EXHIBIT 1
STRUCTURED ASSET MORTGAGE INVESTMENTS INC.,
SELLER
JPMORGAN CHASE BANK,
TRUSTEE
XXXXX FARGO BANK MINNESOTA, NATIONAL ASSOCIATION,
MASTER SERVICER AND SECURITIES ADMINISTRATOR
and
EMC MORTGAGE CORPORATION
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POOLING AND SERVICING AGREEMENT
Dated as of September 1, 2003
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Structured Asset Mortgage Investments Inc.
Bear Xxxxxxx ALT-A Trust, Mortgage Pass-Through Certificates
Series 2003-3
TABLE OF CONTENTS
ARTICLE I
Definitions
ARTICLE II
Conveyance of Mortgage Loans;
Original Issuance of Certificates
Section 2.01 Conveyance of Mortgage Loans to Trustee.............................................31
Section 2.02 Acceptance of Mortgage Loans by Trustee.............................................33
Section 2.03 Assignment of Interest in the Mortgage Loan Purchase Agreement......................35
Section 2.04 Substitution of Mortgage Loans......................................................36
Section 2.05 Issuance of Certificates............................................................37
Section 2.06 Representations and Warranties Concerning the Seller................................37
ARTICLE III
Administration and Servicing of Mortgage Loans
Section 3.01 Master Servicer.....................................................................39
Section 3.02 REMIC-Related Covenants.............................................................40
Section 3.03 Monitoring of Servicers.............................................................40
Section 3.04 Fidelity Bond.......................................................................41
Section 3.05 Power to Act; Procedures............................................................41
Section 3.06 Due-on-Sale Clauses; Assumption Agreements..........................................42
Section 3.07 Release of Mortgage Files...........................................................42
Section 3.08 Documents, Records and Funds in Possession of Master Servicer To Be Held for
Trustee.............................................................................43
Section 3.09 Standard Hazard Insurance and Flood Insurance Policies..............................44
Section 3.10 Presentment of Claims and Collection of Proceeds....................................44
Section 3.11 Maintenance of the Primary Mortgage Insurance Policies..............................45
Section 3.12 Trustee to Retain Possession of Certain Insurance Policies and Documents............45
Section 3.13 Realization Upon Defaulted Mortgage Loans...........................................46
Section 3.14 Compensation for the Master Servicer................................................46
Section 3.15 REO Property........................................................................46
Section 3.16 Annual Officer's Certificate as to Compliance.......................................47
Section 3.17 Annual Independent Accountant's Servicing Report....................................47
Section 3.18 Reports Filed with Securities and Exchange Commission...............................48
Section 3.19 EMC.................................................................................49
Section 3.20 UCC.................................................................................49
Section 3.21 Optional Purchase of Defaulted Mortgage Loans.......................................49
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ARTICLE IV
Accounts
Section 4.01 Protected Accounts..................................................................51
Section 4.02 Master Servicer Collection Account..................................................52
Section 4.03 Permitted Withdrawals and Transfers from the Master Servicer Collection Account.....53
Section 4.04 Distribution Account................................................................54
Section 4.05 Permitted Withdrawals and Transfers from the Distribution Account...................54
ARTICLE V
Certificates
Section 5.01 Certificates........................................................................58
Section 5.02 Registration of Transfer and Exchange of Certificates...............................64
Section 5.03 Mutilated, Destroyed, Lost or Stolen Certificates...................................67
Section 5.04 Persons Deemed Owners...............................................................68
Section 5.05 Transfer Restrictions on Residual Certificates......................................68
Section 5.06 Restrictions on Transferability of Certificates.....................................69
Section 5.07 ERISA Restrictions..................................................................69
Section 5.08 Rule 144A Information...............................................................70
ARTICLE VI
Payments to Certificateholders
Section 6.01 Distributions on the Certificates...................................................72
Section 6.02 Allocation of Losses................................................................75
Section 6.03 Payments............................................................................75
Section 6.04 Statements to Certificateholders....................................................75
Section 6.05 Monthly Advances....................................................................78
Section 6.06 Compensating Interest Payments......................................................78
ARTICLE VII
The Master Servicer
Section 7.01 Liabilities of the Master Servicer..................................................79
Section 7.02 Merger or Consolidation of the Master Servicer......................................79
Section 7.03 Indemnification of the Trustee, the Master Servicer and the Securities
Administrator.......................................................................79
Section 7.04 Limitations on Liability of the Master Servicer and Others..........................80
Section 7.05 Master Servicer Not to Resign.......................................................81
Section 7.06 Successor Master Servicer...........................................................81
Section 7.07 Sale and Assignment of Master Servicing.............................................81
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ARTICLE VIII
Default
Section 8.01 Events of Default...................................................................83
Section 8.02 Trustee to Act; Appointment of Successor............................................84
Section 8.03 Notification to Certificateholders..................................................85
Section 8.04 Waiver of Defaults..................................................................85
Section 8.05 List of Certificateholders..........................................................86
ARTICLE IX
Concerning the Trustee and the Securities Administrator
Section 9.01 Duties of Trustee...................................................................87
Section 9.02 Certain Matters Affecting the Trustee and the Securities Administrator..............89
Section 9.03 Trustee and Securities Administrator Not Liable for Certificates or Mortgage Loans..91
Section 9.04 Trustee and Securities Administrator May Own Certificates...........................91
Section 9.05 Trustee's and Securities Administrator's Fees and Expenses..........................91
Section 9.06 Eligibility Requirements for Trustee and Securities Administrator...................92
Section 9.07 Insurance...........................................................................92
Section 9.08 Resignation and Removal of the Trustee and Securities Administrator.................92
Section 9.09 Successor Trustee and Successor Securities Administrator............................93
Section 9.10 Merger or Consolidation of Trustee or Securities Administrator......................94
Section 9.11 Appointment of Co-Trustee or Separate Trustee.......................................94
Section 9.12 Federal Information Returns and Reports to Certificateholders; REMIC
Administration......................................................................95
ARTICLE X
Termination
Section 10.01 Termination Upon Repurchase by the Seller or its Designee or Liquidation of the
Mortgage Loans......................................................................98
Section 10.02 Additional Termination Requirements................................................100
ARTICLE XI
Miscellaneous Provisions
Section 11.01 Intent of Parties..................................................................102
Section 11.02 Amendment..........................................................................102
Section 11.03 Recordation of Agreement...........................................................103
Section 11.04 Limitation on Rights of Certificateholders.........................................103
Section 11.05 Acts of Certificateholders.........................................................104
Section 11.06 Governing Law......................................................................105
Section 11.07 Notices............................................................................105
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Section 11.08 Severability of Provisions.........................................................105
Section 11.09 Successors and Assigns.............................................................106
Section 11.10 Article and Section Headings.......................................................106
Section 11.11 Counterparts.......................................................................106
Section 11.12 Notice to Rating Agencies..........................................................106
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EXHIBITS
Exhibit A-1 - Form of Class A and Class X Certificates
Exhibit A-2 - Form of Class B Certificates
Exhibit A-3 - Form of Class R Certificates
Exhibit A-4 - Form of Class S Certificates
Exhibit B - Mortgage Loan Schedule
Exhibit C - [Reserved]
Exhibit D - Request for Release of Documents
Exhibit E - Form of Affidavit pursuant to Section 860E(e)(4)
Exhibit F-1 - Form of Investment Letter
Exhibit F-2 - Form of Rule 144A and Related Matters Certificate
Exhibit G - Form of Custodial Agreement
Exhibit H-1 - Alliance Servicing Agreement
Exhibit H-2 - IndyMac Servicing Agreement
Exhibit H-3 - U.S. Bank Servicing Agreement
Exhibit I - Assignment Agreements
Exhibit J - Mortgage Loan Purchase Agreement
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POOLING AND SERVICING AGREEMENT
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Pooling and Servicing Agreement dated as of September 1, 2003, among
Structured Asset Mortgage Investments Inc., a Delaware corporation, as seller
(the "Seller"), JPMorgan Chase Bank, a New York banking corporation, not in its
individual capacity but solely as trustee (the "Trustee"), Xxxxx Fargo Bank
Minnesota, National Association, as master servicer (in such capacity, the
"Master Servicer") and as securities administrator (in such capacity, the
"Securities Administrator") and EMC Mortgage Corporation ("EMC").
PRELIMINARY STATEMENT
On or prior to the Closing Date, the Seller acquired the Mortgage Loans
from EMC. On the Closing Date, the Seller will sell the Mortgage Loans and
certain other property to the Trust Fund and receive in consideration therefor
Certificates evidencing the entire beneficial ownership interest in the Trust
Fund.
The Trustee on behalf of the Trust shall make an election for the
assets constituting REMIC I to be treated for federal income tax purposes as a
REMIC. On the Startup Day, the REMIC I Regular Interests will be designated
"regular interests" in such REMIC and the Class R-I Certificate will be
designated the "residual interest" in such REMIC.
The Trustee on behalf of the Trust shall make an election for the
assets constituting REMIC II to be treated for federal income tax purposes as a
REMIC. On the Startup Day, the REMIC II Regular Interests will be designated
"regular interests" in such REMIC and the Class R-II Certificate will be
designated the "residual interest" in such REMIC.
The Trustee on behalf of the Trust shall make an election for the
assets constituting REMIC III to be treated for federal income tax purposes as a
REMIC. On the Startup Day, the REMIC III Regular Certificates will be designated
"regular interests" in such REMIC and the Class R-III Certificate will be
designated the "residual interest" in such REMIC.
The Group 1 Mortgage Loans will have an Outstanding Principal Balance
as of the Cut-off Date, after deducting all Scheduled Principal due on or before
the Cut-off Date, of $182,325,877.42. The initial principal amount of the Group
1 Certificates will not exceed such Outstanding Principal Balance. The Group 2
Mortgage Loans will have an Outstanding Principal Balance as of the Cut-off
Date, after deducting all Scheduled Principal due on or before the Cut-off Date,
of $278,279,128.40. The initial principal amount of the Group 2 Certificates
will not exceed such Outstanding Principal Balance. The Group 3 Mortgage Loans
will have an Outstanding Principal Balance as of the Cut-off Date, after
deducting all Scheduled Principal due on or before the Cut-off Date, of
$147,552,425.71. The initial principal amount of the Group 3 Certificates will
not exceed such Outstanding Principal Balance. The Group 4 Mortgage Loans will
have an Outstanding Principal Balance as of the Cut-off Date, after deducting
all Scheduled Principal due on or before the Cut-off Date, of $27,558,469.77.
The initial principal amount of the Group 4 Certificates will not exceed such
Outstanding Principal Balance. The Group 5 Mortgage Loans will have an
Outstanding Principal Balance as of the Cut-off Date, after deducting all
Scheduled Principal due on or before the Cut-off Date, of $44,190,605.12. The
initial principal amount of the Group 5 Certificates will not exceed such
Outstanding Principal
Balance. The Group 6 Mortgage Loans will have an Outstanding Principal Balance
as of the Cut-off Date, after deducting all Scheduled Principal due on or before
the Cut-off Date, of $19,468,159.87. The initial principal amount of the Group 6
Certificates will not exceed such Outstanding Principal Balance. The Mortgage
Loans in the aggregate will have an Outstanding Principal Balance as of the
Cut-off Date, after deducting all Scheduled Principal due on or before the
Cut-off Date, of $699,374,666.29. The aggregate initial principal amount of the
Certificates will not exceed such Outstanding Principal Balance.
In consideration of the mutual agreements herein contained, the Seller,
the Master Servicer, the Securities Administrator, EMC and the Trustee agree as
follows:
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ARTICLE I
Definitions
Whenever used in this Agreement, the following words and phrases,
unless otherwise expressly provided or unless the context otherwise requires,
shall have the meanings specified in this Article.
Accepted Master Servicing Practices: With respect to any Mortgage Loan,
as applicable, either (x) those customary mortgage servicing practices of
prudent mortgage servicing institutions that master service mortgage loans of
the same type and quality as such Mortgage Loan in the jurisdiction where the
related Mortgaged Property is located, to the extent applicable to the Trustee
or the Master Servicer (except in its capacity as successor to a Servicer), or
(y) as provided in the applicable Servicing Agreement, to the extent applicable
to any Servicer, but in no event below the standard set forth in clause (x).
Account: The Master Servicer Collection Account, the Distribution
Account or the Protected Account as the context may require.
Accrued Certificate Interest: For any Certificate for any Distribution
Date, the interest accrued during the related Interest Accrual Period at the
applicable Pass-Through Rate on the Current Principal Amount, or Notional Amount
in the case of any Interest Only Certificate or Class S Certificate, of such
Certificate immediately prior to such Distribution Date, less (i) in the case of
a Senior Certificate related to a Certificate Group, such Certificate's share of
any Net Interest Shortfall from the related Mortgage Loans and, after the
Cross-Over Date, the interest portion of any Realized Losses on the Mortgage
Loans allocated thereto in accordance with Section 6.02(g), and (ii) in the case
of a Subordinate Certificate, such Certificate's share of any Net Interest
Shortfall from the Mortgage Loans and the interest portion of any Realized
Losses on the Mortgage Loans allocated thereto in accordance with Section
6.02(g). Interest on the Certificates, other than the Class S Certificates and
the Class III-A Certificates on or prior to the Distribution Date in May 2008,
shall be calculated on the basis of a 360-day year consisting of twelve 30-day
months. Interest on the Class S Certificates and the Class III-A Certificates on
or prior to the Distribution Date in May 2008 shall be calculated on the basis
of a 360-day year and the actual number of days in the related Interest Accrual
Period.
Affiliate: As to any Person, any other Person controlling, controlled
by or under common control with such Person. "Control" means the power to direct
the management and policies of a Person, directly or indirectly, whether through
ownership of voting securities, by contract or otherwise. "Controlled" and
"Controlling" have meanings correlative to the foregoing. The Trustee may
conclusively presume that a Person is not an Affiliate of another Person unless
a Responsible Officer of the Trustee has actual knowledge to the contrary.
Agreement: This Pooling and Servicing Agreement and all amendments
hereof and supplements hereto.
Alliance: Alliance Mortgage Company, or its successor in interest.
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Alliance Servicing Agreement: The Subservicing Agreement, dated as of
August 1, 2002, between Alliance Mortgage Company and EMC, attached hereto as
Exhibit H-1.
Allocable Share:
With respect to each Class of Subordinate Certificates:
(a) as to any Distribution Date and amounts distributable pursuant to
clauses (i), (iv) and (vi) of the definition of Subordinate Optimal Principal
Amount, the fraction, expressed as a percentage, the numerator of which is the
Current Principal Amount of such Class and the denominator of which is the
aggregate Current Principal Amount of all Classes of the Subordinate
Certificates; and
(b) as to any Distribution Date and amounts distributable pursuant to
clauses (ii), (iii) and (v) of the definition of Subordinate Optimal Principal
Amount, and as to each Class of Subordinate Certificates (other than the Class
of Subordinate Certificates having the lowest numerical designation as to which
the Class Prepayment Distribution Trigger shall not be applicable) for which (x)
the related Class Prepayment Distribution Trigger has been satisfied on such
Distribution Date, the fraction, expressed as a percentage, the numerator of
which is the Current Principal Amount of such Class and the denominator of which
is the aggregate Current Principal Amount of all such Classes of Subordinate
Certificates and (y) the related Class Prepayment Distribution Trigger has not
been satisfied on such Distribution Date, 0%; provided that if on a Distribution
Date, the Current Principal Amount of any Class of Subordinate Certificates for
which the related Class Prepayment Distribution Trigger was satisfied on such
Distribution Date is reduced to zero, any amounts distributed pursuant to this
clause (b), to the extent of such Class's remaining Allocable Share, shall be
distributed to the remaining Classes of Subordinate Certificates which satisfy
the related Class Prepayment Distribution Trigger and to the Class of
Subordinate Certificates having the lowest Class numerical designation in
reduction of their respective Current Principal Amounts in the order of their
numerical Class designations.
Applicable Credit Rating: For any long-term deposit or security, a
credit rating of AAA in the case of S&P or Aaa in the case of Xxxxx'x. For any
short-term deposit or security, or a rating of A-l+ in the case of S&P or P-1 in
the case of Xxxxx'x.
Applicable State Law: For purposes of Section 9.12(d), the Applicable
State Law shall be (a) the law of the State of New York and (b) such other state
law whose applicability shall have been brought to the attention of the
Securities Administrator and the Trustee by either (i) an Opinion of Counsel
reasonably acceptable to the Securities Administrator and the Trustee delivered
to it by the Master Servicer or the Seller, or (ii) written notice from the
appropriate taxing authority as to the applicability of such state law.
Appraised Value: For any Mortgaged Property related to a Mortgage Loan,
the amount set forth as the appraised value of such Mortgaged Property in an
appraisal made for the mortgage originator in connection with its origination of
the related Mortgage Loan.
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Assignment Agreements: The agreements attached hereto as Exhibit I,
whereby the Servicing Agreements were assigned to the Trustee for the benefit of
the Certificateholders.
Assumed Final Distribution Date: October 25, 2033, or if such day is
not a Business Day, the next succeeding Business Day.
Available Funds: With respect to any Distribution Date, the sum of the
Group 1, Group 2, Group 3, Group 4, Group 5 and Group 6 Available Funds for such
Distribution Date.
Average Loss Severity Percentage: With respect to any Distribution Date
and each Loan Group, the percentage equivalent of a fraction, the numerator of
which is the sum of the Loss Severity Percentages for each Mortgage Loan in such
Loan Group which had a Realized Loss and the denominator of which is the number
of Mortgage Loans in the related Loan Group which had Realized Losses.
Bankruptcy Code: The United States Bankruptcy Code, as amended as
codified in 11 U.S.C.
xx.xx. 101-1330.
Bankruptcy Loss: With respect to any Mortgage Loan, any Deficient
Valuation or Debt Service Reduction related to such Mortgage Loan as reported by
the applicable Servicer to the Master Servicer.
Book-Entry Certificates: Initially, all Classes of Certificates other
than the Physical Certificates.
Business Day: Any day other than (i) a Saturday or a Sunday, or (ii) a
day on which the New York Stock Exchange or Federal Reserve is closed or on
which banking institutions in the jurisdiction in which the Trustee, the Master
Servicer, any Servicer or the Securities Administrator are authorized or
obligated by law or executive order to be closed.
Calendar Quarter: January 1 to March 31, April 1 to June 30, July 1 to
September 30, or October 1 to December 31, as applicable.
Certificate: Any mortgage pass-through certificate evidencing a
beneficial ownership interest in the Trust Fund signed and countersigned by the
Trustee in substantially the forms annexed hereto as Exhibits X-0, X-0, X-0 and
A-4, with the blanks therein appropriately completed.
Certificate Group: The Group 1 Senior Certificates, Group 2 Senior
Certificates, Group 3 Senior Certificates, Group 4 Senior Certificates, Group 5
Senior Certificates and Group 6 Senior Certificates, as applicable.
Certificate Owner: Any Person who is the beneficial owner of a
Certificate registered in the name of the Depository or its nominee.
Certificate Register: The register maintained pursuant to Section 5.02.
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Certificateholder: A Holder of a Certificate.
Class: With respect to the Certificates, X-X, X-X, XX-X, XX-X, XXX-X,
XX-X, X-X, XX-X, X-X, R-II, R-III, X-0, X-0, X-0, X-0, X-0, B-6 and S.
Class Prepayment Distribution Trigger: With respect to the Class of
Subordinate Certificates for any Distribution Date, the Class Prepayment
Distribution Trigger is satisfied if the fraction (expressed as a percentage),
the numerator of which is the aggregate Current Principal Amount of such Class
and each Class of Subordinate Certificates subordinate thereto, if any, and the
denominator of which is the aggregate Scheduled Principal Balance of all of the
Mortgage Loans, as of the related Due Date, equals or exceeds such percentage
calculated as of the Closing Date.
Class R Certificates: The Class R-I, Class R-II and Class R-III
Certificates.
Closing Date: September 30, 2003.
Code: The Internal Revenue Code of 1986, as amended.
Compensating Interest Payment: As defined in Section 6.06.
Corporate Trust Office: The office of the Trustee at which at any
particular time its corporate trust business is administered, which office, at
the date of the execution of this Agreement, is located at 0 Xxx Xxxx Xxxxx, 0xx
Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Institutional Trust
Services/Structured Finance Services, BALTA Series 2003-3. For purposes of
registration and transfer and exchange only, the Corporate Trust Office shall be
located at 0000 Xxxxx Xxxxxx, 0xx Xxxxx, Xxxxxx, Xxxxx 00000, Attn: ITS Transfer
Dept. - BALTA Series 2003-3.
Corresponding Class: With respect to each REMIC II Regular Interest,
the Class with the same designation.
Cross-Over Date: The first Distribution Date on which the aggregate
Current Principal Amount of the Subordinate Certificates has been reduced to
zero (giving effect to all distributions on such Distribution Date).
Current Principal Amount: With respect to any Certificate (other than
the Interest Only Certificates and Class S Certificates) as of any Distribution
Date, the initial principal amount of such Certificate, and reduced by (i) all
amounts distributed on previous Distribution Dates on such Certificate with
respect to principal, (ii) the principal portion of all Realized Losses
allocated prior to such Distribution Date to such Certificate, taking account of
the Loss Allocation Limitation, and (iii) in the case of a Subordinate
Certificate, such Certificate's pro rata share, if any, of the applicable
Subordinate Certificate Writedown Amount for previous Distribution Dates. With
respect to any Class of Certificates (other than the Interest Only Certificates
and Class S Certificates), the Current Principal Amount thereof will equal the
sum of the Current Principal Amounts of all Certificates of such Class.
Notwithstanding the foregoing, solely for purposes of giving consents,
directions, waivers, approvals, requests and notices, the Class R-I, Class R-II
and Class R-III Certificates after the Distribution Date on which they each
receive the distribution of the last dollar of their respective
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original principal amount shall be deemed to have Current Principal Amounts
equal to their respective Current Principal Amounts on the day immediately
preceding such Distribution Date.
Custodial Agreement: An agreement, dated as of the Closing Date among
the Seller, the Master Servicer, the Trustee and the Custodian in substantially
the form of Exhibit G hereto.
Custodian: Xxxxx Fargo Bank Minnesota, National Association, or any
successor custodian appointed pursuant to the provisions hereof and of the
Custodial Agreement.
Cut-off Date: September 1, 2003.
Cut-off Date Balance: $699,374,666.29.
Debt Service Reduction: Any reduction of the Scheduled Payments which a
Mortgagor is obligated to pay with respect to a Mortgage Loan as a result of any
proceeding under the Bankruptcy Code or any other similar state law or other
proceeding.
Deficient Valuation: With respect to any Mortgage Loan, a valuation of
the Mortgaged Property by a court of competent jurisdiction in an amount less
than the then outstanding indebtedness under the Mortgage Loan, which valuation
results from a proceeding initiated under the Bankruptcy Code or any other
similar state law or other proceeding.
Depository: The Depository Trust Company, the nominee of which is Cede
& Co., or any successor thereto.
Depository Agreement: The meaning specified in Subsection 5.01(a)
hereof.
Depository Participant: A broker, dealer, bank or other financial
institution or other Person for whom from time to time the Depository effects
book-entry transfers and pledges of securities deposited with the Depository.
Designated Depository Institution: A depository institution (commercial
bank, federal savings bank mutual savings bank or savings and loan association)
or trust company (which may include the Trustee), the deposits of which are
fully insured by the FDIC to the extent provided by law.
Determination Date: With respect to each Mortgage Loan, the
Determination Date as defined in the related Servicing Agreement.
Disqualified Organization: Any of the following: (i) the United States,
any State or political subdivision thereof, any possession of the United States,
or any agency or instrumentality of any of the foregoing (other than an
instrumentality which is a corporation if all of its activities are subject to
tax and, except for the Xxxxxxx Mac or any successor thereto, a majority of its
board of directors is not selected by such governmental unit), (ii) any foreign
government, any international organization, or any agency or instrumentality of
any of the foregoing, (iii) any organization (other than certain farmers'
cooperatives described in Section 521 of the Code) which is exempt from the tax
imposed by Chapter 1 of the Code (including the tax imposed by Section 511 of
the Code on
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unrelated business taxable income), (iv) rural electric and telephone
cooperatives described in Section 1381(a)(2)(C) of the Code or (v) any other
Person so designated by the Trustee based upon an Opinion of Counsel that the
holding of an ownership interest in a Residual Certificate by such Person may
cause any REMIC contained in the Trust or any Person having an ownership
interest in the Residual Certificate (other than such Person) to incur a
liability for any federal tax imposed under the Code that would not otherwise be
imposed but for the transfer of an ownership interest in a Residual Certificate
to such Person. The terms "United States," "State" and "international
organization" shall have the meanings set forth in Section 7701 of the Code or
successor provisions.
Distribution Account: The trust account or accounts created and
maintained pursuant to Section 4.04, which shall be denominated "JPMorgan Chase
Bank, as Trustee f/b/o holders of Structured Asset Mortgage Investments Inc.,
Bear Xxxxxxx ALT-A Trust, Mortgage Pass-Through Certificates, Series 2003-3 -
Distribution Account." The Distribution Account shall be an Eligible Account.
Distribution Account Deposit Date: The Business Day prior to each
Distribution Date.
Distribution Date: The 25th day of any month, beginning in the month
immediately following the month of the Closing Date, or, if such 25th day is not
a Business Day, the Business Day immediately following.
DTC Custodian: JPMorgan Chase Bank, or its successors in interest as
custodian for the Depository.
Due Date: With respect to each Mortgage Loan, the date in each month on
which its Scheduled Payment is due if such due date is the first day of a month
and otherwise is deemed to be the first day of the following month or such other
date specified in the related Servicing Agreement.
Due Period: With respect to any Distribution Date and each Mortgage
Loan, the period commencing on the second day of the month preceding the month
in which the Distribution Date occurs and ending at the close of business on the
first day of the month in which the Distribution Date occurs.
Eligible Account: Any of (i) a segregated account maintained with a
federal or state chartered depository institution (A) the short-term obligations
of which are rated A-1 or better by S&P and P-1 by Xxxxx'x at the time of any
deposit therein or (B) insured by the FDIC (to the limits established by such
Corporation), the uninsured deposits in which account are otherwise secured such
that, as evidenced by an Opinion of Counsel (obtained by the Person requesting
that the account be held pursuant to this clause (i)) delivered to the Trustee
prior to the establishment of such account, the Certificateholders will have a
claim with respect to the funds in such account and a perfected first priority
security interest against any collateral (which shall be limited to Permitted
Investments, each of which shall mature not later than the Business Day
immediately preceding the Distribution Date next following the date of
investment in such collateral or the Distribution Date if such Permitted
Investment is an obligation of the institution that maintains the Distribution
Account) securing such funds that is superior to claims of any other depositors
or general creditors of the depository institution with which such account is
maintained, (ii) a segregated trust account or accounts
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maintained with a federal or state chartered depository institution or trust
company with trust powers acting in its fiduciary capacity or (iii) a segregated
account or accounts of a depository institution acceptable to the Rating
Agencies (as evidenced in writing by the Rating Agencies that use of any such
account as the Distribution Account will not have an adverse effect on the
then-current ratings assigned to the Classes of the Certificates then rated by
the Rating Agencies). Eligible Accounts may bear interest.
EMC: EMC Mortgage Corporation.
ERISA: The Employee Retirement Income Security Act of 1974, as amended.
Event of Default: An event of default described in Section 8.01.
Excess Liquidation Proceeds: To the extent that such amount is not
required by law to be paid to the related Mortgagor, the amount, if any, by
which Liquidation Proceeds with respect to a Liquidated Mortgage Loan exceed the
sum of (i) the Outstanding Principal Balance of such Mortgage Loan and accrued
but unpaid interest at the related Mortgage Interest Rate through the last day
of the month in which the related Liquidation Date occurs, plus (ii) related
Liquidation Expenses.
Xxxxxx Xxx: Federal National Mortgage Association or any successor
thereto.
FDIC: Federal Deposit Insurance Corporation or any successor thereto.
Final Certification: The certification substantially in the form of
Exhibit Three to the Custodial Agreement.
Fractional Undivided Interest: With respect to any Class of
Certificates, the fractional undivided interest evidenced by any Certificate of
such Class the numerator of which is the Current Principal Amount, or Notional
Amount in the case of the Interest Only Certificates, of such Certificate and
the denominator of which is the Current Principal Amount, or Notional Amount in
the case of the Interest Only Certificates, of such Class. With respect to the
Certificates in the aggregate, the fractional undivided interest evidenced by
(i) a Residual Certificate will be deemed to equal 0.25%, (ii) an Interest Only
Certificate will be deemed to equal 1.0% multiplied by a fraction, the numerator
of which is the Notional Amount of such Certificate and the denominator of which
is the aggregate Notional Amount of such respective Class and (iii) a
Certificate of any other Class (other than the Class S Certificates) will be
deemed to equal 97.25% multiplied by a fraction, the numerator of which is the
Current Principal Amount of such Certificate and the denominator of which is the
aggregate Current Principal Amount of all the Certificates; provided, however,
the percentage in clause (iii) above shall be increased by 1.0% upon the
retirement of each Class of Interest Only Certificates.
Xxxxxxx Mac: Xxxxxxx Mac, formerly the Federal Home Loan Mortgage
Corporation, or any successor thereto.
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Global Certificate: Any Private Certificate registered in the name of
the Depository or its nominee, beneficial interests in which are reflected on
the books of the Depository or on the books of a Person maintaining an account
with such Depository (directly or as an indirect participant in accordance with
the rules of such depository).
Grantor Trust: The trust fund created under the Grantor Trust
Agreement.
Grantor Trust Agreement: The grantor trust agreement dated September
30, 2003, between the Seller and JPMorgan Chase Bank as grantor trustee.
Grantor Trust Certificates: The grantor trust certificates issued
pursuant to the Grantor Trust Agreement.
Gross Margin: As to each Mortgage Loan, the fixed percentage set forth
in the related Mortgage Note and indicated on the Mortgage Loan Schedule which
percentage is added to the related Index on each Interest Adjustment Date to
determine (subject to rounding, the minimum and maximum Mortgage Interest Rate
and the Periodic Rate Cap) the Mortgage Interest Rate until the next Interest
Adjustment Date.
Group 1 Available Funds, Group 2 Available Funds, Group 3 Available
Funds, Group 4 Available Funds, Group 5 Available Funds or Group 6 Available
Funds: With respect to any Distribution Date, an amount equal to the aggregate
of the following amounts with respect to the Mortgage Loans in the related Loan
Group: (a) all previously undistributed payments on account of principal
(including the principal portion of Scheduled Payments, Principal Prepayments
and the principal portion of Net Liquidation Proceeds) and all previously
undistributed payments on account of interest received after the Cut-off Date
and on or prior to the related Determination Date, (b) any Monthly Advances and
Compensating Interest Payments by the Servicers or the Master Servicer with
respect to such Distribution Date and (c) any reimbursed amount in connection
with losses on investments of deposits in an account, except:
(i) all payments that were due on or before the Cut-off Date;
(ii) all Principal Prepayments and Liquidation Proceeds
received after the applicable Prepayment Period;
(iii) all payments, other than Principal Prepayments, that
represent early receipt of Scheduled Payments due on a date or dates
subsequent to the related Due Date;
(iv) amounts received on particular Mortgage Loans as late
payments of principal or interest and respecting which, and to the
extent that, there are any unreimbursed Monthly Advances;
(v) amounts representing Monthly Advances determined to be
Nonrecoverable Advances;
-10-
(vi) any investment earnings on amounts on deposit in the
Master Servicer Collection Account and the Distribution Account and
amounts permitted to be withdrawn from the Master Servicer Collection
Account and the Distribution Account pursuant to this Agreement;
(vii) amounts needed to pay the Servicing Fees or to reimburse
any Servicer or the Master Servicer for amounts due under the
applicable Servicing Agreement and the Agreement to the extent such
amounts have not been retained by or paid to such Servicer or the
Master Servicer; and
(viii) any expenses or other amounts reimbursable to the
Trustee, the Securities Administrator and the Custodian pursuant to
Section 7.04(c) or Section 9.05.
Loss Allocation Limitation: The meaning specified in Section 6.02(c)
hereof.
Group 1 Mortgage Loans: The Mortgage Loans identified as such on the
Mortgage Loan Schedule.
Group 2 Mortgage Loans: The Mortgage Loans identified as such on the
Mortgage Loan Schedule.
Group 3 Mortgage Loans: The Mortgage Loans identified as such on the
Mortgage Loan Schedule.
Group 4 Mortgage Loans: The Mortgage Loans identified as such on the
Mortgage Loan Schedule.
Group 5 Mortgage Loans: The Mortgage Loans identified as such on the
Mortgage Loan Schedule.
Group 6 Mortgage Loans: The Mortgage Loans identified as such on the
Mortgage Loan Schedule.
Optional Termination Date: The Distribution Date on which the aggregate
Scheduled Principal Balance (before giving effect to distributions to be made on
such Distribution Date) of the Mortgage Loans is less than 10% of the Cut-off
Date Balance.
Group 1 Senior Certificates: The Class I-A Certificates and Class I-X
Certificates.
Group 2 Senior Certificates: The Class II-A Certificates and Class II-X
Certificates.
Group 3 Senior Certificates: The Class III-A Certificates.
Group 4 Senior Certificates: The Class IV-A, Class R-I, Class R-II and
Class R-III Certificates.
-11-
Group 5 Senior Certificates: The Class V-A Certificates.
Group 6 Senior Certificates: The Class VI-A Certificates.
Group 1 Senior Optimal Principal Amount, Group 2 Senior Optimal
Principal Amount, Group 3 Senior Optimal Principal Amount, Group 4 Senior
Optimal Principal Amount, Group 5 Senior Optimal Principal Amount and Group 6
Senior Optimal Principal Amount: With respect to each Distribution Date and the
Group 1, Group 2, Group 3, Group 4, Group 5 and Group 6 Senior Certificates
(other than the Interest Only Certificates), an amount equal to the sum, without
duplication, of the following (but in no event greater than the aggregate
Current Principal Amount of the Group 1, Group 2, Group 3, Group 4, Group 5 and
Group 6 Senior Certificates, as applicable, immediately prior to such
Distribution Date):
(i) the applicable Senior Percentage of the principal portion
of all Scheduled Payments due on each Outstanding Mortgage Loan in the
related Loan Group on the related Due Date as specified in the
amortization schedule at the time applicable thereto (after adjustments
for previous Principal Prepayments but before any adjustment to such
amortization schedule by reason of any bankruptcy or similar proceeding
or any moratorium or similar waiver or grace period);
(ii) the applicable Senior Prepayment Percentage of the
Scheduled Principal Balance of each Mortgage Loan in the related Loan
Group which was the subject of a Principal Prepayment in full received
by the Master Servicer during the related Prepayment Period;
(iii) the applicable Senior Prepayment Percentage of all
Principal Prepayments in part received by the Master Servicer during
the related Prepayment Period with respect to each Mortgage Loan in the
related Loan Group;
(iv) the lesser of (a) the applicable Senior Prepayment
Percentage of the sum of (A) all Net Liquidation Proceeds allocable to
principal received in respect of each Mortgage Loan in the related Loan
Group which became a Liquidated Mortgage Loan during the related
Prepayment Period (other than Mortgage Loans described in the
immediately following clause (B)) and (B) the Scheduled Principal
Balance of each such Mortgage Loan in the related Loan Group purchased
by an insurer from the Trust during the related Prepayment Period
pursuant to the related Primary Mortgage Insurance Policy, if any, or
otherwise; and (b) the applicable Senior Percentage of the sum of (A)
the Scheduled Principal Balance of each Mortgage Loan in the related
Loan Group which became a Liquidated Mortgage Loan during the related
Prepayment Period (other than the Mortgage Loans described in the
immediately following clause (B)) and (B) the Scheduled Principal
Balance of each such Mortgage Loan in the related Loan Group that was
purchased by an insurer from the Trust during the related Prepayment
Period pursuant to the related Primary Mortgage Insurance Policy, if
any or otherwise; and
(v) the applicable Senior Prepayment Percentage of the sum of
(a) the Scheduled Principal Balance of each Mortgage Loan in the
related Loan Group which was repurchased
-12-
by the Mortgage Loan Seller in connection with such Distribution Date
and (b) the excess, if any, of the Scheduled Principal Balance of a
Mortgage Loan in the related Loan Group that has been replaced by the
Mortgage Loan Seller with a substitute Mortgage Loan pursuant to the
Mortgage Loan Purchase Agreement in connection with such Distribution
Date over the Scheduled Principal Balance of such substitute Mortgage
Loan.
Group 1 Senior Percentage: Initially, 94.10%. On any Distribution Date,
the lesser of (i) 100% and (ii) the percentage (carried to six places rounded
up) obtained by dividing the aggregate Current Principal Amount of the Group 1
Senior Certificates (other than the Class I-X Certificates) immediately
preceding such Distribution Date by the aggregate Scheduled Principal Balance of
the Group 1 Mortgage Loans as of the beginning of the related Due Period.
Group 2 Senior Percentage: Initially, 94.10%. On any Distribution Date,
the lesser of (i) 100% and (ii) the percentage (carried to six places rounded
up) obtained by dividing the aggregate Current Principal Amount of the Group 2
Senior Certificates (other than the Class II-X Certificates) immediately
preceding such Distribution Date by the aggregate Scheduled Principal Balance of
the Group 2 Mortgage Loans as of the beginning of the related Due Period.
Group 3 Senior Percentage: Initially, 94.10%. On any Distribution Date,
the lesser of (i) 100% and (ii) the percentage (carried to six places rounded
up) obtained by dividing the aggregate Current Principal Amount of the Group 3
Senior Certificates immediately preceding such Distribution Date by the
aggregate Scheduled Principal Balance of the Group 3 Mortgage Loans as of the
beginning of the related Due Period.
Group 4 Senior Percentage: Initially, 94.10%. On any Distribution Date,
the lesser of (i) 100% and (ii) the percentage (carried to six places rounded
up) obtained by dividing the aggregate Current Principal Amount of the Group 4
Senior Certificates immediately preceding such Distribution Date by the
aggregate Scheduled Principal Balance of the Group 4 Mortgage Loans as of the
beginning of the related Due Period.
Group 5 Senior Percentage: Initially, 94.10%. On any Distribution Date,
the lesser of (i) 100% and (ii) the percentage (carried to six places rounded
up) obtained by dividing the aggregate Current Principal Amount of the Group 5
Senior Certificates immediately preceding such Distribution Date by the
aggregate Scheduled Principal Balance of the Group 5 Mortgage Loans as of the
beginning of the related Due Period.
Group 6 Senior Percentage: Initially, 94.10%. On any Distribution Date,
the lesser of (i) 100% and (ii) the percentage (carried to six places rounded
up) obtained by dividing the aggregate Current Principal Amount of the Group 6
Senior Certificates immediately preceding such Distribution Date by the
aggregate Scheduled Principal Balance of the Group 6 Mortgage Loans as of the
beginning of the related Due Period.
Group 1 Senior Prepayment Percentage: On any Distribution Date
occurring during the periods set forth below, as follows:
-13-
Period (dates inclusive) Group 1 Senior Prepayment Percentage
------------------------ ------------------------------------
October 25, 2003 - September 25, 2010 100%
October 25, 2010 - September 25, 2011 Group 1 Senior Percentage plus 70% of the
Subordinate Percentage.
October 25, 2011 - September 25, 2012 Group 1 Senior Percentage plus 60% of the
Subordinate Percentage.
October 25, 2012 - September 25, 2013 Group 1 Senior Percentage plus 40% of the
Subordinate Percentage.
October 25, 2013 - September 25, 2014 Group 1 Senior Percentage plus 20% of the
Subordinate Percentage.
October 25, 2014 and thereafter Group 1 Senior Percentage.
In addition, no reduction of the Group 1 Senior Prepayment Percentage
shall occur on any Distribution Date unless, as of the last day of the month
preceding such Distribution Date, (A) the aggregate Scheduled Principal Balance
of the Mortgage Loans delinquent 60 days or more (including for this purpose any
such Mortgage Loans in foreclosure and Mortgage Loans with respect to which the
related Mortgaged Property has been acquired by the Trust), averaged over the
last six months, as a percentage of the aggregate Current Principal Amount of
the Subordinate Certificates does not exceed 50%; and (B) cumulative Realized
Losses on the Mortgage Loans do not exceed (a) 30% of the Original Subordinate
Principal Balance if such Distribution Date occurs between and including October
2010 and September 2011, (b) 35% of the Original Subordinate Principal Balance
if such Distribution Date occurs between and including October 2011 and
September 2012, (c) 40% of the Original Subordinate Principal Balance if such
Distribution Date occurs between and including October 2012 and September 2013,
(d) 45% of the Original Subordinate Principal Balance if such Distribution Date
occurs between and including October 2013 and September 2014, and (e) 50% of the
Original Subordinate Principal Balance if such Distribution Date occurs during
or after October 2014.
In addition, if on any Distribution Date the current weighted average
of the Subordinate Percentages is equal to or greater than two times the initial
weighted average of the Subordinate Percentages, and (a) the aggregate Scheduled
Principal Balance of the Mortgage Loans delinquent 60 days or more (including
for this purpose any such Mortgage Loans in foreclosure and Mortgage Loans with
respect to which the related Mortgaged Property has been acquired by the Trust),
averaged over the last six months, as a percentage of the aggregate Current
Principal Amount of the Subordinate Certificates does not exceed 50% and (b)(i)
on or prior to the Distribution Date occurring in September 2006 cumulative
Realized Losses on the Mortgage Loans as of the end of the related Prepayment
Period do not exceed 20% of the Original Subordinate Principal Balance and (ii)
after the Distribution Date occurring in September 2006 cumulative Realized
Losses on the Mortgage Loans as of the end of the related Prepayment Period do
not exceed 30% of the Original Subordinate Principal Balance, then, in each
case, the Group 1 Senior Prepayment Percentage for such Distribution Date will
equal the Group 1 Senior Percentage; provided, however, if on such Distribution
Date the current weighted average of the Subordinate Percentages is equal to or
greater than two times the initial weighted average of the Subordinate
Percentages on or prior to the Distribution Date occurring in September 2006 and
the above delinquency and loss tests are met,
-14-
then the Group 1 Senior Prepayment Percentage for such Distribution Date will
equal the Group 1 Senior Percentage plus 50% of the Group 1 Subordinate
Percentage.
Notwithstanding the foregoing, if on any Distribution Date the Group 1
Senior Percentage exceeds the Group 1 Senior Percentage as of the Cut-Off Date,
the Group 1 Senior Prepayment Percentage for such Distribution Date will equal
100%. On the Distribution Date on which the Current Principal Amounts of the
Group 1 Senior Certificates are reduced to zero, the Group 1 Senior Prepayment
Percentage shall be the minimum percentage sufficient to effect such reduction
and thereafter shall be zero.
Group 2 Senior Prepayment Percentage: On any Distribution Date
occurring during the periods set forth below, as follows:
Period (dates inclusive) Group 2 Senior Prepayment Percentage
------------------------ ------------------------------------
October 25, 2003 - September 25, 2010 100%
October 25, 2010 - September 25, 2011 Group 2 Senior Percentage plus 70% of the
Subordinate Percentage.
October 25, 2011 - September 25, 2012 Group 2 Senior Percentage plus 60% of the
Subordinate Percentage.
October 25, 2012 - September 25, 2013 Group 2 Senior Percentage plus 40% of the
Subordinate Percentage.
October 25, 2013 - September 25, 2014 Group 2 Senior Percentage plus 20% of the
Subordinate Percentage.
October 25, 2014 and thereafter Group 2 Senior Percentage.
In addition, no reduction of the Group 2 Senior Prepayment Percentage
shall occur on any Distribution Date unless, as of the last day of the month
preceding such Distribution Date, (A) the aggregate Scheduled Principal Balance
of the Mortgage Loans delinquent 60 days or more (including for this purpose any
such Mortgage Loans in foreclosure and Mortgage Loans with respect to which the
related Mortgaged Property has been acquired by the Trust), averaged over the
last six months, as a percentage of the aggregate Current Principal Amount of
the Subordinate Certificates does not exceed 50%; and (B) cumulative Realized
Losses on the Mortgage Loans do not exceed (a) 30% of the Original Subordinate
Principal Balance if such Distribution Date occurs between and including October
2010 and September 2011, (b) 35% of the Original Subordinate Principal Balance
if such Distribution Date occurs between and including October 2011 and
September 2012, (c) 40% of the Original Subordinate Principal Balance if such
Distribution Date occurs between and including October 2012 and September 2013,
(d) 45% of the Original Subordinate Principal Balance if such Distribution Date
occurs between and including October 2013 and September 2014, and (e) 50% of the
Original Subordinate Principal Balance if such Distribution Date occurs during
or after October 2014.
In addition, if on any Distribution Date the current weighted average
of the Subordinate Percentages is equal to or greater than two times the initial
weighted average of the Subordinate Percentages, and (a) the aggregate Scheduled
Principal Balance of the Mortgage Loans delinquent 60 days or more (including
for this purpose any such Mortgage Loans in foreclosure and Mortgage
-15-
Loans with respect to which the related Mortgaged Property has been acquired by
the Trust), averaged over the last six months, as a percentage of the aggregate
Current Principal Amount of the Subordinate Certificates does not exceed 50% and
(b)(i) on or prior to the Distribution Date occurring in September 2006
cumulative Realized Losses on the Mortgage Loans as of the end of the related
Prepayment Period do not exceed 20% of the Original Subordinate Principal
Balance and (ii) after the Distribution Date occurring in September 2006
cumulative Realized Losses on the Mortgage Loans as of the end of the related
Prepayment Period do not exceed 30% of the Original Subordinate Principal
Balance, then, in each case, the Group 2 Senior Prepayment Percentage for such
Distribution Date will equal the Group 2 Senior Percentage; provided, however,
if on such Distribution Date the current weighted average of the Subordinate
Percentages is equal to or greater than two times the initial weighted average
of the Subordinate Percentages on or prior to the Distribution Date occurring in
September 2006 and the above delinquency and loss tests are met, then the Group
2 Senior Prepayment Percentage for such Distribution Date will equal the Group 2
Senior Percentage plus 50% of the Group 2 Subordinate Percentage.
Notwithstanding the foregoing, if on any Distribution Date the Group 2
Senior Percentage exceeds the Group 2 Senior Percentage as of the Cut-Off Date,
the Group 2 Senior Prepayment Percentage for such Distribution Date will equal
100%. On the Distribution Date on which the Current Principal Amounts of the
Group 2 Senior Certificates are reduced to zero, the Group 2 Senior Prepayment
Percentage shall be the minimum percentage sufficient to effect such reduction
and thereafter shall be zero.
Group 3 Senior Prepayment Percentage: On any Distribution Date
occurring during the periods set forth below, as follows:
Period (dates inclusive) Group 3 Senior Prepayment Percentage
------------------------ ------------------------------------
October 25, 2003 - September 25, 2010 100%
October 25, 2010 - September 25, 2011 Group 3 Senior Percentage plus 70% of the
Subordinate Percentage.
October 25, 2011 - September 25, 2012 Group 3 Senior Percentage plus 60% of the
Subordinate Percentage.
October 25, 2012 - September 25, 2013 Group 3 Senior Percentage plus 40% of the
Subordinate Percentage.
October 25, 2013 - September 25, 2014 Group 3 Senior Percentage plus 20% of the
Subordinate Percentage.
October 25, 2014 and thereafter Group 3 Senior Percentage.
In addition, no reduction of the Group 3 Senior Prepayment Percentage
shall occur on any Distribution Date unless, as of the last day of the month
preceding such Distribution Date, (A) the aggregate Scheduled Principal Balance
of the Mortgage Loans delinquent 60 days or more (including for this purpose any
such Mortgage Loans in foreclosure and Mortgage Loans with respect to which the
related Mortgaged Property has been acquired by the Trust), averaged over the
last six months, as a percentage of the aggregate Current Principal Amount of
the Subordinate Certificates does not exceed 50%; and (B) cumulative Realized
Losses on the Mortgage Loans do not exceed (a) 30% of the Original Subordinate
Principal Balance if such Distribution Date occurs between and including
-16-
October 2010 and September 2011, (b) 35% of the Original Subordinate Principal
Balance if such Distribution Date occurs between and including October 2011 and
September 2012, (c) 40% of the Original Subordinate Principal Balance if such
Distribution Date occurs between and including October 2012 and September 2013,
(d) 45% of the Original Subordinate Principal Balance if such Distribution Date
occurs between and including October 2013 and September 2014, and (e) 50% of the
Original Subordinate Principal Balance if such Distribution Date occurs during
or after October 2014.
In addition, if on any Distribution Date the current weighted average
of the Subordinate Percentages is equal to or greater than two times the initial
weighted average of the Subordinate Percentages, and (a) the aggregate Scheduled
Principal Balance of the Mortgage Loans delinquent 60 days or more (including
for this purpose any such Mortgage Loans in foreclosure and Mortgage Loans with
respect to which the related Mortgaged Property has been acquired by the Trust),
averaged over the last six months, as a percentage of the aggregate Current
Principal Amount of the Subordinate Certificates does not exceed 50% and (b)(i)
on or prior to the Distribution Date occurring in September 2006 cumulative
Realized Losses on the Mortgage Loans as of the end of the related Prepayment
Period do not exceed 20% of the Original Subordinate Principal Balance and (ii)
after the Distribution Date occurring in September 2006 cumulative Realized
Losses on the Mortgage Loans as of the end of the related Prepayment Period do
not exceed 30% of the Original Subordinate Principal Balance, then, in each
case, the Group 3 Senior Prepayment Percentage for such Distribution Date will
equal the Group 3 Senior Percentage; provided, however, if on such Distribution
Date the current weighted average of the Subordinate Percentages is equal to or
greater than two times the initial weighted average of the Subordinate
Percentages on or prior to the Distribution Date occurring in September 2006 and
the above delinquency and loss tests are met, then the Group 3 Senior Prepayment
Percentage for such Distribution Date will equal the Group 3 Senior Percentage
plus 50% of the Group 3 Subordinate Percentage.
Notwithstanding the foregoing, if on any Distribution Date the Group 3
Senior Percentage exceeds the Group 3 Senior Percentage as of the Cut-Off Date,
the Group 3 Senior Prepayment Percentage for such Distribution Date will equal
100%. On the Distribution Date on which the Current Principal Amounts of the
Group 3 Senior Certificates are reduced to zero, the Group 3 Senior Prepayment
Percentage shall be the minimum percentage sufficient to effect such reduction
and thereafter shall be zero.
GROUP 4 SENIOR PREPAYMENT PERCENTAGE: On any Distribution Date
occurring during the periods set forth below, as follows:
Period (dates inclusive) Group 4 Senior Prepayment Percentage
------------------------ ------------------------------------
October 25, 2003 - September 25, 2010 100%
October 25, 2010 - September 25, 2011 Group 4 Senior Percentage plus 70% of the
Subordinate Percentage.
October 25, 2011 - September 25, 2012 Group 4 Senior Percentage plus 60% of the
Subordinate Percentage.
October 25, 2012 - September 25, 2013 Group 4 Senior Percentage plus 40% of the
Subordinate Percentage.
-17-
October 25, 2013 - September 25, 2014 Group 4 Senior Percentage plus 20% of the
Subordinate Percentage.
October 25, 2014 and thereafter Group 4 Senior Percentage.
In addition, no reduction of the Group 4 Senior Prepayment Percentage
shall occur on any Distribution Date unless, as of the last day of the month
preceding such Distribution Date, (A) the aggregate Scheduled Principal Balance
of the Mortgage Loans delinquent 60 days or more (including for this purpose any
such Mortgage Loans in foreclosure and Mortgage Loans with respect to which the
related Mortgaged Property has been acquired by the Trust), averaged over the
last six months, as a percentage of the aggregate Current Principal Amount of
the Subordinate Certificates does not exceed 50%; and (B) cumulative Realized
Losses on the Mortgage Loans do not exceed (a) 30% of the Original Subordinate
Principal Balance if such Distribution Date occurs between and including October
2010 and September 2011, (b) 35% of the Original Subordinate Principal Balance
if such Distribution Date occurs between and including October 2011 and
September 2012, (c) 40% of the Original Subordinate Principal Balance if such
Distribution Date occurs between and including October 2012 and September 2013,
(d) 45% of the Original Subordinate Principal Balance if such Distribution Date
occurs between and including October 2013 and September 2014, and (e) 50% of the
Original Subordinate Principal Balance if such Distribution Date occurs during
or after October 2014.
In addition, if on any Distribution Date the current weighted average
of the Subordinate Percentages is equal to or greater than two times the initial
weighted average of the Subordinate Percentages, and (a) the aggregate Scheduled
Principal Balance of the Mortgage Loans delinquent 60 days or more (including
for this purpose any such Mortgage Loans in foreclosure and Mortgage Loans with
respect to which the related Mortgaged Property has been acquired by the Trust),
averaged over the last six months, as a percentage of the aggregate Current
Principal Amount of the Subordinate Certificates does not exceed 50% and (b)(i)
on or prior to the Distribution Date occurring in September 2006 cumulative
Realized Losses on the Mortgage Loans as of the end of the related Prepayment
Period do not exceed 20% of the Original Subordinate Principal Balance and (ii)
after the Distribution Date occurring in September 2006 cumulative Realized
Losses on the Mortgage Loans as of the end of the related Prepayment Period do
not exceed 30% of the Original Subordinate Principal Balance, then, in each
case, the Group 4 Senior Prepayment Percentage for such Distribution Date will
equal the Group 4 Senior Percentage; provided, however, if on such Distribution
Date the current weighted average of the Subordinate Percentages is equal to or
greater than two times the initial weighted average of the Subordinate
Percentages on or prior to the Distribution Date occurring in September 2006 and
the above delinquency and loss tests are met, then the Group 4 Senior Prepayment
Percentage for such Distribution Date will equal the Group 4 Senior Percentage
plus 50% of the Group 4 Subordinate Percentage.
Notwithstanding the foregoing, if on any Distribution Date the Group 4
Senior Percentage exceeds the Group 4 Senior Percentage as of the Cut-Off Date,
the Group 4 Senior Prepayment Percentage for such Distribution Date will equal
100%. On the Distribution Date on which the Current Principal Amounts of the
Group 4 Senior Certificates are reduced to zero, the Group 4 Senior Prepayment
Percentage shall be the minimum percentage sufficient to effect such reduction
and thereafter shall be zero.
-18-
GROUP 5 SENIOR PREPAYMENT PERCENTAGE: On any Distribution Date
occurring during the periods set forth below, as follows:
Period (dates inclusive) Group 5 Senior Prepayment Percentage
------------------------ ------------------------------------
October 25, 2003 - September 25, 2010 100%
October 25, 2010 - September 25, 2011 Group 5 Senior Percentage plus 70% of the
Subordinate Percentage.
October 25, 2011 - September 25, 2012 Group 5 Senior Percentage plus 60% of the
Subordinate Percentage.
October 25, 2012 - September 25, 2013 Group 5 Senior Percentage plus 40% of the
Subordinate Percentage.
October 25, 2013 - September 25, 2014 Group 5 Senior Percentage plus 20% of the
Subordinate Percentage.
October 25, 2014 and thereafter Group 5 Senior Percentage.
In addition, no reduction of the Group 5 Senior Prepayment Percentage
shall occur on any Distribution Date unless, as of the last day of the month
preceding such Distribution Date, (A) the aggregate Scheduled Principal Balance
of the Mortgage Loans delinquent 60 days or more (including for this purpose any
such Mortgage Loans in foreclosure and Mortgage Loans with respect to which the
related Mortgaged Property has been acquired by the Trust), averaged over the
last six months, as a percentage of the aggregate Current Principal Amount of
the Subordinate Certificates does not exceed 50%; and (B) cumulative Realized
Losses on the Mortgage Loans do not exceed (a) 30% of the Original Subordinate
Principal Balance if such Distribution Date occurs between and including October
2010 and September 2011, (b) 35% of the Original Subordinate Principal Balance
if such Distribution Date occurs between and including October 2011 and
September 2012, (c) 40% of the Original Subordinate Principal Balance if such
Distribution Date occurs between and including October 2012 and September 2013,
(d) 45% of the Original Subordinate Principal Balance if such Distribution Date
occurs between and including October 2013 and September 2014, and (e) 50% of the
Original Subordinate Principal Balance if such Distribution Date occurs during
or after October 2014.
In addition, if on any Distribution Date the current weighted average
of the Subordinate Percentages is equal to or greater than two times the initial
weighted average of the Subordinate Percentages, and (a) the aggregate Scheduled
Principal Balance of the Mortgage Loans delinquent 60 days or more (including
for this purpose any such Mortgage Loans in foreclosure and Mortgage Loans with
respect to which the related Mortgaged Property has been acquired by the Trust),
averaged over the last six months, as a percentage of the aggregate Current
Principal Amount of the Subordinate Certificates does not exceed 50% and (b)(i)
on or prior to the Distribution Date occurring in September 2006 cumulative
Realized Losses on the Mortgage Loans as of the end of the related Prepayment
Period do not exceed 20% of the Original Subordinate Principal Balance and (ii)
after the Distribution Date occurring in September 2006 cumulative Realized
Losses on the Mortgage Loans as of the end of the related Prepayment Period do
not exceed 30% of the Original Subordinate Principal Balance, then, in each
case, the Group 5 Senior Prepayment Percentage for such Distribution Date will
equal the Group 5 Senior Percentage; provided, however, if on such Distribution
Date the current weighted average of the Subordinate Percentages is equal to or
greater
-19-
than two times the initial weighted average of the Subordinate Percentages on or
prior to the Distribution Date occurring in September 2006 and the above
delinquency and loss tests are met, then the Group 5 Senior Prepayment
Percentage for such Distribution Date will equal the Group 5 Senior Percentage
plus 50% of the Group 5 Subordinate Percentage.
Notwithstanding the foregoing, if on any Distribution Date the Group 5
Senior Percentage exceeds the Group 5 Senior Percentage as of the Cut-Off Date,
the Group 5 Senior Prepayment Percentage for such Distribution Date will equal
100%. On the Distribution Date on which the Current Principal Amounts of the
Group 5 Senior Certificates are reduced to zero, the Group 5 Senior Prepayment
Percentage shall be the minimum percentage sufficient to effect such reduction
and thereafter shall be zero.
Group 6 Senior Prepayment Percentage: On any Distribution Date
occurring during the periods set forth below, as follows:
Period (dates inclusive) Group 6 Senior Prepayment Percentage
------------------------ ------------------------------------
October 25, 2003 - September 25, 2010 100%
October 25, 2010 - September 25, 2011 Group 6 Senior Percentage plus 70% of the
Subordinate Percentage.
October 25, 2011 - September 25, 2012 Group 6 Senior Percentage plus 60% of the
Subordinate Percentage.
October 25, 2012 - September 25, 2013 Group 6 Senior Percentage plus 40% of the
Subordinate Percentage.
October 25, 2013 - September 25, 2014 Group 6 Senior Percentage plus 20% of the
Subordinate Percentage.
October 25, 2014 and thereafter Group 6 Senior Percentage.
In addition, no reduction of the Group 6 Senior Prepayment Percentage
shall occur on any Distribution Date unless, as of the last day of the month
preceding such Distribution Date, (A) the aggregate Scheduled Principal Balance
of the Mortgage Loans delinquent 60 days or more (including for this purpose any
such Mortgage Loans in foreclosure and Mortgage Loans with respect to which the
related Mortgaged Property has been acquired by the Trust), averaged over the
last six months, as a percentage of the aggregate Current Principal Amount of
the Subordinate Certificates does not exceed 50%; and (B) cumulative Realized
Losses on the Mortgage Loans do not exceed (a) 30% of the Original Subordinate
Principal Balance if such Distribution Date occurs between and including October
2010 and September 2011, (b) 35% of the Original Subordinate Principal Balance
if such Distribution Date occurs between and including October 2011 and
September 2012, (c) 40% of the Original Subordinate Principal Balance if such
Distribution Date occurs between and including October 2012 and September 2013,
(d) 45% of the Original Subordinate Principal Balance if such Distribution Date
occurs between and including October 2013 and September 2014, and (e) 50% of the
Original Subordinate Principal Balance if such Distribution Date occurs during
or after October 2014.
In addition, if on any Distribution Date the current weighted average
of the Subordinate Percentages is equal to or greater than two times the initial
weighted average of the Subordinate
-20-
Percentages, and (a) the aggregate Scheduled Principal Balance of the Mortgage
Loans delinquent 60 days or more (including for this purpose any such Mortgage
Loans in foreclosure and Mortgage Loans with respect to which the related
Mortgaged Property has been acquired by the Trust), averaged over the last six
months, as a percentage of the aggregate Current Principal Amount of the
Subordinate Certificates does not exceed 50% and (b)(i) on or prior to the
Distribution Date occurring in September 2006 cumulative Realized Losses on the
Mortgage Loans as of the end of the related Prepayment Period do not exceed 20%
of the Original Subordinate Principal Balance and (ii) after the Distribution
Date occurring in September 2006 cumulative Realized Losses on the Mortgage
Loans as of the end of the related Prepayment Period do not exceed 30% of the
Original Subordinate Principal Balance, then, in each case, the Group 6 Senior
Prepayment Percentage for such Distribution Date will equal the Group 6 Senior
Percentage; provided, however, if on such Distribution Date the current weighted
average of the Subordinate Percentages is equal to or greater than two times the
initial weighted average of the Subordinate Percentages on or prior to the
Distribution Date occurring in September 2006 and the above delinquency and loss
tests are met, then the Group 6 Senior Prepayment Percentage for such
Distribution Date will equal the Group 6 Senior Percentage plus 50% of the Group
6 Subordinate Percentage.
Notwithstanding the foregoing, if on any Distribution Date the Group 6
Senior Percentage exceeds the Group 6 Senior Percentage as of the Cut-Off Date,
the Group 6 Senior Prepayment Percentage for such Distribution Date will equal
100%. On the Distribution Date on which the Current Principal Amounts of the
Group 6 Senior Certificates are reduced to zero, the Group 6 Senior Prepayment
Percentage shall be the minimum percentage sufficient to effect such reduction
and thereafter shall be zero.
Holder: The Person in whose name a Certificate is registered in the
Certificate Register, except that, subject to Subsections 11.02(b) and 11.05(e),
solely for the purpose of giving any consent pursuant to this Agreement, any
Certificate registered in the name of the Seller or the Trustee or any Affiliate
thereof shall be deemed not to be outstanding and the Fractional Undivided
Interest evidenced thereby shall not be taken into account in determining
whether the requisite percentage of Fractional Undivided Interests necessary to
effect any such consent has been obtained.
Indemnified Persons: The Trustee, the Master Servicer, the Custodian
and the Securities Administrator, and their officers, directors, agents and
employees and, with respect to the Trustee, any separate co-trustee and its
officers, directors, agents and employees.
Independent: When used with respect to any specified Person, this term
means that such Person (a) is in fact independent of the Seller or the Master
Servicer and of any Affiliate of the Seller or the Master Servicer, (b) does not
have any direct financial interest or any material indirect financial interest
in the Seller or the Master Servicer or any Affiliate of the Seller or the
Master Servicer and (c) is not connected with the Seller or the Master Servicer
or any Affiliate as an officer, employee, promoter, underwriter, trustee,
partner, director or person performing similar functions.
Index: The index, if any, specified in a Mortgage Note by reference to
which the related Mortgage Interest Rate will be adjusted from time to time.
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Individual Certificate: Any Private Certificate registered in the name
of the Holder other than the Depository or its nominee.
IndyMac: IndyMac Bank, F.S.B., or its successor in interest.
IndyMac Servicing Agreement: The Master Purchase, Warranties and
Servicing Agreement, dated as of August 1, 2001, between IndyMac Bank, F.S.B.
and EMC, attached hereto as Exhibit H-2.
Initial Certification: The certification substantially in the form of
Exhibit One to the Custodial Agreement.
Institutional Accredited Investor: Any Person meeting the requirements
of Rule 501(a)(l), (2), (3) or (7) of Regulation D under the Securities Act or
any entity all of the equity holders in which come within such paragraphs.
Insurance Policy: With respect to any Mortgage Loan, any standard
hazard insurance policy, flood insurance policy or title insurance policy.
Insurance Proceeds: Amounts paid by the insurer under any Insurance
Policy covering any Mortgage Loan or Mortgaged Property other than amounts
required to be paid over to the Mortgagor pursuant to law or the related
Mortgage Note or Security Instrument and other than amounts used to repair or
restore the Mortgaged Property or to reimburse insured expenses.
