignee thereof, in and to that Mortgage Note); or, with respect to any Lost Mortgage Note, a lost note affidavit from the related originator or the Transferor stating that the original Mortgage Note was lost or destroyed, together with a copy of such Mortgage Note;

(ii)    except as provided below, the original recorded Mortgage or a copy of such Mortgage certified by the related originator as being a true and complete copy of the Mortgage;

(iii)   a duly executed assignment of the Mortgage (which may be included in a blanket assignment or assignments), endorsed with the assignee’s name in blank, together with, except as provided below, all interim recorded assignments of such mortgage (each such assignment, when duly and validly completed, to be in recordable form and sufficient to effect the assignment of and transfer to the assignee thereof, under the Mortgage to which the assignment relates); provided that, if the related Mortgage has not been returned from the applicable public recording office, such assignment of the Mortgage may exclude the information to be provided by the recording office;

(iv)   the original or copies of each assumption, modification, written assurance or substitution agreement, if any; and

(v)    except as provided below, the original or duplicate original lender’s title policy and all riders thereto.

(b) with respect to each such Mortgage Loan that is a Cooperative Loan:

(i)     the Cooperative Shares, together with the Stock Power in blank; 

(ii)    the executed Security Agreement; 

(iii)   the executed Proprietary Lease and the Assignment of Proprietary Lease to the originator of the Cooperative Loan; 

(iv)   the executed Recognition Agreement; 

	 
	 	H-2 	 
	

	 

(v)    copies of the original UCC financing statement, and any continuation statements, filed by the originator of such Cooperative Loan as secured party, each with evidence of recording thereof, evidencing the interest of the originator under the Security Agreement and the Assignment of Proprietary Lease;

(vi)   copies of the filed UCC assignments or amendments of the security interest referenced in clause (v) above showing an unbroken chain of title from the originator to the Trust, each with evidence of recording thereof, evidencing the interest of the assignee under the Security Agreement and the Assignment of Proprietary Lease;

(vii)          an executed assignment of the interest of the originator in the Security Agreement, the Assignment of Proprietary Lease and the Recognition Agreement, showing an unbroken chain of title from the originator to the Trust; and

(viii)          for any Cooperative Loan that has been modified or amended, the original instrument or instruments effecting such modification or amendment.

Based on its review and examination and only as to the foregoing documents, (a) such documents appear regular on their face and related to such Mortgage Loan, and (b) the information set forth in items (1), (2), (3), (4), (9), (16) and (21) of the definition of the “Mortgage Loan Schedule” in Section 1.01 of the Pooling and Servicing Agreement accurately reflects information set forth in the Mortgage File.

The Custodian on behalf of the Trustee has made no independent examination of any documents contained in each related Mortgage File beyond the review specifically required in the Pooling and Servicing Agreement. The Custodian on behalf of the Trustee makes no representations as to: (i) the validity, legality, sufficiency, enforceability or genuineness of any of the documents contained in each related Mortgage File of any of the related Mortgage Loans identified on the Mortgage Loan Schedule, or (ii) the collectability, insurability, effectiveness or suitability of any such Mortgage Loan.

Capitalized words and phrases used herein shall have the respective meanings assigned to them in the Pooling and Servicing Agreement.

	 	
[NAME OF CUSTODIAN],

	 	
as Custodian

	 	 	 
	 	 	 
	 	
By:
	 
	 	
Name:
	 
	 	
Title:
	 

	
	 	 H-3	 
	

	

 

EXHIBIT I

FORM OF CLASS A-[_]R TRANSFER AFFIDAVIT

MASTR SEASONED SECURITIZATION TRUST 2004-1

Mortgage Asset Securitization Transactions, Inc.

Mortgage Pass-Through Certificates

Series 2004-1

	
STATE OF
	
)
	 
	 	
)
	
ss.:

	
COUNTY OF
	
)
	 

The undersigned, being first duly sworn, deposes and says as follows:

1.    The undersigned is an officer of _______, the proposed Transferee of an Ownership Interest in a Class A-[_]R Certificate (the “Certificate”) issued pursuant to the Pooling and Servicing Agreement dated as of August 1, 2004 (the “Agreement”) among Mortgage Asset Securitization Transactions, Inc., as depositor, Wells Fargo Bank, N.A., as master servicer (in such capacity, the “Master Servicer”), as trust administrator (in such capacity, the “Trust Administrator”) and as a custodian (in such capacity, a “Custodian”), Wachovia Bank, National Association, as trustee (in such capacity, the “Trustee”), and U.S. Bank National Association, as a custodian (in such capacity, a “Custodian”). Capitalized terms used, but not defined herein or in Exhibit 1 hereto, shall have the meanings ascribed to such terms in the Agreement. The Transferee has authorized the undersigned to make this affidavit on behalf of the Transferee.

2.    The Transferee is, as of the date hereof, and will be, as of the date of the Transfer, a Permitted Transferee. The Transferee is acquiring its Ownership Interest in the Certificate either (i) for its own account or (ii) as nominee, trustee or agent for another Person and has attached hereto an affidavit from such Person in substantially the same form as this affidavit. The Transferee has no knowledge that any such affidavit is false.

3.    The Transferee has been advised of, and understands that (i) a tax will be imposed on Transfers of the Certificate to Persons that are Disqualified Organizations; (ii) such tax will be imposed on the transferor, or, if such Transfer is through an agent (which includes a broker, nominee or middleman) for a Person that is a Disqualified Organization, on the agent; and (iii) the Person otherwise liable for the tax shall be relieved of liability for the tax if the subsequent Transferee furnished to such Person an affidavit that such subsequent Transferee is not a Disqualified Organization and, at the time of Transfer, such Person does not have actual knowledge that the affidavit is false.

