BEAR XXXXXXX ASSET BACKED SECURITIES, INC.,
Depositor
EMC MORTGAGE CORPORATION,
Seller and Company
XXXXX FARGO BANK MINNESOTA, NATIONAL ASSOCIATION,
Master Servicer and Securities Administrator
and
BANK ONE, NATIONAL ASSOCIATION,
Trustee
--------------------
POOLING AND SERVICING AGREEMENT
Dated as of January 1, 2002
----------------------------------------
BEAR XXXXXXX ASSET BACKED SECURITIES TRUST 2002-AC1
ASSET-BACKED CERTIFICATES, SERIES 2002-AC1
TABLE OF CONTENTS
Page
----
ARTICLE I
DEFINITIONS
Section 1.01 Defined Terms.................................................................-4-
ARTICLE II
CONVEYANCE OF TRUST FUND
REPRESENTATIONS AND WARRANTIES
Section 2.01 Conveyance of Trust Fund.....................................................-39-
Section 2.02 Acceptance of the Mortgage Loans.............................................-40-
Section 2.03 Representations, Warranties and Covenants of the Company and the Seller
............................................................................-42-
Section 2.04 Representations and Warranties of the Depositor..............................-52-
Section 2.05 Delivery of Opinion of Counsel in Connection With Substitutions and
Repurchases..................................................................-53-
Section 2.06 Countersignature and Delivery of Certificates................................-54-
ARTICLE III
ADMINISTRATION AND SERVICING OF EMC MORTGAGE LOANS BY COMPANY
Section 3.01 The Company..................................................................-55-
Section 3.02 Due-on-Sale Clauses; Assumption Agreements...................................-56-
Section 3.03 Subservicers.................................................................-57-
Section 3.04 Documents, Records and Funds in Possession of Company To Be Held for
Trustee......................................................................-58-
Section 3.05 Maintenance of Hazard Insurance..............................................-58-
Section 3.06 Presentment of Claims and Collection of Proceeds.............................-59-
Section 3.07 Maintenance of the Primary Mortgage Insurance Policies.......................-59-
Section 3.08 Fidelity Bond, Errors and Omissions Insurance................................-60-
Section 3.09 Realization Upon Defaulted Mortgage Loans; Determination of Excess
Liquidation Proceeds and Realized Losses; Repurchases of Certain Mortgage
Loans........................................................................-60-
Section 3.10 Servicing Compensation.......................................................-63-
Section 3.11 Reo Property.................................................................-63-
Section 3.12 Liquidation Reports..........................................................-63-
Section 3.13 Annual Certificate as to Compliance..........................................-64-
i
Section 3.14 Annual Independent Certified Public Accountants' Servicing Report
............................................................................-64-
Section 3.15 Books and Records............................................................-64-
ARTICLE IV
ADMINISTRATION AND SERVICING OF MORTGAGE LOANS BY MASTER SERVICER
Section 4.01 Master Servicer..........................................................-66-
Section 4.02 REMIC-related Covenants..................................................-67-
Section 4.03 Monitoring of Servicers..................................................-67-
Section 4.04 Fidelity Bond............................................................-68-
Section 4.05 Power to Act; Procedures.................................................-68-
Section 4.06 Due-on-sale Clauses; Assumption Agreements...............................-69-
Section 4.07 Release of Mortgage Files................................................-69-
Section 4.08 Documents, Records and Funds in Possession of Master Servicer,
Company and Servicer to be Held for Trustee.............................................-70-
Section 4.09 Standard Hazard Insurance and Flood Insurance Policies...................-71-
Section 4.10 Presentment of Claims and Collection of Proceeds.........................-71-
Section 4.11 Maintenance of the Primary Mortgage Insurance Policies...................-72-
Section 4.12 Trustee to Retain Possession of Certain Insurance Policies and
Documents...............................................................................-72-
Section 4.13 Realization Upon Defaulted Mortgage Loans................................-73-
Section 4.14 Compensation for the Master Servicer.....................................-73-
Section 4.15 Reo Property.............................................................-73-
Section 4.16 Annual Officer's Certificate as to Compliance............................-74-
Section 4.17 Annual Independent Accountant's Servicing Report.........................-74-
Section 4.18 Reports Filed With Securities and Exchange Commission....................-75-
Section 4.19 EMC......................................................................-75-
Section 4.20 UCC......................................................................-75-
Section 4.21 Optional Purchase of Defaulted Mortgage Loans............................-75-
ARTICLE V
ACCOUNTS
Section 5.01 Collection of Mortgage Loan Payments; Protected Account......................-77-
Section 5.02 Permitted Withdrawals From the Protected Account.............................-78-
Section 5.02A Reports to Master Servicer...................................................-80-
Section 5.03 Collection of Taxes; Assessments and Similar Items; Escrow Accounts
............................................................................-81-
Section 5.04 Servicer Protected Accounts..............................................-81-
Section 5.05 Master Servicer Collection Account.......................................-82-
ii
Section 5.06 Permitted Withdrawals and Transfers From the Master Servicer
Collection Account......................................................................-84-
Section 5.07 Distribution Account.........................................................-84-
Section 5.08 Permitted Withdrawals and Transfers From the Distribution Account
.............................................................................-85-
ARTICLE VI
DISTRIBUTIONS AND ADVANCES
Section 6.01 Advances.....................................................................-88-
Section 6.02 Compensating Interest Payments...............................................-89-
Section 6.03 REMIC Distributions..........................................................-89-
Section 6.04 Distributions................................................................-89-
Section 6.04A Allocation of Realized Losses................................................-93-
Section 6.05 Monthly Statements to Certificateholders.....................................-95-
Section 6.06 REMIC Designations and Allocations...........................................-98-
ARTICLE VII
THE CERTIFICATES
Section 7.01 the Certificates.............................................................-100-
Section 7.02 Certificate Register; Registration of Transfer and Exchange of Certificates
............................................................................-101-
Section 7.03 Mutilated, Destroyed, Lost or Stolen Certificates............................-105-
Section 7.04 Persons Deemed Owners........................................................-105-
Section 7.05 Access to List of Certificateholders' Names and Addresses....................-105-
Section 7.06 Book-entry Certificates......................................................-105-
Section 7.07 Notices to Depository........................................................-106-
Section 7.08 Definitive Certificates......................................................-107-
Section 7.09 Maintenance of Office or Agency..............................................-107-
ARTICLE VIII
THE COMPANY AND THE MASTER SERVICER
Section 8.01 Liabilities of the Company and the Master Servicer. Each of the
Company and t...........................................................................-108-
Section 8.02 Merger or Consolidation of the Company or the Master Servicer
.......................................................................................-108-
iii
Section 8.03 Indemnification of the Trustee, the Master Servicer, the Securities
Administrator and the Company...........................................................-108-
Section 8.04 Limitations On Liability of the Company, the Master Servicer and
Others..................................................................................-109-
Section 8.05 Master Servicer and Company Not to Resign................................-110-
Section 8.06 Successor Master Servicer................................................-111-
Section 8.07 Sale and Assignment of Master Servicing..................................-111-
ARTICLE IX
DEFAULT; TERMINATION OF MASTER SERVICER;
TERMINATION OF COMPANY
Section 9.01 Events of Default............................................................-112-
Section 9.02 Trustee to Act; Appointment of Successor.....................................-113-
Section 9.03 Notification to Certificateholders...........................................-115-
ARTICLE X
CONCERNING THE TRUSTEE AND THE SECURITIES ADMINISTRATOR
Section 10.01 Duties of Trustee and Securities Administrator...............................-118-
Section 10.02 Certain Matters Affecting the Trustee and the Securities Administrator
............................................................................-120-
Section 10.03 Trustee and Securities Administrator Not Liable for Certificates or Mortgage
Loans........................................................................-121-
Section 10.04 Trustee and Securities Administrator May Own Certificates....................-122-
Section 10.05 Trustee's and Securities Administrator's Fees and Expenses...................-122-
Section 10.06 Eligibility Requirements for Trustee and Securities Administrator............-123-
Section 10.07 Insurance....................................................................-123-
Section 10.08 Resignation and Removal of Trustee and Securities Administrator..............-123-
Section 10.09 Successor Trustee or Securities Administrator................................-124-
Section 10.10 Merger or Consolidation of Trustee or Securities Administrator...............-125-
Section 10.11 Appointment of Co-trustee or Separate Trustee................................-125-
Section 10.12 Tax Matters..................................................................-126-
ARTICLE XI
TERMINATION
Section 11.01 Termination Upon Liquidation or Repurchase of All Mortgage Loans
.............................................................................-130-
iv
Section 11.02 Final Distribution on the Certificates....................-130-
Section 11.03 Additional Termination Requirements.......................-131-
ARTICLE XII
MISCELLANEOUS PROVISIONS
Section 12.01 Amendment.................................................-133-
Section 12.02 Recordation of Agreement; Counterparts....................-134-
Section 12.03 Governing Law.............................................-134-
Section 12.04 Intention of Parties......................................-134-
Section 12.05 Notices...................................................-135-
Section 12.06 Severability of Provisions................................-136-
Section 12.07 Assignment................................................-136-
Section 12.08 Limitation On Rights of Certificateholders................-136-
Section 12.09 Inspection and Audit Rights...............................-137-
Section 12.10 Certificates Nonassessable and Fully Paid.................-138-
v
EXHIBITS
Exhibit A-1 Form of Class I-A Certificates
Exhibit A-2 Form of Class II-A Certificates
Exhibit A-3 Form of Class PO-1 Certificates
Exhibit A-4 Form of Class PO-2 Certificates
Exhibit A-5 Form of Class X-1 Certificates
Exhibit A-6 Form of Class X-2 Certificates
Exhibit A-7 Form of Class X-3 Certificates
Exhibit A-8 Form of Class B-1 Certificates
Exhibit A-9 Form of Class B-2 Certificates
Exhibit A-10 Form of Class B-3 Certificates
Exhibit A-11 Form of Class B-4 Certificates
Exhibit A-12 Form of Class B-5 Certificates
Exhibit A-13 Form of Class B-6 Certificates
Exhibit A-14 Form of Class XP Certificates
Exhibit A-15 Form of Class R-1 Certificates
Exhibit A-16 Form of Class R-2 Certificate
Exhibit B Mortgage Loan Schedule
Exhibit C-1 Form of Initial Certification of Trustee
Exhibit C-2 Form of Interim Certification of Trustee
Exhibit C-3 Form of Final Certification of Trustee
Exhibit D Form of Transfer Affidavit
Exhibit E Form of Transferor Certificate
Exhibit F Form of Investment Letter (Non-Rule 144A)
Exhibit G Form of Rule 144A Investment Letter
Exhibit H Form of Request for Release
Exhibit I DTC Letter of Representations
Exhibit J Schedule of Mortgage Loans with Lost Notes
Exhibit K Form of Custodial Agreement
vi
POOLING AND SERVICING AGREEMENT, dated as of January 1, 2002, among
BEAR XXXXXXX ASSET BACKED SECURITIES, INC., a Delaware corporation, as depositor
(the "Depositor"), EMC MORTGAGE CORPORATION, a Delaware corporation, as seller
(in such capacity, the "Seller") and as company (in such capacity, the
"Company"), XXXXX FARGO BANK MINNESOTA, NATIONAL ASSOCIATION, a national banking
association, as master servicer (in such capacity, the "Master Servicer" and as
securities administrator (in such capacity, the "Securities Administrator") and
BANK ONE, NATIONAL ASSOCIATION, a national banking association, not in its
individual capacity, but solely as trustee (the "Trustee").
PRELIMINARY STATEMENT
The Depositor is the owner of the Trust Fund that is hereby conveyed
to the Trustee in return for the Certificates.
REMIC I
-------
As provided herein, the Trustee will make an election to treat the
segregated pool of assets consisting of the Mortgage Loans and certain other
related assets subject to this Agreement as a real estate mortgage investment
conduit (a "REMIC") for federal income tax purposes, and such segregated pool of
assets will be designated as "REMIC I." The Class R-1 Certificates will
represent the sole class of "residual interests" in REMIC I for purposes of the
REMIC Provisions (as defined herein) under federal income tax law and will have
an initial Certificate Principal Balance of $50.00. The following table
irrevocably sets forth the designation, the Uncertificated REMIC I Pass-Through
Rate, the initial Uncertificated Principal Balance, and solely for purposes of
satisfying Treasury regulation Section 1.860G-1(a)(4)(iii), the "latest possible
maturity date" for each of the REMIC I Regular Interests. None of the REMIC I
Regular Interests will be certificated.
Uncertificated
Initial Uncertificated REMIC I Pass- Assumed Final
Designation Principal Balance Through Rate Maturity Date(1)
-------------- ------------------------ ----------------- -------------------
LTI-IA $287,145,000 8.000% Xxxxxxx 00, 0000
XXX-XXX $206,224,000 8.000% January 25, 2032
LTI-XI N/A Variable(2) January 25, 2032
XXX-XXX X/X Xxxxxxxx(0) Xxxxxxx 00, 0000
XXX-XXX $7,073,728 X/X(0) Xxxxxxx 00, 0000
XXX-XXXX $7,643,009 X/X(0) Xxxxxxx 00, 0000
XXX-X $48,720,522 8.000% January 25, 2032
LTI-XP $100 X/X(0) Xxxxxxx 00, 0000
XXX-X0 $50 8.000% January 25, 2032
-------------------
(1) Solely for purposes of Section 1.860G-1(a)(4)(iii) of the Treasury
regulations, the Distribution Date in the month following the maturity date
for the Mortgage Loan with the latest maturity date has been designated as
the "latest possible maturity date" for each Class of Certificates that
represents one or more of the "regular interests" in REMIC I.
-1-
(2) The Uncertificated REMIC I Pass-Through Rate for Uncertificated REMIC I
Regular Interest LTI-XI shall be the weighted average of the excess of (a)
the Net Mortgage Rate on each [Non-Discount] Mortgage Loan in Group I over
(b) 8.000% per annum, weighted on the basis of the Stated Principal Balance
thereof. The Uncertificated REMIC I Pass-Through Rate for Uncertificated
REMIC I Regular Interest LTI-XII shall be the weighted average of the
excess of (a) the Net Mortgage Rate on each Non-Discount Mortgage Loan in
Group II over (b) 8.00% per annum, weighted on the basis of the Stated
Principal Balance thereof.
(3) REMIC I Regular Interest LTI-X1 will not have an Uncertificated Principal
Balance and is not entitled to receive distributions of principal. Instead,
interest will accrue on an Uncertificated Notional Balance equal to the
aggregate Stated Principal Balance of the Non-Discount Mortgage Loans in
Loan Group I.
(4) REMIC I Regular Interest LTI-XII will not have an Uncertificated Principal
Balance and is not entitled to distributions of principal. Instead,
interest will accrue on an Uncertificated Notional Balance equal to the
aggregate Stated Principal Balance of the Non-Discount Mortgage Loans in
Loan Group II.
(5) REMIC I Regular Interest LTI-POI and REMIC I Regular Interest LTI-POII are
principal only certificates and will not be entitled to distributions of
interest.
(6) REMIC I Regular Interest LTI-XP will accrue interest at a variable rate
equal to the weighted average of the Net Mortgage Rates of the Mortgage
Loans in Loan Group II.
REMIC II
--------
As provided herein, the Trustee will make an election to treat the
segregated pool of assets consisting of the REMIC I Regular Interests as a REMIC
for federal income tax purposes, and such segregated pool of assets will be
designated as "REMIC II". The Class R-2 Certificates will represent the sole
class of "residual interests" in REMIC II for purposes of the REMIC Provisions
and will have an initial Certificate Principal Balance of $50.00.
The following table irrevocably sets forth the Class designation,
Pass-Through Rate and Initial Certificate Principal Balance for each Class of
Certificates that represents one or more of the "regular interests" in REMIC II
created hereunder:
Initial Certificate Assumed Final
Class Designation Principal Balance Pass-Through Rate Maturity Date(1)
------------------ ------------------- ------------------ ----------------
Class I-A
Class I-A $287,145,000 Pass-Through Rate January 25, 2032
Class II-A
Class II-A $206,224,000 Pass-Through Rate January 25, 2032
Class X-1
Class X-1 N/A(2) Pass-Through Rate January 25, 2032
Class X-2
Class X-2 N/A(3) Pass-Through Rate January 25, 2032
Class X-3
Class X-3 N/A(4) Pass-Through Rate January 25, 2032
Class PO-1 $7,073,728 N/A(5) January 25, 2032
Class PO-2 $7,643,009 N/A(6) January 25, 2032
Class B-1
Class B-1 $19,488,000 Pass-Through Rate January 25, 2032
Class B-2
Class B-2 $9,744,100 Pass-Through Rate January 25, 2032
-2-
Class B-3
Class B-3 $8,352,100 Pass-Through Rate January 25, 2032
Class B-4
Class B-4 $3,897,600 Pass-Through Rate January 25, 2032
Class B-5
Class B-5 $2,227,200 Pass-Through Rate January 25, 2032
Class B-6
Class B-6 $5,011,522 Pass-Through Rate January 25, 2032
Class XP $100 N/A(7) January 25, 2032
-------------------
(1) Solely for purposes of Section 1.860G-1(a)(4)(iii) of the Treasury
regulations, the Distribution Date in the month following the maturity date
for the Mortgage Loan with the latest maturity date has been designated as
the "latest possible maturity date" for each Class of Certificates that
represents one or more of the "regular interests" in REMIC II.
(2) The Class X-1 Certificates will accrue interest at the Class X-1
Pass-Through Rate on the Certificate Notional Balance of the Class X-1
Certificates calculated in accordance with the definition of "Certificate
Notional Balance" herein. The Class X-1 Certificates will not be entitled
to distributions in respect of principal.
(3) The Class X-2 Certificates will accrue interest at the Class X-2
Pass-Through Rate on the Certificate Notional Balance of the Class X-2
Certificates calculated in accordance with the definition of "Certificate
Notional Balance" herein. The Class X-2 Certificates will not be entitled
to distributions in respect of principal.
(4) The Class X-3 Certificates will accrue interest on the Certificate Notional
Balance of the Class X-3 Certificates calculated in accordance with the
definition of "Certificate Notional Balance" herein. The Class X-3
Certificates will not be entitled to distributions in respect of principal.
(5) The Class PO-1 Certificates are principal only certificates and are not
entitled to distributions in respect of interest.
(6) The Class PO-2 Certificates are principal only certificates and are not
entitled to distributions in respect of interest.
(7) The Class XP Certificates will accrue interest at a variable rate equal to
the weighted average of the Net Mortgage Rates of the Mortgage Loans in
Loan Group II.
The Trust Fund shall be named, and may be referred to as, the "Bear Xxxxxxx
Asset Backed Securities Trust 2002-AC1." The Certificates issued hereunder may
be referred to as "Asset-Backed Certificates Series 2002-AC1" (including for
purposes of any endorsement or assignment of a Mortgage Note or Mortgage).
In consideration of the mutual agreements herein contained, the Depositor,
the Master Servicer, the Securities Administrator, the Seller, the Company and
the Trustee agree as follows:
-3-
ARTICLE I
DEFINITIONS
Section 1.01 DEFINED TERMS.
In addition to those terms defined in Section 1.02, whenever used in
this Agreement, the following words and phrases, unless the context otherwise
requires, shall have the following meanings:
ACCEPTED MASTER SERVICING PRACTICES: With respect to any Mortgage
Loan, as applicable, either (a) 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 the Company or a
Servicer), or (b) as provided in Section 3.01 hereof or the related Servicing
Agreement, but, in each case, in no event below the standard set forth in clause
(a).
ACCEPTED SERVICING PRACTICES: With respect to each EMC Mortgage Loan,
those mortgage servicing practices (including collection procedures) that are in
accordance with all applicable statutes, regulations and prudent mortgage
banking practices for similar mortgage loans.
ACCOUNT: The Distribution Account, the Master Servicer Collection
Account and any Protected Account.
ACCRUAL PERIOD: With respect to the Certificates (other than the Class
PO-1 Certificates and Class PO-2 Certificates) and any Distribution Date, the
calendar month immediately preceding such Distribution Date. All calculations of
interest on the Certificates (other than the Class PO-1 Certificates and Class
PO-2 Certificates) will be made on the basis of a 360-day year consisting of
twelve 30-day months.
ACCRUED CERTIFICATE INTEREST: With respect to the Certificates (other
than the Class PO- 1 Certificates and Class PO-2 Certificates) for any
Distribution Date, means an amount equal to the interest accrued during the
related Accrual Period at the applicable Pass-Through Rate on the Certificate
Principal Balance (or Certificate Notional Balance) of such Certificate
immediately prior to such Distribution Date less (i) in the case of a Senior
Certificate (other than the Class PO-1 Certificates and Class PO-2
Certificates), such Certificate's share of any Net Interest Shortfall from the
Mortgage Loans in the related Loan Group, and, after the Cross-Over Date, the
interest portion of any Realized Losses on the Mortgage Loans in the related
Loan Group, if applicable, and (ii) in the case of a Subordinated Certificate,
such Certificate's share of any Net Interest Shortfall and the interest portion
of any Realized Losses on the Mortgage Loans in the related Loan Group. Such Net
Interest Shortfalls will be allocated among the Certificates in proportion to
the amount of Accrued Certificate Interest that would have been allocated
thereto in the absence of such shortfalls. The interest portion of Realized
Losses for the Mortgage Loans will be allocated sequentially, in the following
order, to the Class B-6, Class B-5, Class B-4, Class B-3, Class B-2 and Class
B-1 Certificates, and following the Cross-Over Date, to the Senior Certificates
(other than the Class PO-1
-4-
Certificates, Class PO-2 Certificates and Class XP Certificates) related to the
Mortgage Loans on which such Realized Losses occurred on a pro rata basis.
Accrued Certificate Interest is calculated on the basis of a 360-day year
consisting of twelve 30-day months. No Accrued Certificate Interest will be
payable with respect to any Class of Certificates after the Distribution Date on
which the outstanding Certificate Principal Balance of such Certificate has been
reduced to zero.
ADVANCE: An advance of delinquent payments of principal or interest in
respect of a Mortgage Loan required to be made by the Company as provided in
Section 6.01(a) hereof, by any Servicer in accordance with the related Servicing
Agreement or by the Master Servicer as provided in Section 6.01(b) hereof.
AGREEMENT: This Pooling and Servicing Agreement and any and all
amendments or supplements hereto made in accordance with the terms herein.
ALLOCABLE SHARE: With respect to each Class of Subordinated
Certificates:
(a) as to any Distribution Date and amounts distributable pursuant to
clauses (i) and (iii) of the definition of Subordinate Optimal Principal Amount,
the fraction, expressed as a percentage, the numerator of which is the
Certificate Principal Balance of such Class and the denominator of which is the
aggregate Certificate Principal Balance of all Classes of the Subordinated
Certificates; and
(b) as to any Distribution Date and amounts distributable pursuant to
clauses (ii), (iv) and (v) of the definition of Subordinate Optimal Principal
Amount, and as to each Class of Subordinated Certificates (other than the Class
of Subordinated 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 Certificate Principal Balance of such Class and the denominator of
which is the aggregate Certificate Principal Balance of all such Classes of
Subordinated 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 Certificate Principal Balance of any Class of
Subordinated 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 Subordinated
Certificates which satisfy the related Class Prepayment Distribution Trigger and
to the Class of Subordinated Certificates having the lowest numerical
designation in reduction of their respective Certificate Principal Balance in
the order of their numerical Class designations.
AMOUNT HELD FOR FUTURE DISTRIBUTION: As to any Distribution Date, the
aggregate amount held in the Company's or the related Sevicer's Protected
Account at the close of business on the immediately preceding Determination Date
on account of (i) all Scheduled Payments or portions thereof received in respect
of the Mortgage Loans due after the related Due Period and (ii) Principal
Prepayments and Liquidation Proceeds received in respect of such Mortgage Loans
after the last day of the related Prepayment Period.
-5-
APPLIED REALIZED LOSS AMOUNT: With respect to any Distribution Date
and a Class of Subordinated Certificates the sum of the Realized Losses with
respect to the Mortgage Loans and Class PO Certificate Deferred Payment
Writedown Amounts, which are to be applied in reduction of the Certificate
Principal Balance of that Class of Certificates pursuant to this Agreement,
which shall on any such Distribution Date equal with respect to the Class B-6
Certificates, Class B-5 Certificates, Class B-4 Certificates, Class B-3
Certificates, Class B-2 Certificates and Class B-1 Certificates, in that order,
so long as their respective Certificate Principal Balances have not been reduced
to zero, the amount, if any, by which, (i) the aggregate Certificate Principal
Balance of all of the Certificates (after all distributions of principal on such
Distribution Date) exceeds (ii) the aggregate Stated Principal Balance of all of
the Mortgage Loans as of the last day of the related Due Period.
APPRAISED VALUE: With respect to any Mortgage Loan originated in
connection with a refinancing, the appraised value of the Mortgaged Property
based upon the appraisal made at the time of such refinancing or, with respect
to any other Mortgage Loan, the lesser of (x) the appraised value of the
Mortgaged Property based upon the appraisal made by a fee appraiser at the time
of the origination of the related Mortgage Loan, and (y) the sales price of the
Mortgaged Property at the time of such origination.
ASSIGNMENT AGREEMENTS: Shall mean, collectively, the National City
Assignment Agreement and the Cendant Assignment Agreement.
BANKRUPTCY CODE: Title 11 of the United States Code.
BOOK-ENTRY CERTIFICATES: Any of the Certificates that shall be
registered in the name of the Depository or its nominee, the ownership of which
is reflected on the books of the Depository or on the books of a person
maintaining an account with the Depository (directly, as a "Depository
Participant", or indirectly, as an indirect participant in accordance with the
rules of the Depository and as described in Section 7.06). As of the Closing
Date, each Class of Regular Certificates (other than the Class XP Certificates)
constitutes a Class of Book-Entry Certificates.
XXXXXX'X GATE: Shall mean Xxxxxx'x Gate Residential Mortgage Trust.
BUSINESS DAY: Any day other than (i) a Saturday or a Sunday, or (ii) a
day on which banking institutions in The City of New York, New York,
Minneapolis, Minnesota or the city in which the Corporate Trust Office of the
Trustee or the principal office of the Company or the Master Servicer is located
are authorized or obligated by law or executive order to be closed.
CENDANT: Shall mean Cendant Mortgage Corporation.
CENDANT ASSIGNMENT AGREEMENT: Shall mean the Assignment, Assumption
and Recognition Agreement, dated February 6, 2002, by and among the Seller,
Cendant, Xxxxxx'x Gate and the Trust acknowledging the assignment of the Cendant
Servicing Agreement to the Trust.
-6-
CENDANT LOANS: Those Mortgage Loans subject to this Agreement which
were purchased by the Seller from Cendant and Xxxxxx'x Gate pursuant to the
Cendant Servicing Agreement and assigned by the Seller to the Trust pursuant to
the Cendant Assignment Agreement.
CENDANT SERVICING AGREEMENT: Shall mean the Purchase, Warranties and
Servicing Agreement, dated as of October 23, 2001, by and among Cendant,
Xxxxxx'x Gate and the Seller.
CERTIFICATE: Any one of the certificates of any Class executed and
authenticated by the Trustee in substantially the forms attached hereto as
Exhibits A-1 through A-16.
CERTIFICATE GROUP: Either the Group I Certificates or the Group II
Certificates, as applicable.
CERTIFICATE NOTIONAL BALANCE: As to any Class X-1 Certificate and any
Distribution Date, an amount equal to 100% of the interest payable on REMIC I
Regular Interest LTI-XI. As to any Class X-2 Certificate and any Distribution
Date, an amount equal to the 100% of the interest payable on REMIC I Regular
Interest LTI-XII. As to any Class X-3 Certificate and any Distribution Date, the
aggregate Certificate Principal Balance of the Subordinated Certificates, which
for federal income tax purposes, is the equivalent of the Uncertificated
Principal Balance of REMIC I Regular Interest LTI-B.
CERTIFICATE OWNER: With respect to a Book-Entry Certificate, the
Person that is the beneficial owner of such Book-Entry Certificate.
CERTIFICATE PRINCIPAL BALANCE: As to any Certificate (other than any
Class X-1, Class X-2 or Class X-3 Certificate) and as of any Distribution Date,
the Initial Certificate Principal Balance of such Certificate less the sum of
(i) all amounts distributed with respect to such Certificate in reduction of the
Certificate Principal Balance thereof on previous Distribution Dates pursuant to
Section 6.04, and (ii) in the case of any Subordinated Certificate, any Applied
Realized Loss Amounts allocated to such Certificate on previous Distribution
Dates. References herein to the Certificate Principal Balance of a Class of
Certificates or a Certificate Group shall mean the Certificate Principal
Balances of all Certificates in such Class or all Certificates in such
Certificate Group, as the case may be.
CERTIFICATE REGISTER: The register maintained pursuant to Section 7.02
hereof.
CERTIFICATEHOLDER OR HOLDER: The person in whose name a Certificate is
registered in the Certificate Register (initially, Cede & Co., as nominee for
the Depository, in the case of any Book-Entry Certificates).
CLASS: All Certificates bearing the same Class designation as set
forth in Section 7.01 hereof.
CLASS I-A CERTIFICATE: Any Certificate designated as a "Class I-A
Certificate" on the face thereof, in the form of Exhibit A-1 hereto,
representing the right to the Percentage Interest of
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distributions provided for the Class I-A Certificates as set forth herein and
evidencing a Regular Interest in REMIC II.
CLASS I-A PASS-THROUGH RATE: On any Distribution Date, 8.00% per
annum.
CLASS II-A CERTIFICATE: Any Certificate designated as a "Class II-A
Certificate" on the face thereof, in the form of Exhibit A-2 hereto,
representing the right to its Percentage Interest of distributions provided for
the Class II-A Certificates as set forth herein and evidencing a Regular
Interest in REMIC II.
CLASS II-A PASS-THROUGH RATE: On any Distribution Date, 8.00% per
annum.
CLASS B-1 CERTIFICATE: Any Certificate designated as a "Class B-1
Certificate" on the face thereof, in the form of Exhibit A-8 hereto,
representing the right to its Percentage Interest of distributions provided for
the Class B-1 Certificates as set forth herein and evidencing a Regular Interest
in REMIC II.
CLASS B-1 PASS-THROUGH RATE: On any Distribution Date, 7.00% per
annum.
CLASS B-2 CERTIFICATE: Any Certificate designated as a "Class B-2
Certificate" on the face thereof, in the form of Exhibit A-9 hereto,
representing the right to its Percentage Interest of distributions provided for
the Class B-2 Certificates as set forth herein and evidencing a Regular Interest
in REMIC II.
CLASS B-2 PASS-THROUGH RATE: On any Distribution Date, 7.00% per
annum.
CLASS B-3 CERTIFICATE: Any Certificate designated as a "Class B-3
Certificate" on the face thereof, in the form of Exhibit A-10 hereto,
representing the right to its Percentage Interest of distributions provided for
the Class B-3 Certificates as set forth herein and evidencing a Regular Interest
in REMIC II.
CLASS B-3 PASS-THROUGH RATE: On any Distribution Date, 7.00% per
annum.
CLASS B-4 CERTIFICATE: Any Certificate designated as a "Class B-4
Certificate" on the face thereof, in the form of Exhibit A-11 hereto,
representing the right to its Percentage Interest of distributions provided for
the Class B-4 Certificates as set forth herein and evidencing a Regular Interest
in REMIC II.