Interest Accrual Period: With respect to each Distribution Date, for
each Class of Certificates (other than the Class S Certificates and the Class
III-A Certificates on or prior to the Distribution Date in May 2008), the
calendar month preceding the month in which such Distribution Date occurs. With
respect to the Class S Certificates and the Class III-A Certificates on or prior
to the Distribution Date in May 2008, the period from and including the
preceding Distribution Date (or, in the case of the first Distribution Date,
from the Closing Date) to and including the day prior to the current
Distribution Date. With respect to each Distribution Date after the Distribution
Date in May 2008, the Interest Accrual Period for the Class III-A Certificates
shall be the calendar month preceding the month in which such Distribution Date
occurs.
Interest Adjustment Date: With respect to a Mortgage Loan, the date, if
any, specified in the related Mortgage Note on which the Mortgage Interest Rate
is subject to adjustment.
Interest Only Certificates: The Class I-X Certificates and Class II-X
Certificates.
Interest Shortfall: With respect to any Distribution Date and each
Mortgage Loan that during the related Prepayment Period was the subject of a
Principal Prepayment or constitutes a Relief Act Mortgage Loan, an amount
determined as follows:
(a) Partial principal prepayments received during the relevant
Prepayment Period: The difference between (i) one month's interest at the
applicable Net Rate on the amount of such
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prepayment and (ii) the amount of interest for the calendar month of such
prepayment (adjusted to the applicable Net Rate) received at the time of such
prepayment;
(b) Principal prepayments in full received during the relevant
Prepayment Period: The difference between (i) one month's interest at the
applicable Net Rate on the Scheduled Principal Balance of such Mortgage Loan
immediately prior to such prepayment and (ii) the amount of interest for the
calendar month of such prepayment (adjusted to the applicable Net Rate) received
at the time of such prepayment; and
(c) Relief Act Mortgage Loans: As to any Relief Act Mortgage Loan, the
excess of (i) 30 days' interest (or, in the case of a principal prepayment in
full, interest to the date of prepayment) on the Scheduled Principal Balance
thereof (or, in the case of a principal prepayment in part, on the amount so
prepaid) at the related Net Rate over (ii) 30 days' interest (or, in the case of
a principal prepayment in full, interest to the date of prepayment) on such
Scheduled Principal Balance (or, in the case of a Principal Prepayment in part,
on the amount so prepaid) at the Net Rate required to be paid by the Mortgagor
as limited by application of the Relief Act.
Interim Certification: The certification substantially in the form of
Exhibit Two to the Custodial Agreement.
Investment Letter: The letter to be furnished by each Institutional
Accredited Investor which purchases any of the Private Certificates in
connection with such purchase, substantially in the form set forth as Exhibit
F-1 hereto.
LIBOR Business Day: Any day other than a Saturday or a Sunday or a day
on which banking institutions in the city of London, England are required or
authorized by law to be closed.
LIBOR Determination Date: With respect to the Class III-A Certificates
and Class S Certificates and for the first Interest Accrual Period, September
24, 2003; with respect to any Interest Accrual Period thereafter, the second
LIBOR Business Day preceding the commencement of such Interest Accrual Period.
Liquidated Mortgage Loan: Any defaulted Mortgage Loan as to which the
related Servicer or the Master Servicer has determined that all amounts it
expects to recover from or on account of such Mortgage Loan have been recovered.
Liquidation Date: With respect to any Liquidated Mortgage Loan, the
date on which the Master Servicer or the related Servicer has certified that
such Mortgage Loan has become a Liquidated Mortgage Loan.
Liquidation Expenses: With respect to a Mortgage Loan in liquidation,
unreimbursed expenses paid or incurred by or for the account of the Master
Servicer or the related Servicer in connection with the liquidation of such
Mortgage Loan and the related Mortgage Property, such expenses including (a)
property protection expenses, (b) property sales expenses, (c) foreclosure and
sale costs, including court costs and reasonable attorneys' fees, and (d)
similar expenses reasonably paid or incurred in connection with liquidation.
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Liquidation Proceeds: Cash received in connection with the liquidation
of a defaulted Mortgage Loan, whether through trustee's sale, foreclosure sale,
Insurance Proceeds, condemnation proceeds or otherwise.
Loan Group: Loan Group 1, Loan Group 2, Loan Group 3, Loan Group 4,
Loan Group 5 or Loan Group 6, as applicable.
Loan Group 1: The group of Mortgage Loans designated as belonging to
Loan Group 1 on the Mortgage Loan Schedule.
Loan Group 2: The group of Mortgage Loans designated as belonging to
Loan Group 2 on the Mortgage Loan Schedule.
Loan Group 3: The group of Mortgage Loans designated as belonging to
Loan Group 3 on the Mortgage Loan Schedule.
Loan Group 4: The group of Mortgage Loans designated as belonging to
Loan Group 4 on the Mortgage Loan Schedule.
Loan Group 5: The group of Mortgage Loans designated as belonging to
Loan Group 5 on the Mortgage Loan Schedule.
Loan Group 6: The group of Mortgage Loans designated as belonging to
Loan Group 6 on the Mortgage Loan Schedule.
Loan-to-Value Ratio: With respect to any Mortgage Loan, the fraction,
expressed as a percentage, the numerator of which is the original principal
balance of the related Mortgage Loan and the denominator of which is the
Original Value of the related Mortgaged Property.
Loss Severity Percentage: With respect to any Distribution Date, the
percentage equivalent of a fraction, the numerator of which is the amount of
Realized Losses incurred on a Mortgage Loan and the denominator of which is the
Scheduled Principal Balance of such Mortgage Loan immediately prior to the
liquidation of such Mortgage Loan.
Master Servicer: As of the Closing Date, Xxxxx Fargo Bank Minnesota,
National Association and, thereafter, its respective successors in interest who
meet the qualifications of the Servicing Agreements and this Agreement.
Master Servicer Certification: A written certification covering
servicing of the Mortgage Loans by all Servicers and signed by an officer of the
Master Servicer that complies with (i) the Xxxxxxxx-Xxxxx Act of 2002, as
amended from time to time, and (ii) the February 21, 2003 Statement by the Staff
of the Division of Corporation Finance of the Securities and Exchange Commission
Regarding Compliance by Asset-Backed Issuers with Exchange Act Rules 13a-14 and
15d-14, as in effect from time to time; provided that if, after the Closing Date
(a) the Xxxxxxxx-Xxxxx Act of 2002 is amended, (b) the Statement referred to in
clause (ii) is modified or superceded by any subsequent statement, rule or
regulation of the Securities and Exchange Commission or any
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statement of a division thereof, or (c) any future releases, rules and
regulations are published by the Securities and Exchange Commission from time to
time pursuant to the Xxxxxxxx-Xxxxx Act of 2002, which in any such case affects
the form or substance of the required certification and results in the required
certification being, in the reasonable judgment of the Master Servicer,
materially more onerous than the form of the required certification as of the
Closing Date, the Master Servicer Certification shall be as agreed to by the
Master Servicer and the Seller following a negotiation in good faith to
determine how to comply with any such new requirements.
Master Servicer Collection Account: The trust account or accounts
created and maintained pursuant to Section 4.02, which shall be denominated
"JPMorgan Chase Bank, as Trustee f/b/o holders of Structured Asset Mortgage
Investments Inc., Bear Xxxxxxx ALT-A Trust, Mortgage Pass-Through Certificates,
Series 2003-3 - Master Servicer Collection Account." The Master Servicer
Collection Account shall be an Eligible Account.
Master Servicing Compensation: The meaning specified in Section 3.14.
Material Defect: The meaning specified in Section 2.02(a).
Maximum Lifetime Mortgage Rate: The maximum level to which a Mortgage
Interest Rate can adjust in accordance with its terms, regardless of changes in
the applicable Index.
MERS: Mortgage Electronic Registration Systems, Inc., a corporation
organized and existing under the laws of the State of Delaware, or any successor
thereto.
MERS(R) System: The system of recording transfers of Mortgages
electronically maintained by MERS.
MIN: The Mortgage Identification Number for Mortgage Loans registered
with MERS on the MERS(R) System.
Minimum Lifetime Mortgage Rate: The minimum level to which a Mortgage
Interest Rate can adjust in accordance with its terms, regardless of changes in
the applicable Index.
MOM Loan: With respect to any Mortgage Loan, MERS acting as the
mortgagee of such Mortgage Loan, solely as nominee for the originator of such
Mortgage Loan and its successors and assigns, at the origination thereof, or as
nominee for any subsequent assignee of the originator pursuant to an assignment
of mortgage to MERS.
Monthly Advance: An advance of principal or interest required to be
made by the applicable Servicer pursuant to the related Servicing Agreement or
the Master Servicer pursuant to Section 6.05.
Moody's: Xxxxx'x Investors Service, Inc. or its successor in interest.
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Mortgage File: The mortgage documents listed in Section 2.01(b)
pertaining to a particular Mortgage Loan and any additional documents required
to be added to the Mortgage File pursuant to this Agreement.
Mortgage Interest Rate: The annual rate at which interest accrues from
time to time on any Mortgage Loan pursuant to the related Mortgage Note, which
rate is equal to the "Mortgage Interest Rate" set forth with respect thereto on
the Mortgage Loan Schedule.
Mortgage Loan: A mortgage loan transferred and assigned to the Trustee
pursuant to Section 2.01 or Section 2.04 and held as a part of the Trust Fund,
as identified in the Mortgage Loan Schedule, including a mortgage loan the
property securing which has become an REO Property.
Mortgage Loan Purchase Agreement: The Mortgage Loan Purchase Agreement
dated as of September 30, 2003, between EMC, as seller, and Structured Asset
Mortgage Investments Inc., as purchaser, and all amendments thereof and
supplements thereto, substantially in the form attached hereto as Exhibit J.
Mortgage Loan Schedule: The schedule, attached hereto as Exhibit B with
respect to the Mortgage Loans and as amended from time to time to reflect the
repurchase or substitution of Mortgage Loans pursuant to this Agreement.
Mortgage Loan Seller: EMC Mortgage Corporation, as mortgage loan seller
under the Mortgage Loan Purchase Agreement.
Mortgage Note: The originally executed note or other evidence of the
indebtedness of a Mortgagor under the related Mortgage Loan.
Mortgaged Property: Land and improvements securing the indebtedness of
a Mortgagor under the related Mortgage Loan or, in the case of REO Property,
such REO Property.
Mortgagor: The obligor on a Mortgage Note.
Net Interest Shortfall: With respect to any Distribution Date, the
Interest Shortfall, if any, for such Distribution Date net of Compensating
Interest Payments made with respect to such Distribution Date.
Net Liquidation Proceeds: As to any Liquidated Mortgage Loan,
Liquidation Proceeds net of (i) Liquidation Expenses which are payable therefrom
by the related Servicer or the Master Servicer in accordance with the related
Servicing Agreement or this Agreement and (ii) unreimbursed advances by the
related Servicer or the Master Servicer and Monthly Advances.
Net Rate: With respect to each Mortgage Loan, the Mortgage Interest
Rate in effect from time to time less the related Servicing Fee Rate (expressed
as a per annum rate).
Nonrecoverable Advance: Any advance or Monthly Advance (i) which was
previously made or is proposed to be made by the Master Servicer, the Trustee
(as successor Master Servicer) or the
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applicable Servicer and (ii) which, in the good faith judgment of the Master
Servicer, the Trustee or the applicable Servicer, will not or, in the case of a
proposed advance or Monthly Advance, would not, be ultimately recoverable by the
Master Servicer, the Trustee (as successor Master Servicer) or the applicable
Servicer from Liquidation Proceeds, Insurance Proceeds or future payments on the
Mortgage Loan for which such advance or Monthly Advance was made.
Notional Amount: The Notional Amount of the Class I-X Certificates, as
of any date of determination, is equal to the aggregate Scheduled Principal
Balance of the Group 1-B Mortgage Loans. The initial Notional Amount for the
Class I-X Certificates shall be equal to $46,159,254.10. The Notional Amount of
the Class II-X Certificates, as of any date of determination, is equal to the
Current Principal Amount of the Class II-A Certificates. For federal income tax
purposes, however, the notional amount of the Class II-X Certificates is the
Uncertificated Principal Balance of REMIC II Regular Interest II-A. The initial
Notional Amount for the Class II-X Certificates shall be equal to
$261,860,600.00. The Notional Amount of the Class S Certificates shall equal the
Current Principal Amount of the Class III-A Certificates, which is equal to
REMIC II Regular Interest III-A. The initial Notional Amount for the Class S
Certificates shall be equal to $138,846,800.00.
Offered Certificate: Any Senior Certificate or Offered Subordinate
Certificate.
Offered Subordinate Certificates: The Class X-x, Class B-2 and Class
B-3 Certificates.
Officer's Certificate: A certificate signed by the Chairman of the
Board, the Vice Chairman of the Board, the President or a Vice President or
Assistant Vice President or other authorized officer of the Master Servicer or
the Seller, as applicable, and delivered to the Trustee, as required by this
Agreement.
LIBOR: With respect to any Interest Accrual Period and the Class III-A
Certificates and Class S Certificates, the rate determined by the Securities
Administrator on the related Interest Determination Date on the basis of the
rate for U.S. dollar deposits for one month that appears on Telerate Screen Page
3750 as of 11:00 a.m. (London time) on such Interest Determination Date;
provided that the parties hereto acknowledge that One-Month LIBOR for the first
Interest Accrual Period shall equal 1.12% per annum. If such rate does not
appear on such page (or such other page as may replace that page on that
service, or if such service is no longer offered, such other service for
displaying LIBOR or comparable rates as may be reasonably selected by the
Securities Administrator), LIBOR for the applicable Interest Accrual Period will
be the Reference Bank Rate. If no such quotations can be obtained by the
Securities Administrator and no Reference Bank Rate is available, LIBOR will be
LIBOR applicable to the preceding Interest Accrual Period.
Opinion of Counsel: A written opinion of counsel who is or are
acceptable to the Trustee and who, unless required to be Independent (an
"Opinion of Independent Counsel"), may be internal counsel for EMC, the Master
Servicer or the Seller.
Optional Termination Date: The Distribution Date on which the aggregate
Stated Principal Balance of all of the Mortgage Loans is equal to or less than
10% of the aggregate Stated Principal Balance of all of the Mortgage Loans as of
the Cut-off Date.
Original Subordinate Principal Balance: The sum of the aggregate
Current Principal Amounts of each Class of Subordinate Certificates as of the
Closing Date.
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Original Value: The lesser of (i) the Appraised Value or (ii) the sales
price of a Mortgaged Property at the time of origination of a Mortgage Loan,
except in instances where either clauses (i) or (ii) is unavailable, the other
may be used to determine the Original Value, or if both clauses (i) and (ii) are
unavailable, Original Value may be determined from other sources reasonably
acceptable to the Seller.
Outstanding Mortgage Loan: With respect to any Due Date, a Mortgage
Loan which, prior to such Due Date, was not the subject of a Principal
Prepayment in full, did not become a Liquidated Mortgage Loan and was not
purchased or replaced.
Outstanding Principal Balance: As of the time of any determination, the
principal balance of a Mortgage Loan remaining to be paid by the Mortgagor, or,
in the case of an REO Property, the principal balance of the related Mortgage
Loan remaining to be paid by the Mortgagor at the time such property was
acquired by the Trust Fund less any Net Liquidation Proceeds with respect
thereto to the extent applied to principal.
Pass-Through Rate: As to each Class of Certificates and the REMIC I
Regular Interests and REMIC II Regular Interests, the rate of interest
determined as provided with respect thereto, in Section 5.01(c). Any monthly
calculation of interest at a stated rate shall be based upon annual interest at
such rate divided by twelve.
Periodic Rate Cap: With respect to each Mortgage Loan, the maximum
adjustment that can be made to the Mortgage Interest Rate on each Interest
Adjustment Date in accordance with its terms, regardless of changes in the
applicable Index.
Permitted Investments: Any one or more of the following obligations or
securities held in the name of the Trustee for the benefit of the
Certificateholders:
(i) direct obligations of, and obligations the timely payment
of which are fully guaranteed by the United States of America or any
agency or instrumentality of the United States of America the
obligations of which are backed by the full faith and credit of the
United States of America;
(ii) (a) demand or time deposits, federal funds or bankers'
acceptances issued by any depository institution or trust company
incorporated under the laws of the United States of America or any
state thereof (including the Trustee or the Master Servicer or its
Affiliates acting in its commercial banking capacity) and subject to
supervision and examination by federal and/or state banking
authorities, provided that the commercial paper and/or the short-term
debt rating and/or the long-term unsecured debt obligations of such
depository institution or trust company at the time of such investment
or contractual commitment providing for such investment have the
Applicable Credit Rating or better from each Rating Agency and (b) any
other demand or time deposit or certificate of deposit that is fully
insured by the Federal Deposit Insurance Corporation;
(iii) repurchase obligations with respect to (a) any security
described in clause (i) above or (b) any other security issued or
guaranteed by an agency or instrumentality of the
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Xxxxxx Xxxxxx xx Xxxxxxx, the obligations of which are backed by the
full faith and credit of the United States of America, in either case
entered into with a depository institution or trust company (acting as
principal) described in clause (ii)(a) above where the Trustee holds
the security therefor;
(iv) securities bearing interest or sold at a discount issued
by any corporation (including the Trustee or the Master Servicer or its
Affiliates) incorporated under the laws of the United States of America
or any state thereof that have the Applicable Credit Rating or better
from each Rating Agency at the time of such investment or contractual
commitment providing for such investment; provided, however, that
securities issued by any particular corporation will not be Permitted
Investments to the extent that investments therein will cause the then
outstanding principal amount of securities issued by such corporation
and held as part of the Trust to exceed 10% of the aggregate
Outstanding Principal Balances of all the Mortgage Loans and Permitted
Investments held as part of the Trust;
(v) commercial paper (including both non-interest-bearing
discount obligations and interest-bearing obligations payable on demand
or on a specified date not more than one year after the date of
issuance thereof) having the Applicable Credit Rating or better from
each Rating Agency at the time of such investment;
(vi) a Reinvestment Agreement issued by any bank, insurance
company or other corporation or entity;
(vii) any other demand, money market or time deposit,
obligation, security or investment as may be acceptable to each Rating
Agency as evidenced in writing by each Rating Agency to the Trustee;
and
(viii) any money market or common trust fund having the
Applicable Credit Rating or better from each Rating Agency, including
any such fund for which the Trustee or the Master Servicer or any
affiliate of the Trustee or the Master Servicer acts as a manager or an
advisor;
provided, however, that no instrument or security shall be a Permitted
Investment if such instrument or security evidences a right to receive only
interest payments with respect to the obligations underlying such instrument or
if such security provides for payment of both principal and interest with a
yield to maturity in excess of 120% of the yield to maturity at par or if such
instrument or security is purchased at a price greater than par.
Permitted Transferee: Any Person other than a Disqualified Organization
or an "electing large partnership" (as defined by Section 775 of the Code).
Person: Any individual, corporation, partnership, joint venture,
association, limited liability company, joint-stock company, trust,
unincorporated organization or government or any agency or political subdivision
thereof.
Physical Certificates: The Residual Certificates and the Private
Certificates.
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Prepayment Charge: With respect to any Mortgage Loan, the charges or
premiums, if any, due in connection with a full or partial prepayment of such
Mortgage Loan in accordance with the terms thereof.
Prepayment Period: With respect to any Mortgage Loan and any
Distribution Date, the calendar month preceding the month in which such
Distribution Date occurs.
Primary Mortgage Insurance Policy: Any primary mortgage guaranty
insurance policy issued in connection with a Mortgage Loan which provides
compensation to a Mortgage Note holder in the event of default by the obligor
under such Mortgage Note or the related Security Instrument, if any or any
replacement policy therefor through the related Interest Accrual Period for such
Class relating to a Distribution Date.
Principal Prepayment: Any payment (whether partial or full) or other
recovery of principal on a Mortgage Loan which is received in advance of its
scheduled Due Date to the extent that it is not accompanied by an amount as to
interest representing scheduled interest due on any date or dates in any month
or months subsequent to the month of prepayment, including Insurance Proceeds
and the Repurchase Proceeds, but excluding the principal portion of Net
Liquidation Proceeds.
Private Certificate: Any Class B-4, Class B-5, Class B-6, Class III-A
or Class S Certificate.
Protected Account: An account established and maintained for the
benefit of Certificateholders by each Servicer with respect to the related
Mortgage Loans and with respect to REO Property pursuant to the respective
Servicing Agreements.
QIB: A Qualified Institutional Buyer as defined in Rule 144A
promulgated under the Securities Act.
Qualified Insurer: Any insurance company duly qualified as such under
the laws of the state or states in which the related Mortgaged Property or
Mortgaged Properties is or are located, duly authorized and licensed in such
state or states to transact the type of insurance business in which it is
engaged and approved as an insurer by the Master Servicer, so long as the claims
paying ability of which is acceptable to the Rating Agencies for pass-through
certificates having the same rating as the Certificates rated by the Rating
Agencies as of the Closing Date.
Rate Adjustment Date: With respect to each Distribution Date and the
Class III-A Certificates and Class S Certificates, the second LIBOR Business Day
immediately preceding the commencement of the related Interest Accrual Period on
which banks are open for dealing in foreign currency and exchange in London,
England.
Rating Agencies: S&P and Xxxxx'x.
Realized Loss: Any (i) Bankruptcy Loss or (ii) as to any Liquidated
Mortgage Loan, (x) the Outstanding Principal Balance of such Liquidated Mortgage
Loan plus accrued and unpaid interest thereon at the Mortgage Interest Rate
through the last day of the month of such liquidation, less (y)
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the related Net Liquidation Proceeds with respect to such Mortgage Loan and the
related Mortgaged Property.
Record Date: For each Class of Certificates (other than the Class III-A
Certificates on or prior to the Distribution Date in May 2008 and the Class S
Certificates), the close of business on the last Business Day of the month
immediately preceding the month of such Distribution Date; and for the Class
III-A Certificates on or prior to the Distribution Date in May 2008 and the
Class S Certificates, the Business Day preceding the applicable Distribution
Date so long as such Class of Certificates remains in book-entry form; and
otherwise, the close of business on the last Business Day of the month
immediately preceding the month of such Distribution Date.
Reference Banks: Bankers Trust Company, Barclay's Bank PLC, The Bank of
Tokyo and National Westminster Bank PLC and their successors in interest;
provided that if any of the foregoing banks are not suitable to serve as a
Reference Bank, then any leading banks selected by the Trustee which are engaged
in transactions in Eurodollar deposits in the international Eurocurrency market
(i) with an established place of business in London, (ii) not controlling, under
the control of or under common control with the Seller or any Affiliate thereof,
(iii) whose quotations appear on the Reuters Screen LIBO Page on the relevant
Rate Adjustment Date and (iv) which have been designated as such by the Trustee.
Reference Bank Rate: With respect to any Interest Accrual Period, as
follows: the arithmetic mean (rounded upwards, if necessary, to the nearest one
sixteenth of a percent) of the offered rates for United States dollar deposits
for one month which are offered by the Reference Banks as of 11:00 A.M., London,
England time, two LIBOR Business Days prior to the first day of such Interest
Accrual Period to prime banks in the London interbank market for a period of one
month in amounts approximately equal to the sum of the outstanding Current
Principal Balance and the Certificates; provided that at least two such
Reference Banks provide such rate. If fewer than two offered rates appear, the
Reference Bank Rate will be the arithmetic mean (rounded upwards if necessary to
the nearest 1/16%) of the rates quoted by one or more major banks in New York
City, selected by the Master Servicer, as of 11:00 a.m., New York time, on such
date for loans in U.S. Dollars to leading European Banks for a period of one
month in amounts approximately equal to the aggregate Current Principal Balance.
If no such quotations can be obtained, the Reference Bank Rate shall be the
Reference Bank Rate applicable to the preceding Interest Accrual Period.
Reinvestment Agreements: One or more reinvestment agreements,
acceptable to the Rating Agencies, from a bank, insurance company or other
corporation or entity (including the Trustee).
Relief Act: The Soldiers' and Sailors' Civil Relief Act of 1940, as
amended, or similar state law.
Relief Act Mortgage Loan: Any Mortgage Loan as to which the Scheduled
Payment thereof has been reduced due to the application of the Relief Act.
REMIC: A real estate mortgage investment conduit, as defined in the
Code.
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REMIC I: That group of assets contained in the Trust Fund designated as
a REMIC consisting of (i) the Mortgage Loans, (ii) the Master Servicer
Collection Account, (iii) the Distribution Account, (iv) any REO Property
relating to the Mortgage Loans, (v) the rights with respect to any related
Servicing Agreement, (vi) the rights with respect to any related Assignment
Agreement and (vii) any proceeds of the foregoing.
REMIC I Interests: The REMIC I Regular Interests and the Class R-I
Certificates.
REMIC I Regular Interests: The REMIC I Regular Interests, with such
terms as described in Section 5.01(c).
REMIC I Subordinated Balance Ratio: The ratio among the Uncertificated
Principal Balances of each of the REMIC I Regular Interests ending with the
designation "A," equal to the ratio among, with respect to each such REMIC I
Regular Interest, the excess of (x) the aggregate Scheduled Principal Balance of
the Mortgage Loans in the related Loan Group over (y) the Current Principal
Amount of the Senior Certificates in the related Group.
REMIC II: That group of assets contained in the Trust Fund designated
as a REMIC consisting of the REMIC I Regular Interests.
REMIC II Interests: The REMIC II Regular Interests and the Class R-II
Certificates.
REMIC II Regular Interests: As defined in Section 5.01(c).
REMIC III: That group of assets contained in the Trust Fund designated
as a REMIC consisting of the REMIC II Regular Interests.
REMIC III Interests: The REMIC III Regular Certificates and the Class
R-III Certificates.
REMIC III Regular Certificates: Certificates as defined in Section
5.01(c).
REMIC Opinion: An Opinion of Independent Counsel, to the effect that
the proposed action described therein would not, under the REMIC Provisions, (i)
cause any REMIC to fail to qualify as a REMIC while any regular interest in such
REMIC is outstanding, (ii) result in a tax on prohibited transactions with
respect to any REMIC or (iii) constitute a taxable contribution to any REMIC
after the Startup Day.
REMIC Provisions: The provisions of the federal income tax law relating
to the REMIC, which appear at Sections 860A through 860G of the Code, and
related provisions and regulations promulgated thereunder, as the foregoing may
be in effect from time to time.
REO Property: A Mortgaged Property acquired in the name of the Trustee,
for the benefit of Certificateholders, by foreclosure or deed-in-lieu of
foreclosure in connection with a defaulted Mortgage Loan.
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Repurchase Price: With respect to any Mortgage Loan (or any property
acquired with respect thereto) required to be repurchased by the Mortgage Loan
Seller pursuant to the Mortgage Loan Purchase Agreement or Article II of this
Agreement, an amount equal to the sum of (i)(a) 100% of the Outstanding
Principal Balance of such Mortgage Loan as of the date of repurchase (or if the
related Mortgaged Property was acquired with respect thereto, 100% of the
Outstanding Principal Balance at the date of the acquisition), plus (b) accrued
but unpaid interest on the Outstanding Principal Balance at the related Mortgage
Interest Rate, through and including the last day of the month of repurchase,
plus (c) any unreimbursed Monthly Advances and servicing advances payable to the
Servicer of the Mortgage Loan or to the Master Servicer and (ii) any costs and
damages (if any) incurred by the Trust in connection with any violation of such
Mortgage Loan of any predatory or abusive lending laws.
Repurchase Proceeds: the Repurchase Price in connection with any
repurchase of a Mortgage Loan by the Mortgage Loan Seller and any cash deposit
in connection with the substitution of a Mortgage Loan.
Request for Release: A request for release in the form attached hereto
as Exhibit D.
Required Insurance Policy: With respect to any Mortgage Loan, any
insurance policy which is required to be maintained from time to time under this
Agreement with respect to such Mortgage Loan.
Residual Certificates: Any of the Class R-I, Class R-II or Class R-III
Certificates.
Responsible Officer: Any officer assigned to the Corporate Trust Office
(or any successor thereto), including any Vice President, Assistant Vice
President, Trust Officer, any Assistant Secretary, any trust officer or any
other officer of the Trustee customarily performing functions similar to those
performed by any of the above designated officers and having direct
responsibility for the administration of this Agreement, and any other officer
of the Trustee to whom a matter arising hereunder may be referred.
Rule 144A Certificate: The certificate to be furnished by each
purchaser of a Private Certificate (which is also a Physical Certificate) which
is a Qualified Institutional Buyer as defined under Rule 144A promulgated under
the Securities Act, substantially in the form set forth as Exhibit F-2 hereto.
S&P: Standard & Poor's, a division of The XxXxxx-Xxxx Companies, Inc.,
and its successor in interest.
Scheduled Payment: With respect to any Mortgage Loan and any month, the
scheduled payment or payments of principal and interest due during such month on
such Mortgage Loan which either is payable by a Mortgagor in such month under
the related Mortgage Note or, in the case of REO Property, would otherwise have
been payable under the related Mortgage Note.
Scheduled Principal: The principal portion of any Scheduled Payment.
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Scheduled Principal Balance: With respect to any Mortgage Loan on any
Distribution Date, (i) the unpaid principal balance of such Mortgage Loan as of
the close of business on the related Due Date (i.e., taking account of the
principal payment to be made on such Due Date and irrespective of any
delinquency in its payment), as specified in the amortization schedule at the
time relating thereto (before any adjustment to such amortization schedule by
reason of any bankruptcy or similar proceeding occurring after the Cut-off Date
(other than a Deficient Valuation) or any moratorium or similar waiver or grace
period) and less (ii) any Principal Prepayments (including the principal portion
of Net Liquidation Proceeds) received during or prior to the related Prepayment
Period; provided that the Scheduled Principal Balance of a Liquidated Mortgage
Loan is zero.
Securities Act: The Securities Act of 1933, as amended.
Securities Administrator: Xxxxx Fargo Bank Minnesota, National
Association, or its successor in interest, or any successor securities
administrator appointed as herein provided.
Securities Legend: "THIS CERTIFICATE HAS NOT BEEN AND WILL NOT BE
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"),
OR UNDER ANY STATE SECURITIES LAWS. THE HOLDER HEREOF, BY PURCHASING THIS
CERTIFICATE, AGREES THAT THIS CERTIFICATE MAY BE REOFFERED, RESOLD, PLEDGED OR
OTHERWISE TRANSFERRED ONLY IN COMPLIANCE WITH THE SECURITIES ACT AND OTHER
APPLICABLE LAWS AND ONLY (1) PURSUANT TO RULE 144A UNDER THE SECURITIES ACT
("RULE 144A") TO A PERSON THAT THE HOLDER REASONABLY BELIEVES IS A QUALIFIED
INSTITUTIONAL BUYER WITHIN THE MEANING OF RULE 144A (A "QIB"), PURCHASING FOR
ITS OWN ACCOUNT OR A QIB PURCHASING FOR THE ACCOUNT OF A QIB, WHOM THE HOLDER
HAS INFORMED, IN EACH CASE, THAT THE REOFFER, RESALE, PLEDGE OR OTHER TRANSFER
IS BEING MADE IN RELIANCE ON RULE 144A, (2) PURSUANT TO AN EXEMPTION FROM
REGISTRATION PROVIDED BY RULE 144 UNDER THE SECURITIES ACT (IF AVAILABLE) OR (3)
IN CERTIFICATED FORM TO AN "INSTITUTIONAL ACCREDITED INVESTOR" WITHIN THE
MEANING THEREOF IN RULE 501(a)(1), (2), (3) or (7) OF REGULATION D UNDER THE ACT
OR ANY ENTITY IN WHICH ALL OF THE EQUITY OWNERS COME WITHIN SUCH PARAGRAPHS
PURCHASING NOT FOR DISTRIBUTION IN VIOLATION OF THE SECURITIES ACT, SUBJECT TO
(A) THE RECEIPT BY THE TRUSTEE OF A LETTER SUBSTANTIALLY IN THE FORM PROVIDED IN
THE AGREEMENT AND (B) THE RECEIPT BY THE TRUSTEE OF SUCH OTHER EVIDENCE
ACCEPTABLE TO THE TRUSTEE THAT SUCH REOFFER, RESALE, PLEDGE OR TRANSFER IS IN
COMPLIANCE WITH THE SECURITIES ACT AND OTHER APPLICABLE LAWS OR IN EACH CASE IN
ACCORDANCE WITH ALL APPLICABLE SECURITIES LAWS OF THE UNITED STATES AND ANY
OTHER APPLICABLE JURISDICTION. THIS CERTIFICATE MAY NOT BE ACQUIRED DIRECTLY OR
INDIRECTLY BY, OR ON BEHALF OF, AN EMPLOYEE BENEFIT PLAN OR OTHER RETIREMENT
ARRANGEMENT WHICH IS SUBJECT TO TITLE I OF THE EMPLOYEE RETIREMENT INCOME
SECURITY ACT OF 1974, AS AMENDED, OR SECTION 4975 OF THE INTERNAL REVENUE CODE
OF 1986, AS AMENDED [in the case of a Residual Certificate and a Private
Certificate other than the Class III-A Certificates after the Distribution Date
in May 2008: UNLESS THE OPINION OF COUNSEL REQUIRED BY SECTION 5.07 OF THE
POOLING AND SERVICING AGREEMENT IS
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PROVIDED OR] [in the case of the Class B-4, Class B-5 and Class B-6
Certificates: UNLESS THE PROPOSED TRANSFER AND HOLDING OF A CERTIFICATE AND THE
SERVICING, MANAGEMENT AND OPERATION OF THE TRUST AND ITS ASSETS: (I) WILL NOT
RESULT IN ANY PROHIBITED TRANSACTION WHICH IS NOT COVERED UNDER AN INDIVIDUAL OR
CLASS PROHIBITED TRANSACTION EXEMPTION, INCLUDING, BUT NOT LIMITED TO,
PROHIBITED TRANSACTION EXEMPTION ("PTE") 84-14, XXX 00-00, XXX 00-0, XXX 95-60
OR PTE 96-23 AND (II) WILL NOT GIVE RISE TO ANY ADDITIONAL OBLIGATIONS ON THE
PART OF THE SELLER, THE SECURITIES ADMINISTRATOR, THE MASTER SERVICER, ANY
SERVICER OR THE TRUSTEE, WHICH WILL BE DEEMED REPRESENTED BY AN OWNER OF A
BOOK-ENTRY CERTIFICATE OR A GLOBAL CERTIFICATE AND WILL BE EVIDENCED BY A
REPRESENTATION OR AN OPINION OF COUNSEL TO SUCH EFFECT BY OR ON BEHALF OF AN
INSTITUTIONAL ACCREDITED INVESTOR].
Security Instrument: A written instrument creating a valid first lien
on a Mortgaged Property securing a Mortgage Note, which may be any applicable
form of mortgage, deed of trust, deed to secure debt or security deed, including
any riders or addenda thereto.
Seller: Structured Asset Mortgage Investments Inc., a Delaware
corporation, or its successors in interest.
Senior Certificates: The Class I-A, Class I-X, Class II-A, Class II-X,
Class III-A, Class IV-A, Class V-A, Class VI-A, Class R-I, Class R-II and Class
R-III Certificates.
Senior Optimal Principal Amount: The Group 1 Senior Optimal Principal
Amount, Group 2 Senior Optimal Principal Amount, Group 3 Senior Optimal
Principal Amount, Group 4 Senior Optimal Principal Amount, Group 5 Senior
Optimal Principal Amount or Group 6 Senior Optimal Principal Amount, as
applicable.
Senior Percentage: The Group 1 Senior Percentage, Group 2 Senior
Percentage, Group 3 Senior Percentage, Group 4 Senior Percentage, Group 5 Senior
Percentage or Group 6 Senior Percentage, as applicable.
Senior Prepayment Percentage: The Group 1 Senior Prepayment Percentage,
Group 2 Senior Prepayment Percentage, Group 3 Senior Prepayment Percentage,
Group 4 Senior Prepayment Percentage, Group 5 Senior Prepayment Percentage or
Group 6 Senior Prepayment Percentage, as applicable.
Servicer: With respect to each Mortgage Loan, Alliance Mortgage
Company, IndyMac or U.S. Bank, or any successor thereto.
Servicer Remittance Date: With respect to each Mortgage Loan, the date
set forth in the related Servicing Agreement.
Servicing Agreements: The Alliance Servicing Agreement, IndyMac
Servicing Agreement and U.S. Bank Servicing Agreement.
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Servicing Fee: As to any Mortgage Loan and Distribution Date, an amount
equal to the product of (i) the Scheduled Principal Balance of such Mortgage
Loan as of the Due Date in the preceding calendar month and (ii) the applicable
Servicing Fee Rate.
Servicing Fee Rate: As to any Mortgage Loan, a per annum rate as set
forth in the Mortgage Loan Schedule.
Startup Day: September 30, 2003.
Subordinate Certificate Writedown Amount: As to any Distribution Date,
the amount by which (a) the aggregate Current Principal Amount of all the
Certificates (after giving effect to the distribution of principal and the
allocation of applicable Realized Losses in reduction of the Current Principal
Amounts of such Certificates on such Distribution Date) exceeds (b) the
aggregate Scheduled Principal Balance of the Mortgage Loans on the Due Date
related to such Distribution Date.
Subordinate Certificates: The Class B-1, Class B-2, Class B-3, Class
B-4, Class B-5 and Class B-6 Certificates.
Subordinate Optimal Principal Amount: As to any Distribution Date, an
amount equal to the sum, without duplication, of the sum of the following (but
in no event greater than the aggregate Current Principal Amount of the
Subordinate Certificates immediately prior to such Distribution Date):
(i) the applicable Subordinate Percentage of the principal
portion of all Scheduled Payments due on each Outstanding Mortgage Loan
in the related Loan Group on the related Due Date as specified in the
amortization schedule at the time applicable thereto (after adjustment
for previous Principal Prepayments but before any adjustment to such
amortization schedule by reason of any bankruptcy or similar proceeding
or any moratorium or similar waiver or grace period);
(ii) the applicable Subordinate Prepayment Percentage of the
Scheduled Principal Balance of each Mortgage Loan in the related Loan
Group that was the subject of a Principal Prepayment in full received
by the Master Servicer during the related Prepayment Period;
(iii) the applicable Subordinate Prepayment Percentage of each
Principal Prepayment in part received during the related Prepayment
Period with respect to each Mortgage Loan in the related Loan Group;
(iv) the excess, if any, of (a) all Net Liquidation Proceeds
allocable to principal received during the related Prepayment Period in
respect of each Liquidated Mortgage Loan in the related Loan Group over
(b) the sum of the amounts distributable to the related Senior
Certificateholders pursuant to clause (iv) of the related definition of
Senior Optimal Principal Amount on such Distribution Date;
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(v) the applicable Subordinate Prepayment Percentage of the
sum of (a) the Scheduled Principal Balance of each Mortgage Loan in the
related Loan Group which was purchased with respect to such
Distribution Date and (b) the difference, if any, between the Scheduled
Principal Balance of a Mortgage Loan in the related Loan Group that has
been replaced by the Mortgage Loan Seller with a Substitute Mortgage
Loan pursuant to the Mortgage Loan Purchase Agreement in connection
with such Distribution Date over the Scheduled Principal Balance of
such Substitute Mortgage Loan; and
(vi) on the Distribution Date on which the Current Principal
Amounts of the Group 1 Senior Certificates, Group 2 Senior
Certificates, Group 3 Senior Certificates, Group 4 Senior Certificates,
Group 5 Senior Certificates and Group 6 Senior Certificates have all
been reduced to zero, 100% of the related Senior Optimal Principal
Amount. After the aggregate Current Principal Amount of the Subordinate
Certificates has been reduced to zero, the Subordinate Optimal
Principal Amount shall be zero.
Subordinate Percentage: On any Distribution Date and each Loan Group,
100% minus the Group 1, Group 2, Group 3, Group 4, Group 5 and Group 6 Senior
Percentage, as applicable.
Subordinate Prepayment Percentage: With respect to the Mortgage Loans,
on any Distribution Date, 100% minus the Senior Prepayment Percentage, except
that on any Distribution Date after the Current Principal Amounts of the Senior
Certificates have been reduced to zero, if (a) the weighted average of the
Subordinate Percentages on such Distribution Date equals or exceeds two times
the initial weighted average of the Subordinate Percentages and (b) the
aggregate Scheduled Principal Balance of the Mortgage Loans delinquent 60 days
or more (including for this purpose any such Mortgage Loans in foreclosure and
Mortgage Loans with respect to which the related Mortgaged Property has been
acquired by the Trust), averaged over the last six months, as a percentage of
the sum of the aggregate Current Principal Amount of the Subordinate
Certificates does not exceed 100%, the Subordinate Prepayment Percentage will
equal 100%. If the test set forth in the preceding sentence is not satisfied on
any Distribution Date after the Current Principal Amounts of the Senior
Certificates have each been reduced to zero, then the Subordinate Prepayment
Percentage will equal zero for such Distribution Date.
Substitute Mortgage Loan: A mortgage loan tendered to the Trustee
pursuant to the related Servicing Agreement, the Mortgage Loan Purchase
Agreement or Section 2.04 of this Agreement, as applicable, in each case, (i)
which has an Outstanding Principal Balance not greater nor materially less than
the Mortgage Loan for which it is to be substituted; (ii) which has a Mortgage
Interest Rate and Net Rate not less than, and not materially greater than, such
Mortgage Loan; (iii) which has a maturity date not materially earlier or later
than such Mortgage Loan and not later than the latest maturity date of any
Mortgage Loan; (iv) which is of the same property type and occupancy type as
such Mortgage Loan; (v) which has a Loan-to-Value Ratio not greater than the
Loan-to-Value Ratio of such Mortgage Loan; (vi) which is current in payment of
principal and interest as of the date of substitution; (vii) as to which the
payment terms do not vary in any material respect from the payment terms of the
Mortgage Loan for which it is to be substituted and (viii) which has a Gross
Margin, Periodic Rate Cap and Maximum Lifetime Mortgage Rate no less than those
of such Mortgage Loan, has the same Index and interval between Interest
Adjustment Dates as such Mortgage Loan, and a Minimum Lifetime Mortgage Rate no
lower than that of such Mortgage Loan.
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Tax Administration and Tax Matters Person: The Securities Administrator
or any successor thereto or assignee thereof shall serve as tax administrator
hereunder and as agent for the Tax Matters Person. The Holder of each Class of
Residual Certificates shall be the Tax Matters Person for the related REMIC, as
more particularly set forth in Section 9.12 hereof.
Termination Purchase Price: The price, calculated as set forth in
Section 10.01, to be paid in connection with the repurchase of the Mortgage
Loans pursuant to Section 10.01.
Trust Fund or Trust: The corpus of the trust created by this Agreement,
consisting of the Mortgage Loans and the other assets described in Section
2.01(a).
Trustee: JPMorgan Chase Bank, or its successor in interest, or any
successor trustee appointed as herein provided.
Uncertificated Principal Balance: With respect to any REMIC I Regular
Interest or REMIC II Regular Interest as of any Distribution Date, the initial
principal amount of such Regular Interest, reduced by (i) all amounts
distributed on previous Distribution Dates on such Regular Interest with respect
to principal, (ii) the principal portion of all Realized Losses allocated prior
to such Distribution Date to such Regular Interest, taking account of the Loss
Allocation Limitation and (iii) in the case of a REMIC II Regular Interest for
which the Corresponding Class is a Subordinate Certificate, such Regular
Interest's pro rata share, if any, of the applicable Subordinate Certificate
Writedown Amount allocated to such Corresponding Class for previous Distribution
Dates.
Uninsured Cause: Any cause of damage to a Mortgaged Property or related
REO Property such that the complete restoration of such Mortgaged Property or
related REO Property is not fully reimbursable by the hazard insurance policies
required to be maintained pursuant the related Servicing Agreement, without
regard to whether or not such policy is maintained.
United States Person: A citizen or resident of the United States, a
corporation or partnership (including an entity treated as a corporation or
partnership for federal income tax purposes) created or organized in, or under
the laws of, the United States or any state thereof or the District of Columbia
(except, in the case of a partnership, to the extent provided in regulations),
provided that, for purposes solely of the Class R Certificates, no partnership
or other entity treated as a partnership for United States federal income tax
purposes shall be treated as a United States Person unless all persons that own
an interest in such partnership either directly or through any entity that is
not a corporation for United States federal income tax purposes are United
States Persons, or an estate whose income is subject to United States federal
income tax regardless of its source, or a trust if a court within the United
States is able to exercise primary supervision over the administration of the
trust and one or more such United States Persons have the authority to control
all substantial decisions of the trust. To the extent prescribed in regulations
by the Secretary of the Treasury, which have not yet been issued, a trust which
was in existence on August 20, 1996 (other than a trust treated as owned by the
grantor under subpart E of part I of subchapter J of chapter 1 of the Code), and
which was treated as a United States person on August 20, 1996 may elect to
continue to be treated as a United States person notwithstanding the previous
sentence.
U.S. Bank: U.S. Bank, N.A, or its successor in interest.
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U.S. Bank Servicing Agreement: The Purchase, Warranties and Servicing
Agreement, dated as of July 1, 2003, between U.S. Bank and EMC, attached hereto
as Exhibit H-3.
Section 1.02. Determination of LIBOR.
LIBOR applicable to the calculation of the Pass-Through Rates on the
Class III-A and Class S Certificates for any Interest Accrual Period (other than
the initial Interest Accrual Period) will be determined on each Rate Adjustment
Date as follows:
For any Interest Accrual Period other than the first Interest Accrual
Period, the rate for United States dollar deposits for one month which appears
on the Telerate Screen Page 3750 as of 11:00 A.M., London, England time, two
LIBOR Business Days prior to the first day of such Interest Accrual Period. For
the first Interest Accrual Period, LIBOR equals 1.12% per annum with respect to
the Class III-A and Class S Certificates. If such rate does not appear on such
page (or such other page as may replace that page on that service, or if such
service is no longer offered, such other service for displaying LIBOR or
comparable rates as may be reasonably selected by the Master Servicer), the rate
will be the Reference Bank Rate. If no such quotations can be obtained and no
Reference Bank Rate is available, LIBOR will be LIBOR applicable to the
preceding Distribution Date.
The establishment of LIBOR by the Trustee on any Rate Adjustment Date
and the Trustee's subsequent calculation of the Pass-Through Rates applicable to
the Class III-A and Class S Certificates for the relevant Interest Accrual
Period, in the absence of manifest error, will be final and binding.
The Trustee will make available on its internet website (which
initially will be located at xxx.xxxxxxxx.xxx/xxx) to each Certificateholder the
Pass-Through Rates on the Class III-A and Class S Certificates for the current
and the immediately preceding Interest Accrual Periods. Parties that are unable
to use the website can obtain such information by calling the Trustee's customer
service desk at (000) 000-0000.
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ARTICLE II
Conveyance of Mortgage Loans;
Original Issuance of Certificates
Section 2.01 Conveyance of Mortgage Loans to Trustee. (a) The Seller
concurrently with the execution and delivery of this Agreement, sells, transfers
and assigns to the Trust without recourse all its right, title and interest in
and to (i) the Mortgage Loans identified in the Mortgage Loan Schedule,
including all interest and principal due with respect to the Mortgage Loans
after the Cut-off Date, but excluding any payments of principal and interest due
on or prior to the Cut-off Date; (ii) such assets as shall from time to time be
credited or are required by the terms of this Agreement to be credited to the
Master Servicer Collection Account, (iii) such assets relating to the Mortgage
Loans as from time to time may be held by the Servicers in Protected Accounts,
the Master Servicer in the Master Servicer Collection Account and the Trustee in
the Distribution Account for the benefit of the Trustee on behalf of the
Certificateholders, (iv) any REO Property, (v) the Required Insurance Policies
and any amounts paid or payable by the insurer under any Insurance Policy (to
the extent the mortgagee has a claim thereto), (vi) the Mortgage Loan Purchase
Agreement to the extent provided in Subsection 2.03(a), (vii) the rights with
respect to the Servicing Agreements as assigned to the Trustee on behalf of the
Certificateholders by the Assignment Agreements and (viii) any proceeds of the
foregoing. Although it is the intent of the parties to this Agreement that the
conveyance of the Seller's right, title and interest in and to the Mortgage
Loans and other assets in the Trust Fund pursuant to this Agreement shall
constitute a purchase and sale and not a loan, in the event that such conveyance
is deemed to be a loan, it is the intent of the parties to this Agreement that
the Seller shall be deemed to have granted to the Trustee a first priority
perfected security interest in all of the Seller's right, title and interest in,
to and under the Mortgage Loans and other assets in the Trust Fund, and that
this Agreement shall constitute a security agreement under applicable law.
(b) In connection with the above transfer and assignment, the Seller
hereby deposits with the Trustee or the Custodian, as its agent, with respect to
each Mortgage Loan, (i) the original Mortgage Note, endorsed without recourse to
the order of the Trustee and showing an unbroken chain of endorsements from the
original payee thereof to the Person endorsing it to the Trustee, or lost note
affidavit, (ii) the original Mortgage and, if the related Mortgage Loan is a MOM
Loan, noting the presence of the MIN and language indicating that such Mortgage
Loan is a MOM Loan, which shall have been recorded (or if the original is not
available, a copy), with evidence of such recording indicated thereon (or if
clause (x) in the proviso below applies, shall be in recordable form), (iii)
unless the Mortgage Loan is a MOM Loan, a certified copy of the assignment
(which may be in the form of a blanket assignment if permitted in the
jurisdiction in which the Mortgaged Property is located) to "JPMorgan Chase
Bank, as Trustee", with evidence of recording with respect to each Mortgage Loan
in the name of the Trustee thereon (or if clause (x) in the proviso below
applies or for Mortgage Loans with respect to which the related Mortgaged
Property is located in a state other than Maryland or an Opinion of Counsel has
been provided as set forth in this Section 2.01(b), shall be in recordable
form), (iv) all intervening assignments of the Security Instrument, if
applicable and only to the extent available to the Seller with evidence of
recording thereon, (v) the original or a copy of the policy or certificate of
primary mortgage guaranty insurance, to the extent available, if any, (vi) the
original policy of title insurance or mortgagee's certificate of title insurance
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or commitment or binder for title insurance and (vii) originals of all
modification agreements, if applicable and available;
provided, however, that in lieu of the foregoing, the Seller may deliver the
following documents, under the circumstances set forth below: (w) in lieu of the
original Security Instrument, assignments to the Trustee or intervening
assignments thereof which have been delivered, are being delivered or will, upon
receipt of recording information relating to the Security Instrument required to
be included thereon, be delivered to recording offices for recording and have
not been returned to the Seller in time to permit their delivery as specified
above, the Seller may deliver a true copy thereof with a certification by the
Seller, on the face of such copy, substantially as follows: "Certified to be a
true and correct copy of the original, which has been transmitted for
recording"; (x) in lieu of the Security Instrument, assignment to the Trustee or
intervening assignments thereof, if the applicable jurisdiction retains the
originals of such documents (as evidenced by a certification from the Seller to
such effect) the Seller may deliver photocopies of such documents containing an
original certification by the judicial or other governmental authority of the
jurisdiction where such documents were recorded; (y) in lieu of the Mortgage
Notes relating to the Mortgage Loans identified on Exhibit 5 to the Mortgage
Loan Purchase Agreement, the Depositor may deliver lost note affidavits from the
Mortgage Loan Seller; and (z) the Seller shall not be required to deliver
intervening assignments or Mortgage Note endorsements between the related
underlying seller of the Mortgage Loans and EMC Mortgage Corporation, between
EMC Mortgage Corporation and the Seller, and between the Seller and the Trustee;
and provided, further, however, that in the case of Mortgage Loans which have
been prepaid in full after the Cut-off Date and prior to the Closing Date, the
Seller, in lieu of delivering the above documents, may deliver to the Trustee or
the Custodian, as its agent, a certification to such effect and shall deposit
all amounts paid in respect of such Mortgage Loans in the Master Servicer
Collection Account on the Closing Date. The Seller shall deliver such original
documents (including any original documents as to which certified copies had
previously been delivered) to the Trustee or the Custodian, as its agent,
promptly after they are received. The Seller shall cause, at its expense, the
assignment of the Security Instrument to the Trustee to be recorded not later
than 180 days after the Closing Date, unless (a) such recordation is not
required by the Rating Agencies or an Opinion of Counsel addressed to the
Trustee has been provided to the Trustee (with a copy to the Custodian) which
states that recordation of such Security Instrument is not required to protect
the interests of the Certificateholders in the related Mortgage Loans or (b)
MERS is identified on the Mortgage or on a properly recorded assignment of the
Mortgage as the mortgagee of record solely as nominee for Seller and its
successor and assigns; provided, however, that each assignment shall be
submitted for recording by the Seller in the manner described above, at no
expense to the Trust or the Trustee or the Custodian, as its agent, upon the
earliest to occur of : (i) reasonable direction by the Holders of Certificates
evidencing Fractional Undivided Interests aggregating not less than 25% of the
Trust, (ii) the occurrence of an Event of Default, (iii) the occurrence of a
bankruptcy, insolvency or foreclosure relating to the Seller and (iv) the
occurrence of a servicing transfer as described in Section 8.02 hereof.
Notwithstanding the foregoing, if the Seller fails to pay the cost of recording
the assignments, such expense will be paid by the Trustee and the Trustee shall
be reimbursed for such expenses by the Trust in accordance with Section 9.05.
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Section 2.02 Acceptance of Mortgage Loans by Trustee. (a) The Trustee
acknowledges the sale, transfer and assignment of the Trust Fund to it by the
Seller and receipt of, subject to further review and the exceptions which may be
noted pursuant to the procedures described below, and declares that it holds,
the documents (or certified copies thereof) delivered to it pursuant to Section
2.01, and declares that it will continue to hold those documents and any
amendments, replacements or supplements thereto and all other assets of the
Trust Fund delivered to it as Trustee in trust for the use and benefit of all
present and future Holders of the Certificates. On the Closing Date, the
Custodian, with respect to the Mortgage Loans, shall acknowledge with respect to
each Mortgage Loan by delivery to the Seller and the Trustee of an Initial
Certification receipt of the Mortgage File, but without review of such Mortgage
File, except to the extent necessary to confirm that such Mortgage File contains
the related Mortgage Note or lost note affidavit. No later than 90 days after
the Closing Date (or, with respect to any Substitute Mortgage Loan, within five
Business Days after the receipt by the Trustee or Custodian thereof), the
Trustee agrees, for the benefit of the Certificateholders, to review or cause to
be reviewed by the Custodian on its behalf (under the Custodial Agreement), each
Mortgage File delivered to it and to execute and deliver, or cause to be
executed and delivered, to the Seller and the Trustee an Interim Certification.
In conducting such review, the Trustee or Custodian will ascertain whether all
required documents have been executed and received, and based on the Mortgage
Loan Schedule, whether those documents relate, determined on the basis of the
Mortgagor name, original principal balance and loan number, to the Mortgage
Loans it has received, as identified in the Mortgage Loan Schedule. In
performing any such review, the Trustee or the Custodian, as its agent, may
conclusively rely on the purported due execution and genuineness of any such
document and on the purported genuineness of any signature thereon. If the
Trustee or the Custodian, as its agent, finds any document constituting part of
the Mortgage File has not been received, or to be unrelated, determined on the
basis of the Mortgagor name, original principal balance and loan number, to the
Mortgage Loans identified in Exhibit B or to appear defective on its face (a
"Material Defect"), the Trustee or the Custodian, as its agent, shall promptly
notify the Mortgage Loan Seller. In accordance with the Mortgage Loan Purchase
Agreement, the Mortgage Loan Seller shall correct or cure any such defect within
ninety (90) days from the date of notice from the Trustee or the Custodian, as
its agent, of the defect and if the Mortgage Loan Seller fails to correct or
cure the defect within such period, and such defect materially and adversely
affects the interests of the Certificateholders in the related Mortgage Loan,
the Trustee or the Custodian, as its agent, shall enforce the Mortgage Loan
Seller's obligation pursuant to the Mortgage Loan Purchase Agreement, within 90
days from the Trustee's or the Custodian's notification, to purchase such
Mortgage Loan at the Repurchase Price; provided that, if such defect would cause
the Mortgage Loan to be other than a "qualified mortgage" as defined in Section
860G(a)(3) of the Code, any such cure or repurchase must occur within 90 days
from the date such breach was discovered; provided, however, that if such defect
relates solely to the inability of the Mortgage Loan Seller to deliver the
original Security Instrument or intervening assignments thereof, or a certified
copy because the originals of such documents, or a certified copy have not been
returned by the applicable jurisdiction, the Mortgage Loan Seller shall not be
required to purchase such Mortgage Loan if the Mortgage Loan Seller delivers
such original documents or certified copy promptly upon receipt, but in no event
later than 360 days after the Closing Date. The foregoing repurchase obligation
shall not apply in the event that the Mortgage Loan Seller cannot deliver such
original or copy of any document submitted for recording to the appropriate
recording office in the applicable jurisdiction because such document has not
been returned by such office; provided that the Mortgage Loan Seller shall
instead deliver a recording receipt of such recording office or, if such
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receipt is not available, a certificate confirming that such documents have been
accepted for recording, and delivery to the Trustee or the Custodian, as its
agent, shall be effected by the Mortgage Loan Seller within thirty days of its
receipt of the original recorded document.
(b) No later than 180 days after the Closing Date, the Trustee or the
Custodian, as its agent, will review, for the benefit of the Certificateholders,
the Mortgage Files delivered to it and will execute and deliver or cause to be
executed and delivered to the Seller and the Trustee a Final Certification. In
conducting such review, the Trustee or the Custodian, as its agent, will
ascertain whether an original of each document required to be recorded has been
returned from the recording office with evidence of recording thereon or a
certified copy has been obtained from the recording office. If the Trustee or
the Custodian, as its agent, finds a Material Defect, the Trustee or the
Custodian, as its agent, shall promptly notify the Mortgage Loan Seller
(provided, however, that with respect to those documents described in
subsections (b)(iv), (v), (vii) and (viii)(2) and (3) of Section 2.01, the
Trustee's and Custodian's obligations shall extend only to the documents
actually delivered pursuant to such subsections). In accordance with the
Mortgage Loan Purchase Agreement, the Mortgage Loan Seller shall correct or cure
any such defect within 90 days from the date of notice from the Trustee or the
Custodian, as its agent, of the Material Defect and if the Mortgage Loan Seller
is unable to cure such defect within such period, and if such defect materially
and adversely affects the interests of the Certificateholders in the related
Mortgage Loan, the Trustee shall enforce the Mortgage Loan Seller's obligation
under the Mortgage Loan Purchase Agreement to provide a Substitute Mortgage Loan
(if within two years of the Closing Date) or purchase such Mortgage Loan at the
Repurchase Price, provided that, if such defect would cause the Mortgage Loan to
be other than a "qualified mortgage" as defined in Section 860G(a)(3) of the
Code, any such cure, repurchase or substitution must occur within 90 days from
the date such breach was discovered, provided, however, that if such defect
relates solely to the inability of the Mortgage Loan Seller to deliver the
original Security Instrument or intervening assignments thereof, or a certified
copy, because the originals of such documents or a certified copy, have not been
returned by the applicable jurisdiction, the Mortgage Loan Seller shall not be
required to purchase such Mortgage Loan, if the Mortgage Loan Seller delivers
such original documents or certified copy promptly upon receipt, but in no event
later than 360 days after the Closing Date. The foregoing repurchase obligation
shall not apply in the event that the Mortgage Loan Seller cannot deliver such
original or copy of any document submitted for recording to the appropriate
recording office in the applicable jurisdiction because such document has not
been returned by such office; provided that the Mortgage Loan Seller shall
instead deliver a recording receipt of such recording office or, if such receipt
is not available, a certificate confirming that such documents have been
accepted for recording, and delivery to the Trustee or the Custodian, as its
agent, shall be effected by the Mortgage Loan Seller within thirty days of its
receipt of the original recorded document.
(c) In the event that a Mortgage Loan is purchased by the Mortgage Loan
Seller in accordance with Subsections 2.02(a) or (b) above, the Mortgage Loan
Seller shall remit to the Master Servicer the Repurchase Price for deposit in
the Master Servicer Collection Account and the Mortgage Loan Seller shall
provide to the Securities Administrator and the Trustee written notification
detailing the components of the Repurchase Price. Upon deposit of the Repurchase
Price in the Master Servicer Collection Account, the Seller shall notify the
Trustee and the Trustee or the Custodian, as its agent (upon receipt of a
Request for Release in the form of Exhibit D attached hereto with respect to
such Mortgage Loan), shall release to the Mortgage Loan Seller the related
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Mortgage File and the Trustee shall execute and deliver all instruments of
transfer or assignment, without recourse, representation or warranty, furnished
to it by the Mortgage Loan Seller as are necessary to vest in the Mortgage Loan
Seller title to and rights under the Mortgage Loan. Such purchase shall be
deemed to have occurred on the date on which the Repurchase Price in available
funds is received by the Trustee. The Trustee shall amend the Mortgage Loan
Schedule, which was previously delivered to it by Seller in a form agreed to
between the Seller and the Trustee, to reflect such repurchase and shall
promptly notify the Rating Agencies and the Master Servicer of such amendment.
The obligation of the Mortgage Loan Seller to repurchase any Mortgage Loan as to
which such a defect in a constituent document exists shall be the sole remedy
respecting such defect available to the Certificateholders or to the Trustee on
their behalf.
Section 2.03 Assignment of Interest in the Mortgage Loan Purchase
Agreement. (a) The Seller hereby assigns to the Trustee, on behalf of the
Certificateholders, all of its right, title and interest in the Mortgage Loan
Purchase Agreement, including but not limited to Seller's rights and obligations
pursuant to the Servicing Agreements (noting that the Mortgage Loan Seller has
retained the right in the event of breach of the representations, warranties and
covenants, if any, with respect to the related Mortgage Loans of the related
Servicer under the related Servicing Agreement to enforce the provisions thereof
and to seek all or any available remedies). The obligations of the Mortgage Loan
Seller to substitute or repurchase, as applicable, a Mortgage Loan shall be the
Trustee's and the Certificateholders' sole remedy for any breach thereof. At the
request of the Trustee, the Seller shall take such actions as may be necessary
to enforce the above right, title and interest on behalf of the Trustee and the
Certificateholders or shall execute such further documents as the Trustee may
reasonably require in order to enable the Trustee to carry out such enforcement.
(b) If the Seller, the Securities Administrator or the Trustee
discovers a breach of any of the representations and warranties set forth in the
Mortgage Loan Purchase Agreement, which breach materially and adversely affects
the value of the interests of Certificateholders or the Trustee in the related
Mortgage Loan, the party discovering the breach shall give prompt written notice
of the breach to the other parties. The Mortgage Loan Seller, within 90 days of
its discovery or receipt of notice that such breach has occurred (whichever
occurs earlier), shall cure the breach in all material respects or, subject to
the Mortgage Loan Purchase Agreement or Section 2.04 of this Agreement, as
applicable, shall purchase the Mortgage Loan or any property acquired with
respect thereto from the Trustee; provided, however, that if there is a breach
of any representation set forth in the Mortgage Loan Purchase Agreement or
Section 2.04 of this Agreement, as applicable, and the Mortgage Loan or the
related property acquired with respect thereto has been sold, then the Mortgage
Loan Seller shall pay, in lieu of the Repurchase Price, any excess of the
Repurchase Price over the Net Liquidation Proceeds received upon such sale. (If
the Net Liquidation Proceeds exceed the Repurchase Price, any excess shall be
paid to the Mortgage Loan Seller to the extent not required by law to be paid to
the borrower.) Any such purchase by the Mortgage Loan Seller shall be made by
providing an amount equal to the Repurchase Price to the Master Servicer for
deposit in the Master Servicer Collection Account and written notification
detailing the components of such Repurchase Price. The Seller shall notify the
Trustee and submit to the Trustee or the Custodian, as its agent, a Request for
Release, and the Trustee shall release, or the Trustee shall cause the Custodian
to release, to the Mortgage Loan Seller the related Mortgage File and the
Trustee shall execute and deliver all instruments of transfer or assignment
furnished to it by the Mortgage Loan Seller, without recourse, representation or
warranty as are necessary to vest in the Mortgage Loan
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Seller title to and rights under the Mortgage Loan or any property acquired with
respect thereto. Such purchase shall be deemed to have occurred on the date on
which the Repurchase Price in available funds is received by the Trustee. The
Master Servicer shall amend the Mortgage Loan Schedule to reflect such
repurchase and shall promptly notify the Trustee and the Rating Agencies of such
amendment. Enforcement of the obligation of the Mortgage Loan Seller to purchase
(or substitute a Substitute Mortgage Loan for) any Mortgage Loan or any property
acquired with respect thereto (or pay the Repurchase Price as set forth in the
above proviso) as to which a breach has occurred and is continuing shall
constitute the sole remedy respecting such breach available to the
Certificateholders or the Trustee on their behalf.