4.    The Transferee has been advised of, and understands that a tax will be imposed on a “pass-through entity” holding the Certificate if at any time during the taxable year of the pass-through entity a Person that is a Disqualified Organization is the record holder of an 

	
	 	I-1 	 
	

	 

 

interest in such entity. The Transferee understands that such tax will not be imposed for any period with respect to which the record holder furnishes to the pass-through entity an affidavit that such record holder is not a Disqualified Organization and the pass-through entity does not have actual knowledge that such affidavit is false; provided, that a pass-through entity which is an “electing large partnership” under the Code will be subject to tax in all events. (For this purpose, a “pass-through entity” includes a regulated investment company, a real estate investment trust or common trust fund, a partnership, trust or estate, and certain cooperatives and, except as may be provided in Treasury Regulations, persons holding interests in pass-through entities as a nominee for another Person.) The Transferee further understands that it may incur tax liabilities with respect to the holding of the Certificate in excess of cash flows generated thereby.

 

5.    The Transferee has reviewed the provisions of Section 5.02(c) of the Agreement (attached hereto as Exhibit 2 and incorporated herein by reference) and understands the legal consequences of the acquisition of an Ownership Interest in the Certificate including, without limitation, the restrictions on subsequent Transfers and the provisions regarding voiding the Transfer and mandatory sales. The Transferee expressly agrees to be bound by and to abide by the provisions of Section 5.02(c) of the Agreement and the restrictions noted on the face of the Certificate. The Transferee understands and agrees that any breach of any of the representations included herein shall render the Transfer to the Transferee contemplated hereby null and void.

6.    The Transferee agrees to require a Transfer Affidavit from any Person to whom the Transferee attempts to Transfer its Ownership Interest in the Certificate, and in connection with any Transfer by a Person for whom the Transferee is acting as nominee, trustee or agent, and the Transferee will not Transfer its Ownership Interest or cause any Ownership Interest to be Transferred to any Person that the Transferee knows is not a Permitted Transferee. In connection with any such Transfer by the Transferee, the Transferee agrees to deliver to the Trust Administrator a certificate substantially in the form set forth as Exhibit I to the Agreement (a “Transferor Certificate”) to the effect that such Transferee has no actual knowledge that the Person to which the Transfer is to be made is not a Permitted Transferee.

7.    The Transferee does not have the intention to impede the assessment or collection of any tax legally required to be paid with respect to the Certificate. The Transferee historically has paid its debts as they have become due and intends to do so in the future. The Transferee understands that the taxable income and tax liability with respect to this Certificate will exceed distributions with respect to the Certificate in some or all periods and intends to pay all taxes with respect to the Certificate as they become due.

8.    The Transferee’s taxpayer identification number is __________.

9.    The Transferee is a U.S. Person as defined in Code Section 7701(a)(30) or is not a U.S. Person and has furnished the Transferor and the Trust Administrator with a duly completed Internal Revenue Service Form W-8ECI or any applicable successor form.

10.          The Transferee is aware that the Certificate may be a “noneconomic residual interest” within the meaning of proposed Treasury regulations promulgated pursuant to 

	 
	 	I-2 	 
	

	 

 

the Code and that the transferor of a noneconomic residual interest will remain liable for any taxes due with respect to the income on such residual interest, unless no significant purpose of the transfer was to impede the assessment or collection of tax.

 

11.          The Transferee will not cause income with respect to the Certificate to be attributable to a foreign permanent establishment or fixed base, within the meaning of an applicable income tax treaty, of the Transferee or any other U.S. Person.

12.          Check one of the following paragraphs:

? The present value of the anticipated tax liabilities associated with holding the Certificate, as applicable, does not exceed the sum of:

	 	(i)	the present value of any consideration given to the Transferee to acquire such Certificate;

	 	(ii)	the present value of the expected future distributions on such Certificate; and 

		(iii)	the present value of the anticipated tax savings associated with holding  such Certificate as the related REMIC generates losses.

For purposes of this calculation, (i) the Transferee is assumed to pay tax at the highest rate currently specified in Section 11(b) of the Code (but the tax rate in Section 55(b)(1)(B) of the Code may be used in lieu of the highest rate specified in Section 11(b) of the Code if the Transferee has been subject to the alternative minimum tax under Section 55 of the Code in the preceding two years and will compute its taxable income in the current taxable year using the alternative minimum tax rate) and (ii) present values are computed using a discount rate equal to the short-term Federal rate prescribed by Section 1274(d) of the Code for the month of the transfer and the compounding period used by the Transferee.