CLASS B-4 PASS-THROUGH RATE: On any Distribution Date, 7.00% per
annum.
CLASS B-5 CERTIFICATE: Any Certificate designated as a "Class B-5
Certificate" on the face thereof, in the form of Exhibit A-12 hereto,
representing the right to its Percentage Interest of distributions provided for
the Class B-5 Certificates as set forth herein and evidencing a Regular Interest
in REMIC II.
CLASS B-5 PASS-THROUGH RATE: On any Distribution Date, 7.00% per
annum.
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CLASS B-6 CERTIFICATE: Any Certificate designated as a "Class B-6
Certificate" on the face thereof, in the form of Exhibit A-13 hereto,
representing the right to its Percentage Interest of distributions provided for
the Class B-6 Certificates as set forth herein and evidencing a Regular Interest
in REMIC II.
CLASS B-6 PASS-THROUGH RATE: On any Distribution Date, 7.00% per
annum.
CLASS PO CERTIFICATES: Shall mean, collectively, the Class PO-1
Certificates and the Class PO-2 Certificates.
CLASS PO-1 CERTIFICATE: Any Certificate designated as a "Class PO-1
Certificate" on the face thereof, in the form of Exhibit A-3 hereto,
representing the right to its Percentage Interest of distributions provided for
the Class PO-1 Certificates as set forth herein and evidencing a Regular
Interest in REMIC II.
CLASS PO-1 CERTIFICATE DISTRIBUTION AMOUNT: With respect to each
Distribution Date and the Class PO-1 Certificates, means an amount equal to the
sum of the following (but in no event greater than the aggregate Certificate
Principal Balance of the Class PO-1 Certificates immediately prior to such
Distribution Date):
(i) the applicable PO Percentage of the principal portion of all
Scheduled Payments due on the Discount Mortgage Loans in Loan Group I 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 PO Percentage of the Stated Principal Balance of
each Discount Mortgage Loan in Loan Group I which was the subject of a
prepayment in full received by the Company or the related Servicer during
the applicable Prepayment Period;
(iii) the applicable PO Percentage of all partial prepayments
allocated to principal received during the applicable Prepayment Period
with respect to any Discount Mortgage Loan in Loan Group I; and
(iv) the lesser of (a) the applicable PO Percentage of the sum of (A)
all Net Liquidation Proceeds allocable to principal received in respect of
each Discount Mortgage Loan in Loan Group I which became a Liquidated Loan
during the related Prepayment Period (other than mortgage loans described
in the immediately following clause (B)) and (B) the Stated Principal
Balance of each such Discount Mortgage Loan in Loan Group I purchased by an
insurer from the trustee during the related Prepayment Period pursuant to
the related primary mortgage insurance policy, if any, or otherwise; and
(b) the applicable PO Percentage of the sum of (A) the Stated Principal
Balance of each Discount Mortgage Loan in Loan Group I which became a
Liquidated Loan during the related Prepayment Period (other than the
Discount Mortgage Loans described in the immediately following clause (B))
and (B) the Stated Principal Balance of each such Discount Mortgage Loan in
Loan Group
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I that was purchased by an insurer from the trustee during the related
Prepayment Period pursuant to the related primary mortgage insurance
policy, if any or otherwise; and the applicable PO Percentage of the sum of
(a) the Stated Principal Balance of each Mortgage Loan in Loan Group I
which was repurchased by the Seller or the related Servicer in connection
with such Distribution Date and (b) the excess, if any, of the Stated
Principal Balance of a Discount Mortgage Loan in Loan Group I that has been
replaced by the Seller or the related Servicer with a Replacement Mortgage
Loan pursuant to this Agreement or the related Servicing Agreement in
connection with such Distribution Date over the Stated Principal Balance of
such Replacement Mortgage Loan.
CLASS PO-2 CERTIFICATE: Any Certificate designated as a "Class PO-2
Certificate" on the face thereof, in the form of Exhibit A-4 hereto,
representing the right to its Percentage Interest of distributions provided for
the Class PO-2 Certificates as set forth herein and evidencing a Regular
Interest in REMIC II.
CLASS PO-2 CERTIFICATE DISTRIBUTION AMOUNT: With respect to each
Distribution Date and the Class PO-2 Certificates, means an amount equal to the
sum of the following (but in no event greater than the aggregate Certificate
Principal Balance of the Class PO-2 Certificates immediately prior to such
Distribution Date):
(i) the applicable PO Percentage of the principal portion of all
Scheduled Payments due on the Discount Mortgage Loans in Loan Group II 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 PO Percentage of the Stated Principal Balance of
each Discount Mortgage Loan in Loan Goup II which was the subject of a
prepayment in full received by the Company or the related Servicer during
the applicable Prepayment Period;
(iii) the applicable PO Percentage of all partial prepayments
allocated to principal received during the applicable Prepayment Period
with respect to any Discount Mortgage Loan in Loan Group II; and
(iv) the lesser of (a) the applicable PO Percentage of the sum of (A)
all Net Liquidation Proceeds allocable to principal received in respect of
each Discount Mortgage Loan in Loan Group II which became a Liquidated Loan
during the related Prepayment Period (other than mortgage loans described
in the immediately following clause (B)) and (B) the Stated Principal
Balance of each such Discount Mortgage Loan in Loan Group II purchased by
an insurer from the trustee during the related Prepayment Period pursuant
to the related primary mortgage insurance policy, if any, or otherwise; and
(b) the applicable PO Percentage of the sum of (A) the Stated Principal
Balance of each Discount Mortgage Loan in Loan Group II which became a
Liquidated Loan during the related Prepayment Period (other than the
Discount Mortgage Loans described in the immediately following clause (B))
and (B) the Stated Principal Balance of each such Discount Mortgage Loan in
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Loan Group II that was purchased by an insurer from the trustee during the
related Prepayment Period pursuant to the related primary mortgage
insurance policy, if any or otherwise; and the applicable PO Percentage of
the sum of (a) the Stated Principal Balance of each Mortgage Loan in Loan
Group II which was repurchased by the Seller or the related Servicer in
connection with such Distribution Date and (b) the excess, if any, of the
Stated Principal Balance of a Discount Mortgage Loan in Loan Group II that
has been replaced by the related Servicer with a Replacement Mortgage Loan
pursuant to this Agreement or the related Servicing Agreement in connection
with such Distribution Date over the Stated Principal Balance of such
Replacement Mortgage Loan.
CLASS PO CERTIFICATE CASH SHORTFALL: As defined in Section 6.04(b)
hereof.
CLASS PO CERTIFICATE DEFERRED AMOUNT: With respect to each
Distribution Date, the aggregate of all amounts allocable on such Distribution
Date to the related Class PO Certificates in respect of the principal portion of
applicable Realized Losses on Discount Mortgage Loans in the related Loan Group
and any related Class PO Certificate Cash Shortfall, and all amounts previously
allocated in respect of such losses and such shortfall to the related Class PO
Certificates and not distributed on prior Distribution Dates. No interest shall
accrue on any Class PO Certificate Deferred Amount.
CLASS PO CERTIFICATE DEFERRED PAYMENT WRITEDOWN AMOUNT: Means, with
respect to any Distribution Date and the Class PO-1 Certificates or the Class
PO-2 Certificates, as applicable, the amount distributed to the related Class PO
Certificates on such Distribution Date pursuant to priority FIFTH under clause
(i) of Section 6.04(a) or priority SIXTH under clause (ii) of Section 6.04(a)
which amount will be allocated to the Class B-6 Certificates, Class B-5
Certificates, Class B-4 Certificates, Class B-3 Certificates, Class B-2
Certificates and Class B-1 Certificates, in that order, until the Certificate
Principal Balance of each such class has been reduced to zero.
CLASS R-1 CERTIFICATE: Any Certificate designated a "Class R-1
Certificate" on the face thereof, in substantially the form set forth in Exhibit
A-15 hereto, evidencing the Residual Interest in REMIC I and representing the
right to the Percentage Interest of distributions provided for the Class R-1
Certificates as set forth herein.
CLASS R-1 PASS-THROUGH RATE: On any Distribution Date, 8.00% per
annum.
CLASS R-2 CERTIFICATE: Any Certificate designated a "Class R-2
Certificate" on the face thereof, in substantially the form set forth in Exhibit
A-16 hereto, evidencing the Residual Interest in REMIC II and representing the
right to the Percentage Interest of distributions provided for the Class R-2
Certificates as set forth herein.
CLASS R-2 PASS-THROUGH RATE: On any Distribution Date, 8.00% per
annum.
CLASS X CERTIFICATES: Shall mean, collectively, the Class X-1
Certificates, Class X-2 Certificates and Class X-3 Certificates.
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CLASS X-1 CERTIFICATE: Any Certificate designated as a "Class X-1
Certificate" on the face thereof, in the form of Exhibit A-6 hereto,
representing the right to its Percentage Interest of distributions provided for
the Class X-1 Certificates as set forth herein and evidencing a Regular Interest
in REMIC II.
CLASS X-1 PASS-THROUGH RATE: On any Distribution Date, the weighted
average of the excess of (a) the Net Mortgage Rate on each Non-Discount Mortgage
Loan in Loan Group I over (b) 8.00% per annum; for federal income tax purposes,
the equivalent of the foregoing is expressed as 100% of amounts payable on REMIC
I Regular Interest LTI-XI.
CLASS X-2 CERTIFICATE: Any Certificate designated as a "Class X-2
Certificate" on the face thereof, in the form of Exhibit A-7 hereto,
representing the right to its Percentage Interest of distributions provided for
the Class X-2 Certificates as set forth herein and evidencing a Regular Interest
in REMIC II.
CLASS X-2 PASS-THROUGH RATE: On any Distribution Date, the weighted
average of the excess of (a) the Net Mortgage Rate on each Non-Discount Mortgage
Loan in Loan Group II over (b) 8.00% per annum; for federal income tax purposes,
the equivalent of the foregoing is expressed as 100% of amounts payable on REMIC
I Regular Interest LTI-XII.
CLASS X-3 CERTIFICATE: Any Certificate designated as a "Class X-3
Certificate" on the face thereof, in the form of Exhibit A-8 hereto,
representing the right to its Percentage Interest of distributions provided for
the Class X-3 Certificates as set forth herein and evidencing a Regular Interest
in REMIC II.
CLASS X-3 PASS-THROUGH RATE: On any Distribution Date, 1.00% per
annum.
CLASS XP CERTIFICATE: Any Certificate designated as a "Class XP
Certificate" on the face thereof, in the form of Exhibit A-14 hereto,
representing the right to its Percentage Interest of distributions provided for
the Class XP Certificates as set forth herein and evidencing a Regular Interest
in REMIC II.
CLOSING DATE: February 6, 2002.
CODE: The Internal Revenue Code of 1986, including any successor or
amendatory provisions.
COMPENSATING INTEREST: An amount, not to exceed the Servicing Fee, to
be deposited in the Master Servicer Collection Account by the Company or the
related Servicer to the payment of a Prepayment Interest Shortfall on a Mortgage
Loan subject to this Agreement; provided that in the event the Company or any
Servicer fails to make such payment, the Master Servicer shall be obligated to
do so pursuant to Section 6.02(c) hereof.
CORPORATE TRUST OFFICE: The designated office of the Trustee where at
any particular time its corporate trust business with respect to this Agreement
shall be administered, which office at the date of the execution of this
Agreement is located at 1 Bank Xxx Xxxxx, Xxxx Xxxxx XX0-0000,
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Xxxxxxx, Xxxxxxxx 00000, Attention: Global Corporate Trust Services, Bear
Xxxxxxx Asset Backed Securities, Inc., Series 2002-AC1, or at such other address
as the Trustee may designate from time to time.
CORRESPONDING CERTIFICATE: With respect to:
(i) REMIC I Regular Interest LTI-AI, the Class I-A Certificates,
(ii) REMIC I Regular Interest LTI-AII, the Class II-A Certificates,
(iii) REMIC I Regular Interest LTI-XI, the Class X-1 Certificates,
(iv) REMIC I Regular Interest LTI-XII, the Class X-2 Certificates,
(v) REMIC I Regular Interest LTI-B, the Subordinate Certificates
and the Class X-3 Certificates,
(vi) REMIC I Regular Interest LTI-POI, the Class PO-1 Certificates,
(vii) REMIC I Regular Interest LTI-POII, the Class PO-2
Certificates,
(viii) REMIC I Regular Interest LTI-XP, the Class XP Certificates,
and
(ix) REMIC I Regular Interest LTI-R2, the Class R-2 Certificates.
CROSS-OVER DATE: The first Distribution Date on which the aggregate
Certificate Principal Balance of the Subordinated Certificates has been reduced
to zero (giving effect to all distributions on such Distribution Date).
CUSTODIAL AGREEMENT: An agreement dated as of the Closing Date among
the Seller, the Servicers, the Trustee and the Custodian in substantially the
form of Exhibit K hereto.
CUSTODIAN: Xxxxx Fargo Bank Minnesota, National Association, or any
successor custodian appointed pursuant to the provisions hereof and the
Custodial Agreement.
CUT-OFF DATE: The close of business on January 1, 2002.
CUT-OFF DATE PRINCIPAL BALANCE: As to any Mortgage Loan, the unpaid
principal balance thereof as of the close of business on the Cut-off Date after
application of all Principal Prepayments received prior to the Cut-off Date and
scheduled payments of principal due on or before the Cut-off Date, whether or
not received, but without giving effect to any installments of principal
received in respect of Due Dates after the Cut-off Date.
DEBT SERVICE REDUCTION: With respect to any Mortgage Loan, a reduction
by a court of competent jurisdiction in a proceeding under the Bankruptcy Code
in the Scheduled Payment for
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such Mortgage Loan that became final and non-appealable, except such a reduction
resulting from a Deficient Valuation or any other reduction that results in a
permanent forgiveness of principal.
DEFICIENT VALUATION: With respect to any Mortgage Loan, a valuation by
a court of competent jurisdiction of the Mortgaged Property in an amount less
than the then outstanding indebtedness under such Mortgage Loan, or any
reduction in the amount of principal to be paid in connection with any Scheduled
Payment that results in a permanent forgiveness of principal, which valuation or
reduction results from an order of such court that is final and non-appealable
in a proceeding under the Bankruptcy Code.
DEFINITIVE CERTIFICATES: As defined in Section 7.06.
DELETED MORTGAGE LOAN: A Mortgage Loan replaced or to be replaced by a
Replacement Mortgage Loan.
DELINQUENT: A Mortgage Loan is "delinquent" if any payment due thereon
is not made pursuant to the terms of such Mortgage Loan by the close of business
on the day such payment is scheduled to be due. A Mortgage Loan is "30 days
delinquent" if such payment has not been received by the close of business on
the corresponding day of the month immediately succeeding the month in which
such payment was due, or, if there is no such corresponding day (e.g., as when a
30- day month follows a 31-day month in which a payment was due on the 31st day
of such month), then on the last day of such immediately succeeding month.
Similarly for "60 days delinquent," "90 days delinquent" and so on.
DENOMINATION: With respect to each Certificate, the amount set forth
on the face thereof as the "Initial Principal Balance of this Certificate".
DEPOSITOR: Bear Xxxxxxx Asset Backed Securities, Inc., a Delaware
corporation, or its successor in interest.
DEPOSITORY: The initial Depository shall be The Depository Trust
Company ("DTC"), the nominee of which is Cede & Co., or any other organization
registered as a "clearing agency" pursuant to Section 17A of the Securities
Exchange Act of 1934, as amended. The Depository shall initially be the
registered Holder of the Book-Entry Certificates. The Depository shall at all
times be a "clearing corporation" as defined in Section 8-102(a)(5) of the
Uniform Commercial Code of the State of New York.
DEPOSITORY AGREEMENT: With respect to the Class of Book-Entry
Certificates, the agreement among the Depositor, the Trustee and the initial
Depository, dated as of the Closing Date, substantially in the form of Exhibit
I.
DEPOSITORY PARTICIPANT: A broker, dealer, bank or other financial
institution or other Person for whom from time to time a Depository effects
book-entry transfers and pledges of securities deposited with the Depository.
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DETERMINATION DATE: With respect to any Distribution Date, the 15th
day of the month of such Distribution Date or, if such 15th day is not a
Business Day, the immediately preceding Business Day.
DISCOUNT MORTGAGE LOAN: Shall mean any Mortgage Loan in Loan Group I
or Loan Group II with a Net Mortgage Rate less than 8.00% per annum.
DISTRIBUTION ACCOUNT: The separate Eligible Account created and
maintained by the Trustee pursuant to Section 5.08 in the name of the Trustee
for the benefit of the Certificateholders and designated "Bank One, National
Association, in trust for registered holders of Bear Xxxxxxx Asset Backed
Securities, Inc., Asset-Backed Certificates, Series 2002- AC1". Funds in the
Distribution Account shall be held in trust for the Certificateholders for the
uses and purposes set forth in this Agreement.
DISTRIBUTION ACCOUNT DEPOSIT DATE: As to any Distribution Date, on or
before 3:00 p.m. Eastern time on the Business Day immediately preceding such
Distribution Date.
DISTRIBUTION DATE: The 25th day of each calendar month after the
initial issuance of the Certificates, or if such 25th day is not a Business Day,
the next succeeding Business Day, commencing in February 2002.
DUE DATE: As to any Mortgage Loan, the date in each month on which the
related Scheduled Payment is due, as set forth in the related Mortgage Note.
DUE PERIOD: With respect to any Distribution Date, the period from the
second day of the calendar month preceding the calendar month in which such
Distribution Date occurs through close of business on the first day of the
calendar month in which such Distribution Date occurs.
ELIGIBLE ACCOUNT: Any of (i) an account or accounts maintained with a
federal or state chartered depository institution or trust company, the
long-term unsecured debt obligations and short-term unsecured debt obligations
of which (or, in the case of a depository institution or trust company that is
the principal subsidiary of a holding company, the debt obligations of such
holding company, so long as Xxxxx'x is not a Rating Agency) are rated by each
Rating Agency in one of its two highest long-term and its highest short-term
rating categories respectively, at the time any amounts are held on deposit
therein, or (ii) an account or accounts in a depository institution or trust
company in which such accounts are insured by the FDIC (to the limits
established by the FDIC) and the uninsured deposits in which accounts are
otherwise secured such that, as evidenced by an Opinion of Counsel delivered to
the Trustee and to each Rating Agency, the Certificateholders have a claim with
respect to the funds in such account or a perfected first priority security
interest against any collateral (which shall be limited to Permitted
Investments) securing such funds that is superior to claims of any other
depositors or creditors of the depository institution or trust company in which
such account is maintained, or (iii) a trust account or accounts maintained with
the corporate trust department of a federal or state chartered depository
institution or trust company having capital and surplus of not less than
$50,000,000, acting in its fiduciary capacity or (iv) any other account
acceptable to the Rating Agencies. Eligible Accounts may bear interest, and may
include, if otherwise qualified under this definition, accounts maintained with
the Trustee.
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EMC: EMC Mortgage Corporation, a Delaware corporation.
EMC LOANS: Shall mean those Mortgage Loans serviced by the Company
pursuant to the terms of this Agreement.
ERISA: The Employee Retirement Income Security Act of 1974, as
amended.
ERISA RESTRICTED CERTIFICATE: Each of the Class B-4 Certificates,
Class B-5 Certificates, Class B-6 Certificates, Class XP Certificates and
Residual Certificates.
EVENT OF DEFAULT: As defined in Section 9.01 hereof.
EXCESS LIQUIDATION PROCEEDS: To the extent not required by law to be
paid to the related Mortgagor, the excess, if any, of any Liquidation Proceeds
with respect to a Mortgage Loan over the Stated Principal Balance of such
Mortgage Loan and accrued and unpaid interest at the related Mortgage Rate
through the last day of the month in which the Mortgage Loan has been
liquidated.
XXXXXX MAE: Xxxxxx Xxx (formerly, Federal National Mortgage
Association), or any successor thereto.
FDIC: The Federal Deposit Insurance Corporation, or any successor
thereto.
XXXXXXX MAC: Federal Home Loan Mortgage Corporation, or any successor
thereto.
FIRREA: The Financial Institutions Reform, Recovery, and Enforcement
Act of 1989.
GROUP I AVAILABLE FUNDS: Shall mean the sum of Interest Funds and
Principal Funds relating to Loan Group I.
GROUP I CERTIFICATES: The Class I-A Certificates, Class X-1
Certificates and Class PO- 1 Certificates.
GROUP I SENIOR OPTIMAL PRINCIPAL AMOUNT: With respect to each
Distribution Date and the Class I-A Certificates, means an amount equal to the
sum of the following (but in no event greater than the aggregate Certificate
Principal Balance of the Class I-A Certificates immediately prior to such
Distribution Date):
(i) the applicable Senior Percentage of the applicable Non-PO
Percentage of the principal portion of all Scheduled Payments due on the
Mortgage Loans in Loan Group I 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);
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(ii) the applicable Senior Prepayment Percentage of the applicable
Non-PO Percentage of the Stated Principal Balance of each Mortgage Loan in
the Loan Group I which was the subject of a prepayment in full received by
the Company or the related Servicer during the applicable Prepayment
Period;
(iii) the applicable Senior Prepayment Percentage of the Non-PO
Percentage of all partial prepayments allocated to principal received
during the applicable Prepayment Period with respect to any Mortgage Loan
in Loan Group I; and
(iv) the lesser of (a) the applicable Senior Prepayment Percentage of
the Non-PO Percentage of the sum of (A) all Net Liquidation Proceeds
allocable to principal received in respect of each Mortgage Loan in Loan
Group I 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 Stated Principal Balance of each such
Mortgage Loan in Loan Group I purchased by an insurer from the trustee
during the related Prepayment Period pursuant to the related primary
mortgage insurance policy, if any, or otherwise; and (b) the applicable
Senior Percentage of the Non-PO Percentage of the sum of (A) the Stated
Principal Balance of each Mortgage Loan in Loan Group I 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 Stated Principal Balance of each such Mortgage Loan in Loan Group I
that was purchased by an insurer from the trustee during the related
Prepayment Period pursuant to the related primary mortgage insurance
policy, if any or otherwise; and the applicable Senior Prepayment
Percentage of the sum of (a) the Stated Principal Balance of each Mortgage
Loan in Loan Group I which was repurchased by the Seller or the related
Servicer in connection with such Distribution Date and (b) the excess, if
any, of the Stated Principal Balance of a Mortgage Loan in Loan Group I
that has been replaced by the Seller or the related Servicer with a
Replacement Mortgage loan pursuant to the related Servicing Agreement or
this Agreement in connection with such Distribution Date over the Stated
Principal Balance of such Replacement Mortgage Loan.
GROUP II AVAILABLE FUNDS: Shall mean the sum of Interest Funds and
Principal Funds relating to Loan Group II.
GROUP II CERTIFICATES: The Class II-A Certificates, Class X-2
Certificates, Class PO- 2 Certificates, Class XP Certificates, Class R-1
Certificates and Class R-2 Certificates.
GROUP II SENIOR OPTIMAL PRINCIPAL AMOUNT: With respect to each
Distribution Date and the Group II Certificates (other than the Class X-2
Certificates and Class PO-2 Certificates), means an amount equal to the sum of
the following (but in no event greater than the aggregate Certificate Principal
Balance of such Group II Certificates (other than the Class X-2 Certificates and
Class PO-2 Certificates) immediately prior to such Distribution Date):
(i) the applicable Senior Percentage of the applicable Non-PO
Percentage of the principal portion of all Scheduled Payments due on the
Mortgage Loans in Loan Group II on the related Due Date, as specified in
the amortization schedule at the time applicable thereto
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(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 Senior Prepayment Percentage of the applicable
Non-PO Percentage of the Stated Principal Balance of each Mortgage Loan in
the Loan Group II which was the subject of a prepayment in full received by
the Company or the related Servicer during the applicable Prepayment
Period;
(iii) the applicable Senior Prepayment Percentage of the Non-PO
Percentage of all partial prepayments allocated to principal received
during the applicable Prepayment Period with respect to any Mortgage Loan
in Loan Group II; and
(iv) the lesser of (a) the applicable Senior Prepayment Percentage of
the Non-PO Percentage of the sum of (A) all Net Liquidation Proceeds
allocable to principal received in respect of each Mortgage Loan in Loan
Group II 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 Stated Principal Balance of each such
Mortgage Loan in Loan Group II purchased by an insurer from the trustee
during the related Prepayment Period pursuant to the related primary
mortgage insurance policy, if any, or otherwise; and (b) the applicable
Senior Percentage of the Non-PO Percentage of the sum of (A) the Stated
Principal Balance of each Mortgage Loan in Loan Group II 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 Stated Principal Balance of each such Mortgage Loan in Loan Group
II that was purchased by an insurer from the trustee during the related
Prepayment Period pursuant to the related primary mortgage insurance
policy, if any or otherwise; and the applicable Senior Prepayment
Percentage of the sum of (a) the Stated Principal Balance of each Mortgage
Loan in Loan Group II which was repurchased by the Seller or the related
Servicer in connection with such Distribution Date and (b) the excess, if
any, of the Stated Principal Balance of a Mortgage Loan in Loan Group I
that has been replaced by the Seller or the related Servicer with a
Replacement Mortgage loan pursuant to the related Servicing Agreement or
this Agreement in connection with such Distribution Date over the Stated
Principal Balance of such Replacement Mortgage Loan.
INITIAL CERTIFICATE PRINCIPAL BALANCE: With respect to any
Certificate, the Certificate Principal Balance of such Certificate or any
predecessor Certificate on the Closing Date.
INSURANCE POLICY: With respect to any Mortgage Loan included in the
Trust Fund, any insurance policy, including all riders and endorsements thereto
in effect with respect to such Mortgage Loan, including any replacement policy
or policies for any Insurance Policies.
INSURANCE PROCEEDS: Proceeds paid in respect of the Mortgage Loans
pursuant to any Insurance Policy or any other insurance policy covering a
Mortgage Loan, to the extent such proceeds are payable to the mortgagee under
the Mortgage, the Company, the related Servicer or the trustee under the deed of
trust and are not applied to the restoration of the related Mortgaged
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Property or released to the Mortgagor in accordance with the procedures that the
Company or such Servicer would follow in servicing mortgage loans held for its
own account, in each case other than any amount included in such Insurance
Proceeds in respect of Insured Expenses.
INSURED EXPENSES: Expenses covered by an Insurance Policy or any other
insurance policy with respect to the Mortgage Loans.
INTEREST FUNDS: For any Distribution Date with respect to each Loan
Group, (I) the sum, without duplication, of (a) all scheduled interest during
the related Due Period with respect to the related Mortgage Loans less the
Servicing Fee and the Master Servicing Fee, (b) all Advances relating to
interest with respect to the related Mortgage Loans made on or prior to the
related Distribution Account Deposit Date, (c) all Compensating Interest with
respect to the related Mortgage Loans and required to be remitted by the Company
or the Master Servicer pursuant to this Agreement or the related Servicer
pursuant to the applicable Servicing Agreement with respect to such Distribution
Date, (d) Liquidation Proceeds with respect to the related Mortgage Loans
collected during the related Prepayment Period (to the extent such Liquidation
Proceeds relate to interest), (e) all amounts relating to interest with respect
to each Mortgage Loan repurchased by the Seller pursuant to Sections 2.02, 2.03
and 4.21 and (f) all amounts in respect of interest paid by the Company pursuant
to Section 11.01, in each case to the extent remitted by the Company or any
Servicer, as applicable, to the Distribution Account pursuant to this Agreement
or any Servicing Agreement minus (ii) all amounts relating to interest required
to be reimbursed pursuant to Section 5.02 and minus (iii) all amounts relating
to interest required to be reimbursed pursuant to Sections 5.04 and 5.05.
INTEREST SHORTFALL: with respect to any Distribution Date, means the
aggregate shortfall, if any, in collections of interest (adjusted to the related
Net Mortgage Rates) on Mortgage Loans in the related Loan Group resulting from
(a) prepayments in full received during the related Prepayment Period, (b) the
partial prepayments received during the related Prepayment Period to the extent
applied prior to the Due Date in the month of the Distribution Date and (c)
interest payments on certain of the Mortgage Loans being limited pursuant to the
provisions of the Relief Act.
LATEST POSSIBLE MATURITY DATE: The Distribution Date following the
final scheduled maturity date of the Mortgage Loan in the Trust Fund having the
latest scheduled maturity date as of the Cut-off Date. For purposes of the
Treasury Regulations under Code section 860A through 860G, the latest possible
maturity date of each regular interest issued by REMIC I and REMIC II shall be
the Latest Possible Maturity Date.
LIQUIDATED LOAN: With respect to any Distribution Date, a defaulted
Mortgage Loan that has been liquidated through deed-in-lieu of foreclosure,
foreclosure sale, trustee's sale or other realization as provided by applicable
law governing the real property subject to the related Mortgage and any security
agreements and as to which the Company or the related Servicer has certified (in
accordance with Section 3.03 hereof or the related Servicing Agreement) in the
related Prepayment Period that it has received all amounts it expects to receive
in connection with such liquidation.
LIQUIDATION PROCEEDS: Amounts, other than Insurance Proceeds, received
in connection with the partial or complete liquidation of a Mortgage Loan,
whether through trustee's
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sale, foreclosure sale or otherwise, or in connection with any condemnation or
partial release of a Mortgaged Property and any other proceeds received with
respect to an REO Property, less the sum of related unreimbursed Advances,
Servicing Fees, Master Servicing Fees and Servicing Advances and all expenses of
liquidation, including property protection expenses and foreclosure and sale
costs, including court and reasonable attorneys fees.
LOAN GROUP: Either Loan Group I or Loan Group II.
LOAN GROUP I: The Mortgage Loans included as such on the Mortgage Loan
Schedule.
LOAN GROUP II: The Mortgage Loans included as such on the Mortgage
Loan Schedule.
LOAN-TO-VALUE RATIO: 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 Appraised Value of the related
Mortgaged Property.
LOSS ALLOCATION LIMITATION: The meaning specified in Section 6.04A(c)
hereof.
MASTER SERVICER: Xxxxx Fargo Bank Minnesota, National Association, in
its capacity as master servicer, and its successors and assigns.
MASTER SERVICER COLLECTION ACCOUNT: The trust accounts or accounts
created and maintained pursuant to Section 5.05 hereof, which shall be entitled
"Bank One, National Association, as Trustee f/b/o holders of Bear Xxxxxxx Asset
Backed Securities, Inc., Asset Backed Certificates, Series 2002-AC1 - Master
Servicer Collection Account".
MASTER SERVICING FEE: As to each Mortgage Loan and any Distribution
Date, an amount equal to 1/12th of the Master Servicing Fee Rate multiplied by
the Stated Principal Balance of such Mortgage Loan as of the last day of the
related Due Period or, in the event of any payment of interest that accompanies
a Principal Prepayment in full during the related Due Period made by the
Mortgagor immediately prior to such prepayment, interest at the Master Servicing
Fee Rate on the Stated Principal Balance of such Mortgage Loan for the period
covered by such payment of interest.
MASTER SERVICING FEE RATE: .02% per annum.
MONTHLY STATEMENT: The statement delivered to the Certificateholders
pursuant to Section 6.05.
MOODY'S: Xxxxx'x Investors Service, Inc.