Section 2.04 Substitution of Mortgage Loans. Notwithstanding anything
to the contrary in this Agreement, in lieu of purchasing a Mortgage Loan
pursuant to the Mortgage Loan Purchase Agreement or Sections 2.02 or 2.03 of
this Agreement, the Mortgage Loan Seller may, no later than the date by which
such purchase by the Mortgage Loan Seller would otherwise be required, tender to
the Trustee a Substitute Mortgage Loan accompanied by a certificate of an
authorized officer of the Mortgage Loan Seller that such Substitute Mortgage
Loan conforms to the requirements set forth in the definition of "Substitute
Mortgage Loan" in the Mortgage Loan Purchase Agreement or this Agreement, as
applicable; provided, however, that substitution pursuant to the Mortgage Loan
Purchase Agreement or Section 2.04 of this Agreement, as applicable, in lieu of
purchase shall not be permitted after the termination of the two-year period
beginning on the Startup Day; provided, further, that if the breach would cause
the Mortgage Loan to be other than a "qualified mortgage" as defined in Section
860G(a)(3) of the Code, any such cure or substitution must occur within 90 days
from the date the breach was discovered. The Trustee or the Custodian, as its
agent, shall examine the Mortgage File for any Substitute Mortgage Loan in the
manner set forth in Section 2.02(a) and the Trustee or the Custodian, as its
agent, shall notify the Mortgage Loan Seller, in writing, within five Business
Days after receipt, whether or not the documents relating to the Substitute
Mortgage Loan satisfy the requirements of the fourth sentence of Subsection
2.02(a). Within two Business Days after such notification, the Mortgage Loan
Seller shall provide to the Trustee for deposit in the Distribution Account the
amount, if any, by which the Outstanding Principal Balance as of the next
preceding Due Date of the Mortgage Loan for which substitution is being made,
after giving effect to Scheduled Principal due on such date, exceeds the
Outstanding Principal Balance as of such date of the Substitute Mortgage Loan,
after giving effect to Scheduled Principal due on such date, which amount shall
be treated for the purposes of this Agreement as if it were the payment by the
Mortgage Loan Seller of the Repurchase Price for the purchase of a Mortgage Loan
by the Mortgage Loan Seller. After such notification to the Mortgage Loan Seller
and, if any such excess exists, upon receipt of such deposit, the Trustee shall
accept such Substitute Mortgage Loan which shall thereafter be deemed to be a
Mortgage Loan hereunder. In the event of such a substitution, accrued interest
on the Substitute Mortgage Loan for the month in which the substitution occurs
and any Principal Prepayments made thereon during such month shall be the
property of the Trust Fund and accrued interest for such month on the Mortgage
Loan for which the substitution is made and any Principal Prepayments made
thereon during such month shall be the property of the Mortgage Loan Seller. The
Scheduled Principal on a Substitute Mortgage Loan due on the Due Date in the
month of substitution shall be the property of the Mortgage Loan Seller and the
Scheduled Principal on the Mortgage Loan for which the substitution is made due
on such Due Date shall be the property of the Trust Fund. Upon acceptance of the
Substitute Mortgage Loan (and delivery to the Trustee or Custodian of a Request
for Release for such Mortgage Loan), the Trustee
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shall release to the Mortgage Loan Seller the related Mortgage File related to
any Mortgage Loan released pursuant to the Mortgage Loan Purchase Agreement or
Section 2.04 of this Agreement, as applicable, and shall execute and deliver all
instruments of transfer or assignment, without recourse, representation or
warranty in form as provided to it as are necessary to vest in the Mortgage Loan
Seller title to and rights under any Mortgage Loan released pursuant to the
Mortgage Loan Purchase Agreement or Section 2.04 of this Agreement, as
applicable. The Mortgage Loan Seller shall deliver the documents related to the
Substitute Mortgage Loan in accordance with the provisions of the Mortgage Loan
Purchase Agreement or Subsections 2.01(b) and 2.02(b) of this Agreement, as
applicable, with the date of acceptance of the Substitute Mortgage Loan deemed
to be the Closing Date for purposes of the time periods set forth in those
Subsections. The representations and warranties set forth in the Mortgage Loan
Purchase Agreement shall be deemed to have been made by the Mortgage Loan Seller
with respect to each Substitute Mortgage Loan as of the date of acceptance of
such Mortgage Loan by the Trustee. The Master Servicer shall amend the Mortgage
Loan Schedule to reflect such substitution and shall provide a copy of such
amended Mortgage Loan Schedule to the Trustee and the Rating Agencies.
Section 2.05 Issuance of Certificates. (a) The Trustee acknowledges the
assignment to it of the Mortgage Loans and the other assets comprising the Trust
Fund and, concurrently therewith, has signed, and countersigned and delivered to
the Seller, in exchange therefor, Certificates in such authorized denominations
representing such Fractional Undivided Interests as the Seller has requested.
The Trustee agrees that it will hold the Mortgage Loans and such other assets as
may from time to time be delivered to it segregated on the books of the Trustee
in trust for the benefit of the Certificateholders.
(a) The Seller, concurrently with the execution and delivery hereof,
does hereby transfer, assign, set over and otherwise convey in trust to the
Trustee without recourse all the right, title and interest of the Seller in and
to the REMIC I Regular Interests, and the other assets of REMIC II for the
benefit of the holders of the REMIC II Certificates. The Trustee acknowledges
receipt of the REMIC I Regular Interests (which are uncertificated) and the
other assets of REMIC II and declares that it holds and will hold the same in
trust for the exclusive use and benefit of the holders of the REMIC II
Certificates.
(b) The Seller, concurrently with the execution and delivery hereof,
does hereby transfer, assign, set over and otherwise convey in trust to the
Trustee without recourse all the right, title and interest of the Seller in and
to the REMIC II Regular Interests, and the other assets of REMIC III for the
benefit of the holders of the REMIC III Certificates. The Trustee acknowledges
receipt of the REMIC I Regular Interests (which are uncertificated) and the
other assets of REMIC II and declares that it holds and will hold the same in
trust for the exclusive use and benefit of the holders of the REMIC III
Certificates.
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Section 2.06 Representations and Warranties Concerning the Seller. The
Seller hereby represents and warrants to the Trustee, the Master Servicer and
the Securities Administrator as follows:
(i) the Seller (a) is a corporation duly organized, validly
existing and in good standing under the laws of the State of Delaware
and (b) is qualified and in good standing as a foreign corporation to
do business in each jurisdiction where such qualification is necessary,
except where the failure so to qualify would not reasonably be expected
to have a material adverse effect on the Seller's business as presently
conducted or on the Seller's ability to enter into this Agreement and
to consummate the transactions contemplated hereby;
(ii) the Seller has full corporate power to own its property,
to carry on its business as presently conducted and to enter into and
perform its obligations under this Agreement;
(iii) the execution and delivery by the Seller of this
Agreement have been duly authorized by all necessary corporate action
on the part of the Seller; and neither the execution and delivery of
this Agreement, nor the consummation of the transactions herein
contemplated, nor compliance with the provisions hereof, will conflict
with or result in a breach of, or constitute a default under, any of
the provisions of any law, governmental rule, regulation, judgment,
decree or order binding on the Seller or its properties or the articles
of incorporation or by-laws of the Seller, except those conflicts,
breaches or defaults which would not reasonably be expected to have a
material adverse effect on the Seller's ability to enter into this
Agreement and to consummate the transactions contemplated hereby;
(iv) the execution, delivery and performance by the Seller of
this Agreement and the consummation of the transactions contemplated
hereby do not require the consent or approval of, the giving of notice
to, the registration with, or the taking of any other action in respect
of, any state, federal or other governmental authority or agency,
except those consents, approvals, notices, registrations or other
actions as have already been obtained, given or made;
(v) this Agreement has been duly executed and delivered by the
Seller and, assuming due authorization, execution and delivery by the
other parties hereto, constitutes a valid and binding obligation of the
Seller enforceable against it in accordance with its terms (subject to
applicable bankruptcy and insolvency laws and other similar laws
affecting the enforcement of the rights of creditors generally);
(vi) there are no actions, suits or proceedings pending or, to
the knowledge of the Seller, threatened against the Seller, before or
by any court, administrative agency, arbitrator or governmental body
(i) with respect to any of the transactions contemplated by this
Agreement or (ii) with respect to any other matter which in the
judgment of the Seller will be determined adversely to the Seller and
will if determined adversely to the Seller materially and adversely
affect the Seller's ability to enter into this Agreement or perform its
obligations under this Agreement; and the Seller is not in default with
respect to any order of any court, administrative agency, arbitrator or
governmental body so as to materially and adversely affect the
transactions contemplated by this Agreement; and
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(vii) immediately prior to the transfer and assignment to the
Trustee, each Mortgage Note and each Mortgage were not subject to an
assignment or pledge, and the Seller had good and marketable title to
and was the sole owner thereof and had full right to transfer and sell
such Mortgage Loan to the Trustee free and clear of any encumbrance,
equity, lien, pledge, charge, claim or security interest.
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ARTICLE III
Administration and Servicing of Mortgage Loans
Section 3.01 Master Servicer. (a) The Master Servicer shall supervise,
monitor and oversee the obligation of the Servicers to service and administer
their respective Mortgage Loans in accordance with the terms of the applicable
Servicing Agreement and shall have full power and authority to do any and all
things which it may deem necessary or desirable in connection with such master
servicing and administration. In performing its obligations hereunder, the
Master Servicer shall act in a manner consistent with Accepted Master Servicing
Practices. Furthermore, the Master Servicer shall oversee and consult with each
Servicer as necessary from time-to-time to carry out the Master Servicer's
obligations hereunder, shall receive, review and evaluate all reports,
information and other data provided to the Master Servicer by each Servicer and
shall cause each Servicer to perform and observe the covenants, obligations and
conditions to be performed or observed by such Servicer under the applicable
Servicing Agreement. The Master Servicer shall independently and separately
monitor each Servicer's servicing activities with respect to each related
Mortgage Loan, reconcile the results of such monitoring with such information
provided in the previous sentence on a monthly basis and coordinate corrective
adjustments to the Servicers' and Master Servicer's records, and based on such
reconciled and corrected information, the Master Servicer shall provide such
information to the Securities Administrator as shall be necessary in order for
it to prepare the statements specified in Section 6.04, and prepare any other
information and statements required to be forwarded by the Master Servicer
hereunder. The Master Servicer shall reconcile the results of its Mortgage Loan
monitoring with the actual remittances of the Servicers to the Protected Account
pursuant to the applicable Servicing Agreement.
(b) The Trustee shall furnish the Servicers and the Master Servicer
with any powers of attorney and other documents in form as provided to it
necessary or appropriate to enable the Servicers and the Master Servicer to
service and administer the related Mortgage Loans and REO Property.
(c) The Trustee shall provide access to the records and documentation
in possession of the Trustee regarding the related Mortgage Loans and REO
Property and the servicing thereof to the Certificateholders, the FDIC, and the
supervisory agents and examiners of the FDIC, such access being afforded only
upon reasonable prior written request and during normal business hours at the
office of the Trustee; provided, however, that, unless otherwise required by
law, the Trustee shall not be required to provide access to such records and
documentation if the provision thereof would violate the legal right to privacy
of any Mortgagor. The Trustee shall allow representatives of the above entities
to photocopy any of the records and documentation and shall provide equipment
for that purpose at a charge that covers the Trustee's actual costs.
(d) The Trustee shall execute and deliver to the related Servicer and
the Master Servicer any court pleadings, requests for trustee's sale or other
documents necessary or desirable to (i) the foreclosure or trustee's sale with
respect to a Mortgaged Property; (ii) any legal action brought to obtain
judgment against any Mortgagor on the Mortgage Note or Security Instrument;
(iii) obtain a deficiency judgment against the Mortgagor; or (iv) enforce any
other rights or remedies provided by the Mortgage Note or Security Instrument or
otherwise available at law or equity.
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Section 3.02 REMIC-Related Covenants. For as long as each REMIC shall
exist, the Trustee and the Securities Administrator shall act in accordance
herewith to assure continuing treatment of such REMIC as a REMIC, and the
Trustee and the Securities Administrator shall comply with any directions of the
Seller, the related Servicer or the Master Servicer to assure such continuing
treatment. In particular, the Trustee shall not (a) sell or permit the sale of
all or any portion of the Mortgage Loans or of any investment of deposits in an
Account unless such sale is as a result of a repurchase of the Mortgage Loans
pursuant to this Agreement or the Trustee has received a REMIC Opinion addressed
to the Trustee prepared at the expense of the Trust Fund; and (b) other than
with respect to a substitution pursuant to the Mortgage Loan Purchase Agreement
or Section 2.04 of this Agreement, as applicable, accept any contribution to any
REMIC after the Startup Day without receipt of a REMIC Opinion addressed to the
Trustee.
Section 3.03 Monitoring of Servicers. (a) The Master Servicer shall be
responsible for reporting to the Trustee and the Seller the compliance by each
Servicer with its duties under the related Servicing Agreement. In the review of
each Servicer's activities, the Master Servicer may rely upon an officer's
certificate of the Servicer (or similar document signed by an officer of the
Servicer) with regard to such Servicer's compliance with the terms of its
Servicing Agreement. In the event that the Master Servicer, in its judgment,
determines that a Servicer should be terminated in accordance with its Servicing
Agreement, or that a notice should be sent pursuant to such Servicing Agreement
with respect to the occurrence of an event that, unless cured, would constitute
grounds for such termination, the Master Servicer shall notify the Seller and
the Trustee thereof and the Master Servicer shall issue such notice or take such
other action as it deems appropriate.
(b) The Master Servicer, for the benefit of the Trustee and the
Certificateholders, shall enforce the obligations of each Servicer under the
related Servicing Agreement, and shall, in the event that a Servicer fails to
perform its obligations in accordance with the related Servicing Agreement,
subject to the preceding paragraph, terminate the rights and obligations of such
Servicer thereunder and act as servicer of the related Mortgage Loans or to
cause the Trustee to enter in to a new Servicing Agreement with a successor
Servicer selected by the Master Servicer; provided, however, it is understood
and acknowledged by the parties hereto that there will be a period of transition
(not to exceed 90 days) before the actual servicing functions can be fully
transferred to such successor Servicer. Such enforcement, including, without
limitation, the legal prosecution of claims, termination of Servicing Agreements
and the pursuit of other appropriate remedies, shall be in such form and carried
out to such an extent and at such time as the Master Servicer, in its good faith
business judgment, would require were it the owner of the related Mortgage
Loans. The Master Servicer shall pay the costs of such enforcement at its own
expense, provided that the Master Servicer shall not be required to prosecute or
defend any legal action except to the extent that the Master Servicer shall have
received reasonable indemnity for its costs and expenses in pursuing such
action.
(c) To the extent that the costs and expenses of the Master Servicer
related to any termination of a Servicer, appointment of a successor Servicer or
the transfer and assumption of servicing by the Master Servicer with respect to
any Servicing Agreement (including, without limitation, (i) all legal costs and
expenses and all due diligence costs and expenses associated with an evaluation
of the potential termination of the Servicer as a result of an event of default
by such Servicer and (ii) all costs and expenses associated with the complete
transfer of servicing, including
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all servicing files and all servicing data and the completion, correction or
manipulation of such servicing data as may be required by the successor servicer
to correct any errors or insufficiencies in the servicing data or otherwise to
enable the successor service to service the Mortgage Loans in accordance with
the related Servicing Agreement) are not fully and timely reimbursed by the
terminated Servicer, the Master Servicer shall be entitled to reimbursement of
such costs and expenses from the Master Servicer Collection Account.
(d) 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.
Section 3.04 Fidelity Bond. The Master Servicer, at its expense, shall
maintain in effect a blanket fidelity bond and an errors and omissions insurance
policy, affording coverage with respect to all directors, officers, employees
and other Persons acting on such Master Servicer's behalf, and covering errors
and omissions in the performance of the Master Servicer's obligations hereunder.
The errors and omissions insurance policy and the fidelity bond shall be in such
form and amount generally acceptable for entities serving as master servicers or
trustees.
Section 3.05 Power to Act; Procedures. The Master Servicer shall master
service the Mortgage Loans and shall have full power and authority, subject to
the REMIC Provisions and the provisions of Article X hereof, to do any and all
things that it may deem necessary or desirable in connection with the master
servicing and administration of the Mortgage Loans, including but not limited to
the power and authority (i) to execute and deliver, on behalf of the
Certificateholders and the Trustee, customary consents or waivers and other
instruments and documents, (ii) to consent to transfers of any Mortgaged
Property and assumptions of the Mortgage Notes and related Mortgages, (iii) to
collect any Insurance Proceeds and Liquidation Proceeds, and (iv) to effectuate
foreclosure or other conversion of the ownership of the Mortgaged Property
securing any Mortgage Loan, in each case, in accordance with the provisions of
this Agreement and the related Servicing Agreement, as applicable; provided,
however, that the Master Servicer shall not (and, consistent with its
responsibilities under Section 3.03, shall not permit any Servicer to) knowingly
or intentionally take any action, or fail to take (or fail to cause to be taken)
any action reasonably within its control and the scope of duties more
specifically set forth herein, that, under the REMIC Provisions, if taken or not
taken, as the case may be, would cause REMIC I, REMIC II or REMIC III to fail to
qualify as a REMIC or result in the imposition of a tax upon the Trust Fund
(including but not limited to the tax on prohibited transactions as defined in
Section 860F(a)(2) of the Code and the tax on contributions to a REMIC set forth
in Section 860G(d) of the Code) unless the Master Servicer has received an
Opinion of Counsel (but not at the expense of the Master Servicer) to the effect
that the contemplated action would not cause REMIC I, REMIC II or REMIC III to
fail to qualify as a REMIC or result in the imposition of a tax upon REMIC I,
REMIC II or REMIC III, as the case may be. The Trustee shall furnish the Master
Servicer, upon written request from a Servicing Officer, with any powers of
attorney empowering the Master Servicer or any Servicer to execute and deliver
instruments of satisfaction or cancellation, or of partial or full release or
discharge, and to foreclose upon or otherwise liquidate Mortgaged Property, and
to appeal, prosecute or defend in any court action relating to the Mortgage
Loans or the Mortgaged Property, in accordance with the applicable
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Servicing Agreement and this Agreement, and the Trustee shall execute and
deliver such other documents, as the Master Servicer may request, to enable the
Master Servicer to master service and administer the Mortgage Loans and carry
out its duties hereunder, in each case in accordance with Accepted Master
Servicing Practices (and the Trustee shall have no liability for misuse of any
such powers of attorney by the Master Servicer or any Servicer). If the Master
Servicer or the Trustee has been advised that it is likely that the laws of the
state in which action is to be taken prohibit such action if taken in the name
of the Trustee or that the Trustee would be adversely affected under the "doing
business" or tax laws of such state if such action is taken in its name, the
Master Servicer shall join with the Trustee in the appointment of a co-trustee
pursuant to Section 9.11 hereof. In the performance of its duties hereunder, the
Master Servicer shall be an independent contractor and shall not, except in
those instances where it is taking action in the name of the Trustee, be deemed
to be the agent of the Trustee.
Section 3.06 Due-on-Sale Clauses; Assumption Agreements. To the extent
provided in the applicable Servicing Agreement, to the extent Mortgage Loans
contain enforceable due-on-sale clauses, the Master Servicer shall cause the
Servicers to enforce such clauses in accordance with the applicable Servicing
Agreement. If applicable law prohibits the enforcement of a due-on-sale clause
or such clause is otherwise not enforced in accordance with the applicable
Servicing Agreement, and, as a consequence, a Mortgage Loan is assumed, the
original Mortgagor may be released from liability in accordance with the
applicable Servicing Agreement.
Section 3.07 Release of Mortgage Files. (a) Upon becoming aware of the
payment in full of any Mortgage Loan, or the receipt by any Servicer of a
notification that payment in full has been escrowed in a manner customary for
such purposes for payment to Certificateholders on the next Distribution Date,
the Servicer will, if required under the applicable Servicing Agreement (or if
the Servicer does not, the Master Servicer may), promptly furnish to the
Custodian, on behalf of the Trustee, two copies of a certification substantially
in the form of Exhibit D hereto signed by a Servicing Officer or in a mutually
agreeable electronic format which will, in lieu of a signature on its face,
originate from a Servicing Officer (which certification shall include a
statement to the effect that all amounts received in connection with such
payment that are required to be deposited in the Protected Account maintained by
the applicable Servicer pursuant to Section 4.01 or by the applicable Servicer
pursuant to its Servicing Agreement have been or will be so deposited) and shall
request that the Custodian, on behalf of the Trustee, deliver to the applicable
Servicer the related Mortgage File. Upon receipt of such certification and
request, the Custodian, on behalf of the Trustee, shall promptly release the
related Mortgage File to the applicable Servicer and the Trustee and Custodian
shall have no further responsibility with regard to such Mortgage File. Upon any
such payment in full, each Servicer is authorized, to give, as agent for the
Trustee, as the mortgagee under the Mortgage that secured the Mortgage Loan, an
instrument of satisfaction (or assignment of mortgage without recourse)
regarding the Mortgaged Property subject to the Mortgage, which instrument of
satisfaction or assignment, as the case may be, shall be delivered to the Person
or Persons entitled thereto against receipt therefor of such payment, it being
understood and agreed that no expenses incurred in connection with such
instrument of satisfaction or assignment, as the case may be, shall be
chargeable to the Protected Account.
(b) From time to time and as appropriate for the servicing or
foreclosure of any Mortgage Loan and in accordance with the applicable Servicing
Agreement, the Trustee shall execute such
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documents as shall be prepared and furnished to the Trustee by a Servicer or the
Master Servicer (in form reasonably acceptable to the Trustee) and as are
necessary to the prosecution of any such proceedings. The Custodian, on behalf
of the Trustee, shall, upon the request of a Servicer or the Master Servicer,
and delivery to the Custodian, on behalf of the Trustee, of two copies of a
request for release signed by a Servicing Officer substantially in the form of
Exhibit D (or in a mutually agreeable electronic format which will, in lieu of a
signature on its face, originate from a Servicing Officer), release the related
Mortgage File held in its possession or control to the Servicer or the Master
Servicer, as applicable. Such trust receipt shall obligate the Servicer or the
Master Servicer to return the Mortgage File to the Custodian on behalf of the
Trustee, when the need therefor by the Servicer or the Master Servicer no longer
exists unless the Mortgage Loan shall be liquidated, in which case, upon receipt
of a certificate of a Servicing Officer similar to that hereinabove specified,
the Mortgage File shall be released by the Custodian, on behalf of the Trustee,
to the Servicer or the Master Servicer.
Section 3.08 Documents, Records and Funds in Possession of Master
Servicer To Be Held for Trustee.
(a) The Master Servicer shall transmit and each Servicer (to the extent
required by the related Servicing Agreement) shall transmit to the Trustee or
Custodian such documents and instruments coming into the possession of the
Master Servicer or such Servicer from time to time as are required by the terms
hereof, or in the case of the Servicers, the applicable Servicing Agreement, to
be delivered to the Trustee or Custodian. Any funds received by the Master
Servicer or by a Servicer in respect of any Mortgage Loan or which otherwise are
collected by the Master Servicer or by a Servicer as Liquidation Proceeds or
Insurance Proceeds in respect of any Mortgage Loan shall be held for the benefit
of the Trustee and the Certificateholders subject to the Master Servicer's right
to retain or withdraw from the Master Servicer Collection Account the Master
Servicing Compensation and other amounts provided in this Agreement, and to the
right of each Servicer to retain its Servicing Fee and other amounts as provided
in the applicable Servicing Agreement. The Master Servicer shall, and (to the
extent provided in the applicable Servicing Agreement) shall cause each Servicer
to, provide access to information and documentation regarding the Mortgage Loans
to the Trustee, its agents and accountants at any time upon reasonable request
and during normal business hours, and to Certificateholders that are savings and
loan associations, banks or insurance companies, the Office of Thrift
Supervision, the FDIC and the supervisory agents and examiners of such Office
and Corporation or examiners of any other federal or state banking or insurance
regulatory authority if so required by applicable regulations of the Office of
Thrift Supervision or other regulatory authority, such access to be afforded
without charge but only upon reasonable request in writing and during normal
business hours at the offices of the Master Servicer designated by it. In
fulfilling such a request the Master Servicer shall not be responsible for
determining the sufficiency of such information.
(b) All Mortgage Files and funds collected or held by, or under the
control of, the Master Servicer, in respect of any Mortgage Loans, whether from
the collection of principal and interest payments or from Liquidation Proceeds
or Insurance Proceeds, shall be held by the Master Servicer for and on behalf of
the Trustee and the Certificateholders and shall be and remain the sole and
exclusive property of the Trustee; provided, however, that the Master Servicer
and each Servicer shall be entitled to setoff against, and deduct from, any such
funds any amounts that are properly due
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and payable to the Master Servicer or such Servicer under this Agreement or the
applicable Servicing Agreement.
Section 3.09 Standard Hazard Insurance and Flood Insurance Policies.
(a) For each Mortgage Loan, the Master Servicer shall enforce any
obligation of the Servicers under the related Servicing Agreement 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 Agreement. It is understood and agreed that such insurance
shall be with insurers meeting the eligibility requirements set forth in the
applicable Servicing Agreement and that no earthquake or other additional
insurance is to be required of any Mortgagor or to be maintained on property
acquired in respect of a defaulted loan, other than pursuant to such applicable
laws and regulations as shall at any time be in force and as shall require such
additional insurance.
(b) Pursuant to Section 4.01 and 4.02, any amounts collected by the
Servicers or the Master Servicer, or by any Servicer, under any insurance
policies (other than amounts to be applied to the restoration or repair of the
property subject to the related Mortgage or released to the Mortgagor in
accordance with the applicable Servicing Agreement) shall be deposited into the
Master Servicer Collection Account, subject to withdrawal pursuant to Section
4.02 and 4.03. Any cost incurred by the Master Servicer or any Servicer in
maintaining any such insurance if the Mortgagor defaults in its obligation to do
so shall be added to the amount owing under the Mortgage Loan where the terms of
the Mortgage Loan so permit; provided, however, that the addition of any such
cost shall not be taken into account for purposes of calculating the
distributions to be made to Certificateholders and shall be recoverable by the
Master Servicer or such Servicer pursuant to Section 4.02 and 4.03.
Section 3.10 Presentment of Claims and Collection of Proceeds. The
Master Servicer shall (to the extent provided in the applicable Servicing
Agreement) cause the related Servicer to, prepare and present on behalf of the
Trustee and the Certificateholders all claims under the Insurance Policies and
take such actions (including the negotiation, settlement, compromise or
enforcement of the insured's claim) as shall be necessary to realize recovery
under such policies. Any proceeds disbursed to the Master Servicer (or disbursed
to a Servicer and remitted to the Master Servicer) in respect of such policies,
bonds or contracts shall be promptly deposited in the Master Servicer Collection
Account upon receipt, except that any amounts realized that are to be applied to
the repair or restoration of the related Mortgaged Property as a condition
precedent to the presentation of claims on the related Mortgage Loan to the
insurer under any applicable Insurance Policy need not be so deposited (or
remitted).
Section 3.11 Maintenance of the Primary Mortgage Insurance Policies.
(a) The Master Servicer shall not take, or permit any Servicer (to the
extent such action is prohibited under the applicable Servicing Agreement) to
take, any action that would result in noncoverage under any applicable Primary
Mortgage Insurance Policy of any loss which, but for the actions of the Master
Servicer or such Servicer, would have been covered thereunder. The Master
Servicer shall use its best reasonable efforts to cause each Servicer (to the
extent required under the related Servicing Agreement) to keep in force and
effect (to the extent that the Mortgage Loan
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requires the Mortgagor to maintain such insurance), primary mortgage insurance
applicable to each Mortgage Loan in accordance with the provisions of this
Agreement and the related Servicing Agreement, as applicable. The Master
Servicer shall not, and shall not permit any Servicer (to the extent required
under the related Servicing Agreement) to, cancel or refuse to renew any such
Primary Mortgage Insurance Policy that is in effect at the date of the initial
issuance of the Mortgage Note and is required to be kept in force hereunder
except in accordance with the provisions of this Agreement and the related
Servicing Agreement, as applicable.
(b) The Master Servicer agrees to present, or to cause each Servicer
(to the extent required under the related Servicing Agreement) to present, on
behalf of the Trustee and the Certificateholders, claims to the insurer under
any Primary Mortgage Insurance Policies and, in this regard, to take such
reasonable action as shall be necessary to permit recovery under any Primary
Mortgage Insurance Policies respecting defaulted Mortgage Loans. Pursuant to
Section 4.01 and 4.02, any amounts collected by the Master Servicer or any
Servicer under any Primary Mortgage Insurance Policies shall be deposited in the
Master Servicer Collection Account, subject to withdrawal pursuant to Section
4.02 and Section 4.03.
Section 3.12 Trustee to Retain Possession of Certain Insurance Policies
and Documents.
The Trustee (or the Custodian, as directed by the Trustee), shall
retain possession and custody of the originals (to the extent available) of any
Primary Mortgage Insurance Policies, or certificate of insurance if applicable,
and any certificates of renewal as to the foregoing as may be issued from time
to time as contemplated by this Agreement. Until all amounts distributable in
respect of the Certificates have been distributed in full and the Master
Servicer otherwise has fulfilled its obligations under this Agreement, the
Trustee (or its Custodian, if any, as directed by the Trustee) shall also retain
possession and custody of each Mortgage File in accordance with and subject to
the terms and conditions of this Agreement. The Master Servicer shall promptly
deliver or cause to be delivered to the Trustee (or the Custodian, as directed
by the Trustee), upon the execution or receipt thereof the originals of any
Primary Mortgage Insurance Policies, any certificates of renewal, and such other
documents or instruments that constitute portions of the Mortgage File that come
into the possession of the Master Servicer from time to time.
Section 3.13 Realization Upon Defaulted Mortgage Loans. The Master
Servicer shall cause each Servicer (to the extent required under the related
Servicing Agreement) to foreclose upon, repossess or otherwise comparably
convert the ownership of Mortgaged Properties securing such of the Mortgage
Loans as come into and continue in default and as to which no satisfactory
arrangements can be made for collection of delinquent payments, all in
accordance with the applicable Servicing Agreement.
Section 3.14 Compensation for the Master Servicer.
The Master Servicer will be entitled to all income and gain realized
from any investment of funds in the Distribution Account and the Master Servicer
Collection Account, pursuant to Article IV, for the performance of its
activities hereunder (the "Master Servicer Compensation"). Servicing
compensation in the form of assumption fees, if any, late payment charges, as
collected, if any, or otherwise (but not including any prepayment premium or
penalty) shall be retained by the applicable
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Servicer and shall not be deposited in the Protected Account. The Master
Servicer shall be required to pay all expenses incurred by it in connection with
its activities hereunder and shall not be entitled to reimbursement therefor
except as provided in this Agreement.
Section 3.15 REO Property.
(a) In the event the Trust Fund acquires ownership of any REO Property
in respect of any related Mortgage Loan, the deed or certificate of sale shall
be issued to the Trustee, or to its nominee, on behalf of the related
Certificateholders. The Master Servicer shall, to the extent provided in the
applicable Servicing Agreement, cause the applicable Servicer to sell, any REO
Property as expeditiously as possible and in accordance with the provisions of
this Agreement and the related Servicing Agreement, as applicable. Pursuant to
its efforts to sell such REO Property, the Master Servicer shall cause the
applicable Servicer to protect and conserve, such REO Property in the manner and
to the extent required by the applicable Servicing Agreement, in accordance with
the REMIC Provisions and in a manner that does not result in a tax on "net
income from foreclosure property" or cause such REO Property to fail to qualify
as "foreclosure property" within the meaning of Section 860G(a)(8) of the Code.
(b) The Master Servicer shall, to the extent required by the related
Servicing Agreement, cause the applicable Servicer to deposit all funds
collected and received in connection with the operation of any REO Property in
the Protected Account.
(c) The Master Servicer and the applicable Servicer, upon the final
disposition of any REO Property, shall be entitled to reimbursement for any
related unreimbursed Monthly Advances and other unreimbursed advances as well as
any unpaid Servicing Fees from Liquidation Proceeds received in connection with
the final disposition of such REO Property; provided, that any such unreimbursed
Monthly Advances as well as any unpaid Servicing Fees may be reimbursed or paid,
as the case may be, prior to final disposition, out of any net rental income or
other net amounts derived from such REO Property.
(d) To the extent provided in the related Servicing Agreement, the
Liquidation Proceeds from the final disposition of the REO Property, net of any
payment to the Master Servicer and the applicable Servicer as provided above
shall be deposited in the Protected Account on or prior to the Determination
Date in the month following receipt thereof and be remitted by wire transfer in
immediately available funds to the Master Servicer for deposit into the related
Master Servicer Collection Account on the next succeeding Servicer Remittance
Date.
Section 3.16 Annual Officer's Certificate as to Compliance.
(a) The Master Servicer shall deliver to the Trustee and the Rating
Agencies on or before March 1 of each year, commencing on March 1, 2004, an
Officer's Certificate, certifying that with respect to the period ending
December 31 of the prior year: (i) such Servicing Officer has reviewed the
activities of such Master Servicer during the preceding calendar year or portion
thereof and its performance under this Agreement, (ii) to the best of such
Servicing Officer's knowledge, based on such review, such Master Servicer has
performed and fulfilled its duties, responsibilities and obligations under this
Agreement in all material respects throughout such year, or, if there has been
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a default in the fulfillment of any such duties, responsibilities or
obligations, specifying each such default known to such Servicing Officer and
the nature and status thereof, (iii) nothing has come to the attention of such
Servicing Officer to lead such Servicing Officer to believe that any Servicer
has failed to perform any of its duties, responsibilities and obligations under
its Servicing Agreement in all material respects throughout such year, or, if
there has been a material default in the performance or fulfillment of any such
duties, responsibilities or obligations, specifying each such default known to
such Servicing Officer and the nature and status thereof.
(b) Copies of such statements shall be provided to any
Certificateholder upon request, by the Master Servicer or by the Trustee at the
Master Servicer's expense if the Master Servicer failed to provide such copies
(unless (i) the Master Servicer shall have failed to provide the Trustee with
such statement or (ii) the Trustee shall be unaware of the Master Servicer's
failure to provide such statement).
Section 3.17 Annual Independent Accountant's Servicing Report. If the
Master Servicer has, during the course of any fiscal year, directly serviced any
of the Mortgage Loans, then the Master Servicer at its expense shall cause a
nationally recognized firm of independent certified public accountants to
furnish a statement to the Trustee, the Rating Agencies and the Seller on or
before March 1 of each year, commencing on March 1, 2004 to the effect that,
with respect to the most recently ended fiscal year, such firm has examined
certain records and documents relating to the Master Servicer's performance of
its servicing obligations under this Agreement and pooling and servicing and
trust agreements in material respects similar to this Agreement and to each
other and that, on the basis of such examination conducted substantially in
compliance with the audit program for mortgages serviced for Xxxxxxx Mac or the
Uniform Single Attestation Program for Mortgage Bankers, such firm is of the
opinion that the Master Servicer's activities have been conducted in compliance
with this Agreement, or that such examination has disclosed no material items of
noncompliance except for (i) such exceptions as such firm believes to be
immaterial, (ii) such other exceptions as are set forth in such statement and
(iii) such exceptions that the Uniform Single Attestation Program for Mortgage
Bankers or the Audit Program for Mortgages Serviced by Xxxxxxx Mac requires it
to report. Copies of such statements shall be provided to any Certificateholder
upon request by the Master Servicer, or by the Trustee at the expense of the
Master Servicer if the Master Servicer shall fail to provide such copies. If
such report discloses exceptions that are material, the Master Servicer shall
advise the Trustee whether such exceptions have been or are susceptible of cure,
and will take prompt action to do so.
Section 3.18 Reports Filed with Securities and Exchange Commission. (a)
Within 15 days after each Distribution Date, the Securities Administrator shall,
in accordance with industry standards, file with the Commission via the
Electronic Data Gathering and Retrieval System ("XXXXX"), a Form 8-K with a copy
of the statement to the Trustee who shall make available a copy of the monthly
statement to the Certificateholders for such Distribution Date as an exhibit
thereto. Prior to January 30 in each year, the Securities Administrator shall,
in accordance with industry standards and only if instructed by the Seller, file
a Form 15 Suspension Notice with respect to the Trust Fund, if applicable. Prior
to (i) March 15, 2004 and (ii) unless and until a Form 15 Suspension Notice
shall have been filed, prior to March 15 of each year thereafter, the Master
Servicer shall provide the Securities Administrator with a Master Servicer
Certification, together with a copy of the annual independent accountant's
servicing report and annual statement of
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compliance of each Servicer, in each case, required to be delivered pursuant to
the related Servicing Agreement, and, if applicable, the annual independent
accountant's servicing report and annual statement of compliance to be delivered
by the Master Servicer pursuant to Sections 3.16 and 3.17. Prior to (i) March
31, 2004, or such earlier filing date as may be required by the Commission, and
(ii) unless and until a Form 15 Suspension Notice shall have been filed, March
31 of each year thereafter, or such earlier filing date as may be required by
the Commission, the Securities Administrator shall file a Form 10-K, in
substance conforming to industry standards, with respect to the Trust. Such Form
10-K shall include the Master Servicer Certification and other documentation
provided by the Master Servicer pursuant to the second preceding sentence. The
Seller hereby grants to the Securities Administrator a limited power of attorney
to execute and file each such document on behalf of the Seller. Such power of
attorney shall continue until either the earlier of (i) receipt by the
Securities Administrator from the Seller of written termination of such power of
attorney and (ii) the termination of the Trust Fund. The Seller agrees to
promptly furnish to the Securities Administrator, from time to time upon
request, such further information, reports and financial statements within its
control related to this Agreement and the Mortgage Loans as the Securities
Administrator reasonably deems appropriate to prepare and file all necessary
reports with the Commission. The Securities Administrator shall have no
responsibility to file any items other than those specified in this Section
3.18; provided, however, the Securities Administrator will cooperate with the
Seller in connection with any additional filings with respect to the Trust Fund
as the Seller deems necessary under the Securities Exchange Act of 1934, as
amended (the "Exchange Act"). Fees and expenses incurred by the Securities
Administrator in connection with this Section 3.18 shall not be reimbursable
from the Trust Fund.
(b) Notwithstanding the provisions of Section 11.02, this Section 3.18
may be amended without the consent of the Certificateholders.
(c) The Seller, the Master Servicer and the Trustee agree to negotiate
in good faith to comply with further guidance from the Commission concerning the
filing of Form 10-Ks with respect to the Trust.
Section 3.19 EMC. On the Closing Date, EMC will receive from the Seller
a payment of $5,000.
Section 3.20 UCC. The Seller shall inform the Trustee in writing of any
Uniform Commercial Code financing statements that were filed on the Closing Date
in connection with the Trust with stamped recorded copies of such financing
statements to be delivered to the Trustee promptly upon receipt by the Seller.
The Trustee agrees to monitor and notify the Seller if any continuation
statements for such Uniform Commercial Code financing statements need to be
filed. If directed by the Seller in writing, the Trustee will file any such
continuation statements solely at the expense of the Seller. The Seller shall
file any financing statements or amendments thereto required by any change in
the Uniform Commercial Code.
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Section 3.21 Optional Purchase of Defaulted Mortgage Loans.
With respect to any Mortgage Loan which as of the first day of a
Calendar Quarter is delinquent in payment by 90 days or more or is an REO
Property, EMC shall have the right to purchase such Mortgage Loan from the Trust
at a price equal to the Repurchase Price; provided however (i) that such
Mortgage Loan is still 90 days or more delinquent or is an REO Property as of
the date of such purchase and (ii) this purchase option, if not theretofore
exercised, shall terminate on the date prior to the last day of the related
Calendar Quarter. This purchase option, if not exercised, shall not be
thereafter reinstated unless the delinquency is cured and the Mortgage Loan
thereafter again becomes 90 days or more delinquent or becomes an REO Property,
in which case the option shall again become exercisable as of the first day of
the related Calendar Quarter.
If at any time EMC remits to the Master Servicer a payment for deposit
in the Master Servicer Collection Account covering the amount of the Repurchase
Price for such a Mortgage Loan, and EMC provides to the Trustee a certification
signed by a Servicing Officer stating that the amount of such payment has been
deposited in the Master Servicer Collection Account, then the Trustee shall
execute the assignment of such Mortgage Loan to EMC at the request of EMC
without recourse, representation or warranty and EMC shall succeed to all of the
Trustee's right, title and interest in and to such Mortgage Loan, and all
security and documents relative thereto. Such assignment shall be an assignment
outright and not for security. EMC will thereupon own such Mortgage, and all
such security and documents, free of any further obligation to the Trustee or
the Certificateholders with respect thereto.
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ARTICLE IV
Accounts
Section 4.01 Protected Accounts. (a) The Master Servicer shall enforce
the obligation of each Servicer to establish and maintain a Protected Account in
accordance with the applicable Servicing Agreement, with records to be kept with
respect thereto on a Mortgage Loan by Mortgage Loan basis, into which accounts
shall be deposited within 48 hours (or as of such other time specified in the
related Servicing Agreement) of receipt, all collections of principal and
interest on any Mortgage Loan and any REO Property received by a Servicer,
including Principal Prepayments, Insurance Proceeds, Liquidation Proceeds, and
advances made from the Servicer's own funds (less servicing compensation as
permitted by the applicable Servicing Agreement in the case of any Servicer) and
all other amounts to be deposited in the Protected Account. The Servicer is
hereby authorized to make withdrawals from and deposits to the related Protected
Account for purposes required or permitted by this Agreement. To the extent
provided in the related Servicing Agreement, the Protected Account shall be held
by a Designated Depository Institution and segregated on the books of such
institution in the name of the Trustee for the benefit of Certificateholders.
(b) To the extent provided in the related Servicing Agreement, amounts
on deposit in a Protected Account may be invested in Permitted Investments in
the name of the Trustee for the benefit of Certificateholders and, except as
provided in the preceding paragraph, not commingled with any other funds. Such
Permitted Investments shall mature, or shall be subject to redemption or
withdrawal, no later than the date on which such funds are required to be
withdrawn for deposit in the Master Servicer Collection Account, and shall be
held until required for such deposit. The income earned from Permitted
Investments made pursuant to this Section 4.01 shall be paid to the related
Servicer under the applicable Servicing Agreement, and the risk of loss of
moneys required to be distributed to the Certificateholders resulting from such
investments shall be borne by and be the risk of the related Servicer. The
related Servicer (to the extent provided in the Servicing Agreement) shall
deposit the amount of any such loss in the Protected Account within two Business
Days of receipt of notification of such loss but not later than the second
Business Day prior to the Distribution Date on which the moneys so invested are
required to be distributed to the Certificateholders.
(c) To the extent provided in the related Servicing Agreement and
subject to this Article IV, on or before each Servicer Remittance Date, the
related Servicer shall withdraw or shall cause to be withdrawn from its
Protected Accounts and shall immediately deposit or cause to be deposited in the
Master Servicer Collection Account amounts representing the following
collections and payments (other than with respect to principal of or interest on
the Mortgage Loans due on or before the Cut-off Date) with respect to each Loan
Group:
(i) Scheduled Payments on the Mortgage Loans received or any
related portion thereof advanced by such Servicer pursuant to its
Servicing Agreement which were due on or before the related Due Date,
net of the amount thereof comprising its Servicing Fee;
(ii) Full Principal Prepayments and any Liquidation Proceeds
received by such Servicer with respect to the Mortgage Loans in the
related Prepayment Period, with interest
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to the date of prepayment or liquidation, net of the amount thereof
comprising its Servicing Fee;
(iii) Partial Principal Prepayments received by such Servicer
for the Mortgage Loans in the related Prepayment Period; and
(iv) Any amount to be used as a Monthly Advance.
(d) Withdrawals may be made from an Account only to make remittances as
provided in Section 4.01(c), 4.02 and 4.03; to reimburse the Master Servicer or
a Servicer for Monthly Advances which have been recovered by subsequent
collections from the related Mortgagor; to remove amounts deposited in error; to
remove fees, charges or other such amounts deposited on a temporary basis; or to
clear and terminate the account at the termination of this Agreement in
accordance with Section 10.01. As provided in Sections 4.01(c) and 4.02(b)
certain amounts otherwise due to the Servicers may be retained by them and need
not be deposited in the Master Servicer Collection Account.
Section 4.02 Master Servicer Collection Account. (a) The Master
Servicer shall establish and maintain in the name of the Trustee, for the
benefit of the Certificateholders, the Master Servicer Collection Account as a
segregated trust account or accounts. The Master Servicer Collection Account
shall be an Eligible Account. The Master Servicer will deposit in the Master
Servicer Collection Account as identified by the Master Servicer and as received
by the Master Servicer, the following amounts:
(i) Any amounts withdrawn from a Protected Account;
(ii) Any Monthly Advance and any Compensating Interest
Payments;
(iii) Any Insurance Proceeds or Net Liquidation Proceeds
received by or on behalf of the Master Servicer or which were not
deposited in a Protected Account;
(iv) The Repurchase Price with respect to any Mortgage Loans
purchased by the Mortgage Loan Seller pursuant to the Mortgage Loan
Purchase Agreement or Sections 2.02 or 2.03 hereof, any amounts which
are to be treated pursuant to Section 2.04 of this Agreement as the
payment of a Repurchase Price in connection with the tender of a
Substitute Mortgage Loan by the Mortgage Loan Seller, the Repurchase
Price with respect to any Mortgage Loans purchased by EMC pursuant to
Section 3.21, and all proceeds of any Mortgage Loans or property
acquired with respect thereto repurchased by the Seller or its designee
pursuant to Section 10.01;
(v) Any amounts required to be deposited with respect to
losses on investments of deposits in an Account; and
(vi) Any other amounts received by or on behalf of the Master
Servicer and required to be deposited in the Master Servicer Collection
Account pursuant to this Agreement.
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(b) All amounts deposited to the Master Servicer Collection Account
shall be held by the Master Servicer in the name of the Trustee in trust for the
benefit of the Certificateholders in accordance with the terms and provisions of
this Agreement. The requirements for crediting the Master Servicer Collection
Account or the Distribution Account shall be exclusive, it being understood and
agreed that, without limiting the generality of the foregoing, payments in the
nature of (i) prepayment or late payment charges or assumption, tax service,
statement account or payoff, substitution, satisfaction, release and other like
fees and charges and (ii) the items enumerated in Subsections 4.05(a)(i), (ii),
(iii), (iv), (vi), (vii), (viii), (ix), (x), (xi) and (xii), need not be
credited by the Master Servicer or the related Servicer to the Distribution
Account or the Master Servicer Collection Account, as applicable. In the event
that the Master Servicer shall deposit or cause to be deposited to the
Distribution Account any amount not required to be credited thereto, the
Trustee, upon receipt of a written request therefor signed by a Servicing
Officer of the Master Servicer, shall promptly transfer such amount to the
Master Servicer, any provision herein to the contrary notwithstanding.
(c) The amount at any time credited to the Master Servicer Collection
Account shall be invested, in the name of the Trustee, or its nominee, for the
benefit of the Certificateholders, in Permitted Investments as directed by
Master Servicer. All Permitted Investments shall mature or be subject to
redemption or withdrawal on or before, and shall be held until, the next
succeeding Distribution Account Deposit Date. Any and all investment earnings on
amounts on deposit in the Master Servicer Collection Account from time to time
shall be for the account of the Master Servicer. The Master Servicer from time
to time shall be permitted to withdraw or receive distribution of any and all
investment earnings from the Master Servicer Collection Account. The risk of
loss of moneys required to be distributed to the Certificateholders resulting
from such investments shall be borne by and be the risk of the Master Servicer.
The Master Servicer shall deposit the amount of any such loss in the Master
Servicer Collection Account within two Business Days of receipt of notification
of such loss but not later than the second Business Day prior to the
Distribution Date on which the moneys so invested are required to be distributed
to the Certificateholders.
Section 4.03 Permitted Withdrawals and Transfers from the Master
Servicer Collection Account. (a) The Master Servicer will, from time to time on
demand of a Servicer or the Securities Administrator, make or cause to be made
such withdrawals or transfers from the Master Servicer Collection Account as the
Master Servicer has designated for such transfer or withdrawal pursuant to this
Agreement and the related Servicing Agreement. The Master Servicer may clear and
terminate the Master Servicer Collection Account pursuant to Section 10.01 and
remove amounts from time to time deposited in error.
(b) On an ongoing basis, the Master Servicer shall withdraw from the
Master Servicer Collection Account (i) any expenses recoverable by the Trustee,
the Master Servicer or the Securities Administrator or the Custodian pursuant to
Sections 3.03, 7.04 and 9.05 and (ii) any amounts payable to the Master Servicer
as set forth in Section 3.14.
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(c) In addition, on or before each Distribution Account Deposit Date,
the Master Servicer shall deposit in the Distribution Account (or remit to the
Trustee for deposit therein) any Monthly Advances required to be made by the
Master Servicer with respect to the Mortgage Loans.
(d) No later than 3:00 p.m. New York time on each Distribution Account
Deposit Date, the Master Servicer will transfer all Available Funds on deposit
in the Master Servicer Collection Account with respect to the related
Distribution Date to the Trustee for deposit in the Distribution Account.
Section 4.04 Distribution Account. (a) The Trustee shall establish and
maintain in the name of the Trustee, for the benefit of the Certificateholders,
the Distribution Account as a segregated trust account or accounts.
(b) All amounts deposited to the Distribution Account shall be held by
the Trustee in the name of the Trustee in trust for the benefit of the
Certificateholders in accordance with the terms and provisions of this
Agreement.
(c) The Distribution Account shall constitute a trust account of the
Trust Fund segregated on the books of the Trustee and held by the Trustee in
trust in its Corporate Trust Office, and the Distribution Account and the funds
deposited therein shall not be subject to, and shall be protected from, all
claims, liens, and encumbrances of any creditors or depositors of the Trustee or
the Master Servicer (whether made directly, or indirectly through a liquidator
or receiver of the Trustee or the Master Servicer). The Distribution Account
shall be an Eligible Account. The amount at any time credited to the
Distribution Account shall be (i) held in cash and fully insured by the FDIC to
the maximum coverage provided thereby or (ii) invested in the name of the
Trustee, in such Permitted Investments selected by the Master Servicer or
deposited in demand deposits with such depository institutions as selected by
the Master Servicer, provided that time deposits of such depository institutions
would be a Permitted Investment. All Permitted Investments shall mature or be
subject to redemption or withdrawal on or before, and shall be held until, the
next succeeding Distribution Date if the obligor for such Permitted Investment
is the Trustee or, if such obligor is any other Person, the Business Day
preceding such Distribution Date. All investment earnings on amounts on deposit
in the Distribution Account or benefit from funds uninvested therein from time
to time shall be for the account of the Master Servicer. The Master Servicer
shall be permitted to withdraw or receive distribution of any and all investment
earnings from the Distribution Account on each Distribution Date. If there is
any loss on a Permitted Investment or demand deposit, the Master Servicer shall
remit the amount of the loss to the Trustee who shall deposit such amount in the
Distribution Account. With respect to the Distribution Account and the funds
deposited therein, the Master Servicer shall take such action as may be
necessary to ensure that the Certificateholders shall be entitled to the
priorities afforded to such a trust account (in addition to a claim against the
estate of the Trustee) as provided by 12 U.S.C. ss. 92a(e), and applicable
regulations pursuant thereto, if applicable, or any applicable comparable state
statute applicable to state chartered banking corporations.
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Section 4.05 Permitted Withdrawals and Transfers from the Distribution
Account. (a) The Trustee will, from time to time on demand of the Master
Servicer or the Securities Administrator, make or cause to be made such
withdrawals or transfers from the Distribution Account as the Master Servicer
has designated for such transfer or withdrawal pursuant to this Agreement and
the Servicing Agreements or as the Securities Administrator has instructed
hereunder for the following purposes (limited in the case of amounts due the
Master Servicer to those not withdrawn from the Master Servicer Collection
Account in accordance with the terms of this Agreement):
(i) to reimburse the Master Servicer or any Servicer for any
Monthly Advance of its own funds, the right of the Master Servicer or a
Servicer to reimbursement pursuant to this subclause (i) being limited
to amounts received on a particular Mortgage Loan (including, for this
purpose, the Repurchase Price therefor, Insurance Proceeds and
Liquidation Proceeds) which represent late payments or recoveries of
the principal of or interest on such Mortgage Loan respecting which
such Monthly Advance was made;
(ii) to reimburse the Master Servicer or any Servicer from
Insurance Proceeds or Liquidation Proceeds relating to a particular
Mortgage Loan for amounts expended by the Master Servicer or such
Servicer in good faith in connection with the restoration of the
related Mortgaged Property which was damaged by an Uninsured Cause or
in connection with the liquidation of such Mortgage Loan;
(iii) to reimburse the Master Servicer or any Servicer from
Insurance Proceeds relating to a particular Mortgage Loan for insured
expenses incurred with respect to such Mortgage Loan and to reimburse
the Master Servicer or such Servicer from Liquidation Proceeds from a
particular Mortgage Loan for Liquidation Expenses incurred with respect
to such Mortgage Loan; provided that the Master Servicer shall not be
entitled to reimbursement for Liquidation Expenses with respect to a
Mortgage Loan to the extent that (i) any amounts with respect to such
Mortgage Loan were paid as Excess Liquidation Proceeds pursuant to
clause (viii) of this Subsection 4.05(a) to the Master Servicer; and
(ii) such Liquidation Expenses were not included in the computation of
such Excess Liquidation Proceeds;
(iv) to reimburse the Master Servicer or any Servicer for
advances of funds (other than Monthly Advances) made with respect to
the Mortgage Loans, and the right to reimbursement pursuant to this
subclause being limited to amounts received on the related Mortgage
Loan (including, for this purpose, the Repurchase Price therefor,
Insurance Proceeds and Liquidation Proceeds) which represent late
recoveries of the payments for which such advances were made;
(v) to reimburse the Master Servicer or any Servicer for any
Monthly Advance or advance, after a Realized Loss has been allocated
with respect to the related Mortgage Loan if the Monthly Advance or
advance has not been reimbursed pursuant to clauses (i) and (vi);
(vi) to pay the Master Servicer as set forth in Section 3.14;
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(vii) to reimburse the Master Servicer for expenses, costs and
liabilities incurred by and reimbursable to it pursuant to Sections
3.03, 7.04(c) and (d);
(viii) to pay to the Master Servicer, as additional servicing
compensation, any Excess Liquidation Proceeds to the extent not
retained by the related Servicer;
(ix) to reimburse or pay any Servicer any such amounts as are
due thereto under the applicable Servicing Agreement and have not been
retained by or paid to the Servicer, to the extent provided in the
related Servicing Agreement;
(x) to reimburse the Trustee, the Securities Administrator or
the Custodian for fees and expenses, costs and liabilities incurred by
or reimbursable to it pursuant to this Agreement;
(xi) to remove amounts deposited in error; and
(xii) to clear and terminate the Distribution Account pursuant
to Section 10.01.
(b) The Master Servicer shall keep and maintain separate accounting, on
a Mortgage Loan by Mortgage Loan basis, for the purpose of accounting for any
reimbursement from the Distribution Account pursuant to subclauses (i) through
(iv) or with respect to any such amounts which would have been covered by such
subclauses had the amounts not been retained by the Master Servicer without
being deposited in the Distribution Account under Section 4.02(b).
(c) On each Distribution Date, the Trustee shall distribute the
Available Funds to the extent on deposit in the Distribution Account for each
Loan Group to the Holders of the Certificates in accordance with distribution
instructions provided to it by the Securities Administrator no later than two
Business Days prior to such Distribution Date and determined by the Securities
Administrator in accordance with Section 6.01.
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ARTICLE V
Certificates
Section 5.01 Certificates. (a) The Depository, the Seller and the
Trustee have entered into a Depository Agreement dated as of the Closing Date
(the "Depository Agreement"). Except for the Residual Certificates, the Private
Certificates and the Individual Certificates and as provided in Subsection
5.01(b), the Certificates shall at all times remain registered in the name of
the Depository or its nominee and at all times: (i) registration of such
Certificates may not be transferred by the Trustee except to a successor to the
Depository; (ii) ownership and transfers of registration of such Certificates on
the books of the Depository shall be governed by applicable rules established by
the Depository; (iii) the Depository may collect its usual and customary fees,
charges and expenses from its Depository Participants; (iv) the Trustee shall
deal with the Depository as representative of such Certificate Owners of the
respective Class of Certificates for purposes of exercising the rights of
Certificateholders under this Agreement, and requests and directions for and
votes of such representative shall not be deemed to be inconsistent if they are
made with respect to different Certificate Owners; and (v) the Trustee may rely
and shall be fully protected in relying upon information furnished by the
Depository with respect to its Depository Participants.
The Residual Certificates and the Private Certificates are initially
Physical Certificates. If at any time the Holders of all of the Certificates of
one or more such Classes request that the Trustee cause such Class to become
Global Certificates, the Trustee and the Seller will take such action as may be
reasonably required to cause the Depository to accept such Class or Classes for
trading if it may legally be so traded.
All transfers by Certificate Owners of such respective Classes of
Book-Entry Certificates and any Global Certificates shall be made in accordance
with the procedures established by the Depository Participant or brokerage firm
representing such Certificate Owners. Each Depository Participant shall only
transfer Book-Entry Certificates of Certificate Owners it represents or of
brokerage firms for which it acts as agent in accordance with the Depository's
normal procedures.
(b) If (i)(A) the Seller advises the Trustee in writing that the
Depository is no longer willing or able to properly discharge its
responsibilities as Depository and (B) the Seller is unable to locate a
qualified successor within 30 days or (ii) the Seller at its option advises the
Trustee in writing that it elects to terminate the book-entry system through the
Depository, the Trustee shall request that the Depository notify all Certificate
Owners of the occurrence of any such event and of the availability of
definitive, fully registered Certificates to Certificate Owners requesting the
same. Upon surrender to the Trustee of the Certificates by the Depository,
accompanied by registration instructions from the Depository for registration,
the Trustee shall issue the definitive Certificates. Neither the Seller nor the
Trustee shall be liable for any delay in delivery of such instructions and may
conclusively rely on, and shall be protected in relying on, such instructions.
(c) (i) REMIC I will be evidenced by (x) the REMIC I Regular Interests
(designated below), which will be uncertificated and non-transferable and are
hereby designated as the "regular interests" in REMIC I and have the principal
balances and accrue interest at the Pass-Through Rates
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equal to those set forth in this Section 5.01(c)(i) and (y) the Class R-I
Certificates, which is hereby designated as the single "residual interest" in
REMIC I.
The REMIC I Regular Interests and the Class R-I Certificate will have
the following designations, initial balances and pass-through rates:
REMIC I Interest Initial Balance Pass-Through Rate Related Group
1A $1,075.73 (1) Group 1 through Group 6
1B $18,232.59 (2) Group 1
2A $1,641.85 (1) Group 1 through Group 6
2B $27,827.91 (3) Group 2
3A $870.56 (1) Group 1 through Group 6
3B $14,755.24 (4) Group 3
4A $162.60 (1) Group 1 through Group 6
4B $2,755.85 (5) Group 4
5A $260.73 (1) Group 1 through Group 6
5B $4,419.06 (6) Group 5
6A $114.87 (1) Group 1 through Group 6
6B $1,946.82 (7) Group 6
ZZZ $699,300,552.48 (1) Group 1 through Group 6
I-X (9) (8) Group 1B
Class R-I $ 50.00 (5) Group 4
(1) The weighted average of the Net Rates of the Mortgage Loans, minus 0.266%
per annum in the case of the Net Rates of the Group 1B Mortgage Loans,
weighted on the basis of the respective Scheduled Principal Balance of
each such Mortgage Loan as of the beginning of the Due Period immediately
preceding the related Distribution Date.
(2) The weighted average of the Net Rates of the Group 1 Mortgage Loans, minus
0.266% per annum in the case of the Net Rates of the Group 1B Mortgage
Loans, weighted on the basis of the respective Scheduled Principal Balance
of each such Mortgage Loan as of the beginning of the Due Period
immediately preceding the related Distribution Date.
(3) The weighted average of the Net Rates of the Group 2 Mortgage Loans,
weighted on the basis of the respective Scheduled Principal Balance of
each such Mortgage Loan as of the beginning of the Due Period immediately
preceding the related Distribution Date.
(4) The weighted average of the Net Rates of the Group 3 Mortgage Loans,
weighted on the basis of the respective Scheduled Principal Balance of
each such Mortgage Loan as of the beginning of the Due Period immediately
preceding the related Distribution Date.
(5) The weighted average of the Net Rates of the Group 4 Mortgage Loans,
weighted on the basis of the respective Scheduled Principal Balance of
each such Mortgage Loan as of the beginning of the Due Period immediately
preceding the related Distribution Date.
(6) The weighted average of the Net Rates of the Group 5 Mortgage Loans,
weighted on the basis of the respective Scheduled Principal Balance of
each such Mortgage Loan as of the beginning of the Due Period immediately
preceding the related Distribution Date.
(7) The weighted average of the Net Rates of the Group 6 Mortgage Loans,
weighted on the basis of the respective Scheduled Principal Balance of
each such Mortgage Loan as of the beginning of the Due Period immediately
preceding the related Distribution Date.
(8) The Class I-X Certificates will bear interest at a pass-through rate equal
to 0.266% per annum.
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(9) REMIC I Regular Interest I-X will have a notional balance equal to the
aggregate principal balance of the Group 1B Mortgage Loans. The notional
balance with respect to the first interest accrual period is expected to
be $46,159,254.10.
Distributions shall be deemed to be made to the REMIC I Regular Interests
first, so as to keep the Uncertificated Principal Balance of each REMIC I
Regular Interest ending with the designation "B" equal to 0.01% of the aggregate
Scheduled Principal Balance of the Mortgage Loans in the related Group; second,
to each REMIC I Regular Interest ending with the designation "A," so that the
Uncertificated Principal Balance of each such REMIC I Regular Interest is equal
to 0.01% of the excess of (x) the aggregate Scheduled Principal Balance of the
Mortgage Loans in the related Group over (y) the Current Principal Amount of the
Senior Certificate in the related Group (except that if any such excess is a
larger number than in the preceding distribution period, the least amount of
principal shall be distributed to such REMIC I Regular Interests such that the
REMIC I Subordinated Balance Ratio is maintained); and third, any remaining
principal to REMIC I Regular Interest ZZZ. Realized Losses shall be applied
after all distributions have been made on each Distribution Date first, so as to
keep the Uncertificated Principal Balance of each REMIC I Regular Interest
ending with the designation "B" equal to 0.01% of the aggregate Scheduled
Principal Balance of the Mortgage Loans in the related Group; second, to each
REMIC I Regular Interest ending with the designation "A," so that the
Uncertificated Principal Balance of each such REMIC I Regular Interest is equal
to 0.01% of the excess of (x) the aggregate Scheduled Principal Balance of the
Mortgage Loans in the related Group over (y) the Current Principal Amount of the
Senior Certificate in the related Group (except that if any such excess is a
larger number than in the preceding distribution period, the least amount of
Realized Losses shall be applied to such REMIC I Regular Interests such that the
REMIC I Subordinated Balance Ratio is maintained); and third, any remaining
Realized Losses shall be allocated to REMIC I Regular Interest ZZZ.
(ii) REMIC II will be evidenced by (x) the REMIC II Regular Interests
(designated below), which will be uncertificated and non-transferable and are
hereby designated as the "regular interests" in REMIC II and have the principal
balances and accrue interest at the Pass-Through Rates equal to those set forth
in this Section 5.01(c)(ii) and (y) the Class R-II Certificate, which is hereby
designated as the single "residual interest" in REMIC II.