? The transfer of the Certificate complies with U.S. Treasury Regulations Sections 1.860E-1(c)(5) and (6) and, accordingly,

	 	(i)	the Transferee is an “eligible corporation,” as defined in U.S. Treasury Regulations Section 1.860E-1(c)(6)(i), as to which income from the Certificate will only be taxed in the United States;

	 	(ii)	at the time of the transfer, and at the close of the Transferee’s two fiscal years preceding the year of the transfer, the Transferee had gross assets for financial reporting purposes (excluding any obligation of a person related to the Transferee within the meaning of U.S. Treasury Regulations Section 1.860E-1(c)(6)(ii)) in excess of $100 million and net assets in excess of $10 million;

	 	(iii)	the Transferee will transfer the Certificate only to another “eligible corporation,” as defined in U.S. Treasury Regulations Section 1.860E-1(c)(6)(i), in a transaction that satisfies the requirements of U.S. Treasury Regulations Sections 1.860E-1(c)(4)(i), (ii) and (iii) and Section 1.860E-1(c)(5); and

	 
	 	I-3 	 
	

	 

 

	 	(iv)	the Transferee determined the consideration paid to it to acquire the Certificate based on reasonable market assumptions (including, but not limited to, borrowing and investment rates, prepayment and loss assumptions, expense and reinvestment assumptions, tax rates and other factors specific to the Transferee) that it has determined in good faith.

? None of the above.

13.          The Transferee is either: (i) not an employee benefit plan or other retirement arrangement subject to Section 406 of ERISA and/or Section 4975 of the Code, or a person acting for, on behalf of or with the assets of, any such plan or arrangement, (ii) if the purchaser is an insurance company, the purchaser is an insurance company which is purchasing such Certificate with funds contained in an “insurance company general account” (as such term is defined in Section V(e) of Prohibited Transaction Class Exemption 95-60 (“PTCE 95-60”)) and the purchase and holding of such Certificate is covered under Sections I and III of PTCE 95-60, or (iii) the Transferee has delivered to the Trust Administrator an Opinion of Counsel satisfactory to the Trust Administrator to the effect that the purchase or holding of such Certificate will not result in prohibited transactions under Section 406 of ERISA and/or Section 4975 of the Code and will not subject the Trustee, the Transferor, the Depositor, the Master Servicer or the Trust Administrator to any obligation in addition to those undertaken in the Agreement, which Opinion of Counsel shall not be an expense of such parties or the Trust Fund.

*         *         *

IN WITNESS WHEREOF, the Transferee has caused this instrument to be executed on its behalf, pursuant to authority of its Board of Directors, by its duly authorized officer and its corporate seal to be hereunto affixed, duly attested, this ____________ day of __________________, 200_.

	 	 
	 	
PRINT NAME OF TRANSFEREE

	 	 	 
	 	 	 
	 	
By:
	 
	 	
Name:
	 
	 	
Title:
	 

[Corporate Seal]

	 
	 	I-4 	 
	

	 

 

	
ATTEST:
	 
	 	 
	 	 
	 	 
	
[Assistant] Secretary
	 

Personally appeared before me the above-named _______, known or proved to me to be the same person who executed the foregoing instrument and to be the __________ of the Transferee, and acknowledged that he executed the same as his free act and deed and the free act and deed of the Transferee.

Subscribed and sworn before me this ____ day of _______, 200_.

	 	 
	 	
NOTARY PUBLIC

	 	 
	 	 
	 	
My Commission expires the ______ day of ________________, 200_.

	 
	 	I-5 	 
	

	 

EXHIBIT 1

to EXHIBIT I

Certain Definitions

“Disqualified Organization”: A Person specified in clauses (i)-(iv) of the definition of “Permitted Transferee.”

“Ownership Interest”: As to any Residual Certificate, any ownership interest in such Certificate, including any interest in such Certificate as the Holder thereof and any other interest therein, whether direct or indirect, legal or beneficial.

“Permitted Transferee”: Any person other than (i) the United States, any State or political subdivision thereof, or any agency or instrumentality of any of the foregoing, (ii) a foreign government, International Organization or any agency or instrumentality of either of the foregoing, (iii) an organization (except certain farmers’ cooperatives described in Section 521 of the Code) which is exempt from tax imposed by Chapter 1 of the Code (including the tax imposed by Section 511 of the Code on unrelated business taxable income) on any excess inclusions (as defined in Section 860E(c)(l) of the Code) with respect to any Residual Certificate, (iv) rural electric and telephone cooperatives described in Section 1381(a)(2)(C) of the Code, (v) a Person that is not a citizen or resident of the United States, a corporation, partnership (except as provided in applicable Treasury Regulations), or other entity created or organized in or under the laws of the United States or any state thereof or the District of Columbia, an estate whose income is subject to United States federal income tax purposes 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 persons described in this clause (v) have the authority to control all substantial decisions of the trust (or, to the extent provided in applicable Treasury Regulations, certain trusts in existence on September 20, 1996 which are eligible to elect to be treated as United States persons) unless such Person has furnished the transferor and the Trust Administrator with a duly completed Internal Revenue Service Form W-8ECI or any applicable successor form, (vi) any Person with respect to whom income on any residual certificate is attributable to a foreign permanent establishment or fixed base, within the meaning of an applicable treaty, of such Person or any other U.S. Person and (vii) any other Person so designated by the Depositor based upon an Opinion of Counsel that the Transfer of an Ownership Interest in a Residual Certificate to such Person may cause a REMIC hereunder to fail to qualify as a REMIC at any time that the Certificates are outstanding. The terms “United States,” “State” and “International Organization” shall have the meanings set forth in Section 7701 of the Code or successor provisions. A corporation will not be treated as an instrumentality of the United States or of any State or political subdivision thereof for these purposes if all of its activities are subject to tax and, with the exception of the Freddie Mac, a majority of its board of directors is not selected by such government unit.

“Person”: Any individual, corporation, partnership, limited liability company, joint venture, association, joint-stock company, trust, unincorporated organization or government or any agency or political subdivision thereof.

	
	 	 I-6	 
	

	 

 

“Transfer”: Any direct or indirect transfer or sale of any Ownership Interest in a Residual Certificate.