MORTGAGE: The mortgage, deed of trust or other instrument creating a
first lien on or first priority ownership interest in an estate in fee simple in
real property securing a Mortgage Note.
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MORTGAGE FILE: The mortgage documents listed in Section 2.01 hereof
pertaining to a particular Mortgage Loan and any additional documents delivered
to the Trustee to be added to the Mortgage File pursuant to this Agreement.
MORTGAGE LOANS: Such of the Mortgage Loans transferred and assigned to
the Trustee pursuant to the provisions hereof, as from time to time are held as
a part of the Trust Fund (including any REO Property), the mortgage loans so
held being identified in the Mortgage Loan Schedule, notwithstanding foreclosure
or other acquisition of title of the related Mortgaged Property. Any mortgage
loan that was intended by the parties hereto to be transferred to the Trust Fund
as indicated by such Mortgage Loan Schedule which is in fact not so transferred
for any reason including, without limitation, a breach of the representation
contained in Section 2.03(b)(v) hereof, shall continue to be a Mortgage Loan
hereunder until the Purchase Price with respect thereto has been paid to the
Trust Fund.
MORTGAGE LOAN PURCHASE AGREEMENT: Shall mean the Mortgage Loan
Purchase Agreement dated as of January 30, 2002, between the Seller, as seller
and the Depositor, as purchaser.
MORTGAGE LOAN PURCHASE PRICE: The price, calculated as set forth in
Section 11.01, to be paid in connection with the repurchase of the Mortgage
Loans pursuant to Section 11.01.
MORTGAGE LOAN SCHEDULE: The list of Mortgage Loans (as from time to
time amended by the Company or the Master Servicer to reflect the deletion of
Deleted Mortgage Loans and the addition of Replacement Mortgage Loans pursuant
to the provisions of this Agreement) transferred to the Trustee as part of the
Trust Fund and from time to time subject to this Agreement, the initial Mortgage
Loan Schedule being attached hereto as Exhibit B, setting forth the following
information with respect to each Mortgage Loan and divided into Loan Groups:
(i) the loan number;
(ii) the Mortgage Rate in effect as of the Cut-off Date;
(iii) the Servicing Fee Rate and the Master Servicing Fee Rate;
(iv) the Net Mortgage Rate in effect as of the Cut-off Date;
(v) the maturity date;
(vi) the original principal balance;
(vii) the Cut-off Date Principal Balance;
(viii) the original term;
(ix) the remaining term;
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(x) the property type;
(xi) the type and term of the related Prepayment Charge, if any;
and
(xii) the Loan Group.
Such schedule shall also set forth the aggregate Cut-off Date Principal Balance
for all of the Mortgage Loans and such aggregate amount for all Mortgage Loans
for each Loan Group.
MORTGAGE NOTE: The original executed note or other evidence of
indebtedness of a Mortgagor under a Mortgage Loan.
MORTGAGE RATE: The annual rate of interest borne by a Mortgage Note.
MORTGAGED PROPERTY: The underlying property securing a Mortgage Loan.
MORTGAGOR: The obligors on a Mortgage Note.
NATIONAL CITY: National City Mortgage Co., and any successor thereto.
NATIONAL CITY ASSIGNMENT AGREEMENT: Shall mean the Assignment,
Assumption and Recognition Agreement, dated February 6, 2002, by and among the
Seller, National City and the Trust acknowledging the assignment of the National
City Servicing Agreement to the Trust.
NATIONAL CITY LOANS: Those Mortgage Loans subject to this Agreement
which were purchased by the Seller from National City pursuant to the National
City Servicing Agreement and assigned by the Seller to the Trust pursuant to the
National City Assignment Agreement.
NATIONAL CITY SERVICING AGREEMENT: Shall mean the Purchase, Warranties
and Servicing Agreement, dated as of October 1, 2001, by and between the Seller
and National City.
NET INTEREST SHORTFALLS: Shall mean Interest Shortfalls net of
payments by the Company, the related Servicer or the Master Servicer in respect
of Compensating Interest.
NET MORTGAGE RATE: As to each Mortgage Loan, and at any time, the per
annum rate equal to the Mortgage Rate less the sum of (i) the related Servicing
Fee Rate and (ii) the Master Servicing Fee Rate.
NON-BOOK-ENTRY CERTIFICATE: Any Certificate other than a Book-Entry
Certificate.
NON-DISCOUNT MORTGAGE LOANS: Shall mean Mortgage Loans in Loan Group I
or Loan Group II which are not Discount Mortgage Loans.
NON-PO PERCENTAGE: Shall mean, with respect to any Discount Mortgage
Loan in Loan Group I or Loan Group II, as applicable, the Net Mortgage Rate
thereof divided by 8.00%.
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NONRECOVERABLE ADVANCE: Any portion of an Advance previously made or
proposed to be made by the Company or the Master Servicer pursuant to this
Agreement or the related Servicer pursuant to applicable Servicing Agreement,
that, in the good faith judgment of the Company, the Master Servicer or such
Servicer, will not or, in the case of a proposed advance, would not, be
ultimately recoverable by it from the related Mortgagor, related Liquidation
Proceeds or otherwise.
OFFERED CERTIFICATES: The Class I-A Certificates, Class II-A
Certificates, Class X-1 Certificates, Class X-2 Certificates, Class X-3
Certificates, Class PO-1 Certificates, Class PO-2 Certificates, Class B-1
Certificates, Class B-2 Certificates, Class B-3 Certificates, Class R-1
Certificates and Class R-2 Certificates.
OFFICER'S CERTIFICATE: A certificate (i) signed by the Chairman of the
Board, the Vice Chairman of the Board, the President, a Vice President (however
denominated), an Assistant Vice President, the Treasurer, the Secretary, or one
of the assistant treasurers or assistant secretaries of the Depositor or the
Master Servicer (or any other officer customarily performing functions similar
to those performed by any of the above designated officers and also to whom,
with respect to a particular matter, such matter is referred because of such
officer's knowledge of and familiarity with a particular subject) or (ii), if
provided for in this Agreement, signed by a Servicing Officer, as the case may
be, and delivered to the Depositor, the Seller, the Securities Administrator
and/or the Trustee, as the case may be, as required by this Agreement.
OPINION OF COUNSEL: A written opinion of counsel, who may be counsel
for the Seller, Depositor, the Company or the Master Servicer, reasonably
acceptable to each addressee of such opinion; provided that with respect to
Section 2.05, 8.05, 8.07 or 12.01, or the interpretation or application of the
REMIC Provisions, such counsel must (i) in fact be independent of the Seller,
Depositor, the Company and the Master Servicer, (ii) not have any direct
financial interest in the Seller, Depositor, the Company or the Master Servicer
or in any affiliate of either, and (iii) not be connected with the Seller,
Depositor, the Company or the Master Servicer as an officer, employee, promoter,
underwriter, trustee, partner, director or person performing similar functions.
OPTIONAL TERMINATION: The termination of the Trust Fund created
hereunder as a result of the purchase of all of the Mortgage Loans and any REO
Property pursuant to the last sentence of Section 11.01 hereof.
OPTIONAL TERMINATION DATE: The Distribution Date on which the Stated
Principal Balance of all of the Mortgage Loans is equal to or less than 1% of
the Stated Principal Balance of all of the Mortgage Loans as of the Cut-off
Date.
ORIGINAL VALUE: The value of the property underlying a Mortgage Loan
based, in the case of the purchase of the underlying Mortgaged Property, on the
lower of an appraisal or the sales price of such property or, in the case of a
refinancing, on an appraisal.
ORIGINATOR: Any of First National Bank of Nevada, Greenpoint Mortgage
Funding or National City.
OTS: The Office of Thrift Supervision.
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OUTSTANDING: With respect to the Certificates as of any date of
determination, all Certificates theretofore executed and authenticated under
this Agreement except:
(a) Certificates theretofore canceled by the Trustee or delivered to
the Trustee for cancellation; and
(b) Certificates in exchange for which or in lieu of which other
Certificates have been executed and delivered by the Trustee pursuant to this
Agreement.
OUTSTANDING MORTGAGE LOAN: As of any date of determination, a Mortgage
Loan with a Stated Principal Balance greater than zero that was not the subject
of a Principal Prepayment in full, and that did not become a Liquidated Loan,
prior to the end of the related Prepayment Period.
OWNERSHIP INTEREST: As to any Certificate, any ownership interest in
such Certificate including any interest in such Certificate as the Holder
thereof and any other interest therein, whether direct or indirect, legal or
beneficial.
PASS-THROUGH RATE: With respect to each Class of Certificates other
than the Residual Certificates, the applicable Pass-Through Rate for each such
Class as set forth in the Preliminary Statement.
PERCENTAGE INTEREST: With respect to any Certificate of a specified
Class, the Percentage Interest set forth on the face thereof or the percentage
obtained by dividing the Denomination of such Certificate by the aggregate of
the Denominations of all Certificates of the such Class.
PERMITTED INVESTMENTS: At any time, any one or more of the following
obligations and securities:
(i) obligations of the United States or any agency thereof, provided
such obligations are backed by the full faith and credit of the United
States;
(ii) general obligations of or obligations guaranteed by any state of
the United States or the District of Columbia receiving the highest
long-term debt rating of each Rating Agency, or such lower rating as will
not result in the downgrading or withdrawal of the ratings then assigned to
the Certificates by each Rating Agency;
(iii) [Reserved];
(iv) commercial or finance company paper which is then receiving the
highest commercial or finance company paper rating of each Rating Agency,
or such lower rating as will not result in the downgrading or withdrawal of
the ratings then assigned to the Certificates by each Rating Agency;
(v) certificates of deposit, demand or time deposits, or bankers'
acceptances issued by any depository institution or trust company
incorporated under the laws of the
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United States or of any state thereof and subject to supervision and
examination by federal and/or state banking authorities (including the
Trustee in its commercial banking capacity), provided that the commercial
paper and/or long term unsecured debt obligations of such depository
institution or trust company (or in the case of the principal depository
institution in a holding company system, the commercial paper or long-term
unsecured debt obligations of such holding company, but only if Xxxxx'x is
not a Rating Agency) are then rated one of the two highest long-term and
the highest short-term ratings of each such Rating Agency for such
securities, or such lower ratings as will not result in the downgrading or
withdrawal of the rating then assigned to the Certificates by any Rating
Agency;
(vi) demand or time deposits or certificates of deposit issued by any
bank or trust company or savings institution to the extent that such
deposits are fully insured by the FDIC; (vii) guaranteed reinvestment
agreements issued by any bank, insurance company or other corporation
containing, at the time of the issuance of such agreements, such terms and
conditions as will not result in the downgrading or withdrawal of the
rating then assigned to the Certificates by any such Rating Agency;
(viii) repurchase obligations with respect to any security described
in clauses (I) and (ii) above, in either case entered into with a
depository institution or trust company (acting as principal) described in
clause (v) above;
(ix) securities (other than stripped bonds, stripped coupons or
instruments sold at a purchase price in excess of 115% of the face amount
thereof) bearing interest or sold at a discount issued by any corporation
incorporated under the laws of the United States or any state thereof
which, at the time of such investment, have one of the two highest long
term ratings of each Rating Agency (except if the Rating Agency is Moody's,
such rating shall be the highest commercial paper rating of Moody's for any
such securities), or such lower rating as will not result in the
downgrading or withdrawal of the rating then assigned to the Certificates
by any Rating Agency, as evidenced by a signed writing delivered by each
Rating Agency;
(x) interests in any money market fund (including any such fund
managed or advised by the Trustee or any affiliate thereof) which at the
date of acquisition of the interests in such fund and throughout the time
such interests are held in such fund has the highest applicable long term
rating by each Rating Agency or such lower rating as will not result in the
downgrading or withdrawal of the ratings then assigned to the Certificates
by each Rating Agency;
(xi) short term investment funds sponsored by any trust company or
national banking association incorporated under the laws of the United
States or any state thereof (including any such fund managed or advised by
the Trustee or any affiliate thereof) which on the date of acquisition has
been rated by each Rating Agency in their respective highest applicable
rating category or such lower rating as will not result in the downgrading
or withdrawal of the ratings then assigned to the Certificates by each
Rating Agency; and
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(xii) such other investments having a specified stated maturity and
bearing interest or sold at a discount acceptable to each Rating Agency as
will not result in the downgrading or withdrawal of the rating then
assigned to the Certificates by any Rating Agency, as evidenced by a signed
writing delivered by each Rating Agency;
provided, that no such instrument shall be a Permitted Investment if
such instrument (I) evidences the right to receive interest only payments with
respect to the obligations underlying such instrument, (ii) is purchased at a
premium or (iii) is purchased at a deep discount; provided further that no such
instrument shall be a Permitted Investment (A) if such instrument evidences
principal and interest payments derived from obligations underlying such
instrument and the interest payments with respect to such instrument provide a
yield to maturity of greater than 120% of the yield to maturity at par of such
underlying obligations, or (B) if it may be redeemed at a price below the
purchase price (the foregoing clause (B) not to apply to investments in units of
money market funds pursuant to clause (vii) above); provided further that no
amount beneficially owned by any REMIC may be invested in investments (other
than money market funds) treated as equity interests for Federal income tax
purposes, unless the Master Servicer shall receive an Opinion of Counsel, at the
expense of the Master Servicer, to the effect that such investment will not
adversely affect the status of any such REMIC as a REMIC under the Code or
result in imposition of a tax on any such REMIC. Permitted Investments that are
subject to prepayment or call may not be purchased at a price in excess of par.
PERMITTED TRANSFEREE: Any person other than (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, (ii) a foreign
government, International Organization or any agency or instrumentality of
either of the foregoing, (iii) an organization (except certain farmers'
cooperatives described in section 521 of the Code) that is exempt from tax
imposed by Chapter 1 of the Code (including the tax imposed by section 511 of
the Code on unrelated business taxable income) on any excess inclusions (as
defined in section 860E(c)(1) of the Code) with respect to any Residual
Certificate, (iv) rural electric and telephone cooperatives described in section
1381(a)(2)(C) of the Code, (v) a Person that is not a citizen or resident of the
United States, a corporation, partnership (other than a partnership that has any
direct or indirect foreign partners) or other entity (treated as a corporation
or a partnership for federal income tax purposes), created or organized in or
under the laws of the United States, any state thereof or the District of
Columbia, an estate whose income from sources without the United States is
includible in gross income for United States federal income tax purposes
regardless of its connection with the conduct of a trade or business within the
United States, 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 United States persons have authority to control all substantial decisions
of the trustor and (vi) any other Person so designated by the Trustee based upon
an Opinion of Counsel (which shall not be an expense of the Trustee) that states
that the Transfer of an Ownership Interest in a Residual Certificate to such
Person may cause REMIC I or REMIC II to fail to qualify as a REMIC at any time
that any Certificates are Outstanding. The terms "United States," "State" and
"International Organization" shall have the meanings set forth in section 7701
of the Code or successor provisions. A corporation will not be treated as an
instrumentality of the United States or of any State or political subdivision
thereof for these purposes if all of its activities are subject to tax and, with
the exception of the Federal Home Loan Mortgage Corporation, a majority of its
board of directors is not selected by such government unit.
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PERSON: Any individual, corporation, partnership, joint venture,
association, joint- stock company, limited liability company, trust,
unincorporated organization or government, or any agency or political
subdivision thereof.
PO PERCENTAGE: Shall mean, with respect to any Discount Mortgage Loan
in Loan Group I or Loan Group II, as applicable, a fraction, expressed as a
percentage, equal to 8.00% minus the Net Mortgage Rate thereof divided by 8.00%.
PREPAYMENT ASSUMPTION: The applicable rate of prepayment, as described
in the Prospectus Supplement relating to each Class of Offered Certificates.
PREPAYMENT CHARGE: Any prepayment premium, penalty or charge payable
by a Mortgagor in connection with any Principal Prepayment on a Mortgage Loan
pursuant to the terms of the related Mortgage Note.
PREPAYMENT CHARGE PAYMENT AMOUNT: The amounts payable by the Company
in respect of any waived Prepayment Charges pursuant to Section 2.03.
PREPAYMENT INTEREST SHORTFALL: With respect to any Distribution Date,
for each Mortgage Loan that was the subject of a partial Principal Prepayment, a
Principal Prepayment in full, or that became a Liquidated Loan during the
related Prepayment Period, (other than a Principal Prepayment in full resulting
from the purchase of a Mortgage Loan pursuant to Section 2.02, 2.03, 4.21 or
11.01 hereof), the amount, if any, by which (i) one month's interest at the
applicable Net Mortgage Rate on the Stated Principal Balance of such Mortgage
Loan immediately prior to such prepayment (or liquidation) or in the case of a
partial Principal Prepayment on the amount of such prepayment (or liquidation
proceeds) exceeds (ii) the amount of interest paid or collected in connection
with such Principal Prepayment or such liquidation proceeds.
PREPAYMENT PERIOD: As to any Distribution Date, the calendar month
immediately 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 Accrual Period for such Class
relating to a Distribution Date.
PRINCIPAL FUNDS: With respect to any Distribution Date, (i) the sum,
without duplication, of (a) all scheduled principal collected during the related
Due Period, (b) all Advances relating to principal made on or before the
Distribution Account Deposit Date, (c) Principal Prepayments exclusive of
prepayment charges or penalties collected during the related Prepayment Period,
(iii) the Stated Principal Balance of each Mortgage Loan that was repurchased by
the Seller pursuant to Sections 2.02, 2.03 or 4.21, (d) the aggregate of all
Substitution Adjustment Amounts for the related Determination Date in connection
with the substitution of Mortgage Loans pursuant to Section 2.03(c), (e) amounts
in respect of principal paid by the Company pursuant to Section 11.01 and (f)
all Liquidation Proceeds collected during the related Prepayment Period (to the
extent
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such Liquidation Proceeds relate to principal), in each case to the extent
remitted by the Company or any Servicer to the Distribution Account pursuant to
this Agreement or any applicable Servicing Agreement minus (ii) all amounts
required to be reimbursed pursuant to Sections 5.02 and 5.05.
PRINCIPAL PREPAYMENT: Any Mortgagor payment or other recovery of (or
proceeds with respect to) principal on a Mortgage Loan (including loans
purchased or repurchased under Sections 2.02, 2.03, 4.21 and 11.01 hereof) that
is received in advance of its scheduled Due Date and 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. Partial Principal
Prepayments shall be applied by the Company or the applicable Servicer, as
appropriate, in accordance with the terms of the related Mortgage Note.
PROSPECTUS SUPPLEMENT: The Prospectus Supplement dated February 4,
2002 relating to the public offering of the Offered Certificates.
PROTECTED ACCOUNT: Each account established and maintained by the
Company with respect to receipts on the Mortgage Loans and REO Property in
accordance with Section 4.01 hereof or by the related Servicer in accordance
with the applicable Servicing Agreement.
PUD: A Planned Unit Development.
PURCHASE PRICE: With respect to any Mortgage Loan (x) required to be
repurchased by the Seller pursuant to Section 2.02 or 2.03 hereof or (y) that
the Seller has a right to purchase pursuant to Section 4.21 hereof, an amount
equal to the sum of (i) 100% of the outstanding principal balance of the
Mortgage Loan as of the date of such purchase plus (ii) accrued interest thereon
at the applicable Mortgage Rate through the first day of the month in which the
Purchase Price is to be distributed to Certificateholders, reduced by any
portion of the Servicing Fee, Master Servicing Fee, Servicing Advances and
Advances payable to the purchaser of the Mortgage Loan.
RATING AGENCY: Each of Xxxxx'x and S&P. If any such organization or
its successor is no longer in existence, "Rating Agency" shall be a nationally
recognized statistical rating organization, or other comparable Person,
designated by the Depositor, notice of which designation shall be given to the
Trustee. References herein to a given rating category of a Rating Agency shall
mean such rating category without giving effect to any modifiers.
REALIZED LOSS: With respect to each Liquidated Loan, an amount (not
less than zero or more than the Stated Principal Balance of the Mortgage Loan)
as of the date of such liquidation, equal to (i) the Stated Principal Balance of
such Liquidated Loan as of the date of such liquidation, minus (ii) the
Liquidation Proceeds, if any, received in connection with such liquidation
during the month in which such liquidation occurs, to the extent applied as
recoveries of principal of the Liquidated Loan. With respect to each Mortgage
Loan that has become the subject of a Deficient Valuation, (i) if the value of
the related Mortgaged Property was reduced below the principal balance of the
related Mortgage Note, the amount by which the value of the Mortgaged Property
was reduced below the principal balance of the related Mortgage Note, and (ii)
if the principal amount due under the related Mortgage Note has been reduced,
the difference between the principal balance of the Mortgage Loan outstanding
immediately prior to such Deficient Valuation and the principal balance
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of the Mortgage Loan as reduced by the Deficient Valuation plus any reduction in
the interest component of the Scheduled Payments. With respect to each Mortgage
Loan that has become the subject of a Debt Service Reduction and any
Distribution Date, the amount, if any, by which the related Scheduled Payment
was reduced. With respect to each Mortgage Loan that has become the subject of a
Servicing Modification, a loss resulting from such Servicing Modification.
RECORD DATE: With respect to the Certificates and (a) the first
Distribution Date, the Closing Date and (b) with respect to any other
Distribution Date, the close of business on the last Business Day of the month
preceding the month in which such Distribution Date occurs.
REGULAR CERTIFICATE: Any Certificate other than a Residual
Certificate.
RELIEF ACT: The Soldiers' and Sailors' Civil Relief Act of 1940, as
amended.
REMIC: A "real estate mortgage investment conduit" within the meaning
of section 860D of the Code.
REMIC I: The segregated pool of assets described in Section 6.06(a).
REMIC I CERTIFICATES: The REMIC I Regular Interests and the Class R-1
Certificate.
REMIC I REGULAR INTEREST LTI-AI: One of the separate non-certificated
beneficial ownership interests in REMIC I issued hereunder and designated as a
Regular Interest in REMIC I. REMIC I Regular Interest LTI-AI shall accrue
interest at the related Uncertificated REMIC I Pass- Through Rate in effect from
time to time, and shall be entitled to distributions of principal, subject to
the terms and conditions hereof, in an aggregate amount equal to its initial
Uncertificated Principal Balance as set forth in the Preliminary Statement
hereto.
REMIC I REGULAR INTEREST LTI-AII: One of the separate non-certificated
beneficial ownership interests in REMIC I issued hereunder and designated as a
Regular Interest in REMIC I. REMIC I Regular Interest LTI-AII shall accrue
interest at the related Uncertificated REMIC I Pass- Through Rate in effect from
time to time, and shall be entitled to distributions of principal, subject to
the terms and conditions hereof, in an aggregate amount equal to its initial
Uncertificated Principal Balance as set forth in the Preliminary Statement
hereto.
REMIC I REGULAR INTEREST LTI-B: One of the separate non-certificated
beneficial ownership interests in REMIC I issued hereunder and designated as a
Regular Interest in REMIC I. REMIC I Regular Interest LTI-B shall accrue
interest at the related Uncertificated REMIC I Pass- Through Rate in effect from
time to time, and shall be entitled to distributions of principal, subject to
the terms and conditions hereof, in an aggregate amount equal to its initial
Uncertificated Principal Balance as set forth in the Preliminary Statement
hereto.
REMIC I REGULAR INTEREST LTI-POI: One of the separate non-certificated
beneficial ownership interests in REMIC I issued hereunder and designated as a
Regular Interest in REMIC I. REMIC I Regular Interest LTI-POI shall not be
entitled to distributions in respect of interest, but shall be entitled to
distributions of principal, subject to the terms and conditions hereof, in an
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aggregate amount equal to its initial Uncertificated Principal Balance as set
forth in the Preliminary Statement hereto.
REMIC I REGULAR INTEREST LTI-POII: One of the separate
non-certificated beneficial ownership interests in REMIC I issued hereunder and
designated as a Regular Interest in REMIC I. REMIC I Regular Interest LTI-POII
shall not be entitled to distributions in respect of interest, but shall be
entitled to distributions of principal, subject to the terms and conditions
hereof, in an aggregate amount equal to its initial Uncertificated Principal
Balance as set forth in the Preliminary Statement hereto.
REMIC I REGULAR INTEREST LTI-R2: One of the separate non-certificated
beneficial ownership interests in REMIC I issued hereunder and designated as a
Regular Interest in REMIC I. REMIC I Regular Interest LTI-R2 shall accrue
interest at the related Uncertificated REMIC I Pass- Through Rate in effect from
time to time, and shall be entitled to distributions of principal, subject to
the terms and conditions hereof, in an aggregate amount equal to its initial
Uncertificated Principal Balance as set forth in the Preliminary Statement
hereto.
REMIC I REGULAR INTEREST LTI-XI: One of the separate non-certificated
beneficial ownership interests in REMIC I issued hereunder and designated as a
Regular Interest in REMIC I. REMIC I Regular Interest LTI-XI shall accrue
interest at the related Uncertificated REMIC I Pass- Through Rate in effect from
time to time. REMIC I Regular Interest LTI-XI will not be entitled to
distributions of principal.
REMIC I REGULAR INTEREST LTI-XII: One of the separate non-certificated
beneficial ownership interests in REMIC I issued hereunder and designated as a
Regular Interest in REMIC I. REMIC I Regular Interest LTI-XII shall accrue
interest at the related Uncertificated REMIC I Pass- Through Rate in effect from
time to time. REMIC I Regular Interest LTI-XII will not be entitled to
distributions of principal.
REMIC I REGULAR INTEREST LTI-XP: One of the separate non-certificated
beneficial ownership interests in REMIC I issued hereunder and designated as a
Regular Interest in REMIC I. REMIC I Regular Interest LTI-XP shall accrue
interest at the related Uncertificated REMIC I Pass- Through Rate in effect from
time to time, and shall be entitled to any Prepayment Charges relating to the
Mortgage Loans collected by the Company or the related Servicer and to
distributions of principal, subject to the terms and conditions hereof, in an
aggregate amount equal to its initial Uncertificated Principal Balance as set
forth in the Preliminary Statement hereto.
REMIC I REGULAR INTERESTS: REMIC I Regular Interest LTI-AI, REMIC I
Regular Interest LTI-AII, REMIC I Regular Interest LTI-XI, REMIC I Regular
Interest LTI-XII, REMIC I Regular Interest LTI-POI, REMIC I Regular Interest
LTI-POII, REMIC I Regular Interest LTI-B, REMIC I Regular Interest LTI-R2 and
REMIC I Regular Interest LTI-XP.
REMIC II: The segregated pool of assets described in the Preliminary
Statement.
REMIC II CERTIFICATES: The REMIC II Regular Interests and the Class
R-2 Certificates.
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REMIC II REGULAR INTERESTS: As defined in the Preliminary Statement.
REMIC PROVISIONS: Provisions of the federal income tax law relating to
real estate mortgage investment conduits, which appear at sections 860A through
860G of Subchapter M of Chapter 1 of the Code, and related provisions, and
proposed, temporary and final regulations and published rulings, notices and
announcements promulgated thereunder, as the foregoing may be in effect from
time to time as well as provisions of applicable state laws.
REMIC REGULAR INTEREST: A REMIC I Regular Interest or REMIC II Regular
Interest.
REMITTANCE DATE: Shall mean (i) with respect to the Company, the
Business Day immediately preceding the Distribution Account Deposit Date and
(ii) with respect to the related Servicer, the date specified in the applicable
Servicing Agreement.
REMITTANCE REPORT: As defined in Section 6.04(d).
REO PROPERTY: A Mortgaged Property acquired by the Company or the
related Servicer through foreclosure or deed-in-lieu of foreclosure in
connection with a defaulted Mortgage Loan.
REPLACEMENT MORTGAGE LOAN: A Mortgage Loan or Mortgage Loans in the
aggregate substituted by the Seller for a Deleted Mortgage Loan, which must, on
the date of such substitution, as confirmed in a Request for Release, (i) have a
Stated Principal Balance, after deduction of the principal portion of the
Scheduled Payment due in the month of substitution, not in excess of, and not
less than 90% of, the Stated Principal Balance of the Deleted Mortgage Loan;
(ii) have a fixed Mortgage Rate not less than or more than 1% per annum higher
than the Mortgage Rate of the Deleted Mortgage Loan; (iii) have the same or
higher credit quality characteristics than that of the Deleted Mortgage Loan;
(iv) have a Loan-to-Value Ratio no higher than that of the Deleted Mortgage
Loan; (v) have a remaining term to maturity no greater than (and not more than
one year less than) that of the Deleted Mortgage Loan; (vi) not permit
conversion of the Mortgage Rate from a fixed rate to a variable rate; (vii)
provide for a prepayment charge on terms substantially similar to those of the
prepayment charge, if any, of the Deleted Mortgage Loan; (viii) have the same
lien priority as the Deleted Mortgage Loan; (ix) constitute the same occupancy
type as the Deleted Mortgage Loan or be owner occupied; and (x) comply with each
representation and warranty set forth in Section 2.03 hereof.
REPURCHASE PRICE: Shall mean (a) with respect to each EMC Mortgage
Loan, a price equal to (i) the outstanding principal balance of the EMC Mortgage
Loan, plus (ii) interest on such outstanding principal balance at the Mortgage
Rate (net of the Servicing Fee Rate) from the lat date through which interest
has been paid tot he end of the month of repurchase, less (iii) amounts advanced
by the Company in respect of such repurchased EMC Mortgage Loan which are being
held in the Master Servicer Collection Account for remittance to the Trustee and
(b) with respect to any other Mortgage Loan, as defined in the related Servicing
Agreement.
REQUEST FOR RELEASE: The Request for Release to be submitted by the
Seller, the Company, the related Servicer or the Master Servicer to the
Custodian substantially in the form of
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Exhibit H. Each Request for Release furnished to the Custodian by the Seller,
the Company, the related Servicer or the Master Servicer shall be in duplicate
and shall be executed by an officer of such Person or a Servicing Officer (or,
if furnished electronically to the Custodian, shall be deemed to have been sent
and executed by an officer of such Person or a Servicing Officer) of the Company
or the related Servicer, as applicable.
REQUIRED INSURANCE POLICY: With respect to any Mortgage Loan, any
insurance policy that is required to be maintained from time to time under this
Agreement or any applicable Servicing Agreement.
RESIDUAL CERTIFICATES: The Class R-1 Certificates and Class R-2
Certificates each evidencing the sole class of "residual interests" (within the
meaning of Section 860G(a)(2) of the Code) in the related REMIC.
RESPONSIBLE OFFICER: With respect to the Trustee, any Vice President,
any Assistant Vice President, the Secretary, any Assistant Secretary, any Trust
Officer, any other officer customarily performing functions similar to those
performed by any of the above designated officers or other officers of the
Trustee specified by the Trustee, as to whom, with respect to a particular
matter, such matter is referred because of such officer's knowledge of and
familiarity with the particular subject.
S&P: Standard & Poor's, a division of The XxXxxx-Xxxx Companies, Inc.
SCHEDULED PAYMENT: The scheduled monthly payment on a Mortgage Loan
due on any Due Date allocable to principal and/or interest on such Mortgage
Loan.
SECURITIES ACT: The Securities Act of 1933, as amended.
SECURITIES ADMINISTRATOR: Xxxxx Fargo Bank Minnesota, National
Association, in its capacity as securities administrator hereunder, and its
successors and assigns.