The REMIC II Regular Interests and the Class R-II Certificate will have
the following designations, initial balances and pass-through rates:
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REMIC II Interest Initial Balance Pass-Through Rate Related Group
----------------- --------------- ----------------- -------------
I-A $171,568,600.00 (1) Group 1
I-X (2) (2)
II-A $261,860,600.00 (3) Group 2
III-A $138,846,800.00 (4) Group 3
IV-A $25,932,300.00 (5)
V-A $41,583,300.00 (6) Group 5
VI-A $18,319,500.00 (7) Group 6
R-III $50.00 (4) Group 4
Class R-II $50.00 (4) Group 4
B-1 $13,288,100.00 (8) Group 1 through Group 6
B-2 $10,490,700.00 (8) Group 1 through Group 6
B-3 $6,294,200.00 (8) Group 1 through Group 6
B-4 $6,993,900.00 (8) Group 1 through Group 6
B-5 $2,098,000.00 (8) Group 1 through Group 6
B-6 $2,098,516.29 (8) Group 1 through Group 6
----------
(1) The weighted average of the Pass-Through Rate for REMIC I Regular
Interest 1B, weighted on the basis of the Uncertificated Principal
Balance of such regular interest immediately preceding the related
Distribution Date.
(2) REMIC II Regular Interest I-X will not have a notional balance or
Pass-Through Rate but will be entitled to receive 100% of the interest
payable with respect to REMIC I Regular Interest I-X.
(3) The weighted average of the Pass-Through Rate for REMIC I Regular
Interest 2B, weighted on the basis of the Uncertificated Principal
Balance of such regular interest immediately preceding the related
Distribution Date.
(4) The weighted average of the Pass-Through Rate for REMIC I Regular
Interest 3B, weighted on the basis of the Uncertificated Principal
Balance of such regular interest immediately preceding the related
Distribution Date.
(5) The weighted average of the Pass-Through Rate for REMIC I Regular
Interest 4B, weighted on the basis of the Uncertificated Principal
Balance of such regular interest immediately preceding the related
Distribution Date.
(6) The weighted average of the Pass-Through Rate for REMIC I Regular
Interest 5B, weighted on the basis of the Uncertificated Principal
Balance of such regular interest immediately preceding the related
Distribution Date.
(7) The weighted average of the Pass-Through Rate for REMIC I Regular
Interest 6B, weighted on the basis of the Uncertificated Principal
Balance of such regular interest immediately preceding the related
Distribution Date.
(8) A variable Pass-Through Rate equal to the weighted average of the
Pass-Through Rates on REMIC I Regular Interests 1A, 2A, 3A, 4A, 5A and
6A, weighted on the basis of the Uncertificated Principal Balance of
each such REMIC I Regular Interest immediately preceding the related
Distribution Date, provided that for purposes of such weighted average,
the Pass-Through Rate of each such REMIC I Regular Interest shall be
subject to a cap and a floor equal to the Pass-Through Rate of the
REMIC I Regular Interest from the related Group ending with the
designation "B".
Principal shall be payable to, and shortfalls, losses and prepayments
are allocable to, the REMIC II Regular Interests as such amounts are payable and
allocable to the Corresponding Certificates.
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The holder of the Class R-I Certificates shall be deemed to contribute
to REMIC II on the Distribution Date in October 2003 an amount equal to the
product of (i) the excess of (A) the Pass-Through Rate on Uncertificated REMIC I
Regular Interest ZZZ over (B) the Pass-Through Rate on Uncertificated REMIC I
Regular Interest 4A, in each case, weighted on the basis of the Uncertificated
Principal Balance of each such REMIC I Regular Interest, and (ii) an amount
equal to the Uncertificated Principal Balance of REMIC I Regular Interest R-1
immediately before such Distribution Date.
(iii) REMIC III will be evidenced by (x) the Certificates (other than
the Class R-I, R-II and R-III Certificates) (the "REMIC III Regular
Certificates"), which are hereby designated as the "regular interests" in REMIC
III and have the principal balances and accrue interest at the Pass-Through
Rates equal to those set forth in Section 5.01(d) and (y) the Class R-III
Certificate, which is hereby designated as the single "residual interest" in
REMIC III.
The Classes of the Certificates shall have the following designations,
initial principal amounts and Pass-Through Rates:
Designation Initial Principal Pass-Through Rate
----------- ----------------- -----------------
I-A $ 171,568,600.00 (1)
I-X $ (2) (2)
II-A $ 261,860,600.00 (3)
II-X $ (4) (4)
III-A $ 138,846,800.00 (5)
IV-A $ 25,932,300.00 (6)
V-A $ 41,583,300.00 (7)
VI-A $ 18,319,500.00 (8)
S $ (9) (9)
R-I $ 50.00 (6)
R-II $ 50.00 (6)
R-III $ 50.00 (6)
B-1 $ 13,288,100.00 (10)
B-2 $ 10,490,700.00 (10)
B-3 $ 6,294,200.00 (10)
B-4 $ 6,993,900.00 (10)
B-5 $ 2,098,000.00 (10)
B-6 $ 2,098,516.29 (10)
----------
(1) The Class I-A Certificates will bear interest at a variable
Pass-Through Rate equal to the weighted average of the Net Rates of the Group 1
Mortgage Loans, minus 0.266% per annum in the case of the Net Rates of the Group
1-B Mortgage Loans, weighted on the basis of the respective Scheduled Principal
Balances of each such Mortgage Loan as of the beginning of the Due Period
immediately preceding the related Distribution Date; provided that for federal
income tax purposes such Certificates will bear interest at a rate equivalent to
the foregoing, expressed as the weighted average of the Pass-Through Rate on
REMIC II Regular Interest I-A, weighted on the basis of the Uncertificated
Principal balance of such REMIC II Regular Interest immediately preceding the
related Distribution Date. The Pass-Through Rate with respect to the first
Interest Accrual Period shall be 4.613% per annum.
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(2) The Class I-X Certificates will bear interest at a Pass-Through
Rate equal to 0.266% per annum. The Notional Amount of the Class I-X
Certificates, as of any date of determination, is equal to the aggregate
Scheduled Principal Balance of the Group 1-B Mortgage Loans. The initial
Notional Amount shall be equal to $46,159,254.10. For federal income tax
purposes, however, the Class I-X Certificates will not have a Notional Amount or
Pass-Through Rate, but will be entitled to receive 100% of the interest payable
with respect to REMIC I Regular Interest I-X.
(3) On or prior to the Distribution Date in July 2008, the Class II-A
Certificates will bear interest at a variable Pass-Through Rate equal to the
weighted average of the Net Rates of the Group 2 Mortgage Loans, weighted on the
basis of the respective Scheduled Principal Balances of each such Mortgage Loan
as of the beginning of the Due Period immediately preceding the related
Distribution Date, minus 0.187% per annum; provided that for federal income tax
purposes such Certificates will bear interest at a rate equivalent to the
foregoing, expressed as the weighted average of the Pass-Through Rate on REMIC
II Regular Interest II-A, weighted on the basis of the Uncertificated Principal
balance of such REMIC II Regular Interest immediately preceding the related
Distribution Date, minus 0.187% per annum. After the Distribution Date in July
2008, the Class II-A Certificates will bear interest at a variable Pass-Through
Rate equal to the weighted average of the Net Rates of the Group 2 Mortgage
Loans, weighted on the basis of the respective Scheduled Principal Balances of
each such Mortgage Loan as of the beginning of the Due Period immediately
preceding the related Distribution Date; provided that for federal income tax
purposes such Certificates will bear interest at a rate equivalent to the
foregoing, expressed as the weighted average of the Pass-Through Rate on REMIC
II Regular Interest II-A, weighted on the basis of the Uncertificated Principal
Balance of such REMIC II Regular Interest immediately preceding the related
Distribution Date. The Pass-Through Rate with respect to the first Interest
Accrual Period shall be 4.650% per annum.
(4) On or prior to the Distribution Date in July 2008, the Class II-X
Certificates will bear interest at a pass-through rate equal to 0.187% per
annum. After the Distribution Date in July 2008, the Class II-X Certificates
will not bear any interest. The Notional Amount of the Class II-X Certificates,
as of any date of determination, is equal to the Current Principal Amount of the
Class II-A Certificates. For federal income tax purposes, however, the Notional
Amount of the Class II-X Certificates is the Uncertificated Principal Balance of
REMIC II Regular Interest II-A. The initial Notional Amount for the Class II-X
Certificates shall be equal to $261,860,600.00.
(5) On or prior to the Distribution Date in May 2008, the Class III-A
Certificates will bear interest at a variable Pass-Through Rate equal to the
lesser of (i) LIBOR plus 0.35% per annum and (ii) (a) the weighted average of
the Net Rates of the Group 3 Mortgage Loans, weighted on the basis of the
respective Scheduled Principal Balances of each such Mortgage Loan as of the
beginning of the Due Period immediately preceding the related Distribution Date,
multiplied by (b) a fraction equal to (x) 30 divided by (y) the actual number of
days in the related Interest Accrual Period provided that, for federal income
tax purposes, the amount calculated under clause (ii)(a) will be the equivalent
of the foregoing, expressed as the weighted average of the Pass-Through Rate on
REMIC II Regular Interest III-A, weighted on the basis of the Uncertificated
Principal Balance of such REMIC II Regular Interest immediately preceding the
related Distribution Date. After the Distribution Date in May 2008, the Class
III-A Certificates will bear interest at a variable Pass-Through Rate equal to
the weighted average of the Net Rates of the Group 3 Mortgage Loans, weighted on
the basis of the respective Scheduled Principal Balances of each such Mortgage
Loan as of the beginning of the Due Period immediately preceding the related
Distribution Date; provided that for federal income tax purposes such
Certificates will bear interest at a rate equivalent to the foregoing, expressed
as the weighted average of the Pass-Through Rate on REMIC II Regular Interest
III-A, weighted on the basis of the Uncertificated Principal balance of such
REMIC II Regular Interest immediately preceding the related Distribution Date.
The Pass-Through Rate with respect to the first Interest Accrual Period is
expected to be approximately 1.470% per annum.
(6) The Class IV-A, Class R-I, Class R-II and Class R-III Certificates
will bear interest at a variable Pass-Through Rate equal to the weighted average
of the Net Rates of the Group 4 Mortgage Loans, weighted on the basis of the
respective Scheduled Principal Balances of each such Mortgage Loan as of the
beginning of the Due Period immediately preceding the related Distribution Date;
provided that for federal income tax purposes such Certificates will bear
interest at a rate equivalent to the foregoing, expressed as the weighted
average of the Pass-Through Rate on REMIC II Regular Interest IV-A, weighted on
the basis of the Uncertificated Principal Balance of such REMIC II Regular
Interest immediately preceding the related Distribution Date. The Pass-Through
Rate with respect to the first Interest Accrual Period shall be 4.416% per
annum.
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(7) The Class V-A Certificates will bear interest at a variable
Pass-Through Rate equal to the weighted average of the Net Rates of the Group 5
Mortgage Loans, weighted on the basis of the respective Scheduled Principal
Balances of each such Mortgage Loan as of the beginning of the Due Period
immediately preceding the related Distribution Date; provided that for federal
income tax purposes such Certificates will bear interest at a rate equivalent to
the foregoing, expressed as the weighted average of the Pass-Through Rate on
REMIC II Regular Interest V-A, weighted on the basis of the Uncertificated
Principal Balance of such REMIC II Regular Interest immediately preceding the
related Distribution Date. The Pass-Through Rate with respect to the first
Interest Accrual Period shall be 4.648% per annum.
(8) The Class VI-A Certificates will bear interest at a variable
Pass-Through Rate equal to the weighted average of the Net Rates of the Group 6
Mortgage Loans, weighted on the basis of the respective Scheduled Principal
Balances of each such Mortgage Loan as of the beginning of the Due Period
immediately preceding the related Distribution Date; provided that for federal
income tax purposes such Certificates will bear interest at a rate equivalent to
the foregoing, expressed as the weighted average of the Pass-Through Rate on
REMIC II Regular Interest VI-A, weighted on the basis of the Uncertificated
Principal Balance of such REMIC II Regular Interest immediately preceding the
related Distribution Date. The Pass-Through Rate with respect to the first
Interest Accrual Period shall be 4.901% per annum.
(9) On or prior to the Distribution Date in May 2008, the Notional
Amount of the Class S Certificates shall equal the Current Principal Amount of
the Class III-A Certificates, provided that, for federal income tax purposes,
such Notional Amount will be the equivalent of the foregoing, expressed as the
Uncertificated Principal balance of REMIC II Regular Interest III-A. The initial
Notional Amount for the Class S Certificates shall be equal to $138,846,800.00.
The Class S Certificates will bear interest at a pass-through rate on the
Notional Amount equal to the excess, if any, of (i) (a) the weighted average of
the Net Rates of the Group 3 Mortgage Loans, weighted on the basis of the
respective Scheduled Principal Balances of each such Mortgage Loan as of the
beginning of the Due Period immediately preceding the related Distribution Date,
multiplied by (b) a fraction equal to (x) 30 divided by (y) the actual number of
days in the related Interest Accrual Period and (ii) LIBOR plus 0.35% per annum
provided that, for federal income tax purposes, the amount calculated under
clause (i)(a) will be the equivalent of the foregoing, expressed as the weighted
average of the Pass-Through Rate on REMIC II Regular Interest III-A, weighted on
the basis of the Uncertificated Principal Balance of such REMIC II Regular
Interest immediately preceding the related Distribution Date. After the
Distribution Date in May 2008, the Class S Certificates will not bear any
interest.
(10) The Class B-1, Class B-2, Class B-3, Class B-4, Class B-5 and
Class B-6 Certificates will bear interest at a variable Pass-Through Rate equal
to the weighted average of the Net Rates the Mortgage Loans, weighted in
proportion to the results of subtracting from the aggregate principal balance of
each Mortgage Loan, the Current Principal Amount of the related class or classes
of Senior Certificates; provided that for federal income tax purposes such
Certificates will bear interest at a rate equivalent to the foregoing, expressed
as the weighted average of the Pass-Through Rates on REMIC II Regular Interests
X-0, X-0, X-0, X-0, B-5 and B-6, weighted on the basis of the Uncertificated
Principal Balance of each such REMIC II Regular Interest immediately preceding
the related Distribution Date. The Pass-Through Rate with respect to the first
Interest Accrual Period shall be 4.835% per annum.
(d) Solely for purposes of Section 1.860G-1(a)(4)(iii) of the Treasury
regulations, the Distribution Date immediately following the maturity date for
the Mortgage Loan with the latest maturity date in the Trust Fund has been
designated as the "latest possible maturity date" for the REMIC I Regular
Interests and the Certificates.
(e) With respect to each Distribution Date, each Class of Certificates
shall accrue interest during the related Interest Accrual Period. With respect
to each Distribution Date and each such Class of Certificates (other than the
Class III-A Certificates on or prior to the Distribution Date in May 2008 and
the Class S Certificates), interest shall be calculated on the basis of a
360-day year comprised of twelve 30-day months, and in the case of the Class S
Certificates and the Class III-A Certificates on or prior to the Distribution
Date in May 2008, on the basis of a 360-day year and the actual number of days
elapsed in the related Interest Accrual Period, based upon the respective
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Pass-Through Rate set forth, or determined as provided, above and the Current
Principal Amount or Notional Amount of such Class applicable to such
Distribution Date.
(f) The Certificates shall be substantially in the forms set forth in
Exhibits X-0, X-0, X-0 and A-4. On original issuance, the Trustee shall sign,
countersign and shall deliver them at the direction of the Seller. Pending the
preparation of definitive Certificates of any Class, the Trustee may sign and
countersign temporary Certificates that are printed, lithographed or
typewritten, in authorized denominations for Certificates of such Class,
substantially of the tenor of the definitive Certificates in lieu of which they
are issued and with such appropriate insertions, omissions, substitutions and
other variations as the officers or authorized signatories executing such
Certificates may determine, as evidenced by their execution of such
Certificates. If temporary Certificates are issued, the Seller will cause
definitive Certificates to be prepared without unreasonable delay. After the
preparation of definitive Certificates, the temporary Certificates shall be
exchangeable for definitive Certificates upon surrender of the temporary
Certificates at the office of the Trustee, without charge to the Holder. Upon
surrender for cancellation of any one or more temporary Certificates, the
Trustee shall sign and countersign and deliver in exchange therefor a like
aggregate principal amount, in authorized denominations for such Class, of
definitive Certificates of the same Class. Until so exchanged, such temporary
Certificates shall in all respects be entitled to the same benefits as
definitive Certificates.
(g) Each Class of Book-Entry Certificates will be registered as a
single Certificate of such Class held by a nominee of the Depository or the DTC
Custodian, and beneficial interests will be held by investors through the
book-entry facilities of the Depository in minimum denominations of (i) in the
case of the Senior Certificates (other than the Residual Certificates), $1,000
and in each case increments of $1.00 in excess thereof, and (ii) in the case of
the Offered Subordinate Certificates, $25,000 and increments of $1.00 in excess
thereof, except that one Certificate of each such Class may be issued in a
different amount so that the sum of the denominations of all outstanding
Certificates of such Class shall equal the Current Principal Amount of such
Class on the Closing Date. On the Closing Date, the Trustee shall execute and
countersign Physical Certificates all in an aggregate principal amount that
shall equal the Current Principal Amount of such Class on the Closing Date. The
Private Certificates shall be issued in certificated fully-registered form in
minimum dollar denominations of $25,000 and integral multiples of $1.00 in
excess thereof, except that one Private Certificate of each Class may be issued
in a different amount so that the sum of the denominations of all outstanding
Private Certificates of such Class shall equal the Current Principal Amount of
such Class on the Closing Date. The Class R-I, Class R-II and Class R-III
Certificates shall each be issued in certificated fully-registered form in the
denomination of $50, $50 and $50, respectively. Each Class of Global
Certificates, if any, shall be issued in fully registered form in minimum dollar
denominations of $50,000 and integral multiples of $1.00 in excess thereof,
except that one Certificate of each Class may be in a different denomination so
that the sum of the denominations of all outstanding Certificates of such Class
shall equal the Current Principal Amount of such Class on the Closing Date. On
the Closing Date, the Trustee shall execute and countersign (i) in the case of
each Class of Offered Certificates, the Certificate in the entire Current
Principal Amount of the respective Class and (ii) in the case of each Class of
Private Certificates, Individual Certificates all in an aggregate principal
amount that shall equal the Current Principal Amount of each such respective
Class on the Closing Date. The Certificates referred to in clause (i) and if at
any time there are to be Global Certificates, the Global Certificates shall be
delivered by the Seller to the
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Depository or pursuant to the Depository's instructions, shall be delivered by
the Seller on behalf of the Depository to and deposited with the DTC Custodian.
The Trustee shall sign the Certificates by facsimile or manual signature and
countersign them by manual signature on behalf of the Trustee by one or more
authorized signatories, each of whom shall be Responsible Officers of the
Trustee or its agent. A Certificate bearing the manual and facsimile signatures
of individuals who were the authorized signatories of the Trustee or its agent
at the time of issuance shall bind the Trustee, notwithstanding that such
individuals or any of them have ceased to hold such positions prior to the
delivery of such Certificate.
(h) No Certificate shall be entitled to any benefit under this
Agreement, or be valid for any purpose, unless there appears on such Certificate
the manually executed countersignature of the Trustee or its agent, and such
countersignature upon any Certificate shall be conclusive evidence, and the only
evidence, that such Certificate has been duly executed and delivered hereunder.
All Certificates issued on the Closing Date shall be dated the Closing Date. All
Certificates issued thereafter shall be dated the date of their
countersignature.
(i) The Closing Date is hereby designated as the "startup" day of each
REMIC within the meaning of Section 860G(a)(9) of the Code.
(j) For federal income tax purposes, each REMIC shall have a tax year
that is a calendar year and shall report income on an accrual basis.
(k) The Trustee on behalf of the Trust shall cause each REMIC to timely
elect to be treated as a REMIC under Section 860D of the Code. Any
inconsistencies or ambiguities in this Agreement or in the administration of any
Trust established hereby shall be resolved in a manner that preserves the
validity of such elections.
(l) The following legend shall be placed on the Residual Certificates
and Private Certificates, whether upon original issuance or upon issuance of any
other Certificate of any such Class in exchange therefor or upon transfer
thereof:
THIS CERTIFICATE MAY NOT BE ACQUIRED DIRECTLY OR INDIRECTLY BY, OR ON
BEHALF OF, AN EMPLOYEE BENEFIT PLAN OR OTHER RETIREMENT ARRANGEMENT
WHICH IS SUBJECT TO TITLE I OF THE EMPLOYEE RETIREMENT INCOME SECURITY
ACT OF 1974, AS AMENDED, OR SECTION 4975 OF THE INTERNAL REVENUE CODE
OF 1986, AS AMENDED, UNLESS THE PROPOSED TRANSFEREE PROVIDES THE
TRUSTEE WITH AN OPINION OF COUNSEL ADDRESSED TO THE TRUSTEE, MASTER
SERVICER AND SECURITIES ADMINISTRATOR AND ON WHICH THEY MAY RELY THAT
IS SATISFACTORY TO THE TRUSTEE THAT THE PURCHASE OF CERTIFICATES ON
BEHALF OF SUCH PERSON WILL NOT RESULT IN OR CONSTITUTE A NONEXEMPT
PROHIBITED TRANSACTION, IS PERMISSIBLE UNDER APPLICABLE LAW AND WILL
NOT GIVE RISE TO ANY ADDITIONAL OBLIGATIONS ON THE PART OF THE SELLER,
THE MASTER SERVICER, THE SECURITIES ADMINISTRATOR OR THE TRUSTEE.
The following legend shall be placed upon the Private Certificates, whether upon
original issuance or upon issuance of any other Certificate of any such Class in
exchange therefor or upon transfer thereof:
THIS CERTIFICATE MAY NOT BE ACQUIRED DIRECTLY OR INDIRECTLY
BY, OR ON BEHALF OF, AN EMPLOYEE BENEFIT PLAN OR OTHER
RETIREMENT ARRANGEMENT WHICH IS SUBJECT TO TITLE I OF THE
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EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED, OR SECTION
4975 OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED, UNLESS THE
TRANSFEREE CERTIFIES OR REPRESENTS THAT THE PROPOSED TRANSFER AND
HOLDING OF A CERTIFICATE AND THE SERVICING, MANAGEMENT AND OPERATION OF
THE TRUST AND ITS ASSETS: (I) WILL NOT RESULT IN ANY PROHIBITED
TRANSACTION WHICH IS NOT COVERED UNDER AN INDIVIDUAL OR CLASS
PROHIBITED TRANSACTION EXEMPTION, INCLUDING, BUT NOT LIMITED TO,
PROHIBITED TRANSACTION EXEMPTION ("PTE") 84-14, XXX 00-00, XXX 00-0,
XXX 95-60 OR PTE 96-23 AND (II) WILL NOT GIVE RISE TO ANY ADDITIONAL
OBLIGATIONS ON THE PART OF THE SELLER, THE SECURITIES ADMINISTRATOR,
THE MASTER SERVICER OR THE TRUSTEE, WHICH WILL BE DEEMED REPRESENTED BY
AN OWNER OF A BOOK-ENTRY CERTIFICATE OR A GLOBAL CERTIFICATE OR UNLESS
THE OPINION SPECIFIED IN SECTION 5.07 OF THE AGREEMENT IS PROVIDED.
Section 5.02 Registration of Transfer and Exchange of Certificates. (a)
The Trustee shall maintain at its Corporate Trust Office a Certificate Register
in which, subject to such reasonable regulations as it may prescribe, the
Trustee shall provide for the registration of Certificates and of transfers and
exchanges of Certificates as herein provided.
(b) Subject to Subsection 5.01(a) and, in the case of any Global
Certificate or Physical Certificate upon the satisfaction of the conditions set
forth below, upon surrender for registration of transfer of any Certificate at
any office or agency of the Trustee maintained for such purpose, the Trustee
shall sign, countersign and shall deliver, in the name of the designated
transferee or transferees, a new Certificate of a like Class and aggregate
Fractional Undivided Interest, but bearing a different number.
(c) By acceptance of an Individual Certificate, whether upon original
issuance or subsequent transfer, each holder of such a Certificate acknowledges
the restrictions on the transfer of such Certificate set forth in the Securities
Legend and agrees that it will transfer such a Certificate only as provided
herein. In addition to the provisions of Subsection 5.02(h), the following
restrictions shall apply with respect to the transfer and registration of
transfer of an Individual Certificate to a transferee that takes delivery in the
form of an Individual Certificate:
(i) The Trustee shall register the transfer of an Individual
Certificate if the requested transfer is being made to a transferee who
has provided the Trustee with a Rule 144A Certificate or comparable
evidence as to its QIB status.
(ii) The Trustee shall register the transfer of any Individual
Certificate if (x) the transferor has advised the Trustee in writing
that the Certificate is being transferred to an Institutional
Accredited Investor; and (y) prior to the transfer the transferee
furnishes to the Trustee an Investment Letter (and the Trustee shall be
fully protected in so doing), provided that, if based upon an Opinion
of Counsel addressed to the Trustee to the effect that the delivery of
(x) and (y) above are not sufficient to confirm that the proposed
transfer is being
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made pursuant to an exemption from, or in a transaction not subject to,
the registration requirements of the Securities Act and other
applicable laws, the Trustee shall as a condition of the registration
of any such transfer require the transferor to furnish such other
certifications, legal opinions or other information prior to
registering the transfer of an Individual Certificate as shall be set
forth in such Opinion of Counsel.
(d) Subject to Subsection 5.02(h), so long as a Global Certificate of
such Class is outstanding and is held by or on behalf of the Depository,
transfers of beneficial interests in such Global Certificate, or transfers by
holders of Individual Certificates of such Class to transferees that take
delivery in the form of beneficial interests in the Global Certificate, may be
made only in accordance with this Subsection 5.02(d) and in accordance with the
rules of the Depository:
(i) In the case of a beneficial interest in the Global
Certificate being transferred to an Institutional Accredited Investor,
such transferee shall be required to take delivery in the form of an
Individual Certificate or Certificates and the Trustee shall register
such transfer only upon compliance with the provisions of Subsection
5.02(c)(ii).
(ii) In the case of a beneficial interest in a Class of Global
Certificates being transferred to a transferee that takes delivery in
the form of an Individual Certificate or Certificates of such Class,
except as set forth in clause (i) above, the Trustee shall register
such transfer only upon compliance with the provisions of Subsection
5.02(c)(i).
(iii) In the case of an Individual Certificate of a Class
being transferred to a transferee that takes delivery in the form of a
beneficial interest in a Global Certificate of such Class, the Trustee
shall register such transfer if the transferee has provided the Trustee
with a Rule 144A Certificate or comparable evidence as to its QIB
status.
(iv) No restrictions shall apply with respect to the transfer
or registration of transfer of a beneficial interest in the Global
Certificate of a Class to a transferee that takes delivery in the form
of a beneficial interest in the Global Certificate of such Class;
provided that each such transferee shall be deemed to have made such
representations and warranties contained in the Rule 144A Certificate
as are sufficient to establish that it is a QIB.
(e) Subject to Subsection 5.02(h), an exchange of a beneficial interest
in a Global Certificate of a Class for an Individual Certificate or Certificates
of such Class, an exchange of an Individual Certificate or Certificates of a
Class for a beneficial interest in the Global Certificate of such Class and an
exchange of an Individual Certificate or Certificates of a Class for another
Individual Certificate or Certificates of such Class (in each case, whether or
not such exchange is made in anticipation of subsequent transfer, and, in the
case of the Global Certificate of such Class, so long as such Certificate is
outstanding and is held by or on behalf of the Depository) may be made only in
accordance with this Subsection 5.02(e) and in accordance with the rules of the
Depository:
(i) A holder of a beneficial interest in a Global Certificate
of a Class may at any time exchange such beneficial interest for an
Individual Certificate or Certificates of such Class.
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(ii) A holder of an Individual Certificate or Certificates of
a Class may exchange such Certificate or Certificates for a beneficial
interest in the Global Certificate of such Class if such holder
furnishes to the Trustee a Rule 144A Certificate or comparable evidence
as to its QIB status.
(iii) A holder of an Individual Certificate of a Class may
exchange such Certificate for an equal aggregate principal amount of
Individual Certificates of such Class in different authorized
denominations without any certification.
(f) (i) Upon acceptance for exchange or transfer of an Individual
Certificate of a Class for a beneficial interest in a Global Certificate of such
Class as provided herein, the Trustee shall cancel such Individual Certificate
and shall (or shall request the Depository to) endorse on the schedule affixed
to the applicable Global Certificate (or on a continuation of such schedule
affixed to the Global Certificate and made a part thereof) or otherwise make in
its books and records an appropriate notation evidencing the date of such
exchange or transfer and an increase in the certificate balance of the Global
Certificate equal to the certificate balance of such Individual Certificate
exchanged or transferred therefor.
(ii) Upon acceptance for exchange or transfer of a beneficial
interest in a Global Certificate of a Class for an Individual
Certificate of such Class as provided herein, the Trustee shall (or
shall request the Depository to) endorse on the schedule affixed to
such Global Certificate (or on a continuation of such schedule affixed
to such Global Certificate and made a part thereof) or otherwise make
in its books and records an appropriate notation evidencing the date of
such exchange or transfer and a decrease in the certificate balance of
such Global Certificate equal to the certificate balance of such
Individual Certificate issued in exchange therefor or upon transfer
thereof.
(g) The Securities Legend shall be placed on any Individual Certificate
issued in exchange for or upon transfer of another Individual Certificate or of
a beneficial interest in a Global Certificate.
(h) Subject to the restrictions on transfer and exchange set forth in
this Section 5.02, the holder of any Individual Certificate may transfer or
exchange the same in whole or in part (in an initial certificate balance equal
to the minimum authorized denomination set forth in Section 5.01(g) above or any
integral multiple of $1.00 in excess thereof) by surrendering such Certificate
at the Corporate Trust Office, or at the office of any transfer agent, together
with an executed instrument of assignment and transfer satisfactory in form and
substance to the Trustee in the case of transfer and a written request for
exchange in the case of exchange. The holder of a beneficial interest in a
Global Certificate may, subject to the rules and procedures of the Depository,
cause the Depository (or its nominee) to notify the Trustee in writing of a
request for transfer or exchange of such beneficial interest for an Individual
Certificate or Certificates. Following a proper request for transfer or
exchange, the Trustee shall, within five Business Days of such request made at
the Corporate Trust Office, sign, countersign and deliver at the Corporate Trust
Office, to the transferee (in the case of transfer) or holder (in the case of
exchange) or send by first class mail at the risk of the transferee (in the case
of transfer) or holder (in the case of exchange) to such address as the
transferee or holder, as applicable, may request, an Individual Certificate or
Certificates, as the case may require,
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for a like aggregate Fractional Undivided Interest and in such authorized
denomination or denominations as may be requested. The presentation for transfer
or exchange of any Individual Certificate shall not be valid unless made at the
Corporate Trust Office by the registered holder in person, or by a duly
authorized attorney-in-fact.
(i) At the option of the Certificateholders, Certificates may be
exchanged for other Certificates of authorized denominations of a like Class and
aggregate Fractional Undivided Interest, upon surrender of the Certificates to
be exchanged at the Corporate Trust Office; provided, however, that no
Certificate may be exchanged for new Certificates unless the original Fractional
Undivided Interest represented by each such new Certificate (i) is at least
equal to the minimum authorized denomination or (ii) is acceptable to the Seller
as indicated to the Trustee in writing. Whenever any Certificates are so
surrendered for exchange, the Trustee shall sign and countersign and the Trustee
shall deliver the Certificates which the Certificateholder making the exchange
is entitled to receive.
(j) If the Trustee so requires, every Certificate presented or
surrendered for transfer or exchange shall be duly endorsed by, or be
accompanied by a written instrument of transfer, with a signature guarantee, in
form satisfactory to the Trustee, duly executed by the holder thereof or his or
her attorney duly authorized in writing.
(k) No service charge shall be made for any transfer or exchange of
Certificates, but the Trustee may require payment of a sum sufficient to cover
any tax or governmental charge that may be imposed in connection with any
transfer or exchange of Certificates.
(l) The Trustee shall cancel all Certificates surrendered for transfer
or exchange but shall retain such Certificates in accordance with its standard
retention policy or for such further time as is required by the record retention
requirements of the Securities Exchange Act of 1934, as amended, and thereafter
may destroy such Certificates.
Section 5.03 Mutilated, Destroyed, Lost or Stolen Certificates. (a) If
(i) any mutilated Certificate is surrendered to the Trustee, or the Trustee
receives evidence to its satisfaction of the destruction, loss or theft of any
Certificate, and (ii) there is delivered to the Trustee such security or
indemnity as it may require to save it harmless, and (iii) the Trustee has not
received notice that such Certificate has been acquired by a third Person, the
Trustee shall sign, countersign and deliver, in exchange for or in lieu of any
such mutilated, destroyed, lost or stolen Certificate, a new Certificate of like
tenor and Fractional Undivided Interest but in each case bearing a different
number. The mutilated, destroyed, lost or stolen Certificate shall thereupon be
canceled of record by the Trustee and shall be of no further effect and evidence
no rights.
(b) Upon the issuance of any new Certificate under this Section 5.03,
the Trustee may require the payment of a sum sufficient to cover any tax or
other governmental charge that may be imposed in relation thereto and any other
expenses (including the fees and expenses of the Trustee) connected therewith.
Any duplicate Certificate issued pursuant to this Section 5.03 shall constitute
complete and indefeasible evidence of ownership in the Trust Fund, as if
originally issued, whether or not the lost, stolen or destroyed Certificate
shall be found at any time.
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Section 5.04 Persons Deemed Owners. Prior to due presentation of a
Certificate for registration of transfer, the Seller, the Trustee and any agent
of the Seller or the Trustee may treat the Person in whose name any Certificate
is registered as the owner of such Certificate for the purpose of receiving
distributions pursuant to Section 6.01 and for all other purposes whatsoever.
Neither the Seller, the Trustee nor any agent of the Seller or the Trustee shall
be affected by notice to the contrary. No Certificate shall be deemed duly
presented for a transfer effective on any Record Date unless the Certificate to
be transferred is presented no later than the close of business on the third
Business Day preceding such Record Date.
Section 5.05 Transfer Restrictions on Residual Certificates. (a)
Residual Certificates, or interests therein, may not be transferred without the
prior express written consent of the Tax Matters Person and the Seller. As a
prerequisite to such consent, the proposed transferee must provide the Tax
Matters Person, the Seller and the Trustee with an affidavit that the proposed
transferee is a Permitted Transferee (and an affidavit that it is a U.S. Person)
as provided in Subsection 5.05(b).
(b) No transfer, sale or other disposition of a Residual Certificate
(including a beneficial interest therein) may be made unless, prior to the
transfer, sale or other disposition of a Residual Certificate, the proposed
transferee (including the initial purchasers thereof) delivers to the Tax
Matters Person, the Trustee and the Seller an affidavit in the form attached
hereto as Exhibit E stating, among other things, that as of the date of such
transfer (i) such transferee is a Permitted Transferee and that (ii) such
transferee is not acquiring such Residual Certificate for the account of any
person who is not a Permitted Transferee. The Tax Matters Person shall not
consent to a transfer of a Residual Certificate if it has actual knowledge that
any statement made in the affidavit issued pursuant to the preceding sentence is
not true. Notwithstanding any transfer, sale or other disposition of a Residual
Certificate to any Person who is not a Permitted Transferee, such transfer, sale
or other disposition shall be deemed to be of no legal force or effect
whatsoever and such Person shall not be deemed to be a Holder of a Residual
Certificate for any purpose hereunder, including, but not limited to, the
receipt of distributions thereon. If any purported transfer shall be in
violation of the provisions of this Subsection 5.05(b), then the prior Holder
thereof shall, upon discovery that the transfer of such Residual Certificate was
not in fact permitted by this Subsection 5.05(b), be restored to all rights as a
Holder thereof retroactive to the date of the purported transfer. None of the
Trustee, the Tax Matters Person or the Seller shall be under any liability to
any Person for any registration or transfer of a Residual Certificate that is
not permitted by this Subsection 5.05(b) or for making payments due on such
Residual Certificate to the purported Holder thereof or taking any other action
with respect to such purported Holder under the provisions of this Agreement so
long as the written affidavit referred to above was received with respect to
such transfer, and the Tax Matters Person, the Trustee and the Seller, as
applicable, had no knowledge that it was untrue. The prior Holder shall be
entitled to recover from any purported Holder of a Residual Certificate that was
in fact not a permitted transferee under this Subsection 5.05(b) at the time it
became a Holder all payments made on such Residual Certificate. Each Holder of a
Residual Certificate, by acceptance thereof, shall be deemed for all purposes to
have consented to the provisions of this Subsection 5.05(b) and to any amendment
of this Agreement deemed necessary (whether as a result of new legislation or
otherwise) by counsel of the Tax Matters Person or the Seller to ensure that the
Residual Certificates are not transferred to any Person who is not a Permitted
Transferee and that any transfer of such Residual Certificates will not cause
the imposition of a tax upon the Trust or cause any REMIC to fail to qualify as
a REMIC.
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(c) The Residual Certificates (including a beneficial interest therein)
may not be purchased by or transferred to any person who is not a United States
Person.
(d) By accepting a Residual Certificate, the purchaser thereof agrees
to be a Tax Matters Person, and appoints the Securities Administrator to act as
its agent with respect to all matters concerning the tax obligations of the
Trust.
Section 5.06 Restrictions on Transferability of Certificates. (a) No
offer, sale, transfer or other disposition (including pledge) of any Certificate
shall be made by any Holder thereof unless registered under the Securities Act,
or an exemption from the registration requirements of the Securities Act and any
applicable state securities or "Blue Sky" laws is available and the prospective
transferee (other than the Seller) of such Certificate signs and delivers to the
Trustee an Investment Letter, if the transferee is an Institutional Accredited
Investor, in the form set forth as Exhibit F-l hereto, or a Rule 144A
Certificate, if the transferee is a QIB, in the form set forth as Exhibit F-2
hereto. Notwithstanding the provisions of the immediately preceding sentence, no
restrictions shall apply with respect to the transfer or registration of
transfer of a beneficial interest in any Certificate that is a Global
Certificate of a Class to a transferee that takes delivery in the form of a
beneficial interest in the Global Certificate of such Class provided that each
such transferee shall be deemed to have made such representations and warranties
contained in the Rule 144A Certificate as are sufficient to establish that it is
a QIB. In the case of a proposed transfer of any Certificate to a transferee
other than a QIB, the Trustee may require an Opinion of Counsel addressed to the
Trustee that such transaction is exempt from the registration requirements of
the Securities Act. The cost of such opinion shall not be an expense of the
Trustee or the Trust Fund.
(b) The Private Certificates shall each bear a Securities Legend.
Section 5.07 ERISA Restrictions. (a) Subject to the provisions of
subsection (b), no Private Certificates (other than the Class III-A Certificates
after the Distribution Date in May 2008) may be acquired directly or indirectly
by, or on behalf of, an employee benefit plan or other retirement arrangement
which is subject to Title I of ERISA and Section 4975 of the Code, unless the
proposed transferee provides either (i) the Trustee, with an Opinion of Counsel
addressed to the Trustee, the Master Servicer and the Securities Administrator
(upon which they may rely) which is satisfactory to the Trustee, which opinion
will not be at the expense of the Trustee, the Master Servicer or the Securities
Administrator, that the purchase of such Certificates by or on behalf of such
Plan is permissible under applicable law, will not constitute or result in a
nonexempt prohibited transaction under ERISA or Section 4975 of the Code and
will not subject the Trustee, the Master Servicer or the Securities
Administrator to any obligation in addition to those undertaken in the Agreement
or (ii) in the case of the Private Certificates (other than the Residual
Certificates and the Class III-A Certificates after the Distribution Date in May
2008), a representation or certification to the Trustee (upon which the Trustee
is authorized to rely) to the effect that the proposed transfer and holding of
such a Certificate and the servicing, management and operation of the Trust: (I)
will not result in a prohibited transaction under Section 406 of ERISA or
Section 4975 of the Code which is not covered under an individual or class
prohibited transaction exemption including but not limited to Department of
Labor Prohibited Transaction Exemption ("PTE") 84-14 (Class Exemption for Plan
Asset Transactions Determined by Independent Qualified Professional Asset
Managers); PTE 91-38
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(Class Exemption for Certain Transactions Involving Bank Collective Investment
Funds); PTE 90-1 (Class Exemption for Certain Transactions Involving Insurance
Company Pooled Separate Accounts), PTE 95-60 (Class Exemption for Certain
Transactions Involving Insurance Company General Accounts), and PTE 96-23 (Class
Exemption for Plan Asset Transactions Determined by In-House Asset Managers and
(II) will not subject the Seller, the Securities Administrator, the Master
Servicer or the Trustee to any obligation in addition to those undertaken in the
Agreement.
(b) Any Person acquiring an interest in a Global Certificate which is a
Private Certificate, by acquisition of such Certificate, shall be deemed to have
represented to the Trustee that either: (i) it is not acquiring an interest in
such Certificate directly or indirectly by, or on behalf of, an employee benefit
plan or other retirement arrangement which is subject to Title I of ERISA and
Section 4975 of the Code, or (ii) the transfer and holding of an interest in
such Certificate to that Person and the subsequent servicing, management and/or
operation of the Trust and its assets: (I) will not result in any prohibited
transaction which is not covered under an individual or class prohibited
transaction exemption, including, but not limited to, XXX 00-00, XXX 00-00, XXX
00-0, XXX 95-60 or PTE 96-23 and (II) will not subject the Seller, the Master
Servicer, the Securities Administrator or the Trustee to any obligation in
addition to those undertaken in the Agreement.
(c) Each beneficial owner of a Class B-1, Class B-2 or Class B-3
Certificate or any interest therein shall be deemed to have represented, by
virtue of its acquisition or holding of that certificate or interest therein,
that either (i) it is not a Plan or investing with assets of a Plan, (ii) it has
acquired and is holding such certificate in reliance on Prohibited Transaction
Exemption 2002- 41, as amended from time to time, and that it understands that
there are certain conditions to the availability of the Exemption, including
that the certificate must be rated, at the time of purchase, not lower than
"BBB-" (or its equivalent) by S&P, Fitch, Inc. or Xxxxx'x, and the certificate
is so rated or (iii) (1) it is an insurance company, (2) the source of funds
used to acquire or hold the certificate or interest therein is an "insurance
company general account," as such term is defined in Prohibited Transaction
Class Exemption ("PTCE") 95-60, and (3) the conditions in Sections I and III of
PTCE 95-60 have been satisfied.
(d) Neither the Trustee, the Master Servicer nor the Securities
Administrator will be required to monitor, determine or inquire as to compliance
with the transfer restrictions with respect to the Global Certificates. Any
attempted or purported transfer of any Certificate in violation of the
provisions of Subsections (a) or (b) above shall be void ab initio and such
Certificate shall be considered to have been held continuously by the prior
permitted Certificateholder. Any transferor of any Certificate in violation of
such provisions, shall indemnify and hold harmless the Trustee, the Securities
Administrator and the Master Servicer from and against any and all liabilities,
claims, costs or expenses incurred by the Trustee, the Securities Administrator
or the Master Servicer as a result of such attempted or purported transfer. The
Trustee shall have no liability for transfer of any such Global Certificates in
or through book-entry facilities of any Depository or between or among
Depository Participants or Certificate Owners made in violation of the transfer
restrictions set forth herein.
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Section 5.08 Rule 144A Information. For so long as any Certificates are
outstanding and are "restricted securities" within the meaning of Rule 144(a)(3)
of the Securities Act, (1) the Seller will provide or cause to be provided to
any holder of such Certificates and any prospective purchaser thereof designated
by such a holder, upon the request of such holder or prospective purchaser, the
information required to be provided to such holder or prospective purchaser by
Rule 144A(d)(4) under the Securities Act; and (2) the Seller shall update such
information from time to time in order to prevent such information from becoming
false and misleading and will take such other actions as are necessary to ensure
that the safe harbor exemption from the registration requirements of the
Securities Act under Rule 144A is and will be available for resales of such
Certificates conducted in accordance with Rule 144A.
ARTICLE VI
Payments to Certificateholders
Section 6.01 Distributions on the Certificates. (a) Interest and
principal on the Certificates (other than the Interest Only Certificates with
respect to principal distributions) will be distributed monthly on each
Distribution Date, commencing in October 2003, in an amount equal to the
Available Funds on deposit in the Distribution Account for such Distribution
Date. On each Distribution Date, the Available Funds on deposit in the
Distribution Account shall be distributed as follows:
(A) on each Distribution Date prior to the Cross-Over Date, the Group 1
Available Funds will be distributed to the Group 1 Senior Certificates as
follows:
first, to the Class I-A Certificates and Class I-X
Certificates, the Accrued Certificate Interest on such Classes
for such Distribution Date, on a pro rata basis based on
Accrued Certificate Interest payable on such Certificates with
respect to such Distribution Date. As described below, Accrued
Certificate Interest on the Class I-A Certificates is subject
to reduction in the event of certain Net Interest Shortfalls
allocable thereto;
second, to the Class I-A Certificates and Class I-X
Certificates, on a pro rata basis, any Accrued Certificate
Interest thereon remaining undistributed from previous
Distribution Dates, to the extent of remaining Group 1
Available Funds; and
third, to the Class I-A Certificates, in reduction of the
Current Principal Amount thereof, the Group 1 Senior Optimal
Principal Amount for such Distribution Date to the extent of
remaining Group 1 Available Funds, until the Current Principal
Amount of such Class has been reduced to zero;
(B) on each Distribution Date prior to the Cross-Over Date, the Group 2
Available Funds will be distributed to the Group 2 Senior Certificates as
follows:
first, to the Class II-A Certificates and Class II-X
Certificates, the Accrued Certificate Interest on such Classes
for such Distribution Date, on a pro rata basis based on
Accrued Certificate Interest payable on such Certificates with
respect to such
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Distribution Date. As described below, Accrued Certificate
Interest on the Class II-A Certificates and Class II-X
Certificates is subject to reduction in the event of certain
Net Interest Shortfalls allocable thereto;
second, to the Class II-A Certificates and Class II-X
Certificates, on a pro rata basis, any Accrued Certificate
Interest thereon remaining undistributed from previous
Distribution Dates, to the extent of remaining Group 2
Available Funds; and
third, to the Class II-A Certificates, in reduction of the
Current Principal Amount thereof, the Group 2 Senior Optimal
Principal Amount for such Distribution Date to the extent of
remaining Group 2 Available Funds, until the Current Principal
Amount of such Class has been reduced to zero;
(C) on each Distribution Date prior to the Cross-Over Date, the Group 3
Available Funds will be distributed to the Class S Certificates and Class III-A
Certificates as follows:
first, to the Class S Certificates, the Accrued Certificate
Interest on such Class for such Distribution Date and any
Accrued Certificate Interest thereon remaining undistributed
from previous Distribution Dates;
second, to the Class III-A Certificates, the Accrued
Certificate Interest on such Class for such Distribution Date.
As described below, Accrued Certificate Interest on the Class
III-A Certificates is subject to reduction in the event of
certain Net Interest Shortfalls allocable thereto;
third, to the Class III-A Certificates, any Accrued
Certificate Interest thereon remaining undistributed from
previous Distribution Dates, to the extent of remaining Group
3 Available Funds; and
fourth, to the Class III-A Certificates, in reduction of the
Current Principal Amount thereof, the Group 3 Senior Optimal
Principal Amount for such Distribution Date to the extent of
remaining Group 3 Available Funds, until the Current Principal
Amount of such Class has been reduced to zero;
(D) on each Distribution Date prior to the Cross-Over Date, the Group 4
Available Funds will be distributed to the Class IV-A Certificates as follows:
first, to the Class IV-A, Class R-I, Class R-II and Class
R-III Certificates, the Accrued Certificate Interest on such
Classes for such Distribution Date, on a pro rata basis based
on Accrued Certificate Interest payable on such Certificates
with respect to such Distribution Date. As described below,
Accrued Certificate Interest on the Class IV-A, Class R-I,
Class R-II and Class R-III Certificates is subject to
reduction in the event of certain Net Interest Shortfalls
allocable thereto;
second, to the Class IV-A, Class R-I, Class R-II and Class
R-III Certificates, on a pro rata basis, any Accrued
Certificate Interest thereon remaining undistributed from
previous Distribution Dates, to the extent of remaining Group
4 Available Funds;
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third, to the Class R-I, Class R-II and Class R-III
Certificates, on a pro rata basis, in reduction of the Current
Principal Amounts thereof, the Group 4 Senior Optimal
Principal Amount for such Distribution Date to the extent of
remaining Group 4 Available Funds, until the Current Principal
Amounts of such Classes have been reduced to zero; and
fourth, to the Class IV-A Certificates, in reduction of the
Current Principal Amount thereof, the Group 4 Senior Optimal
Principal Amount for such Distribution Date remaining after
the distributions, if any, in priority third above, to the
extent of remaining Group 4 Available Funds, until the Current
Principal Amount of such Class has been reduced to zero;
(E) on each Distribution Date prior to the Cross-Over Date, the Group 5
Available Funds will be distributed to the Class V-A Certificates as follows:
first, to the Class V-A Certificates, the Accrued Certificate
Interest on such Class for such Distribution Date. As
described below, Accrued Certificate Interest on the Class V-A
Certificates is subject to reduction in the event of certain
Net Interest Shortfalls allocable thereto;
second, to the Class V-A Certificates, any Accrued Certificate
Interest thereon remaining undistributed from previous
Distribution Dates, to the extent of remaining Group 5
Available Funds; and
third, to the Class V-A Certificates, in reduction of the
Current Principal Amount thereof, the Group 5 Senior Optimal
Principal Amount for such Distribution Date to the extent of
remaining Group 5 Available Funds, until the Current Principal
Amount of such Class has been reduced to zero;
(F) on each Distribution Date prior to the Cross-Over Date, the Group 6
Available Funds will be distributed to the Class VI-A Certificates as follows:
first, to the Class VI-A Certificates, the Accrued Certificate
Interest on such Class for such Distribution Date. As
described below, Accrued Certificate Interest on the Class
VI-A Certificates is subject to reduction in the event of
certain Net Interest Shortfalls allocable thereto;
second, to the Class VI-A Certificates, any Accrued
Certificate Interest thereon remaining undistributed from
previous Distribution Dates, to the extent of remaining Group
6 Available Funds; and
third, to the Class VI-A Certificates, in reduction of the
Current Principal Amount thereof, the Group 6 Senior Optimal
Principal Amount for such Distribution Date to the extent of
remaining Group 6 Available Funds, until the Current Principal
Amount of such Class has been reduced to zero;
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(G) Except as provided in clauses (H) and (I) below, on each
Distribution Date prior to the Cross-Over Date, an amount equal to any remaining
Group 1, Group 2, Group 3, Group 4, Group 5, Group 6 Available Funds after the
distributions in clauses (A), (B), (C), (D), (E), (F) above will be distributed
sequentially, in the following order, to the Class B-1, Class B-2, Class B-3,
Class B-4, Class B-5 and Class B-6 Certificates, in each case up to an amount
equal to and in the following order: (a) the Accrued Certificate Interest
thereon for such Distribution Date, (b) any Accrued Certificate Interest thereon
remaining undistributed from previous Distribution Dates and (c) such Class's
Allocable Share for such Distribution Date, in each case, to the extent of
remaining Available Funds.
(H) On each Distribution Date prior to the Cross-Over Date, but after
the reduction of the Current Principal Amount of the Group 1, Group 2, Group 3,
Group 4, Group 5 or Group 6 Senior Certificates to zero, the remaining Class or
Classes of Senior Certificates (other than the Interest Only Certificates) will
be entitled to receive in reduction of their Current Principal Amounts, pro rata
based upon their Current Principal Amounts immediately prior to such
Distribution Date, in addition to any Principal Prepayments related to such
remaining Senior Certificates' respective Loan Group allocated to such Senior
Certificates, 100% of the Principal Prepayments on any Mortgage Loan in the Loan
Group relating to the fully repaid Class of Senior Certificates; provided,
however, that if (A) the weighted average of the Subordinate Percentages on such
Distribution Date for the Mortgage Loans equals or exceeds two times the initial
weighted average of the Subordinate Percentages and (B) the aggregate Scheduled
Principal Balance of the Mortgage Loans delinquent 60 days or more (including
for this purpose any such Mortgage Loans in foreclosure and Mortgage Loans with
respect to which the related Mortgaged Property has been acquired by the Trust),
averaged over the last six months, as a percentage of the aggregate Current
Principal Amount of the Subordinate Certificates does not exceed 100%, then the
additional allocation of Principal Prepayments to the Senior Certificates in
accordance with this clause (H) will not be made and 100% of the Principal
Prepayments on any Mortgage Loan in the Loan Group relating to the fully repaid
Class or Classes of Senior Certificates will be allocated to the Subordinate
Certificates.
(I) If on any Distribution Date on which the aggregate Current
Principal Amount of any Class or Classes of Senior Certificates (other than the
Interest Only Certificates) would be greater than the aggregate Scheduled
Principal Balance of the Mortgage Loans in its related Loan Group and any
Subordinate Certificates are still outstanding in each case after giving effect
to distributions to be made on such Distribution Date, (i) 100% of amounts
otherwise allocable to the Subordinate Certificates in respect of principal will
be distributed to such Class or Classes of Senior Certificates in reduction of
the Current Principal Amounts thereof, until the aggregate Current Principal
Amount of such Class or Classes of Senior Certificates is an amount equal to the
aggregate Scheduled Principal Balance of the Mortgage Loans in its related Loan
Group, and (ii) the Accrued Certificate Interest otherwise allocable to the
Subordinate Certificates on such Distribution Date will be reduced, if
necessary, and distributed to such Class or Classes of Senior Certificates in an
amount equal to the Accrued Certificate Interest for such Distribution Date on
the excess of (x) the aggregate Current Principal Amount of such Class or
Classes of Senior Certificates over (y) the aggregate Scheduled Principal
Balance of the Mortgage Loans in the related Loan Group. Any such reduction in
the Accrued Certificate Interest on the Subordinate Certificates will be
allocated in reverse order of the Subordinate Certificates numerical
designations, commencing with the Class B-6 Certificates.
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(J) If, after distributions have been made pursuant to priorities first
and second of clauses (a)(i)(A), (B), (D), (E) or (F) above and priorities
first, second and third of clause (a)(i)(C) above on any Distribution Date, the
remaining Group 1, Group 2, Group 3, Group 4, Group 5 and Group 6 Available
Funds, respectively, are less than the sum of the Group 1, Group 2, Group 3,
Group 4, Group 5 and Group 6 Senior Optimal Principal Amounts such amount shall
be reduced, and such remaining funds will be distributed on the related Senior
Certificates on the basis of such reduced amount.
(K) On each Distribution Date, any Available Funds remaining after
payment of interest and principal to the Classes of Certificates entitled
thereto, as described above, will be distributed to the Class R-III
Certificates; provided that if on any Distribution Date there are any Group 1,
Group 2, Group 3, Group 4, Group 5 and Group 6 Available Funds remaining after
payment of interest and principal to a Class or Classes of Certificates entitled
thereto, such amounts will be distributed to the other Classes of Senior
Certificates, pro rata, based upon their Current Principal Amounts, until all
amounts due to all Classes of Senior Certificates have been paid in full, before
any amounts are distributed to the Class R-III Certificates.
(b) "Pro rata" distributions among Classes of Certificates will be made
in proportion to the then Current Principal Amount of such Classes.
(c) No Accrued Certificate Interest will be payable with respect to any
Class of Certificates after the Distribution Date on which the Current Principal
Amount of such Certificate has been reduced to zero.
(d) If on any Distribution Date the Available Funds for the Senior
Certificates in any Certificate Group is less than the Accrued Certificate
Interest on the related Senior Certificates for such Distribution Date prior to
reduction for Net Interest Shortfalls and the interest portion of Realized
Losses, the shortfall will be allocated among the holders of each Class of
Senior Certificates in such Certificate Group in proportion to the respective
amounts of Accrued Certificate Interest that would have been allocated thereto
in the absence of such Net Interest Shortfalls and/or Realized Losses for such
Distribution Date. In addition, the amount of any interest shortfalls will
constitute unpaid Accrued Certificate Interest and will be distributable to
holders of the Certificates of the related Classes entitled to such amounts on
subsequent Distribution Dates, to the extent of the applicable Available Funds
after current interest distributions as required herein. Any such amounts so
carried forward will not bear interest. Shortfalls in interest payments will not
be offset by a reduction in the servicing compensation of the Master Servicer or
otherwise, except to the extent of applicable Compensating Interest Payments.
(e) The expenses and fees of the Trust shall be paid by each of the
REMICs, to the extent that such expenses relate to the assets of each of such
respective REMICs, and all other expenses and fees of the Trust shall be paid
pro rata by each of the REMICs.
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Section 6.02 Allocation of Losses. (a) On or prior to each
Determination Date, the Master Servicer shall determine the amount of any
Realized Loss in respect of each Mortgage Loan that occurred during the
immediately preceding calendar month, based on information provided by the
related Servicer.
(b) With respect to the Certificates (other than the Interest Only
Certificates) on any Distribution Date, the principal portion of each Realized
Loss on a Mortgage Loan shall be allocated as follows:
first, to the Class B-6 Certificates until the Current
Principal Amount thereof has been reduced to zero;
second, to the Class B-5 Certificates until the Current
Principal Amount thereof has been reduced to zero;
third, to the Class B-4 Certificates until the Current
Principal Amount thereof has been reduced to zero;
fourth, to the Class B-3 Certificates until the Current
Principal Amount thereof has been reduced to zero;
fifth, to the Class B-2 Certificates until the Current
Principal Amount thereof has been reduced to zero;
sixth, to the Class B-1 Certificates until the Current
Principal Amount thereof has been reduced to zero;
seventh, if such loss is on a Group 1, Group 2, Group 3, Group
4, Group 5 or Group 6 Mortgage Loan, to the Group 1, Group 2, Group 3,
Group 4, Group 5 or Group 6 Senior Certificates (other than the
Interest Only Certificates), respectively, in each case until the
Current Principal Amount thereof has been reduced to zero; and
eighth, to the related Senior Certificates (other than the
Interest Only Certificates), on a pro rata basis, until the Current
Principal Amounts thereof have been reduced to zero.
No Realized Losses will be allocated to the Class S Certificates.
(c) Notwithstanding (x) the foregoing clause (a), no such allocation of
any Realized Loss shall be made on a Distribution Date to any Class of
Certificates to the extent that such allocation would result in the reduction of
the aggregate Current Principal Amounts of all the Certificates as of such
Distribution Date, after giving effect to all distributions and prior
allocations of Realized Losses on the Mortgage Loans on such date, to an amount
less than the aggregate Scheduled Principal Balance of all of the Mortgage Loans
as of the first day of the month of such Distribution Date (such limitation, the
"Loss Allocation Limitation").
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(d) Any Realized Losses allocated to a Class of Certificates shall be
allocated among the Certificates of such Class (other than the Interest Only
Certificates) in proportion to their respective Current Principal Amounts. Any
allocation of Realized Losses shall be accomplished by reducing the Current
Principal Amount of the related Certificates on the related Distribution Date.
(e) Realized Losses shall be allocated on the Distribution Date in the
month following the month in which such loss was incurred and, in the case of
the principal portion thereof, after giving effect to distributions made on such
Distribution Date.
(f) On each Distribution Date, the Securities Administrator shall
determine and notify the Trustee of the Subordinate Certificate Writedown
Amount. Any Subordinate Certificate Writedown Amount shall effect a
corresponding reduction in the Current Principal Amount of (i) if prior to the
Cross-Over Date, the Current Principal Amounts of the Subordinate Certificates,
in the reverse order of their numerical Class designations, and (ii) from and
after the Cross-Over Date, the Senior Certificates which reduction shall occur
on such Distribution Date after giving effect to distributions made on such
Distribution Date.
(g) Any Net Interest Shortfall will be allocated among the Classes of
Certificates in proportion to the respective amounts of Accrued Certificate
Interest that would have been allocated thereto in the absence of such Net
Interest Shortfall for such Distribution Date. The interest portion of any
Realized Losses with respect to the Mortgage Loans occurring on or prior to the
Cross-Over Date will not be allocated among any Certificates, but will reduce
the amount of Available Funds on the related Distribution Date. As a result of
the subordination of the Subordinate Certificates in right of distribution, such
Realized Losses on the Mortgage Loans will be borne by the Subordinate
Certificates in inverse order of their numerical Class designations. Following
the Cross-Over Date, the interest portion of Realized Losses on the Group 1,
Group 2, Group 3, Group 4, Group 5 and Group 6 Mortgage Loans will be allocated
to the related Group 1, Group 2, Group 3, Group 4, Group 5 and Group 6 Senior
Certificates, respectively, on a pro rata basis.
Section 6.03 Payments. (a) On each Distribution Date, other than the
final Distribution Date, the Trustee shall distribute to each Certificateholder
of record as of the immediately preceding Record Date the Certificateholder's
pro rata share of its Class (based on the aggregate Fractional Undivided
Interest represented by such Holder's Certificates) of all amounts required to
be distributed on such Distribution Date to such Class, based on information
provided to the Trustee by the Securities Administrator. The Securities
Administrator shall calculate the amount to be distributed to each Class,
including the Grantor Trust Certificates, and, based on such amounts, the
Securities Administrator shall determine the amount to be distributed to each
Certificateholder and the holder of the Grantor Trust Certificates. All of the
Securities Administrator's calculations of payments shall be based solely on
information provided to the Securities Administrator by the Master Servicer.
Neither the Securities Administrator nor the Trustee shall be required to
confirm, verify or recompute any such information but shall be entitled to rely
conclusively on such information.
(b) Payment of the above amounts to each Certificateholder shall be
made (i) by check mailed to each Certificateholder entitled thereto at the
address appearing in the Certificate Register or (ii) upon receipt by the
Trustee on or before the fifth Business Day preceding the Record Date of
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written instructions from a Certificateholder by wire transfer to a United
States dollar account maintained by the payee at any United States depository
institution with appropriate facilities for receiving such a wire transfer;
provided, however, that the final payment in respect of each Class of
Certificates will be made only upon presentation and surrender of such
respective Certificates at the office or agency of the Trustee specified in the
notice to Certificateholders of such final payment.
Section 6.04 Statements to Certificateholders. (a) Concurrently with
each distribution to Certificateholders, the Securities Administrator shall make
available to the parties hereto and each Certificateholder via the Securities
Administrator's internet website as set forth below, the following information,
expressed with respect to clauses (i) through (vii) in the aggregate and as a
Fractional Undivided Interest representing an initial Current Principal Amount
or Notional Amount of $1,000, or in the case of the Residual Certificates, an
initial Current Principal Amount of $50:
(i) the Current Principal Amount or Notional Amount of each
Class of Certificates immediately prior to such Distribution Date;
(ii) the amount of the distribution allocable to principal on
each applicable Class of Certificates;
(iii) the aggregate amount of interest accrued at the related
Pass-Through Rate with respect to each Class during the related
Interest Accrual Period;
(iv) the Net Interest Shortfall and any other adjustments to
interest at the related Pass-Through Rate necessary to account for any
difference between interest accrued and aggregate interest distributed
with respect to each Class of Certificates;
(v) the amount of the distribution allocable to interest on
each Class of Certificates;
(vi) the Pass-Through Rates for each Class of Certificates
with respect to such Distribution Date;
(vii) the Current Principal Amount or Notional Amount of each
Class of Certificates after such Distribution Date;
(viii) the amount of any Monthly Advances, Compensating
Interest Payments and outstanding unreimbursed advances by the Master
Servicer or the Servicer included in such distribution;
(ix) the aggregate amount of any Realized Losses (listed
separately for each category of Realized Loss and for each Loan Group)
during the related Prepayment Period and cumulatively since the Cut-off
Date and the amount and source (separately identified) of any
distribution in respect thereof included in such distribution;
(x) with respect to each Mortgage Loan which incurred a
Realized Loss during the related Prepayment Period, (i) the loan
number, (ii) the Scheduled Principal Balance of
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such Mortgage Loan as of the Cut-off Date, (ii) the Scheduled Principal
Balance of such Mortgage Loan as of the beginning of the related Due
Period, (iii) the Net Liquidation Proceeds with respect to such
Mortgage Loan and (iv) the amount of the Realized Loss with respect to
such Mortgage Loan;
(xi) with respect to each Loan Group, the amount of Scheduled
Principal and Principal Prepayments, (including but separately
identifying the principal amount of Principal Prepayments, Insurance
Proceeds, the purchase price in connection with the purchase of
Mortgage Loans, cash deposits in connection with substitutions of
Mortgage Loans and Net Liquidation Proceeds) and the number and
principal balance of Mortgage Loans purchased or substituted for during
the relevant period and cumulatively since the Cut- off Date;
(xii) the number of Mortgage Loans (excluding REO Property) in
each Loan Group remaining in the Trust Fund as of the end of the
related Prepayment Period;
(xiii) information for each Loan Group and in the aggregate
regarding any Mortgage Loan delinquencies as of the end of the related
Prepayment Period, including the aggregate number and aggregate
Outstanding Principal Balance of Mortgage Loans (a) delinquent 30 to 59
days on a contractual basis, (b) delinquent 60 to 89 days on a
contractual basis, and (c) delinquent 90 or more days on a contractual
basis, in each case as of the close of business on the last Business
Day of the immediately preceding month;
(xiv) for each Loan Group, the number of Mortgage Loans in the
foreclosure process as of the end of the related Due Period and the
aggregate Outstanding Principal Balance of such Mortgage Loans;
(xv) for each Loan Group, the number and aggregate Outstanding
Principal Balance of all Mortgage Loans as to which the Mortgaged
Property was REO Property as of the end of the related Due Period;
(xvi) the book value (the sum of (A) the Outstanding Principal
Balance of the Mortgage Loan, (B) accrued interest through the date of
foreclosure and (C) foreclosure expenses) of any REO Property in each
Loan Group; provided that, in the event that such information is not
available to the Securities Administrator on the Distribution Date,
such information shall be furnished promptly after it becomes
available;
(xvii) the amount of Realized Losses allocated to each Class
of Certificates since the prior Distribution Date and in the aggregate
for all prior Distribution Dates; and
(xviii) the Average Loss Severity Percentage for each Loan
Group;
(xix) the then applicable Group 1, Group 2, Group 3, Group 4,
Group 5 and Group 6 Senior Percentage, Group 1, Group 2, Group 3, Group
4, Group 5 and Group 6 Senior Prepayment Percentage, the Group 1, Group
2, Group 3, Group 4, Group 5 and Group 6
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Subordinate Prepayment Percentage and the Group 1, Group 2, Group 3,
Group 4, Group 5 and Group 6 Subordinate Percentage.