“Transferee”: Any Person who is acquiring by Transfer any Ownership Interest in a Residual Certificate.

	
	 	I-7 	 
	

	 

EXHIBIT 2

to EXHIBIT I

Section 5.02(c) of the Agreement

Each Person who has or who acquires any Ownership Interest in a Residual Certificate shall be deemed by the acceptance or acquisition of such Ownership Interest to have agreed to be bound by the following provisions, and the rights of each Person acquiring any Ownership Interest in a Residual Certificate are expressly subject to the following provisions:

(i)     Each Person holding or acquiring any Ownership Interest in a Residual Certificate shall be a Permitted Transferee and shall promptly notify the Trust Administrator of any change or impending change in its status as a Permitted Transferee.

(ii)    No Ownership Interest in a Residual Certificate may be registered on the Closing Date or thereafter transferred, and the Trust Administrator shall not register the Transfer of any Residual Certificate unless, in addition to the certificates required to be delivered to the Trust Administrator under subparagraph (b) above, the Trust Administrator shall have been furnished with an affidavit (a “Transfer Affidavit”) of the initial owner or the proposed transferee in the form attached hereto as Exhibit I.

(iii)   Each Person holding or acquiring any Ownership Interest in a Residual Certificate shall agree (A) to obtain a Transfer Affidavit from any other Person to whom such Person attempts to Transfer its Ownership Interest in a Residual Certificate, (B) to obtain a Transfer Affidavit from any Person for whom such Person is acting as nominee, trustee or agent in connection with any Transfer of a Residual Certificate and (C) not to Transfer its Ownership Interest in a Residual Certificate or to cause the Transfer of an Ownership Interest in a Residual Certificate to any other Person if it has actual knowledge that such Person is not a Permitted Transferee.

(iv)   Any attempted or purported Transfer of any Ownership Interest in a Residual Certificate in violation of the provisions of this Section 5.02(c) shall be absolutely null and void and shall vest no rights in the purported Transferee. If any purported transferee shall become a Holder of a Residual Certificate in violation of the provisions of this Section 5.02(c), then the last preceding Permitted Transferee shall be restored to all rights as Holder thereof retroactive to the date of registration of Transfer of such Residual Certificate. The Trust Administrator shall be under no liability to any Person for any registration of Transfer of a Residual Certificate that is in fact not permitted by Section 5.02(b) and this Section 5.02(c) or for making any payments due on such Certificate to the Holder thereof or taking any other action with respect to such Holder under the provisions of this Agreement so long as the Transfer was registered after receipt of the related Transfer Affidavit, Transferor Certificate and either the Rule 144A Letter or the Investment Letter. The Trust Administrator shall be entitled but not obligated to recover from any Holder of a Residual Certificate that was in fact not a Permitted Transferee at the time it became a Holder or, at such subsequent time as it became other than a Permitted Transferee, all payments made on such Residual Certificate at and after either such time. Any such payments so recovered by the Trust Administrator shall be paid and delivered by the Trust Administrator to the last preceding Permitted Transferee of such Certificate.

	
	 	I-8 	 
	

	 

 

(v)    The Depositor shall use its best efforts to make available, upon receipt of written request from the Trust Administrator, all information necessary to compute any tax imposed under Section 860E(e) of the Code as a result of a Transfer of an Ownership Interest in a Residual Certificate to any Holder who is not a Permitted Transferee described in clauses (i) through (iv) of the definition thereof.

The restrictions on Transfers of a Residual Certificate set forth in this Section 5.02(c) shall cease to apply (and the applicable portions of the legend on a Residual Certificate may be deleted) with respect to Transfers occurring after delivery to the Trust Administrator of an Opinion of Counsel, which Opinion of Counsel shall not be an expense of the Trust Fund, the Trustee, the Loan Seller, the Transferors, the Master Servicer or the Trust Administrator, to the effect that the elimination of such restrictions will not cause a REMIC hereunder to fail to qualify as a REMIC at any time that the Certificates are outstanding or result in the imposition of any tax on the Trust Fund, a Certificateholder or another Person. Each Person holding or acquiring any Ownership Interest in a Residual Certificate hereby consents to any amendment of this Agreement which, based on an Opinion of Counsel furnished to the Trust Administrator, is reasonably necessary (a) to ensure that the record ownership of, or any beneficial interest in, a Residual Certificate is not transferred, directly or indirectly, to a Person that is not a Permitted Transferee and (b) to provide for a means to compel the Transfer of a Residual Certificate which is held by a Person that is not a Permitted Transferee to a Holder that is a Permitted Transferee.

	
	 	 I-9	 
	

	

 

EXHIBIT J

FORM OF TRANSFEROR CERTIFICATE

	 	 	 
	 	
Date
	 

Mortgage Asset Securitization Transactions, Inc.

1285 Avenue of the Americas

New York, New York 10019

Attention: 

Wells Fargo Bank, N.A., as trust administrator

Sixth Street and Marquette Avenue 

Minneapolis, Minnesota 55479

Attention:

	 	Re:	Mortgage Asset Securitization Transactions, Inc., MASTR Seasoned Securitization Trust 2004-1, Mortgage Pass-Through Certificates, Series 2004-1, Class A-[_]R

Ladies and Gentlemen:

In connection with our disposition of the above Certificates we certify that (a) we have not offered or sold any Certificates to, or solicited offers to buy any Certificates from, any person, or otherwise approached or negotiated with any person with respect thereto, in a manner that would be deemed, or taken any other action which would result in, a violation of Section 5 of the Securities Act of 1933, as amended and (b) to the extent we are disposing of a Class A-[_]R Certificate, (i) we have no knowledge the Transferee is not a Permitted Transferee, (ii) after conducting a reasonable investigation of the financial condition of the Transferee, we have no reason to believe that the Transferee will not pay taxes with respect to the Class A-[_]R Certificate when due, and (iii) we have no reason to believe that the statements made in paragraphs 7, 10 and 11 of the Transferee’s Transfer Affidavit are false.