SELLER: EMC Mortgage Corporation, a Delaware corporation, and its
successors and assigns, in its capacity as seller of the Mortgage Loans to the
Depositor.
SENIOR CERTIFICATES: The Class I-A Certificates, Class II-A
Certificates, Class X-1 Certificates, Class X-2 Certificates, Class X-3
Certificates, Class PO-1 Certificates, Class PO-2 Certificates, Class XP
Certificates, Class R-1 Certificates and Class R-2 Certificates.
SENIOR PERCENTAGE: For either the Group I and Group II Certificates
(other than the Class X Certificates and Class PO Certificates) on any
Distribution Date will equal the lesser of (i) 100% and (ii) the percentage
(carried to six places rounded up) obtained by dividing the aggregate
Certificate Principal Balance of the Group I or Group II Certificates (other
than the Class X Certificates and Class PO Certificates), as applicable,
immediately preceding such distribution date by the aggregate Stated Principal
Balance of the Mortgage Loans in the related Loan Group (other than the PO
Percentage thereof, with respect to the Discount Mortgage Loans) as of the
beginning
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of the related Due Period. The initial Senior Percentages for the Group I and
Group II Certificates will be equal to approximately 91.05% and 90.96%,
respectively.
SENIOR PREPAYMENT PERCENTAGE: For the Group I and Group II
Certificates (other than the Class X Certificates and Class PO Certificates), as
applicable, on any Distribution Date occurring during the periods set forth
below will be as follows:
PERIOD (DATES INCLUSIVE) SENIOR PREPAYMENT PERCENTAGE
February 25, 2002 - January 25, 2007 100%
February 25, 2007 - January 25, 2008 Senior Percentage for the related
Senior Certificates plus 70% of the
related Subordinate Percentage.
February 25, 2008 - January 25, 2009 Senior Percentage for the related
Senior Certificates plus 60% of the
related Subordinate Percentage.
February 25, 2009 - January 25, 2010 Senior Percentage for the related
Senior Certificates plus 40% of the
related Subordinate Percentage.
February 25, 2010 - January 25, 2011 Senior Percentage for the related
Senior Certificates plus 20% of the
related Subordinate Percentage.
February 25, 2011 and thereafter Senior Percentage for the related
Senior Certificates.
In addition, no reduction of the Group I or Group II Senior Prepayment
Percentage shall occur on any Distribution Date unless, as of the last day of
the month preceding such Distribution Date, (A) the aggregate Stated 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
Certificate Principal Balance of the Subordinated Certificates does not exceed
50%; and (B) cumulative Realized Losses on the Mortgage Loans do not exceed (a)
30% of the aggregate Certificate Principal Balances of the Subordinated
Certificates as of the Cut-off Date (the "Original Subordinate Principal
Balance") if such Distribution Date occurs between and including February 2007
and January 2008, (b) 35% of the Original Subordinate Principal Balance if such
Distribution Date occurs between and including February 2008 and January 2009,
(c) 40% of the Original Subordinate Principal Balance if such Distribution Date
occurs between and including February 2009 and January 2010, (d) 45% of the
Original Subordinate Principal Balance if such Distribution Date occurs between
and including February 2010 and January 2011, and (e) 50% of the Original
Subordinate Principal Balance if such Distribution Date occurs during or after
February 2011.
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Notwithstanding the foregoing, if on any Distribution Date, the percentage,
the numerator of which is the aggregate Certificate Principal Balance of the
Senior Certificates in the related Loan Group (other than the Class X
Certificates and Class PO Certficates) immediately preceding such Distribution
Date, and the denominator of which is the Stated Principal Balance of the
Mortgage Loans in the related Loan Group (other than the PO Percentage thereof,
with respect to the Discount Mortgage Loans) as of the beginning of the related
Due Period, exceeds such percentage as of the Cut-off Date, then the Group I and
Group II Senior Prepayment Percentages with respect to the Group I and Group II
Certificates for such Distribution Date will equal 100%.
SERVICER: Shall mean either National City or Cendant, as the case may
be.
SERVICING ADVANCES: All customary, reasonable and necessary "out of
pocket" costs and expenses (including reasonable legal fees) incurred in the
performance by the Company or the related Servicer of its servicing obligations
hereunder or under the applicable Servicing Agreement, including, but not
limited to, the cost of (i) the preservation, restoration and protection of a
Mortgaged Property, (ii) any enforcement or judicial proceedings, including
foreclosures, (iii) the management and liquidation of any REO Property
(including, without limitation, realtor's commissions) and (iv) compliance with
any obligations under Section 3.09 hereof to cause insurance to be maintained.
SERVICING AGREEMENT: Shall mean either the National City Servicing
Agreement or the Cendant Servicing Agreement, as applicable.
SERVICING FEE: As to each Mortgage Loan and any Distribution Date, an
amount equal to 1/12th of the Servicing Fee Rate multiplied by the Stated
Principal Balance of such Mortgage Loan as of the last day of the related Due
Period or, in the event of any payment of interest that accompanies a Principal
Prepayment in full during the related Due Period made by the Mortgagor
immediately prior to such prepayment, interest at the Servicing Fee Rate on the
Stated Principal Balance of such Mortgage Loan for the period covered by such
payment of interest.
SERVICING FEE RATE: 0.25% per annum.
SERVICING MODIFICATION: With respect to any Mortgage Loan that is in
default or, in the reasonable judgment of the Company or any Servicer, as to
which default is reasonably foreseeable, any modification which is effected by
the Company or any Servicer in accordance with the terms of this Agreement or
any applicable Servicing Agreement which results in any change in the
outstanding Stated Principal Balance, any change in the Mortgage Rate or any
extension of the term of such Mortgage Loan.
SERVICING OFFICER: Any officer of the Company or any Servicer involved
in, or responsible for, the administration and servicing of the Mortgage Loans
(i) in the case of the Company, whose name and facsimile signature appear on a
list of servicing officers furnished to the Trustee by the Company on the
Closing Date pursuant to this Agreement, as such list may from time to time be
amended and (ii) in the case of any Servicer, as to which evidence reasonably
acceptable to the Trustee, as applicable, of due authorization, by such party
has been furnished from time to time to the Trustee.
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STARTUP DAY: The Startup Day for each REMIC formed hereunder shall be
the Closing Date.
STATED PRINCIPAL BALANCE: With respect to any Mortgage Loan or related
REO Property and any Distribution Date, the Cut-off Date Principal Balance
thereof minus the sum of (i) the principal portion of the Scheduled Payments due
with respect to such Mortgage Loan during each Due Period ending prior to such
Distribution Date (and irrespective of any delinquency in their payment), (ii)
all Principal Prepayments with respect to such Mortgage Loan received prior to
or during the related Prepayment Period, and all Liquidation Proceeds to the
extent applied by the Company or the related Servicer as recoveries of principal
in accordance with Section 3.09 or the applicable Servicing Agreement with
respect to such Mortgage Loan, that were received by the Company or the related
Servicer as of the close of business on the last day of the Prepayment Period
related to such Distribution Date and (iii) any Realized Losses on such Mortgage
Loan incurred during the related Prepayment Period. The Stated Principal Balance
of a Liquidated Loan equals zero. References herein to the Stated Principal
Balance of a Loan Group at any time shall mean the aggregate Stated Principal
Balance of all Mortgage Loans in such Loan Group.
SUBORDINATE OPTIMAL PRINCIPAL AMOUNT: For the Subordinated
Certificates with respect to each Distribution Date means an amount equal to the
sum of the following for Loan Group I and Loan Group II (but in no event greater
than the aggregate Certificate Principal Balances of the Subordinated
Certificates immediately prior to such Distribution Date):
(i) the applicable Subordinate Percentage of the applicable Non-PO
Percentage of the principal portion of all Scheduled Payments due on each
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
applicable Non-PO Percentage of the Stated Principal Balance of each
Mortgage Loan in the related Loan Group which was the subject of a
prepayment in full received by the Company or the related Servicer during
the applicable Prepayment Period;
(iii) the applicable Subordinate Prepayment Percentage of the
applicable Non-PO Percentage of all partial prepayments of principal
received during the applicable Prepayment Period for each Mortgage Loan in
the related Loan Group;
(iv) the excess, if any, of (a) the 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" and "Class PO-1 Certificate Principal Distribution Amount" or Class
PO-2 Certificate Principal Distribution Amount", as applicable, on such
Distribution Date;
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(v) the applicable Subordinate Prepayment Percentage of the applicable
Non-PO Percentage of the sum of (a) the Stated Principal Balance of each
Mortgage Loan in the related Loan Group which was repurchased by the Seller
or the related Servicer in connection with such Distribution Date and (b)
the difference, if any, between the Stated Principal Balance of a Mortgage
Loan in the related Loan Group that has been replaced by the Seller or the
related Servicer with a Replacement Mortgage Loan pursuant to this
Agreement or the related Servicing Agreement in connection with such
distribution date and the Stated Principal Balance of such Replacement
Mortgage Loan; and
(vi) on the Distribution Date on which the Certificate Principal
Balances of the related Senior Certificates (other than the Class PO
Certificates) have all been reduced to zero, 100% of any applicable Senior
Optimal Principal Amount.
SUBORDINATE PERCENTAGE: For the Subordinated Certificates with respect
to each Loan Group related to the Mortgage Loans on any Distribution Date, means
100% minus the related Senior Percentage for the Senior Certificates related to
such Loan Group.
SUBORDINATE PREPAYMENT PERCENTAGE: For the Subordinated Certificates
with respect to each Loan Group related to the Mortgage Loans on any
Distribution Date will equal 100% minus the related Senior Prepayment Percentage
for the Senior Certificates related to such Loan Group, except that on any
Distribution Date after the Certificate Principal Balances of the Group I or
Group II Certificates have each been reduced to zero, the Subordinate Prepayment
Percentage for the Subordinated Certificates with respect to each Loan Group
related to the Mortgage Loans will equal 100%. The initial Subordinate
Percentages for Loan Group I and Loan Group II will be equal to approximately
8.95% and 9.04%, respectively.
SUBORDINATED CERTIFICATES: The Class B-1 Certificates, Class B-2
Certificates, Class B-3 Certificates, Class B-4 Certificates, Class B-5
Certificates and Class B-6 Certificates.
SUBSERVICING AGREEMENT: Any agreement entered into between the Company
and a subservicer with respect to the subservicing of any Mortgage Loan
hereunder by such subservicer.
SUBSTITUTION ADJUSTMENT AMOUNT: The meaning ascribed to such term
pursuant to Section 2.03(c).
SUCCESSOR MASTER SERVICER: The meaning ascribed to such term pursuant
to Section 9.01.
TAX MATTERS PERSON: The person designated as "tax matters person" in
the manner provided under Treasury regulation ss. 1.860F-4(d) and temporary
Treasury regulation ss. 301.6231(a)(7)-1T. The holder of the greatest Percentage
Interest in a Class of Residual Certificates shall be the Tax Matters Person for
the related REMIC. The Securities Administrator, or any successor thereto or
assignee thereof shall serve as tax administrator hereunder and as agent for the
related Tax Matters Person.
TRANSFER AFFIDAVIT: As defined in Section 6.02(c).
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TRANSFER: Any direct or indirect transfer or sale of any Ownership
Interest in a Certificate.
TRUST FUND: The corpus of the trust created hereunder consisting of
(i) the Mortgage Loans and all interest accruing and principal due with respect
thereto after the Cut-off Date to the extent not applied in computing the
Cut-off Date Principal Balance thereof; (ii) the Distribution Account, the
Master Servicer Collection Account maintained by the Master Servicer and the
Protected Accounts maintained by the Company and the Servicers and all amounts
deposited therein pursuant to the applicable provisions of this Agreement; (iii)
property that secured a Mortgage Loan and has been acquired by foreclosure, deed
in lieu of foreclosure or otherwise; (iv) the mortgagee's rights under the
Insurance Policies with respect to the Mortgage Loans; (v) the National City
Servicing Agreement, the Cendant Servicing Agreement and the Assignment
Agreements; and (vi) all proceeds of the foregoing, including proceeds of
conversion, voluntary or involuntary, of any of the foregoing into cash or other
liquid property.
TRUSTEE: Bank One, National Association, a national banking
association, not in its individual capacity, but solely in its capacity as
trustee for the benefit of the Certificateholders under this Agreement, and any
successor thereto, and any corporation or national banking association resulting
from or surviving any consolidation or merger to which it or its successors may
be a party and any successor trustee as may from time to time be serving as
successor trustee hereunder.
UNCERTIFICATED ACCRUED INTEREST: With respect to each REMIC Regular
Interest on each Distribution Date, an amount equal to one month's interest at
the related Uncertificated Pass- Through Rate on the Uncertificated Principal
Balance or Uncertificated Notional Amount, as applicable, of such REMIC Regular
Interest. In each case, Uncertificated Accrued Interest will be reduced by any
Prepayment Interest Shortfalls and shortfalls resulting from application of the
Relief Act (allocated to such REMIC Regular Interests as set forth in Section
6.06).
UNCERTIFICATED NOTIONAL AMOUNT: With respect to REMIC I Regular
Interest LTI-XI, the aggregate Stated Principal Balance of the Non-Discount
Mortgage Loans in Loan Group I. With respect to REMIC I Regular Interest
LTI-XII, the aggregate Stated Principal Balance of the Non- Discount Mortgage
Loans in Loan Group II.
UNCERTIFICATED PRINCIPAL BALANCE: With respect to each REMIC Regular
Interest (other than REMIC I Regular Interest LTI-XI and REMIC I Regular
Interest LTI-XII), the principal amount of such REMIC Regular Interest
outstanding as of any date of determination. As of the Closing Date, the
Uncertificated Principal Balance of each REMIC Regular Interest (other than
REMIC I Regular Interest LTI-XI and REMIC I Regular Interest LTI-XII) shall
equal the amount set forth in the Preliminary Statement hereto as its initial
Uncertificated Principal Balance. On each Distribution Date, the Uncertificated
Principal Balance of each REMIC Regular Interest shall be reduced by all
distributions of principal made on such REMIC Regular Interest on such
Distribution Date pursuant to Section 6.06 and, if and to the extent necessary
and appropriate, shall be further reduced on such Distribution Date by Realized
Losses as provided in Section 6.06. The Uncertificated Principal Balance of each
REMIC Regular Interest shall never be less than zero. REMIC I Regular Interest
LTI-XI and REMIC I Regular Interest LTI-XII will not have an Uncertificated
Principal Balance.
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UNCERTIFICATED REMIC I PASS-THROUGH RATE: With respect to each
Uncertificated REMIC I Regular Interest, the Uncertificated REMIC I Pass-Through
Rate as provided in the Preliminary Statement.
VOTING RIGHTS: The portion of the voting rights of all the
Certificates that is allocated to any Certificate for purposes of the voting
provisions hereunder. Voting Rights shall be allocated (i) 95% to the
Certificates (other than the Class X Certificates, the Class XP Certificates and
the Residual Certificates), (ii) 1% to each of the Class X-1 Certificates, the
Class X-2 Certificates, the Class X-3 Certificates and the Class XP Certificates
and (iii) 0.50% to each Class of Residual Certificates, with the allocation
among the Certificates other than the Class X Certificates, the Class XP
Certificates and the Residual Certificates to be in proportion to the
Certificate Principal Balance of each Class relative to the Certificate
Principal Balance of all other such Classes. Voting Rights will be allocated
among the Certificates of each such Class in accordance with their respective
Percentage Interests.
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ARTICLE II
CONVEYANCE OF TRUST FUND
REPRESENTATIONS AND WARRANTIES
Section 2.01 CONVEYANCE OF TRUST FUND.
The Seller hereby sells, transfers, assigns, sets over and otherwise
conveys to the Depositor, without recourse, all the right, title and interest of
the Seller in and to the assets in the Trust Fund.
The Seller has entered into this Agreement in consideration for the
purchase of the Mortgage Loans by the Depositor and has agreed to take the
actions specified herein.
The Depositor, concurrently with the execution and delivery hereof,
hereby sells, transfers, assigns, sets over and otherwise conveys to the Trustee
for the use and benefit of the Certificateholders, without recourse, all the
right, title and interest of the Depositor in and to the Trust Fund.
In connection with any such transfer and assignment, the Depositor has
delivered to, and deposited with, the Trustee or the Custodian, as its agent,
the following documents or instruments with respect to each Mortgage Loan so
assigned: (i) the original Mortgage Note, including any riders thereto, endorsed
without recourse to the order of "Bank One, National Association, as Trustee for
certificateholders of Bear Xxxxxxx Asset Backed Securities, Inc. Asset Backed
Certificates, Series 2002- AC1," and showing to the extent available to the
Seller an unbroken chain of endorsements from the original payee thereof to the
Person endorsing it to the Trustee, (ii) the original Mortgage, 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) the assignment (either an original or a
copy, which may be in the form of a blanket assignment if permitted in the
jurisdiction in which the Mortgaged Property is located) to the Trustee of the
Mortgage with respect to each Mortgage Loan in the name of "Bank One, National
Association, as Trustee for certificateholders of Bear Xxxxxxx Asset Backed
Securities, Inc. Asset Backed Certificates, Series 2002-AC1," which shall have
been recorded (or if clause (x) in the proviso below applies, shall be in
recordable form) (iv) an original or a copy of all intervening assignments of
the Mortgage, if any, to the extent available to the Seller, with evidence of
recording thereon, (v) the original policy of title insurance or mortgagee's
certificate of title insurance or commitment or binder for title insurance, if
available, or a copy thereof, or, in the event that such original title
insurance policy is unavailable, a photocopy thereof, or in lieu thereof, a
current lien search on the related Mortgaged Property and (vi) originals or
copies of all available assumption, modification or substitution agreements, if
any; provided, however, that in lieu of the foregoing, the Seller may deliver
the following documents, under the circumstances set forth below: (x) if any
Mortgage, assignment thereof to the Trustee or intervening assignments thereof
have been delivered or are being delivered to recording offices for recording
and have not been returned in time to permit their delivery as specified above,
the Depositor may deliver a true copy thereof with a certification by the Seller
or the title company issuing the commitment for title insurance, on the face
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of such copy, substantially as follows: "Certified to be a true and correct copy
of the original, which has been transmitted for recording"; and (y) in lieu of
the Mortgage Notes relating to the Mortgage Loans identified in the list set
forth in Exhibit J, the Depositor may deliver a lost note affidavit and
indemnity and a copy of the original note, if available; and provided, further,
however, that in the case of Mortgage Loans which have been prepaid in full
after the Cut-Off Date and prior to the Closing Date, the Depositor, in lieu of
delivering the above documents, may deliver to the Trustee a certification of a
Servicing Officer to such effect and in such case shall deposit all amounts paid
in respect of such Mortgage Loans, in the Master Servicer Collection Account or
in the Distribution Account on the Closing Date. In the case of the documents
referred to in clause (x) above, the Depositor shall deliver such documents to
the Trustee promptly after they are received. The Seller shall cause, at its
expense, the Mortgage and intervening assignments, if any, and to the extent
required in accordance with the foregoing, the assignment of the Mortgage to the
Trustee to be submitted for recording promptly after the Closing Date; provided
that the Seller need not cause to be recorded any assignment in any jurisdiction
under the laws of which, as evidenced by an Opinion of Counsel delivered by the
Seller to the Trustee and the Rating Agencies, the recordation of such
assignment is not necessary to protect the Trustee's interest in the related
Mortgage Loan. In the event that the Seller, the Depositor or the Master
Servicer gives written notice to the Trustee that a court has recharacterized
the sale of the Mortgage Loans as a financing, the Seller shall submit or cause
to be submitted for recording as specified above or, should the Seller fail to
perform such obligations, the Trustee shall cause each such previously
unrecorded assignment to be submitted for recording as specified above at the
expense of the Trust pursuant to Section 10.05. In the event a Mortgage File is
released to the Company or the related Servicer as a result of such Person
having completed a Request for Release, the Trustee shall, if not so completed,
complete the assignment of the related Mortgage in the manner specified in
clause (iii) above.
Section 2.02 ACCEPTANCE OF THE MORTGAGE LOANS.
(a) The Trustee acknowledges receipt of, subject to the further review
and exceptions reported by the Trustee pursuant to the procedures described
below, the documents (or certified copies thereof) delivered to the Trustee or
the Custodian on its behalf pursuant to Section 2.01 and declares that it holds
and will continue to hold directly or through a custodian those documents and
any amendments, replacements or supplements thereto and all other assets of the
Trust Fund delivered to it in trust for the use and benefit of all present and
future Holders of the Certificates. On the Closing Date, the Trustee or the
Custodian on its behalf will deliver an Initial Certification in the form
annexed hereto as Exhibit C-1 confirming whether or not it has received the
Mortgage File for each Mortgage Loan, but without review of such Mortgage File,
except to the extent necessary to confirm whether such Mortgage File contains
the original Mortgage Note or a lost note affidavit and indemnity in lieu
thereof. No later than 90 days after the Closing Date, the Trustee or the
Custodian on its behalf shall, for the benefit of the Certificateholders, review
each Mortgage File delivered to it and execute and deliver to the Seller and the
Master Servicer an Interim Certification substantially in the form annexed
hereto as Exhibit C-2. In conducting such review, the Trustee or the Custodian
on its behalf will ascertain whether all required documents have been executed
and received and whether those documents relate, determined on the basis of the
Mortgagor name, original principal balance and loan number, to the Mortgage
Loans identified in Exhibit B to this Agreement, as supplemented (provided,
however, that with respect to those documents described in subclauses (iv) and
(vi) of Section 2.01, such obligations shall extend only to documents actually
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delivered pursuant to such subclauses). In performing any such review, the
Trustee and the Custodian 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 on its behalf finds any
document constituting part of the Mortgage File not to have been executed or
received, or to be unrelated to the Mortgage Loans identified in Exhibit B or to
appear to be defective on its face, the Trustee or the Custodian on its behalf
shall include such information in the exception report attached to Exhibit C-2.
The Seller shall correct or cure any such defect or, if prior to the end of the
second anniversary of the Closing Date, the Seller may substitute for the
related Mortgage Loan a Replacement Mortgage Loan, which substitution shall be
accomplished in the manner and subject to the conditions set forth in Section
2.03 or shall deliver to the Trustee an Opinion of Counsel to the effect that
such defect does not materially or adversely affect the interests of
Certificateholders in such Mortgage Loan within 60 days from the date of notice
from the Trustee of the defect and if the Seller fails to correct or cure the
defect or deliver such opinion within such period, the Seller will, subject to
Section 2.03, within 90 days from the notification of the Trustee purchase such
Mortgage Loan at the Purchase Price; provided, however, that if such defect
relates solely to the inability of the Seller to deliver the Mortgage,
assignment thereof to the Trustee, or intervening assignments thereof with
evidence of recording thereon because such documents have been submitted for
recording and have not been returned by the applicable jurisdiction, the Seller
shall not be required to purchase such Mortgage Loan if the Seller delivers such
documents promptly upon receipt, but in no event later than 360 days after the
Closing Date.
(b) No later than 180 days after the Closing Date, the Trustee or the
Custodian on its behalf will review, for the benefit of the Certificateholders,
the Mortgage Files and will execute and deliver or cause to be executed and
delivered to the Seller and the Master Servicer, a Final Certification
substantially in the form annexed hereto as Exhibit C-3. In conducting such
review, the Trustee or the Custodian on its behalf will ascertain whether each
document required to be recorded has been returned from the recording office
with evidence of recording thereon and the Trustee or the Custodian on its
behalf has received either an original or a copy thereof, as required in Section
2.01 (provided, however, that with respect to those documents described in
subclauses (iv) and (vi) of Section 2.01, such obligations shall extend only to
documents actually delivered pursuant to such subclauses). If the Trustee or the
Custodian on its behalf finds any document with respect to a Mortgage Loan 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, the Trustee or the
Custodian on its behalf shall note such defect in the exception report attached
to the Final Certification and shall promptly notify the Seller. The Seller
shall correct or cure any such defect or, if prior to the end of the second
anniversary of the Closing Date, the Seller may substitute for the related
Mortgage Loan a Replacement Mortgage Loan, which substitution shall be
accomplished in the manner and subject to the conditions set forth in Section
2.03 or shall deliver to the Trustee an Opinion of Counsel to the effect that
such defect does not materially or adversely affect the interests of
Certificateholders in such Mortgage Loan within 60 days from the date of notice
from the Trustee of the defect and if the Seller is unable within such period to
correct or cure such defect, or to substitute the related Mortgage Loan with a
Replacement Mortgage Loan or to deliver such opinion, the Seller shall, subject
to Section 2.03, within 90 days from the notification of the Trustee, purchase
such Mortgage Loan at the Purchase Price; provided, however, that if such defect
relates solely to the inability of the Seller to deliver the Mortgage,
assignment thereof to the Trustee or intervening assignments thereof with
evidence of
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recording thereon, because such documents have not been returned by the
applicable jurisdiction, the Seller shall not be required to purchase such
Mortgage Loan, if the Seller delivers such documents promptly upon receipt, but
in no event later than 360 days after the Closing Date.
(c) In the event that a Mortgage Loan is purchased by the Seller in
accordance with subsections 2.02(a) or (b) above or Section 2.03, the Seller
shall remit the applicable Purchase Price to the Master Servicer for deposit in
the Master Servicer Collection Account and shall provide written notice to the
Trustee detailing the components of the Purchase Price, signed by a Servicing
Officer. Upon deposit of the Purchase Price in the Master Servicer Collection
Account and upon receipt of a Request for Release with respect to such Mortgage
Loan, the Trustee will release to the Seller the related Mortgage File and the
Trustee shall execute and deliver all instruments of transfer or assignment,
without recourse, furnished to it by the Seller, as are necessary to vest in the
Seller title to and rights under the Mortgage Loan. Such purchase shall be
deemed to have occurred on the date on which the deposit into the Master
Servicer Collection Account was made. The Trustee shall promptly notify the
Rating Agencies of such repurchase. The obligation of the Seller to cure,
repurchase or substitute for any Mortgage Loan as to which 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.
(d) The Seller shall deliver to the Trustee, and Trustee agrees to
accept the Mortgage Note and other documents constituting the Mortgage File with
respect to any Replacement Mortgage Loan, which the Trustee will review as
provided in subsections 2.02(a) and 2.02(b), provided, that the Closing Date
referred to therein shall instead be the date of delivery of the Mortgage File
with respect to each Replacement Mortgage Loan.
Section 2.03 REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE COMPANY
AND THE SELLER.
(a) The Company hereby represents and warrants to the Master Servicer,
the Depositor, the Securities Administrator and the Trustee as follows, as of
the Closing Date:
(i) It is duly organized and is validly existing and in good standing
under the laws of the State of Delaware and is duly authorized and
qualified to transact any and all business contemplated by this Agreement
to be conducted by it in any state in which a Mortgaged Property is located
or is otherwise not required under applicable law to effect such
qualification and, in any event, is in compliance with the doing business
laws of any such state, to the extent necessary to ensure its ability to
enforce each Mortgage Loan, to service the Mortgage Loans in accordance
with the terms of this Agreement and to perform any of its other
obligations under this Agreement in accordance with the terms hereof.
(ii) It has the full corporate power and authority to service each
Mortgage Loan, and to execute, deliver and perform, and to enter into and
consummate the transactions contemplated by this Agreement and has duly
authorized by all necessary corporate action on its part the execution,
delivery and performance of this Agreement; and this Agreement, assuming
the due authorization, execution and delivery hereof by the other parties
hereto, constitutes its legal, valid and binding obligation, enforceable
against it in accordance with its terms, except that (a) the enforceability
hereof may be limited by bankruptcy, insolvency,
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moratorium, receivership and other similar laws relating to creditors'
rights generally and (b) the remedy of specific performance and injunctive
and other forms of equitable relief may be subject to equitable defenses
and to the discretion of the court before which any proceeding therefor may
be brought.
(iii) The execution and delivery of this Agreement by it, the
servicing of the Mortgage Loans by it under this Agreement, the
consummation of any other of the transactions contemplated by this
Agreement, and the fulfillment of or compliance with the terms hereof are
in its ordinary course of business and will not (A) result in a material
breach of any term or provision of its charter or by-laws or (B) materially
conflict with, result in a material breach, violation or acceleration of,
or result in a material default under, the terms of any other material
agreement or instrument to which it is a party or by which it may be bound,
or (C) constitute a material violation of any statute, order or regulation
applicable to it of any court, regulatory body, administrative agency or
governmental body having jurisdiction over it; and it is not in breach or
violation of any material indenture or other material agreement or
instrument, or in violation of any statute, order or regulation of any
court, regulatory body, administrative agency or governmental body having
jurisdiction over it which breach or violation may materially impair its
ability to perform or meet any of its obligations under this Agreement.
(iv) It is an approved servicer of conventional mortgage loans for
Xxxxxx Xxx or Xxxxxxx Mac and is a mortgagee approved by the Secretary of
Housing and Urban Development pursuant to sections 203 and 211 of the
National Housing Act.
(v) No litigation is pending or, to the best of its knowledge,
threatened, against it that would materially and adversely affect the
execution, delivery or enforceability of this Agreement or its ability to
service the Mortgage Loans or to perform any of its other obligations under
this Agreement in accordance with the terms hereof.
(vi) No consent, approval, authorization or order of any court or
governmental agency or body is required for its execution, delivery and
performance of, or compliance with, this Agreement or the consummation of
the transactions contemplated hereby, or if any such consent, approval,
authorization or order is required, it has obtained the same.
(vii) The Company will not waive any Prepayment Charge unless it is
waived in accordance with the standard set forth in Section 3.01.
(b) The Seller hereby represents and warrants to the Depositor, the
Securities Administrator, the Master Servicer and the Trustee as follows, as of
the Closing Date:
(i) The Seller is duly organized as a Delaware corporation and is
validly existing and in good standing under the laws of the State of
Delaware and is duly authorized and qualified to transact any and all
business contemplated by this Agreement to be conducted by the Seller in
any state in which a Mortgaged Property is located or is otherwise not
required under applicable law to effect such qualification and, in any
event, is in compliance with the doing business laws of any such state, to
the extent necessary to ensure its ability
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to enforce each Mortgage Loan, to sell the Mortgage Loans in accordance
with the terms of this Agreement and to perform any of its other
obligations under this Agreement in accordance with the terms hereof.
(ii) The Seller has the full corporate power and authority to sell
each Mortgage Loan, and to execute, deliver and perform, and to enter into
and consummate the transactions contemplated by this Agreement and has duly
authorized by all necessary corporate action on the part of the Seller the
execution, delivery and performance of this Agreement; and this Agreement,
assuming the due authorization, execution and delivery hereof by the other
parties hereto, constitutes a legal, valid and binding obligation of the
Seller, enforceable against the Seller in accordance with its terms, except
that (a) the enforceability hereof may be limited by bankruptcy,
insolvency, moratorium, receivership and other similar laws relating to
creditors' rights generally and (b) the remedy of specific performance and
injunctive and other forms of equitable relief may be subject to equitable
defenses and to the discretion of the court before which any proceeding
therefor may be brought.