The information set forth above shall be calculated or reported, as the
case may be, by the Securities Administrator, based solely on, and to the extent
of, information provided to the Securities Administrator by the Master Servicer.
The Securities Administrator may conclusively rely on such information and shall
not be required to confirm, verify or recalculate any such information.
The Securities Administrator may make available each month, to any
interested party , the monthly statement to Certificateholders via the
Securities Administrator's website initially located at "xxx.xxxxxxx.xxx."
Assistance in using the website can be obtained by calling the Securities
Administrator's customer service desk at (000) 000-0000. Parties that are unable
to use the above distribution option are entitled to have a paper copy mailed to
them via first class mail by calling the Securities Administrator's customer
service desk and indicating such. The Securities Administrator shall have the
right to change the way such reports are distributed in order to make such
distribution more convenient and/or more accessible to the parties, and the
Securities Administrator shall provide timely and adequate notification to all
parties regarding any such change.
To the extent timely received from the Securities Administrator, the
Trustee will also make monthly statements available each month to
Certificateholders via the Trustee's internet website. The Trustee's internet
website will initially be located at xxx.xxxxxxxx.xxx/xxx. Assistance in using
the Trustee's website service can be obtained by calling the Trustee's customer
service desk at (000) 000-0000.
(b) By April 30 of each year beginning in 2004, the Trustee will
furnish such report to each Holder of the Certificates of record at any time
during the prior calendar year as to the aggregate of amounts reported pursuant
to subclauses (a)(ii) and (a)(v) above with respect to the Certificates, plus
information with respect to the amount of servicing compensation and such other
customary information as the Securities Administrator may determine and advises
the Trustee to be necessary and/or to be required by the Internal Revenue
Service or by a federal or state law or rules or regulations to enable such
Holders to prepare their tax returns for such calendar year. Such obligations
shall be deemed to have been satisfied to the extent that substantially
comparable information shall be provided by the Securities Administrator or the
Trustee pursuant to the requirements of the Code.
Section 6.05 Monthly Advances. If the Scheduled Payment on a Mortgage
Loan that was due on a related Due Date is delinquent other than as a result of
application of the Relief Act and for which the related Servicer was required to
make an advance pursuant to the related Servicing Agreement exceeds the amount
deposited in the Master Servicer Collection Account which will be used for an
advance with respect to such Mortgage Loan, the Master Servicer will deposit in
the Master Servicer Collection Account not later than the Distribution Account
Deposit Date immediately preceding the related Distribution Date an amount equal
to such deficiency, net of the Servicing Fee for such Mortgage Loan except to
the extent the Master Servicer determines any such advance to be a
Nonrecoverable Advance. Subject to the foregoing, the Master Servicer shall
continue to make such advances through the date that the related Servicer is
required to do so under its Servicing Agreement. If the Master Servicer deems an
advance to be a Nonrecoverable Advance,
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on the Distribution Account Deposit Date, the Master Servicer shall present an
Officer's Certificate to the Trustee (i) stating that the Master Servicer elects
not to make a Monthly Advance in a stated amount and (ii) detailing the reason
it deems the advance to be a Nonrecoverable Advance.
Section 6.06 Compensating Interest Payments. The Master Servicer shall
deposit in the Master Servicer Collection Account not later than each
Distribution Account Deposit Date an amount equal to the lesser of (i) the sum
of the aggregate amounts required to be paid by the Servicers under the
Servicing Agreements with respect to subclauses (a) and (b) of the definition of
Interest Shortfall with respect to the Mortgage Loans for the related
Distribution Date, and not so paid by the related Servicers and (ii) the Master
Servicer Compensation for such Distribution Date (such amount, the "Compensating
Interest Payment"). The Master Servicer shall not be entitled to any
reimbursement of any Compensating Interest Payment.
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ARTICLE VII
The Master Servicer
Section 7.01 Liabilities of the Master Servicer. The Master Servicer
shall be liable in accordance herewith only to the extent of the obligations
specifically imposed upon and undertaken by it herein.
Section 7.02 Merger or Consolidation of the Master Servicer.
(a) The Master Servicer will keep in full force and effect its
existence, rights and franchises as a corporation under the laws of the state of
its incorporation, and will obtain and preserve its qualification to do business
as a foreign corporation in each jurisdiction in which such qualification is or
shall be necessary to protect the validity and enforceability of this Agreement,
the Certificates or any of the Mortgage Loans and to perform its duties under
this Agreement.
(b) Any Person into which the Master Servicer may be merged or
consolidated, or any corporation resulting from any merger or consolidation to
which the Master Servicer shall be a party, or any Person succeeding to the
business of the Master Servicer, shall be the successor of the Master Servicer
hereunder, without the execution or filing of any paper or further act on the
part of any of the parties hereto, anything herein to the contrary
notwithstanding.
Section 7.03 Indemnification of the Trustee, the Master Servicer and
the Securities Administrator. (a) The Master Servicer agrees to indemnify the
Indemnified Persons for, and to hold them harmless against, any loss, liability
or expense (including reasonable legal fees and disbursements of counsel)
incurred on their part that may be sustained in connection with, arising out of,
or relating to, any claim or legal action (including any pending or threatened
claim or legal action) relating to this Agreement, the Servicing Agreements, the
Assignment Agreements or the Certificates or the powers of attorney delivered by
the Trustee hereunder (i) related to the Master Servicer's failure to perform
its duties in compliance with this Agreement (except as any such loss, liability
or expense shall be otherwise reimbursable pursuant to this Agreement) or (ii)
incurred by reason of the Master Servicer's willful misfeasance, bad faith or
gross negligence in the performance of duties hereunder or by reason of reckless
disregard of obligations and duties hereunder, provided, in each case, that with
respect to any such claim or legal action (or pending or threatened claim or
legal action), the Trustee shall have given the Master Servicer and the Seller
written notice thereof promptly after the Trustee shall have with respect to
such claim or legal action knowledge thereof. The Master Servicer's failure to
receive any such notice shall not affect the Trustee's right to indemnification
hereunder, except to the extent the Master Servicer is materially prejudiced by
such failure to give notice. This indemnity shall survive the resignation or
removal of the Trustee, Master Servicer or the Securities Administrator and the
termination of this Agreement.
(b) The Seller will indemnify any Indemnified Person for any loss,
liability or expense of any Indemnified Person not otherwise covered by the
Master Servicer's indemnification pursuant to Subsection (a) above.
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Section 7.04 Limitations on Liability of the Master Servicer and
Others. Subject to the obligation of the Master Servicer to indemnify the
Indemnified Persons pursuant to Section 7.03:
(a) Neither the Master Servicer nor any of the directors, officers,
employees or agents of the Master Servicer shall be under any liability to the
Indemnified Persons, the Seller, the Trust Fund or the Certificateholders for
taking any action or for refraining from taking any action in good faith
pursuant to this Agreement, or for errors in judgment; provided, however, that
this provision shall not protect the Master Servicer or any such Person against
any breach of warranties or representations made herein or any liability which
would otherwise be imposed by reason of such Person's willful misfeasance, bad
faith or gross negligence in the performance of duties or by reason of reckless
disregard of obligations and duties hereunder.
(b) The Master Servicer and any director, officer, employee or agent of
the Master Servicer may rely in good faith on any document of any kind prima
facie properly executed and submitted by any Person respecting any matters
arising hereunder.
(c) The Master Servicer, the Custodian and any director, officer,
employee or agent of the Master Servicer or the Custodian shall be indemnified
by the Trust and held harmless thereby against any loss, liability or expense
(including reasonable legal fees and disbursements of counsel) incurred on their
part that may be sustained in connection with, arising out of, or related to,
any claim or legal action (including any pending or threatened claim or legal
action) relating to this Agreement, the Certificates or any Servicing Agreement
(except to the extent that the Master Servicer is indemnified by the Servicer
thereunder), other than (i) any such loss, liability or expense related to the
Master Servicer's failure to perform its duties in compliance with this
Agreement (except as any such loss, liability or expense shall be otherwise
reimbursable pursuant to this Agreement), or to the Custodian's failure to
perform its duties under the Custodial Agreement, respectively, or (ii) any such
loss, liability or expense incurred by reason of the Master Servicer's or the
Custodian's willful misfeasance, bad faith or gross negligence in the
performance of duties hereunder or under the Custodial Agreement, as applicable,
or by reason of reckless disregard of obligations and duties hereunder or under
the Custodial Agreement, as applicable.
(d) The Master Servicer shall not be under any obligation to appear in,
prosecute or defend any legal action that is not incidental to its duties under
this Agreement and that in its opinion may involve it in any expense or
liability; provided, however, the Master Servicer may in its discretion, with
the consent of the Trustee (which consent shall not be unreasonably withheld),
undertake any such action which it may deem necessary or desirable with respect
to this Agreement and the rights and duties of the parties hereto and the
interests of the Certificateholders hereunder. In such event, the legal expenses
and costs of such action and any liability resulting therefrom shall be
expenses, costs and liabilities of the Trust Fund, and the Master Servicer shall
be entitled to be reimbursed therefor out of the Master Servicer Collection
Account as provided by Section 4.03. Nothing in this Subsection 7.04(d) shall
affect the Master Servicer's obligation to supervise, or to take such actions as
are necessary to ensure, the servicing and administration of the Mortgage Loans
pursuant to Subsection 3.01(a).
(e) In taking or recommending any course of action pursuant to this
Agreement, unless specifically required to do so pursuant to this Agreement, the
Master Servicer shall not be required
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to investigate or make recommendations concerning potential liabilities which
the Trust might incur as a result of such course of action by reason of the
condition of the Mortgaged Properties but shall give notice to the Trustee if it
has notice of such potential liabilities.
(f) The Master Servicer shall not be liable for any acts or omissions
of any Servicer, except as otherwise expressly provided herein.
Section 7.05 Master Servicer Not to Resign. Except as provided in
Section 7.07, the Master Servicer shall not resign from the obligations and
duties hereby imposed on it except upon a determination that any such duties
hereunder are no longer permissible under applicable law and such
impermissibility cannot be cured. Any such determination permitting the
resignation of the Master Servicer shall be evidenced by an Opinion of
Independent Counsel addressed to the Trustee to such effect delivered to the
Trustee. No such resignation by the Master Servicer shall become effective until
EMC or the Trustee or a successor to the Master Servicer reasonably satisfactory
to the Trustee shall have assumed the responsibilities and obligations of the
Master Servicer in accordance with Section 8.02 hereof. The Trustee shall notify
the Rating Agencies of the resignation of the Master Servicer.
Section 7.06 Successor Master Servicer. In connection with the
appointment of any successor master servicer or the assumption of the duties of
the Master Servicer, EMC or the Trustee may make such arrangements for the
compensation of such successor master servicer out of payments on the Mortgage
Loans as EMC or the Trustee and such successor master servicer shall agree. If
the successor master servicer does not agree that such market value is a fair
price, such successor master servicer shall obtain two quotations of market
value from third parties actively engaged in the servicing of single-family
mortgage loans. Notwithstanding the foregoing, the compensation payable to a
successor master servicer may not exceed the compensation which the Master
Servicer would have been entitled to retain if the Master Servicer had continued
to act as Master Servicer hereunder.
Section 7.07 Sale and Assignment of Master Servicing. The Master
Servicer may sell and assign its rights and delegate its duties and obligations
in its entirety as Master Servicer under this Agreement and EMC may terminate
the Master Servicer without cause and select a new Master Servicer; provided,
however, that: (i) the purchaser or transferee accepting such assignment and
delegation (a) shall be a Person which shall be qualified to service mortgage
loans for Xxxxxx Xxx or Xxxxxxx Mac; (b) shall have a net worth of not less than
$10,000,000 (unless otherwise approved by each Rating Agency pursuant to clause
(ii) below); (c) shall be reasonably satisfactory to the Trustee (as evidenced
in a writing signed by the Trustee); and (d) shall execute and deliver to the
Trustee an agreement, in form and substance reasonably satisfactory to the
Trustee, which contains an assumption by such Person of the due and punctual
performance and observance of each covenant and condition to be performed or
observed by it as master servicer under this Agreement, any custodial agreement
from and after the effective date of such agreement; (ii) each Rating Agency
shall be given prior written notice of the identity of the proposed successor to
the Master Servicer and each Rating Agency's rating of the Certificates in
effect immediately prior to such assignment, sale and delegation will not be
downgraded, qualified or withdrawn as a result of such assignment, sale and
delegation, as evidenced by a letter to such effect delivered to the Master
Servicer and the Trustee; (iii) the Master Servicer assigning and selling the
master servicing shall deliver to the
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Trustee an Officer's Certificate and an Opinion of Independent Counsel addressed
to the Trustee, each stating that all conditions precedent to such action under
this Agreement have been completed and such action is permitted by and complies
with the terms of this Agreement; and (iv) in the event the Master Servicer is
terminated without cause by EMC, EMC shall pay the terminated Master Servicer a
termination fee equal to 0.25% of the aggregate Scheduled Principal Balance of
the Mortgage Loans at the time the master servicing of the Mortgage Loans is
transferred to the successor Master Servicer. No such assignment or delegation
shall affect any liability of the Master Servicer arising prior to the effective
date thereof.
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ARTICLE VIII
Default
Section 8.01 Events of Default. "Event of Default," wherever used
herein, means any one of the following events (whatever the reason for such
Event of Default and whether it shall be voluntary or involuntary or be effected
by operation of law or pursuant to any judgment, decree or order of any court or
any order, rule or regulation of any administrative or governmental body) and
only with respect to the defaulting Master Servicer:
(i) The Master Servicer fails to cause to be deposited in the
Distribution Account any amount so required to be deposited pursuant to
this Agreement (other than a Monthly Advance), and such failure
continues unremedied for a period of three Business Days after the date
upon which written notice of such failure, requiring the same to be
remedied, shall have been given to the Master Servicer; or
(ii) The Master Servicer fails to observe or perform in any
material respect any other material covenants and agreements set forth
in this Agreement to be performed by it, which covenants and agreements
materially affect the rights of Certificateholders, and such failure
continues unremedied for a period of 60 days after the date on which
written notice of such failure, properly requiring the same to be
remedied, shall have been given to the Master Servicer by the Trustee
or to the Master Servicer and the Trustee by the Holders of
Certificates evidencing Fractional Undivided Interests aggregating not
less than 25% of the Trust Fund; or
(iii) There is entered against the Master Servicer a decree or
order by a court or agency or supervisory authority having jurisdiction
in the premises for the appointment of a conservator, receiver or
liquidator in any insolvency, readjustment of debt, marshaling of
assets and liabilities or similar proceedings, or for the winding up or
liquidation of its affairs, and the continuance of any such decree or
order is unstayed and in effect for a period of 60 consecutive days, or
an involuntary case is commenced against the Master Servicer under any
applicable insolvency or reorganization statute and the petition is not
dismissed within 60 days after the commencement of the case; or
(iv) The Master Servicer consents to the appointment of a
conservator or receiver or liquidator in any insolvency, readjustment
of debt, marshaling of assets and liabilities or similar proceedings of
or relating to the Master Servicer or substantially all of its
property; or the Master Servicer admits in writing its inability to pay
its debts generally as they become due, files a petition to take
advantage of any applicable insolvency or reorganization statute, makes
an assignment for the benefit of its creditors, or voluntarily suspends
payment of its obligations;
(v) The Master Servicer assigns or delegates its duties or
rights under this Agreement in contravention of the provisions
permitting such assignment or delegation under Sections 7.05 or 7.07;
or
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(vi) The Master Servicer fails to deposit, or cause to be
deposited, in the Distribution Account any Monthly Advance (other than
a Nonrecoverable Advance) by 5:00 p.m. New York City time on the
Distribution Account Deposit Date.
In each and every such case, so long as such Event of Default with respect to
the Master Servicer shall not have been remedied, either the Trustee or the
Holders of Certificates evidencing Fractional Undivided Interests aggregating
not less than 51% of the principal of the Trust Fund, by notice in writing to
the Master Servicer (and to the Trustee if given by such Certificateholders),
with a copy to the Rating Agencies, and with the consent of EMC, may terminate
all of the rights and obligations (but not the liabilities) of the Master
Servicer under this Agreement and in and to the Mortgage Loans and/or the REO
Property serviced by the Master Servicer and the proceeds thereof. Upon the
receipt by the Master Servicer of the written notice, all authority and power of
the Master Servicer under this Agreement, whether with respect to the
Certificates, the Mortgage Loans, REO Property or under any other related
agreements (but only to the extent that such other agreements relate to the
Mortgage Loans or related REO Property) shall, subject to Section 8.02,
automatically and without further action pass to and be vested in the Trustee
pursuant to this Section 8.01; and, without limitation, the Trustee is hereby
authorized and empowered to execute and deliver, on behalf of the Master
Servicer as attorney-in-fact or otherwise, any and all documents and other
instruments and to do or accomplish all other acts or things necessary or
appropriate to effect the purposes of such notice of termination, whether to
complete the transfer and endorsement or assignment of the Mortgage Loans and
related documents, or otherwise. The Master Servicer agrees to cooperate with
the Trustee in effecting the termination of the Master Servicer's rights and
obligations hereunder, including, without limitation, the transfer to the
Trustee of (i) the property and amounts which are then or should be part of the
Trust or which thereafter become part of the Trust; and (ii) originals or copies
of all documents of the Master Servicer reasonably requested by the Trustee to
enable it to assume the Master Servicer's duties thereunder. In addition to any
other amounts which are then, or, notwithstanding the termination of its
activities under this Agreement, may become payable to the Master Servicer under
this Agreement, the Master Servicer shall be entitled to receive, out of any
amount received on account of a Mortgage Loan or related REO Property, that
portion of such payments which it would have received as reimbursement under
this Agreement if notice of termination had not been given. The termination of
the rights and obligations of the Master Servicer shall not affect any
obligations incurred by the Master Servicer prior to such termination.
Notwithstanding the foregoing, if an Event of Default described in
clause (vi) of this Section 8.01 shall occur, the Trustee shall, by notice in
writing to the Master Servicer, which may be delivered by telecopy, immediately
terminate all of the rights and obligations of the Master Servicer thereafter
arising under this Agreement, but without prejudice to any rights it may have as
a Certificateholder or to reimbursement of Monthly Advances and other advances
of its own funds, and the Trustee shall act as provided in Section 8.02 to carry
out the duties of the Master Servicer, including the obligation to make any
Monthly Advance the nonpayment of which was an Event of Default described in
clause (vi) of this Section 8.01. Any such action taken by the Trustee must be
prior to the distribution on the relevant Distribution Date.
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Section 8.02 Trustee to Act; Appointment of Successor. (a) Upon the
receipt by the Master Servicer of a notice of termination pursuant to Section
8.01 or an Opinion of Independent Counsel pursuant to Section 7.05 to the effect
that the Master Servicer is legally unable to act or to delegate its duties to a
Person which is legally able to act, the Trustee shall automatically become the
successor in all respects to the Master Servicer in its capacity under this
Agreement and the transactions set forth or provided for herein and shall
thereafter be subject to all the responsibilities, duties, liabilities and
limitations on liabilities relating thereto placed on the Master Servicer by the
terms and provisions hereof; provided, however, that EMC shall have the right to
either (a) immediately assume the duties of the Master Servicer or (b) select a
successor Master Servicer; provided further, however, that the Trustee shall
have no obligation whatsoever with respect to any liability (other than advances
deemed recoverable and not previously made) incurred by the Master Servicer at
or prior to the time of termination. As compensation therefor, but subject to
Section 7.06, the Trustee shall be entitled to compensation which the Master
Servicer would have been entitled to retain if the Master Servicer had continued
to act hereunder, except for those amounts due the Master Servicer as
reimbursement permitted under this Agreement for advances previously made or
expenses previously incurred. Notwithstanding the above, the Trustee may, if it
shall be unwilling so to act, or shall, if it is legally unable so to act,
appoint or petition a court of competent jurisdiction to appoint, any
established housing and home finance institution which is a Xxxxxx Mae- or
Xxxxxxx Mac-approved servicer, and with respect to a successor to the Master
Servicer only, having a net worth of not less than $10,000,000, as the successor
to the Master Servicer hereunder in the assumption of all or any part of the
responsibilities, duties or liabilities of the Master Servicer hereunder;
provided, that the Trustee shall obtain a letter from each Rating Agency that
the ratings, if any, on each of the Certificates will not be lowered as a result
of the selection of the successor to the Master Servicer. Pending appointment of
a successor to the Master Servicer hereunder, the Trustee shall act in such
capacity as hereinabove provided. In connection with such appointment and
assumption, the Trustee may make such arrangements for the compensation of such
successor out of payments on the Mortgage Loans as it and such successor shall
agree; provided, however, that the provisions of Section 7.06 shall apply, the
compensation shall not be in excess of that which the Master Servicer would have
been entitled to if the Master Servicer had continued to act hereunder, and that
such successor shall undertake and assume the obligations of the Trustee to pay
compensation to any third Person acting as an agent or independent contractor in
the performance of master servicing responsibilities hereunder. The Trustee and
such successor shall take such action, consistent with this Agreement, as shall
be necessary to effectuate any such succession.
(b) If the Trustee shall succeed to any duties of the Master Servicer
respecting the Mortgage Loans as provided herein, it shall do so in a separate
capacity and not in its capacity as Trustee and, accordingly, the provisions of
Article IX shall be inapplicable to the Trustee in its duties as the successor
to the Master Servicer in the servicing of the Mortgage Loans (although such
provisions shall continue to apply to the Trustee in its capacity as Trustee);
the provisions of Article VII, however, shall apply to it in its capacity as
successor master servicer.
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Section 8.03 Notification to Certificateholders. Upon any termination
or appointment of a successor to the Master Servicer, the Trustee shall give
prompt written notice thereof to Certificateholders at their respective
addresses appearing in the Certificate Register and to the Rating Agencies.
Section 8.04 Waiver of Defaults. The Trustee shall transmit by mail to
all Certificateholders, within 60 days after the occurrence of any Event of
Default actually known to a Responsible Officer of the Trustee, unless such
Event of Default shall have been cured, notice of each such Event of Default.
The Holders of Certificates evidencing Fractional Undivided Interests
aggregating not less than 51% of the Trust Fund may, on behalf of all
Certificateholders, waive any default by the Master Servicer in the performance
of its obligations hereunder and the consequences thereof, except a default in
the making of or the causing to be made any required distribution on the
Certificates, which default may only be waived by Holders of Certificates
evidencing Fractional Undivided Interests aggregating 100% of the Trust Fund.
Upon any such waiver of a past default, such default shall be deemed to cease to
exist, and any Event of Default arising therefrom shall be deemed to have been
timely remedied for every purpose of this Agreement. No such waiver shall extend
to any subsequent or other default or impair any right consequent thereon except
to the extent expressly so waived. The Trustee shall give notice of any such
waiver to the Rating Agencies.
Section 8.05 List of Certificateholders. Upon written request of three
or more Certificateholders of record, for purposes of communicating with other
Certificateholders with respect to their rights under this Agreement, the
Trustee will afford such Certificateholders access during business hours to the
most recent list of Certificateholders held by the Trustee.
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ARTICLE IX
Concerning the Trustee and the Securities Administrator
Section 9.01 Duties of Trustee. (a) The Trustee, prior to the
occurrence of an Event of Default and after the curing or waiver of all Events
of Default which may have occurred, and the Securities Administrator each
undertake to perform such duties and only such duties as are specifically set
forth in this Agreement as duties of the Trustee and the Securities
Administrator, respectively. If an Event of Default has occurred and has not
been cured or waived, the Trustee shall exercise such of the rights and powers
vested in it by this Agreement, and subject to Section 8.02(b) use the same
degree of care and skill in their exercise, as a prudent person would exercise
under the circumstances in the conduct of his own affairs.
(b) Upon receipt of all resolutions, certificates, statements,
opinions, reports, documents, orders or other instruments which are specifically
required to be furnished to the Trustee and the Securities Administrator
pursuant to any provision of this Agreement, the Trustee and the Securities
Administrator, respectively, shall examine them to determine whether they are in
the form required by this Agreement; provided, however, that neither the Trustee
nor the Securities Administrator shall be responsible for the accuracy or
content of any resolution, certificate, statement, opinion, report, document,
order or other instrument furnished hereunder; provided, further, that neither
the Trustee nor the Securities Administrator shall be responsible for the
accuracy or verification of any calculation provided to it pursuant to this
Agreement.
(c) On each Distribution Date, the Trustee shall make monthly
distributions and the final distribution to the Certificateholders from funds in
the Distribution Account as provided in Sections 6.01 and 10.01 herein based
solely on the report of the Securities Administrator.
(d) No provision of this Agreement shall be construed to relieve the
Trustee or the Securities Administrator from liability for its own negligent
action, its own negligent failure to act or its own willful misconduct;
provided, however, that:
(i) Prior to the occurrence of an Event of Default, and after
the curing or waiver of all such Events of Default which may have
occurred, the duties and obligations of the Trustee and the Securities
Administrator shall be determined solely by the express provisions of
this Agreement, neither the Trustee nor the Securities Administrator
shall be liable except for the performance of their respective duties
and obligations as are specifically set forth in this Agreement, no
implied covenants or obligations shall be read into this Agreement
against the Trustee or the Securities Administrator and, in the absence
of bad faith on the part of the Trustee or the Securities
Administrator, respectively, the Trustee or the Securities
Administrator, respectively, may conclusively rely, as to the truth of
the statements and the correctness of the opinions expressed therein,
upon any certificates or opinions furnished to the Trustee or the
Securities Administrator, respectively, and conforming to the
requirements of this Agreement;
(ii) Neither the Trustee nor the Securities Administrator
shall be liable in its individual capacity for an error of judgment
made in good faith by a Responsible Officer or
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Responsible Officers of the Trustee or an officer of the Securities
Administrator, respectively, unless it shall be proved that the Trustee
or the Securities Administrator, respectively, was negligent in
ascertaining the pertinent facts;
(iii) Neither the Trustee nor the Securities Administrator
shall be liable with respect to any action taken, suffered or omitted
to be taken by it in good faith in accordance with the directions of
the Holders of Certificates evidencing Fractional Undivided Interests
aggregating not less than 25% of the Trust Fund, if such action or
non-action relates to the time, method and place of conducting any
proceeding for any remedy available to the Trustee or the Securities
Administrator, respectively, or exercising any trust or other power
conferred upon the Trustee or the Securities Administrator,
respectively, under this Agreement;
(iv) The Trustee shall not be required to take notice or be
deemed to have notice or knowledge of any default or Event of Default
unless a Responsible Officer of the Trustee's Corporate Trust Office
shall have actual knowledge thereof. In the absence of such notice, the
Trustee may conclusively assume there is no such default or Event of
Default;
(v) The Trustee shall not in any way be liable by reason of
any insufficiency in any Account held by or in the name of Trustee
unless it is determined by a court of competent jurisdiction that the
Trustee's gross negligence or willful misconduct was the primary cause
of such insufficiency (except to the extent that the Trustee is obligor
and has defaulted thereon);
(vi) Anything in this Agreement to the contrary
notwithstanding, in no event shall the Trustee or the Securities
Administrator be liable for special, indirect or consequential loss or
damage of any kind whatsoever (including but not limited to lost
profits), even if the Trustee or the Securities Administrator,
respectively, has been advised of the likelihood of such loss or damage
and regardless of the form of action; and
(vii) None of the Securities Administrator, the Seller, EMC or
the Trustee shall be responsible for the acts or omissions of the
other, it being understood that this Agreement shall not be construed
to render them partners, joint venturers or agents of one another; and
(viii) Neither the Trustee nor the Securities Administrator
shall be required to expend or risk its own funds or otherwise incur
financial liability in the performance of any of its duties hereunder,
or in the exercise of any of its rights or powers, if there is
reasonable ground for believing that the repayment of such funds or
adequate indemnity against such risk or liability is not reasonably
assured to it, and none of the provisions contained in this Agreement
shall in any event require the Trustee or the Securities Administrator
to perform, or be responsible for the manner of performance of, any of
the obligations of the Master Servicer under the Agreement, except
during such time, if any, as the Trustee shall be the successor to, and
be vested with the rights, duties, powers and privileges of, the Master
Servicer in accordance with the terms of this Agreement.
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(e) All funds received by the Master Servicer and the Trustee and
required to be deposited in the Master Servicer Collection Account or
Distribution Account pursuant to this Agreement will be promptly so deposited by
the Master Servicer and the Trustee.
(f) Except for those actions that the Trustee or the Securities
Administrator is required to take hereunder, neither the Trustee nor the
Securities Administrator shall have any obligation or liability to take any
action or to refrain from taking any action hereunder in the absence of written
direction as provided hereunder.
Section 9.02 Certain Matters Affecting the Trustee and the Securities
Administrator. Except as otherwise provided in Section 9.01:
(i) The Trustee and the Securities Administrator may rely and
shall be protected in acting or refraining from acting in reliance on
any resolution, certificate of a Seller, Master Servicer or Servicer,
certificate of auditors or any other certificate, statement,
instrument, opinion, report, notice, request, consent, order,
appraisal, bond or other paper or document believed by it to be genuine
and to have been signed or presented by the proper party or parties;
(ii) The Trustee and the Securities Administrator may consult
with counsel and any advice of such counsel or any Opinion of Counsel
shall be full and complete authorization and protection with respect to
any action taken or suffered or omitted by it hereunder in good faith
and in accordance with such advice or Opinion of Counsel:
(iii) Neither the Trustee nor the Securities Administrator
shall be under any obligation to exercise any of the trusts or powers
vested in it by this Agreement, other than its obligation to give
notices pursuant to this Agreement, or to institute, conduct or defend
any litigation hereunder or in relation hereto at the request, order or
direction of any of the Certificateholders pursuant to the provisions
of this Agreement, unless such Certificateholders shall have offered to
the Trustee reasonable security or indemnity against the costs,
expenses and liabilities which may be incurred therein or thereby.
Nothing contained herein shall, however, relieve the Trustee of the
obligation, upon the occurrence of an Event of Default of which a
Responsible Officer of the Trustee's Corporate Trust Office has actual
knowledge (which has not been cured or waived), subject to Section
8.02(b), to exercise such of the rights and powers vested in it by this
Agreement pursuant to the terms and conditions with respect thereto set
forth in this Agreement, and to use the same degree of care and skill
in their exercise, as a prudent person would exercise under the
circumstances in the conduct of his own affairs;
(iv) Prior to the occurrence of an Event of Default hereunder
and after the curing or waiver of all Events of Default which may have
occurred, neither the Trustee nor the Securities Administrator shall be
liable in its individual capacity for any action taken, suffered or
omitted by it in good faith and believed by it to be authorized or
within the discretion or rights or powers conferred upon it by this
Agreement;
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(v) Neither the Trustee nor the Securities Administrator shall
be bound to make any investigation into the facts or matters stated in
any resolution, certificate, statement, instrument, opinion, report,
notice, request, consent, order, approval, bond or other paper or
document, unless requested in writing to do so by Holders of
Certificates evidencing Fractional Undivided Interests aggregating not
less than 25% of the Trust Fund and provided that the payment within a
reasonable time to the Trustee or the Securities Administrator, as
applicable, of the costs, expenses or liabilities likely to be incurred
by it in the making of such investigation is, in the opinion of the
Trustee or the Securities Administrator, as applicable, reasonably
assured to the Trustee or the Securities Administrator, as applicable,
by the security afforded to it by the terms of this Agreement. The
Trustee or the Securities Administrator may require reasonable
indemnity against such expense or liability as a condition to taking
any such action. The reasonable expense of every such examination shall
be paid by the Certificateholders requesting the investigation;
(vi) The Trustee and the Securities Administrator may execute
any of the trusts or powers hereunder or perform any duties hereunder
either directly or through Affiliates, agents or attorneys; provided,
however, that the Trustee may not appoint any agent to perform its
custodial functions with respect to the Mortgage Files or paying agent
functions under this Agreement without the express written consent of
the Master Servicer, which consent will not be unreasonably withheld.
Neither the Trustee nor the Securities Administrator shall be liable or
responsible for the misconduct or negligence of any of the Trustee's or
the Securities Administrator's agents or attorneys or a custodian or
paying agent appointed hereunder by the Trustee or the Securities
Administrator with due care and, when required, with the consent of the
Master Servicer;
(vii) Should the Trustee or the Securities Administrator deem
the nature of any action required on its part, other than a payment or
transfer under Subsection 4.01(b) or Section 4.02, to be unclear, the
Trustee or the Securities Administrator, respectively, may require
prior to such action that it be provided by the Seller with reasonable
further instructions;
(viii) The right of the Trustee or the Securities
Administrator to perform any discretionary act enumerated in this
Agreement shall not be construed as a duty, and neither the Trustee nor
the Securities Administrator shall be accountable for other than its
negligence or willful misconduct in the performance of any such act;
(ix) Neither the Trustee nor the Securities Administrator
shall be required to give any bond or surety with respect to the
execution of the trust created hereby or the powers granted hereunder,
except as provided in Subsection 9.07; and
(x) Neither the Trustee nor the Securities Administrator shall
have any duty to conduct any affirmative investigation as to the
occurrence of any condition requiring the repurchase of any Mortgage
Loan by the Mortgage Loan Seller pursuant to the Mortgage Loan Purchase
Agreement or this Agreement, as applicable, or the eligibility of any
Mortgage Loan for purposes of this Agreement.
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Section 9.03 Trustee and Securities Administrator Not Liable for
Certificates or Mortgage Loans. The recitals contained herein and in the
Certificates (other than the signature and countersignature of the Trustee on
the Certificates) shall be taken as the statements of the Seller, and neither
the Trustee nor the Securities Administrator shall have any responsibility for
their correctness. Neither the Trustee nor the Securities Administrator makes
any representation as to the validity or sufficiency of the Certificates (other
than the signature and countersignature of the Trustee on the Certificates) or
of any Mortgage Loan except as expressly provided in Sections 2.02 and 2.05
hereof; provided, however, that the foregoing shall not relieve the Trustee of
the obligation to review the Mortgage Files pursuant to Sections 2.02 and 2.04.
The Trustee's signature and countersignature (or countersignature of its agent)
on the Certificates shall be solely in its capacity as Trustee and shall not
constitute the Certificates an obligation of the Trustee in any other capacity.
Neither the Trustee or the Securities Administrator shall be accountable for the
use or application by the Seller of any of the Certificates or of the proceeds
of such Certificates, or for the use or application of any funds paid to the
Seller with respect to the Mortgage Loans. Subject to the provisions of Section
2.05, neither the Trustee nor the Securities Administrator shall not be
responsible for the legality or validity of this Agreement or any document or
instrument relating to this Agreement, the validity of the execution of this
Agreement or of any supplement hereto or instrument of further assurance, or the
validity, priority, perfection or sufficiency of the security for the
Certificates issued hereunder or intended to be issued hereunder. Neither the
Trustee nor the Securities Administrator shall at any time have any
responsibility or liability for or with respect to the legality, validity and
enforceability of any Mortgage or any Mortgage Loan, or the perfection and
priority of any Mortgage or the maintenance of any such perfection and priority,
or for or with respect to the sufficiency of the Trust Fund or its ability to
generate the payments to be distributed to Certificateholders, under this
Agreement. Neither the Trustee nor the Securities Administrator shall have any
responsibility for filing any financing or continuation statement in any public
office at any time or to otherwise perfect or maintain the perfection of any
security interest or lien granted to it hereunder or to record this Agreement.
Section 9.04 Trustee and Securities Administrator May Own Certificates.
The Trustee and the Securities Administrator in its individual capacity or in
any capacity other than as Trustee hereunder may become the owner or pledgee of
any Certificates with the same rights it would have if it were not Trustee or
the Securities Administrator, as applicable, and may otherwise deal with the
parties hereto.
Section 9.05 Trustee's and Securities Administrator's Fees and
Expenses. The fees and expenses of the Trustee and the Securities Administrator
shall be paid in accordance with a side letter agreement between the Trustee and
the Master Servicer. In addition, the Trustee and the Securities Administrator
will be entitled to recover from the Master Servicer Collection Account pursuant
to Section 4.03(b) all reasonable out-of-pocket expenses, disbursements and
advances and the expenses of the Trustee and the Securities Administrator,
respectively, in connection with any Event of Default, any breach of this
Agreement or any claim or legal action (including any pending or threatened
claim or legal action) incurred or made by the Trustee or the Securities
Administrator, respectively, in the administration of the trusts hereunder
(including the reasonable compensation, expenses and disbursements of its
counsel) except any such expense, disbursement or advance as may arise from its
negligence or intentional misconduct or which is the responsibility of the
Certificateholders. If funds in the Master Servicer Collection Account are
insufficient therefor, the
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Trustee and the Securities Administrator shall recover such expenses from the
Seller. Such compensation and reimbursement obligation shall not be limited by
any provision of law in regard to the compensation of a trustee of an express
trust.
Section 9.06 Eligibility Requirements for Trustee and Securities
Administrator. The Trustee and any successor Trustee and the Securities
Administrator and any successor Securities Administrator shall during the entire
duration of this Agreement be a state bank or trust company or a national
banking association organized and doing business under the laws of such state or
the United States of America, authorized under such laws to exercise corporate
trust powers, having a combined capital and surplus and undivided profits of at
least $40,000,000 or, in the case of a successor Trustee, $50,000,000, subject
to supervision or examination by federal or state authority and, in the case of
the Trustee, rated "BBB" or higher by S&P with respect to their long-term rating
and rated "BBB" or higher by S&P and "Baa2" or higher by Moody's with respect to
any outstanding long-term unsecured unsubordinated debt, and, in the case of a
successor Trustee or successor Securities Administrator other than pursuant to
Section 9.10, rated in one of the two highest long-term debt categories of, or
otherwise acceptable to, each of the Rating Agencies. If the Trustee publishes
reports of condition at least annually, pursuant to law or to the requirements
of the aforesaid supervising or examining authority, then for the purposes of
this Section 9.06 the combined capital and surplus of such corporation shall be
deemed to be its total equity capital (combined capital and surplus) as set
forth in its most recent report of condition so published. In case at any time
the Trustee or the Securities Administrator shall cease to be eligible in
accordance with the provisions of this Section 9.06, the Trustee or the
Securities Administrator shall resign immediately in the manner and with the
effect specified in Section 9.08.
Section 9.07 Insurance. The Trustee and the Securities Administrator,
at their own expense, shall at all times maintain and keep in full force and
effect: (i) fidelity insurance, (ii) theft of documents insurance and (iii)
forgery insurance (which may be collectively satisfied by a "Financial
Institution Bond" and/or a "Bankers' Blanket Bond"). All such insurance shall be
in amounts, with standard coverage and subject to deductibles, as are customary
for insurance typically maintained by banks or their affiliates which act as
custodians for investor-owned mortgage pools. A certificate of an officer of the
Trustee or the Securities Administrator as to the Trustee's or the Securities
Administrator's, respectively, compliance with this Section 9.07 shall be
furnished to any Certificateholder upon reasonable written request.
Section 9.08 Resignation and Removal of the Trustee and Securities
Administrator. (a) The Trustee and the Securities Administrator may at any time
resign and be discharged from the Trust hereby created by giving written notice
thereof to the Seller and the Master Servicer, with a copy to the Rating
Agencies. Upon receiving such notice of resignation, the Seller shall promptly
appoint a successor Trustee or successor Securities Administrator, as
applicable, by written instrument, in triplicate, one copy of which instrument
shall be delivered to each of the resigning Trustee or Securities Administrator,
as applicable, the successor Trustee or Securities Administrator, as applicable.
If no successor Trustee or Securities Administrator shall have been so appointed
and have accepted appointment within 30 days after the giving of such notice of
resignation, the resigning Trustee or Securities Administrator may petition any
court of competent jurisdiction for the appointment of a successor Trustee or
Securities Administrator.
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(b) If at any time the Trustee or the Securities Administrator shall
cease to be eligible in accordance with the provisions of Section 9.06 and shall
fail to resign after written request therefor by the Seller or if at any time
the Trustee or the Securities Administrator shall become incapable of acting, or
shall be adjudged a bankrupt or insolvent, or a receiver of the Trustee or the
Securities Administrator, as applicable, or of its property shall be appointed,
or any public officer shall take charge or control of the Trustee or the
Securities Administrator, as applicable, or of its property or affairs for the
purpose of rehabilitation, conservation or liquidation, then the Seller shall
promptly remove the Trustee, or shall be entitled to remove the Securities
Administrator, as applicable, and appoint a successor Trustee or Securities
Administrator, as applicable, by written instrument, in triplicate, one copy of
which instrument shall be delivered to each of the Trustee or Securities
Administrator, as applicable, so removed, the successor Trustee or Securities
Administrator, as applicable.
(c) The Holders of Certificates evidencing Fractional Undivided
Interests aggregating not less than 51% of the Trust Fund may at any time remove
the Trustee or the Securities Administrator and appoint a successor Trustee or
Securities Administrator by written instrument or instruments, in quadruplicate,
signed by such Holders or their attorneys-in-fact duly authorized, one complete
set of which instruments shall be delivered to the Seller, the Master Servicer,
the Securities Administrator (if the Trustee is removed), the Trustee (if the
Securities Administrator is removed), and the Trustee or Securities
Administrator so removed and the successor so appointed. In the event that the
Trustee or Securities Administrator is removed by the Holders of Certificates in
accordance with this Section 9.08(c), the Holders of such Certificates shall be
responsible for paying any compensation payable to a successor Trustee or
successor Securities Administrator, in excess of the amount paid to the
predecessor Trustee or predecessor Securities Administrator, as applicable.
(d) No resignation or removal of the Trustee or the Securities
Administrator and appointment of a successor Trustee or Securities Administrator
pursuant to any of the provisions of this Section 9.08 shall become effective
except upon appointment of and acceptance of such appointment by the successor
Trustee or Securities Administrator as provided in Section 9.09.
Section 9.09 Successor Trustee and Successor Securities Administrator.
(a) Any successor Trustee or Securities Administrator appointed as provided in
Section 9.08 shall execute, acknowledge and deliver to the Seller and to its
predecessor Trustee or Securities Administrator an instrument accepting such
appointment hereunder. The resignation or removal of the predecessor Trustee or
Securities Administrator shall then become effective and such successor Trustee
or Securities Administrator, without any further act, deed or conveyance, shall
become fully vested with all the rights, powers, duties and obligations of its
predecessor hereunder, with like effect as if originally named as Trustee or
Securities Administrator herein. The predecessor Trustee or Securities
Administrator shall after payment of its outstanding fees and expenses promptly
deliver to the successor Trustee or Securities Administrator, as applicable, all
assets and records of the Trust held by it hereunder, and the Seller and the
predecessor Trustee or Securities Administrator, as applicable, shall execute
and deliver such instruments and do such other things as may reasonably be
required for more fully and certainly vesting and confirming in the successor
Trustee or Securities Administrator, as applicable, all such rights, powers,
duties and obligations.
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(b) No successor Trustee or Securities Administrator shall accept
appointment as provided in this Section 9.09 unless at the time of such
acceptance such successor Trustee or Securities Administrator shall be eligible
under the provisions of Section 9.06.
(c) Upon acceptance of appointment by a successor Trustee or Securities
Administrator as provided in this Section 9.09, the successor Trustee or
Securities Administrator shall mail notice of the succession of such Trustee or
Securities Administrator hereunder to all Certificateholders at their addresses
as shown in the Certificate Register and to the Rating Agencies. EMC shall pay
the cost of any mailing by the successor Trustee or Securities Administrator.
Section 9.10 Merger or Consolidation of Trustee or Securities
Administrator. Any state bank or trust company or national banking association
into which the Trustee or the Securities Administrator may be merged or
converted or with which it may be consolidated or any state bank or trust
company or national banking association resulting from any merger, conversion or
consolidation to which the Trustee or the Securities Administrator,
respectively, shall be a party, or any state bank or trust company or national
banking association succeeding to all or substantially all of the corporate
trust business of the Trustee or the Securities Administrator, respectively,
shall be the successor of the Trustee or the Securities Administrator,
respectively, hereunder, provided such state bank or trust company or national
banking association shall be eligible under the provisions of Section 9.06. Such
succession shall be valid without the execution or filing of any paper or any
further act on the part of any of the parties hereto, anything herein to the
contrary notwithstanding.
Section 9.11 Appointment of Co-Trustee or Separate Trustee. (a)
Notwithstanding any other provisions hereof, at any time, for the purpose of
meeting any legal requirements of any jurisdiction in which any part of the
Trust or property constituting the same may at the time be located, the Seller
and the Trustee acting jointly shall have the power and shall execute and
deliver all instruments to appoint one or more Persons approved by the Trustee
and the Seller to act as co- trustee or co-trustees, jointly with the Trustee,
or separate trustee or separate trustees, of all or any part of the Trust, and
to vest in such Person or Persons, in such capacity, such title to the Trust, or
any part thereof, and, subject to the other provisions of this Section 9.11,
such powers, duties, obligations, rights and trusts as the Seller and the
Trustee may consider necessary or desirable.
(b) If the Seller shall not have joined in such appointment within 15
days after the receipt by it of a written request so to do, the Trustee shall
have the power to make such appointment without the Seller.
(c) No co-trustee or separate trustee hereunder shall be required to
meet the terms of eligibility as a successor Trustee under Section 9.06
hereunder and no notice to Certificateholders of the appointment of
co-trustee(s) or separate trustee(s) shall be required under Section 9.08
hereof.
(d) In the case of any appointment of a co-trustee or separate trustee
pursuant to this Section 9.11, all rights, powers, duties and obligations
conferred or imposed upon the Trustee and required to be conferred on such
co-trustee shall be conferred or imposed upon and exercised or performed by the
Trustee and such separate trustee or co-trustee jointly, except to the extent
that under any law of any jurisdiction in which any particular act or acts are
to be performed (whether as Trustee hereunder or as successor to the Master
Servicer hereunder), the Trustee shall be
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incompetent or unqualified to perform such act or acts, in which event such
rights, powers, duties and obligations (including the holding of title to the
Trust or any portion thereof in any such jurisdiction) shall be exercised and
performed by such separate trustee or co-trustee at the direction of the
Trustee.
(e) Any notice, request or other writing given to the Trustee shall be
deemed to have been given to each of the then separate trustees and co-trustees,
as effectively as if given to each of them. Every instrument appointing any
separate trustee or co-trustee shall refer to this Agreement and the conditions
of this Article IX. Each separate trustee and co-trustee, upon its acceptance of
the trusts conferred, shall be vested with the estates or property specified in
its instrument of appointment, either jointly with the Trustee or separately, as
may be provided therein, subject to all the provisions of this Agreement,
specifically including every provision of this Agreement relating to the conduct
of, affecting the liability of, or affording protection to, the Trustee. Every
such instrument shall be filed with the Trustee.
(f) To the extent not prohibited by law, any separate trustee or
co-trustee may, at any time, request the Trustee, its agent or attorney-in-fact,
with full power and authority, to do any lawful act under or with respect to
this Agreement on its behalf and in its name. If any separate trustee or
co-trustee shall die, become incapable of acting, resign or be removed, all of
its estates, properties rights, remedies and trusts shall vest in and be
exercised by the Trustee, to the extent permitted by law, without the
appointment of a new or successor Trustee.
(g) No trustee under this Agreement shall be personally liable by
reason of any act or omission of another trustee under this Agreement. The
Seller and the Trustee acting jointly may at any time accept the resignation of
or remove any separate trustee or co-trustee.
Section 9.12 Federal Information Returns and Reports to
Certificateholders; REMIC Administration; Grantor Trust Administration. (a) For
federal income tax purposes, the taxable year of each REMIC shall be a calendar
year and the Securities Administrator shall maintain or cause the maintenance of
the books of each such REMIC on the accrual method of accounting.
(b) The Securities Administrator shall prepare and file or cause to be
filed with the Internal Revenue Service, and the Trustee shall sign, Federal tax
information returns or elections required to be made hereunder with respect to
each REMIC, the Trust Fund, if applicable, and the Certificates containing such
information and at the times and in the manner as may be required by the Code or
applicable Treasury regulations, and shall furnish to each Holder of
Certificates at any time during the calendar year for which such returns or
reports are made such statements or information at the times and in the manner
as may be required thereby, including, without limitation, reports relating to
interest, original issue discount and market discount or premium (using a
constant prepayment assumption of 25% CPR). The Securities Administrator will
apply for an Employee Identification Number from the IRS under Form SS-4 or any
other acceptable method for all tax entities. In connection with the foregoing,
the Securities Administrator shall timely prepare and file, and the Trustee
shall sign, IRS Form 8811, which shall provide the name and address of the
person who can be contacted to obtain information required to be reported to the
holders of regular interests in each REMIC (the "REMIC Reporting Agent"). The
Trustee shall make elections to treat each REMIC (which elections shall apply to
the taxable period ending December 31, 2003 and each
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calendar year thereafter) in such manner as the Code or applicable Treasury
regulations may prescribe, and as described by the Securities Administrator. The
Trustee shall sign all tax information returns filed pursuant to this Section
and any other returns as may be required by the Code. The Holder of the Class
R-I Certificate is hereby designated as the "Tax Matters Person" (within the
meaning of Treas. Reg. ss.ss.1.860F-4(d)) for REMIC I, the Holder of the Class
R-II Certificate is hereby designated as the "Tax Matters Person" for REMIC II
and the Holder of the Class R-III Certificate is hereby designated as the "Tax
Matters Person" for REMIC III. The Securities Administrator is hereby designated
and appointed as the agent of each such Tax Matters Person. Any Holder of a
Residual Certificate will by acceptance thereof appoint the Securities
Administrator as agent and attorney-in-fact for the purpose of acting as Tax
Matters Person for each REMIC during such time as the Securities Administrator
does not own any such Residual Certificate. In the event that the Code or
applicable Treasury regulations prohibit the Trustee from signing tax or
information returns or other statements, or the Securities Administrator from
acting as agent for the Tax Matters Person, the Trustee and the Securities
Administrator shall take whatever action that in its sole good faith judgment is
necessary for the proper filing of such information returns or for the provision
of a tax matters person, including designation of the Holder of a Residual
Certificate to sign such returns or act as tax matters person. Each Holder of a
Residual Certificate shall be bound by this Section.
(c) The Securities Administrator shall provide upon request and receipt
of reasonable compensation, such information as required in Section
860D(a)(6)(B) of the Code to the Internal Revenue Service, to any Person
purporting to transfer a Residual Certificate to a Person other than a
transferee permitted by Section 5.05(b), and to any regulated investment
company, real estate investment trust, common trust fund, partnership, trust,
estate, organization described in Section 1381 of the Code, or nominee holding
an interest in a pass-through entity described in Section 860E(e)(6) of the
Code, any record holder of which is not a transferee permitted by Section
5.05(b) (or which is deemed by statute to be an entity with a disqualified
member).
(d) The Securities Administrator shall prepare and file or cause to be
filed, and the Trustee shall sign, any state income tax returns required under
Applicable State Law with respect to each REMIC or the Trust Fund.
(e) Notwithstanding any other provision of this Agreement, the Trustee
and the Securities Administrator shall comply with all federal withholding
requirements respecting payments to Certificateholders of interest or original
issue discount on the Mortgage Loans, that the Trustee or the Securities
Administrator reasonably believes are applicable under the Code. The consent of
Certificateholders shall not be required for such withholding. In the event the
Trustee or the Securities Administrator withholds any amount from interest or
original issue discount payments or advances thereof to any Certificateholder
pursuant to federal withholding requirements, the Trustee or the Securities
Administrator shall, together with its monthly report to such
Certificateholders, indicate such amount withheld.
(f) The Trustee and the Securities Administrator agree to indemnify the
Trust Fund and the Seller for any taxes and costs including, without limitation,
any reasonable attorneys fees imposed on or incurred by the Trust Fund, the
Seller or the Master Servicer, as a result of a breach of the Trustee's
covenants and the Securities Administrator's covenants, respectively, set forth
in
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this Section 9.12; provided, however, such liability and obligation to indemnify
in this paragraph shall not be joint and several and neither the Trustee nor the
Securities Administrator shall be liable or be obligated to indemnify the Trust
Fund for the failure by the other to perform any duty under this Agreement or
the breach by the other of any covenant in this Agreement.
(g) The Securities Administrator shall perform its obligations set
forth under Section 7.12 of the Grantor Trust Agreement regarding the
preparation and filing of tax returns for the Grantor Trust. The Securities
Administrator shall indemnify the Grantor Trust and the Seller for any taxes and
costs including, without limitation, any reasonable attorneys fees imposed on or
incurred by the Grantor Trust or the Seller as a result of a breach of the
Securities Administrator's obligations set forth under Section 7.12 of the
Grantor Trust Agreement.
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ARTICLE X
Termination
Xxxxxxx 00.00 Xxxxxxxxxxx Xxxx Xxxxxxxxxx by the Seller or its
Designee or Liquidation of the Mortgage Loans.
(a) Subject to Section 10.02, the respective obligations and
responsibilities of the Seller, the Trustee, the Master Servicer and the
Securities Administrator created hereby, other than the obligation of the
Trustee to make payments to Certificateholders as hereinafter set forth shall
terminate upon:
(i) the repurchase by or at the direction of the Seller or its
designee of all Mortgage Loans and all related REO Property remaining
in the Trust at a price (the "Termination Purchase Price") equal to the
sum of (a) 100% of the Outstanding Principal Balance of each Mortgage
Loan (other than a Mortgage Loan related to REO Property) as of the
date of repurchase, net of the principal portion of any unreimbursed
Monthly Advances made by the purchaser, together with interest at the
applicable Mortgage Interest Rate accrued but unpaid to, but not
including, the first day of the month of repurchase, (b) the appraised
value of any related REO Property, less the good faith estimate of the
Seller of liquidation expenses to be incurred in connection with its
disposal thereof (but not more than the Outstanding Principal Balance
of the related Mortgage Loan, together with interest at the applicable
Mortgage Interest Rate accrued on that balance but unpaid to, but not
including, the first day of the month of repurchase), such appraisal to
be calculated by an appraiser mutually agreed upon by the Seller and
the Trustee at the expense of the Seller, (c) unreimbursed out-of
pocket costs of the Master Servicer, including unreimbursed servicing
advances and the principal portion of any unreimbursed Monthly
Advances, made on the Mortgage Loans prior to the exercise of such
repurchase right and (d) any unreimbursed costs and expenses of the
Trustee and the Securities Administrator payable pursuant to Section
9.05; or
(ii) the later of the making of the final payment or other
liquidation, or any advance with respect thereto, of the last Mortgage
Loan remaining in the Trust Fund or the disposition of all property
acquired with respect to any Mortgage Loan; provided, however, that in
the event that an advance has been made, but not yet recovered, at the
time of such termination, the Person having made such advance shall be
entitled to receive, notwithstanding such termination, any payments
received subsequent thereto with respect to which such advance was
made; or
(iii) the payment to Certificateholders of all amounts
required to be paid to them pursuant to this Agreement.
(b) In no event, however, shall the Trust created hereby continue
beyond the expiration of 21 years from the death of the last survivor of the
descendants of Xxxxxx X. Xxxxxxx, the late Ambassador of the United States to
the Court of St. James's, living on the date of this Agreement.
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(c) The right of the Seller or its designee to repurchase all the
assets of the Trust Fund described in Subsection 10.01(a)(i) above shall be
exercisable only if (i) the aggregate Scheduled Principal Balance of the
Mortgage Loans at the time of any such repurchase is less than 10% of the
Cut-off Date Balance or (ii) the Seller, based upon an Opinion of Counsel, has
determined that the REMIC status of REMIC I, REMIC II or REMIC III has been lost
or that a substantial risk exists that such REMIC status will be lost for the
then-current taxable year. At any time thereafter, in the case of (i) or (ii)
above, the Seller may elect to terminate the REMIC I, REMIC II or REMIC III at
any time, and upon such election, the Seller or its designee, shall repurchase
all the assets of the Trust Fund described in Subsection 10.01(a)(i) above .
(d) The Trustee shall give notice of any termination to the
Certificateholders, with a copy to the Master Servicer, the Securities
Administrator and the Rating Agencies, upon which the Certificateholders shall
surrender their Certificates to the Trustee for payment of the final
distribution and cancellation. Such notice shall be given by letter, mailed not
earlier than the l5th day and not later than the 25th day of the month next
preceding the month of such final distribution, and shall specify (i) the
Distribution Date upon which final payment of the Certificates will be made upon
presentation and surrender of the Certificates at the office of the Trustee
therein designated, (ii) the amount of any such final payment and (iii) that the
Record Date otherwise applicable to such Distribution Date is not applicable,
payments being made only upon presentation and surrender of the Certificates at
the office of the Trustee therein specified.
(e) If the option of the Seller to repurchase or cause the repurchase
of all assets of the Trust Fund described in Subsection 10.01(a)(i) above is
exercised, the Seller and/or its designee shall deliver to the Trustee for
deposit in the Distribution Account, by the Business Day prior to the applicable
Distribution Date, an amount equal to the Termination Purchase Price for the
Mortgage Loans being purchased by it and all property acquired with respect to
such Mortgage Loans remaining in REMIC I, REMIC II and REMIC III. Upon
presentation and surrender of the Certificates by the Certificateholders, the
Trustee shall distribute to the Certificateholders as directed by the Securities
Administrator in writing an amount determined as follows: with respect to each
Certificate (other than the Class R Certificates), the outstanding Current
Principal Amount, plus with respect to each Certificate (other than the Class R
Certificates), one month's interest thereon at the applicable Pass-Through Rate;
and with respect to the Class R Certificates, the percentage interest evidenced
thereby multiplied by the difference, if any, between the above described
Termination Purchase Price and the aggregate amount to be distributed to the
Holders of the Certificates (other than the Class R Certificates). If the
proceeds with respect to the Mortgage Loans are not sufficient to pay all of the
Senior Certificates in full, any such deficiency will be allocated first, to the
Subordinate Certificates, in inverse order of their numerical designation, and
then to the Senior Certificates on a pro rata basis. Upon deposit of the
Termination Purchase Price and following such final Distribution Date, the
Trustee shall release promptly to the Seller and/or its designee the Mortgage
Files for the remaining applicable Mortgage Loans, and the Accounts with respect
thereto shall terminate, subject to the Trustee's obligation to hold any amounts
payable to Certificateholders in trust without interest pending final
distributions pursuant to Subsection 10.01(g). Any other amounts remaining in
the Accounts will belong to the Seller.
(f) In the event that this Agreement is terminated by reason of the
payment or liquidation of all Mortgage Loans or the disposition of all property
acquired with respect to all Mortgage Loans
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under Subsection 10.01(a)(ii) above, the Master Servicer shall deliver to the
Trustee for deposit in the Distribution Account all distributable amounts
remaining in the Master Servicer Collection Account. Upon the presentation and
surrender of the Certificates, the Trustee shall distribute to the remaining
Certificateholders, pursuant to the written direction of the Securities
Administrator and in accordance with their respective interests, all
distributable amounts remaining in the Distribution Account. Upon deposit by the
Master Servicer of such distributable amounts, and following such final
Distribution Date, the Trustee shall release promptly to the Seller or its
designee the Mortgage Files for the remaining Mortgage Loans, and the Master
Servicer Collection Account and the Distribution Account shall terminate,
subject to the Trustee's obligation to hold any amounts payable to the
Certificateholders in trust without interest pending final distributions
pursuant to this Subsection 10.01(f).
(g) If not all of the Certificateholders shall surrender their
Certificates for cancellation within six months after the time specified in the
above-mentioned written notice, the Trustee shall give a second written notice
to the remaining Certificateholders to surrender their Certificates for
cancellation and receive the final distribution with respect thereto. If within
six months after the second notice, not all the Certificates shall have been
surrendered for cancellation, the Trustee may take appropriate steps, or appoint
any agent to take appropriate steps, to contact the remaining Certificateholders
concerning surrender of their Certificates, and the cost thereof shall be paid
out of the funds and other assets which remain subject to this Agreement.
Section 10.02 Additional Termination Requirements. (a) If the option of
the Seller to repurchase all the Mortgage Loans under Subsection 10.01(a)(i)
above is exercised, the Trust Fund and each of REMIC I, REMIC II and REMIC III
shall be terminated in accordance with the following additional requirements,
unless the Trustee has been furnished with an Opinion of Counsel addressed to
the Trustee to the effect that the failure of the Trust to comply with the
requirements of this Section 10.02 will not (i) result in the imposition of
taxes on "prohibited transactions" as defined in Section 860F of the Code on
each of REMIC I, REMIC II and REMIC III or (ii) cause any REMIC to fail to
qualify as a REMIC at any time that any Regular Certificates are outstanding:
(i) within 90 days prior to the final Distribution Date, at
the written direction of the Seller, the Trustee, as agent for the
respective Tax Matters Persons, shall adopt a plan of complete
liquidation of REMIC I, REMIC II and REMIC III in the case of a
termination under Subsection 10.01(a)(i), or a plan of complete
liquidation of REMIC I in the case of a termination under Subsection
10.01(c), provided to it by the Seller meeting the requirements of a
"qualified liquidation" under Section 860F of the Code and any
regulations thereunder.
(ii) the Seller shall notify the Trustee at the commencement
of such 90-day liquidation period and, at or prior to the time of
making of the final payment on the Certificates, the Trustee shall sell
or otherwise dispose of all of the remaining assets of the Trust Fund
in accordance with the terms hereof; and
(iii) at or after the time of adoption of such a plan of
complete liquidation of any of REMIC I, REMIC II and REMIC III and at
or prior to the final Distribution Date, the Trustee shall sell for
cash all of the assets of the Trust to or at the direction of the
Seller, and REMIC I, REMIC II and REMIC III, as applicable, shall
terminate at such time.
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(b) By their acceptance of the Residual Certificates, the Holders
thereof hereby (i) agree to adopt such a plan of complete liquidation of the
related REMIC upon the written request of the Seller, and to take such action in
connection therewith as may be reasonably requested by the Seller and (ii)
appoint the Seller as their attorney-in-fact, with full power of substitution,
for purposes of adopting such a plan of complete liquidation. The Trustee shall
adopt such plan of liquidation by filing the appropriate statement on the final
tax return of each REMIC. Upon complete liquidation or final distribution of all
of the assets of the Trust Fund, the Trust Fund and each of REMIC I, REMIC II
and REMIC III shall terminate.