	 	
Very truly yours,

	 	 	 
	 	 	 
	 	 
	 	
Print Name of Transferor

	 	 	 
	 	 	 
	 	
By:
	 
	 	
Authorized Officer

	
	 	 J-1	 
	

	

EXHIBIT K

FORM OF INVESTMENT LETTER (NON-RULE 144A)

	 	 	 
	 	
Date
	 

Mortgage Asset Securitization Transactions, Inc.

1285 Avenue of the Americas

New York, New York 10019

Attention: 

Wells Fargo Bank, N.A., as trust administrator

Sixth Street and Marquette Avenue 

Minneapolis, Minnesota 55479

Attention: 

	 	Re:	Mortgage Asset Securitization Transactions, Inc., MASTR Seasoned Securitization Trust 2004-1, Mortgage Pass-Through Certificates, Series 2004-1, Class [__________]

Ladies and Gentlemen:

In connection with our acquisition of the above Certificates we certify that (a) we understand that the Certificates are not being registered under the Securities Act of 1933, as amended (the “Act”), or any state securities laws and are being transferred to us in a transaction that is exempt from the registration requirements of the Act and any such laws, (b) we are an “accredited investor,” as defined in Regulation D under the Act, and have such knowledge and experience in financial and business matters that we are capable of evaluating the merits and risks of investments in the Certificates, (c) we have had the opportunity to ask questions of and receive answers from the Depositor concerning the purchase of the Certificates and all matters relating thereto or any additional information deemed necessary to our decision to purchase the Certificates, (d) either (i) we are not an employee benefit plan or other retirement arrangement subject to Section 406 of ERISA and/or Section 4975 of the Code, or a person acting for, on behalf of or with the assets of, any such plan or arrangement, (ii) in the case of an ERISA-Restricted Certificate which is the subject of an ERISA Qualifying Underwriting, if we are an insurance company, we are an insurance company that is purchasing such Certificates with funds contained in an “insurance company general account” (as such term is defined in Section V(e) of Prohibited Transaction Class Exemption 95-60 (“PTCE 95-60”)) and the purchase and holding of such Certificates are covered under Sections I and III of PTCE 95-60 or (iii) we have provided the Trust Administrator with a satisfactory Opinion of Counsel as required in the Agreement to the effect that the purchase or holding of such ERISA-Restricted Certificate will not result in prohibited transactions under Section 406 of ERISA and/or Section 4975 of the Code and will not subject the Trustee, the Transferor, the Depositor, the Master Servicer or the Trust Administrator to any obligation or liability (including obligations or liabilities under ERISA or section 4975 of the Code) in addition to those undertaken in the Agreement, (e) we are acquiring the Certificates for

	 
	 	 K-1	 
	

	 

 

investment for our own account and not with a view to any distribution of such Certificates (but without prejudice to our right at all times to sell or otherwise dispose of the Certificates in accordance with clause (g) below), (f) we have not offered or sold any Certificates to, or solicited offers to buy any Certificates from, any person, or otherwise approached or negotiated with any person with respect thereto, or taken any other action which would result in a violation of Section 5 of the Act, and (g) we will not sell, transfer or otherwise dispose of any Certificates unless (1) such sale, transfer or other disposition is made pursuant to an effective registration statement under the Act or is exempt from such registration requirements, and if requested, we will at our expense provide an opinion of counsel satisfactory to the addressees of this Certificate that such sale, transfer or other disposition may be made pursuant to an exemption from the Act, (2) the purchaser or transferee of such Certificate has executed and delivered to you a certificate to substantially the same effect as this certificate, and (3) the purchaser or transferee has otherwise complied with any conditions for transfer set forth in the Pooling and Servicing Agreement.

	 	
Very truly yours,

	 	 	 
	 	 	 
	 	 
	 	
Print Name of Transferor

	 	 	 
	 	 	 
	 	
By:
	 
	 	
Authorized Officer

	
	 	 K-2	 
	

	

EXHIBIT L

FORM OF RULE 144A LETTER

	 	 	 
	 	
Date
	 

Mortgage Asset Securitization Transactions, Inc.