(iii) The execution and delivery of this Agreement by the Seller, the
sale of the Mortgage Loans by the Seller under this Agreement, the
consummation of any other of the transactions contemplated by this
Agreement, and the fulfillment of or compliance with the terms hereof are
in the ordinary course of business of the Seller and will not (A) result in
a material breach of any term or provision of the charter or by-laws of the
Seller or (B) materially conflict with, result in a material breach,
violation or acceleration of, or result in a material default under, the
terms of any other material agreement or instrument to which the Seller is
a party or by which it may be bound, or (C) constitute a material violation
of any statute, order or regulation applicable to the Seller of any court,
regulatory body, administrative agency or governmental body having
jurisdiction over the Seller; and the Seller is not in breach or violation
of any material indenture or other material agreement or instrument, or in
violation of any statute, order or regulation of any court, regulatory
body, administrative agency or governmental body having jurisdiction over
it which breach or violation may materially impair the Seller's ability to
perform or meet any of its obligations under this Agreement.
(iv) The Seller is an approved seller of conventional mortgage loans
for Xxxxxx Mae or Xxxxxxx Mac and is a mortgagee approved by the Secretary
of Housing and Urban Development pursuant to sections 203 and 211 of the
National Housing Act.
(v) No litigation is pending or, to the best of the Seller's
knowledge, threatened, against the Seller that would materially and
adversely affect the execution, delivery or enforceability of this
Agreement or the ability of the Seller to sell the Mortgage Loans or to
perform any of its other obligations under this Agreement in accordance
with the terms hereof.
(vi) No consent, approval, authorization or order of any court or
governmental agency or body is required for the execution, delivery and
performance by the Seller of, or compliance by the Seller with, this
Agreement or the consummation of the transactions
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contemplated hereby, or if any such consent, approval, authorization or
order is required, the Seller has obtained the same.
(vii) With respect to each Mortgage Loan as of the Cut-off Date
(unless otherwise expressly provided):
(A) The information set forth in the Mortgage Loan Schedule on the
Closing Date is complete, true and correct.
(B) All payments required to be made prior to the Cut-off Date with
respect to each Mortgage Loan have been made and no Mortgage Loan is delinquent
sixty or more days; and the Seller has not advanced funds, or induced, solicited
or knowingly received any advance of funds from a party other than the owner of
the Mortgaged Property subject to the Mortgage, directly or indirectly, for the
payment of any amount required under any Mortgage Loan.
(C) Except with respect to taxes, insurance and other amounts
previously advanced by a prior servicer with respect to any Mortgage Loan, to
the best of Seller's knowledge, there are no delinquent taxes, water charges,
sewer rents, assessments, insurance premiums, leasehold payments, including
assessments payable in future installments, or other outstanding charges
affecting the related Mortgaged Property.
(D) The terms of the Mortgage Note and the Mortgage have not been
impaired, waived, altered or modified in any respect, except by written
instruments which in the case of the Mortgage Loans are in the Mortgage File and
have been or will be recorded, if necessary to protect the interests of the
Trustee, and which have been or will be delivered to the Trustee, all in
accordance with this Agreement. The substance of any such waiver, alteration or
modification has been approved by the title insurer, to the extent required by
the related policy. No Mortgagor has been released, in whole or in part, except
in connection with an assumption agreement approved by the title insurer, to the
extent required by the policy, and which assumption agreement in the case of the
Mortgage Loans is part of the Mortgage File.
(E) The Mortgage Note and the Mortgage are not subject to any right of
rescission, set-off, counterclaim or defense, including the defense of usury,
nor will the operation of any of the terms of the Mortgage Note and the
Mortgage, or the exercise of any right thereunder, render the Mortgage
unenforceable, in whole or in part, or subject to any right of rescission,
set-off, counterclaim or defense, including the defense of usury and no such
right of rescission, set-off, counterclaim or defense has been asserted with
respect thereto.
(F) All buildings upon, or comprising part of, the Mortgaged Property
are insured by an insurer acceptable to Xxxxxx Xxx and Xxxxxxx Mac against loss
by fire, hazards of extended coverage and such other hazards as are customary in
the area where the Mortgaged Property is located, and such insurer is licensed
to do business in the state where the Mortgaged Property is located. All such
insurance policies contain a standard mortgagee clause naming the originator,
its successors and assigns as mortgagee and Seller has received no notice that
all premiums thereon have not been paid. If upon origination of the Mortgage
Loan, the Mortgaged Property was, or was subsequently deemed to be, in an area
identified in the Federal Register by the Federal Emergency
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Management Agency as having special flood hazards (and such flood insurance has
been made available), which require under applicable law that a flood insurance
policy meeting the requirements of the current guidelines of the Federal
Insurance Administration (or any successor thereto) be obtained, such flood
insurance policy is in effect which policy is with a generally acceptable
carrier in an amount representing coverage not less than the least of (A) the
Stated Principal Balance of the related Mortgage Loan, (B) the minimum amount
required to compensate for damage or loss on a replacement cost basis, or (C)
the maximum amount of insurance that is available under the Flood Disaster
Protection Act of 1973. The Mortgage obligates the Mortgagor thereunder to
maintain all such insurance at Mortgagor's cost and expense and, on the
Mortgagor's failure to do so, authorizes the holder of the Mortgage to maintain
such insurance at Mortgagor's cost and expense and to obtain reimbursement
therefor from the Mortgagor.
(G) Any and all requirements of any federal, state or local law
including, usury, truth in lending, real estate settlement procedures including,
the Real Estate Settlement Procedures Act of 1974, as amended, consumer credit
protection, equal credit opportunity or disclosure laws applicable to the
Mortgage Loan have been complied with in all material respects.
(H) The Mortgage has not been satisfied, canceled, subordinated, or
rescinded, in whole or in part, and the Mortgaged Property has not been released
from the lien of the Mortgage, in whole or in part, nor has any instrument been
executed that would effect any such release, cancellation, subordination or
rescission.
(I) The Mortgage is a valid, existing and enforceable first on the
Mortgaged Property, including all improvements on the Mortgaged Property, if
any, subject only to (1) the lien of current real property taxes and assessments
not yet due and payable, (2) covenants, conditions and restrictions, rights of
way, easements and other matters of the public record as of the date of
recording being acceptable to mortgage lending institutions generally and
specifically referred to in the lender's title insurance policy delivered to the
originator of the Mortgage Loan and which do not adversely affect the Appraised
Value of the Mortgaged Property and (3) 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 the Mortgage. The Seller has full right to
sell and assign the Mortgage to the Depositor.
(J) The Mortgage Note and the related Mortgage are genuine and each is
the legal, valid and binding obligation of the maker thereof, enforceable in
accordance with its terms, except as the enforceability thereof may be limited
by bankruptcy, insolvency or reorganization or general principles of equity.
(K) All parties to the Mortgage Note and the Mortgage had the legal
capacity to enter into the Mortgage Loan transaction and to execute and deliver
the Mortgage Note and the Mortgage, and the Mortgage Note and the Mortgage have
been duly and properly executed by such parties.
(L) The proceeds of the Mortgage Loan have been fully disbursed and
there is no requirement for future advances thereunder and any and all
requirements as to completion of any on- site or off-site improvement and as to
disbursements of any escrow funds therefor have been
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complied with. All costs, fees and expenses incurred in making or closing the
Mortgage Loan and the recording of the Mortgage were paid, and the Mortgagor is
not entitled to any refund of any amounts paid or due under the Mortgage Note or
Mortgage.
(M) Immediately prior to the conveyance of the Mortgage Loans by the
Seller to the Depositor hereunder, the Seller was the sole owner and holder of
the Mortgage Loan; the related Originator or the Seller or the applicable
Servicer was the custodian of the related escrow account, if applicable; the
Mortgage Loan had neither been assigned nor pledged, and the Seller had good and
marketable title thereto, and had full right to transfer and sell the Mortgage
Loan and the related servicing rights to the Depositor free and clear of any
encumbrance, equity, lien, pledge, charge, claim or security interest subject to
the National City Subservicing Agreement, if applicable, and had full right and
authority subject to no interest or participation of, or agreement with, any
other party, to sell and assign the Mortgage Loan and the related servicing
rights to the Depositor pursuant to the terms of this Agreement.
(N) All parties which have had any interest in the Mortgage, whether
as mortgagee, assignee, pledgee or otherwise, are (or, during the period in
which they held and disposed of such interest, were) (1) in compliance with any
and all applicable licensing requirements of the laws of the state wherein the
Mortgaged Property is located, and (2) organized under the laws of such state,
qualified to do business in such state, a federal savings and loan association
or national bank having principal offices in such state or not deemed to be
doing business in such state under applicable law.
(O) The Mortgage Loan is covered by an ALTA lender's title insurance
policy or equivalent form acceptable to the Department of Housing and Urban
Development, or any successor thereto, and qualified to do business in the
jurisdiction where the Mortgaged Property is located, insuring (subject to the
exceptions contained in clause (I) above) the Seller (as assignee), its
successors and assigns as to the first priority lien of the Mortgage in the
original principal amount of the Mortgage Loan and against any loss by reason of
the invalidity or unenforceability of the lien resulting from the provisions of
the Mortgage Note and/or Mortgage providing for adjustment in the Mortgage Rate
and monthly payment. Additionally, such lender's title insurance policy
affirmatively insures ingress and egress, and against encroachments by or upon
the Mortgaged Property or any interest therein. With respect to each Mortgage
Loan, the Seller (as assignee) is the sole insured of such lender's title
insurance policy, and such lender's title insurance policy is in full force and
effect. No claims have been made under such lender's title insurance policy, and
no prior holder of the related Mortgage, including the Seller in the case of a
Mortgage Loan, has done, by act or omission, anything which would impair the
coverage of such lender's title insurance policy. (P) Except as provided in
clause (B), immediately prior to the Cut-off Date, there was no default, breach,
violation or event of acceleration existing under the Mortgage or the Mortgage
Note and there was no event which, with the passage of time or with notice and
the expiration of any grace or cure period, would constitute a default, breach,
violation or event of acceleration, and the Seller has not waived any default,
breach, violation or event of acceleration.
(Q) There are no mechanics' or similar liens or claims which have been
filed for work, labor or material (and no rights are outstanding that under law
could give rise to such lien)
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affecting the related Mortgaged Property which are or may be liens prior to or
equal with, the lien of the related Mortgage.
(R) All improvements which were considered in any appraisal which was
used in determining the Appraised Value of the related Mortgaged Property lay
wholly within the boundaries and building restriction lines of the Mortgaged
Property, and no improvements on adjoining properties encroach upon the
Mortgaged Property.
(S) [Reserved]
(T) The origination, servicing and collection practices with respect
to each Mortgage Note and Mortgage including, the establishment, maintenance and
servicing of the escrow accounts and escrow payments, if any, since origination,
have been conducted in all respects in accordance with the terms of Mortgage
Note and in compliance with all applicable laws and regulations and, unless
otherwise required by law or Xxxxxx Xxx/Xxxxxxx Mac standard, in accordance with
the proper, prudent and customary practices in the mortgage origination and
servicing business. With respect to the escrow accounts and escrow payments, if
any, and a Mortgage Loan (other than the National City Loans and the Cendant
Loans) all such payments are in the possession or under the control of the
Seller (including pursuant to a Servicing Agreement) and there exists no
deficiencies in connection therewith for which customary arrangements for
repayment thereof have not been made. Any interest required to be paid pursuant
to state and local law has been properly paid and credited.
(U) The Mortgaged Property is free of material damage and waste and
there is no proceeding pending for the total or partial condemnation thereof.
(V) The Mortgage contains customary and enforceable provisions to
render the rights and remedies of the holder thereof adequate for the
realization against the Mortgaged Property of the benefits of the security
intended to be provided thereby, including, (1) in the case of a Mortgage
designated as a deed of trust, by trustee's sale, and (2) otherwise by judicial
foreclosure. There is no other exemption available to the Mortgagor which would
interfere with the right to sell the Mortgaged Property at a trustee's sale or
the right to foreclose the Mortgage. The Mortgagor has not notified the Seller
and the Seller has no knowledge of any relief requested or allowed to the
Mortgagor under the Soldiers and Sailors Civil Relief Act of 1940.
(W) The Mortgage Note is not and has not been secured by any
collateral except the lien of the applicable Mortgage.
(X) [Reserved]
(Y) In the event the Mortgage constitutes a deed of trust, a trustee,
duly qualified under applicable law to serve as such, has been properly
designated and currently so serves and is named in the Mortgage, and no fees or
expenses are or will become payable by the Certificateholders to the trustee
under the deed of trust, except in connection with a trustee's sale after
default by the Mortgagor.
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(Z) No Mortgage Loan contains a permanent or temporary "buydown"
provision. The Mortgage Loan is not a graduated payment mortgage loan.
(AA) The Mortgagor has received all disclosure materials required by
applicable law with respect to the making of the Mortgage Loan.
(BB) No Mortgage Loan was made in connection with the construction or
rehabilitation of a Mortgaged Property.
(CC) To the best of Seller's knowledge, the Mortgaged Property is
lawfully occupied under applicable law and all inspections, licenses and
certificates required to be made or issued with respect to all occupied portions
of the Mortgaged Property and, with respect to the use and occupancy of the
same, including but not limited to certificates of occupancy, have been made or
obtained from the appropriate authorities.
(DD) The assignment of Mortgage with respect to a Mortgage Loan is in
recordable form and is acceptable for recording under the laws of the
jurisdiction in which the Mortgaged Property is located.
(EE) [Reserved].
(FF) [Reserved].
(GG) The Mortgaged Property consists of a single parcel of real
property with or without a detached single family residence erected thereon, or
an individual condominium unit, or a 2-4 family dwelling, or an individual unit
in a planned unit development as defined by Xxxxxx Mae or a manufactured
dwelling which conforms with Xxxxxx Xxx and Xxxxxxx Mac requirements regarding
such dwellings, or a townhouse, each structure of which is permanently affixed
to the Mortgaged Property, and is legally classified as real estate.
(HH) [Reserved]
(II) [Reserved].
(JJ) Each Mortgage Loan at the time of origination was underwritten in
general in accordance with guidelines not inconsistent with the guidelines set
forth in the Prospectus Supplement and generally accepted prime credit
underwriting guidelines.
(KK) No error, omission, misrepresentation, fraud or similar
occurrence with respect to a Mortgage Loan has taken place on the part of the
Seller or the related Originator.
(LL) As of the Cut-off Date, none of the Mortgage Loans were subject
to the Home Ownership and Equity Protection Act of 1994 ("HOEPA").
(MM) No Mortgage Loan imposes a Prepayment Charge for a term in excess
of five years.
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(c) Upon discovery by any of the parties hereto of a breach of a
representation or warranty set forth in Section 2.03(b)(vii) that materially and
adversely affects the interests of the Certificateholders in any Mortgage Loan,
the party discovering such breach shall give prompt written notice thereof to
the other parties. Any breach of a representation or warranty contained in
clauses (LL) and/or (MM) above, shall be automatically deemed to affect
materially and adversely the interests of the Certificateholders. The Seller
hereby covenants with respect to the representations and warranties set forth in
Section 2.03(b)(vii), that within 90 days of the discovery of a breach of any
representation or warranty set forth therein that materially and adversely
affects the interests of the Certificateholders in any Mortgage Loan, it shall
cure such breach in all material respects and, if such breach is not so cured,
(i) if such 90-day period expires prior to the second anniversary of the Closing
Date, remove such Mortgage Loan (a "Deleted Mortgage Loan") from the Trust Fund
and substitute in its place a Replacement Mortgage Loan, in the manner and
subject to the conditions set forth in this Section; or (ii) repurchase the
affected Mortgage Loan or Mortgage Loans from the Trustee at the Purchase Price
in the manner set forth below; provided that any such substitution pursuant to
(i) above or repurchase pursuant to (ii) above shall not be effected prior to
the delivery to the Trustee of an Opinion of Counsel if required by Section 2.05
hereof and any such substitution pursuant to (i) above shall not be effected
prior to the additional delivery to the Trustee of a Request for Release. The
Seller shall promptly reimburse the Master Servicer and the Trustee for any
expenses reasonably incurred by the Master Servicer or the Trustee in respect of
enforcing the remedies for such breach. To enable the Securities Administrator
to amend the Mortgage Loan Schedule, the Seller shall, unless it cures such
breach in a timely fashion pursuant to this Section 2.03, promptly notify the
Securities Administrator whether it intends either to repurchase, or to
substitute for, the Mortgage Loan affected by such breach. With respect to the
representations and warranties in Section 2.03(b)(vii) that are made to the best
of the Seller's knowledge, if it is discovered by any of the Depositor, the
Master Servicer, the Seller, the Securities Administrator or the Trustee that
the substance of such representation and warranty is inaccurate and such
inaccuracy materially and adversely affects the value of the related Mortgage
Loan, notwithstanding the Seller's lack of knowledge with respect to the
substance of such representation or warranty, the Seller shall nevertheless be
required to cure, substitute for or repurchase the affected Mortgage Loan in
accordance with the foregoing.
Notwithstanding the foregoing, within 90 days of the earlier of
discovery by the Company or receipt of notice by the Company of the breach of
the covenant of the Company set forth in Section 2.03(a)(vii) above which
materially and adversely affects the interests of the Holders of the Class XP
Certificates in any Prepayment Charge, the Company shall remedy such breach as
follows: the Company shall pay the amount of such waived Prepayment Charge, for
the benefit of the holders of the Class XP Certificates, by depositing such
amount into the Master Servicer Collection Account (net of any amount actually
collected by the Company in respect of such Prepayment Charge and remitted by
the Company, for the benefit of the holders of the Class XP Certificates, in
respect of such Prepayment Charge, into the Master Servicer Collection Account).
With respect to any Replacement Mortgage Loan or Loans, the Seller
shall deliver to the Trustee for the benefit of the Certificateholders such
documents and agreements as are required by Section 2.01. No substitution will
be made in any calendar month after the Determination Date for such month.
Scheduled Payments due with respect to Replacement Mortgage Loans in the Due
Period related to the Distribution Date on which such proceeds are to be
distributed
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shall not be part of the Trust Fund and will be retained by the Seller. For the
month of substitution, distributions to Certificateholders will include the
Scheduled Payment due on any Deleted Mortgage Loan for the related Due Period
and thereafter the Seller shall be entitled to retain all amounts received in
respect of such Deleted Mortgage Loan. The Securities Administrator shall amend
the Mortgage Loan Schedule for the benefit of the Certificateholders to reflect
the removal of such Deleted Mortgage Loan and the substitution of the
Replacement Mortgage Loan or Loans and the Securities Administrator shall
deliver the amended Mortgage Loan Schedule to the Trustee. Upon such
substitution, the Replacement Mortgage Loan or Loans shall be subject to the
terms of this Agreement in all respects, and the Seller shall be deemed to have
made with respect to such Replacement Mortgage Loan or Loans, as of the date of
substitution, the representations and warranties set forth in Section
2.03(b)(vii) with respect to such Mortgage Loan. Upon any such substitution and
the deposit into the Master Servicer Collection Account of the amount required
to be deposited therein in connection with such substitution as described in the
following paragraph and receipt by the Trustee of a Request for Release for such
Mortgage Loan, the Trustee shall release to the Seller the Mortgage File
relating to such Deleted Mortgage Loan and held for the benefit of the
Certificateholders and shall execute and deliver at the Seller's direction such
instruments of transfer or assignment as have been prepared by the Seller, in
each case without recourse, as shall be necessary to vest in the Seller, or its
respective designee, title to the Trustee's interest in any Deleted Mortgage
Loan substituted for pursuant to this Section 2.03.
For any month in which the Seller substitutes one or more Replacement
Mortgage Loans for a Deleted Mortgage Loan, the Master Servicer will determine
the amount (if any) by which the aggregate principal balance of all the
Replacement Mortgage Loans as of the date of substitution is less than the
Stated Principal Balance (after application of the principal portion of the
Scheduled Payment due in the month of substitution) of such Deleted Mortgage
Loan. An amount equal to the aggregate of such deficiencies, described in the
preceding sentence for any Distribution Date (such amount, the "Substitution
Adjustment Amount") shall be deposited into the Master Servicer Collection
Account, by the Seller delivering such Replacement Mortgage Loan on the
Determination Date for the Distribution Date relating to the Prepayment Period
during which the related Mortgage Loan became required to be purchased or
replaced hereunder.
In the event that the Seller shall have repurchased a Mortgage Loan,
the Purchase Price therefor shall be deposited into the Master Servicer
Collection Account maintained by the Master Servicer, on the Determination Date
for the Distribution Date in the month following the month during which the
Seller became obligated to repurchase or replace such Mortgage Loan and upon
such deposit of the Purchase Price, the delivery of an Opinion of Counsel if
required by Section 2.05 and the receipt of a Request for Release, the Trustee
shall release the related Mortgage File held for the benefit of the
Certificateholders to the Seller, and the Trustee shall execute and deliver at
such Person's direction the related instruments of transfer or assignment
prepared by the Seller, in each case without recourse, as shall be necessary to
transfer title from the Trustee for the benefit of the Certificateholders and
transfer the Trustee's interest to the Seller to any Mortgage Loan purchased
pursuant to this Section 2.03. It is understood and agreed that the obligation
under this Agreement of the Seller to cure, repurchase or replace any Mortgage
Loan as to which a breach has occurred and is continuing shall constitute the
sole remedy against the Seller respecting such breach available to
Certificateholders, the Depositor or the Trustee.
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(d) The representations and warranties set forth in Section 2.03
hereof shall survive delivery of the respective Mortgage Loans and Mortgage
Files to the Trustee or the Custodian for the benefit of the Certificateholders.
Section 2.04 REPRESENTATIONS AND WARRANTIES OF THE DEPOSITOR.
The Depositor hereby represents and warrants to the Master Servicer,
the Securities Administrator and the Trustee as follows, as of the date hereof
and as of the Closing Date:
(i) The Depositor is duly organized and is validly existing as a
corporation in good standing under the laws of the State of Delaware and
has full power and authority (corporate and other) necessary to own or hold
its properties and to conduct its business as now conducted by it and to
enter into and perform its obligations under this Agreement.
(ii) The Depositor has the full corporate power and authority to
execute, deliver and perform, and to enter into and consummate the
transactions contemplated by, this Agreement and has duly authorized, by
all necessary corporate action on its part, the execution, delivery and
performance of this Agreement; and this Agreement, assuming the due
authorization, execution and delivery hereof by the other parties hereto,
constitutes a legal, valid and binding obligation of the Depositor,
enforceable against the Depositor in accordance with its terms, subject, as
to enforceability, to (i) bankruptcy, insolvency, reorganization,
moratorium and other similar laws affecting creditors' rights generally and
(ii) general principles of equity, regardless of whether enforcement is
sought in a proceeding in equity or at law.
(iii) The execution and delivery of this Agreement by the Depositor,
the consummation of the transactions contemplated by this Agreement, and
the fulfillment of or compliance with the terms hereof are in the ordinary
course of business of the Depositor and will not (A) result in a material
breach of any term or provision of the charter or by-laws of the Depositor
or (B) materially conflict with, result in a material breach, violation or
acceleration of, or result in a material default under, the terms of any
other material agreement or instrument to which the Depositor is a party or
by which it may be bound or (C) constitute a material violation of any
statute, order or regulation applicable to the Depositor of any court,
regulatory body, administrative agency or governmental body having
jurisdiction over the Depositor; and the Depositor is not in breach or
violation of any material indenture or other material agreement or
instrument, or in violation of any statute, order or regulation of any
court, regulatory body, administrative agency or governmental body having
jurisdiction over it which breach or violation may materially impair the
Depositor's ability to perform or meet any of its obligations under this
Agreement.
(iv) No litigation is pending, or, to the best of the Depositor's
knowledge, threatened, against the Depositor that would materially and
adversely affect the execution, delivery or enforceability of this
Agreement or the ability of the Depositor to perform its obligations under
this Agreement in accordance with the terms hereof.
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(v) No consent, approval, authorization or order of any court or
governmental agency or body is required for the execution, delivery and
performance by the Depositor of, or compliance by the Depositor with, this
Agreement or the consummation of the transactions contemplated hereby, or
if any such consent, approval, authorization or order is required, the
Depositor has obtained the same.
The Depositor hereby represents and warrants to the Trustee as of the
Closing Date, following the transfer of the Mortgage Loans to it by the Seller,
the Depositor had good title to the Mortgage Loans and the related Mortgage
Notes were subject to no offsets, claims, defenses or counterclaims.
It is understood and agreed that the representations and warranties
set forth in the immediately preceding paragraph shall survive delivery of the
Mortgage Files to the Trustee. Upon discovery by the Depositor or the Trustee of
a breach of such representations and warranties, the party discovering such
breach shall give prompt written notice to the others and to each Rating Agency.
Section 2.05 DELIVERY OF OPINION OF COUNSEL IN CONNECTION WITH
SUBSTITUTIONS AND REPURCHASES.
(a) Notwithstanding any contrary provision of this Agreement, with
respect to any Mortgage Loan that is not in default or as to which default is
not imminent, no repurchase or substitution pursuant to Sections 2.02 or 2.03
shall be made unless the Seller delivers to the Trustee an Opinion of Counsel,
addressed to the Trustee, to the effect that such repurchase or substitution
would not (i) result in the imposition of the tax on "prohibited transactions"
of REMIC I or REMIC II or contributions after the Closing Date, as defined in
sections 860F(a)(2) and 860G(d) of the Code, respectively or (ii) cause any
either REMIC I or REMIC II to fail to qualify as a REMIC at any time that any
Certificates are outstanding. Any Mortgage Loan as to which repurchase or
substitution was delayed pursuant to this paragraph shall be repurchased or the
substitution therefor shall occur (subject to compliance with Sections 2.02 or
2.03) upon the earlier of (a) the occurrence of a default or imminent default
with respect to such Mortgage Loan and (b) receipt by the Trustee of an Opinion
of Counsel to the effect that such repurchase or substitution, as applicable,
will not result in the events described in clause (i) or clause (ii) of the
preceding sentence.
(b) Upon discovery by the Depositor, the Seller or the Master Servicer
that any Mortgage Loan does not constitute a "qualified mortgage" within the
meaning of section 860G(a)(3) of the Code, the party discovering such fact shall
promptly (and in any event within 5 Business Days of discovery) give written
notice thereof to the other parties and the Trustee. In connection therewith,
the Trustee shall require the Seller, at the Seller's option, to either (i)
substitute, if the conditions in Section 2.03(c) with respect to substitutions
are satisfied, a Replacement Mortgage Loan for the affected Mortgage Loan, or
(ii) repurchase the affected Mortgage Loan within 90 days of such discovery in
the same manner as it would a Mortgage Loan for a breach of representation or
warranty contained in Section 2.03. The Trustee shall reconvey to the Seller the
Mortgage Loan to be released pursuant hereto in the same manner, and on the same
terms and conditions, as it would a Mortgage Loan repurchased for breach of a
representation or warranty contained in Section 2.03.
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Section 2.06 COUNTERSIGNATURE AND DELIVERY OF CERTIFICATES.
The Trustee acknowledges the transfer and assignment to it of the
Trust Fund and, concurrently with such transfer and assignment, has executed,
countersigned and delivered, to or upon the order of the Depositor, the
Certificates in authorized denominations evidencing the entire ownership of the
Trust Fund. The Trustee agrees to hold the Trust Fund and exercise the rights
referred to above for the benefit of all present and future Holders of the
Certificates and to perform the duties set forth in this Agreement in accordance
with its terms.
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ARTICLE III
ADMINISTRATION AND SERVICING OF EMC MORTGAGE LOANS BY COMPANY
Section 3.01 THE COMPANY.
The Company shall service and administer the EMC Mortgage Loans in
accordance with customary and usual standards of practice of prudent mortgage
loan servicers in the respective states in which the related Mortgaged
Properties are located. In connection with such servicing and administration,
the Company shall have full power and authority, acting alone and/or through
subservicers as provided in Section 3.03, to do or cause to be done any and all
things that it may deem necessary or desirable in connection with such servicing
and administration, including but not limited to, the power and authority,
subject to the terms hereof (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 related Mortgaged
Property and assumptions of the Mortgage Notes and related Mortgages (but only
in the manner provided herein), (iii) to collect any Insurance Proceeds and
other Liquidation Proceeds, and (iv) subject to Section 3.09, to effectuate
foreclosure or other conversion of the ownership of the Mortgaged Property
securing any EMC Mortgage Loan; provided that the Company shall take no action
that is inconsistent with or prejudices the interests of the Trust Fund or the
Certificateholders in any EMC Mortgage Loan or the rights and interests of the
Depositor and the Trustee under this Agreement. To the extent consistent with
the foregoing, the Company shall be permitted to waive a Prepayment Charge only
under the following circumstances: (i) such waiver is standard and customary in
servicing similar mortgage loans and (ii) such waiver would, in the reasonable
judgment of the Company, maximize recovery of total proceeds taking into account
the value of such Prepayment Charge and the related EMC Mortgage Loan.
Without limiting the generality of the foregoing, the Company, in its
own name or in the name of the Trust, the Depositor or the Trustee, is hereby
authorized and empowered by the Trust, the Depositor and the Trustee, when the
Company believes it appropriate in its reasonable judgment, to execute and
deliver, on behalf of the Trustee, the Depositor, the Certificateholders or any
of them, any and all instruments of satisfaction or cancellation, or of partial
or full release or discharge and all other comparable instruments, with respect
to the EMC Mortgage Loans, and with respect to the related Mortgaged Properties
held for the benefit of the Certificateholders. The Company shall prepare and
deliver to the Depositor and/or the Trustee such documents requiring execution
and delivery by any or all of them as are necessary or appropriate to enable the
Company to service and administer the EMC Mortgage Loans. Upon receipt of such
documents, the Depositor and/or the Trustee shall execute such documents and
deliver them to the Company.
In accordance with the standards of the first paragraph of this
Section 3.01, the Company shall advance or cause to be advanced funds as
necessary for the purpose of effecting the payment of taxes and assessments on
the Mortgaged Properties relating to the EMC Mortgage Loans, which advances
shall be reimbursable in the first instance from related collections from the
Mortgagors pursuant to Section 5.03, and further as provided in Section 5.02.
All costs incurred by the Company, if any, in effecting the timely payments of
taxes and assessments on the Mortgaged
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Properties relating to the EMC Mortgage Loans and related insurance premiums
shall not, for the purpose of calculating monthly distributions to the
Certificateholders, be added to the Stated Principal Balance under the related
EMC Mortgage Loans, notwithstanding that the terms of such Mortgage Loans so
permit.
Section 3.02 DUE-ON-SALE CLAUSES; ASSUMPTION AGREEMENTS.
(a) Except as otherwise provided in this Section 3.02, when any
property subject to a Mortgage has been or is about to be conveyed by the
Mortgagor, the Company shall to the extent that it has knowledge of such
conveyance, enforce any due-on-sale clause contained in any Mortgage Note or
Mortgage, to the extent permitted under applicable law and governmental
regulations, but only to the extent that such enforcement will not adversely
affect or jeopardize coverage under any Required Insurance Policy.