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ARTICLE XI
Miscellaneous Provisions
Section 11.01 Intent of Parties. The parties intend that each of REMIC
I, REMIC II and REMIC III shall be treated as a REMIC for federal income tax
purposes and that the provisions of this Agreement should be construed in
furtherance of this intent.
Section 11.02 Amendment. (a) This Agreement may be amended from time to
time by EMC, the Seller, the Master Servicer, the Securities Administrator and
the Trustee, without notice to or the consent of any of the Certificateholders,
to cure any ambiguity, to correct or supplement any provisions herein or therein
that may be defective or inconsistent with any other provisions herein or
therein, to comply with any changes in the Code or to make any other provisions
with respect to matters or questions arising under this Agreement which shall
not be inconsistent with the provisions of this Agreement; provided, however,
that such action shall not, as evidenced by an Opinion of Independent Counsel,
addressed to the Trustee, adversely affect in any material respect the interests
of any Certificateholder.
(b) This Agreement may also be amended from time to time by EMC, the
Master Servicer, the Seller, the Securities Administrator and the Trustee, with
the consent of the Holders of Certificates evidencing Fractional Undivided
Interests aggregating not less than 51% of the Trust Fund or of the applicable
Class or Classes, if such amendment affects only such Class or Classes, for the
purpose of adding any provisions to or changing in any manner or eliminating any
of the provisions of this Agreement or of modifying in any manner the rights of
the Certificateholders; provided, however, that no such amendment shall (i)
reduce in any manner the amount of, or delay the timing of, payments received on
Mortgage Loans which are required to be distributed on any Certificate without
the consent of the Holder of such Certificate, (ii) reduce the aforesaid
percentage of Certificates the Holders of which are required to consent to any
such amendment, without the consent of the Holders of all Certificates then
outstanding, or (iii) cause any REMIC to fail to qualify as a REMIC for federal
income tax purposes, as evidenced by an Opinion of Independent Counsel addressed
to the Trustee which shall be provided to the Trustee other than at the
Trustee's expense. Notwithstanding any other provision of this Agreement, for
purposes of the giving or withholding of consents pursuant to this Section
11.02(b), Certificates registered in the name of or held for the benefit of the
Seller, the Securities Administrator, the Master Servicer, or the Trustee or any
Affiliate thereof shall be entitled to vote their Fractional Undivided Interests
with respect to matters affecting such Certificates.
(c) Promptly after the execution of any such amendment, the Trustee
shall furnish a copy of such amendment or written notification of the substance
of such amendment to each Certificateholder, with a copy to the Rating Agencies.
(d) In the case of an amendment under Subsection 11.02(b) above, it
shall not be necessary for the Certificateholders to approve the particular form
of such an amendment. Rather, it shall be sufficient if the Certificateholders
approve the substance of the amendment. The manner of obtaining such consents
and of evidencing the authorization of the execution thereof by
Certificateholders shall be subject to such reasonable regulations as the
Trustee may prescribe.
-116-
(e) Prior to the execution of any amendment to this Agreement, the
Trustee shall be entitled to receive and rely upon an Opinion of Counsel
addressed to the Trustee stating that the execution of such amendment is
authorized or permitted by this Agreement. The Trustee and the Securities
Administrator may, but shall not be obligated to, enter into any such amendment
which affects the Trustee's or the Securities Administrator's own respective
rights, duties or immunities under this Agreement.
Section 11.03 Recordation of Agreement. To the extent permitted by
applicable law, this Agreement is subject to recordation in all appropriate
public offices for real property records in all the counties or other comparable
jurisdictions in which any or all of the Mortgaged Properties are situated, and
in any other appropriate public recording office or elsewhere. The Seller shall
effect such recordation, at the expense of the Trust upon the request in writing
of a Certificateholder, but only if such direction is accompanied by an Opinion
of Counsel (provided at the expense of the Certificateholder requesting
recordation) to the effect that such recordation would materially and
beneficially affect the interests of the Certificateholders or is required by
law.
Section 11.04 Limitation on Rights of Certificateholders. (a) The death
or incapacity of any Certificateholder shall not terminate this Agreement or the
Trust, nor entitle such Certificateholder's legal representatives or heirs to
claim an accounting or to take any action or proceeding in any court for a
partition or winding up of the Trust, nor otherwise affect the rights,
obligations and liabilities of the parties hereto or any of them.
(b) Except as expressly provided in this Agreement, no
Certificateholders shall have any right to vote or in any manner otherwise
control the operation and management of the Trust, or the obligations of the
parties hereto, nor shall anything herein set forth, or contained in the terms
of the Certificates, be construed so as to establish the Certificateholders from
time to time as partners or members of an association; nor shall any
Certificateholders be under any liability to any third Person by reason of any
action taken by the parties to this Agreement pursuant to any provision hereof.
(c) No Certificateholder shall have any right by virtue of any
provision of this Agreement to institute any suit, action or proceeding in
equity or at law upon, under or with respect to this Agreement against the
Seller, the Master Servicer, the Securities Administrator or any successor to
any such parties unless (i) such Certificateholder previously shall have given
to the Trustee a written notice of a continuing default, as herein provided,
(ii) the Holders of Certificates evidencing Fractional Undivided Interests
aggregating not less than 51% of the Trust Fund shall have made written request
upon the Trustee to institute such action, suit or proceeding in its own name as
Trustee hereunder and shall have offered to the Trustee such reasonable
indemnity as it may require against the costs and expenses and liabilities to be
incurred therein or thereby, and (iii) the Trustee, for 60 days after its
receipt of such notice, request and offer of indemnity, shall have neglected or
refused to institute any such action, suit or proceeding.
(d) No one or more Certificateholders shall have any right by virtue of
any provision of this Agreement to affect the rights of any other
Certificateholders or to obtain or seek to obtain priority or preference over
any other such Certificateholder, or to enforce any right under this Agreement,
except in the manner herein provided and for the equal, ratable and common
benefit of
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all Certificateholders. For the protection and enforcement of the provisions of
this Section 11.04, each and every Certificateholder and the Trustee shall be
entitled to such relief as can be given either at law or in equity.
Section 11.05 Acts of Certificateholders. (a) Any request, demand,
authorization, direction, notice, consent, waiver or other action provided by
this Agreement to be given or taken by Certificateholders may be embodied in and
evidenced by one or more instruments of substantially similar tenor signed by
such Certificateholders in person or by an agent duly appointed in writing.
Except as herein otherwise expressly provided, such action shall become
effective when such instrument or instruments are delivered to the Trustee and,
where it is expressly required, to the Seller. Proof of execution of any such
instrument or of a writing appointing any such agent shall be sufficient for any
purpose of this Agreement and conclusive in favor of the Trustee and the Seller,
if made in the manner provided in this Section 11.05.
(b) The fact and date of the execution by any Person of any such
instrument or writing may be proved by the affidavit of a witness of such
execution or by a certificate of a notary public or other officer authorized by
law to take acknowledgments of deeds, certifying that the individual signing
such instrument or writing acknowledged to him the execution thereof. Where such
execution is by a signer acting in a capacity other than his or her individual
capacity, such certificate or affidavit shall also constitute sufficient proof
of his or her authority. The fact and date of the execution of any such
instrument or writing, or the authority of the individual executing the same,
may also be proved in any other manner which the Trustee deems sufficient.
(c) The ownership of Certificates (notwithstanding any notation of
ownership or other writing on such Certificates, except an endorsement in
accordance with Section 5.02 made on a Certificate presented in accordance with
Section 5.04) shall be proved by the Certificate Register, and neither the
Trustee, the Securities Administrator, the Seller, the Master Servicer nor any
successor to any such parties shall be affected by any notice to the contrary.
(d) Any request, demand, authorization, direction, notice, consent,
waiver or other action of the holder of any Certificate shall bind every future
holder of the same Certificate and the holder of every Certificate issued upon
the registration of transfer or exchange thereof, if applicable, or in lieu
thereof with respect to anything done, omitted or suffered to be done by the
Trustee, the Securities Administrator, the Seller, the Master Servicer or any
successor to any such party in reliance thereon, whether or not notation of such
action is made upon such Certificates.
(e) In determining whether the Holders of the requisite percentage of
Certificates evidencing Fractional Undivided Interests have given any request,
demand, authorization, direction, notice, consent or waiver hereunder,
Certificates owned by the Trustee, the Securities Administrator, the Seller, the
Master Servicer or any Affiliate thereof shall be disregarded, except as
otherwise provided in Section 11.02(b) and except that, in determining whether
the Trustee shall be protected in relying upon any such request, demand,
authorization, direction, notice, consent or waiver, only Certificates which a
Responsible Officer of the Trustee actually knows to be so owned shall be so
disregarded. Certificates which have been pledged in good faith to the Trustee,
the Securities Administrator, the Seller, the Master Servicer or any Affiliate
thereof may be regarded as outstanding if the pledgor establishes to the
satisfaction of the Trustee the pledgor's right to act with respect to
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such Certificates and that the pledgor is not an Affiliate of the Trustee, the
Securities Administrator, the Seller, or the Master Servicer, as the case may
be.
Section 11.06 Governing Law. THIS AGREEMENT AND THE CERTIFICATES SHALL
BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT
REFERENCE TO ITS CONFLICT OF LAWS RULES (OTHER THAN SECTION 5- 1401 OF THE
GENERAL OBLIGATIONS LAW, WHICH THE PARTIES HERETO EXPRESSLY RELY UPON IN THE
CHOICE OF SUCH LAW AS THE GOVERNING LAW HEREUNDER) AND THE OBLIGATIONS, RIGHTS
AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH
SUCH LAWS.
Section 11.07 Notices. All demands and notices hereunder shall be in
writing and shall be deemed given when delivered at (including delivery by
facsimile) or mailed by registered mail, return receipt requested, postage
prepaid, or by recognized overnight courier, to (i) in the case of the Seller,
000 Xxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Vice
President-Servicing, telecopier number: (000) 000-0000, or to such other address
as may hereafter be furnished to the other parties hereto in writing; (ii) in
the case of the Trustee, at its Corporate Trust Office, or such other address as
may hereafter be furnished to the other parties hereto in writing; (iii) in the
case of the EMC, 000 Xxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Vice
President-Servicing, telecopier number: (000) 000-0000, or to such other address
as may hereafter be furnished to the other parties hereto in writing; (iv) in
the case of the Master Servicer or Securities Administrator, Xxxxx Fargo Bank
Minnesota, National Association, X.X. Xxx 00, Xxxxxxxx Xxxxxxxx 00000 (or, in
the case of overnight deliveries, 0000 Xxx Xxxxxxxxx Xxxx, Xxxxxxxx, Xxxxxxxx
00000) (Attention: BALTA 2003-3), facsimile no.: (000) 000-0000, or such other
address as may hereafter be furnished to the other parties hereto in writing; or
(v) in the case of the Rating Agencies, Xxxxx'x Investors Service, Inc., 00
Xxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, and S&P, a division of The XxXxxx-Xxxx
Companies, Inc., 00 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx, 00000. Any notice
delivered to the Seller, the Master Servicer, the Securities Administrator or
the Trustee under this Agreement shall be effective only upon receipt. Any
notice required or permitted to be mailed to a Certificateholder, unless
otherwise provided herein, shall be given by first-class mail, postage prepaid,
at the address of such Certificateholder as shown in the Certificate Register.
Any notice so mailed within the time prescribed in this Agreement shall be
conclusively presumed to have been duly given when mailed, whether or not the
Certificateholder receives such notice.
Section 11.08 Severability of Provisions. If any one or more of the
covenants, agreements, provisions or terms of this Agreement shall be for any
reason whatsoever held invalid, then such covenants, agreements, provisions or
terms shall be deemed severed from the remaining covenants, agreements,
provisions or terms of this Agreement and shall in no way affect the validity or
enforceability of the other provisions of this Agreement or of the Certificates
or the rights of the holders thereof.
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Section 11.09 Successors and Assigns. The provisions of this Agreement
shall be binding upon and inure to the benefit of the respective successors and
assigns of the parties hereto.
Section 11.10 Article and Section Headings. The article and section
headings herein are for convenience of reference only, and shall not limit or
otherwise affect the meaning hereof.
Section 11.11 Counterparts. This Agreement may be executed in two or
more counterparts each of which when so executed and delivered shall be an
original but all of which together shall constitute one and the same instrument.
Section 11.12 Notice to Rating Agencies. The article and section
headings herein are for convenience of reference only, and shall not limited or
otherwise affect the meaning hereof. The Trustee shall promptly provide notice
to each Rating Agency with respect to each of the following of which it has
actual knowledge:
(a) Any material change or amendment to this Agreement or the Servicing
Agreements;
(b) The occurrence of any Event of Default that has not been cured;
(c) The resignation or termination of the Master Servicer, the Trustee
or the Securities Administrator;
(d) The repurchase or substitution of Mortgage Loans;
(e) The final payment to Certificateholders; and
(f) Any change in the location of the Master Servicer Collection
Account or the Distribution Account.
-120-
IN WITNESS WHEREOF, the Seller, the Trustee, EMC and the Securities
Administrator have caused their names to be signed hereto by their respective
officers thereunto duly authorized as of the day and year first above written.
STRUCTURED ASSET MORTGAGE
INVESTMENTS INC., as Seller
By: /s/ Xxxxx Xxxxxxxxxxx
-------------------------------
Name: Xxxxx Xxxxxxxxxxx
Title: Vice President
JPMORGAN CHASE BANK, as Trustee
By: /s/ Xxxxxx Xxxxxx
-------------------------------
Name: Xxxxxx Xxxxxx
Title: Vice President
XXXXX FARGO BANK MINNESOTA,
NATIONAL ASSOCIATION, as Master
Servicer
By: /s/ Xxxxxx Xxxxxx
-------------------------------
Name: Xxxxxx Xxxxxx
Title: Assistant Vice President
XXXXX FARGO BANK MINNESOTA,
NATIONAL ASSOCIATION, as Securities
Administrator
By: /s/ Xxxxxx Xxxxxx
-------------------------------
Name: Xxxxxx Xxxxxx
Title: Assistant Vice President
EMC MORTGAGE CORPORATION
By: /s/ Xxxxxx Xxxxxxxxx
-------------------------------
Name: Xxxxxx Xxxxxxxxx
Title: Executive Vice President
Accepted and Agreed as to Sections 2.01, 2.02, 2.03, 2.04 and 9.09(c) in its
capacity as Mortgage Loan Seller
EMC MORTGAGE CORPORATION
By: /s/ Xxxxxx Xxxxxxxxx
-------------------------------
Name: Xxxxxx Xxxxxxxxx
Title: Executive Vice President
STATE OF NEW YORK )
) ss.:
COUNTY OF NEW YORK )
On the 30th day of September, 2003 before me, a notary public in and
for said State, personally appeared ____________________, known to me to be a
____________________ of Structured Asset Mortgage Investments Inc., the
corporation that executed the within instrument, and also known to me to be the
person who executed it on behalf of said corporation, and acknowledged to me
that such corporation executed the within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official
seal the day and year in this certificate first above written.
----------------------------------
Notary Public
[Notarial Seal]
STATE OF NEW YORK )
) ss.:
COUNTY OF NEW YORK )
On the 30th day of September, 2003 before me, a notary public in and
for said State, personally appeared Xxxxx Xxxxxxx, known to me to be an
Authorized Officer of JPMorgan Chase Bank, the entity that executed the within
instrument, and also known to me to be the person who executed it on behalf of
said entity, and acknowledged to me that such entity executed the within
instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official
seal the day and year in this certificate first above written.
----------------------------------
Notary Public
[Notarial Seal]
STATE OF MARYLAND )
) ss.:
COUNTY OF XXXXXX )
On the 30th day of September, 2003 before me, a notary public in and
for said State, personally appeared Xxxxxx Xxxxxx, known to me to be an
Assistant Vice President of Xxxxx Fargo Bank Minnesota, National Association,
the entity that executed the within instrument, and also known to me to be the
person who executed it on behalf of said entity, and acknowledged to me that
such entity executed the within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official
seal the day and year in this certificate first above written.
----------------------------------
Notary Public
[Notarial Seal]
STATE OF MARYLAND )
) ss.:
COUNTY OF XXXXXX )
On the 30th day of September, 2003 before me, a notary public in and
for said State, personally appeared Xxxxxx Xxxxxx, known to me to be an
Assistant Vice President of Xxxxx Fargo Bank Minnesota, National Association,
the entity that executed the within instrument, and also known to me to be the
person who executed it on behalf of said entity, and acknowledged to me that
such entity executed the within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official
seal the day and year in this certificate first above written.
----------------------------------
Notary Public
[Notarial Seal]
STATE OF TEXAS )
) ss.:
COUNTY OF DALLAS )
On the 30th day of September, 2003 before me, a notary public in and
for said State, personally appeared Xxxxxx Xxxxxxxxx, known to me to be an
Executive Vice President of EMC Mortgage Corporation, the corporation that
executed the within instrument, and also known to me to be the person who
executed it on behalf of said corporation, and acknowledged to me that such
corporation executed the within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official
seal the day and year in this certificate first above written.
----------------------------------
Notary Public
[Notarial Seal]
STATE OF TEXAS )
) ss.:
COUNTY OF DALLAS )
On the 30th day of September, 2003 before me, a notary public in and
for said State, personally appeared Xxxxxx Xxxxxxxxx, known to me to be an
Executive Vice President of EMC Mortgage Corporation, the corporation that
executed the within instrument, and also known to me to be the person who
executed it on behalf of said corporation, and acknowledged to me that such
corporation executed the within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official
seal the day and year in this certificate first above written.
----------------------------------
Notary Public
[Notarial Seal]
EXHIBIT A-1
FORM OF CLASS A AND CLASS X CERTIFICATE
SOLELY 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 (THE "CODE").
[THE CURRENT PRINCIPAL AMOUNT OF THIS CERTIFICATE WILL BE
DECREASED BY THE PRINCIPAL PAYMENTS HEREON [AND REALIZED LOSSES ALLOCABLE
HERETO]. ACCORDINGLY, FOLLOWING THE INITIAL ISSUANCE OF THE CERTIFICATES, THE
CURRENT PRINCIPAL AMOUNT OF THIS CERTIFICATE WILL BE DIFFERENT FROM THE
DENOMINATION SHOWN BELOW. ANYONE ACQUIRING THIS CERTIFICATE MAY ASCERTAIN ITS
CURRENT PRINCIPAL AMOUNT BY INQUIRY OF THE TRUSTEE NAMED HEREIN.]
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY TO THE TRUSTEE OR ITS AGENT FOR
REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED WILL
BE REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY AND ANY PAYMENT WILL
BE MADE TO CEDE & CO., ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL SINCE THE REGISTERED OWNER HEREOF,
CEDE & CO., HAS AN INTEREST HEREIN.
A-1
Certificate No.1 Variable Pass-Through Rate
Class [_-A] [_-X] Senior
Date of Pooling and Servicing Agreement and Aggregate Initial Current [Principal] [Notional]
Cut-off Date: Amount of this Senior Certificate as of the
September 1, 2003 Cut-off Date:
$[_____________]
First Distribution Date: Initial Current [Principal][Notional] Amount of
October 27, 2003 this Senior Certificate as of the Cut-off Date:
$[_____________]
Master Servicer:
Xxxxx Fargo Bank Minnesota, National
Association CUSIP: [____________]
Assumed Final Distribution Date:
October 25, 2033
BEAR XXXXXXX ALT-A TRUST 2003-3
MORTGAGE PASS-THROUGH CERTIFICATE
SERIES 2003-3
evidencing a fractional undivided interest in the distributions
allocable to the Class [_-A-][_-X] Certificates with respect to a Trust
Fund consisting primarily of a pool of adjustable rate mortgage loans
secured by first liens on one-to-four family residential properties
sold by STRUCTURED ASSET MORTGAGE INVESTMENTS INC.
This Certificate is payable solely from the assets of the
Trust Fund, and does not represent an obligation of or interest in Structured
Asset Mortgage Investments Inc., the Master Servicer or the Trustee referred to
below or any of their affiliates or any other person. Neither this Certificate
nor the underlying Mortgage Loans are guaranteed or insured by any governmental
entity or by Structured Asset Mortgage Investments Inc., the Master Servicer or
the Trustee or any of their affiliates or any other person. None of Structured
Asset Mortgage Investments Inc., the Master Servicer or any of their affiliates
will have any obligation with respect to any certificate or other obligation
secured by or payable from payments on the Certificates.
This certifies that Cede & Co. is the registered owner of the
Fractional Undivided Interest evidenced hereby in the beneficial ownership
interest of Certificates of the same Class as this Certificate in a trust (the
"Trust Fund") primarily consisting of adjustable rate mortgage loans secured by
first liens on one- to four- family residential properties (collectively, the
"Mortgage Loans") sold by Structured Asset Mortgage Investments Inc. ("SAMI").
The Mortgage Loans were
A-2
sold by EMC Mortgage Corporation ("EMC") to SAMI. Xxxxx Fargo Bank Minnesota,
National Association ("Xxxxx Fargo") will act as master servicer of the Mortgage
Loans (the "Master Servicer," which term includes any successors thereto under
the Agreement referred to below). The Trust Fund was created pursuant to the
Pooling and Servicing Agreement dated as of the Cut-off Date specified above
(the "Agreement"), among SAMI, as seller (the "Seller"), Xxxxx Fargo Bank
Minnesota, National Association as master servicer and securities administrator,
EMC Mortgage Corporation and JPMorgan Chase Bank, as trustee (the "Trustee"), a
summary of certain of the pertinent provisions of which is set forth hereafter.
To the extent not defined herein, capitalized terms used herein shall have the
meaning ascribed to them 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 its acceptance hereof
assents and by which such Holder is bound.
Interest on this Certificate will accrue during the month
prior to the month in which a Distribution Date (as hereinafter defined) occurs
on the Current Principal Amount hereof at a per annum rate equal to the
Pass-Through Rate set forth above and as further described in the Agreement. The
Trustee will distribute on the 25th day of each month, or, if such 25th day is
not a Business Day, the immediately following Business Day (each, a
"Distribution Date"), commencing on the First Distribution Date specified above,
to the Person in whose name this Certificate is registered at the close of
business on the Business Day immediately preceding the Distribution Date, an
amount equal to the product of the Fractional Undivided Interest evidenced by
this Certificate and the amount (of interest and principal, if any) required to
be distributed to the Holders of Certificates of the same Class as this
Certificate. The Assumed Final Distribution Date is the Distribution Date in the
month immediately following the month of the latest scheduled maturity date of
any Mortgage Loan and is not likely to be the date on which the
[Current][Initial Notional] [Principal] Amount of this Class of Certificates
will be reduced to zero.
Distributions on this Certificate will be made by the Trustee
by check mailed to the address of the Person entitled thereto as such name and
address shall appear on the Certificate Register or, if such Person so requests
by notifying the Trustee in writing as specified in the Agreement by wire
transfer. Notwithstanding the above, the final distribution on this Certificate
will be made after due notice by the Trustee of the pendency of such
distribution and only upon presentation and surrender of this Certificate at the
office or agency appointed by the Trustee for that purpose and designated in
such notice. The Initial [Current Principal][Notional] Amount of this
Certificate is set forth above. [The Current Principal Amount hereof will be
reduced to the extent of distributions allocable to principal hereon and any
Realized Losses allocable hereto.]
This Certificate is one of a duly authorized issue of
Certificates designated as set forth on the face hereof (the "Certificates"),
issued in eighteen Classes. The Certificates, in the aggregate, evidence the
entire beneficial ownership interest in the Trust Fund formed pursuant to the
Agreement.
The Certificateholder, by its acceptance of this Certificate,
agrees that it will look solely to the Trust Fund for payment hereunder and that
the Trustee 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.
A-3
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 hereby, and the rights,
duties and immunities of the Trustee.
The Agreement permits, with certain exceptions therein
provided, the amendment thereof and the modification of the rights and
obligations of the Seller, the Master Servicer and the Trustee and the rights of
the Certificateholders under the Agreement from time to time by EMC, the Seller,
the Master Servicer, the Securities Administrator and the Trustee, with the
consent of the Holders of Certificates, evidencing Fractional Undivided
Interests aggregating not less than 51% of the Trust Fund (or in certain cases,
Holders of Certificates of affected Classes evidencing such percentage of the
Fractional Undivided Interests thereof). 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 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
with the Trustee upon surrender of this Certificate for registration of transfer
at the offices or agencies maintained by the Trustee for such purposes, duly
endorsed by, or accompanied by a written instrument of transfer in form
satisfactory to the Trustee duly executed by the Holder hereof or such Holder's
attorney duly authorized in writing, and thereupon one or more new Certificates
in authorized denominations representing a like aggregate Fractional Undivided
Interest will be issued to the designated transferee.
The Certificates are issuable only as registered Certificates
without coupons in the Classes and denominations specified in the Agreement. As
provided in the Agreement and subject to certain limitations therein set forth,
this Certificate is exchangeable for one or more new Certificates evidencing the
same Class and in the same aggregate Fractional Undivided Interest, as requested
by the Holder surrendering the same.
No service charge will be made to the Certificateholders for
any such registration of transfer, but the Trustee may require payment of a sum
sufficient to cover any tax or other governmental charge payable in connection
therewith. The Seller, the Master Servicer, the Trustee and any agent of any of
them may treat the Person in whose name this Certificate is registered as the
owner hereof for all purposes, and none of the Seller, the Master Servicer, the
Trustee or any such agent shall be affected by notice to the contrary.
The obligations created by the Agreement and the Trust Fund
created thereby (other than the obligations to make payments to
Certificateholders with respect to the termination of the Agreement) shall
terminate upon the earlier of (i) the later of the (A) final payment or other
liquidation (or Advance with respect thereto) of the last Mortgage Loan
remaining in the Trust Fund and (B) disposition of all property acquired upon
foreclosure or deed in lieu of foreclosure of any Mortgage Loan and the
remittance of all funds due under the Agreement, or (ii) the optional repurchase
by the party named in the Agreement of all the Mortgage Loans and other assets
of the Trust Fund in accordance with the terms of the Agreement. Such optional
repurchase may be made only on or after the Distribution Date on which the
aggregate unpaid principal balance of the
A-4
Mortgage Loans is less than the percentage of the aggregate Outstanding
Principal Balance specified in the Agreement of the Mortgage Loans at the
Cut-off Date. The exercise of such right will effect the early retirement of the
Certificates. In no event, however, will the Trust Fund created by the Agreement
continue beyond the expiration of 21 years after the death of certain persons
identified in the Agreement.
Unless this Certificate has been countersigned by an
authorized signatory of the Trustee by manual signature, this Certificate shall
not be entitled to any benefit under the Agreement, or be valid for any purpose.
A-5
IN WITNESS WHEREOF, the Trustee has caused this Certificate to
be duly executed.
Dated: September ___, 2003 JPMORGAN CHASE BANK
Not in its individual capacity
but solely as Trustee
By:______________________________
Authorized Signatory
CERTIFICATE OF AUTHENTICATION
-----------------------------
This is one of the Class [_-A] [_-X] Certificates referred to
in the within-mentioned Agreement.
JPMORGAN CHASE BANK Authorized
signatory of JPMorgan Chase Bank,
not in its individual capacity
but solely as Trustee
By:______________________________
Authorized Signatory
A-6
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) a Fractional
Undivided Interest evidenced by the within Mortgage Pass-Through Certificate and
hereby authorizes the transfer of registration of such interest to assignee on
the Certificate Register of the Trust Fund.
I (We) further direct the Certificate Registrar 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
_____________________________________________
Signature Guaranteed
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 ______________________________. Applicable statements should be mailed
to _____________________________________________.
This information is provided by __________________, the
assignee named above, or ________________________, as its agent.
EXHIBIT A-2
FORM OF CLASS B CERTIFICATE
THIS CERTIFICATE IS SUBORDINATED IN RIGHT OF PAYMENT TO
THE SENIOR CERTIFICATES, [AND THE CLASS B-_ CERTIFICATES], AS DESCRIBED
IN THE AGREEMENT (AS DEFINED BELOW).
SOLELY 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 (THE "CODE").
THE CURRENT PRINCIPAL AMOUNT OF THIS CERTIFICATE WILL BE
DECREASED BY THE PRINCIPAL PAYMENTS HEREON AND ANY REALIZED LOSSES ALLOCABLE
HERETO. ACCORDINGLY, FOLLOWING THE INITIAL ISSUANCE OF THE CERTIFICATES, THE
CURRENT PRINCIPAL AMOUNT OF THIS CERTIFICATE WILL BE DIFFERENT FROM THE
DENOMINATION SHOWN BELOW. ANYONE ACQUIRING THIS CERTIFICATE MAY ASCERTAIN ITS
CURRENT PRINCIPAL AMOUNT BY INQUIRY OF THE TRUSTEE NAMED HEREIN.
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY TO THE TRUSTEE OR ITS AGENT FOR
REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, ANY CERTIFICATE ISSUED WILL BE
REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY AND ANY PAYMENT WILL
BE MADE TO CEDE & CO. ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL SINCE THE REGISTERED OWNER HEREOF,
CEDE & CO., HAS AN INTEREST HEREIN.
[FOR CLASS B-1, CLASS B-2 AND CLASS B-3:] [EACH BENEFICIAL
OWNER OF THIS CERTIFICATE OR ANY INTEREST HEREIN SHALL BE DEEMED TO HAVE
REPRESENTED, BY VIRTUE OF ITS ACQUISITION OR HOLDING OF THIS CERTIFICATE OR
INTEREST HEREIN, THAT EITHER (I) IT IS NOT AN EMPLOYEE BENEFIT PLAN SUBJECT TO
THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED OR SECTION 4975
OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED ("PLAN"), OR INVESTING WITH
ASSETS OF A PLAN OR (II) IT HAS ACQUIRED AND IS HOLDING SUCH CERTIFICATE IN
RELIANCE ON PROHIBITED TRANSACTION EXEMPTION 90-30, AS AMENDED FROM TIME TO TIME
("EXEMPTION"), AND THAT IT UNDERSTANDS THAT THERE ARE CERTAIN CONDITIONS TO THE
AVAILABILITY OF THE EXEMPTION, INCLUDING THAT THE CERTIFICATE MUST BE RATED, AT
THE TIME OF PURCHASE, NOT LOWER THAN "BBB-" (OR ITS EQUIVALENT) BY STANDARD &
POOR'S, FITCH, INC. OR MOODY'S
A-2-1
INVESTORS SERVICE, INC., AND THE CERTIFICATE IS SO RATED OR (III) (1) IT IS AN
INSURANCE COMPANY, (2) THE SOURCE OF FUNDS USED TO ACQUIRE OR HOLD THE
CERTIFICATE OR INTEREST HEREIN IS AN "INSURANCE COMPANY GENERAL ACCOUNT", AS
SUCH TERM IS DEFINED IN PROHIBITED TRANSACTION CLASS EXEMPTION ("PTCE") 95-60,
AND (3) THE CONDITIONS IN SECTIONS I AND III OF PTCE 95-60 HAVE BEEN SATISFIED.]
[FOR CLASS B-4, CLASS B-5 AND CLASS B-6] [THIS CERTIFICATE HAS NOT BEEN
AND WILL NOT BE REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
"SECURITIES ACT"), OR UNDER ANY STATE SECURITIES LAWS. THE HOLDER HEREOF, BY
PURCHASING THIS CERTIFICATE, AGREES THAT THIS CERTIFICATE MAY BE REOFFERED,
RESOLD, PLEDGED OR OTHERWISE TRANSFERRED ONLY IN COMPLIANCE WITH THE SECURITIES
ACT AND OTHER APPLICABLE LAWS AND ONLY (1) PURSUANT TO RULE 144A UNDER THE
SECURITIES ACT ("RULE 144A") TO A PERSON THAT THE HOLDER REASONABLY BELIEVES IS
A QUALIFIED INSTITUTIONAL BUYER WITHIN THE MEANING OF RULE 144A (A "QIB"),
PURCHASING FOR ITS OWN ACCOUNT OR A QIB PURCHASING FOR THE ACCOUNT OF A QIB,
WHOM THE HOLDER HAS INFORMED, IN EACH CASE, THAT THE REOFFER, RESALE, PLEDGE OR
OTHER TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A, (2) PURSUANT TO AN
EXEMPTION FROM REGISTRATION PROVIDED BY RULE 144 UNDER THE SECURITIES ACT (IF
AVAILABLE) OR (3) IN CERTIFICATED FORM TO AN "INSTITUTIONAL ACCREDITED INVESTOR"
WITHIN THE MEANING THEREOF IN RULE 501(A)(1), (2), (3) OR (7) OF REGULATION D
UNDER THE ACT OR ANY ENTITY IN WHICH ALL OF THE EQUITY OWNERS COME WITHIN SUCH
PARAGRAPHS PURCHASING NOT FOR DISTRIBUTION IN VIOLATION OF THE SECURITIES ACT,
SUBJECT TO (A) THE RECEIPT BY THE TRUSTEE OF A LETTER SUBSTANTIALLY IN THE FORM
PROVIDED IN THE AGREEMENT AND (B) THE RECEIPT BY THE TRUSTEE OF SUCH OTHER
EVIDENCE ACCEPTABLE TO THE TRUSTEE THAT SUCH REOFFER, RESALE, PLEDGE OR TRANSFER
IS IN COMPLIANCE WITH THE SECURITIES ACT AND OTHER APPLICABLE LAWS OR IN EACH
CASE IN ACCORDANCE WITH ALL APPLICABLE SECURITIES LAWS OF THE UNITED STATES AND
ANY OTHER APPLICABLE JURISDICTION.]
THIS CERTIFICATE MAY NOT BE ACQUIRED DIRECTLY OR INDIRECTLY BY, OR ON
BEHALF OF, AN EMPLOYEE BENEFIT PLAN OR OTHER RETIREMENT ARRANGEMENT WHICH IS
SUBJECT TO TITLE I OF THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS
AMENDED, OR SECTION 4975 OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED,
UNLESS THE TRANSFEREE CERTIFIES OR REPRESENTS THAT THE PROPOSED TRANSFER AND
HOLDING OF A CERTIFICATE AND THE SERVICING, MANAGEMENT AND OPERATION OF THE
TRUST AND ITS ASSETS: (I) WILL NOT RESULT IN ANY PROHIBITED TRANSACTION WHICH IS
NOT COVERED UNDER AN INDIVIDUAL OR CLASS PROHIBITED TRANSACTION EXEMPTION,
INCLUDING, BUT NOT LIMITED TO, PROHIBITED TRANSACTION EXEMPTION ("PTE") 84-14,
XXX 00-00, XXX 00-0, XXX 95-60 OR PTE 96-23 AND (II) WILL NOT GIVE RISE TO ANY
ADDITIONAL
A-2-2
OBLIGATIONS ON THE PART OF THE SELLER, THE SECURITIES ADMINISTRATOR, THE MASTER
SERVICER OR THE TRUSTEE, WHICH WILL BE DEEMED REPRESENTED BY AN OWNER OF A
BOOK-ENTRY CERTIFICATE OR A GLOBAL CERTIFICATE OR UNLESS THE OPINION SPECIFIED
IN SECTION 5.07 OF THE AGREEMENT IS PROVIDED.
THE CERTIFICATES ARE SUBJECT TO THE RESTRICTIONS IN SECTION 5.07
OF THE POOLING AND SERVICING AGREEMENT.
A-2-3
Certificate No.1 Variable Pass-Through Rate
Class [B-_] Subordinate
Date of Pooling and Servicing Agreement and Aggregate Initial Current Principal Amount of
Cut-off Date: September 1, 2003 this Subordinate Certificate as of the Cut-off
Date: $[_________]
First Distribution Date: Initial Current Principal Amount of this
October 27, 2003 Subordinate Certificate as of the Cut-off Date:
$[_________]
Master Servicer:
Xxxxx Fargo Bank Minnesota, National
Association CUSIP: [____________]
Assumed Final Distribution Date:
October 25, 2033
BEAR XXXXXXX ALT-A TRUST 2003-3
MORTGAGE PASS-THROUGH CERTIFICATE
SERIES 2003-3
evidencing a fractional undivided interest in the distributions
allocable to the Class [B-_] Certificates with respect to a Trust Fund
consisting primarily of a pool of adjustable rate mortgage loans
secured by first liens on one-to-four family residential properties and
individual condominium units sold by STRUCTURED ASSET MORTGAGE
INVESTMENTS INC.
This Certificate is payable solely from the assets of the
Trust Fund, and does not represent an obligation of or interest in Structured
Asset Mortgage Investments Inc., the Master Servicer or the Trustee referred to
below or any of their affiliates or any other person. Neither this Certificate
nor the underlying Mortgage Loans are guaranteed or insured by any governmental
entity or by Structured Asset Mortgage Investments Inc., the Master Servicer or
the Trustee or any of their affiliates or any other person. None of Structured
Asset Mortgage Investments Inc., the Master Servicer or any of their affiliates
will have any obligation with respect to any certificate or other obligation
secured by or payable from payments on the Certificates.
This certifies that Cede & Co. is the registered owner of the
Fractional Undivided Interest evidenced hereby in the beneficial ownership
interest of Certificates of the same Class as this Certificate in a trust (the
"Trust Fund") primarily consisting of adjustable rate mortgage loans secured by
first liens on one- to four- family residential properties (collectively, the
"Mortgage Loans") sold by Structured Asset Mortgage Investments Inc. ("SAMI").
The Mortgage Loans were sold by EMC Mortgage Corporation ("EMC") to SAMI. Xxxxx
Fargo Bank Minnesota, National
2
Association ("Xxxxx Fargo") will act as master servicer of the Mortgage Loans
(the "Master Servicer," which term includes any successors thereto under the
Agreement referred to below). The Trust Fund was created pursuant to the Pooling
and Servicing Agreement dated as of the Cut-off Date specified above (the
"Agreement"), among SAMI, as seller (the "Seller"), Xxxxx Fargo Bank Minnesota,
National Association as master servicer and securities administrator, EMC
Mortgage Corporation and JPMorgan Chase Bank, as trustee (the "Trustee") , a
summary of certain of the pertinent provisions of which is set forth hereafter.
To the extent not defined herein, capitalized terms used herein shall have the
meaning ascribed to them 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 its acceptance hereof
assents and by which such Holder is bound.
Interest on this Certificate will accrue during the month
prior to the month in which a Distribution Date (as hereinafter defined) occurs
on the Current Principal Amount hereof at a per annum rate equal to the
Pass-Through Rate set forth above and as further described in the Agreement. The
Trustee will distribute on the 25th day of each month, or, if such 25th day is
not a Business Day, the immediately following Business Day (each, a
"Distribution Date"), commencing on the First Distribution Date specified above,
to the Person in whose name this Certificate is registered at the close of
business on the last Business Day of the calendar month preceding the month of
such Distribution Date, an amount equal to the product of the Fractional
Undivided Interest evidenced by this Certificate and the amount (of interest and
principal, if any) required to be distributed to the Holders of Certificates of
the same Class as this Certificate. The Assumed Final Distribution Date is the
Distribution Date in the month immediately following the month of the latest
scheduled maturity date of any Mortgage Loan and is not likely to be the date on
which the Current Principal Amount of this Class of Certificates will be reduced
to zero.
Distributions on this Certificate will be made by the Trustee
by check mailed to the address of the Person entitled thereto as such name and
address shall appear on the Certificate Register or, if such Person so requests
by notifying the Trustee in writing as specified in the Agreement by wire
transfer. Notwithstanding the above, the final distribution on this Certificate
will be made after due notice by the Trustee of the pendency of such
distribution and only upon presentation and surrender of this Certificate at the
office or agency appointed by the Trustee for that purpose and designated in
such notice. The Initial Current Principal Amount of this Certificate is set
forth above. The Current Principal Amount hereof will be reduced to the extent
of distributions allocable to principal hereon and any Realized Losses allocable
hereto.
[No transfer of this Class [B-_] Certificate will be made unless such
transfer is (i) exempt from the registration requirements of the Securities act
of 1933, as amended, and any applicable state securities laws or is made in
accordance with said Act and laws and (ii) made in accordance with Section 5.02
of the Agreement. In the event that such transfer is to be made the Trustee
shall register such transfer if, (i) made to a transferee who has provided the
Trustee with evidence as to its QIB status; or (ii) (A) the transferor has
advised the Trustee in writing that the Certificate is being transferred to an
Institutional Accredited Investor and (B) prior to such transfer the transferee
furnishes to the Trustee an Investment Letter; provided that if based upon an
Opinion of Counsel to the effect that (A) and (B) above are met sufficient to
confirm that such transfer is being made
3
pursuant to an exemption from, or in a transaction not subject to, the
registration requirements of the Securities Act and other applicable laws.]
This Certificate may not be acquired directly or indirectly by, or on
behalf of, an employee benefit plan or other retirement arrangement which is
subject to Title I of the Employee Retirement Income Security Act of 1974, as
amended, or Section 4975 of the Internal Revenue Code of 1986, as amended,
unless the transferee certifies or represents that the proposed transfer and
holding of a Certificate and the servicing, management and operation of the
trust and its assets: (i) will not result in any prohibited transaction which is
not covered under an individual or class prohibited transaction exemption,
including, but not limited to, Prohibited Transaction Exemption ("PTE") 00-00,
XXX 00- 00, XXX 00-0, XXX 00-00 or PTE 96-23 and (ii) will not give rise to any
additional obligations on the part of the Seller, the Securities Administrator,
the Master Servicer or the Trustee, which will be deemed represented by an owner
of a Book-Entry Certificate or a Global Certificate or unless the opinion
specified in section 5.07 of the Agreement is provided.
The Certificates are subject to the restrictions in Section 5.07 of the
Pooling and Servicing Agreement.
This Certificate is one of a duly authorized issue of
Certificates designated as set forth on the face hereof (the "Certificates"),
issued in eighteen Classes. The Certificates, in the aggregate, evidence the
entire beneficial ownership interest in the Trust Fund formed pursuant to the
Agreement.
The Certificateholder, by its acceptance of this Certificate,
agrees that it will look solely to the Trust Fund for payment hereunder and that
the Trustee 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.
[For Class B-1, Class B-2 and Class B-3] [Each beneficial
owner of this Certificate or any interest herein shall be deemed to have
represented, by virtue of its acquisition or holding of this certificate or
interest herein, that either (i) it is not an employee benefit plan subject to
the Employee Retirement Income Security Act of 1974, as amended or section 4975
of the Internal Revenue Code of 1986, as amended ("Plan"), or investing with
assets of a Plan or (ii) it has acquired and is holding such certificate in
reliance on Prohibited Transaction Exemption 90-30, as amended from time to time
("Exemption"), and that it understands that there are certain conditions to the
availability of the Exemption, including that the certificate must be rated, at
the time of purchase, not lower than "BBB-" (or its equivalent) by Standard &
Poor's, Fitch, Inc. or Xxxxx'x Investors Service, Inc., and the certificate is
so rated or (iii) (1) it is an insurance company, (2) the source of funds used
to acquire or hold the certificate or interest therein is an "insurance company
general account", as such term is defined in Prohibited Transaction Class
Exemption ("PTCE") 95-60, and (3) the conditions in Sections I and III of PTCE
95-60 have been satisfied.]
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 hereby, and the rights,
duties and immunities of the Trustee.
4
The Agreement permits, with certain exceptions therein
provided, the amendment thereof and the modification of the rights and
obligations of the Seller, the Master Servicer and the Trustee and the rights of
the Certificateholders under the Agreement from time to time by EMC, the Seller,
the Master Servicer, the Securities Administrator and the Trustee, with the
consent of the Holders of Certificates, evidencing Fractional Undivided
Interests aggregating not less than 51% of the Trust Fund (or in certain cases,
Holders of Certificates of affected Classes evidencing such percentage of the
Fractional Undivided Interests thereof). 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 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
with the Trustee upon surrender of this Certificate for registration of transfer
at the offices or agencies maintained by the Trustee for such purposes, duly
endorsed by, or accompanied by a written instrument of transfer in form
satisfactory to the Trustee duly executed by the Holder hereof or such Holder's
attorney duly authorized in writing, and thereupon one or more new Certificates
in authorized denominations representing a like aggregate Fractional Undivided
Interest will be issued to the designated transferee.
The Certificates are issuable only as registered Certificates
without coupons in the Classes and denominations specified in the Agreement. As
provided in the Agreement and subject to certain limitations therein set forth,
this Certificate is exchangeable for one or more new Certificates evidencing the
same Class and in the same aggregate Fractional Undivided Interest, as requested
by the Holder surrendering the same.
No service charge will be made to the Certificateholders for
any such registration of transfer, but the Trustee may require payment of a sum
sufficient to cover any tax or other governmental charge payable in connection
therewith. The Seller, the Master Servicer, the Trustee and any agent of any of
them may treat the Person in whose name this Certificate is registered as the
owner hereof for all purposes, and none of the Seller, the Master Servicer, the
Trustee or any such agent shall be affected by notice to the contrary.
The obligations created by the Agreement and the Trust Fund
created thereby (other than the obligations to make payments to
Certificateholders with respect to the termination of the Agreement) shall
terminate upon the earlier of (i) the later of the (A) final payment or other
liquidation (or Advance with respect thereto) of the last Mortgage Loan
remaining in the Trust Fund and (B) disposition of all property acquired upon
foreclosure or deed in lieu of foreclosure of any Mortgage Loan and the
remittance of all funds due under the Agreement, or (ii) the optional repurchase
by the party named in the Agreement of all the Mortgage Loans and other assets
of the Trust Fund in accordance with the terms of the Agreement. Such optional
repurchase may be made only on or after the Distribution Date on which the
aggregate unpaid principal balance of the Mortgage Loans is less than the
percentage of the aggregate Outstanding Principal Balance specified in the
Agreement of the Mortgage Loans at the Cut-off Date. The exercise of such right
will effect the early retirement of the Certificates. In no event, however, will
the Trust Fund created by the
5
Agreement continue beyond the expiration of 21 years after the death of certain
persons identified in the Agreement.
Unless this Certificate has been countersigned by an
authorized signatory of the Trustee by manual signature, this Certificate shall
not be entitled to any benefit under the Agreement, or be valid for any purpose.
6
IN WITNESS WHEREOF, the Trustee has caused this Certificate to
be duly executed.
Dated: September ___, 2003 JPMORGAN CHASE BANK
Not in its individual capacity
but solely as Trustee
By:______________________________
Authorized Signatory
CERTIFICATE OF AUTHENTICATION
-----------------------------
This is one of the Class [B-__] Certificates referred to in
the within-mentioned Agreement.
JPMORGAN CHASE BANK Authorized
signatory of JPMorgan Chase Bank,
not in its individual capacity
but solely as Trustee
By:______________________________
Authorized Signatory
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) a Fractional
Undivided Interest evidenced by the within Mortgage Pass-Through Certificate and
hereby authorizes the transfer of registration of such interest to assignee on
the Certificate Register of the Trust Fund.
I (We) further direct the Certificate Registrar 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
_____________________________________________
Signature Guaranteed
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 ______________________________. Applicable statements should be mailed
to _____________________________________________.
This information is provided by __________________, the
assignee named above, or ________________________, as its agent.
EXHIBIT A-3
FORM OF CLASS R CERTIFICATE
THIS CERTIFICATE MAY NOT BE HELD BY OR TRANSFERRED TO A
NON-UNITED STATES PERSON, A PUBLICLY TRADED PARTNERSHIP OR A DISQUALIFIED
ORGANIZATION (AS DEFINED BELOW).
SOLELY 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 (THE "CODE").
THIS CERTIFICATE MAY NOT BE ACQUIRED DIRECTLY OR INDIRECTLY
BY, OR ON BEHALF OF, AN EMPLOYEE BENEFIT PLAN OR OTHER RETIREMENT ARRANGEMENT
WHICH IS SUBJECT TO TITLE I OF THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF
1974, AS AMENDED, AND/OR SECTION 4975 OF THE INTERNAL REVENUE CODE OF 1986, AS
AMENDED, UNLESS THE PROPOSED TRANSFEREE PROVIDES THE TRUSTEE WITH AN OPINION OF
COUNSEL ADDRESSED TO THE TRUSTEE, MASTER SERVICER AND SECURITIES ADMINISTRATOR
AND ON WHICH THEY MAY RELY THAT IS SATISFACTORY TO THE TRUSTEE THAT THE PURCHASE
OF CERTIFICATES ON BEHALF OF SUCH PERSON WILL NOT RESULT IN OR CONSTITUTE A
NONEXEMPT PROHIBITED TRANSACTION, IS PERMISSIBLE UNDER APPLICABLE LAW AND WILL
NOT GIVE RISE TO ANY ADDITIONAL OBLIGATIONS ON THE PART OF THE SELLER, THE
MASTER SERVICER, THE SECURITIES ADMINISTRATOR OR THE TRUSTEE.
ANY RESALE, TRANSFER OR OTHER DISPOSITION OF THIS CERTIFICATE
MAY BE MADE ONLY IF THE PROPOSED TRANSFEREE OBTAINS THE PRIOR WRITTEN CONSENT OF
STRUCTURED ASSET MORTGAGE INVESTMENTS INC. AND THE SECURITIES ADMINISTRATOR AND
PROVIDES A TRANSFER AFFIDAVIT TO STRUCTURED ASSET MORTGAGE INVESTMENTS INC., THE
SECURITIES ADMINISTRATOR AND THE TRUSTEE THAT (1) SUCH TRANSFEREE IS NOT (A) THE
UNITED STATES, ANY STATE OR POLITICAL SUBDIVISION THEREOF, ANY FOREIGN
GOVERNMENT, ANY INTERNATIONAL ORGANIZATION, OR ANY AGENCY OR INSTRUMENTALITY OF
ANY OF THE FOREGOING, (B) ANY ORGANIZATION (OTHER THAN A COOPERATIVE DESCRIBED
IN SECTION 521 OF THE CODE) WHICH IS EXEMPT FROM THE TAX IMPOSED BY CHAPTER 1 OF
THE CODE UNLESS SUCH ORGANIZATION IS SUBJECT TO THE TAX IMPOSED BY SECTION 511
OF THE CODE, (C) ANY ORGANIZATION DESCRIBED IN SECTION 1381(A)(2)(C) OF THE
CODE, (ANY SUCH PERSON DESCRIBED IN THE FOREGOING CLAUSES (A), (B) OR (C) BEING
HEREIN REFERRED TO AS A "DISQUALIFIED ORGANIZATION") OR (D) AN AGENT OF A
DISQUALIFIED ORGANIZATION, (2) NO PURPOSE OF SUCH TRANSFER IS TO
IMPEDE THE ASSESSMENT OR COLLECTION OF TAX AND (3) SUCH TRANSFEREE SATISFIES
CERTAIN ADDITIONAL CONDITIONS RELATING TO THE FINANCIAL CONDITION OF THE
PROPOSED TRANSFEREE. NOTWITHSTANDING THE REGISTRATION IN THE CERTIFICATE
REGISTER OR ANY TRANSFER, SALE OR OTHER DISPOSITION OF THIS CERTIFICATE TO A
DISQUALIFIED ORGANIZATION OR AN AGENT OF A DISQUALIFIED ORGANIZATION, SUCH
REGISTRATION SHALL BE DEEMED TO BE OF NO LEGAL FORCE OR EFFECT WHATSOEVER AND
SUCH PERSON SHALL NOT BE DEEMED TO BE A CERTIFICATEHOLDER FOR ANY PURPOSE
HEREUNDER, INCLUDING, BUT NOT LIMITED TO, THE RECEIPT OF DISTRIBUTIONS ON THIS
CERTIFICATE. EACH HOLDER OF THIS CERTIFICATE BY ACCEPTANCE OF THIS CERTIFICATE
SHALL BE DEEMED TO HAVE CONSENTED TO THE PROVISIONS OF THIS PARAGRAPH.
THIS CERTIFICATE MAY NOT BE ACQUIRED DIRECTLY OR INDIRECTLY BY, OR ON
BEHALF OF, AN EMPLOYEE BENEFIT PLAN OR OTHER RETIREMENT ARRANGEMENT WHICH IS
SUBJECT TO TITLE I OF THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS
AMENDED, OR SECTION 4975 OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED,
UNLESS THE TRANSFEREE CERTIFIES OR REPRESENTS THAT THE PROPOSED TRANSFER AND
HOLDING OF A CERTIFICATE AND THE SERVICING, MANAGEMENT AND OPERATION OF THE
TRUST AND ITS ASSETS: (I) WILL NOT RESULT IN ANY PROHIBITED TRANSACTION WHICH IS
NOT COVERED UNDER AN INDIVIDUAL OR CLASS PROHIBITED TRANSACTION EXEMPTION,
INCLUDING, BUT NOT LIMITED TO, PROHIBITED TRANSACTION EXEMPTION ("PTE") 84-14,
XXX 00-00, XXX 00-0, XXX 95-60 OR PTE 96-23 AND (II) WILL NOT GIVE RISE TO ANY
ADDITIONAL OBLIGATIONS ON THE PART OF THE SELLER, THE SECURITIES ADMINISTRATOR,
THE MASTER SERVICER OR THE TRUSTEE, WHICH WILL BE DEEMED REPRESENTED BY AN OWNER
OF A BOOK-ENTRY CERTIFICATE OR A GLOBAL CERTIFICATE OR UNLESS THE OPINION
SPECIFIED IN SECTION 5.07 OF THE AGREEMENT IS PROVIDED.
THE CERTIFICATES ARE SUBJECT TO THE RESTRICTIONS IN SECTION 5.07
OF THE POOLING AND SERVICING AGREEMENT.
5
Certificate No.1
Class R-[_]
Date of Pooling and Servicing Agreement and Aggregate Initial Current Principal Amount of
Cut-off Date: September 1, 2003 this Certificate as of the Cut-off Date:
$___________
First Distribution Date: Initial Current Principal Amount of this
October 27, 2003 Certificate as of the Cut-off Date: $_________
Master Servicer:
Xxxxx Fargo Bank Minnesota, National
Association CUSIP: [_____________]
Assumed Final Distribution Date:
October 25, 2033
BEAR XXXXXXX ALT-A TRUST 2003-3
MORTGAGE PASS-THROUGH CERTIFICATE
SERIES 2003-3
evidencing a fractional undivided interest in the distributions
allocable to the Class R-[_] Certificates with respect to a Trust Fund
consisting primarily of a pool of adjustable rate mortgage loans
secured by first liens on one-to-four family residential properties and
individual condominium units sold by STRUCTURED ASSET MORTGAGE
INVESTMENTS INC.
This Certificate is payable solely from the assets of the
Trust Fund, and does not represent an obligation of or interest in Structured
Asset Mortgage Investments Inc., the Master Servicer or the Trustee referred to
below or any of their affiliates or any other person. Neither this Certificate
nor the underlying Mortgage Loans are guaranteed or insured by any governmental
entity or by Structured Asset Mortgage Investments Inc., the Master Servicer or
the Trustee or any of their affiliates or any other person. None of Structured
Asset Mortgage Investments Inc., the Master Servicer or any of their affiliates
will have any obligation with respect to any certificate or other obligation
secured by or payable from payments on the Certificates.
This certifies that Bear, Xxxxxxx Securities Corp. is the
registered owner of the Fractional Undivided Interest evidenced hereby in the
beneficial ownership interest of Certificates of the same Class as this
Certificate in a trust (the "Trust Fund") primarily consisting of adjustable
rate mortgages loans secured by first liens on one- to four- family residential
properties (collectively, the "Mortgage Loans") sold by Structured Asset
Mortgage Investments Inc. ("SAMI"). The Mortgage Loans were sold by EMC Mortgage
Corporation ("EMC") to SAMI. Xxxxx Fargo Bank Minnesota, National Association
("Xxxxx Fargo") will act as master servicer of the Mortgage Loans
3
(the "Master Servicer," which term includes any successors thereto under the
Agreement referred to below). The Trust Fund was created pursuant to the Pooling
and Servicing Agreement dated as of the Cut-off Date specified above (the
"Agreement'), among SAMI, as seller (the "Seller"), Xxxxx Fargo Bank Minnesota,
National Association as master servicer and securities administrator, EMC
Mortgage Corporation and JPMorgan Chase Bank, as trustee (the "Trustee"), a
summary of certain of the pertinent provisions of which is set forth hereafter.
To the extent not defined herein, capitalized terms used herein shall have the
meaning ascribed to them 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 its acceptance hereof
assents and by which such Holder is bound.
[Interest on this Certificate will accrue during the month
prior to the month in which a Distribution Date (as hereinafter defined) occurs
on the Current Principal Amount hereof at a per annum rate equal to the
Pass-Through Rate set forth above and as further described in the Agreement. The
Trustee will distribute on the 25th day of each month, or, if such 25th day is
not a Business Day, the immediately following Business Day (each, a
"Distribution Date"), commencing on the First Distribution Date specified above,
to the Person in whose name this Certificate is registered at the close of
business on the last Business Day of the calendar month preceding the month of
such Distribution Date, an amount equal to the product of the Fractional
Undivided Interest evidenced by this Certificate and the amount (of interest and
principal, if any) required to be distributed to the Holders of Certificates of
the same Class as this Certificate. The Assumed Final Distribution Date is the
Distribution Date in the month immediately following the month of the latest
scheduled maturity date of any Mortgage Loan and is not likely to be the date on
which the Current Principal Amount of this Class of Certificates will be reduced
to zero.]
Distributions on this Certificate will be made by the Trustee
by check mailed to the address of the Person entitled thereto as such name and
address shall appear on the Certificate Register, or if such Person so requests
by notifying the Trustee in writing as specified in the Agreement by wire
transfer. Notwithstanding the above, the final distribution on this Certificate
will be made after due notice by the Trustee of the pendency of such
distribution and only upon presentation and surrender of this Certificate at the
office or agency appointed by the Trustee for that purpose and designated in
such notice. The Initial Current Principal Amount of this Certificate is set
forth above. The Current Principal Amount hereof will be reduced to the extent
of distributions allocable to principal hereon and any Realized Losses allocable
hereto.
Each Holder of this Certificate will be deemed to have agreed
to be bound by the restrictions set forth in the Agreement to the effect that
(i) each person holding or acquiring any Ownership Interest in this Certificate
must be a United States Person and a Permitted Transferee, (ii) the transfer of
any Ownership Interest in this Certificate will be conditioned upon the delivery
to SAMI, the Trustee and the Securities Administrator of, among other things, an
affidavit to the effect that it is a United States Person and Permitted
Transferee, (iii) any attempted or purported transfer of any Ownership Interest
in this Certificate in violation of such restrictions will be absolutely null
and void and will vest no rights in the purported transferee, and (iv) if any
person other than a United States Person and a Permitted Transferee acquires any
Ownership Interest in this Certificate in violation of such restrictions, then
the Seller will have the right, in its sole discretion and without notice to the
Holder of this Certificate, to sell this Certificate to a purchaser selected by
the Seller,
4
which purchaser may be the Seller, or any affiliate of the Seller, on such terms
and conditions as the Seller may choose.
This certificate may not be acquired directly or indirectly
by, or on behalf of, an employee benefit plan or other retirement arrangement
which is subject to title I of the Employee Retirement Income Security Act of
1974, as amended, and/or section 4975 of the Internal Revenue Code of 1986, as
amended, unless the proposed transferee provides the Trustee with an opinion of
counsel addressed to the Trustee, Master Servicer and the Securities
Administrator and on which they may rely(which shall not be at the expense of
the Trustee, Master Servicer or the Securities Administrator) which is
acceptable to the Trustee, that the purchase of this Certificate will not result
in or constitute a nonexempt prohibited transaction, is permissible under
applicable law and will not give rise to any additional fiduciary obligations on
the part of the Seller, the Master Servicer or the Trustee.
This Certificate may not be acquired directly or indirectly
by, or on behalf of, an employee benefit plan or other retirement arrangement
which is subject to Title I of the Employee Retirement Income Security Act of
1974, as amended, or Section 4975 of the Internal Revenue Code of 1986, as
amended, unless the transferee certifies or represents that the proposed
transfer and holding of a Certificate and the servicing, management and
operation of the trust and its assets: (i) will not result in any prohibited
transaction which is not covered under an individual or class prohibited
transaction exemption, including, but not limited to, Prohibited Transaction
Exemption ("PTE") 84-14, XXX 00-00, XXX 00-0, XXX 00-00 or PTE 96-23 and (ii)
will not give rise to any additional obligations on the part of the Seller, the
Securities Administrator, the Master Servicer or the Trustee, which will be
deemed represented by an owner of a Book-Entry Certificate or a Global
Certificate or unless the opinion specified in section 5.07 of the Agreement is
provided.
The Certificates are subject to the restrictions in Section
5.07 of the Pooling and Servicing Agreement.
This Certificate is one of a duly authorized issue of
Certificates designated as set forth on the face hereof (the "Certificates"),
issued in eighteen Classes. The Certificates, in the aggregate, evidence the
entire beneficial ownership interest in the Trust Fund formed pursuant to the
Agreement.
The Certificateholder, by its acceptance of this Certificate,
agrees that it will look solely to the Trust Fund for payment hereunder and that
the Trustee 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 hereby, and the rights,
duties and immunities of the Trustee.
The Agreement permits, with certain exceptions therein
provided, the amendment thereof and the modification of the rights and
obligations of the Seller, the Master Servicer and the Trustee and the rights of
the Certificateholders under the Agreement from time to time by EMC, the
5
Seller, the Master Servicer, the Securities Administrator and the Trustee, with
the consent of the Holders of Certificates, evidencing Fractional Undivided
Interests aggregating not less than 51% of the Trust Fund (or in certain cases,
Holders of Certificates of affected Classes evidencing such percentage of the
Fractional Undivided Interests thereof). 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 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
with the Trustee upon surrender of this Certificate for registration of transfer
at the offices or agencies maintained by the Trustee for such purposes, duly
endorsed by, or accompanied by a written instrument of transfer in form
satisfactory to the Trustee duly executed by the Holder hereof or such Holder's
attorney duly authorized in writing, and thereupon one or more new Certificates
in authorized denominations representing a like aggregate Fractional Undivided
Interest will be issued to the designated transferee.
The Certificates are issuable only as registered Certificates
without coupons in the Classes and denominations specified in the Agreement. As
provided in the Agreement and subject to certain limitations therein set forth,
this Certificate is exchangeable for one or more new Certificates evidencing the
same Class and in the same aggregate Fractional Undivided Interest, as requested
by the Holder surrendering the same.
No service charge will be made to the Certificateholders for
any such registration of transfer, but the Trustee may require payment of a sum
sufficient to cover any tax or other governmental charge payable in connection
therewith. The Seller, the Master Servicer, the Trustee and any agent of any of
them may treat the Person in whose name this Certificate is registered as the
owner hereof for all purposes, and none of the Seller, the Master Servicer, the
Trustee or any such agent shall be affected by notice to the contrary.
The obligations created by the Agreement and the Trust Fund
created thereby (other than the obligations to make payments to
Certificateholders with respect to the termination of the Agreement) shall
terminate upon the earlier of (i) the later of the (A) final payment or other
liquidation (or Advance with respect thereto) of the last Mortgage Loan
remaining in the Trust Fund and (B) disposition of all property acquired upon
foreclosure or deed in lieu of foreclosure of any Mortgage Loan and the
remittance of all funds due under the Agreement, or (ii) the optional repurchase
by the party named in the Agreement of all the Mortgage Loans and other assets
of the Trust Fund in accordance with the terms of the Agreement. Such optional
repurchase may be made only on or after the Distribution Date on which the
aggregate unpaid principal balance of the Mortgage Loans is less than the
percentage of the aggregate Outstanding Principal Balance specified in the
Agreement of the Mortgage Loans at the Cut-off Date. The exercise of such right
will effect the early retirement of the Certificates. In no event, however, will
the Trust Fund created by the Agreement continue beyond the expiration of 21
years after the death of certain persons identified in the Agreement.
6
Unless this Certificate has been countersigned by an
authorized signatory of the Trustee by manual signature, this Certificate shall
not be entitled to any benefit under the Agreement, or be valid for any purpose.
7
IN WITNESS WHEREOF, the Trustee has caused this Certificate to
be duly executed.
Dated: September ___, 2003 JPMORGAN CHASE BANK
Not in its individual capacity
but solely as Trustee
By:______________________________
Authorized Signatory
CERTIFICATE OF AUTHENTICATION
-----------------------------
This is one of the Class [R-__] Certificates referred to in
the within-mentioned Agreement.