1285 Avenue of the Americas

New York, New York 10019

Attention: 

Wells Fargo Bank, N.A., as trust administrator

Sixth Street and Marquette Avenue 

Minneapolis, Minnesota 55479

Attention: 

	 	Re:	Mortgage Asset Securitization Transactions, Inc., MASTR Seasoned Securitization Trust 2004-1, Mortgage Pass-Through Certificates, Series 2004-1, Class [_______________]

Ladies and Gentlemen:

In connection with our acquisition of the above Certificates we certify that (a) we understand that the Certificates are not being registered under the Securities Act of 1933, as amended (the “Act”), or any state securities laws and are being transferred to us in a transaction that is exempt from the registration requirements of the Act and any such laws, (b) we have such knowledge and experience in financial and business matters that we are capable of evaluating the merits and risks of investments in the Certificates, (c) we have had the opportunity to ask questions of and receive answers from the Depositor concerning the purchase of the Certificates and all matters relating thereto or any additional information deemed necessary to our decision to purchase the Certificates, (d) either (i) we are not an employee benefit plan or other retirement arrangement subject to Section 406 of ERISA and/or Section 4975 of the Code, or a person acting for, on behalf of or with the assets of, any such plan or arrangement, (ii) in the case of an ERISA-Restricted Certificate which is the subject of an ERISA Qualifying Underwriting, if we are an insurance company, we are an insurance company that is purchasing such Certificates with funds contained in an “insurance company general account” (as such term is defined in Section V(e) of Prohibited Transaction Class Exemption 95-60 (“PTCE 95-60”)) and that the purchase and holding of such Certificates are covered under Sections I and III of PTCE 95-60 or (iii) we have provided the Trust Administrator with a satisfactory Opinion of Counsel as required in the Agreement to the effect that the purchase or holding of such ERISA-Restricted Certificate will not result in prohibited transactions under Section 406 of ERISA and/or Section 4975 of the Code and will not subject the Trustee, the Transferor, the Depositor, the Master Servicer or the Trust Administrator to any obligation or liability (including obligations or liabilities under ERISA or section 4975 of the Code) in addition to those undertaken in the Agreement, (e) we have not, nor has anyone acting on our behalf offered, transferred, pledged, sold or otherwise 

	 
	 	L-1 	 
	

	 

disposed of the Certificates, any interest in the Certificates or any other similar security to, or solicited any offer to buy or accept a transfer, pledge or other disposition of the Certificates, any interest in the Certificates or any other similar security from, or otherwise approached or negotiated with respect to the Certificates, any interest in the Certificates or any other similar security with, any person in any manner, or made any general solicitation by means of general advertising or in any other manner, or taken any other action, that would constitute a distribution of the Certificates under the Securities Act or that would render the disposition of the Certificates a violation of Section 5 of the Securities Act or require registration pursuant thereto, nor will act, nor has authorized or will authorize any person to act, in such manner with respect to the Certificates, (f) we are a “qualified institutional buyer” as that term is defined in Rule 144A under the Securities Act and have completed either of the forms of certification to that effect attached hereto as Annex 1 or Annex 2. We are aware that the sale to us is being made in reliance on Rule 144A. We are acquiring the Certificates for our own account or for resale pursuant to Rule 144A and further, understand that such Certificates may be resold, pledged or transferred only (i) to a person reasonably believed to be a qualified institutional buyer that purchases for its own account or for the account of a qualified institutional buyer to whom notice is given that the resale, pledge or transfer is being made in reliance on Rule 144A, or (ii) pursuant to another exemption from registration under the Securities Act.

	
	 	L-2	 
	

	 

ANNEX 1

to EXHIBIT L

QUALIFIED INSTITUTIONAL BUYER STATUS UNDER SEC RULE 144A

(For Transferees Other Than Registered Investment Companies)

The undersigned (the “Buyer”) hereby certifies as follows to the parties listed in the Rule 144A Transferee Certificate to which this certification relates with respect to the Certificates described therein:

1.    As indicated below, the undersigned is the President, Chief Financial Officer, Senior Vice President or other executive officer of the Buyer.

2.    In connection with purchases by the Buyer, the Buyer is a “qualified institutional buyer” as that term is defined in Rule 144A under the Securities Act of 1933, as amended (“Rule 144A”) because (i) the Buyer owned and/or invested on a discretionary basis either at least $100,000 in securities or, if Buyer is a dealer, Buyer must own and/or invest on a discretionary basis at least $10,000,000 in securities (except for the excluded securities referred to below) as of the end of the Buyer’s most recent fiscal year (such amount being calculated in accordance with Rule 144A and (ii) the Buyer satisfies the criteria in the category marked below.

·     Corporation, etc. The Buyer is a corporation (other than a bank, savings and loan association or similar institution), Massachusetts or similar business trust, partnership, or charitable organization described in Section 501(c)(3) of the Internal Revenue Code of 1986, as amended.

·     Bank. The Buyer (a) is a national bank or banking institution organized under the laws of any State, territory or the District of Columbia, the business of which is substantially confined to banking and is supervised by the State or territorial banking commission or similar official or is a foreign bank or equivalent institution, and (b) has an audited net worth of at least $25,000,000 as demonstrated in its latest annual financial statements, a copy of which is attached hereto.

·     Savings and Loan. The Buyer (a) is a savings and loan association, building and loan association, cooperative bank, homestead association or similar institution, which is supervised and examined by a State or Federal authority having supervision over any such institutions or is a foreign savings and loan association or equivalent institution and (b) has an audited net worth of at least $25,000,000 as demonstrated in its latest annual financial statements, a copy of which is attached hereto.

·     Broker-dealer. The Buyer is a dealer registered pursuant to Section 15 of the Securities Exchange Act of 1934.

·     Insurance Company. The Buyer is an insurance company whose primary and predominant business activity is the writing of insurance or the reinsuring of risks underwritten by insurance companies and which is subject to supervision by the insurance commissioner or a similar official or agency of a State, territory or the District of Columbia.

	
	 	L-3	 
	

	 

 

·     State or Local Plan. The Buyer is a plan established and maintained by a State, its political subdivisions, or any agency or instrumentality of the State or its political subdivisions, for the benefit of its employees.