Notwithstanding the foregoing, the Company is not required to exercise such
rights with respect to an EMC Mortgage Loan if the Person to whom the related
Mortgaged Property has been conveyed or is proposed to be conveyed satisfies the
terms and conditions contained in the Mortgage Note and Mortgage related thereto
and the consent of the mortgagee under such Mortgage Note or Mortgage is not
otherwise so required under such Mortgage Note or Mortgage as a condition to
such transfer. In the event that the Company is prohibited by law from enforcing
any such due-on-sale clause, or if coverage under any Required Insurance Policy
would be adversely affected, or if nonenforcement is otherwise permitted
hereunder, the Company is authorized, subject to Section 3.02(b), to take or
enter into an assumption and modification agreement from or with the person to
whom such property has been or is about to be conveyed, pursuant to which such
person becomes liable under the Mortgage Note and, unless prohibited by
applicable state law, the Mortgagor remains liable thereon, provided that the
Mortgage Loan shall continue to be covered (if so covered before the Company
enters such agreement) by the applicable Required Insurance Policies. The
Company, subject to Section 3.02(b), is also authorized with the prior approval
of the insurers under any Required Insurance Policies to enter into a
substitution of liability agreement with such Person, pursuant to which the
original Mortgagor is released from liability and such Person is substituted as
Mortgagor and becomes liable under the Mortgage Note. Notwithstanding the
foregoing, the Company shall not be deemed to be in default under this Section
3.02(a) by reason of any transfer or assumption that the Company reasonably
believes it is restricted by law from preventing.
(b) Subject to the Company's duty to enforce any due-on-sale clause to
the extent set forth in Section 3.02(a), in any case in which a Mortgaged
Property has been conveyed to a Person by a Mortgagor, and such Person is to
enter into an assumption agreement or modification agreement or supplement to
the Mortgage Note or Mortgage that requires the signature of the Trustee, or if
an instrument of release signed by the Trustee is required releasing the
Mortgagor from liability on the related EMC Mortgage Loan, the Company shall
prepare and deliver or cause to be prepared and delivered to the Trustee for
signature and shall direct, in writing, the Trustee to execute the assumption
agreement with the Person to whom the Mortgaged Property is to be conveyed and
such modification agreement or supplement to the Mortgage Note or Mortgage or
other instruments as are reasonable or necessary to carry out the terms of the
Mortgage Note or Mortgage or otherwise to comply with any applicable laws
regarding assumptions or the transfer of the Mortgaged Property to such Person.
In connection with any such assumption, no material term of the Mortgage Note
(including, but not limited to, the Mortgage Rate, the amount of the Scheduled
Payment and any
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other term affecting the amount or timing of payment on the Mortgage Loan) may
be changed. In addition, the substitute Mortgagor and the Mortgaged Property
must be acceptable to the Company in accordance with its servicing standards as
then in effect. The Company shall notify the Trustee that any such substitution
or assumption agreement has been completed by forwarding to the Trustee the
original of such substitution or assumption agreement, which in the case of the
original shall be added to the related Mortgage File and shall, for all
purposes, be considered a part of such Mortgage File to the same extent as all
other documents and instruments constituting a part thereof. Any fee collected
by the Company for entering into an assumption or substitution of liability
agreement will be retained by the Company as additional servicing compensation.
Section 3.03 SUBSERVICERS.
The Company shall perform all of its servicing responsibilities
hereunder or may cause a subservicer to perform any such servicing
responsibilities on its behalf, but the use by the Company of a subservicer
shall not release the Company from any of its obligations hereunder and the
Company shall remain responsible hereunder for all acts and omissions of each
subservicer as fully as if such acts and omissions were those of the Company.
The Company shall pay all fees of each subservicer from its own funds, and a
subservicer's fee shall not exceed the Servicing Fee payable to the Company
hereunder.
At the cost and expense of the Company, without any right of
reimbursement from its Protected Account, the Company shall be entitled to
terminate the rights and responsibilities of a subservicer and arrange for any
servicing responsibilities to be performed by a successor subservicer; provided,
however, that nothing contained herein shall be deemed to prevent or prohibit
the Company, at the Company's option, from electing to service the related EMC
Mortgage Loans itself. In the event that the Company's responsibilities and
duties under this Agreement are terminated pursuant to Section 9.04, the Company
shall at its own cost and expense terminate the rights and responsibilities of
each subservicer effective as of the date of termination of the Company. The
Company shall pay all fees, expenses or penalties necessary in order to
terminate the rights and responsibilities of each subservicer from the Company's
own funds without reimbursements from the Trust Fund.
Notwithstanding the foregoing, the Company shall not be relieved of
its obligations hereunder and shall be obligated to the same extent and under
the same terms and conditions as if it alone were servicing and administering
the EMC Mortgage Loans. The Company shall be entitled to enter into an agreement
with a subservicer for indemnification of the Company by the subservicer and
nothing contained in this Agreement shall be deemed to limit or modify such
indemnification.
Any subservicing agreement and any other transactions or services
relating to the EMC Mortgage Loans involving a subservicer shall be deemed to be
between such subservicer and the Company alone, and neither the Master Servicer
nor the Trustee shall have any obligations, duties or liabilities with respect
to such subservicer including any obligation, duty or liability of either the
Master Servicer or the Trustee to pay such subservicer's fees and expenses. For
purposes of remittances to the Master Servicer pursuant to this Agreement, the
Company shall be deemed to have received a payment on an EMC Mortgage Loan when
a subservicer has received such payment.
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Section 3.04 DOCUMENTS, RECORDS AND FUNDS IN POSSESSION OF COMPANY TO BE
HELD FOR TRUSTEE.
Notwithstanding any other provisions of this Agreement, the Company
shall transmit to the Trustee as required by this Agreement all documents and
instruments in respect of an EMC Mortgage Loan coming into the possession of the
Company from time to time and shall account fully to the Trustee for any funds
received by the Company or that otherwise are collected by the Company as
Liquidation Proceeds or Insurance Proceeds in respect of any such Mortgage Loan.
All Mortgage Files and funds collected or held by, or under the control of, the
Company in respect of any EMC Mortgage Loans, whether from the collection of
principal and interest payments or from Liquidation Proceeds, including but not
limited to, any funds on deposit in the Protected Account maintained by the
Company, shall be held by the Company for and on behalf of the Trustee and shall
be and remain the sole and exclusive property of the Trustee, subject to the
applicable provisions of this Agreement. The Company also agrees that it shall
not create, incur or subject any Mortgage File or any funds that are deposited
in the Protected Account maintained by the Company or the Master Servicer
Collection Account or in any Escrow Account, or any funds that otherwise are or
may become due or payable to the Trustee for the benefit of the
Certificateholders, to any claim, lien, security interest, judgment, levy, writ
of attachment or other encumbrance, or assert by legal action or otherwise any
claim or right of set off against any Mortgage File or any funds collected on,
or in connection with, an EMC Mortgage Loan, except, however, that the Company
shall be entitled to set off against and deduct from any such funds any amounts
that are properly due and payable to the Company under this Agreement.
Section 3.05 MAINTENANCE OF HAZARD INSURANCE.
The Company shall cause to be maintained, for each EMC Mortgage Loan,
hazard insurance on buildings upon, or comprising part of, the Mortgaged
Property against loss by fire, hazards of extended coverage and such other
hazards as are customary in the area where the related Mortgaged Property is
located with an insurer which is licensed to do business in the state where the
related Mortgaged Property is located. Each such policy of standard hazard
insurance shall contain, or have an accompanying endorsement that contains, a
standard mortgagee clause. The Company shall also cause flood insurance to be
maintained on property acquired upon foreclosure or deed in lieu of foreclosure
of any EMC Mortgage Loan, to the extent described below. Pursuant to Section
5.01, any amounts collected by the Company under any such policies (other than
the amounts to be applied to the restoration or repair of the related Mortgaged
Property or property thus acquired or amounts released to the Mortgagor in
accordance with the Company's normal servicing procedures) shall be deposited in
the Protected Account maintained by the Company. Any cost incurred by the
Company in maintaining any such insurance shall not, for the purpose of
calculating monthly distributions to the Certificateholders or remittances to
the Trustee for their benefit, be added to the principal balance of the Mortgage
Loan, notwithstanding that the terms of the EMC Mortgage Loan so permit. Such
costs shall be recoverable by the Company out of late payments by the related
Mortgagor or out of Liquidation Proceeds to the extent permitted by Section
5.02. It is understood and agreed that no earthquake or other additional
insurance is to be required of any Mortgagor or maintained on property acquired
in respect of a Mortgage other than pursuant to such applicable laws and
regulations as shall at any time be in force and as shall require such
additional insurance. If the Mortgaged Property is located at the time of
origination of the EMC Mortgage Loan in a federally
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designated special flood hazard area and such area is participating in the
national flood insurance program, the Company shall cause flood insurance to be
maintained with respect to such Mortgage Loan. Such flood insurance shall be in
an amount equal to the least of (i) the Stated Principal Balance of the related
Mortgage Loan, (ii) minimum amount required to compensate for damage or loss on
a replacement cost basis or (iii) the maximum amount of such insurance available
for the related Mortgaged Property under the Flood Disaster Protection Act of
1973, as amended.
In the event that the Company shall obtain and maintain a blanket
policy insuring against hazard losses on all of the Mortgage Loans, it shall
conclusively be deemed to have satisfied its obligations as set forth in the
first sentence of this Section 3.05, it being understood and agreed that such
policy may contain a deductible clause on terms substantially equivalent to
those commercially available and maintained by comparable servicers. If such
policy contains a deductible clause, the Company shall, in the event that there
shall not have been maintained on the related Mortgaged Property a policy
complying with the first sentence of this Section 3.05, and there shall have
been a loss that would have been covered by such policy, deposit in the
Protected Account maintained by the Company the amount not otherwise payable
under the blanket policy because of such deductible clause. Such deposit shall
constitute a Servicing Advance. In connection with its activities as
administrator and servicer of the EMC Mortgage Loans, the Company agrees to
present, on behalf of itself, the Depositor and the Trustee for the benefit of
the Certificateholders, claims under any such blanket policy.
Section 3.06 PRESENTMENT OF CLAIMS AND COLLECTION OF PROCEEDS.
The Company shall 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 Insurance
Policies. Any proceeds disbursed to the Company in respect of such Insurance
Policies shall be promptly deposited in the Protected Account maintained by the
Company 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 3.07 MAINTENANCE OF THE PRIMARY MORTGAGE INSURANCE POLICIES.
(a) The Company shall not 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 Company would have been covered thereunder.
The Company shall use its best efforts to keep in force and effect (to the
extent that the Mortgage Loan requires the Mortgagor to maintain such
insurance), Primary Mortgage Insurance applicable to each EMC Mortgage Loan. The
Company shall not 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.
(b) The Company agrees 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
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Mortgage Insurance Policies respecting defaulted Mortgage Loans. Pursuant to
Section 5.01, any amounts collected by the Company under any Primary Mortgage
Insurance Policies shall be deposited in the Protected Account maintained by the
Company, subject to withdrawal pursuant to Section 5.02 hereof.
Section 3.08 FIDELITY BOND, ERRORS AND OMISSIONS INSURANCE.
The Company shall maintain, at its own expense, a blanket fidelity
bond and an errors and omissions insurance policy, with broad coverage with
responsible companies on all officers, employees or other persons acting in any
capacity with regard to the EMC Mortgage Loans and who handle funds, money,
documents and papers relating to the EMC Mortgage Loans. The fidelity bond and
errors and omissions insurance shall be in the form of the Mortgage Banker's
Blanket Bond and shall protect and insure the Company against losses, including
forgery, theft, embezzlement, fraud, errors and omissions and negligent acts of
such persons. Such fidelity bond shall also protect and insure the Company
against losses in connection with the failure to maintain any insurance policies
required pursuant to this Agreement and the release or satisfaction of an EMC
Mortgage Loan which is not in accordance with Accepted Servicing Practices. No
provision of this Section 3.08 requiring the fidelity bond and errors and
omissions insurance shall diminish or relieve the Company from its duties and
obligations as set forth in this Agreement. The minimum coverage under any such
bond and insurance policy shall be at least equal to the corresponding amounts
required by Accepted Servicing Practices. The Company shall deliver to the
Master Servicer a certificate from the surety and the insurer as to the
existence of the fidelity bond and errors and omissions insurance policy and
shall obtain a statement from the surety and the insurer that such fidelity bond
or insurance policy shall in no event be terminated or materially modified
without thirty days prior written notice to the Master Servicer and the Trustee.
The Company shall notify the Master Servicer and the Trustee within five
business days of receipt of notice that such fidelity bond or insurance policy
will be, or has been, materially modified or terminated. The Trustee for the
benefit of the Certificateholders must be named as loss payees on the fidelity
bond and as additional insured on the errors and omissions policy.
Section 3.09 REALIZATION UPON DEFAULTED MORTGAGE LOANS; DETERMINATION OF
EXCESS LIQUIDATION PROCEEDS AND REALIZED LOSSES; REPURCHASES
OF CERTAIN MORTGAGE LOANS.
(a) The Company shall use reasonable efforts to foreclose upon or
otherwise comparably convert the ownership of properties securing such of the
EMC Mortgage Loans as come into and continue in default and as to which no
satisfactory arrangements can be made for collection of delinquent payments. In
connection with such foreclosure or other conversion, the Company shall follow
such practices and procedures as it shall deem necessary or advisable and as
shall be normal and usual in its general mortgage servicing activities and the
requirements of the insurer under any Required Insurance Policy; provided that
the Company shall not be required to expend its own funds in connection with any
foreclosure or towards the restoration of any property unless it shall determine
(i) that such restoration and/or foreclosure will increase the proceeds of
liquidation of the EMC Mortgage Loan after reimbursement to itself of such
expenses and (ii) that such expenses will be recoverable to it through
Liquidation Proceeds (respecting which it shall have priority for purposes of
withdrawals from the Protected Account maintained by the Company pursuant to
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Section 5.02). If the Company reasonably believes that Liquidation Proceeds with
respect to any such Mortgage Loan would not be increased as a result of such
foreclosure or other action, such Mortgage Loan will be charged-off and will
become a Liquidated Loan. The Company will give notice of any such charge-off to
the Trustee and the Securities Administrator. The Company shall be responsible
for all other costs and expenses incurred by it in any such proceedings;
provided that such costs and expenses shall be Servicing Advances and that it
shall be entitled to reimbursement thereof from the proceeds of liquidation of
the related Mortgaged Property, as contemplated in Section 5.02. If the Company
has knowledge that a Mortgaged Property that the Company is contemplating
acquiring in foreclosure or by deed- in-lieu of foreclosure is located within a
one-mile radius of any site with environmental or hazardous waste risks known to
the Company, the Company will, prior to acquiring the Mortgaged Property,
consider such risks and only take action in accordance with its established
environmental review procedures.
With respect to any REO Property, the deed or certificate of sale
shall be taken in the name of the Trustee for the benefit of the
Certificateholders (or the Trustee's nominee on behalf of the
Certificateholders). The Trustee's name shall be placed on the title to such REO
Property solely as the Trustee hereunder and not in its individual capacity. The
Company shall ensure that the title to such REO Property references this
Agreement and the Trustee's capacity hereunder. Pursuant to its efforts to sell
such REO Property, the Company shall either itself or through an agent selected
by the Company protect and conserve such REO Property in the same manner and to
such extent as is customary in the locality where such REO Property is located
and may, incident to its conservation and protection of the interests of the
Certificateholders, rent the same, or any part thereof, as the Company deems to
be in the best interest of the Company and the Certificateholders for the period
prior to the sale of such REO Property. The Company shall prepare for and
deliver to the Trustee a statement with respect to each REO Property that has
been rented showing the aggregate rental income received and all expenses
incurred in connection with the management and maintenance of such REO Property
at such times as is necessary to enable the Trustee to comply with the reporting
requirements of the REMIC Provisions. The net monthly rental income, if any,
from such REO Property shall be deposited in the Protected Account maintained by
the Company no later than the close of business on each Determination Date. The
Company shall perform the tax reporting and withholding related to foreclosures,
abandonments and cancellation of indebtedness income as specified by Sections
1445, 6050J and 6050P of the Code by preparing and filing such tax and
information returns, as may be required.
In the event that the Trust Fund acquires any Mortgaged Property as
aforesaid or otherwise in connection with a default or imminent default on an
EMC Mortgage Loan, the Company shall dispose of such Mortgaged Property prior to
three years after its acquisition by the Trust Fund or, at the expense of the
Trust Fund, request more than 60 days prior to the day on which such three-year
period would otherwise expire, an extension of the three-year grace period
unless the Trustee shall have been supplied with an Opinion of Counsel (such
opinion not to be an expense of the Trustee) to the effect that the holding by
the Trust Fund of such Mortgaged Property subsequent to such three-year period
will not result in the imposition of taxes on "prohibited transactions" of REMIC
I or REMIC II as defined in section 860F of the Code or cause either REMIC I or
REMIC II to fail to qualify as a REMIC at any time that any Certificates are
outstanding, in which case the Trust Fund may continue to hold such Mortgaged
Property (subject to any conditions contained in such Opinion of Counsel).
Notwithstanding any other provision of this
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Agreement, no Mortgaged Property acquired by the Trust Fund shall be rented (or
allowed to continue to be rented) or otherwise used for the production of income
by or on behalf of the Trust Fund in such a manner or pursuant to any terms that
would (i) cause such Mortgaged Property to fail to qualify as "foreclosure
property" within the meaning of section 860G(a)(8) of the Code or (ii) subject
either REMIC I or REMIC II to the imposition of any federal, state or local
income taxes on the income earned from such Mortgaged Property under section
860G(c) of the Code or otherwise, unless the Company has agreed to indemnify and
hold harmless the Trust Fund with respect to the imposition of any such taxes.
The decision of the Company to foreclose on a defaulted EMC Mortgage
Loan shall be subject to a determination by the Company that the proceeds of
such foreclosure would exceed the costs and expenses of bringing such a
proceeding. The income earned from the management of any Mortgaged Properties
acquired through foreclosure or other judicial proceeding, net of reimbursement
to the Company for expenses incurred (including any property or other taxes) in
connection with such management and net of unreimbursed Servicing Fees,
Advances, Servicing Advances and any management fee paid or to be paid with
respect to the management of such Mortgaged Property, shall be applied to the
payment of principal of, and interest on, the related defaulted EMC Mortgage
Loans (with interest accruing as though such Mortgage Loans were still current)
and all such income shall be deemed, for all purposes in the Agreement, to be
payments on account of principal and interest on the related Mortgage Notes and
shall be deposited into the Protected Account maintained by the Company. To the
extent the income received during a Prepayment Period is in excess of the amount
attributable to amortizing principal and accrued interest at the related
Mortgage Rate on the related EMC Mortgage Loan, such excess shall be considered
to be a partial Principal Prepayment for all purposes hereof.
The Liquidation Proceeds from any liquidation of a Mortgage Loan, net
of any payment to the Company as provided above, shall be deposited in the
Protected Account maintained by the Company on the next succeeding Determination
Date following receipt thereof for distribution on the related Distribution
Date, except that any Excess Liquidation Proceeds shall be retained by the
Company as additional servicing compensation.
The proceeds of any Liquidated Loan, as well as any recovery resulting
from a partial collection of Liquidation Proceeds or any income from an REO
Property, will be applied in the following order of priority: first, to
reimburse the Company for any related unreimbursed Servicing Advances and
Servicing Fees, pursuant to Section 5.02 or this Section 3.09; second, to
reimburse the Company for any unreimbursed Advances, pursuant to Section 5.02 or
this Section 3.09; third, to accrued and unpaid interest (to the extent no
Advance has been made for such amount) on the EMC Mortgage Loan or related REO
Property, at the Net Mortgage Rate to the first day of the month in which such
amounts are required to be distributed; and fourth, as a recovery of principal
of the Mortgage Loan.
(b) On each Determination Date, the Company shall determine the
respective aggregate amounts of Excess Liquidation Proceeds and Realized Losses,
if any, for the related Prepayment Period.
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(c) The Company has no intent to foreclose on any EMC Mortgage Loan
based on the delinquency characteristics as of the Closing Date; provided, that
the foregoing does not prevent the Company from initiating foreclosure
proceedings on any date hereafter if the facts and circumstances of such
Mortgage Loans including delinquency characteristics in the Company's discretion
so warrant such action.
Section 3.10 SERVICING COMPENSATION.
As compensation for its activities hereunder, the Company shall be
entitled to retain or withdraw from its Protected Account out of each payment of
interest on an EMC Mortgage Loan included in the Trust Fund an amount equal to
the Servicing Fee.
Additional servicing compensation in the form of any Excess
Liquidation Proceeds, assumption fees, late payment charges, all income and gain
net of any losses realized from Permitted Investments with respect to funds in
or credited to the Protected Account maintained by the Company shall be retained
by the Company to the extent not required to be deposited in the Protected
Account maintained by the Company pursuant to Section 5.02. The Company shall be
required to pay all expenses incurred by it in connection with its servicing
activities hereunder (including payment of any premiums for hazard insurance, as
required by Section 3.05 and maintenance of the other forms of insurance
coverage required by Section 3.07) and shall not be entitled to reimbursement
therefor except as specifically provided in Section 5.02.
Section 3.11 REO PROPERTY.
(a) In the event the Trust Fund acquires ownership of any REO Property
in respect of any related EMC 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 Company shall sell any REO Property as expeditiously as
possible and in accordance with the provisions of this Agreement. Pursuant to
its efforts to sell such REO Property, the Company shall protect and conserve
such REO Property in the manner and to the extent required herein, in accordance
with the REMIC Provisions.
(b) The Company shall deposit all funds collected and received in
connection with the operation of any REO Property into the Protected Account
maintained by the Company.
(c) The Company, upon the final disposition of any REO Property, shall
be entitled to reimbursement for any related unreimbursed Advances, unreimbursed
Servicing Advances or Servicing Fees from Liquidation Proceeds received in
connection with the final disposition of such REO Property; provided, that any
such unreimbursed Advances or Servicing Fees 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.
Section 3.12 LIQUIDATION REPORTS.
Upon the foreclosure of any Mortgaged Property relating to an EMC
Mortgage Loan or the acquisition thereof by the Trust Fund pursuant to a
deed-in-lieu of foreclosure, the Company shall submit a liquidation report to
the Master Servicer containing such information as shall be
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mutually acceptable to the Company and the Master Servicer with respect to such
Mortgaged Property.
Section 3.13 ANNUAL CERTIFICATE AS TO COMPLIANCE.
The Company will deliver to the Master Servicer not later than 90 days
following the end of each fiscal year of the Company beginning in 2003, an
certificate of a Servicing Officer stating, as to each signatory thereof, that
(i) a review of the activities of the Company during the preceding calendar year
and of performance under this Agreement has been made under such officers'
supervision, and (ii) to the best of such officers' knowledge, based on such
review, the Company has fulfilled all of its obligations under this Agreement
throughout such year, or, if there has been a default in the fulfillment of any
such obligation, specifying each such default known to such officers and the
nature and status thereof except for such defaults as such officer in its good
faith judgment believe to be immaterial.
Section 3.14 ANNUAL INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS'
SERVICING REPORT.
Not later than 120 days following the end of each fiscal year of the
Company, the Company at its expense shall cause a firm of independent public
accountants which is a member of the American Institute of Certified Public
Accountants to furnish a statement to the Master Servicer to the effect that
such firm has examined certain documents and records relating to the Company's
servicing of mortgage loans of the same type as the EMC Mortgage Loans pursuant
to servicing agreements substantially similar to this Agreement, which
agreements may include this Agreement, and that, on the basis of such an
examination, conducted substantially in compliance with the Uniform Single
Attestation Program for Mortgage Bankers, such firm is of the opinion that the
Company's servicing has been conducted in compliance with the agreements
examined pursuant to this Section 3.14, except for (i) such exceptions as such
firm shall believe to be immaterial,(ii) such other exceptions as shall be set
forth in such statement and (iii) such exceptions that the Uniform Single
Attestation Program for Mortgage Bankers requires it to report.
Section 3.15 BOOKS AND RECORDS.
The Company shall be responsible for maintaining, and shall maintain,
a complete set of books and records for the EMC Mortgage Loans which shall be
appropriately identified in the Company's computer system to clearly reflect the
ownership of the EMC Mortgage Loans by the Trust. In particular, the Company
shall maintain in its possession, available for inspection by the Master
Servicer and the Trustee and shall deliver to Master Servicer and the Trustee
upon demand, evidence of compliance with all federal, state and local laws,
rules and regulations. To the extent that original documents are not required
for purposes of realization of Liquidation Proceeds or Insurance Proceeds,
documents maintained by the Company may be in the form of microfilm or
microfiche or such other reliable means of recreating original documents,
including, but not limited to, optical imagery techniques so long as the Company
complies with the requirements of Accepted Servicing Practices.
The Company shall maintain with respect to each EMC Mortgage Loan and
shall make available for inspection by the Master Servicer and the Trustee the
related servicing file during
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the time such EMC Mortgage Loan is subject to this Agreement and thereafter in
accordance with applicable law.
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ARTICLE IV
ADMINISTRATION AND SERVICING OF MORTGAGE LOANS BY MASTER SERVICER
Section 4.01 MASTER SERVICER. The Master Servicer shall supervise, monitor
and oversee the obligation of the Company and the Servicers to service and
administer their respective Mortgage Loans in accordance with the terms of this
Agreement and the applicable Servicing Agreements and shall have full power and
authority to do any and all things which it may deem necessary or desirable in
connection with such master servicing and administration. In performing its
obligations hereunder, the Master Servicer shall act in a manner consistent with
Accepted Master Servicing Practices. Furthermore, the Master Servicer shall
oversee and consult with the Company and 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 the Company and each Servicer and shall cause the Company
and each Servicer to perform and observe the covenants, obligations and
conditions to be performed or observed by such Person under this Agreement and
the applicable Servicing Agreement. The Master Servicer shall independently and
separately monitor the Company and 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 Company's, the Servicers' and Master
Servicer's records, and based on such reconciled and corrected information,
prepare the statements specified in Section 6.05 and any other information and
statements required hereunder. The Master Servicer shall reconcile the results
of its Mortgage Loan monitoring with the actual remittances of the Company and
the Servicers to the Protected Accounts pursuant to this Agreement and the
Servicing Agreements.
The Trustee shall furnish the Company, 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 Company, the Servicers and the Master
Servicer to service and administer the related Mortgage Loans and REO Property.
The Trustee and the Securities Administrator shall provide access to the
records and documentation in possession of the Trustee or the Securities
Administrator 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 or the Securities Administrator; provided, however, that, unless
otherwise required by law, neither the Trustee nor the Securities Administrator
shall 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 and the Securities Administrator 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 or the
Securities Administrator's actual costs.
The Trustee shall execute and deliver to the Company or the related
Servicer and the Master Servicer any court pleadings, requests for trustee's
sale or other documents necessary or desirable
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to (i) the foreclosure or trustee's sale with respect to a Mortgaged Property;
(ii) any legal action brought to obtain judgment against any Mortgagor on the
Mortgage Note or Security Instrument; (iii) obtain a deficiency judgment against
the Mortgagor; or (iv) enforce any other rights or remedies provided by the
Mortgage Note or Security Instrument or otherwise available at law or equity.
Section 4.02 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 Company, 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 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.
Section 4.03 MONITORING OF SERVICERS. (a) The Master Servicer shall be
responsible for reporting to the Trustee and the Seller the compliance by the
Company and each Servicer with its duties under this Agreement and the related
Servicing Agreement. In the review of the Company's and each Servicer's
activities, the Master Servicer may rely upon an Officer's Certificate of the
Company and the Servicer with regard to such Person's compliance with the terms
of this Agreement or the related Servicing Agreement. In the event that the
Master Servicer, in its judgment, determines that the Company or a Servicer
should be terminated in accordance with this Agreement or the Servicing
Agreement, or that a notice should be sent pursuant to this Agreement or 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 the Company under this
Agreement and each Servicer under the related Servicing Agreement, and shall, in
the event that the Company or a Servicer fails to perform its obligations in
accordance with this Agreement or the related Servicing Agreement, subject to
the preceding paragraph, terminate the rights and obligations of such Person
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, subject to its right of reimbursement pursuant to the provisions of
this Agreement or the applicable Servicing Agreement, provided that the Master
Servicer shall not be required to prosecute or defend any legal action except
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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 the Company or a Servicer, appointment of a
successor Servicer or the transfer and assumption of servicing by the Master
Servicer with respect to this Agreement or 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
Company or such Servicer as a result of an event of default by such Person and
(ii) all costs and expenses associated with the complete transfer of servicing,
including all servicing files and all servicing data and the completion,
correction or manipulation of such servicing data as may be required by the
successor servicer to correct any errors or insufficiencies in the servicing
data or otherwise to enable the successor service to service the Mortgage Loans
in accordance with this Agreement or the related Servicing Agreement) are not
fully and timely reimbursed by the Company or the terminated Servicer, the
Master Servicer shall be entitled to reimbursement of such costs and expenses
from the Master Servicer Collection Account.
(d) The Master Servicer shall require the Company and each Servicer to
comply with the remittance requirements and other obligations set forth in this
Agreement or the related Servicing Agreement, as applicable.
(e) If the Master Servicer acts as a servicer, it will not assume liability
for the representations and warranties of the Company or the Servicer, if any,
that it replaces.
Section 4.04 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 4.05 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 XI 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 4.03, 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 or REMIC II to fail to qualify as
a REMIC or
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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
will not would cause REMIC I or REMIC II to fail to qualify as a REMIC or result
in the imposition of a tax upon REMIC I or REMIC II, 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, the Company
or any Servicer to execute and deliver instruments of satisfaction or
cancellation, or of partial or full release or discharge, and to foreclose upon
or otherwise liquidate Mortgaged Property, and to appeal, prosecute or defend in
any court action relating to the Mortgage Loans or the Mortgaged Property, in
accordance with the applicable Servicing Agreement and this Agreement, and the
Trustee shall execute and deliver such other documents, as the Master Servicer
may request, to enable the Master Servicer to master service and administer the
Mortgage Loans and carry out its duties hereunder, in each case in accordance
with Accepted Master Servicing Practices (and the Trustee shall have no
liability for misuse of any such powers of attorney by the Master Servicer, the
Company 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 10.11 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 4.06 DUE-ON-SALE CLAUSES; ASSUMPTION AGREEMENTS. To the extent
provided in this Agreement or the applicable Servicing Agreement, to the extent
Mortgage Loans contain enforceable due-on-sale clauses, the Master Servicer
shall cause the Company and the Servicers to enforce such clauses in accordance
with this Agreement or 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 this Agreement or the applicable Servicing
Agreement, and, as a consequence, a Mortgage Loan is assumed, the original
Mortgagor may be released from liability in accordance with this Agreement or
the applicable Servicing Agreement.
Section 4.07 RELEASE OF MORTGAGE FILES. (a) Upon becoming aware of the
payment in full of any Mortgage Loan, or the receipt by the Company or 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 Company or the related Servicer will, if required under
the applicable Servicing Agreement, promptly furnish to the Custodian, on behalf
of the Trustee, two copies of a certification substantially in the form of
Exhibit H 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 Company or the
applicable Servicer pursuant to Article V 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 Company or the
applicable Servicer the related Mortgage File. Upon receipt of such
certification and request, the Custodian, on behalf of the
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Trustee, shall promptly release the related Mortgage File to the Company or 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,
the Company or the related 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 this Agreement or the applicable
Servicing Agreement, the Trustee shall execute such documents as shall be
prepared and furnished to the Trustee by the Company, 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 the Company, 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 H (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 Company, the
related Servicer or the Master Servicer, as applicable. Such trust receipt shall
obligate the Company, the related Servicer or the Master Servicer to return the
Mortgage File to the Custodian on behalf of the Trustee, when the need therefor
by such Person 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 Company, the related Servicer or the Master
Servicer.