JPMORGAN CHASE BANK Authorized
signatory of JPMorgan Chase Bank,
not in its individual capacity
but solely as Trustee
By:______________________________
Authorized Signatory
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) a Fractional
Undivided Interest evidenced by the within Mortgage Pass-Through Certificate and
hereby authorizes the transfer of registration of such interest to assignee on
the Certificate Register of the Trust Fund.
I (We) further direct the Certificate Registrar 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
_____________________________________________
Signature Guaranteed
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 ______________________________. Applicable statements should be mailed
to _____________________________________________.
This information is provided by __________________, the
assignee named above, or ________________________, as its agent.
EXHIBIT A-4
FORM OF CLASS S CERTIFICATE
SOLELY 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 (THE "CODE").
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY TO THE TRUSTEE OR ITS AGENT FOR
REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS
REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY AND ANY PAYMENT IS
MADE TO CEDE & CO., ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL SINCE THE REGISTERED OWNER HEREOF,
CEDE & CO., HAS AN INTEREST HEREIN.
THIS CERTIFICATE HAS NOT BEEN AND WILL NOT BE REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR UNDER ANY
STATE SECURITIES LAWS. THE HOLDER HEREOF, BY PURCHASING THIS CERTIFICATE, AGREES
THAT THIS CERTIFICATE MAY BE REOFFERED, RESOLD, PLEDGED OR OTHERWISE TRANSFERRED
ONLY IN COMPLIANCE WITH THE SECURITIES ACT AND OTHER APPLICABLE LAWS AND ONLY
(1) PURSUANT TO RULE 144A UNDER THE SECURITIES ACT ("RULE 144A") TO A PERSON
THAT THE HOLDER REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER WITHIN
THE MEANING OF RULE 144A (A "QIB"), PURCHASING FOR ITS OWN ACCOUNT OR A QIB
PURCHASING FOR THE ACCOUNT OF A QIB, WHOM THE HOLDER HAS INFORMED, IN EACH CASE,
THAT THE REOFFER, RESALE, PLEDGE OR OTHER TRANSFER IS BEING MADE IN RELIANCE ON
RULE 144A, (2) PURSUANT TO AN EXEMPTION FROM REGISTRATION PROVIDED BY RULE 144
UNDER THE SECURITIES ACT (IF AVAILABLE) OR (3) IN CERTIFICATED FORM TO AN
"INSTITUTIONAL ACCREDITED INVESTOR" WITHIN THE MEANING THEREOF IN RULE
501(A)(1), (2), (3) OR (7) OF REGULATION D UNDER THE ACT OR ANY ENTITY IN WHICH
ALL OF THE EQUITY OWNERS COME WITHIN SUCH PARAGRAPHS PURCHASING NOT FOR
DISTRIBUTION IN VIOLATION OF THE SECURITIES ACT, SUBJECT TO (A) THE RECEIPT BY
THE TRUSTEE OF A LETTER SUBSTANTIALLY IN THE FORM PROVIDED IN THE AGREEMENT AND
(B) THE RECEIPT BY THE TRUSTEE OF SUCH OTHER EVIDENCE ACCEPTABLE TO THE TRUSTEE
THAT SUCH REOFFER, RESALE, PLEDGE OR TRANSFER IS IN COMPLIANCE WITH THE
SECURITIES ACT AND OTHER APPLICABLE LAWS OR IN EACH CASE IN ACCORDANCE WITH ALL
APPLICABLE SECURITIES LAWS OF THE UNITED STATES AND ANY OTHER APPLICABLE
JURISDICTION.
6
THIS CERTIFICATE MAY NOT BE ACQUIRED DIRECTLY OR INDIRECTLY BY, OR ON
BEHALF OF, AN EMPLOYEE BENEFIT PLAN OR OTHER RETIREMENT ARRANGEMENT WHICH IS
SUBJECT TO TITLE I OF THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS
AMENDED, OR SECTION 4975 OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED,
UNLESS THE TRANSFEREE CERTIFIES OR REPRESENTS THAT THE PROPOSED TRANSFER AND
HOLDING OF A CERTIFICATE AND THE SERVICING, MANAGEMENT AND OPERATION OF THE
TRUST AND ITS ASSETS: (I) WILL NOT RESULT IN ANY PROHIBITED TRANSACTION WHICH IS
NOT COVERED UNDER AN INDIVIDUAL OR CLASS PROHIBITED TRANSACTION EXEMPTION,
INCLUDING, BUT NOT LIMITED TO, PROHIBITED TRANSACTION EXEMPTION ("PTE") 84-14,
XXX 00-00, XXX 00-0, XXX 95-60 OR PTE 96-23 AND (II) WILL NOT GIVE RISE TO ANY
ADDITIONAL OBLIGATIONS ON THE PART OF THE SELLER, THE SECURITIES ADMINISTRATOR,
THE MASTER SERVICER OR THE TRUSTEE, WHICH WILL BE DEEMED REPRESENTED BY AN OWNER
OF A BOOK-ENTRY CERTIFICATE OR A GLOBAL CERTIFICATE OR UNLESS THE OPINION
SPECIFIED IN SECTION 5.07 OF THE AGREEMENT IS PROVIDED.
THE CERTIFICATES ARE SUBJECT TO THE RESTRICTIONS IN SECTION 5.07
OF THE POOLING AND SERVICING AGREEMENT.
7
Certificate No.1 Variable Pass-Through Rate
Class S
Date of Pooling and Servicing Agreement and Aggregate Initial Notional Amount of this
Cut-off Date: September 1, 2003 Certificate as of the Cut-off Date:
$___________
First Distribution Date: Initial Current Principal Amount of this
October 27, 2003 Certificate as of the Cut-off Date: $_________
Master Servicer:
Xxxxx Fargo Bank Minnesota, National
Association
Assumed Final Distribution Date:
October 25, 2033
BEAR XXXXXXX ALT-A TRUST 2003-3
MORTGAGE PASS-THROUGH CERTIFICATE
SERIES 2003-3
evidencing a fractional undivided interest in the distributions
allocable to the Class S Certificates with respect to a Trust Fund
consisting primarily of a pool of adjustable rate mortgage loans
secured by first liens on one-to-four family residential properties and
individual condominium units sold by STRUCTURED ASSET MORTGAGE
INVESTMENTS INC.
This Certificate is payable solely from the assets of the
Trust Fund, and does not represent an obligation of or interest in Structured
Asset Mortgage Investments Inc., the Master Servicer or the Trustee referred to
below or any of their affiliates or any other person. Neither this Certificate
nor the underlying Mortgage Loans are guaranteed or insured by any governmental
entity or by Structured Asset Mortgage Investments Inc., the Master Servicer or
the Trustee or any of their affiliates or any other person. None of Structured
Asset Mortgage Investments Inc., the Master Servicer or any of their affiliates
will have any obligation with respect to any certificate or other obligation
secured by or payable from payments on the Certificates.
This certifies that ________________, as nominee for JPMorgan
Chase Bank, as grantor trustee (in that capacity, the "Grantor Trustee") under
the Grantor Trust Agreement, dated September 30, 2003, between Structured Asset
Mortgage Investment Inc. and the Grantor Trustee, is the registered owner of the
Fractional Undivided Interest evidenced hereby in the beneficial ownership
interest of Certificates of the same Class as this Certificate in a trust (the
"Trust Fund") generally consisting of adjustable rate mortgages loans secured by
first liens on one- to four- family residential properties (collectively, the
"Mortgage Loans") sold by Structured Asset Mortgage
3
Investments Inc. ("SAMI"). The Mortgage Loans were sold by EMC Mortgage
Corporation ("EMC") to SAMI. Xxxxx Fargo Bank Minnesota, National Association
("Xxxxx Fargo") will act as master servicer of the Mortgage Loans (the "Master
Servicer," which term includes any successors thereto under the Agreement
referred to below). The Trust Fund was created pursuant to the Pooling and
Servicing Agreement dated as of the Cut-off Date specified above (the
"Agreement'), among SAMI, as seller (the "Seller"), Xxxxx Fargo Bank Minnesota,
National Association as master servicer and securities administrator, EMC
Mortgage Corporation and JPMorgan Chase Bank, as trustee (the "Trustee"), a
summary of certain of the pertinent provisions of which is set forth hereafter.
To the extent not defined herein, capitalized terms used herein shall have the
meaning ascribed to them 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 its acceptance hereof
assents and by which such Holder is bound.
Interest on this Certificate will accrue during the month
prior to the month in which a Distribution Date (as hereinafter defined) occurs
on the Notional Amount hereof at a per annum rate equal to the Pass-Through Rate
set forth above and as further described in the Agreement. The Trustee will
distribute on the 25th day of each month, or, if such 25th day is not a Business
Day, the immediately following Business Day (each, a "Distribution Date"),
commencing on the First Distribution Date specified above, to the Person in
whose name this Certificate is registered at the close of business on the
Business Day preceding the Distribution Date, an amount equal to the product of
the Fractional Undivided Interest evidenced by this Certificate and the amount
(of interest, if any) required to be distributed to the Holders of Certificates
of the same Class as this Certificate. The Assumed Final Distribution Date is
the Distribution Date in the month immediately following the month of the latest
scheduled maturity date of any Mortgage Loan and is not likely to be the date on
which the Notional Amount of this Class of Certificates will be reduced to zero.
Distributions on this Certificate will be made by the Trustee
by check mailed to the address of the Person entitled thereto as such name and
address shall appear on the Certificate Register or, if such Person so requests
by notifying the Trustee in writing as specified in the Agreement by wire
transfer. Notwithstanding the above, the final distribution on this Certificate
will be made after due notice by the Trustee of the pendency of such
distribution and only upon presentation and surrender of this Certificate at the
office or agency appointed by the Trustee for that purpose and designated in
such notice. The Initial Notional Amount of this Certificate is set forth above.
This Certificate may not be acquired directly or indirectly
by, or on behalf of, an employee benefit plan or other retirement arrangement
which is subject to Title I of the Employee Retirement Income Security Act of
1974, as amended, or Section 4975 of the Internal Revenue Code of 1986, as
amended, unless the transferee certifies or represents that the proposed
transfer and holding of a Certificate and the servicing, management and
operation of the trust and its assets: (i) will not result in any prohibited
transaction which is not covered under an individual or class prohibited
transaction exemption, including, but not limited to, Prohibited Transaction
Exemption ("PTE") 84-14, XXX 00-00, XXX 00-0, XXX 00-00 or PTE 96-23 and (ii)
will not give rise to any additional obligations on the part of the Seller, the
Securities Administrator, the Master Servicer or the Trustee, which will be
deemed represented by an owner of a Book-Entry Certificate or a Global
Certificate or unless the opinion specified in section 5.07 of the Agreement is
provided.
4
The Certificates are subject to the restrictions in Section
5.07 of the Pooling and Servicing Agreement.
This Certificate is one of a duly authorized issue of
Certificates designated as set forth on the face hereof (the "Certificates"),
issued in eighteen classes. The Certificates, in the aggregate, evidence the
entire beneficial ownership interest in the Trust Fund formed pursuant to the
Agreement.
The Certificateholder, by its acceptance of this Certificate,
agrees that it will look solely to the Trust Fund for payment hereunder and that
the Trustee 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 hereby, and the rights,
duties and immunities of the Trustee.
The Agreement permits, with certain exceptions therein
provided, the amendment thereof and the modification of the rights and
obligations of the Seller, the Master Servicer and the Trustee and the rights of
the Certificateholders under the Agreement from time to time by EMC, the Seller,
the Master Servicer, the Securities Administrator and the Trustee, with the
consent of the Holders of Certificates, evidencing Fractional Undivided
Interests aggregating not less than 51% of the Trust Fund (or in certain cases,
Holders of Certificates of affected Classes evidencing such percentage of the
Fractional Undivided Interests thereof). 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 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
with the Trustee upon surrender of this Certificate for registration of transfer
at the offices or agencies maintained by the Trustee for such purposes, duly
endorsed by, or accompanied by a written instrument of transfer in form
satisfactory to the Trustee duly executed by the Holder hereof or such Holder's
attorney duly authorized in writing, and thereupon one or more new Certificates
in authorized denominations representing a like aggregate Fractional Undivided
Interest will be issued to the designated transferee.
The Certificates are issuable only as registered Certificates
without coupons in the Classes and denominations specified in the Agreement. As
provided in the Agreement and subject to certain limitations therein set forth,
this Certificate is exchangeable for one or more new Certificates evidencing the
same Class and in the same aggregate Fractional Undivided Interest, as requested
by the Holder surrendering the same.
No service charge will be made to the Certificateholders for
any such registration of transfer, but the Trustee may require payment of a sum
sufficient to cover any tax or other
5
governmental charge payable in connection therewith. The Seller, the Master
Servicer, the Trustee and any agent of any of them may treat the Person in whose
name this Certificate is registered as the owner hereof for all purposes, and
none of the Seller, the Master Servicer, the Trustee or any such agent shall be
affected by notice to the contrary.
The obligations created by the Agreement and the Trust Fund
created thereby (other than the obligations to make payments to
Certificateholders with respect to the termination of the Agreement) shall
terminate upon the earlier of (i) the later of the (A) final payment or other
liquidation (or Advance with respect thereto) of the last Mortgage Loan
remaining in the Trust Fund and (B) disposition of all property acquired upon
foreclosure or deed in lieu of foreclosure of any Mortgage Loan and the
remittance of all funds due under the Agreement, or (ii) the optional repurchase
by the party named in the Agreement of all the Mortgage Loans and other assets
of the Trust Fund in accordance with the terms of the Agreement. Such optional
repurchase may be made only on or after the Distribution Date on which the
aggregate unpaid principal balance of the Mortgage Loans is less than the
percentage of the aggregate Outstanding Principal Balance specified in the
Agreement of the Mortgage Loans at the Cut-off Date. The exercise of such right
will effect the early retirement of the Certificates. In no event, however, will
the Trust Fund created by the Agreement continue beyond the expiration of 21
years after the death of certain persons identified in the Agreement.
Unless this Certificate has been countersigned by an
authorized signatory of the Trustee by manual signature, this Certificate shall
not be entitled to any benefit under the Agreement, or be valid for any purpose.
6
IN WITNESS WHEREOF, the Trustee has caused this Certificate to
be duly executed.
Dated: September ___, 2003 JPMORGAN CHASE BANK
Not in its individual capacity
but solely as Trustee
By:______________________________
Authorized Signatory
CERTIFICATE OF AUTHENTICATION
-----------------------------
This is one of the Class S Certificates referred to in the
within-mentioned Agreement.
JPMORGAN CHASE BANK Authorized
signatory of JPMorgan Chase Bank,
not in its individual capacity
but solely as Trustee
By:______________________________
Authorized Signatory
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) a Fractional
Undivided Interest evidenced by the within Mortgage Pass-Through Certificate and
hereby authorizes the transfer of registration of such interest to assignee on
the Certificate Register of the Trust Fund.
I (We) further direct the Certificate Registrar 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
_____________________________________________
Signature Guaranteed
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 ______________________________. Applicable statements should be mailed
to _____________________________________________.
This information is provided by __________________, the
assignee named above, or ________________________, as its agent.
EXHIBIT B
MORTGAGE LOAN SCHEDULE
----------------------
The Preliminary and Final Mortgage Loan Schedules shall set
forth the following information with respect to each Mortgage Loan:
(a) the loan number;
(b) [reserved];
(c) the city, state and zip code of the Mortgaged Property;
(d) the property type;
(e) the Mortgage Rate;
(f) the Servicing Rate;
(g) the Net Rate;
(h) the original term;
(i) the maturity date;
(j) the stated remaining term to maturity;
(k) the original principal balance;
(1) the first payment date;
(m) the principal and interest payment in effect as of the Cut-off Date;
(n) the unpaid principal balance as of the Cut-off Date;
(o) the Loan-to-Value Ratio at origination;
(p) paid-through date;
(q) the insurer of any Primary Mortgage Insurance Policy;
(r) the Gross Margin, if applicable;
(s) the Maximum Lifetime Mortgage Rate, if applicable;
(t) the Minimum Lifetime Mortgage Rate, if applicable;
(u) the Periodic Rate Cap, if applicable;
(v) the number of days delinquent, if any;
(w) which Mortgage Loans adjust after an initial fixed-rate period of five,
seven or ten years;
(x) The Loan Group; and
(y) The Prepayment Charge Loans.
Such schedule also shall set forth for all of the Mortgage Loans, the total
number of Mortgage Loans, the total of each of the amounts described under (k)
and (n) above, the weighted average by principal balance as of the Cut-off Date
of each of the rates described under (e), (f) and (g) above, and the weighted
average remaining term to maturity by unpaid principal balance as of the Cut-off
Date.
EXHIBIT C
[RESERVED]
C-1
EXHIBIT D
REQUEST FOR RELEASE OF DOCUMENTS
To: JPMorgan Chase Bank
0 Xxx Xxxx Xxxxx, 0xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
RE: Pooling and Servicing Agreement dated as of
September 1, 2003, among SAMI,
Xxxxx Fargo Bank Minnesota,
National Association, as master servicer
and securities administrator,
EMC Mortgage Corporation and
JPMorgan Chase Bank as Trustee
In connection with the administration of the Mortgage Loans held by you
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.
Mortgage Loan Number:
--------------------
Mortgagor Name, Address & Zip Code:
----------------------------------
Reason for Requesting Documents (check one):
-------------------------------------------
_____ 1. Mortgage Paid in Full and proceeds have been
deposited into the Custodial Account
_____ 2. Foreclosure
_____ 3. Substitution
_____ 4. Other Liquidation
_____ 5. Nonliquidation Reason:_______________________
_____ 6. California Mortgage Loan paid in full
By:______________________________
(authorized signer)
Issuer:__________________________
Address:_________________________
Date:____________________________
D-1
EXHIBIT E
FORM OF AFFIDAVIT
Affidavit pursuant to Section
860E(e)(4) of the Internal Revenue
Code of 1986, as amended, and for
other purposes
STATE OF )
) ss:
COUNTY OF )
[NAME OF OFFICER], being first duly sworn, deposes and says:
1. That he is [Title of Officer] of [Name of Investor] (the
"Investor"), a [savings institution] [corporation] duly organized and existing
under the laws of [the State of ] [the United States], on behalf of which he
makes this affidavit.
2. That (i) the Investor is not a "disqualified organization" as
defined in Section 860E(e)(5) of the Internal Revenue Code of 1986, as amended
(the "Code"), and will not be a disqualified organization as of [Closing Date]
[date of purchase]; (ii) it is not acquiring the Structured Asset Mortgage
Investments Inc., Bear Xxxxxxx ALT-A Trust, Mortgage Pass-Through Certificates,
Series 2003-3 Class R-I, Class R-II and Class R-III Certificates (the "Residual
Certificates") for the account of a disqualified organization; (iii) it consents
to any amendment of the Pooling and Servicing Agreement that shall be deemed
necessary by Structured Asset Mortgage Investments Inc. (upon advice of counsel)
to constitute a reasonable arrangement to ensure that the Residual Certificates
will not be owned directly or indirectly by a disqualified organization; and
(iv) it will not transfer such Residual Certificates unless (a) it has received
from the transferee an affidavit in substantially the same form as this
affidavit containing these same four representations and (b) as of the time of
the transfer, it does not have actual knowledge that such affidavit is false.
3. That the Investor is one of the following: (i) a citizen or resident
of the United States, (ii) a corporation or partnership (including an entity
treated as a corporation or partnership for federal income tax purposes) created
or organized in, or under the laws of, the United States or any state thereof or
the District of Columbia (except, in the case of a partnership, to the extent
provided in regulations), provided that no partnership or other entity treated
as a partnership for United States federal income tax purposes shall be treated
as a United States Person unless all persons that own an interest in such
partnership either directly or through any entity that is not a corporation for
United States federal income tax purposes are United States Persons, (iii) an
estate whose income is subject to United States federal income tax regardless of
its source, or (iv) a trust other than a "foreign trust," as defined in Section
7701 (a)(31) of the Code.
4. That the Investor's taxpayer identification number is
______________________.
5. That no purpose of the acquisition of the Residual Certificates is
to avoid or impede the assessment or collection of tax.
E-1
6. That the Investor understands that, as the holder of the Residual
Certificates, the Investor may incur tax liabilities in excess of any cash flows
generated by such Residual Certificates.
7. That the Investor intends to pay taxes associated with holding the
Residual Certificates as they become due.
IN WITNESS WHEREOF, the Investor has caused this instrument to be
executed on its behalf, pursuant to authority of its Board of Directors, by its
[Title of Officer] this ____ day of _________, 20__.
[NAME OF INVESTOR]
By:______________________________________
[Name of Officer]
[Title of Officer]
[Address of Investor for receipt of
distributions]
Address of Investor for receipt of tax
information:
E-2
Personally appeared before me the above-named [Name of Officer], known
or proved to me to be the same person who executed the foregoing instrument and
to be the [Title of Officer] of the Investor, and acknowledged to me that he
executed the same as his free act and deed and the free act and deed of the
Investor.
Subscribed and sworn before me this ___ day of _________, 20___.
NOTARY PUBLIC
COUNTY OF
STATE OF
My commission expires the ___ day of ___________________, 20___.
E-3
EXHIBIT F-1
FORM OF INVESTMENT LETTER
[Date]
[SELLER]
JPMorgan Chase Bank
4 New York Plaza, 6th Floor
New York ,New York 10004
Structured Asset Mortgage Investments Inc.
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Re: Structured Asset Mortgage Investments Inc., Bear Xxxxxxx ALT-A
Trust, Series 2003-3 Mortgage Pass-Through Certificates (the
"Certificates"), including the Class B-4, Class B-5 and Class
B-6 Certificates (the "Privately Offered Certificates")
--------------------------------------------------------------
Dear Ladies and Gentlemen:
In connection with our purchase of Privately Offered Certificates, we
confirm that:
(i) we understand that the Privately Offered Certificates
are not being registered under the Securities Act of
1933, as amended (the "Act") or any applicable state
securities or "Blue Sky" laws, and are being sold to
us in a transaction that is exempt from the
registration requirements of such laws;
(ii) any information we desired concerning the
Certificates, including the Privately Offered
Certificates, the trust in which the Certificates
represent the entire beneficial ownership interest
(the "Trust") or any other matter we deemed relevant
to our decision to purchase Privately Offered
Certificates has been made available to us;
(iii) we are able to bear the economic risk of investment
in Privately Offered Certificates; we are an
institutional "accredited investor" as defined in
Section 501(a) of Regulation D promulgated under the
Act and a sophisticated institutional investor;
(iv) we are acquiring Privately Offered Certificates for
our own account, not as nominee for any other person,
and not with a present view to any distribution or
other disposition of the Privately Offered
Certificates;
(v) we agree the Privately Offered Certificates must be
held indefinitely by us (and may not be sold,
pledged, hypothecated or in any way disposed of)
F-1-1
unless subsequently registered under the Act and any
applicable state securities or "Blue Sky" laws or an
exemption from the registration requirements of the
Act and any applicable state securities or "Blue Sky"
laws is available;
(vi) we agree that in the event that at some future time
we wish to dispose of or exchange any of the
Privately Offered Certificates (such disposition or
exchange not being currently foreseen or
contemplated), we will not transfer or exchange any
of the Privately Offered Certificates unless:
(A) (1) the sale is to an Eligible Purchaser
(as defined below), (2) if required by the Pooling
and Servicing Agreement (as defined below) a letter
to substantially the same effect as either this
letter or, if the Eligible Purchaser is a Qualified
Institutional Buyer as defined under Rule 144A of the
Act, the Rule 144A and Related Matters Certificate in
the form attached to the Pooling and Servicing
Agreement (as defined below) (or such other
documentation as may be acceptable to the Trustee) is
executed promptly by the purchaser and delivered to
the addressees hereof and (3) all offers or
solicitations in connection with the sale, whether
directly or through any agent acting on our behalf,
are limited only to Eligible Purchasers and are not
made by means of any form of general solicitation or
general advertising whatsoever; and
(B) if the Privately Offered Certificate is
not registered under the Act (as to which we
acknowledge you have no obligation), the Privately
Offered Certificate is sold in a transaction that
does not require registration under the Act and any
applicable state securities or "blue sky" laws and,
if JPMorgan Chase Bank (the "Trustee") so requests, a
satisfactory Opinion of Counsel is furnished to such
effect, which Opinion of Counsel shall be an expense
of the transferor or the transferee;
(vii) we agree to be bound by all of the terms (including
those relating to restrictions on transfer) of the
Pooling and Servicing, pursuant to which the Trust
was formed; we have reviewed carefully and understand
the terms of the Pooling and Servicing Agreement;
(viii) we either: (i) are not acquiring the Privately
Offered Certificate directly or indirectly by, or on
behalf of, an employee benefit plan or other
retirement arrangement which is subject to Title I of
the Employee Retirement Income Security Act of 1974,
as amended, or section 4975 of the Internal Revenue
Code of 1986, as amended, or (ii) are providing a
representation to the effect that the proposed
transfer and holding of a Privately Offered
Certificate and the servicing, management and
operation of the Trust and its assets: (I) will not
result in any prohibited transaction which is not
covered under an individual or class prohibited
transaction exemption, including, but not limited to,
Prohibited Transaction Exemption ("PTE") 84-14, XXX
00-00,
X-0-0
XXX 00-0, XXX 95-60, or PTE 96-23 and (II) will not
give rise to any additional obligation on the part of
the Seller, the Master Servicer, THE Securities
Administrator or the Trustee (iii) have attached
hereto the opinion specified in Section 5.07 of the
Agreement.
(ix) We understand that each of the B-4, Class B-5 and
Class B-6 Certificates bears, and will continue to
bear, a legend to substantiate the following effect:
"THIS CERTIFICATE HAS NOT BEEN AND WILL NOT BE
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "SECURITIES ACT"), OR UNDER ANY STATE
SECURITIES LAWS. THE HOLDER HEREOF, BY PURCHASING
THIS CERTIFICATE, AGREES THAT THIS CERTIFICATE MAY BE
REOFFERED, RESOLD, PLEDGED OR OTHERWISE TRANSFERRED
ONLY IN COMPLIANCE WITH THE SECURITIES ACT AND OTHER
APPLICABLE LAWS AND ONLY (1) PURSUANT TO RULE 144A
UNDER THE SECURITIES ACT ("RULE 144A") TO A PERSON
THAT THE HOLDER REASONABLY BELIEVES IS A QUALIFIED
INSTITUTIONAL BUYER WITHIN THE MEANING OF RULE 144A
(A "QIB"), PURCHASING FOR ITS OWN ACCOUNT OR A QIB
PURCHASING FOR THE ACCOUNT OF A QIB, WHOM THE HOLDER
HAS INFORMED, IN EACH CASE, THAT THE REOFFER, RESALE,
PLEDGE OR OTHER TRANSFER IS BEING MADE IN RELIANCE ON
RULE 144A, (2) PURSUANT TO AN EXEMPTION FROM
REGISTRATION PROVIDED BY RULE 144 UNDER THE
SECURITIES ACT (IF AVAILABLE) OR (3) IN CERTIFICATED
FORM TO AN "INSTITUTIONAL ACCREDITED INVESTOR" WITHIN
THE MEANING THEREOF IN RULE 501(a)(1), (2), (3) or
(7) OF REGULATION D UNDER THE ACT OR ANY ENTITY IN
WHICH ALL OF THE EQUITY OWNERS COME WITHIN SUCH
PARAGRAPHS PURCHASING NOT FOR DISTRIBUTION IN
VIOLATION OF THE SECURITIES ACT, SUBJECT TO (A) THE
RECEIPT BY THE TRUSTEE OF A LETTER SUBSTANTIALLY IN
THE FORM PROVIDED IN THE AGREEMENT AND (B) THE
RECEIPT BY THE TRUSTEE OF SUCH OTHER EVIDENCE
ACCEPTABLE TO THE TRUSTEE THAT SUCH REOFFER, RESALE,
PLEDGE OR TRANSFER IS IN COMPLIANCE WITH THE
SECURITIES ACT AND OTHER APPLICABLE LAWS OR IN EACH
CASE IN ACCORDANCE WITH ALL APPLICABLE SECURITIES
LAWS OF THE UNITED STATES AND ANY OTHER APPLICABLE
JURISDICTION. THIS CERTIFICATE MAY NOT BE ACQUIRED
DIRECTLY OR INDIRECTLY BY, OR ON BEHALF OF, AN
EMPLOYEE BENEFIT PLAN OR OTHER RETIREMENT ARRANGEMENT
WHICH IS SUBJECT TO TITLE I OF THE EMPLOYEE
RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED,
OR SECTION 4975 OF THE INTERNAL REVENUE CODE OF 1986,
AS AMENDED, UNLESS THE PROPOSED TRANSFER AND HOLDING
OF A CERTIFICATE AND THE SERVICING, MANAGEMENT AND
OPERATION OF THE TRUST
F-1-3
AND ITS ASSETS: (1) WILL NOT RESULT IN ANY PROHIBITED
TRANSACTION WHICH IS NOT COVERED UNDER AN INDIVIDUAL
OR CLASS PROHIBITED TRANSACTION EXEMPTION, INCLUDING,
BUT NOT LIMITED TO, PROHIBITED TRANSACTION EXEMPTION
("PTE") 84-14, XXX 00-00, XXX 00-0, XXX 95-60 OR PTE
96-23 AND (II) WILL NOT GIVE RISE TO ANY ADDITIONAL
OBLIGATIONS ON THE PART OF THE SELLER, THE MASTER
SERVICER OR THE TRUSTEE, WHICH WILL BE DEEMED
REPRESENTED BY AN OWNER OF A BOOK-ENTRY CERTIFICATE
OR A GLOBAL CERTIFICATE OR UNLESS THE OPINION
PROVIDED IN SECTION 5.07 OF THE AGREEMENT IS
PROVIDED."
"Eligible Purchaser" means a corporation, partnership or other entity
which we have reasonable grounds to believe and do believe (i) can make
representations with respect to itself to substantially the same effect as the
representations set forth herein, and (ii) is either a Qualified Institutional
Buyer as defined under Rule 144A of the Act or an institutional "Accredited
Investor" as defined under Rule 501 of the Act.
Terms not otherwise defined herein shall have the meanings assigned to
them in the Pooling and Servicing Agreement, dated as of September 1, 2003,
among Structured Asset Mortgage Investments Inc., Xxxxx Fargo Bank Minnesota,
National Association as master servicer and securities administrator, EMC
Mortgage Corporation and JPMorgan Chase Bank, as Trustee (the "Pooling and
Servicing Agreement').
If the Purchaser proposes that its Certificates be registered in the
name of a nominee on its behalf, the Purchaser has identified such nominee
below, and has caused such nominee to complete the Nominee Acknowledgment at the
end of this letter.
Name of Nominee (if any):____________________
F-1-4
IN WITNESS WHEREOF, this document has been executed by the undersigned
who is duly authorized to do so on behalf of the undersigned Eligible Purchaser
on the ___ day of ________, 20___.
Very truly yours,
[PURCHASER]
By:________________________________
(Authorized Officer)
[By:_______________________________
Attorney-in-fact]
F-1-5
Nominee Acknowledgment
The undersigned hereby acknowledges and agrees that as to the
Certificates being registered in its name, the sole beneficial owner thereof is
and shall be the Purchaser identified above, for whom the undersigned is acting
as nominee.
[NAME OF NOMINEE]
By:______________________________
(Authorized Officer)
[By:_____________________________
Attorney-in-fact]
F-1-6
EXHIBIT F-2
FORM OF RULE 144A AND RELATED MATTERS CERTIFICATE
[SELLER] [Date]
JPMorgan Chase Bank
4 New York Plaza, 6th Floor
New York, New York 10004
Structured Asset Mortgage Investments Inc.
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Re: Structured Asset Mortgage Investments Inc., Bear
Xxxxxxx ALT-A Trust, Series 2003-3 Mortgage
Pass-Through Certificates, B-4, Class B-5 and Class
B-6 Certificates (the "Privately Offered
Certificates")
---------------------------------------------------
Dear Ladies and Gentlemen:
In connection with our purchase of Privately Offered Certificates, the
undersigned certifies to each of the parties to whom this letter is addressed
that it is a qualified institutional buyer (as defined in Rule 144A under the
Securities Act of 1933, as amended (the "Act")) as follows:
1. It owned and/or invested on a discretionary basis eligible securities
(excluding affiliate's securities, bank deposit notes and CD's, loan
participations, repurchase agreements, securities owned but subject to
a repurchase agreement and swaps), as described below:
Date: ______________, 20__ (must be on or after the close of its most
recent fiscal year)
Amount: $ _____________________; and
2. The dollar amount set forth above is:
a. greater than $100 million and the undersigned is one of the
following entities:
(x) |_| an insurance company as defined in Section 2(13) of
the Act1; or
--------
1 A purchase by an insurance company for one or more of its
separate accounts, as defined by Section 2(a)(37) of the
Investment Company Act of 1940, which are neither registered
nor required to be registered thereunder, shall be deemed to
be a purchase for the account of such insurance company.
F-2-1
(y) |_| an investment company registered under the
Investment Company Act or any business
development company as defined in Section
2(a)(48) of the Investment Company Act of
1940; or
(z) |_| 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; or
(aa) |_| a plan (i) established and maintained by a
state, its political subdivisions, or any
agency or instrumentality of a state or its
political subdivisions, the laws of which
permit the purchase of securities of this
type, for the benefit of its employees and
(ii) the governing investment guidelines of
which permit the purchase of securities of
this type; or
(bb) |_| a business development company as defined in
Section 202(a)(22) of the Investment
Advisers Act of 1940; or
(cc) |_| a corporation (other than a U.S. bank,
savings and loan association or equivalent
foreign institution), partnership,
Massachusetts or similar business trust, or
an organization described in Section
501(c)(3) of the Internal Revenue Code; or
(dd) |_| a U.S. bank, savings and loan association or
equivalent foreign institution, which has an
audited net worth of at least $25 million as
demonstrated in its latest annual financial
statements; or
(ee) |_| an investment adviser registered under the
Investment Advisers Act; or
b. |_| greater than $10 million, and the undersigned is a
broker-dealer registered with the SEC; or
c. |_| less than $ 10 million, and the undersigned is a
broker-dealer registered with the SEC and will only
purchase Rule 144A securities in transactions in
which it acts as a riskless principal (as defined in
Rule 144A); or
d. |_| less than $100 million, and the undersigned is an
investment company registered under the Investment
Company Act of 1940, which, together with one or more
registered investment companies having the same or an
affiliated investment adviser, owns at least $100
million of eligible securities; or
e. |_| less than $100 million, and the undersigned is an
entity, all the equity owners of which are qualified
institutional buyers.
F-2-2
The undersigned further certifies that it is purchasing a Privately
Offered Certificate for its own account or for the account of others that
independently qualify as "Qualified Institutional Buyers" as defined in Rule
144A. It is aware that the sale of the Privately Offered Certificates is being
made in reliance on its continued compliance with Rule 144A. It is aware that
the transferor may rely on the exemption from the provisions of Section 5 of the
Act provided by Rule 144A. The undersigned understands that the Privately
Offered Certificates may be resold, pledged or transferred only to (i) 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 in Rule
144A, or (ii) an institutional "accredited investor," as such term is defined
under Rule 501 of the Act in a transaction that otherwise does not constitute a
public offering.
The undersigned agrees that if at some future time it wishes to dispose
of or exchange any of the Privately Offered Certificates, it will not transfer
or exchange any of the Privately Offered Certificates to a Qualified
Institutional Buyer without first obtaining a Rule 144A and Related Matters
Certificate in the form hereof from the transferee and delivering such
certificate to the addressees hereof. Prior to making any transfer of Privately
Offered Certificates, if the proposed Transferee is an institutional "accredited
investor," the transferor shall obtain from the transferee and deliver to the
addressees hereof an Investment Letter in the form attached to the Pooling and
Servicing Agreement, dated as of September 1, 2003, among Structured Asset
Mortgage Investments Inc., Xxxxx Fargo Bank Minnesota, National Association, EMC
Mortgage Corporation and JPMorgan Chase Bank, as Trustee, pursuant to
Certificates were issued.
The undersigned certifies that it either: (i) is not acquiring the
Privately Offered Certificate directly or indirectly by, or on behalf of, an
employee benefit plan or other retirement arrangement which is subject to Title
I of the Employee Retirement Income Security Act of 1974, as amended, or section
4975 of the Internal Revenue Code of 1986, as amended, or (ii) is providing a
representation or an opinion of counsel to the effect that the proposed transfer
and holding of a Privately Offered Certificate and the servicing, management and
operation of the Trust and its assets: (I) will not result in any prohibited
transaction which is not covered under a prohibited transaction exemption,
including, but not limited to, Prohibited Transaction Exemption ("PTE") 84-14,
XXX 00- 00, XXX 00-0, XXX 95-60, PTE 96-23 and (II) will not give rise to any
additional fiduciary duties on the part of the Seller, the Master Servicer, the
Securities Administrator or the Trustee or (iii) has attached hereto the opinion
specified in Section 5.07 of the Agreement.
If the Purchaser proposes that its Certificates be registered in the
name of a nominee on its behalf, the Purchaser has identified such nominee
below, and has caused such nominee to complete the Nominee Acknowledgment at the
end of this letter.
F-2-3
Name of Nominee (if any):
IN WITNESS WHEREOF, this document has been executed by the undersigned who is
duly authorized to do so on behalf of the undersigned Eligible Purchaser on the
____ day of ___________, 20___.
Very truly yours,
[PURCHASER]
By:______________________________
(Authorized Officer)
[By:_____________________________
Attorney-in-fact]
F-2-4
Nominee Acknowledgment
The undersigned hereby acknowledges and agrees that as to the
Certificates being registered in its name, the sole beneficial owner thereof is
and shall be the Purchaser identified above, for whom the undersigned is acting
as nominee.
[NAME OF NOMINEE]
By:_________________________________
(Authorized Officer)
[By:________________________________
Attorney-in-fact]
F-2-5
EXHIBIT G
FORM OF CUSTODIAL AGREEMENT
THIS CUSTODIAL AGREEMENT (as amended and supplemented from
time to time, the "Agreement'), dated as of September 30, 2003, by and among
JPMORGAN CHASE BANK, as trustee (including its successors under the Pooling and
Servicing Agreement defined below, the "Trustee"), STRUCTURED ASSET MORTGAGE
INVESTMENTS INC., as company (together with any successor in interest, the
"Company"), XXXXX FARGO BANK MINNESOTA, NATIONAL ASSOCIATION, as master servicer
and securities administrator (together with any successor in interest or
successor under the Pooling and Servicing Agreement referred to below, the
"Master Servicer") and XXXXX FARGO BANK MINNESOTA, NATIONAL ASSOCIATION, as
custodian (together with any successor in interest or any successor appointed
hereunder, the "Custodian").
WITNESSETH THAT:
---------------
WHEREAS, the Company, the Master Servicer and the Trustee have
entered into a Pooling and Servicing Agreement, dated as of September 1, 2003,
relating to the issuance of Bear Xxxxxxx ALT-A Trust 2003-3, Mortgage
Pass-Through Certificates, Series 2003-3 (as in effect on the date of this
agreement, the "Original Pooling and Servicing Agreement," and as amended and
supplemented from time to time, the "Pooling and Servicing Agreement'); and
WHEREAS, the Custodian has agreed to act as agent for the
Trustee for the purposes of receiving and holding certain documents and other
instruments delivered by the Company or the Master Servicer under the Pooling
and Servicing Agreement and the Servicers under their respective Servicing
Agreements, all upon the terms and conditions and subject to the limitations
hereinafter set forth;
NOW, THEREFORE, in consideration of the premises and the
mutual covenants and agreements hereinafter set forth, the Trustee, the Company,
the Master Servicer and the Custodian hereby agree as follows:
SECTION 1.
DEFINITIONS
Capitalized terms used in this Agreement and not defined
herein shall have the meanings assigned in the Original Pooling and Servicing
Agreement, unless otherwise required by the context herein.
SECTION 2.
CUSTODY OF MORTGAGE DOCUMENTS
Section 2.1. Custodian to Act as Agent: Acceptance of Mortgage
Files. The Custodian, as the duly appointed agent of the Trustee for these
purposes, acknowledges (subject to
G-1
any exceptions noted in the Initial Certification referred to in Section 2.3(a)
receipt of the Mortgage Files relating to the Mortgage Loans identified on the
schedule attached hereto (the "Mortgage Files") and declares that it holds and
will hold such Mortgage Files as agent for the Trustee, in trust, for the use
and benefit of all present and future Certificateholders.
Section 2.2. Recordation of Assignments. If any Mortgage File
includes one or more assignments of Mortgage to the Trustee in a state which is
specifically excluded from the Opinion of Counsel delivered by the Seller to the
Trustee and the Custodian pursuant to the provisions of Section 2.01 of the
Pooling and Servicing Agreement, each such assignment shall be delivered by the
Custodian to the Company for the purpose of recording it in the appropriate
public office for real property records, and the Company, at no expense to the
Custodian, shall promptly cause to be recorded in the appropriate public office
for real property records each such assignment of Mortgage and, upon receipt
thereof from such public office, shall return each such assignment of Mortgage
to the Custodian.
Section 2.3. Review of Mortgage Files.
(a) On or prior to the Closing Date, in accordance with
Section 2.02 of the Pooling and Servicing Agreement, the Custodian shall deliver
to the Trustee an Initial Certification in the form annexed hereto as Exhibit
One evidencing receipt (subject to any exceptions noted therein) of a Mortgage
File for each of the Mortgage Loans listed on the Schedule attached hereto (the
"Mortgage Loan Schedule").
(b) Within 90 days of the Closing Date, the Custodian agrees,
for the benefit of Certificateholders, to review, in accordance with the
provisions of Section 2.02 of the Pooling and Servicing Agreement, each such
document, and shall deliver to the Seller and the Trustee an Interim
Certification in the form annexed hereto as Exhibit Two to the effect that all
such documents have been executed and received and that such documents relate to
the Mortgage Loans identified on the Mortgage Loan Schedule, except for any
exceptions listed on Schedule A attached to such Interim Certification. The
Custodian shall be under no duty or obligation to 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 or that they are other than what they
purport to be on their face.
(c) Not later than 180 days after the Closing Date, the
Custodian shall review the Mortgage Files as provided in Section 2.02 of the
Pooling and Servicing Agreement and deliver to the Seller and the Trustee a
Final Certification in the form annexed hereto as Exhibit Three evidencing the
completeness of the Mortgage Files.
(d) In reviewing the Mortgage Files as provided herein and in
the Pooling and Servicing Agreement, the Custodian shall make no representation
as to and shall not be responsible to verify (i) the validity, legality,
enforceability, due authorization, recordability, sufficiency or genuineness of
any of the documents included in any Mortgage File or (ii) the collectibility,
insurability, effectiveness or suitability of any of the documents in any
Mortgage File.
G-2
Upon receipt of written request from the Trustee, the Custodian shall
as soon as practicable supply the Trustee with a list of all of the documents
relating to the Mortgage Loans missing from the Mortgage Files.
Section 2.4. Notification of Breaches of Representations and
Warranties. Upon discovery by the Custodian of a breach of any representation or
warranty made by the Company as set forth in the Pooling and Servicing Agreement
with respect to a Mortgage Loan relating to a Mortgage File, the Custodian shall
give prompt written notice to the Company, the related Servicer and the Trustee.
Section 2.5. Custodian to Cooperate: Release of Mortgage
Files. Upon receipt of written notice from the Trustee that the Mortgage Loan
Seller has repurchased a Mortgage Loan pursuant to Article II of the Pooling and
Servicing Agreement, and that the purchase price therefore has been deposited in
the Master Servicer Collection Account or the Distribution Account, then the
Custodian agrees to promptly release to the Mortgage Loan Seller the related
Mortgage File.
Upon the Custodian's receipt of a request for release (a
"Request for Release") substantially in the form of Exhibit D to the Pooling and
Servicing Agreement signed by a Servicing Officer of the related Servicer
stating that it has received payment in full of a Mortgage Loan or that payment
in full will be escrowed in a manner customary for such purposes, the Custodian
agrees promptly to release to the related Servicer the related Mortgage File.
The Company shall deliver to the Custodian and the Custodian agrees to accept
the Mortgage Note and other documents constituting the Mortgage File with
respect to any Substitute Mortgage Loan.
From time to time as is appropriate for the servicing or
foreclosure of any Mortgage Loan, including, for this purpose, collection under
any Primary Insurance Policy, the related Servicer (or if the Servicer does not,
the Master Servicer) shall deliver to the Custodian a Request for Release signed
by a Servicing Officer requesting that possession of all of the Mortgage File be
released to the related Servicer and certifying as to the reason for such
release and that such release will not invalidate any insurance coverage
provided in respect of the Mortgage Loan under any of the Insurance Policies.
Upon receipt of the foregoing, the Custodian shall deliver the Mortgage File to
the related Servicer. The related Servicer shall cause each Mortgage File or any
document therein so released to be returned to the Custodian when the need
therefore by the related Servicer no longer exists, unless (i) the Mortgage Loan
has been liquidated and the Liquidation Proceeds relating to the Mortgage Loan
have been deposited in the Master Servicer Collection Account or the
Distribution Account or (ii) the Mortgage File or such document has been
delivered to an attorney, or to a public trustee or other public official as
required by law, for purposes of initiating or pursuing legal action or other
proceedings for the foreclosure of the Mortgaged Property either judicially or
non-judicially, and the related Servicer has delivered to the Custodian a
certificate of a Servicing Officer certifying as to the name and address of the
Person to which such Mortgage File or such document was delivered and the
purpose or purposes of such delivery.
At any time that a Servicer is required to deliver to the
Custodian a Request for Release, the Servicer shall deliver two copies of the
Request for Release if delivered in hard copy or the Servicer may furnish such
Request for Release electronically to the Custodian, in which event the
Servicing Officer transmitting the same shall be deemed to have signed the
Request for Release.
G-3
In connection with any Request for Release of a Mortgage File because of a
repurchase of a Mortgage Loan, such Request for Release shall be accompanied by
an assignment of mortgage, without recourse from the Trustee to the Mortgage
Loan Seller and the related Mortgage Note shall be endorsed without recourse by
the Trustee and be returned to the Mortgage Loan Seller. In connection with any
Request for Release of a Mortgage File because of the payment in full of a
Mortgage Loan, such Request for Release shall be accompanied by a certificate of
satisfaction or other similar instrument to be executed by or on behalf of the
Trustee and returned to the related Servicer.
Section 2.6. Assumption Agreements. In the event that any
assumption agreement, substitution of liability agreement or sale of servicing
agreement is entered into with respect to any Mortgage Loan subject to this
Agreement in accordance with the terms and provisions of the Pooling and
Servicing Agreement, the Master Servicer, to the extent provided in the related
Servicing Agreement, shall cause the related Servicer to notify the Custodian
that such assumption or substitution agreement has been completed by forwarding
to the Custodian the original of such assumption or substitution agreement,
which shall be added to the related Mortgage File and, for all purposes, shall
be considered a part of such Mortgage File to the same extent as all other
documents and instruments constituting parts thereof.
SECTION 3.
CONCERNING THE CUSTODIAN
Section 3.1. Custodian as Bailee and Agent of the Trustee.
With respect to each Mortgage Note, Mortgage and other documents constituting
each Mortgage File which are delivered to the Custodian, the Custodian is
exclusively the bailee and agent of the Trustee and has no instructions to hold
any Mortgage Note or Mortgage for the benefit of any person other than the
Trustee and the Certificateholders and undertakes to perform such duties and
only such duties as are specifically set forth in this Agreement. Except upon
compliance with the provisions of Section 2.5 of this Agreement, no Mortgage
Note, Mortgage or Mortgage File shall be delivered by the Custodian to the
Company, the Servicers or the Master Servicer or otherwise released from the
possession of the Custodian.
Section 3.2. Reserved.
Section 3.3. Custodian May Own Certificates. The Custodian in
its individual or any other capacity may become the owner or pledgee of
Certificates with the same rights it would have if it were not Custodian.
Section 3.4. Master Servicer to Pay Custodian's Fees and
Expenses. The Master Servicer covenants and agrees to pay to the Custodian from
time to time, and the Custodian shall be entitled to, reasonable compensation
for all services rendered by it in the exercise and performance of any of the
powers and duties hereunder of the Custodian, and the Master Servicer will pay
or reimburse the Custodian upon its request for all reasonable expenses,
disbursements and advances incurred or made by the Custodian in accordance with
any of the provisions of this Agreement (including the reasonable compensation
and the expenses and disbursements of its counsel and of all persons not
regularly in its employ), except any such expense, disbursement or advance as
may
G-4
arise from its negligence or bad faith or to the extent that such cost or
expense is indemnified by the Company pursuant to the Pooling and Servicing
Agreement.
Section 3.5. Custodian May Resign Trustee May Remove
Custodian. The Custodian may resign from the obligations and duties hereby
imposed upon it as such obligations and duties relate to its acting as Custodian
of the Mortgage Loans. Upon receiving such notice of resignation, the Trustee
shall either take custody of the Mortgage Files itself and give prompt notice
thereof to the Company, the Master Servicer and the Custodian, or promptly
appoint a successor Custodian by written instrument, in duplicate, one copy of
which instrument shall be delivered to the resigning Custodian and one copy to
the successor Custodian. If the Trustee shall not have taken custody of the
Mortgage Files and no successor Custodian shall have been so appointed and have
accepted appointment within 30 days after the giving of such notice of
resignation, the resigning Custodian may petition any court of competent
jurisdiction for the appointment of a successor Custodian.
The Trustee may remove the Custodian at any time with the
consent of the Master Servicer. In such event, the Trustee shall appoint, or
petition a court of competent jurisdiction to appoint, a successor Custodian
hereunder. Any successor Custodian shall be a depository institution subject to
supervision or examination by federal or state authority, shall be able to
satisfy the other requirements contained in Section 3.7 and shall be
unaffiliated with the Servicer or the Company.
Any resignation or removal of the Custodian and appointment of
a successor Custodian pursuant to any of the provisions of this Section 3.5
shall become effective upon acceptance of appointment by the successor
Custodian. The Trustee shall give prompt notice to the Company and the Master
Servicer of the appointment of any successor Custodian. No successor Custodian
shall be appointed by the Trustee without the prior approval of the Company and
the Master Servicer.
Section 3.6. Merger or Consolidation of Custodian. Any Person
into which the Custodian may be merged or converted or with which it may be
consolidated, or any Person resulting from any merger, conversion or
consolidation to which the Custodian shall be a party, or any Person succeeding
to the business of the Custodian, shall be the successor of the Custodian
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.
Section 3.7. Representations of the Custodian. The Custodian
hereby represents that it is a depository institution subject to supervision or
examination by a federal or state authority, has a combined capital and surplus
of at least $15,000,000 and is qualified to do business in the jurisdictions in
which it will hold any Mortgage File.
SECTION 4.
MISCELLANEOUS PROVISIONS
Section 4.1. Notices. All notices, requests, consents and
demands and other communications required under this Agreement or pursuant to
any other instrument or document delivered hereunder shall be in writing and,
unless otherwise specifically provided, may be delivered personally, by telegram
or telex, or by registered or certified mail, postage prepaid, return receipt
G-5
requested, at the addresses specified on the signature page hereof (unless
changed by the particular party whose address is stated herein by similar notice
in writing), in which case the notice will be deemed delivered when received.
Section 4.2. Amendments. No modification or amendment of or
supplement to this Agreement shall be valid or effective unless the same is in
writing and signed by all parties hereto, and neither the Company, the Master
Servicer nor the Trustee shall enter into any amendment hereof except as
permitted by the Pooling and Servicing Agreement. The Trustee shall give prompt
notice to the Custodian of any amendment or supplement to the Pooling and
Servicing Agreement and furnish the Custodian with written copies thereof.
Section 4.3. GOVERNING LAW. THIS AGREEMENT SHALL BE DEEMED A
CONTRACT MADE UNDER THE LAWS OF THE STATE OF NEW YORK AND SHALL BE CONSTRUED AND
ENFORCED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF NEW YORK.
Section 4.4. Recordation of Agreement. To the extent permitted
by applicable law, this Agreement is subject to recordation in all appropriate
public offices for real property records in all the counties or other comparable
jurisdictions in which any or all of the properties subject to the Mortgages are
situated, and in any other appropriate public recording office or elsewhere,
such recordation to be effected by the Company and at the Trust's expense, but
only upon direction accompanied by an Opinion of Counsel reasonably satisfactory
to the Company to the effect that the failure to effect such recordation is
likely to materially and adversely affect 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 4.5. 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.
G-6
IN WITNESS WHEREOF, this Agreement is executed as of the date
first above written.
Address: JPMORGAN CHASE BANK, as Trustee
0 Xxx Xxxx Xxxxx, 0xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000 By:___________________________
Name:
Attention: Title:
Telecopy:
Confirmation:
Address: STRUCTURED ASSET MORTGAGE
INVESTMENTS INC.
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
By:___________________________
Name: Xxxxx Xxxxxxxxxxx
Title: Vice President
Address: XXXXX FARGO BANK MINNESOTA,
NATIONAL ASSOCIATION, as Master
0000 Xxx Xxxxxxxxx Xxxx Xxxxxxxx
Xxxxxxxx, Xxxxxxxx 00000
By:___________________________
Name: Xxxxxx Xxxxxx
Title: Assistant Vice President
Address: XXXXX FARGO BANK MINNESOTA,
NATIONAL ASSOCIATION, as Custodian
0000 Xxx Xxxxxxxxx Xxxx
Xxxxxxxx, Xxxxxxxx 00000 By:___________________________
Name: Xxxxxx Xxxxxx
Title: Assistant Vice President
X-0
XXXXX XX XXX XXXX )
)ss.:
COUNTY OF NEW YORK )
On the 30st day of September 2003 before me, a notary public
in and for said State, personally appeared _______________, known to me to be a
_________________of JPMorgan Chase Bank, a state banking association that
executed the within instrument, and also known to me to be the person who
executed it on behalf of said corporation and acknowledged to me that such
corporation executed the within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my
official seal the day and year in this certificate first above written.
______________________
Notary Public
[SEAL]
STATE OF MARYLAND )
) ss.:
COUNTY OF XXXXXX )
On the 30st day of September 2003 before me, a notary public
in and for said State, personally appeared Xxxxxx Xxxxxx, known to me to be an
Assistant Vice President of Xxxxx Fargo Bank Minnesota, National Association, a
national banking association that executed the within instrument, and also known
to me to be the person who executed it on behalf of said national banking
association, and acknowledged to me that such national banking association
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]
STATE OF NEW YORK )
)ss.:
COUNTY OF NEW YORK )
On the 30st day of September 2003 before me, a notary public
in and for said State, personally appeared Xxxxx Xxxxxxxxxxx, known to me to be
a Vice President of Structured Asset Mortgage Investments 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 said corporation, and acknowledged to me
that such corporation executed the within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my
official seal the day and year in this certificate first above written.
______________________
Notary Public
[Notarial Seal]
STATE OF MARYLAND )
)ss.:
COUNTY OF XXXXXX )
On the 30st day of September 2003 before me, a notary public
in and for said State, personally appeared Xxxxxx Xxxxxx, known to me to be an
Assistant Vice President of Xxxxx Fargo Bank Minnesota, 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 said corporation, and
acknowledged to me that such corporation executed the within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my
official seal the day and year in this certificate first above written.
______________________
Notary Public
[Notarial Seal]
EXHIBIT ONE
FORM OF CUSTODIAN INITIAL CERTIFICATION
September__, 20__
JPMorgan Chase Bank Structured Asset Mortgage Investments Inc.
0 Xxx Xxxx Xxxxx, 0xx Xxxxx 000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000 Xxx Xxxx, Xxx Xxxx 00000
Attention: Structured Asset Mortgage Investments Inc.
Bear Xxxxxxx ALT-A Trust 2003-3, Mortgage Pass-Through Certificates,
Series 2003-3
Re: Custodial Agreement, dated as of September 30, 2003,
by and among JPMorgan Chase Bank, Structured Asset
Mortgage Investments Inc. and Xxxxx Fargo Bank
Minnesota, National Association relating to Bear
Xxxxxxx ALT-A Trust 2003-3, Mortgage Pass-Through
Certificates, Series 2003-3
----------------------------------------------------
Ladies and Gentlemen:
In accordance with Section 2.3 of the above-captioned
Custodial Agreement, and subject to Section 2.02 of the Pooling and Servicing
Agreement, the undersigned, as Custodian, hereby certifies that it has received
a Mortgage File (which contains an original Mortgage Note or lost note
affidavit) to the extent required in Section 2.01 of the Pooling and Servicing
Agreement with respect to each Mortgage Loan listed in the Mortgage Loan
Schedule, with any exceptions listed on Schedule A attached hereto.
Capitalized words and phrases used herein shall have the
respective meanings assigned to them in the above-captioned Custodial Agreement.
XXXXX FARGO BANK MINNESOTA,
NATIONAL ASSOCIATION
By:_______________________________
Name:
Title:
EXHIBIT TWO
FORM OF CUSTODIAN INTERIM CERTIFICATION
September __, 20__
JPMorgan Chase Bank Structured Asset Mortgage Investments Inc.
0 Xxx Xxxx Xxxxx, 0xx Xxxxx 000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000 Xxx Xxxx, Xxx Xxxx 00000
Attention: Structured Asset Mortgage Investments Inc.
Bear Xxxxxxx ALT-A Trust 2003-3, Mortgage Pass-Through Certificates,
Series 2003-3
Re: Custodial Agreement, dated as of September 30, 2003,
by and among JPMorgan Chase Bank, Structured Asset
Mortgage Investments Inc. and Xxxxx Fargo Bank
Minnesota, National Association relating to Bear
Xxxxxxx ALT-A Trust 2003-3, Mortgage Pass-Through
Certificates, Series 2003-3
----------------------------------------------------
Ladies and Gentlemen:
In accordance with Section 2.3 of the above-captioned
Custodial Agreement, the undersigned, as Custodian, hereby certifies that it has
received a Mortgage File to the extent required pursuant to Section 2.01 of the
Pooling and Servicing Agreement with respect to each Mortgage Loan listed in the
Mortgage Loan Schedule, and it has reviewed the Mortgage File and the Mortgage
Loan Schedule and has determined that: all required documents have been executed
and received and that such documents related to the Mortgage Loans identified on
the Mortgage Loan Schedule, with any exceptions listed on Schedule A attached
hereto.
Capitalized words and phrases used herein shall have the
respective meanings assigned to them in the above-captioned Custodial Agreement.
XXXXX FARGO BANK MINNESOTA,
NATIONAL ASSOCIATION
By:________________________
Name:______________________
Title:_____________________
EXHIBIT THREE
FORM OF CUSTODIAN FINAL CERTIFICATION
_______, 20__
JPMorgan Chase Bank Structured Asset Mortgage Investments Inc.
0 Xxx Xxxx Xxxxx, 0xx Xxxxx 000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000 Xxx Xxxx, Xxx Xxxx 00000
Attention: Structured Asset Mortgage Investments Inc.
Bear Xxxxxxx ALT-A Trust 2003-3, Mortgage Pass-Through Certificates,
Series 2003-3
Re: Custodial Agreement, dated as of September 30, 2003,
by and among JPMorgan Chase Bank, Structured Asset
Mortgage Investments Inc. and Xxxxx Fargo Bank
Minnesota, National Association relating to Bear
Xxxxxxx ALT-A Trust 2003-3, Mortgage Pass-Through
Certificates, Series 2003-3
----------------------------------------------------
Ladies and Gentlemen:
In accordance with Section 2.3 of the above-captioned
Custodial Agreement and subject to Section 2.02(b) of the Pooling and Servicing
Agreement, the undersigned, as Custodian, hereby certifies that it has received
a Mortgage File with respect to each such Mortgage Loan listed in the Mortgage
Loan Schedule:
(i) The original Mortgage Note, endorsed without recourse to
the order of the Trustee and showing an unbroken chain of endorsements
from the originator thereof to the Person endorsing it to the Trustee,
or a lost note affidavit together with a copy of the related Mortgage
Note;
(ii) The original Mortgage and, if the related Mortgage Loan
is a MOM Loan, noting the presence of the MIN and language indicating
that such Mortgage Loan is a MOM Loan, which shall have been recorded
(or if the original is not available, a copy), with evidence of such
recording indicated thereon;
(iii) unless the Mortgage Loan is a MOM Loan, a certified copy
of the assignment (which may be in the form of a blanket assignment if
permitted in the jurisdiction in which the Mortgaged Property is
located) to "JPMorgan Chase Bank, as Trustee", with evidence of
recording with respect to each Mortgage Loan in the name of the Trustee
thereon (or if (A) the original Security Instrument, assignments to the
Trustee or intervening assignments thereof which have been delivered,
are being delivered or will, upon receipt of recording
information relating to the Security Instrument required to be included
thereon, be delivered to recording offices for recording and have not
been returned to the Seller in time to permit their delivery as
specified in Section 2.01(b) of the Pooling and Servicing Agreement, a
true copy thereof with a certification by the Seller, on the face of
such copy, substantially as follows: "Certified to be a true and
correct copy of the original, which has been transmitted for recording"
or (B) the related Mortgaged Property is located in a state other than
Maryland and an Opinion of Counsel has been provided as set forth in
Section 2.01(b), shall be in recordable form);
(iv) all intervening assignments of the Security Instrument,
if applicable and only to the extent available to the Seller with
evidence of recording thereon;
(v) the original or a copy of the policy or certificate of
primary mortgage guaranty insurance, to the extent available, if any;
(vi) the original policy of title insurance or mortgagee's
certificate of title insurance or commitment or binder for title
insurance; and
(vii) originals of all modification agreements, if applicable
and available.
Capitalized words and phrases used herein shall have the
respective meanings assigned to them in the above-captioned Custodial Agreement
or in the Pooling and Servicing Agreement, as applicable.
XXXXX FARGO BANK MINNESOTA, NATIONAL
ASSOCIATION
By:_____________________________
Name:___________________________
Title:__________________________
EXHIBIT H-1
ALLIANCE SERVICING AGREEMENT
(Provided Upon Request)
H-1-1
EXHIBIT H-2
INDYMAC SERVICING AGREEMENT
(Provided Upon Request)
X-0-0
XXXXXXX X-0
X.X. BANK SERVICING AGREEMENTS
(Provided Upon Request)
H-3-1
EXHIBIT I
ASSIGNMENT AGREEMENTS
(Provided Upon Request)
I-1-1
EXHIBIT J
FORM OF MORTGAGE LOAN PURCHASE AGREEMENT
MORTGAGE LOAN PURCHASE AGREEMENT, dated as of September 30,
2003, as amended and supplemented by any and all amendments hereto
(collectively, the "Agreement"), by and between EMC MORTGAGE CORPORATION, a
Delaware corporation (the "Mortgage Loan Seller"), and STRUCTURED ASSET MORTGAGE
INVESTMENTS INC., a Delaware corporation (the "Purchaser").
Upon the terms and subject to the conditions of this
Agreement, the Mortgage Loan Seller agrees to sell, and the Purchaser agrees to
purchase, certain conventional, first lien mortgage loans secured primarily by
one- to four-family residential properties (collectively, the "Mortgage Loans")
as described herein. The Purchaser intends to deposit the Mortgage Loans into a
trust fund (the "Trust Fund") and create Bear Xxxxxxx ALT-A Trust, Mortgage
Pass-Through Certificates, Series 2003-3 (the "Certificates"), under a pooling
and servicing agreement, to be dated as of September 1, 2003 (the "Pooling and
Servicing Agreement"), among the Purchaser, as seller, Xxxxx Fargo Bank
Minnesota, National Association, as master servicer and securities
administrator, JPMorgan Chase Bank, as trustee (the "Trustee") and EMC Mortgage
Corporation.
The Purchaser has filed with the Securities and Exchange
Commission (the "Commission") a registration statement on Form S-3 (Number
333-68542) relating to its Mortgage Pass-Through Certificates and the offering
of certain series thereof (including certain classes of the Certificates) from
time to time in accordance with Rule 415 under the Securities Act of 1933, as
amended, and the rules and regulations of the Commission promulgated thereunder
(the "Securities Act"). Such registration statement, when it became effective
under the Securities Act, and the prospectus relating to the public offering of
certain classes of the Certificates by the Purchaser (the "Public Offering"), as
from time to time each is amended or supplemented pursuant to the Securities Act
or otherwise, are referred to herein as the "Registration Statement" and the
"Prospectus," respectively. The "Prospectus Supplement" shall mean that
supplement, dated September 26, 2003 to the Prospectus, dated September 26,
2003, relating to certain classes of the Certificates. With respect to the
Public Offering of certain classes of the Certificates, the Purchaser and Bear,
Xxxxxxx & Co. Inc. ("Bear Xxxxxxx") have entered into a terms agreement dated as
of September 26, 2003 to an underwriting agreement dated June 25, 1996, between
the Purchaser and Bear Xxxxxxx (collectively, the "Underwriting Agreement").