·     ERISA Plan. The Buyer is an employee benefit plan within the meaning of Title I of the Employee Retirement Income Security Act of 1974.

·     Investment Advisor. The Buyer is an investment advisor registered under the Investment Advisors Act of 1940.

·     Small Business Investment Company. Buyer is a small business investment company licensed by the U.S. Small Business Administration under Section 301(c) or (d) of the Small Business Investment Act of 1958.

·     Business Development Company. Buyer is a business development company as defined in Section 202(a)(22) of the Investment Advisors Act of 1940.

3.    The term “securities” as used herein does not include (i) securities of issuers that are affiliated with the Buyer, (ii) securities that are part of an unsold allotment to or subscription by the Buyer, if the Buyer is a dealer, (iii) securities issued or guaranteed by the U.S. or any instrumentality thereof, (iv) bank deposit notes and certificates of deposit, (v) loan participations, (vi) repurchase agreements, (vii) securities owned but subject to a repurchase agreement and (viii) currency, interest rate and commodity swaps.

4.    For purposes of determining the aggregate amount of securities owned and/or invested on a discretionary basis by the Buyer, the Buyer used the cost of such securities to the Buyer and did not include any of the securities referred to in the preceding paragraph, except (i) where the Buyer reports its securities holdings in its financial statements on the basis of their market value, and (ii) no current information with respect to the cost of those securities has been published. If clause (ii) in the preceding sentence applies, the securities may be valued at market. Further, in determining such aggregate amount, the Buyer may have included securities owned by subsidiaries of the Buyer, but only if such subsidiaries are consolidated with the Buyer in its financial statements prepared in accordance with generally accepted accounting principles and if the investments of such subsidiaries are managed under the Buyer’s direction. However, such securities were not included if the Buyer is a majority-owned, consolidated subsidiary of another enterprise and the Buyer is not itself a reporting company under the Securities Exchange Act of 1934, as amended.

5.    The Buyer acknowledges that it is familiar with Rule 144A and understands that the seller to it and other parties related to the Certificates are relying and will continue to rely on the statements made herein because one or more sales to the Buyer may be in reliance on Rule 144A.

6.    Until the date of purchase of the Rule 144A Securities, the Buyer will notify each of the parties to which this certification is made of any changes in the information and conclusions herein. Until such notice is given, the Buyer’s purchase of the Certificates will constitute a reaffirmation of this certification as of the date of such purchase. In addition, if the 

	
	 	L-4	 
	

	 

 

Buyer is a bank or savings and loan is provided above, the Buyer agrees that it will furnish to such parties updated annual financial statements promptly after they become available.

	 	 
	 	
Print Name of Buyer

	 	 	 
	 	 	 
	 	
By:
	 
	 	
Name:
	 
	 	
Title:
	 
	 	
Date:
	 

	
	 	L-5	 
	

	 

 

ANNEX 2

to EXHIBIT L

QUALIFIED INSTITUTIONAL BUYER STATUS UNDER SEC RULE 144A

(For Transferees That are Registered Investment Companies)

The undersigned (the “Buyer”) hereby certifies as follows to the parties listed in the Rule 144A Transferee Certificate to which this certification relates with respect to the Certificates described therein:

1.    As indicated below, the undersigned is the President, Chief Financial Officer or Senior Vice President of the Buyer or, if the Buyer is a “qualified institutional buyer” as that term is defined in Rule 144A under the Securities Act of 1933, as amended (“Rule 144A”), because Buyer is part of a Family of Investment Companies (as defined below), is such an officer of the Adviser.

2.    In connection with purchases by Buyer, the Buyer is a “qualified institutional buyer” as defined in SEC Rule 144A because (i) the Buyer is an investment company registered under the Investment Company Act of 1940, as amended and (ii) as marked below, the Buyer alone, or the Buyer’s Family of Investment Companies, owned at least $100,000,000 in securities (other than the excluded securities referred to below) as of the end of the Buyer’s most recent fiscal year. For purposes of determining the amount of securities owned by the Buyer or the Buyer’s Family of Investment Companies, the cost of such securities was used, except (i) where the Buyer or the Buyer’s Family of Investment Companies reports its securities holdings in its financial statements on the basis of their market value, and (ii) no current information with respect to the cost of those securities has been published. If clause (ii) in the preceding sentence applies, the securities may be valued at market.

___ The Buyer owned $_______ in securities (other than the excluded securities referred to below) as of the end of the Buyer’s most recent fiscal year (such amount being calculated in accordance with Rule 144A).

___ The Buyer is part of a Family of Investment Companies which owned in the aggregate $_______ in securities (other than the excluded securities referred to below) as of the end of the Buyer’s most recent fiscal year (such amount being calculated in accordance with Rule 144A).

3.    The term “Family of Investment Companies” as used herein means two or more registered investment companies (or series thereof) that have the same investment adviser or investment advisers that are affiliated (by virtue of being majority owned subsidiaries of the same parent or because one investment adviser is a majority owned subsidiary of the other).

4.    The term “securities” as used herein does not include (i) securities of issuers that are affiliated with the Buyer or are part of the Buyer’s Family of Investment Companies, (ii) securities issued or guaranteed by the U.S. or any instrumentality thereof, (iii) bank deposit notes and certificates of deposit, (iv) loan participations, (v) repurchase agreements, (vi) securities owned but subject to a repurchase agreement and (vii) currency, interest rate and commodity swaps.