Section 4.08 DOCUMENTS, RECORDS AND FUNDS IN POSSESSION OF MASTER SERVICER,
COMPANY AND SERVICER TO BE HELD FOR TRUSTEE.
(a) The Master Servicer shall transmit and the Company or the related
Servicer (to the extent required by this Agreement or the applicable Servicing
Agreement) shall transmit to the Trustee or Custodian such documents and
instruments coming into the possession of such Person 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, the Company or by a Servicer in respect of any
Mortgage Loan or which otherwise are collected by the Master Servicer, the
Company 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 Fee
and other amounts provided in this Agreement, and to the right of the Company
and the related Servicer to retain its Servicing Fee and other amounts as
provided in this Agreement or the applicable Servicing Agreement. The Master
Servicer shall, and (to the extent provided in this Agreement or the applicable
Servicing Agreement) shall cause the Company and 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
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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,
the Company and each Servicer shall be entitled to setoff against, and deduct
from, any such funds any amounts that are properly due and payable to the Master
Servicer or such Servicer under this Agreement or the applicable Servicing
Agreement.
Section 4.09 STANDARD HAZARD INSURANCE AND FLOOD INSURANCE POLICIES.
(a) For each Mortgage Loan, the Master Servicer shall enforce any
obligation of the Company and the related Servicer under this Agreement or the
applicable 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 this Agreement or the related Servicing
Agreement. It is understood and agreed that such insurance shall be with
insurers meeting the eligibility requirements set forth in this Agreement and
the applicable Servicing Agreement and that no earthquake or other additional
insurance is to be required of any Mortgagor or to be maintained on property
acquired in respect of a defaulted loan, other than pursuant to such applicable
laws and regulations as shall at any time be in force and as shall require such
additional insurance.
(b) Pursuant to Sections 5.01, 5.03 and 5.04 any amounts collected by the
Company, the Servicers or the Master Servicer, or by the Company or 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 this Agreement or the applicable
Servicing Agreement) shall be deposited by the Company in its Protected Account
or by the related Servicer or the Master Servicer into the Master Servicer
Collection Account, subject to withdrawal pursuant to Sections 5.02, 5.03, 5.04
and 5.06, as applicable. Any cost incurred by the Master Servicer, the Company
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, the Company or the related Servicer pursuant
to Sections 5.02, 5.03, 5.04 and 5.06, as applicable.
Section 4.10 PRESENTMENT OF CLAIMS AND COLLECTION OF PROCEEDS. The Master
Servicer shall (to the extent provided in this Agreement and the applicable
Servicing Agreement) cause the Company or the related Servicer to, prepare and
present on behalf of the Trustee and the
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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 the Company or 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 4.11 MAINTENANCE OF THE PRIMARY MORTGAGE INSURANCE POLICIES.
(a) The Master Servicer shall not take, or permit the Company or any
Servicer (to the extent such action is prohibited under this Agreement or 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, the Company or such Servicer,
would have been covered thereunder. The Master Servicer shall use its best
reasonable efforts to cause the Company and each Servicer (to the extent
required under this Agreement and the related Servicing Agreement) to keep in
force and effect (to the extent that the Mortgage Loan requires the Mortgagor to
maintain such insurance), primary mortgage insurance applicable to each Mortgage
Loan (including any lender-paid Primary Mortgage Insurance Policy) in accordance
with the provisions of this Agreement and the related Servicing Agreement, as
applicable. The Master Servicer shall not, and shall not permit the Company or
any Servicer (to the extent required under this Agreement or 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 cause the Company and each Servicer (to
the extent required under this Agreement and 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 Sections 5.01, 5.03 and 5.04, any amounts collected by the Company
or the related Servicer under any Primary Mortgage Insurance Policies shall be
deposited by the Company in its Protected Account or by the related Servicer in
the Master Servicer Collection Account, subject to withdrawal pursuant to
Section 5.03 or 5.04, as applicable.
Section 4.12 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
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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 4.13 REALIZATION UPON DEFAULTED MORTGAGE LOANS. The Master Servicer
shall cause the Company and each Servicer (to the extent required under this
Agreement and 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 this Agreement or the applicable Servicing Agreement.
Section 4.14 COMPENSATION FOR THE MASTER SERVICER.
The Master Servicer shall be entitled to the Master Servicing Fee on
each Distribution Date as compensation for the performance of its obligations
hereunder. In addition, pursuant to Article V all income and gain realized from
any investment of funds in the Distribution Account and the Master Servicer
Collection Account shall be for the benefit of the Master Servicer as additional
compensation. The Master Servicer will be entitled to retain, as additional
compensation, any interest remitted by a Servicer in connection with a Principal
Prepayment in full or otherwise in excess of amounts required to be remitted to
the Master Servicer Collection 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 4.15 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 this
Agreement or the applicable Servicing Agreement, cause the Company or 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 Company or the applicable Servicer to protect
and conserve, such REO Property in the manner and to the extent required by this
Agreement or 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 this Agreement or
the related Servicing Agreement, cause the Company or 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 Company or the applicable Servicer, upon
the final disposition of any REO Property, shall be entitled to reimbursement
for any related unreimbursed Advances and other unreimbursed advances as well as
any unpaid Servicing Fees from Liquidation
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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 this Agreement or 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 Company or 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 Remittance Date.
Section 4.16 ANNUAL OFFICER'S CERTIFICATE AS TO COMPLIANCE.
(a) The Master Servicer shall deliver to the Trustee and the Rating
Agencies on or before May 31 of each year, commencing on May 31, 2003, an
Officer's Certificate, certifying that with respect to the period ending
December 31 of the prior year: (i) such Servicing Officer has reviewed the
activities of such Master Servicer during the preceding calendar year or portion
thereof and its performance under this Agreement, (ii) to the best of such
Servicing Officer's knowledge, based on such review, such Master Servicer has
performed and fulfilled its duties, responsibilities and obligations under this
Agreement in all material respects throughout such year, or, if there has been a
default in the fulfillment of any such duties, responsibilities or obligations,
specifying each such default known to such Servicing Officer and the nature and
status thereof, (iii) nothing has come to the attention of such Servicing
Officer to lead such Servicing Officer to believe that the Company or any
Servicer has failed to perform any of its duties, responsibilities and
obligations under this Agreement or the related 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 4.17 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 May 31 of each year, commencing on May 31, 2003 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
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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 4.18 REPORTS FILED WITH SECURITIES AND EXCHANGE COMMISSION. Within
15 days after each Distribution Date, the Securities Administrator shall, in
accordance with industry standards, file with the Commission via the Electronic
Data Gathering and Retrieval System ("XXXXX"), a Form 8-K with a copy of the
statement to the Trustee who shall furnish a copy of the statement to the
Certificateholders for such Distribution Date as an exhibit thereto. Prior to
January 30, 2003, 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 March
30, 2003, the Securities Administrator shall file a Form 10-K, in substance
conforming to industry standards, with respect to the Trust Fund. 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
4.18; 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"). Copies of all reports filed by the Securities
Administrator under the Exchange Act shall be sent to: the Seller c/o Bear,
Xxxxxxx & Co. Inc., Attn: Managing Director-Analysis and Control, Xxx Xxxxxxxxx
Xxxxxx Xxxxx, Xxxxxxxx, Xxx Xxxx 00000- 3859. Fees and expenses incurred by the
Securities Administrator in connection with this Section 4.18 shall not be
reimbursable from the Trust Fund.
Section 4.19 EMC. On the Closing Date, EMC will receive from the Seller a
payment of $5,000.
Section 4.20 UCC. The Trustee agrees to file continuation statements for
any Uniform Commercial Code financing statements which the Seller has informed
the Trustee were filed on the Closing Date in connection with the Trust. The
Seller shall file any financing statements or amendments thereto required by any
change in the Uniform Commercial Code.
Section 4.21 OPTIONAL PURCHASE OF DEFAULTED MORTGAGE LOANS.
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With respect to any Mortgage Loans 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 any Mortgage Loan from the Trust which becomes
90 days or more delinquent or becomes an REO Property 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 at the request of EMC without
recourse to EMC which shall succeed to all 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 V
ACCOUNTS
Section 5.01 COLLECTION OF MORTGAGE LOAN PAYMENTS; PROTECTED ACCOUNT.
(a) The Company shall make reasonable efforts in accordance with
customary and usual standards of practice of prudent mortgage lenders in the
respective states in which the Mortgaged Properties are located to collect all
payments called for under the terms and provisions of the Mortgage Loans to the
extent such procedures shall be consistent with this Agreement and the terms and
provisions of any related Required Insurance Policy. Consistent with the
foregoing, the Company may in its discretion (i) waive any late payment charge
and (ii) extend the due dates for payments due on a Mortgage Note for a period
not greater than 125 days. In the event of any such arrangement, the Company
shall make Advances on the related Mortgage Loan during the scheduled period in
accordance with the amortization schedule of such Mortgage Loan without
modification thereof by reason of such arrangements, and shall be entitled to
reimbursement therefor in accordance with Section 6.01. The Company shall not be
required to institute or join in litigation with respect to collection of any
payment (whether under a Mortgage, Mortgage Note or otherwise or against any
public or governmental authority with respect to a taking or condemnation) if it
reasonably believes that enforcing the provision of the Mortgage or other
instrument pursuant to which such payment is required is prohibited by
applicable law. In addition, if (x) a Mortgage Loan is in default or default is
imminent or (y) the Company delivers to the Trustee a certification, based on
the advice of counsel or certified public accountants, in either case, that have
a national reputation with respect to taxation of REMICs, that a modification of
such Mortgage Loan will not result in the imposition of taxes on or disqualify
any of REMIC I or REMIC II, the Company may, (A) amend the related Mortgage Note
to reduce the Mortgage Rate applicable thereto, provided that such reduced
Mortgage Rate shall in no event be lower than 8.25% and (B) amend any Mortgage
Note to extend to the maturity thereof.
(b) The Company shall establish and maintain a Protected Account
(which shall at all times be an Eligible Account) with a depository institution
in the name of the Company for the benefit of the Trustee on behalf of the
Certificateholders and designated "Bank One, National Association, in trust for
registered holders of Bear Xxxxxxx Asset Backed Securities, Inc., Asset- Backed
Certificates Series 2002-AC1". The Company shall deposit or cause to be
deposited into the Protected Account on a daily basis within one Business Day of
receipt, except as otherwise specifically provided herein, the following
payments and collections remitted by subservicers or received by it in respect
of the EMC Mortgage Loans subsequent to the Cut-off Date (other than in respect
of principal and interest due on the EMC Mortgage Loans on or before the Cut-off
Date) and the following amounts required to be deposited hereunder:
(i) all payments on account of principal, including Principal
Prepayments, on the EMC Mortgage Loans and all Prepayment Charges collected
by the Company with respect to the EMC Mortgage Loans;
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(ii) all payments on account of interest on the EMC Mortgage Loans net
of the related Servicing Fee permitted under Section 3.10;
(iii) all Liquidation Proceeds, other than proceeds to be applied to
the restoration or repair of the Mortgaged Property or released to the
Mortgagor in accordance with the Company's normal servicing procedures;
(iv) any amount required to be deposited by the Company pursuant to
Section 5.01(c) in connection with any losses on Permitted Investments;
(v) any amounts required to be deposited by the Company pursuant to
Section 3.05; and
(vi) any other amounts required to be deposited hereunder.
The foregoing requirements for remittance by the Company into the
Protected Account shall be exclusive, it being understood and agreed that,
without limiting the generality of the foregoing, payments in the nature of late
payment charges or assumption fees, if collected, need not be remitted by the
Company. In the event that the Company shall remit any amount not required to be
remitted and not otherwise subject to withdrawal pursuant to Section 5.02, it
may at any time withdraw or direct the institution maintaining the Protected
Account, to withdraw such amount from the Protected Account, any provision
herein to the contrary notwithstanding. Such withdrawal or direction may be
accomplished by delivering written notice thereof to the institution maintaining
the Protected Account, that describes the amounts deposited in error in the
Protected Account. The Company shall maintain adequate records with respect to
all withdrawals made pursuant to this Section. All funds deposited in the
Protected Account shall be held in trust for the Certificateholders until
withdrawn in accordance with Section 5.02.
(c) The institution that maintains the Protected Account shall invest
the funds in the Protected Account, in the manner directed by the Company, in
Permitted Investments which shall mature not later than the Remittance Date and
shall not be sold or disposed of prior to its maturity. All such Permitted
Investments shall be made in the name of the Trustee, for the benefit of the
Certificateholders. All income and gain net of any losses realized from any such
investment shall be for the benefit of the Company as servicing compensation and
shall be remitted to it monthly as provided herein. The amount of any losses
incurred in the Protected Account in respect of any such investments shall be
deposited by the Company into the Protected Account, out of the Company's own
funds.
(d) The Company shall give at least 30 days advance notice to the
Trustee, the Seller, the Master Servicer, each Rating Agency and the Depositor
of any proposed change of location of the Protected Account prior to any change
thereof.
Section 5.02 PERMITTED WITHDRAWALS FROM THE PROTECTED ACCOUNT.
(a) The Company may from time to time make withdrawals from the
Protected Account for the following purposes:
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(i) to pay itself (to the extent not previously paid to or withheld by
the Company), as servicing compensation in accordance with Section 3.10,
that portion of any payment of interest that equals the Servicing Fee for
the period with respect to which such interest payment was made, and, as
additional servicing compensation, those other amounts set forth in Section
3.10;
(ii) to reimburse the Company for Advances made by it with respect to
the Mortgage Loans, provided, however, that the Company's right of
reimbursement pursuant to this subclause (ii) shall be limited to amounts
received on particular Mortgage Loan(s) (including, for this purpose,
Liquidation Proceeds) that represent late recoveries of payments of
principal and/or interest on such particular Mortgage Loan(s) in respect of
which any such Advance was made;
(iii) to reimburse the Company for any previously made portion of a
Servicing Advance or an Advance made by the Company that, in the good faith
judgment of the Company, will not be ultimately recoverable by it from the
related Mortgagor, any related Liquidation Proceeds or otherwise (a
"Nonrecoverable Advance"), to the extent not reimbursed pursuant to clause
(ii) or clause (v);
(iv) to reimburse the Company from Insurance Proceeds for Insured
Expenses covered by the related Insurance Policy;
(v) to pay the Company any unpaid Servicing Fees and to reimburse it
for any unreimbursed Servicing Advances, provided, however, that the
Company's right to reimbursement for Servicing Advances pursuant to this
subclause (v) with respect to any Mortgage Loan shall be limited to amounts
received on particular Mortgage Loan(s) (including, for this purpose,
Liquidation Proceeds and purchase and repurchase proceeds) that represent
late recoveries of the payments for which such Servicing Advances were
made;
(vi) to pay to the Seller, the Depositor or itself, as applicable,
with respect to each Mortgage Loan or property acquired in respect thereof
that has been purchased pursuant to Section 2.02 or 2.03 of this Agreement,
all amounts received thereon and not taken into account in determining the
related Stated Principal Balance of such repurchased Mortgage Loan;
(vii) to pay any expenses recoverable by the Company pursuant to
Sections 8.04 of this Agreement;
(viii) to withdraw pursuant to Section 5.01 any amount deposited in
the Protected Account and not required to be deposited therein; and
(ix) to clear and terminate the Protected Account upon termination of
this Agreement pursuant to Section 11.01 hereof.
In addition, no later than 1:00 p.m. Eastern time on the Remittance
Date, the Company shall withdraw from the Protected Account and remit to the
Master Servicer the amount
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required to be withdrawn therefrom pursuant to Section 5.04 hereof. In addition,
on or before the Remittance Date, the Company shall remit to the Master Servicer
for deposit in the Master Servicer Collection Account any Advances or any
payments of Compensating Interest required to be made by the Company with
respect to the EMC Mortgage Loans. Furthermore, on each Remittance Date, the
Company shall remit to the Master Servicer for deposit in the Master Servicer
Collection Account all Prepayment Charges collected by the Company with respect
to the EMC Mortgage Loans during the related Prepayment Period and any
Prepayment Charge Payment Amounts required to be made by the Company in
connection with any Prepayment Charges waived by the Company during the related
Prepayment Period.
The Company shall keep and maintain separate accounting, on a Mortgage
Loan by Mortgage Loan basis, for the purpose of justifying any withdrawal from
the Protected Account pursuant to subclauses (i), (ii), (iv), (v) and (vi)
above. Prior to making any withdrawal from the Protected Account pursuant to
subclause (iii), the Company shall deliver to the Trustee an Officer's
Certificate of a Servicing Officer indicating the amount of any previous Advance
or Servicing Advance determined by the Company to be a Nonrecoverable Advance
and identifying the related Mortgage Loan(s), and their respective portions of
such Nonrecoverable Advance.
Section 5.02A REPORTS TO MASTER SERVICER.
On or before the tenth calendar day of each month, the Company shall
furnish to the Master Servicer electronically in a format acceptable to the
Master Servicer loan accounting reports in the investor's assigned loan number
order to document the payment activity on each EMC Mortgage Loan on an
individual mortgage loan basis. With respect to each month, such loan accounting
reports shall contain the following:
(i) With respect to each Scheduled Payment (on both an actual and
scheduled basis with respect to mortgage loan balances and on an actual
basis with respect to paid-through dates), the amount of such remittance
allocable to principal (including a separate breakdown of any Principal
Prepayment, including the amount of any Prepayment Interest Shortfall);
(ii) with respect to each Monthly Payment, the amount of such
remittance allocable to scheduled interest;
(iii) the amount of servicing compensation received by the Company
during the prior calendar month;
(iv) the aggregate scheduled principal balance of the EMC Mortgage
Loans;
(v) the aggregate amount of Advances made by the Company pursuant to
Section 6.01;
(vi) the aggregate of any expenses reimbursed to the Company during
the prior calender month pursuant to Section 5.02; and
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(vii) the number and aggregate outstanding principal balances of EMC
Mortgage Loans (a) delinquent (1) 30 to 59 days, (2) 60 to 89 days, (3) 90
days or more; (b) as to which foreclosure has commenced; and (c) as to
which REO Property has been acquired.
Section 5.03 COLLECTION OF TAXES; ASSESSMENTS AND SIMILAR ITEMS;
ESCROW ACCOUNTS.
With respect to each EMC Mortgage Loan, to the extent required by the
related Mortgage Note, the Company shall establish and maintain one or more
accounts (each, an "Escrow Account") and deposit and retain therein all
collections from the Mortgagors (or advances by the Company) for the payment of
taxes, assessments, hazard insurance premiums or comparable items for the
account of the Mortgagors. Nothing herein shall require the Company to compel a
Mortgagor to establish an Escrow Account in violation of applicable law.
Withdrawals of amounts so collected from the Escrow Accounts may be
made only to effect timely payment of taxes, assessments, hazard insurance
premiums, condominium or PUD association dues, or comparable items, to reimburse
the Company out of related collections for any payments made with respect to
each EMC Mortgage Loan pursuant to Section 3.01 (with respect to taxes and
assessments and insurance premiums) and Section 3.05 (with respect to hazard
insurance), to refund to any Mortgagors for any EMC Mortgage Loans any sums as
may be determined to be overages, to pay interest, if required by law or the
terms of the related Mortgage or Mortgage Note, to such Mortgagors on balances
in the Escrow Account or to clear and terminate the Escrow Account at the
termination of this Agreement in accordance with Section 11.01 thereof. The
Escrow Account shall not be a part of the Trust Fund.
Section 5.04 SERVICER PROTECTED ACCOUNTS. (a) The Master Servicer shall
enforce the obligation of the Company and each Servicer to establish and
maintain a Protected Account in accordance with this Agreement and the Servicing
Agreements, with records to be kept with respect thereto on a Mortgage Loan by
Mortgage Loan basis, into which accounts shall be deposited within one Business
Day (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 with
respect to any REO Property received by the Company or the related Servicer,
including Principal Prepayments, Insurance Proceeds, Liquidation Proceeds, and
advances made from the Company's or the related Servicer's own funds (less
servicing compensation as permitted by this Agreement or the applicable
Servicing Agreement) and all other amounts to be deposited in the Protected
Accounts. Each of the Company and the Servicers are 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 this
Agreement or the related Servicing Agreement, the Protected Account shall be
held in 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 this Agreement or 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 to mature, or to be
subject to redemption or withdrawal, no later than the date on which such funds
are required to be
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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 5.04 shall be paid to the Company or
the related Servicer under this Agreement or 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 Company or the related Servicer, as the case may be. The Company or
the related Servicer (to the extent provided in this Agreement or 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 this Agreement or the related Servicing
Agreement and subject to this Article V, on or before each Remittance Date, the
Company or the related Servicer shall withdraw or shall cause to be withdrawn
from its Protected Account 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 the Company or the Servicers pursuant to the
Servicing Agreements which were due on or before the related Due Date, net of
the amount thereof comprising the Servicing Fees;
(ii) Full Principal Prepayments and any Liquidation Proceeds received
by the Company or the Servicers with respect to such Mortgage Loans in the
related Prepayment Period, with interest to the date of prepayment or
liquidation, net of the amount thereof comprising the Servicing Fees;
(iii) Partial Principal Prepayments received by the Company or the
Servicers for such Mortgage Loans in the related Prepayment Period; and
(iv) Any amount to be used as an Advance.
(d) Withdrawals may be made from a Protected Account by the Company as
described in Section 5.02 hereof and by the Master Servicer or the related
Servicer only to make remittances as provided in Section 5.04(c), 5.05 and 5.06;
to reimburse the Master Servicer or a Servicer for Advances which have been
recovered by subsequent collection 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 11.01. As provided in Sections 5.04(c)
and 5.05(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 5.05 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 will deposit in
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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 Advance and any Compensating Interest Payments;
(iii) Any Insurance Proceeds or 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 or Section 2.02 or 2.03, any amounts which are to be
treated pursuant to Section 2.04 of this Agreement as the payment of such a
Repurchase Price, the Repurchase Price with respect to any Mortgage Loans
purchased by EMC pursuant to Section 4.21, and all proceeds of any Mortgage
Loans or property acquired with respect thereto repurchased by the Seller or its
designee pursuant to Section 11.01;
(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
or the Trustee and required to be deposited in the Master Servicer Collection
Account pursuant to this Agreement.
(c) 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 late payment charges or assumption, tax service, statement account or
payoff, substitution, satisfaction, release and other like fees and charges,
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.
(d) 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
from the Master Servicer Collection Account shall be paid to the Master
Servicer. 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
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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 5.06 PERMITTED WITHDRAWALS AND TRANSFERS FROM THE MASTER SERVICER
COLLECTION ACCOUNT. (a) The Master Servicer 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 Master Servicer Collection Account as the
Master Servicer has designated for such transfer or withdrawal pursuant to the
Servicing Agreements. The Master Servicer may clear and terminate the Master
Servicer Collection Account pursuant to Section 11.01 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 any expenses recoverable by the Trustee, the Master
Servicer or the Securities Administrator pursuant to Sections 4.03, 8.03, 8.04
and 10.05.
(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 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 5.07 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 an Eligible Account of
the Trust Fund segregated on the books of the Trustee and held by the Trustee
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 (whether made directly, or indirectly
through a liquidator or receiver of the Trustee). The amount at any time
credited to the Distribution Account may be invested in the name of the Trustee,
in such Permitted Investments, or deposited in demand deposits with such
depository institutions, as directed by the 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 Date if the obligor
for such Permitted Investment is the Master Servicer 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 receive distribution of any
and all investment
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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
deposit the amount of the loss in the Distribution Account. With respect to the
Distribution Account and the funds deposited therein, the Trustee 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.
Section 5.08 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 or 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, the Company or any Servicer for
any Advance of its own funds or any advance of the Company's or such Servicer's
own funds, the right of the Master Servicer, the Company 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 Advance or advance was made;
(ii) to reimburse the Master Servicer, the Company or any Servicer
from Insurance Proceeds or Liquidation Proceeds relating to a particular
Mortgage Loan for amounts expended by the Master Servicer, the Company 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, the Company 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, the Company 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 (xi) of this Subsection (a) to
the Master Servicer; and (ii) such Liquidation Expenses were not included in the
computation of such Excess Liquidation Proceeds;
(iv) to pay the Master Servicer, the Company or any Servicer, as
appropriate, from Liquidation Proceeds or Insurance Proceeds received in
connection with the liquidation of any Mortgage Loan, the amount which it, the
Company or such Servicer would have been entitled to
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receive under subclause (ix) of this Subsection 4.05(a) as servicing
compensation on account of each defaulted scheduled payment on such Mortgage
Loan if paid in a timely manner by the related Mortgagor;
(v) to pay the Master Servicer, the Company or any Servicer from the
Repurchase Price for any Mortgage Loan, the amount which it, the Company or such
Servicer would have been entitled to receive under subclause (ix) of this
Subsection (a) as servicing compensation;
(vi) to reimburse the Master Servicer, the Company or any Servicer for
advances of funds pursuant to this Agreement or the related Servicing Agreement,
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;
(vii) to reimburse the Master Servicer, the Company or any Servicer
for any Advance or advance, after a Realized Loss has been allocated with
respect to the related Mortgage Loan if the Advance or advance has not been
reimbursed pursuant to clauses (i) and (vi);
(viii) to pay the Master Servicer as set forth in Section 4.14;
(ix) to reimburse the Master Servicer for expenses, costs and
liabilities incurred by and reimbursable to it pursuant to Sections 4.03,
8.04(c) and (d) and 12.02;
(x) to pay to the Master Servicer, as additional servicing
compensation, any Excess Liquidation Proceeds to the extent not retained by the
Company or the related Servicer;
(xi) to reimburse or pay the Company or any Servicer any such amounts
as are due thereto under this Agreement or the applicable Servicing Agreement
and have not been retained by or paid to the Company or such Servicer, to the
extent provided herein and in the related Servicing Agreement;
(xii) to reimburse the Trustee or the Securities Administrator for
expenses, costs and liabilities incurred by or reimbursable to it pursuant to
this Agreement;
(xiii) to remove amounts deposited in error; and
(xiv) to clear and terminate the Distribution Account pursuant to
Section 11.01.
(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
(vi), inclusive, and (viii) 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 5.06.
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(C) On each Distribution Date, the Trustee shall distribute Group I
Available Funds and Group II Available Funds in the Distribution Account to the
holders of the Certificates in accordance with Section 6.04.
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ARTICLE VI
DISTRIBUTIONS AND ADVANCES
Section 6.01 ADVANCES.
(a) The Company shall make an Advance with respect to any EMC Mortgage Loan
and deposit such Advance in the Master Servicer Collection Account no later than
1:00 p.m. Eastern time on the Remittance Date in immediately available funds.
The Master Servicer shall cause the related Servicer to remit any such Advance
required pursuant to the terms of the related Servicing Agreement. The Company
or the related Servicer, as applicable, shall be obligated to make any such
Advance only to the extent that such advance would not be a Nonrecoverable
Advance. If the Company or the related Servicer shall have determined that it
has made a Nonrecoverable Advance or that a proposed Advance or a lesser portion
of such Advance would constitute a Nonrecoverable Advance, the Company or the
related Servicer, as the case may be, shall deliver (i) to the Trustee for the
benefit of the Certificateholders funds constituting the remaining portion of
such Advance, if applicable, and (ii) to the Depositor, the Master Servicer each
Rating Agency and the Trustee an Officer's Certificate setting forth the basis
for such determination.
In lieu of making all or a portion of such Advance from its own funds,
the Company may (i) cause to be made an appropriate entry in its records
relating to the Protected Account that any Amount Held for Future Distributions
has been used by the Company in discharge of its obligation to make any such
Advance and (ii) transfer such funds from the Protected Account to the
Distribution Account. Any funds so applied and transferred shall be replaced by
the Company by deposit in the Distribution Account, no later than the close of
business on the Remittance Date immediately preceding the Distribution Date on
which such funds are required to be distributed pursuant to this Agreement.
The Company shall be entitled to be reimbursed from the Protected
Account for all Advances of its own funds made pursuant to this Section as
provided in Section 5.02. The obligation to make Advances with respect to any
Mortgage Loan shall continue until such Mortgage Loan is paid in full or the
related Mortgaged Property or related REO Property has been liquidated or until
the purchase or repurchase thereof (or substitution therefor) from the Trust
Fund pursuant to any applicable provision of this Agreement, except as otherwise
provided in this Section 6.01.
(b) If the Scheduled Payment on a Mortgage Loan that was due on a related
Due Date and is delinquent other than as a result of application of the Relief
Act and for which the Company or the related Servicer was required to make an
Advance pursuant to this Agreement or 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 Master Servicing Fee and
Servicing Fee for such Mortgage Loan except to the extent the Master Servicer
determines any such Advance to be nonrecoverable from Liquidation Proceeds,
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Insurance Proceeds or future payments on the Mortgage Loan for which such
Advance was made. Subject to the foregoing, the Master Servicer shall continue
to make such Advances through the date that the Company or the related Servicer
is required to do so under this Agreement or the related Servicing Agreement, as
applicable. If applicable, 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 Advance in a stated amount and (ii)
detailing the reason it deems the advance to be nonrecoverable.
Subject to and in accordance with the provisions of Article IX hereof,
in the event the Master Servicer fails to make such Advance, then the Trustee,
as Successor Master Servicer, shall be obligated to make such Advance, subject
to the provisions of this Section 6.01.
Section 6.02 COMPENSATING INTEREST PAYMENTS.
(a) In the event that there is a Prepayment Interest Shortfall arising from
a voluntary Principal Prepayment in part or in full by the Mortgagor with
respect to any EMC Mortgage Loan, the Company shall, to the extent of the
Servicing Fee for such Distribution Date, deposit into the Master Servicer
Collection Account, as a reduction of the Servicing Fee for such Distribution
Date, no later than the close of business on the Remittance Date immediately
preceding such Distribution Date, an amount equal to the Prepayment Interest
Shortfall; and in case of such deposit, the Company shall not be entitled to any
recovery or reimbursement from the Depositor, the Trustee, the Seller, the
Securities Administrator, the Trust Fund or the Certificateholders.
(b) The Master Servicer shall cause the related Servicer under the
applicable Servicing Agreement to remit any required Compensating Interest
Payments to the Master Servicer Collection Account on the Remittance Date.
(c) The Master Servicer shall be required to remit the amount of any such
Prepayment Interest Shortfalls, to the extent of the Master Servicing Fee for
such Distribution Date, in the event the Company or the related Servicer fails
to do so.
Section 6.03 REMIC DISTRIBUTIONS.
On each Distribution Date the Securities Administrator, as agent for
the Trustee, shall allocate distributions to the REMIC I Regular Interests in
accordance with Section 6.06 hereof.
Section 6.04 DISTRIBUTIONS.