Now, therefore, in consideration of the premises and the
mutual agreements set forth herein, the parties hereto agree as follows:
SECTION 1. Definitions. Certain terms are defined herein.
Capitalized terms used herein but not defined herein shall have the meanings
specified in the Pooling and Servicing Agreement. The following other terms are
defined as follows:
Acquisition Price: Cash in an amount equal to $__________
(plus $_______ in accrued interest).
J-1
Bear Xxxxxxx: Bear, Xxxxxxx & Co. Inc.
Closing Date: September 30, 2003.
Cut-off Date: September 1, 2003.
Cut-off Date Balance: $699,374,666
Deleted Mortgage Loan: A Mortgage Loan replaced or to be
replaced by a Substitute Mortgage Loan.
Due Date: With respect to each Mortgage Loan, the date in each
month on which its scheduled payment is due if such due date is the first day of
a month and otherwise is deemed to be the first day of the following month or
such other date specified in the related Servicing Agreement.
Master Servicer: Xxxxx Fargo Bank Minnesota, National
Association.
Moody's: Xxxxx'x Investors Service, Inc., or its successor in
interest.
MERS: Mortgage Electronic Registration Systems, Inc., a
corporation organized and existing under the laws of the State of Delaware, or
any successor thereto.
MERS(R) System: The system of recording transfers of Mortgages
electronically maintained by MERS.
Mortgage: The mortgage or deed of trust creating a first lien
on an interest in real property securing a Mortgage Note.
Mortgage File: The items referred to in Exhibit 1 pertaining
to a particular Mortgage Loan and any additional documents required to be added
to such documents pursuant to this Agreement.
Mortgage Interest Rate: The annual rate of interest borne by a
Mortgage Note as stated therein.
Mortgagor: The obligor(s) on a Mortgage Note.
Net Rate: For each Mortgage Loan, the Mortgage Interest Rate
for such Mortgage Loan less the Servicing Fee Rate.
Opinion of Counsel: A written opinion of counsel, who may be
counsel for the Mortgage Loan Seller or the Purchaser, reasonably acceptable to
the Trustee.
Person: Any legal person, including any individual,
corporation, partnership, joint venture, association, joint stock company,
trust, unincorporated organization or government or any agency or political
subdivision thereof.
J-2
Purchase Price: With respect to any Mortgage Loan (or any
property acquired with respect thereto) required to be repurchased by the
Mortgage Loan Seller pursuant to this Agreement or Article II of the Pooling and
Servicing Agreement, an amount equal to the sum of (i)(a) 100% of the
Outstanding Principal Balance of such Mortgage Loan as of the date of repurchase
(or if the related Mortgaged Property was acquired with respect thereto, 100% of
the Outstanding Principal Balance at the date of the acquisition), plus (b)
accrued but unpaid interest on the Outstanding Principal Balance at the related
Mortgage Interest Rate, through and including the last day of the month of
repurchase, and reduced by (c) any portion of the Master Servicing Compensation,
Monthly Advances and advances payable to the purchaser of the Mortgage Loan and
(ii) any costs and damages (if any) incurred by the Trust in connection with any
violation of such Mortgage Loan of any predatory or abusive lending laws.
PWS Agreements: The various agreements attached hereto as
Exhibit 6.
Rating Agencies: Standard & Poor's and Moody's, each a "Rating
Agency."
Securities Act: The Securities Act of 1933, as amended.
Security Instrument: A written instrument creating a valid
first lien on a Mortgaged Property securing a Mortgage Note, which may be any
applicable form of mortgage, deed of trust, deed to secure debt or security
deed, including any riders or addenda thereto.
Standard & Poor's: Standard & Poor's, a division of The
XxXxxx-Xxxx Companies, Inc. or its successor in interest.
Substitute Mortgage Loan: A mortgage loan substituted for a
Deleted Mortgage Loan which must meet on the date of such substitution the
requirements stated herein and in the Pooling and Servicing Agreement; upon such
substitution, such mortgage loan shall be a "Mortgage Loan" hereunder.
Value: The value of the Mortgaged Property at the time of
origination of the related Mortgage Loan, such value being the lesser of (i) the
value of such property set forth in an appraisal accepted by the applicable
originator of the Mortgage Loan or (ii) the sales price of such property at the
time of origination.
SECTION 2. Purchase and Sale of the Mortgage Loans and Related
Rights. (a) Upon satisfaction of the conditions set forth in Section 10 hereof,
the Mortgage Loan Seller agrees to sell, and the Purchaser agrees to purchase
Mortgage Loans having an aggregate outstanding principal balance as of the
Cut-off Date equal to the Cut-off Date Balance.
(b) The closing for the purchase and sale of the Mortgage
Loans and the closing for the issuance of the Certificates will take place on
the Closing Date at the office of the Purchaser's counsel in New York, New York
or such other place as the parties shall agree.
(c) Upon the satisfaction of the conditions set forth in
Section 10 hereof, on the Closing Date, the Purchaser shall pay to the Mortgage
Loan Seller the Acquisition Price for the
J-3
Mortgage Loans in immediately available funds by wire transfer to such account
or accounts as shall be designated by the Mortgage Loan Seller.
(d) In addition to the foregoing, on the Closing Date the
Mortgage Loan Seller assigns to the Purchaser all of its right, title and
interest in the PWS Agreements (other than its right to enforce the
representations and warranties set forth therein).
SECTION 3. Mortgage Loan Schedules. The Mortgage Loan Seller
agrees to provide to the Purchaser as of the date hereof a preliminary listing
of the Mortgage Loans (the "Preliminary Mortgage Loan Schedule") setting forth
the information listed on Exhibit 2 to this Agreement with respect to each of
the Mortgage Loans being sold by the Mortgage Loan Seller. If there are changes
to the Preliminary Mortgage Loan Schedule, the Mortgage Loan Seller shall
provide to the Purchaser as of the Closing Date a final schedule (the "Final
Mortgage Loan Schedule") setting forth the information listed on Exhibit 2 to
this Agreement with respect to each of the Mortgage Loans being sold by the
Mortgage Loan Seller to the Purchaser. The Final Mortgage Loan Schedule shall be
delivered to the Purchaser on the Closing Date, shall be attached to an
amendment to this Agreement to be executed on the Closing Date by the parties
hereto and shall be in form and substance mutually agreed to by the Mortgage
Loan Seller and the Purchaser (the "Amendment"). If there are no changes to the
Preliminary Mortgage Loan Schedule, the Preliminary Mortgage Loan Schedule shall
be the Final Mortgage Loan Schedule for all purposes hereof.
SECTION 4. Mortgage Loan Transfer.
(a) The Purchaser will be entitled to all scheduled payments
of principal and interest on the Mortgage Loans due after the Cut-off Date
(regardless of when actually collected) and all payments thereon, other than
scheduled principal and interest, received after the Cut-off Date. The Mortgage
Loan Seller will be entitled to all scheduled payments of principal and interest
on the Mortgage Loans due on or before the Cut-off Date (including payments
collected after the Cut-off Date) and all payments thereon, other than scheduled
principal and interest, received on or before the Cut-off Date. Such principal
amounts and any interest thereon belonging to the Mortgage Loan Seller as
described above will not be included in the aggregate outstanding principal
balance of the Mortgage Loans as of the Cut-off Date as set forth on the Final
Mortgage Loan Schedule.
(b) Pursuant to various conveyancing documents to be executed
on the Closing Date and pursuant to the Pooling and Servicing Agreement, the
Purchaser will assign on the Closing Date all of its right, title and interest
in and to the Mortgage Loans to the Trustee for the benefit of the
Certificateholders. In connection with the transfer and assignment of the
Mortgage Loans, the Mortgage Loan Seller has delivered or will deliver or cause
to be delivered to the Trustee by the Closing Date or such later date as is
agreed to by the Purchaser and the Mortgage Loan Seller (each of the Closing
Date and such later date is referred to as a "Mortgage File Delivery Date"), the
items of each Mortgage File, provided, however, that in lieu of the foregoing,
the Mortgage Loan Seller may deliver the following documents, under the
circumstances set forth below: (x) in lieu of the original Security Instrument,
assignments to the Trustee or intervening assignments thereof which have been
delivered, are being delivered or will, upon receipt of recording information
relating to the Security Instrument required to be included thereon, be
delivered to recording offices for recording and have not been returned to the
Mortgage Loan Seller in time to permit their delivery
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as specified above, the Mortgage Loan Seller may deliver a true copy thereof
with a certification by the Mortgage Loan Seller, on the face of such copy,
substantially as follows: "Certified to be a true and correct copy of the
original, which has been transmitted for recording" (y) in lieu of the Security
Instrument, assignments to the Trustee or intervening assignments thereof, if
the applicable jurisdiction retains the originals of such documents (as
evidenced by a certification from the Mortgage Loan Seller to such effect) the
Mortgage Loan Seller may deliver photocopies of such documents containing an
original certification by the judicial or other governmental authority of the
jurisdiction where such documents were recorded; and (z) in lieu of the Mortgage
Notes relating to the Mortgage Loans, each identified in the list delivered by
the Purchaser to the Trustee on the Closing Date and attached hereto as Exhibit
5, the Mortgage Loan Seller may deliver lost note affidavits and indemnities of
the Mortgage Loan Seller; and provided further, however, that in the case of
Mortgage Loans which have been prepaid in full after the Cut-off Date and prior
to the Closing Date, the Mortgage Loan Seller, in lieu of delivering the above
documents, may deliver to the Trustee a certification by the Mortgage Loan
Seller or the Master Servicer to such effect. The Mortgage Loan Seller shall
deliver such original documents (including any original documents as to which
certified copies had previously been delivered) or such certified copies to the
Trustee promptly after they are received. The Mortgage Loan Seller shall cause
the Mortgage and intervening assignments, if any, and the assignment of the
Security Instrument to be recorded not later than 180 days after the Closing
Date, unless such assignment is not required to be recorded under the terms set
forth in Section 6(a) hereof.
(c) In connection with the assignment of any Mortgage Loan
registered on the MERS(R) System, the Mortgage Loan Seller further agrees that
it will cause, at the Mortgage Loan Seller's own expense, within 30 days after
the Closing Date, the MERS(R) System to indicate that such Mortgage Loans have
been assigned by the Mortgage Loan Seller to the Purchaser and by the Purchaser
to the Trustee in accordance with this Agreement for the benefit of the
Certificateholders by including (or deleting, in the case of Mortgage Loans
which are repurchased in accordance with this Agreement) in such computer files
(a) the code in the field which identifies the specific Trustee and (b) the code
in the field "Pool Field" which identifies the series of the Certificates issued
in connection with such Mortgage Loans. The Mortgage Loan Seller further agrees
that it will not, and will not permit any Servicer or the Master Servicer to,
and the Master Servicer agrees that it will not, alter the codes referenced in
this paragraph with respect to any Mortgage Loan during the term of the Pooling
and Servicing Agreement unless and until such Mortgage Loan is repurchased in
accordance with the terms of the Pooling and Servicing Agreement.
(d) The Mortgage Loan Seller and the Purchaser acknowledge
hereunder that all of the Mortgage Loans and the related servicing will
ultimately be assigned to JPMorgan Chase Bank, as Trustee for the
Certificateholders, on the date hereof.
SECTION 5. Examination of Mortgage Files.
(a) On or before the Mortgage File Delivery Date, the Mortgage
Loan Seller will have made the Mortgage Files available to the Purchaser or its
agent for examination which may be at the offices of the Trustee or the Mortgage
Loan Seller and/or the Mortgage Loan Seller's custodian. The fact that the
Purchaser or its agent has conducted or has failed to conduct any partial or
complete examination of the Mortgage Files shall not affect the Purchaser's
rights to demand cure,
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repurchase, substitution or other relief as provided in this Agreement. In
furtherance of the foregoing, the Mortgage Loan Seller shall make the Mortgage
Files available to the Purchaser or its agent from time to time so as to permit
the Purchaser to confirm the Mortgage Loan Seller's compliance with the delivery
and recordation requirements of this Agreement and the Pooling and Servicing
Agreement. In addition, upon request of the Purchaser, the Mortgage Loan Seller
agrees to provide to the Purchaser, Bear Xxxxxxx and to any investors or
prospective investors in the Certificates information regarding the Mortgage
Loans and their servicing, to make the Mortgage Files available to the
Purchaser, Bear Xxxxxxx and to such investors or prospective investors (which
may be at the offices of the Mortgage Loan Seller and/or the Mortgage Loan
Seller's custodian) and to make available personnel knowledgeable about the
Mortgage Loans for discussions with the Purchaser, Bear Xxxxxxx and such
investors or prospective investors, upon reasonable request during regular
business hours, sufficient to permit the Purchaser, Bear Xxxxxxx and such
investors or potential investors to conduct such due diligence as any such party
reasonably believes is appropriate.
(b) Pursuant to the Pooling and Servicing Agreement, on the
Closing Date the Custodian, on behalf of the Trustee, for the benefit of the
Certificateholders, will acknowledge receipt of each Mortgage Loan, by delivery
to the Mortgage Loan Seller, the Purchaser and the Trustee of an initial
certification in the form attached as Exhibit One to the Custodial Agreement.
(c) Pursuant to the Pooling and Servicing Agreement, within 90
days of the Closing Date (or, with respect to any Substitute Mortgage Loan,
within five Business Days after the receipt by the Trustee or Custodian
thereof), the Trustee will review or shall cause the Custodian to review items
of the Mortgage Files as set forth on Exhibit 1 and will deliver to the Mortgage
Loan Seller, the Purchaser and the Trustee an interim certification
substantially in the form of Exhibit Two to the Custodial Agreement. If the
Trustee or Custodian, as its agent, finds any document listed on Exhibit 1 not
to have been executed or received, or to be unrelated, determined on the basis
of the Mortgagor name, original principal balance and loan number, to the
Mortgage Loans identified in the Final Mortgage Loan Schedule or to appear
defective on its face (a "Material Defect"), the Trustee or the Custodian, as
its agent, shall promptly notify the Mortgage Loan Seller of such Material
Defect. The Mortgage Loan Seller shall correct or cure any such Material Defect
within 90 days from the date of notice from the Trustee or the Custodian, as its
agent, of the Material Defect and if the Mortgage Loan Seller fails to correct
or cure such Material Defect within such period and such defect materially and
adversely affects the interests of the Certificateholders in the related
Mortgage Loan, the Mortgage Loan Seller will, in accordance with the terms of
the Pooling and Servicing Agreement, within 90 days of the date of notice,
provide the Trustee with a Substitute Mortgage Loan (if within two years of the
Closing Date) or purchase the related Mortgage Loan at the applicable Purchase
Price; provided that, if such defect would cause the Mortgage Loan to be other
than a "qualified mortgage" as defined in Section 860G(a)(3) of the Code, any
such cure, repurchase or substitution must occur within 90 days from the date
such breach was discovered; provided, however, that if such defect relates
solely to the inability of the Mortgage Loan Seller to deliver the original
Security Instrument or intervening assignments thereof, or a certified copy
because the originals of such documents, or a certified copy, have not been
returned by the applicable jurisdiction, the Mortgage Loan Seller shall not be
required to purchase such Mortgage Loan if the Mortgage Loan Seller delivers
such original documents or certified copy promptly upon receipt, but in no event
later than 360 days after the Closing Date. The foregoing repurchase obligation
shall not apply in the event that the Mortgage Loan Seller cannot deliver such
original or copy of any
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document submitted for recording to the appropriate recording office in the
applicable jurisdiction because such document has not been returned by such
office; provided that the Mortgage Loan Seller shall instead deliver a recording
receipt of such recording office or, if such receipt is not available, a
certificate confirming that such documents have been accepted for recording, and
delivery to the Trustee or the Custodian, as its agent, shall be effected by the
Mortgage Loan Seller within thirty days of its receipt of the original recorded
document.
(d) Pursuant to the Pooling and Servicing Agreement, within
180 days of the Closing Date (or, with respect to any Substitute Mortgage Loan,
within five Business Days after the receipt by the Trustee or Custodian thereof)
the Trustee will review or cause the Custodian to review items of the Mortgage
Files as set forth on Exhibit 1 and will deliver to the Mortgage Loan Seller,
the Purchaser and the Trustee a final certification substantially in the form of
Exhibit Three to the Custodial Agreement. If the Trustee or Custodian, as its
agent, finds a Material Defect, the Trustee or the Custodian, as its agent,
shall promptly notify the Mortgage Loan Seller of such Material Defect. The
Mortgage Loan Seller shall correct or cure any such Material Defect within 90
days from the date of notice from the Trustee or the Custodian, as its agent, of
the Material Defect and if the Mortgage Loan Seller fails to correct or cure
such Material Defect within such period and such defect materially and adversely
affects the interests of the Certificateholders in the related Mortgage Loan,
the Mortgage Loan Seller will, in accordance with the terms of the Pooling and
Servicing Agreement, within 90 days of the date of notice, provide the Trustee
with a Substitute Mortgage Loan (if within two years of the Closing Date) or
purchase the related Mortgage Loan at the applicable Purchase Price; provided
that, if such defect would cause the Mortgage Loan to be other than a "qualified
mortgage" as defined in Section 860G(a)(3) of the Code, any such cure,
repurchase or substitution must occur within 90 days from the date such breach
was discovered; provided, however, that if such defect relates solely to the
inability of the Mortgage Loan Seller to deliver the original Security
Instrument or intervening assignments thereof, or a certified copy because the
originals of such documents, or a certified copy, have not been returned by the
applicable jurisdiction, the Mortgage Loan Seller shall not be required to
purchase such Mortgage Loan if the Mortgage Loan Seller delivers such original
documents or certified copy promptly upon receipt, but in no event later than
360 days after the Closing Date. The foregoing repurchase obligation shall not
apply in the event that the Mortgage Loan Seller cannot deliver such original or
copy of any document submitted for recording to the appropriate recording office
in the applicable jurisdiction because such document has not been returned by
such office; provided that the Mortgage Loan Seller shall instead deliver a
recording receipt of such recording office or, if such receipt is not available,
a certificate confirming that such documents have been accepted for recording,
and delivery to the Trustee or the Custodian, as its agent, shall be effected by
the Mortgage Loan Seller within thirty days of its receipt of the original
recorded document.
(e) At the time of any substitution, the Mortgage Loan Seller
shall deliver or cause to be delivered the Substitute Mortgage Loan, the related
Mortgage File and any other documents and payments required to be delivered in
connection with a substitution pursuant to the Pooling and Servicing Agreement.
At the time of any purchase or substitution, the Trustee in accordance with the
terms of the Pooling and Servicing Agreement shall (i) assign to the Mortgage
Loan Seller and cause the Custodian to release the documents (including, but not
limited to, the Mortgage, Mortgage Note and other contents of the Mortgage File)
in the possession of the Custodian relating to the Deleted Mortgage Loan and
(ii) execute and deliver such instruments of
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transfer or assignment, in each case without recourse, as shall be necessary to
vest in the Mortgage Loan Seller title to such Deleted Mortgage Loan.
SECTION 6. Recordation of Assignments of Mortgage.
(a) The Mortgage Loan Seller shall cause each assignment of
the Security Instrument from the Mortgage Loan Seller to the Trustee to be
recorded not later than 180 days after the Closing Date, unless (a) such
recordation is not required by the Rating Agencies or an Opinion of Counsel has
been provided to the Trustee (with a copy to the Custodian) which states that
the recordation of such assignments is not necessary to protect the interests of
the Certificateholders in the related Mortgage Loans or (b) MERS is identified
on the Mortgage or a properly recorded assignment of the Mortgage, as the
Mortgagee of record solely as nominee for the Mortgage Loan Seller and its
successors and assigns; provided, however, notwithstanding the foregoing, each
assignment shall be submitted for recording by the Mortgage Loan Seller in the
manner described above, at no expense to the Trust or Trustee, upon the earliest
to occur of (i) reasonable direction by the Holders of Certificates evidencing
Fractional Undivided Interests aggregating not less than 25% of the Trust, (ii)
the occurrence of a Event of Default, (iii) the occurrence of a bankruptcy,
insolvency or foreclosure relating to the Mortgage Loan Seller and (iv) the
occurrence of a servicing transfer as described in Section 8.02 of the Pooling
and Servicing Agreement.
While each such Mortgage or assignment is being recorded, if
necessary, the Mortgage Loan Seller shall leave or cause to be left with the
Trustee a certified copy of such Mortgage or assignment. All customary recording
fees and reasonable expenses relating to the recordation of the assignments of
mortgage to the Trustee or the Opinion of Counsel, as the case may be, shall be
borne by the Mortgage Loan Seller.
(b) It is the express intent of the parties hereto that the
conveyance of the Mortgage Loans by the Mortgage Loan Seller to the Purchaser,
as contemplated by this Agreement be, and be treated as, a sale. It is, further,
not the intention of the parties that such conveyance be deemed a pledge of the
Mortgage Loans by the Mortgage Loan Seller to the Purchaser to secure a debt or
other obligation of the Mortgage Loan Seller. However, in the event that,
notwithstanding the intent of the parties, the Mortgage Loans are held by a
court to continue to be property of the Mortgage Loan Seller, then (a) this
Agreement shall also be deemed to be a security agreement within the meaning of
Articles 8 and 9 of the applicable Uniform Commercial Code; (b) the transfer of
the Mortgage Loans provided for herein shall be deemed to be a grant by the
Mortgage Loan Seller to the Purchaser of a security interest in all of the
Mortgage Loan Seller's right, title and interest in and to the Mortgage Loans
and all amounts payable to the holders of the Mortgage Loans in accordance with
the terms thereof and all proceeds of the conversion, voluntary or involuntary,
of the foregoing into cash, instruments, securities or other property, to the
extent the Purchaser would otherwise be entitled to own such Mortgage Loans and
proceeds pursuant to Section 4 hereof, including all amounts, other than
investment earnings, from time to time held or invested in any accounts created
pursuant to the Pooling and Servicing Agreement, whether in the form of cash,
instruments, securities or other property; (c) the possession by the Purchaser
or the Trustee of Mortgage Notes and such other items of property as constitute
instruments, money, negotiable documents or chattel paper shall be deemed to be
"possession by the secured party" for purposes of perfecting the security
interest pursuant to Section 9-313 (or comparable provision) of the applicable
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Uniform Commercial Code; and (d) notifications to persons holding such property,
and acknowledgments, receipts or confirmations from persons holding such
property, shall be deemed notifications to, or acknowledgments, receipts or
confirmations from, financial intermediaries, bailees or agents (as applicable)
of the Purchaser for the purpose of perfecting such security interest under
applicable law. Any assignment of the interest of the Purchaser pursuant to any
provision hereof or pursuant to the Pooling and Servicing Agreement shall also
be deemed to be an assignment of any security interest created hereby. The
Mortgage Loan Seller and the Purchaser shall, to the extent consistent with this
Agreement, take such actions as may be reasonably necessary to ensure that, if
this Agreement were deemed to create a security interest in the Mortgage Loans,
such security interest would be deemed to be a perfected security interest of
first priority under applicable law and will be maintained as such throughout
the term of the Pooling and Servicing Agreement.
SECTION 7. Representations and Warranties of Mortgage Loan
Seller Concerning the Mortgage Loans. The Mortgage Loan Seller hereby represents
and warrants to the Purchaser as of the Closing Date or such other date as may
be specified below with respect to each Mortgage Loan being sold by it:
(i) the information set forth in the Mortgage Loan Schedule
hereto is true and correct in all material respects and the information
provided to the Rating Agencies, including the Mortgage Loan level
detail, is true and correct according to the Rating Agency
requirements;
(ii) immediately prior to the transfer to the Purchaser, the
Mortgage Loan Seller was the sole owner of beneficial title and holder
of each Mortgage and Mortgage Note relating to the Mortgage Loans and
is conveying the same free and clear of any and all liens, claims,
encumbrances, participation interests, equities, pledges, charges or
security interests of any nature and the Mortgage Loan Seller has full
right and authority to sell or assign the same pursuant to this
Agreement;
(iii) to the best of the Mortgage Loan Seller's knowledge,
each Mortgage Loan at the time it was made complied in all material
respects with applicable state and federal laws, including, without
limitation, usury, equal credit opportunity, disclosure and recording
laws; and, to the best of the Mortgage Loan Seller's knowledge, each
Mortgage Loan has been serviced in all material respects in accordance
with applicable state and federal laws, including, without limitation,
usury, equal credit opportunity, disclosure and recording laws and the
terms of the related Mortgage Note, the Mortgage and other loan
documents;
(iv) there is no monetary default existing under any Mortgage
or the related Mortgage Note and there is no material event which, with
the passage of time or with notice and the expiration of any grace or
cure period, would constitute a default, breach or event of
acceleration; and neither the Mortgage Loan Seller, any of its
affiliates nor any servicer of any related Mortgage Loan has taken any
action to waive any default, breach or event of acceleration; no
foreclosure action is threatened or has been commenced with respect to
the Mortgage Loan;
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(v) the terms of the Mortgage Note and the Mortgage have not
been impaired, waived, altered or modified in any respect, except by
written instruments, (i) if required by law in the jurisdiction where
the Mortgaged Property is located, or (ii) to protect the interests of
the Trustee on behalf of the Certificateholders;
(vi) no selection procedure reasonably believed by the
Mortgage Loan Seller to be adverse to the interests of the
Certificateholders was utilized in selecting the Mortgage Loans;
(vii) each Mortgage is a valid and enforceable first lien on
the property securing the related Mortgage Note and each Mortgaged
Property is owned by the Mortgagor in fee simple (except with respect
to common areas in the case of condominiums, PUDs and de minimis PUDs)
or by leasehold for a term longer than the term of the related
Mortgage, subject only to (i) the lien of current real property taxes
and assessments, (ii) covenants, conditions and restrictions, rights of
way, easements and other matters of public record as of the date of
recording of such Mortgage, such exceptions being acceptable to
mortgage lending institutions generally or specifically reflected in
the appraisal obtained in connection with the origination of the
related Mortgage Loan or referred to in the lender's title insurance
policy delivered to the originator of the related Mortgage Loan and
(iii) other matters to which like properties are commonly subject which
do not materially interfere with the benefits of the security intended
to be provided by such Mortgage;
(viii) there is no mechanics' lien or claim for work, labor or
material affecting the premises subject to any Mortgage which is or may
be a lien prior to, or equal with, the lien of such Mortgage except
those which are insured against by the title insurance policy referred
to in (xiiii) below;
(ix) as of the Cut-off Date, to the best of the Mortgage Loan
Seller's knowledge, there was no delinquent tax or assessment lien
against the property subject to any Mortgage, except where such lien
was being contested in good faith and a stay had been granted against
levying on the property;
(x) there is no valid offset, defense or counterclaim to any
Mortgage Note or Mortgage, including the obligation of the Mortgagor to
pay the unpaid principal and interest on such Mortgage Note;
(xi) to the best of the Mortgage Loan Seller's knowledge,
except to the extent insurance is in place which will cover such
damage, the physical property subject to any Mortgage is free of
material damage and is in good repair and there is no proceeding
pending or threatened for the total or partial condemnation of any
Mortgaged Property;
(xii) to the best of the Mortgage Loan Seller's knowledge, the
Mortgaged Property and all improvements thereon comply with all
requirements of any applicable zoning and subdivision laws and
ordinances;
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(xiii) a lender's title insurance policy (on an ALTA or CLTA
form) or binder, or other assurance of title customary in the relevant
jurisdiction therefor in a form acceptable to Xxxxxx Xxx or Xxxxxxx
Mac, was issued on the date that each Mortgage Loan was created by a
title insurance company which, to the best of the Mortgage Loan
Seller's knowledge, was qualified to do business in the jurisdiction
where the related Mortgaged Property is located, insuring the Mortgage
Loan Seller and its successors and assigns that the Mortgage is a first
priority lien on the related Mortgaged Property in the original
principal amount of the Mortgage Loan. The Mortgage Loan Seller is the
sole insured under such lender's title insurance policy, and such
policy, binder or assurance is valid and remains in full force and
effect, and each such policy, binder or assurance shall contain all
applicable endorsements including a negative amortization endorsement,
if applicable;
(xiv) at the time of origination, each Mortgaged Property was
the subject of an appraisal which conformed to the underwriting
requirements of the originator of the Mortgage Loan;
(xv) as of the Closing Date, the improvements on each
Mortgaged Property securing a Mortgage Loan is insured (by an insurer
which is acceptable to the Mortgage Loan Seller) against loss by fire
and such hazards as are covered under a standard extended coverage
endorsement in the locale in which the Mortgaged Property is located,
in an amount which is not less than the lesser of the maximum insurable
value of the improvements securing such Mortgage Loan or the
outstanding principal balance of the Mortgage Loan, but in no event in
an amount less than an amount that is required to prevent the Mortgagor
from being deemed to be a co-insurer thereunder; if the improvement on
the Mortgaged Property is a condominium unit, it is included under the
coverage afforded by a blanket policy for the condominium project; if
upon origination of the related Mortgage Loan, the improvements on the
Mortgaged Property were in an area identified as a federally designated
flood area, a flood insurance policy is in effect in an amount
representing coverage not less than the least of (i) the outstanding
principal balance of the Mortgage Loan, (ii) the restorable cost of
improvements located on such Mortgaged Property or (iii) the maximum
coverage available under federal law; and each Mortgage obligates the
Mortgagor thereunder to maintain the insurance referred to above at the
Mortgagor's cost and expense;
(xvi) each Mortgage Loan constitutes a "qualified mortgage"
under Section 860G(a)(3)(A) of the Code and Treasury Regulation Section
1.8600-2(a)(1);
(xvii) each Mortgage Loan was originated or funded by (a) a
savings and loan association, savings bank, commercial bank, credit
union, insurance company or similar institution which is supervised and
examined by a federal or state authority (or originated by (i) a
subsidiary of any of the foregoing institutions which subsidiary is
actually supervised and examined by applicable regulatory authorities
or (ii) a mortgage loan correspondent of any of the foregoing and that
was originated pursuant to the criteria established by any of the
foregoing) or (b) a mortgagee approved by the Secretary of Housing and
Urban Development pursuant to sections 203 and 211 of the National
Housing Act, as amended;
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(xviii) none of the Mortgage Loans are (a) loans subject to 12
CFR Part 226.31, 12 CFR Part 226.32 or 12 CFR Part 226.34 of Regulation
Z, the regulation implementing TILA, which implements the Home
Ownership and Equity Protection Act of 1994, as amended or (b)
classified and/or defined as a "high cost", "covered", or "predatory"
loan under any other state, federal or local law or regulation or
ordinance, including, but not limited to, the States of Georgia or
North Carolina, or the City of New York; and
(xxix) the information set forth in Schedule A of the
Prospectus Supplement with respect to the Mortgage Loans is true and
correct in all material respects.
It is understood and agreed that the representations and
warranties set forth in this Section 7 will inure to the benefit of the
Purchaser, its successors and assigns, notwithstanding any restrictive or
qualified endorsement on any Mortgage Note or assignment of Mortgage or the
examination of any Mortgage File. Upon any substitution for a Mortgage Loan, the
representations and warranties set forth above shall be deemed to be made by the
Mortgage Loan Seller as to any Substitute Mortgage Loan as of the date of
substitution.
Upon discovery or receipt of notice by the Mortgage Loan
Seller, the Purchaser or the Trustee of a breach of any representation or
warranty of the Mortgage Loan Seller set forth in this Section 7 which
materially and adversely affects the value of the interests of the Purchaser,
the Certificateholders or the Trustee in any of the Mortgage Loans delivered to
the Purchaser pursuant to this Agreement, the party discovering or receiving
notice of such breach shall give prompt written notice to the others. In the
case of any such breach of a representation or warranty set forth in this
Section 7, within 90 days from the date of discovery by the Mortgage Loan
Seller, or the date the Mortgage Loan Seller is notified by the party
discovering or receiving notice of such breach (whichever occurs earlier), the
Mortgage Loan Seller will (i) cure such breach in all material respects, (ii)
purchase the affected Mortgage Loan at the applicable Purchase Price or (iii) if
within two years of the Closing Date, substitute a qualifying Substitute
Mortgage Loan in exchange for such Mortgage Loan. The obligations of the
Mortgage Loan Seller to cure, purchase or substitute a qualifying Substitute
Mortgage Loan shall constitute the Purchaser's, the Trustee's and the
Certificateholder's sole and exclusive remedy under this Agreement or otherwise
respecting a breach of representations or warranties hereunder with respect to
the Mortgage Loans, except for the obligation of the Mortgage Loan Seller to
indemnify the Purchaser for such breach as set forth in and limited by Section
13 hereof.
Any cause of action against the Mortgage Loan Seller or
relating to or arising out of a breach by the Mortgage Loan Seller of any
representations and warranties made in this Section 7 shall accrue as to any
Mortgage Loan upon (i) discovery of such breach by the Mortgage Loan Seller or
notice thereof by the party discovering such breach and (ii) failure by the
Mortgage Loan Seller to cure such breach, purchase such Mortgage Loan or
substitute a qualifying Substitute Mortgage Loan pursuant to the terms hereof.
SECTION 8. Representations and Warranties Concerning the
Mortgage Loan Seller. As of the date hereof and as of the Closing Date, the
Mortgage Loan Seller represents and warrants to the Purchaser as to itself in
the capacity indicated as follows:
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(a) the Mortgage Loan Seller (i) is a corporation duly
organized, validly existing and in good standing under the laws of the
State of Delaware and (ii) is qualified and in good standing to do
business in each jurisdiction where such qualification is necessary,
except where the failure so to qualify would not reasonably be expected
to have a material adverse effect on the Mortgage Loan Seller's
business as presently conducted or on the Mortgage Loan Sellers ability
to enter into this Agreement and to consummate the transactions
contemplated hereby;
(b) the Mortgage Loan Seller has full power to own its
property, to carry on its business as presently conducted and to enter
into and perform its obligations under this Agreement;
(c) the execution and delivery by the Mortgage Loan Seller of
this Agreement have been duly authorized by all necessary action on the
part of the Mortgage Loan Seller; and neither the execution and
delivery of this Agreement, nor the consummation of the transactions
herein contemplated, nor compliance with the provisions hereof, will
conflict with or result in a breach of, or constitute a default under,
any of the provisions of any law, governmental rule, regulation,
judgment, decree or order binding on the Mortgage Loan Seller or its
properties or the charter or by-laws of the Mortgage Loan Seller,
except those conflicts, breaches or defaults which would not reasonably
be expected to have a material adverse effect on the Mortgage Loan
Seller's ability to enter into this Agreement and to consummate the
transactions contemplated hereby;
(d) the execution, delivery and performance by the Mortgage
Loan Seller of this Agreement and the consummation of the transactions
contemplated hereby do not require the consent or approval of, the
giving of notice to, the registration with, or the taking of any other
action in respect of, any state, federal or other governmental
authority or agency, except those consents, approvals, notices,
registrations or other actions as have already been obtained, given or
made and, in connection with the recordation of the Mortgages, powers
of attorney or assignments of Mortgages not yet completed;
(e) this Agreement has been duly executed and delivered by the
Mortgage Loan Seller and, assuming due authorization, execution and
delivery by the Purchaser, constitutes a valid and binding obligation
of the Mortgage Loan Seller enforceable against it in accordance with
its terms (subject to applicable bankruptcy and insolvency laws and
other similar laws affecting the enforcement of the rights of creditors
generally);
(f) there are no actions, suits or proceedings pending or, to
the knowledge of the Mortgage Loan Seller, threatened against the
Mortgage Loan Seller, before or by any court, administrative agency,
arbitrator or governmental body (i) with respect to any of the
transactions contemplated by this Agreement or (ii) with respect to any
other matter which in the judgment of the Mortgage Loan Seller will be
determined adversely to the Mortgage Loan Seller and will if determined
adversely to the Mortgage Loan Seller materially and adversely affect
the Mortgage Loan Seller's ability to perform its obligations under
this Agreement; and the Mortgage Loan Seller is not in default with
respect to any order of any
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court, administrative agency, arbitrator or governmental body so as to
materially and adversely affect the transactions contemplated by this
Agreement; and
(g) the Mortgage Loan Seller's Information (as defined in
Section 13(a) hereof) does not include any untrue statement of a
material fact or omit to state a material fact necessary in order to
make the statements made, in light of the circumstances under which
they were made, not misleading.
SECTION 9. Representations and Warranties Concerning the
Purchaser. As of the date hereof and as of the Closing Date, the Purchaser
represents and warrants to the Mortgage Loan Seller as follows:
(a) the Purchaser (i) is a corporation duly organized, validly
existing and in good standing under the laws of the State of Delaware
and (ii) is qualified and in good standing as a foreign corporation to
do business in each jurisdiction where such qualification is necessary,
except where the failure so to qualify would not reasonably be expected
to have a material adverse effect on the Purchaser's business as
presently conducted or on the Purchaser's ability to enter into this
Agreement and to consummate the transactions contemplated hereby;
(b) the Purchaser has full corporate power to own its
property, to carry on its business as presently conducted and to enter
into and perform its obligations under this Agreement;
(c) the execution and delivery by the Purchaser of this
Agreement have been duly authorized by all necessary corporate action
on the part of the Purchaser; and neither the execution and delivery of
this Agreement, nor the consummation of the transactions herein
contemplated, nor compliance with the provisions hereof, will conflict
with or result in a breach of, or constitute a default under, any of
the provisions of any law, governmental rule, regulation, judgment,
decree or order binding on the Purchaser or its properties or the
articles of incorporation or by-laws of the Purchaser, except those
conflicts, breaches or defaults which would not reasonably be expected
to have a material adverse effect on the Purchaser's ability to enter
into this Agreement and to consummate the transactions contemplated
hereby;
(d) the execution, delivery and performance by the Purchaser
of this Agreement and the consummation of the transactions contemplated
hereby do not require the consent or approval of, the giving of notice
to, the registration with, or the taking of any other action in respect
of, any state, federal or other governmental authority or agency,
except those consents, approvals, notices, registrations or other
actions as have already been obtained, given or made;
(e) this Agreement has been duly executed and delivered by the
Purchaser and, assuming due authorization, execution and delivery by
the Mortgage Loan Seller, constitutes a valid and binding obligation of
the Purchaser enforceable against it in accordance with its terms
(subject to applicable bankruptcy and insolvency laws and other similar
laws affecting the enforcement of the rights of creditors generally);
J-14
(f) there are no actions, suits or proceedings pending or, to
the knowledge of the Purchaser, threatened against the Purchaser,
before or by any court, administrative agency, arbitrator or
governmental body (i) with respect to any of the transactions
contemplated by this Agreement or (ii) with respect to any other matter
which in the judgment of the Purchaser will be determined adversely to
the Purchaser and will if determined adversely to the Purchaser
materially and adversely affect the Purchaser's ability to perform its
obligations under this Agreement; and the Purchaser is not in default
with respect to any order of any court, administrative agency,
arbitrator or governmental body so as to materially and adversely
affect the transactions contemplated by this Agreement; and
(g) the Purchaser's Information (as defined in Section 13(b)
hereof) does not include any untrue statement of a material fact or
omit to state a material fact necessary in order to make the statements
made, in light of the circumstances under which they were made, not
misleading.
SECTION 10. Conditions to Closing.
(a) The obligations of the Purchaser under this Agreement will
be subject to the satisfaction, on or prior to the Closing Date, of the
following conditions:
(1) Each of the obligations of the Mortgage
Loan Seller required to be performed at or prior to the
Closing Date pursuant to the terms of this Agreement shall
have been duly performed and complied with in all material
respects; all of the representations and warranties of the
Mortgage Loan Seller under this Agreement shall be true and
correct as of the date or dates specified in all material
respects; and no event shall have occurred which, with notice
or the passage of time, would constitute a default under this
Agreement, or the Pooling and Servicing Agreement; and the
Purchaser shall have received certificates to that effect
signed by authorized officers of the Mortgage Loan Seller.
(2) The Purchaser shall have received all of
the following closing documents, in such forms as are agreed
upon and reasonably acceptable to the Purchaser, duly executed
by all signatories other than the Purchaser as required
pursuant to the respective terms thereof:
(i) If required pursuant to Section 3
hereof, the Amendment dated as of the Closing Date and any
documents referred to therein;
(ii) If required pursuant to Section 3
hereof, the Final Mortgage Loan Schedule containing the
information set forth on Exhibit 2 hereto, one copy to be
attached to each counterpart of the Amendment;
(iii) The Pooling and Servicing Agreement,
in form and substance reasonably satisfactory to the Trustee
and the Purchaser, and all documents required thereby duly
executed by all signatories;
J-15
(iv) A certificate of an officer of the
Mortgage Loan Seller dated as of the Closing Date, in a form
reasonably acceptable to the Purchaser, and attached thereto
the resolutions of the Mortgage Loan Seller authorizing the
transactions contemplated by this Agreement, together with
copies of the charter and by-laws of the Mortgage Loan Seller;
(v) One or more opinions of counsel from the
Mortgage Loan Seller's counsel otherwise in form and substance
reasonably satisfactory to the Purchaser, the Trustee and each
Rating Agency;
(vi) A letter from each of the Rating
Agencies giving each Class of Certificates set forth on
Schedule A the rating set forth on Schedule A; and
(vii) Such other documents, certificates
(including additional representations and warranties) and
opinions as may be reasonably necessary to secure the intended
ratings from each Rating Agency for the Certificates.
(3) The Certificates to be sold to Bear
Xxxxxxx pursuant to the Underwriting Agreement and the
Purchase Agreement shall have been issued and sold to Bear
Xxxxxxx.
(4) The Mortgage Loan Seller shall have
furnished to the Purchaser such other certificates of its
officers or others and such other documents and opinions of
counsel to evidence fulfillment of the conditions set forth in
this Agreement and the transactions contemplated hereby as the
Purchaser and its counsel may reasonably request.
(b) The obligations of the Mortgage Loan Seller under this
Agreement shall be subject to the satisfaction, on or prior to the
Closing Date, of the following conditions:
(1) The obligations of the Purchaser
required to be performed by it on or prior to the Closing Date
pursuant to the terms of this Agreement shall have been duly
performed and complied with in all material respects, and all
of the representations and warranties of the Purchaser under
this Agreement shall be true and correct in all material
respects as of the date hereof and as of the Closing Date, and
no event shall have occurred which would constitute a breach
by it of the terms of this Agreement, and the Mortgage Loan
Seller shall have received a certificate to that effect signed
by an authorized officer of the Purchaser.
(2) The Mortgage Loan Seller shall have
received copies of all of the following closing documents, in
such forms as are agreed upon and reasonably acceptable to the
Mortgage Loan Seller, duly executed by all signatories other
than the Mortgage Loan Seller as required pursuant to the
respective terms thereof:
(i) If required pursuant to Section 3
hereof, the Amendment dated as of the Closing Date and any
documents referred to therein;
J-16
(ii) The Pooling and Servicing Agreement, in
form and substance reasonably satisfactory to the Mortgage
Loan Seller, and all documents required thereby duly executed
by all signatories;
(iii) A certificate of an officer of the
Purchaser dated as of the Closing Date, in a form reasonably
acceptable to the Mortgage Loan Seller, and attached thereto
the resolutions of the Purchaser authorizing the transactions
contemplated by this Agreement and the Pooling and Servicing
Agreement, together with copies of the Purchaser's articles of
incorporation, and evidence as to the good standing of the
Purchaser dated as of a recent date;
(iv) One or more opinions of counsel from
the Purchaser's counsel in form and substance reasonably
satisfactory to the Mortgage Loan Seller;
(v) Such other documents, certificates
(including additional representations and warranties) and
opinions as may be reasonably necessary to secure the intended
rating from each Rating Agency for the Certificates;
SECTION 11. Fees and Expenses. Subject to Section 17 hereof,
the Mortgage Loan Seller shall pay on the Closing Date or such later date as may
be agreed to by the Purchaser (i) the fees and expenses of the Mortgage Loan
Seller's attorneys and the reasonable fees and expenses of the Purchaser's
attorneys, (ii) the fees and expenses of Deloitte & Touche LLP, (iii) the fee
for the use of Purchaser's Registration Statement based on the aggregate
original principal amount of the Certificates and the filing fee of the
Commission as in effect on the date on which the Registration Statement was
declared effective, (iv) the fees and expenses including counsel's fees and
expenses in connection with any "blue sky" and legal investment matters, (v) the
fees and expenses of the Trustee which shall include without limitation the fees
and expenses of the Trustee (and the fees and disbursements of its counsel) with
respect to (A) legal and document review of this Agreement, the Pooling and
Servicing Agreement, the Certificates and related agreements, (B) attendance at
the Closing and (C) review of the Mortgage Loans to be performed by the Trustee,
(vi) the expenses for printing or otherwise reproducing the Certificates, the
Prospectus and the Prospectus Supplement, (vii) the fees and expenses of each
Rating Agency (both initial and ongoing), (viii) the fees and expenses relating
to the preparation and recordation of mortgage assignments (including
intervening assignments, if any and if available, to evidence a complete chain
of title from the originator to the Trustee) from the Mortgage Loan Seller to
the Trustee or the expenses relating to the Opinion of Counsel referred to in
Section 6(a) hereof, as the case may be, and (ix) Mortgage File due diligence
expenses and other out-of-pocket expenses incurred by the Purchaser in
connection with the purchase of the Mortgage Loans and by Bear Xxxxxxx in
connection with the sale of the Certificates. The Mortgage Loan Seller
additionally agrees to pay directly to any third party on a timely basis the
fees provided for above which are charged by such third party and which are
billed periodically.
SECTION 12. Accountants' Letters.
(a) Deloitte & Touche LLP will review the characteristics of a
sample of the Mortgage Loans described in the Final Mortgage Loan
Schedule and will compare those characteristics to the description of
the Mortgage Loans contained in the Prospectus
J-17
Supplement under the captions "Summary of Terms--The Mortgage Pool" and
"Description of the Mortgage Loans" and in Annex A thereto. The
Mortgage Loan Seller will cooperate with the Purchaser in making
available all information and taking all steps reasonably necessary to
permit such accountants to complete the review and to deliver the
letters required of them under the Underwriting Agreement. Deloitte &
Touche LLP will also confirm certain calculations as set forth under
the caption "Yield and Prepayment Considerations" in the Prospectus
Supplement.
(b) To the extent statistical information with respect to the
Master Servicer's servicing portfolio is included in the Prospectus
Supplement under the caption "The Master Servicer," a letter from the
certified public accountant for the Master Servicer will be delivered
to the Purchaser dated the date of the Prospectus Supplement, in the
form previously agreed to by the Mortgage Loan Seller and the
Purchaser, with respect to such statistical information.
SECTION 13. Indemnification.
(a) The Mortgage Loan Seller shall indemnify and hold harmless
the Purchaser and its directors, officers and controlling persons (as
defined in Section 15 of the Securities Act) from and against any loss,
claim, damage or liability or action in respect thereof, to which they
or any of them may become subject, under the Securities Act or
otherwise, insofar as such loss, claim, damage, liability or action
arises out of, or is based upon (i) any untrue statement of a material
fact contained in the Mortgage Loan Seller's Information as identified
in Exhibit 3, the omission to state in the Prospectus Supplement or
Prospectus (or any amendment thereof or supplement thereto approved by
the Mortgage Loan Seller and in which additional Mortgage Loan Seller's
Information is identified), in reliance upon and in conformity with
Mortgage Loan Seller's Information a material fact required to be
stated therein or necessary to make the statements therein in light of
the circumstances in which they were made, not misleading, (ii) any
representation or warranty assigned or made by the Mortgage Loan Seller
in Section 7 or Section 8 hereof being, or alleged to be, untrue or
incorrect, or (iii) any failure by the Mortgage Loan Seller to perform
its obligations under this Agreement; and the Mortgage Loan Seller
shall reimburse the Purchaser and each other indemnified party for any
legal and other expenses reasonably incurred by them in connection with
investigating or defending or preparing to defend against any such
loss, claim, damage, liability or action.
The foregoing indemnity agreement is in addition to any liability which
the Mortgage Loan Seller otherwise may have to the Purchaser or any other such
indemnified party.
(b) The Purchaser shall indemnify and hold harmless the
Mortgage Loan Seller and its respective directors, officers and
controlling persons (as defined in Section 15 of the Securities Act)
from and against any loss, claim, damage or liability or action in
respect thereof, to which they or any of them may become subject, under
the Securities Act or otherwise, insofar as such loss, claim, damage,
liability or action arises out of, or is based upon (i) any untrue
statement of a material fact contained in the Purchaser's Information
as identified in Exhibit 4, the omission to state in the Prospectus
Supplement or Prospectus (or
J-18
any amendment thereof or supplement thereto approved by the Purchaser
and in which additional Purchaser's Information is identified), in
reliance upon and in conformity with the Purchaser's Information, a
material fact required to be stated therein or necessary to make the
statements therein in light of the circumstances in which they were
made, not misleading, (ii) any representation or warranty made by the
Purchaser in Section 9 hereof being, or alleged to be, untrue or
incorrect, or (iii) any failure by the Purchaser to perform its
obligations under this Agreement; and the Purchaser shall reimburse the
Mortgage Loan Seller, and each other indemnified party for any legal
and other expenses reasonably incurred by them in connection with
investigating or defending or preparing to defend any such loss, claim,
damage, liability or action. The foregoing indemnity agreement is in
addition to any liability which the Purchaser otherwise may have to the
Mortgage Loan Seller, or any other such indemnified party,
(c) Promptly after receipt by an indemnified party under
subsection (a) or (b) above of notice of the commencement of any
action, such indemnified party shall, if a claim in respect thereof is
to be made against the indemnifying party under such subsection, notify
each party against whom indemnification is to be sought in writing of
the commencement thereof (but the failure so to notify an indemnifying
party shall not relieve it from any liability which it may have under
this Section 13 except to the extent that it has been prejudiced in any
material respect by such failure or from any liability which it may
have otherwise). In case any such action is brought against any
indemnified party, and it notifies an indemnifying party of the
commencement thereof, the indemnifying party will be entitled to
participate therein and, to the extent it may elect by written notice
delivered to the indemnified party promptly (but, in any event, within
30 days) after receiving the aforesaid notice from such indemnified
party, to assume the defense thereof with counsel reasonably
satisfactory to such indemnified party. Notwithstanding the foregoing,
the indemnified party or parties shall have the right to employ its or
their own counsel in any such case, but the fees and expenses of such
counsel shall be at the expense of such indemnified party or parties
unless (i) the employment of such counsel shall have been authorized in
writing by one of the indemnifying parties in connection with the
defense of such action, (ii) the indemnifying parties shall not have
employed counsel to have charge of the defense of such action within a
reasonable time after notice of commencement of the action, or (iii)
such indemnified party or parties shall have reasonably concluded that
there is a conflict of interest between itself or themselves and the
indemnifying party in the conduct of the defense of any claim or that
the interests of the indemnified party or parties are not substantially
co-extensive with those of the indemnifying party (in which case the
indemnifying parties shall not have the right to direct the defense of
such action on behalf of the indemnified party or parties), in any of
which events such fees and expenses shall be borne by the indemnifying
parties (provided, however, that the indemnifying party shall be liable
only for the fees and expenses of one counsel in addition to one local
counsel in the jurisdiction involved. Anything in this subsection to
the contrary notwithstanding, an indemnifying party shall not be liable
for any settlement or any claim or action effected without its written
consent; provided, however, that such consent was not unreasonably
withheld.
(d) If the indemnification provided for in paragraphs (a) and
(b) of this Section 13 shall for any reason be unavailable to an
indemnified party in respect of any loss, claim,
J-19
damage or liability, or any action in respect thereof, referred to in
Section 13, then the indemnifying party shall in lieu of indemnifying
the indemnified party contribute to the amount paid or payable by such
indemnified party as a result of such loss, claim, damage or liability,
or action in respect thereof, in such proportion as shall be
appropriate to reflect the relative benefits received by the Mortgage
Loan Seller on the one hand and the Purchaser on the other from the
purchase and sale of the Mortgage Loans, the offering of the
Certificates and the other transactions contemplated hereunder. No
person found liable for a fraudulent misrepresentation shall be
entitled to contribution from any person who is not also found liable
for such fraudulent misrepresentation.
(e) The parties hereto agree that reliance by an indemnified
party on any publicly available information or any information or
directions furnished by an indemnifying party shall not constitute
negligence, bad faith or willful misconduct by such indemnified party.
SECTION 14. Notices. All demands, notices and communications
hereunder shall be in writing but may be delivered by facsimile transmission
subsequently confirmed in writing. Notices to the Mortgage Loan Seller shall be
directed to EMC Mortgage Corporation, Mac Xxxxxx Xxxxx XX, 000 Xxxxxx Xxxxx
Xxxxx, Xxxxx 000, Xxxxxx, Xxxxx 00000 (Telecopy: (972-444-2880)), and notices to
the Purchaser shall be directed to Structured Asset Mortgage Investments Inc.,
000 Xxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000 (Telecopy: (212-272-7206)),
Attention: Xxxxx Xxxxxxxxxxx; or to any other address as may hereafter be
furnished by one party to the other party by like notice. Any such demand,
notice or communication hereunder shall be deemed to have been received on the
date received at the premises of the addressee (as evidenced, in the case of
registered or certified mail, by the date noted on the return receipt) provided
that it is received on a business day during normal business hours and, if
received after normal business hours, then it shall be deemed to be received on
the next business day.
SECTION 15. Transfer of Mortgage Loans. The Purchaser retains
the right to assign the Mortgage Loans and any or all of its interest under this
Agreement to the Trustee without the consent of the Mortgage Loan Seller, and,
upon such assignment, the Trustee shall succeed to the applicable rights and
obligations of the Purchaser hereunder; provided, however, the Purchaser shall
remain entitled to the benefits set forth in Sections 11, 13 and 17 hereto and
as provided in Section 2(a). Notwithstanding the foregoing, the sole and
exclusive right and remedy of the Trustee with respect to a breach of
representation or warranty of the Mortgage Loan Seller shall be the purchase or
substitution obligations of the Mortgage Loan Seller contained in Sections 5 and
7 hereof.
SECTION 16. Termination. This Agreement may be terminated (a)
by the mutual consent of the parties hereto prior to the Closing Date, (b) by
the Purchaser, if the conditions to the Purchaser's obligation to close set
forth under Section 10(a) hereof are not fulfilled as and when required to be
fulfilled or (c) by the Mortgage Loan Seller, if the conditions to the Mortgage
Loan Seller's obligation to close set forth under Section 10(b) hereof are not
fulfilled as and when required to be fulfilled. In the event of termination
pursuant to clause (b), the Mortgage Loan Seller shall pay, and in the event of
termination pursuant to clause (c), the Purchaser shall pay, all reasonable
out-of- pocket expenses incurred by the other in connection with the
transactions contemplated by this Agreement. In the event of a termination
pursuant to clause (a), each party shall be responsible for its own expenses.
J-20
SECTION 17. Representations, Warranties and Agreements to
Survive Delivery. All representations, warranties and agreements contained in
this Agreement, or contained in certificates of officers of the Mortgage Loan
Seller submitted pursuant hereto, shall remain operative and in full force and
effect and shall survive delivery of the Mortgage Loans to the Purchaser (and by
the Purchaser to the Trustee). Subsequent to the delivery of the Mortgage Loans
to the Purchaser, the Mortgage Loan Seller's representations and warranties
contained herein with respect to the Mortgage Loans shall be deemed to relate to
the Mortgage Loans actually delivered to the Purchaser and included in the Final
Mortgage Loan Schedule and any Substitute Mortgage Loan and not to those
Mortgage Loans deleted from the Preliminary Mortgage Loan Schedule pursuant to
Section 3 hereof prior to the Closing.
SECTION 18. Severability. If any provision of this Agreement
shall be prohibited or invalid under applicable law, the Agreement shall be
ineffective only to such extent, without invalidating the remainder of this
Agreement.
SECTION 19. Counterparts. This Agreement may be executed in
counterparts, each of which will be an original, but which together shall
constitute one and the same agreement.
SECTION 20. Amendment. This Agreement cannot be amended or
modified in any manner without the prior written consent of each party.
SECTION 21. GOVERNING LAW. THIS AGREEMENT SHALL BE DEEMED TO
HAVE BEEN MADE AND PERFORMED IN THE STATE OF NEW YORK AND SHALL BE INTERPRETED
IN ACCORDANCE WITH THE LAWS OF SUCH STATE, WITHOUT REGARD TO CONFLICT OF LAWS
PRINCIPLES OF SUCH STATE.
SECTION 22. Further Assurances. Each of the parties agrees to
execute and deliver such instruments and take such actions as another party may,
from time to time, reasonably request in order to effectuate the purpose and to
carry out the terms of this Agreement including any amendments hereto which may
be required by either Rating Agency.
SECTION 23. Successors and Assigns.
This Agreement shall bind and inure to the benefit of and be
enforceable by the Mortgage Loan Seller and the Purchaser and their permitted
successors and assigns and, to the extent specified in Section 13 hereof, Bear
Xxxxxxx, and their directors, officers and controlling persons (within the
meaning of federal securities laws). The Mortgage Loan Seller acknowledges and
agrees that the Purchaser may assign its rights under this Agreement (including,
without limitation, with respect to the Mortgage Loan Seller's representations
and warranties respecting the Mortgage Loans) to the Trustee. Any person into
which the Mortgage Loan Seller may be merged or consolidated (or any person
resulting from any merger or consolidation involving the Mortgage Loan Seller),
any person resulting from a change in form of the Mortgage Loan Seller or any
person succeeding to the business of the Mortgage Loan Seller, shall be
considered the "successor" of the Mortgage Loan Seller hereunder and shall be
considered a party hereto without the execution or filing of any paper or any
further act or consent on the part of any party hereto. Except as provided in
the two preceding sentences, this Agreement cannot be assigned, pledged or
hypothecated by either party hereto
J-21
without the written consent of the other parties to this Agreement and any such
assignment or purported assignment shall be deemed null and void.
SECTION 24. The Mortgage Loan Seller. The Mortgage Loan Seller
will keep in full effect all rights as are necessary to perform their respective
obligations under this Agreement.
SECTION 25. Entire Agreement. This Agreement contains the
entire agreement and understanding between the parties with respect to the
subject matter hereof, and supersedes all prior and contemporaneous agreements,
understandings, inducements and conditions, express or implied, oral or written,
of any nature whatsoever with respect to the subject matter hereof.
SECTION 26. No Partnership. Nothing herein contained shall be
deemed or construed to create a partnership or joint venture between the parties
hereto.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
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IN WITNESS WHEREOF, the parties hereto have caused their names to be
signed hereto by their respective duly authorized officers as of the date first
above written.
EMC MORTGAGE CORPORATION
By:_________________________________
Name:
Title:
STRUCTURED ASSET MORTGAGE
INVESTMENTS INC.
By:_________________________________
Name:
Title:
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EXHIBIT 1
---------
CONTENTS OF MORTGAGE FILE
-------------------------
The Mortgage File shall include each of the following items, which
shall be available for inspection by the Purchaser or its designee, and which
shall be delivered to the Purchaser or its designee pursuant to the terms of the
Agreement.
(i) The original Mortgage Note, endorsed without recourse to
the order of the Trustee and showing an unbroken chain of endorsements
from the original payee thereof to the Person endorsing it to the
Trustee, or lost note affidavit;
(ii) The original Mortgage and, if the related Mortgage Loan
is a MOM Loan, noting the presence of the MIN and language indicating
that such Mortgage Loan is a MOM Loan, which shall have been recorded
(or if the original is not available, a copy), with evidence of such
recording indicated thereon (or if the original Security Instrument,
assignments to the Trustee or intervening assignments thereof which
have been delivered, are being delivered or will, upon receipt of
recording information relating to the Security Instrument required to
be included thereon, be delivered to recording offices for recording
and have not been returned to the Seller in time to permit their
recording as specified in Section 2.01(b) of the Pooling and Servicing
Agreement, shall be in recordable form);
(iii) Unless the Mortgage Loan is a MOM Loan, a certified copy
of the assignment (which may be in the form of a blanket assignment if
permitted in the jurisdiction in which the Mortgaged Property is
located) to "JPMorgan Chase Bank, as Trustee", with evidence of
recording with respect to each Mortgage Loan in the name of the Trustee
thereon (or if the original Security Instrument, assignments to the
Trustee or intervening assignments thereof which have been delivered,
are being delivered or will, upon receipt of recording information
relating to the Security Instrument required to be included thereon, be
delivered to recording offices for recording and have not been returned
to the Seller in time to permit their delivery as specified in Section
2.01(b) of the Pooling and Servicing Agreement, the Seller may deliver
a true copy thereof with a certification by the Seller, on the face of
such copy, substantially as follows: "Certified to be a true and
correct copy of the original, which has been transmitted for
recording");
(iv) All intervening assignments of the Security Instrument,
if applicable and only to the extent available to the Seller with
evidence of recording thereon;
(v) The original or a copy of the policy or certificate of
primary mortgage guaranty insurance, to the extent available, if any;
(vi) The original policy of title insurance or mortgagee's
certificate of title insurance or commitment or binder for title
insurance; and
(vii) The originals of all modification agreements, if
applicable and available.
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EXHIBIT 2
MORTGAGE LOAN SCHEDULE INFORMATION
The Preliminary and Final Mortgage Loan Schedules shall set forth the
following information with respect to each Mortgage Loan:
(a) the loan number;
(b) the Mortgagor's name;
(c) the city, state and zip code of the Mortgaged Property;
(d) the property type;
(e) the Mortgage Interest Rate;
(f) the Servicing Rate;
(g) the Net Rate;
(h) the original term;
(i) the maturity date;
(j) the stated remaining term to maturity;
(k) the original principal balance;
(1) the first payment date;
(m) the principal and interest payment in effect as of the Cut-off Date;
(n) the unpaid principal balance as of the Cut-off Date;
(o) the Loan-to-Value Ratio at origination;
(p) paid-through date;
(q) the insurer of any Primary Mortgage Insurance Policy;
(r) the Gross Margin, if applicable;
(s) the Maximum Lifetime Mortgage Rate, if applicable;
(t) the Minimum Lifetime Mortgage Rate, if applicable;
E-2
(u) the Periodic Rate Cap, if applicable;
(v) the number of days delinquent, if any;
(w) which Mortgage Loans adjust after an initial fixed-rate period of two,
three, five, seven or ten years;
(x) The Loan Group; and
(y) The Prepayment Charge Loans.
Such schedule also shall set forth for all of the Mortgage Loans, the total
number of Mortgage Loans, the total of each of the amounts described under (k)
and (n) above, the weighted average by principal balance as of the Cut-off Date
of each of the rates described under (e), (f) and (g) above, and the weighted
average remaining term to maturity by unpaid principal balance as of the Cut-off
Date.
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EXHIBIT 3
---------
MORTGAGE LOAN SELLER'S INFORMATION
----------------------------------
All information in the Prospectus Supplement described under the
following Sections: "SUMMARY OF TERMS -- The Mortgage Pool," "DESCRIPTION OF THE
MORTGAGE LOANS" and "SCHEDULE A -- CERTAIN CHARACTERISTICS OF THE MORTGAGE
LOANS."
E-4
EXHIBIT 4
---------
PURCHASER'S INFORMATION
-----------------------
All information in the Prospectus Supplement and the Prospectus, except
the Mortgage Loan Seller's Information.
E-5
EXHIBIT 5
---------
SCHEDULE OF LOST NOTES
----------------------
Available Upon Request
E-6
SCHEDULE A
----------
REQUIRED RATINGS FOR EACH CLASS OF CERTIFICATES
-----------------------------------------------
Public Certificates
-------------------
Class S&P Xxxxx'x
----- --- -------
I-A.................................... AAA Aaa
I-X.................................... AAA Aaa
II-A................................... AAA Aaa
II-X................................... AAA Aaa
III-A.................................. AAA Aaa
IV-A................................... AAA Aaa
V-A.................................... AAA Aaa
VI-A................................... AAA Aaa
R-I.................................... AAA NR
R-II................................... AAA NR
R-III.................................. AAA NR
B-1.................................... AA Aa2
B-2.................................... A A2
B-3.................................... BBB Baa2
None of the above ratings has been lowered since the respective dates of such
letters.
A-1
SCHEDULE B
MORTGAGE LOAN SCHEDULE
[Provided upon request]
B-1