	
	 	L-6	 
	

	 

 

5.    The Buyer is familiar with Rule 144A and understands that the parties listed in the Rule 144A Transferee Certificate to which this certification relates are relying and will continue to rely on the statements made herein because one or more sales to the Buyer will be in reliance on Rule 144A. In addition, the Buyer will only purchase for the Buyer’s own account.

6.    Until the date of purchase of the Certificates, the undersigned will notify the parties listed in the Rule 144A Transferee Certificate to which this certification relates of any changes in the information and conclusions herein. Until such notice is given, the Buyer’s purchase of the Certificates will constitute a reaffirmation of this certification by the undersigned as of the date of such purchase.

	 	 
	 	
Print Name of Buyer or Adviser

	 	 	 
	 	 	 
	 	
By:
	 
	 	
Name:
	 
	 	
Title:
	 
	 	 	 
	 	 	 
	 	
IF AN ADVISER:

	 	 	 
	 	 	 
	 	 
	 	
Print Name of Buyer

	 	 	 
	 	 	 
	 	
Date:

	
	 	 L-7	 
	

	

 

EXHIBIT M

FORM OF REQUEST FOR RELEASE OF DOCUMENTS

	 	To:	[Wells Fargo Bank, N.A.

1015 10th Avenue S.E.

Minneapolis, MN 55414-0031

Attn: Inventory Control—MASTR 2004-1]

[U.S. Bank National Association

Attn: Document Collateral Services 

1133 Rankin Street 

St. Paul, MN 55116]

	 	Re:	Pooling and Servicing Agreement, dated as of August 1, 2004, by and among Mortgage Asset Securitization Transactions, Inc., as depositor, Wells Fargo Bank, N.A., as master servicer, as trust administrator and as a custodian, and Wachovia Bank, National Association, as trustee and U.S. Bank National Association, as custodian.

 In connection with the administration of the related Mortgage Loans held by you as a Custodian pursuant to the above-captioned Pooling and Servicing Agreement, we request the release, and hereby acknowledge receipt, of the Mortgage File for the Mortgage Loan described below, for the reason indicated. If such Mortgage Loan is being repurchased, we hereby certify that the Purchase Price for such Mortgage Loan has been paid.

Mortgage Loan Number:

Mortgagor Name, Address & Zip Code:

 

Reason for Requesting Documents (check one):

	
 
	 	
1.
	 	
Mortgage Paid in Full

	 	 	 	 	 
	
 
	 	
2.
	 	
Foreclosure

	 	 	 	 	 
	
 
	 	
3. 
	 	
Substitution

	 	 	 	 	 
	
 
	 	
4.
	 	
Other Liquidation (Repurchases, etc.)

	 	 	 	 	 
	
 
	 	
5.
	 	
Nonliquidation

	
	 	 M-1	 
	

	 

 

	
Reason:
	 
	 	 
	
Address to which Custodian should
	 
	
Deliver the Mortgage File:
	 
	 	 
	 	 
	 	 

	 	
By:
	 
	 	 	
(authorized signer)

	 	
Issuer:
	 	 
	 	 	 	 
	 	
Address:
	 	 
	 	 	 	 
	 	 	 	 
	 	 	 	 
	 	
Date:
	 	 

Custodian

[Wells Fargo Bank, N.A.]

[U.S. Bank National Association]

 

Please acknowledge the execution of the above request by your signature and date below:

	 	 	 
	
Signature
	 	
Date

Documents returned to Custodian:

	 	 	 
	
Custodian
	 	
Date

	
 

	 	 M-2	 
	

	

 

EXHIBIT N

FORM OF CERTIFICATION TO BE PROVIDED WITH FORM 10-K

[Name of Trust] (the “Trust”)

Mortgage Pass-Through Certificates

Series 20[__]-[__]

I, [identify the certifying individual], certify that:

	 	1.	I have reviewed this annual report on Form 10-K, and all reports on Form 8-K containing distribution date reports filed in respect of periods included in the year covered by this annual report, of the Trust;

	 	2.	Based on my knowledge, the information in these reports, taken as a whole, does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading as of the last day of the period covered by this annual report;

	 	3.	Based on my knowledge, the servicing information required to be provided to the Master Servicer under the Pooling and Servicing Agreement for inclusion in these reports is included in these reports;

	 	4.	I am responsible for reviewing the activities performed by the Servicers under the Servicing Agreements and based upon my knowledge and the annual compliance review required under the Servicing Agreements, and except as disclosed in the reports, each Servicer has fulfilled its obligations under the related Servicing Agreement; and

	 	5.	The reports disclose all significant deficiencies relating to each Servicer’s compliance with the minimum servicing standards based upon the report provided by an independent public accountant, after conducting a review in compliance with the Uniform Single Attestation Program for Mortgage Bankers or similar procedures as set forth in the related Servicing Agreement that is included in these reports.

In giving the certifications above, I have reasonably relied on information provided to me by the following unaffiliated parties: [name of each Servicer, Trustee or Depositor].

Capitalized terms used but not defined herein have the meanings assigned in the pooling and servicing agreement dated as of August 1, 2004 (the “Pooling and Servicing Agreement”) among Mortgage Asset Securitization Transactions, Inc., as depositor, Wells Fargo Bank, N.A., as master servicer, trust administrator and a custodian, and Wachovia Bank, National Association, as trustee, and U.S. Bank National Association, as a custodian.

	 
	 	N-1 	 
	

	 

	
Date:
	 
	 	 
	 	 
	 
	
[Signature]

	
Name:
	 
	
Title:
	
 

	
 

	 	N-2

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