(a) On each Distribution Date, an amount equal to the Group I
Available Funds and the Group II Available Funds for such Distribution Date
shall be withdrawn by the Trustee from the Distribution Account and distributed
as directed in accordance with the Remittance Report for such Distribution Date,
in the following order of priority:
(i) on each Distribution Date, the Group I Available Funds will be
distributed to the Group I Certificates as follows:
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FIRST, to the Class I-A Certificates and Class X-1 Certificates, on a
pro rata basis, the Accrued Certificate Interest on each such Class for
such Distribution Date;
SECOND, to the Class I-A Certificates and Class X-1 Certificates, on a
pro rata basis, any Accrued Certificate Interest thereon remaining
undistributed from previous Distribution Dates, to the extent of remaining
Group I Available Funds;
THIRD, to the Class X-3 Certificates, distributions in respect of
interest as provided in clause (iii) below;
FOURTH, (i) to the Class I-A Certificates, in reduction of the
Certificate Principal Balance thereof, the Group I Senior Optimal Principal
Amount for such Distribution Date and (ii) to the Class PO-1 Certificates,
the Class PO-1 Certificate Principal Distribution Amount for such
Distribution Date, in each case, to the extent of remaining Group I
Available Funds, until the Certificate Principal Balance of each such Class
has been reduced to zero; and
FIFTH, the Class PO-1 Certificate Deferred Amount to the Class PO-1
Certificates, provided, that (i) on any Distribution Date, distributions
pursuant to this priority FIFTH shall not exceed the excess, if any, of (x)
Group I Available Funds remaining after giving effect to distributions
pursuant to priority FIRST through FOURTH above over (y) the sum of the
amount of Accrued Certificate Interest for such Distribution Date and
Accrued Certificate Interest remaining undistributed from previous
Distribution Dates on all Classes of Subordinated Certificates then
outstanding, (ii) such distributions shall not reduce the Certificate
Principal Balance of the Class PO-1 Certificates and (iii) no distribution
will be made in respect of the Class PO-1 Certificate Deferred Amount on or
after the Cross-over Date.
(ii) On each Distribution Date, the Group II Available Funds will be
distributed to the Group II Certificates as follows:
FIRST, to the Group II Certificates (other than the Class PO-2
Certificates), on a pro rata basis, the Accrued Certificate Interest on
each such class for such Distribution Date;
SECOND, to the Group II Certificates (other than the Class PO-2
Certificates), on a pro rata basis, any Accrued Certificate Interest
thereon remaining undistributed from previous Distribution Dates, to the
extent of remaining Group II Available Funds;
THIRD, to the Class X-3 Certificates, distributions in respect of
interest as provided in clause (iii) below;
FOURTH, (A) sequentially, in the following order, to the Class R-1
Certificates, Class R-2 Certificates and Class II-A Certificates, in
reduction of the Certificate Principal Balance thereof, the Group II Senior
Optimal Principal Amount for such distribution date and (B) to the Class
PO-2 Certificates, the Class PO-2 Certificate Principal Distribution Amount
for such distribution date, in each case, to the extent of remaining Group
II Available Funds, until the Certificate Principal Balance of each such
Class has been reduced to zero; and
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FIFTH, on the Distribution Date for which during the related Due
Period, the last Prepayment Charge on the Mortgage Loans expires, to the
Class XP Certificates, in reduction of the Certificate Principal Balance
thereof, until the Certificate Principal Balance of such Class has been
reduced to zero;
SIXTH, the Class PO-2 Certificate Deferred Amount to the Class PO-2
Certificates, provided, that (i) on any Distribution Date, distributions
pursuant to this priority SIXTH shall not exceed the excess, if any, of (x)
Group II Available Funds remaining after giving effect to distributions
pursuant to priority FIRST through FIFTH above over (y) the sum of the
amount of Accrued Certificate Interest for such Distribution Date and
Accrued Certificate Interest remaining undistributed from previous
Distribution Dates on all classes of Subordinated Certificates then
outstanding, (ii) such distributions shall not reduce the Certificate
Principal Balance of the Class PO-2 Certificates and (iii) no distribution
will be made in respect of the Class PO-2 Certificate Deferred Amount on or
after the Cross-over Date.
(iii) On each Distribution Date, to the extent of any remaining Group I and
Group II Available Funds after distributions pursuant to priority FIRST and
SECOND of clauses (i) and (ii) above, an amount equal to Accrued Certificate
Interest on the Class X-3 Certificates for such Distribution Date and any
Accrued Certificate Interest thereon remaining unpaid from previous Distribution
Dates to be paid pro rata from any remaining Group I and Group II Available
Funds.
(iv) Except as provided in paragraphs (v) and (vi) below, on each
Distribution Date on or prior to the Cross-Over Date, an amount equal to the sum
of the remaining Group I and Group II Available Funds after the distributions in
(i) and (ii) 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, if any, for such
Distribution Date, in each case, to the extent of the sum of the remaining Group
I and Group II Available Funds.
(v) On each Distribution Date prior to the Cross-Over Date but after the
reduction of the Certificate Principal Balance of any of the Group I
Certificates (other than the Class X-1 Certificates) or Group II Certificates
(other than the Class X-2 Certificates) to zero, the remaining class or classes
of Senior Certificates (other than the Class X and Class PO Certificates) will
be entitled to receive in reduction of their Certificate Principal Balances, pro
rata based upon their Certificate Principal Balances 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 Non-PO Percentage of the Principal Prepayments on any
Mortgage Loan in the Loan Group relating to the fully repaid Class or Classes of
Senior Certificates; provided, however, that if (A) the weighted average
Subordinate Percentage equals or exceeds approximately 17.98% on such
distribution date and (B) the aggregate Stated 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 Certificate Principal
Balance of the Subordinated Certificates does not exceed 100%, then the
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additional allocation of Principal Prepayments to the senior certificates in
accordance with this clause (v) will not be made.
(vi) If on any Distribution Date on which the aggregate Certificate
Principal Balance of any Class or Classes of Senior Certificates (other than
Class PO Certificates) would be greater than the aggregate Stated Principal
Balance of the Mortgage Loans in its related Loan Group (other than the PO
Percentage of the related Discount Mortgage Loans) and any Subordinated
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 Subordinated Certificates in respect of principal
will be distributed to such Class or Classes of Senior Certificates in reduction
of the Certificate Principal Balance thereof, until the aggregate Certificate
Principal Balance of such Class or Classes of Senior Certificates is an amount
equal to the aggregate Stated Principal Balance of the Mortgage Loans in the
related Loan Group (other than the PO Percentage of the related Discount
Mortgage Loans), and (ii) the Accrued Certificate Interest otherwise allocable
to the Subordinated 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 Certificate Principal Balance of such Class or
Classes of Senior Certificates over (y) the aggregate Stated Principal Balance
of the Mortgage Loans in the related Loan Group (other than the PO Percentage of
the related Discount Mortgage Loans). Any such reduction in the Accrued
Certificate Interest on the Subordinated Certificates will be allocated in
reverse order of the Subordinated Certificates numerical designations,
commencing with the Class B-6 Certificates.
(b) If, after distributions have been made pursuant to priorities
FIRST through THIRD of clause (a)(i) or clause (a)(ii) above on any Distribution
Date, the remaining Group I or Group II Available Funds are less than the sum of
the Group I Senior Optimal Principal Distribution Amount and the Class PO-1
Certificate Principal Distribution Amount and the Group II Senior Optimal
Principal Amount and the Class PO-2 Certificate Principal Distribution Amount,
respectively, such amounts shall be proportionately reduced, and such remaining
available funds will be distributed to the Class I-A and Class PO-1 Certificates
and the Class II-A and Class PO-2 Certificates, as applicable, on the basis of
such reduced amount. Notwithstanding any reduction in principal distributable to
the Class PO Certificates pursuant to this paragraph, the Certificate Principal
Balance of the Class PO Certificates shall be reduced not only by principal so
distributed but also by the difference between (i) principal distributable to
the related Class PO Certificates in accordance with the priority FOURTH under
clause (a)(i) or clause (a)(ii) above, as applicable, and (ii) principal
actually distributed to the related Class PO Certificate after giving effect to
this paragraph (such difference, the "Class PO Certificate Cash Shortfall"). The
Class PO Certificate Cash Shortfall with respect to any distribution date will
be added to the related Class PO Certificate Deferred Amount.
(c) 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-2 Certificates;
provided that if on any Distribution Date there are any Group I or Group II
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 Certificate
Principal Balances, until all amounts due to all Classes of Senior Certificates
have been paid in full, before any amounts are distributed to the
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Class R-2 Certificates. It is not anticipated that there will be any significant
amounts remaining for such distribution.
(d) On each Distribution Date, all amounts representing Prepayment
Charges in respect of the Mortgage Loans received during the related Prepayment
Period will be withdrawn from the Distribution Account and distributed by the
trustee to the Class XP Certificates and shall not be available for distribution
to the holders of any other Class of Certificates. The payment of such
Prepayment Charges shall not reduce the Certificate Principal Balance of the
Class XP Certificates.
(e) Subject to Section 11.02 hereof respecting the final distribution,
on each Distribution Date the Trustee shall make distributions to each
Certificateholder of record on the preceding Record Date either by wire transfer
in immediately available funds to the account of such holder at a bank or other
entity having appropriate facilities therefor, if (i) such Holder has so
notified the Trustee at least 5 Business Days prior to the related Record Date
and (ii) such Holder shall hold Regular Certificates with aggregate principal
denominations of not less than $1,000,000 or evidencing a Percentage Interest
aggregating 10% or more with respect to such Class or, if not, by check mailed
by first class mail to such Certificateholder at the address of such holder
appearing in the Certificate Register. Notwithstanding the foregoing, but
subject to Section 11.02 hereof respecting the final distribution, distributions
with respect to Certificates registered in the name of a Depository shall be
made to such Depository in immediately available funds.
(f) On or before 5:00 p.m. Eastern time on the fifth Business Day
immediately preceding each Distribution Date, the Master Servicer shall deliver
a report to the Securities Administrator in the form of a computer readable
magnetic tape (or by such other means as the Master Servicer and the Securities
Administrator may agree from time to time) containing such data and information,
as agreed to by the Master Servicer and the Securities Administrator such as to
permit the Securities Administrator to prepare the Monthly Statement to
Certificateholders and to direct the Trustee in writing to make the required
distributions for the related Distribution Date (the "Remittance Report"). The
Securities Administrator shall deliver a Remittance Report to the Trustee on or
before 5:00 p.m. Eastern time on the Business Day immediately preceding each
Distribution Date.
Section 6.04A ALLOCATION OF REALIZED 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.
(b) With respect to any Certificates on any Distribution Date, the
principal portion of each Realized Loss on a Mortgage Loan shall be allocated as
follows:
(i) The applicable PO Percentage of any such Realized Loss on a
Discount Mortgage Loan in the related Loan Group and any Class PO
Certificate Cash Shortfall shall be allocated to the related Class PO
Certificates; and
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(ii) The applicable Non-PO Percentage of any such Realized Loss on a
Mortgage Loan shall be allocated as follows:
first, to the Class B-6 Certificates until the Certificate Principal
Balance thereof has been reduced to zero;
second, to the Class B-5 Certificates until the Certificate Principal
Balance thereof has been reduced to zero;
third, to the Class B-4 Certificates until the Certificate Principal
Balance thereof has been reduced to zero;
fourth, to the Class B-3 Certificates until the Certificate Principal
Balance thereof has been reduced to zero;
fifth, to the Class B-2 Certificates until the Certificate Principal
Balance thereof has been reduced to zero;
sixth, to the Class B-1 Certificates until the Certificate Principal
Balance thereof has been reduced to zero; and
seventh, to the Classes of related Senior Certificates, pro rata, in
accordance with their Certificate Principal Balances;
No Realized Losses will be allocated to the Class XP Certificates.
(c) Notwithstanding the foregoing clause (b), 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 Certificate Principal Balances of all the Certificates as of such
Distribution Date, after giving effect to all distributions and prior
allocations of Realized Losses on such date, to an amount less than the
aggregate Stated 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").
(d) Any Realized Losses allocated to a Class of Certificates shall be
allocated among the Certificates of such Class in proportion to their respective
Certificate Principal Balances. Any allocation of Realized Losses shall be
accomplished by reducing the Certificate Principal Balances 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, except that the aggregate amount of Realized Losses to be
allocated to the related Class PO Certificates on any Distribution Date through
the Cross-Over Date will be taken into account in determining distributions in
respect of the related Class PO Certificate Deferred Amount for such
Distribution Date.
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(f) On each Distribution Date, the Securities Administrator shall determine
the Applied Realized Loss Amount. Any such Applied Realized Loss Amount shall
effect a corresponding reduction in the Certificate Principal Balance of (i) if
prior to the Cross-Over Date, the Subordinated Certificates, in the reverse
order of their numerical Class designations and (ii) from and after the
Cross-Over Date, the Senior Certificates (other than the Class XP Certificates
and the Class X Certificates) which reduction shall occur on such Distribution
Date after giving effect to distributions made on such Distribution Date.
(g) On each Distribution Date, on or prior to the Cross-Over Date the
Securities Administrator shall determine the Class PO Certificate Deferred
Payment Writedown Amount with respect to the related Class PO Certificates, if
any. Any such Class PO Certificate Deferred Payment Writedown Amount with
respect to the Class PO Certificates shall effect a corresponding reduction in
the Certificate Principal Balance of the Subordinated Certificates in the
reverse order of their numerical Class designations.
(h) 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 Subordinated Certificates in right of distribution,
such Realized Losses will be borne by the Subordinated Certificates in inverse
order of their numerical Class designations. Following the Cross-Over Date, the
interest portion of Realized Losses on the Mortgage Loans in any Loan Group will
be allocated to the related Senior Certificates (other than the Class XP
Certificates).
Section 6.05 MONTHLY STATEMENTS TO CERTIFICATEHOLDERS.
(a) Not later than each Distribution Date, the Securities
Administrator shall prepare and make available to each Holder of Certificates,
the Trustee, the Master Servicer and the Depositor a statement setting forth for
the Certificates:
(i) the amount of the related distribution to Holders of each Class
allocable to principal, separately identifying (A) the aggregate amount of
any Principal Prepayments included therein and (B) the aggregate of all
scheduled payments of principal included therein;
(ii) the amount of such distribution to Holders of each Class (other
than Class PO- 1 and Class PO-2) allocable to interest;
(iii) the Certificate Principal Balance or Certificate Notional
Balance of each Class after giving effect (i) to all distributions
allocable to principal on such Distribution Date and (ii) the allocation of
any Applied Realized Loss Amounts for such Distribution Date;
(iv) the aggregate of the Stated Principal Balances of all of the
Mortgage Loans and of the Mortgage Loans in each Loan Group for the
following Distribution Date;
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(v) the related amount of the Master Servicing Fees paid to or
retained by the Master Servicer and the Servicing Fees paid to or retained
by the Company or any Servicer for the related Due Period;
(vi) the amount of the distribution made on such Distribution Date to
the Holders of the Class XP Certificates allocable to Prepayment Charges
and Prepayment Charge Payment Amounts;
(vii) the amount of Advances for each Loan Group included in the
distribution on such Distribution Date;
(viii) the cumulative amount of Applied Realized Loss Amounts to date;
(ix) the number and aggregate principal amounts of Mortgage Loans in
each Loan Group for each such Loan Group and the mortgage pool (A)
Delinquent (exclusive of Mortgage Loans in foreclosure and bankruptcy) (1)
31 to 60 days, (2) 61 to 90 days and (3) 91 or more days, (B) in
foreclosure and delinquent (1) 31 to 60 days, (2) 61 to 90 days and (3) 91
or more days and (C) in bankruptcy and delinquent (1) 31 to 60 days, (2) 61
to 90 days and (3) 91 or more days, in each case as of the close of
business on the last day of the calendar month preceding such Distribution
Date;
(x) with respect to any Mortgage Loan that was liquidated during the
preceding calendar month in each Loan Group and the mortgage pool, the loan
number and Stated Principal Balance of, and Realized Loss on, such Mortgage
Loan as of the close of business on the Determination Date preceding such
Distribution Date;
(xi) the total number and principal balance of any real estate owned
or REO Properties in each Loan Group as of the close of business on the
Determination Date preceding such Distribution Date;
(xii) the three month rolling average of the percent equivalent of a
fraction, the numerator of which is the aggregate stated Principal Balance
of the Mortgage Loans that are 60 days or more delinquent or are in
bankruptcy or foreclosure or are REO Properties, and the denominator of
which is the aggregate Stated Principal Balance of all of the Mortgage
Loans as of the last day of such Distribution Date;
(xiii) the Realized Losses for each Loan Group during the related
Prepayment Period and the cumulative Realized Losses for each Loan Group
and the mortgage pool through the end of the preceding month; and
(xvi) the then applicable Senior Percentages, the Senior Prepayment
Percentages, the Subordinate Percentages and the Subordinate Prepayment
Percentages.
The Securities Administrator may make the foregoing monthly statement
(and, at its option, any additional files containing the same information in an
alternative format) available each month to Certificateholders via the
Securities Administrator's internet website. The Security
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Administrator's internet website shall initially be 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 options are entitled to have a
paper copy mailed to them via first class mail by calling the customer service
desk and indicating such. The Securities Administrator may change the way
monthly statements are distributed in order to make such distributions more
convenient or more accessible to the above parties.
(b) The Securities Administrator's responsibility for making the above
information available to the Certificateholders is limited to the availability,
timeliness and accuracy of the information derived from the Master Servicer, the
Company and the Servicers. The Securities Administrator will make available a
copy of each statement provided pursuant to this Section 6.05 to each Rating
Agency.
(c) Within a reasonable period of time after the end of each calendar
year, the Trustee shall cause to be furnished upon request to each Person who at
any time during the calendar year was a Certificateholder, a statement
containing the information set forth in clauses (a)(i) and (a)(ii) of this
Section 6.05 aggregated for such calendar year or applicable portion thereof
during which such Person was a Certificateholder. Such obligation of the Trustee
shall be deemed to have been satisfied to the extent that substantially
comparable information shall be provided by the Trustee pursuant to any
requirements of the Code as from time to time in effect.
(d) Upon filing with the Internal Revenue Service, the Securities
Administrator shall furnish to the Holders of the Residual Certificates the
applicable Form 1066 and each applicable Form 1066Q and shall respond promptly
to written requests made not more frequently than quarterly by any Holder of a
Residual Certificate with respect to the following matters:
(i) The original projected principal and interest cash flows on the
Closing Date on each Class of regular and residual interests created
hereunder and on the Mortgage Loans, based on the Prepayment Assumption;
(ii) The projected remaining principal and interest cash flows as of
the end of any calendar quarter with respect to each Class of regular and
residual interests created hereunder and the Mortgage Loans, based on the
Prepayment Assumption;
(iii) The applicable Prepayment Assumption and any interest rate
assumptions used in determining the projected principal and interest cash
flows described above;
(iv) The original issue discount (or, in the case of the Mortgage
Loans, market discount) or premium accrued or amortized through the end of
such calendar quarter with respect to each Class of regular or residual
interests created hereunder and to the Mortgage Loans, together with each
constant yield to maturity used in computing the same;
(v) The treatment of losses realized with respect to the Mortgage
Loans or the regular interests created hereunder, including the timing and
amount of any cancellation of indebtedness income of a REMIC with respect
to such regular interests or bad debt deductions claimed with respect to
the Mortgage Loans;
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(vi) The amount and timing of any non-interest expenses of a REMIC;
and
(vii) Any taxes (including penalties and interest) imposed on the
REMIC, including, without limitation, taxes on "prohibited transactions,"
"contributions" or "net income from foreclosure property" or state or local
income or franchise taxes.
The information pursuant to clauses (i), (ii), (iii) and (iv) above
shall be provided by the Depositor pursuant to Section 10.12.
Section 6.06 REMIC DESIGNATIONS AND ALLOCATIONS.
(a) The Trustee shall elect that each of REMIC I and REMIC II shall be
treated as a REMIC under Section 860D of the Code. Any inconsistencies or
ambiguities in this Agreement or in the administration of this Agreement shall
be resolved in a manner that preserves the validity of such REMIC elections. The
assets of REMIC I shall include the Mortgage Loans and all interest owing in
respect of and principal due thereon, the Distribution Account, the Master
Servicer Collection Account, the Protected Accounts maintained by the Company
and the Servicers, any REO Property and any proceeds of the foregoing. The REMIC
I Regular Interests shall constitute the assets of REMIC II.
(b) On each Distribution Date, the Trustee shall cause the Group I
Available Funds and the Group II Available Funds, in the following order of
priority and in accordance with the Remittance Report, to be distributed by
REMIC I to REMIC II on account of the REMIC I Regular Interests or withdrawn
from the Distribution Account and distributed to the Holders of the Class R-1
Certificates, as the case may be:
(i) Uncertificated Accrued Interest on the Uncertificated REMIC I
Regular Interests for such Distribution Date, plus any Uncertificated
Accrued Interest thereon remaining unpaid from any previous
Distribution Date; and
(ii) In accordance with the priority set forth in Section 6.06(c), an
amount equal to the sum of the amounts in respect of principal
distributable on the Class I-A, Class II-A, Class B-1, Class B-3,
Class B-4, Class B-5, Class B-6, Class PO-1, Class PO-2, Class XP and
Class R-II Certificates under Section 6.04, as allocated thereto.
(c) The amount described in Section 6.06(c)(ii) shall be deemed
distributed to (i) Uncertificated REMIC I Regular Interest LTI-IA, (ii)
Uncertificated REMIC I Regular Interest LTI- IIA, (iii) Uncertificated REMIC I
Regular Interest LTI-B, (iv) Uncertificated REMIC I Regular Interest LTI-POI,
(v) Uncertificated REMIC I Regular Interest LTI-POII and (vi) Uncertificated
REMIC I Regular Interest LTI-R2 with the amount to be distributed allocated
among such interests in accordance with the priority assigned to the (i) Class
I-A Certificates, (ii) Class II-A Certificates, (iii) Class B Certificates, (iv)
Class PO-1 Certificates, (v) Class PO-2 Certificates and (vi) Class R-2
Certificates, respectively, under Section 4.01 until the Uncertificated
Principal Balance of each such interest is reduced to zero.
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(d) the Uncertificated REMIC I Regular Interest distribution amounts
described in Section 4.04(a)(ii) shall be deemed distributed by REMIC I to REMIC
II in accordance with the priority assigned to the REMIC II Certificates
relative to that assigned to the REMIC I Certificates under Section 4.01(b).
(e) In determining from time to time the Uncertificated REMIC I
Regular Interest distribution amount for a particular Uncertificated REMIC I
Regular Interest, Realized Losses allocated to the Certificates under Section
6.04A shall be allocated to the Uncertificated REMIC I Regular Interests in the
same amounts and priorities as allocated to the Certificates with the
corresponding numerical designation in 6.06(c) above.
(f) On each Distribution Date the Trustee shall be deemed to
distribute from REMIC II, in the priority set forth in Sections 6.04, to the
Certificates the amounts distributable thereon, from the REMIC I Regular
Interests deemed to have been received by REMIC II from REMIC I under this
Section 6.06.
(g) Notwithstanding the deemed distributions on the Uncertificated
REMIC I Regular Interests described in this Section 6.06, distributions of funds
from the Distribution Account shall be made only in accordance with Section
6.04.
On each Distribution Date, all amounts representing Prepayment Charges
in respect of the Mortgage Loans received during the related Prepayment Period
and any Prepayment Charge Payment Amounts paid by the Company during the related
Prepayment Period will be distributed by REMIC I to the Holders of REMIC I
Regular Interest LTI-XP. The payment of the foregoing amounts to the Holders of
REMIC I Regular Interest LTI-XP shall not reduce the Uncertificated Principal
Balance thereof.
For purposes of calculating the amount of Uncertificated Accrued Interest
for the Uncertificated REMIC I Regular Interests for any Distribution Date, the
aggregate amount of any Net Interest Shortfalls incurred in respect of the
Mortgage Loans for any Distribution Date shall be allocated in the same manner
and extent as such amounts are allocated to the Certificates with the same
numerical and alphabetical designation.
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ARTICLE VII
THE CERTIFICATES
Section 7.01 THE CERTIFICATES.
The Certificates shall be substantially in the forms attached hereto
as Exhibits A-1 through A-16. The Certificates shall be issuable in registered
form, in the minimum dollar denominations, integral dollar multiples in excess
thereof (except that one Certificate of each Class may be issued in a different
amount which must be in excess of the applicable minimum dollar denomination)
and aggregate dollar denominations as set forth in the following table:
Original Certificate
Principal-Balance/or
Minimum Integral Multiple in Notional-Principal
Class Denomination Excess of Minimum Balance Pass-Through Rate
------ ------------ --------------------- -------------------- ------------------
Class I-A
I-A $25,000 $1,000 $287,145,000 Pass-Through Rate
Class II-A
II-A $25,000 $1,000 $206,224,000 Pass-Through Rate
Class X-1
X-1 $25,000 $1,000 N/A Pass-Through Rate
Class X-2
X-2 $25,000 $1,000 N/A Pass-Through Rate
Class X-3
X-3 $25,000 $1,000 N/A Pass-Through Rate
PO-1 $25,000 $1,000 $7,037,728 N/A
PO-2 $25,000 $1,000 $7,643,009 N/A
Class B-1
B-1 $25,000 $1,000 $19,488,000 Pass-Through Rate
Class B-2
B-2 $25,000 $1,000 $9,744,100 Pass-Through Rate
Class B-3
B-3 $25,000 $1,000 $8,352,100 Pass-Through Rate
Class B-4
B-4 $25,000 $1,000 $3,897,600 Pass-Through Rate
Class B-5
B-5 $25,000 $1,000 $2,227,200 Pass-Through Rate
Class B-6
B-6 $25,000 $1,000 $5,011,587 Pass-Through Rate
Class XP
XP $100 N/A $100 Pass-Through Rate
Class R-1 Pass-
R-1 100% N/A $50 Through Rate
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R-2 100% N/A $50 Class R-2 Pass-
Through Rate
The Certificates shall be executed by manual or facsimile signature on
behalf of the Trustee by an authorized officer. Certificates bearing the manual
or facsimile signatures of individuals who were, at the time when such
signatures were affixed, authorized to sign on behalf of the Trustee shall bind
the Trustee, notwithstanding that such individuals or any of them have ceased to
be so authorized prior to the authentication and delivery of such Certificates
or did not hold such offices at the date of such authentication and delivery. No
Certificate shall be entitled to any benefit under this Agreement, or be valid
for any purpose, unless there appears on such Certificate the countersignature
of the Trustee by manual signature, and such countersignature upon any
Certificate shall be conclusive evidence, and the only evidence, that such
Certificate has been duly countersigned and delivered hereunder. All
Certificates shall be dated the date of their countersignature. On the Closing
Date, the Trustee shall authenticate the Certificates to be issued at the
written direction of the Depositor, or any affiliate thereof.
The Depositor shall provide, or cause to be provided, to the Trustee
on a continuous basis, an adequate inventory of Certificates to facilitate
transfers.
Section 7.02 CERTIFICATE REGISTER; REGISTRATION OF TRANSFER AND EXCHANGE OF
CERTIFICATES.
(a) The Trustee shall maintain, or cause to be maintained in
accordance with the provisions of Section 7.09 hereof, a Certificate Register
for the Trust Fund in which, subject to the provisions of subsections (b) and
(c) below and to such reasonable regulations as it may prescribe, the Trustee
shall provide for the registration of Certificates and of Transfers and
exchanges of Certificates as herein provided. Upon surrender for registration of
Transfer of any Certificate, the Trustee shall authenticate and deliver, in the
name of the designated transferee or transferees, one or more new Certificates
of the same Class and of like aggregate Percentage Interest.
At the option of a Certificateholder, Certificates may be exchanged
for other Certificates of the same Class in authorized denominations and
evidencing the same aggregate Percentage Interest upon surrender of the
Certificates to be exchanged at the office or agency of the Trustee. Whenever
any Certificates are so surrendered for exchange, the Trustee shall execute,
authenticate, and deliver the Certificates that the Certificateholder making the
exchange is entitled to receive. Every Certificate presented or surrendered for
registration of Transfer or exchange shall be accompanied by a written
instrument of Transfer in form satisfactory to the Trustee duly executed by the
holder thereof or his attorney duly authorized in writing.
No service charge to the Certificateholders shall be made for any
registration of Transfer or exchange of Certificates, but payment of a sum
sufficient to cover any tax or governmental charge that may be imposed in
connection with any Transfer or exchange of Certificates may be required.
All Certificates surrendered for registration of Transfer or exchange
shall be canceled and subsequently destroyed by the Trustee in accordance with
the Trustee's customary procedures.
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(b) No Transfer of a Subordinated Certificate, Class XP Certificate or
Class R Certificate shall be made unless such Transfer is made pursuant to an
effective registration statement under the Securities Act and any applicable
state securities laws or is exempt from the registration requirements under the
Securities Act and such state securities laws. In the event that a Transfer is
to be made in reliance upon an exemption from the Securities Act and such laws,
in order to assure compliance with the Securities Act and such laws, the
Certificateholder desiring to effect such Transfer and such Certificateholder's
prospective transferee shall each certify to the Trustee and the Securities
Administrator in writing the facts surrounding the Transfer in substantially the
forms set forth in Exhibit E (the "Transferor Certificate") and (x) deliver a
letter in substantially the form of either Exhibit F (the "Investment Letter")
or Exhibit G (the "Rule 144A Letter") or (y) there shall be delivered to the
Trustee and the Securities Administrator an Opinion of Counsel that such
Transfer may be made pursuant to an exemption from the Securities Act, which
Opinion of Counsel shall not be an expense of the Depositor, the Seller, the
Master Servicer, the Securities Administrator or the Trustee. The Depositor
shall provide to any Holder of a Subordinated Certificate, Class XP Certificate
or Class R Certificate and any prospective transferee designated by any such
Holder, information regarding the related Certificates and the Mortgage Loans
and such other information as shall be necessary to satisfy the condition to
eligibility set forth in Rule 144A(d)(4) for Transfer of any such Certificate
without registration thereof under the Securities Act pursuant to the
registration exemption provided by Rule 144A. The Trustee, the Securities
Administrator and the Master Servicer shall cooperate with the Depositor in
providing the Rule 144A information referenced in the preceding sentence,
including providing to the Depositor such information regarding the
Certificates, the Mortgage Loans and other matters regarding the Trust Fund as
the Depositor shall reasonably request to meet its obligation under the
preceding sentence. Each Holder of a Subordinate Certificate, Class XP
Certificate or Class R Certificate desiring to effect such Transfer shall, and
does hereby agree to, indemnify the Trustee, the Depositor, the Seller, the
Securities Administrator and the Master Servicer against any liability that may
result if the Transfer is not so exempt or is not made in accordance with such
federal and state laws.
No Transfer of an ERISA Restricted Certificate shall be made unless
the Trustee, the Master Servicer and the Securities Administrator shall have
received either (i) a representation from the transferee of such Certificate
acceptable to and in form and substance satisfactory to the Trustee, the Master
Servicer and the Securities Administrator, to the effect that such transferee is
not an employee benefit plan subject to Section 406 of ERISA and/or a plan
subject to Section 4975 of the Code, or a Person acting on behalf of any such
plan or using the assets of any such plan, or (ii) in the case of any such ERISA
Restricted Certificate presented for registration in the name of an employee
benefit plan subject to ERISA, or a plan subject to Section 4975 of the Code (or
comparable provisions of any subsequent enactments), or a trustee of any such
plan or any other person acting on behalf of any such plan, an Opinion of
Counsel satisfactory to the Trustee, the Master Servicer and the Securities
Administrator to the effect that the purchase or holding of such ERISA
Restricted Certificate will not result in any prohibited transactions 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
expressly undertaken in this Agreement, which Opinion of Counsel shall not be an
expense of the Trustee, the Master Servicer or the Securities Administrator. For
purposes of clause (I) of the preceding sentence, such representation shall be
deemed to have been made to the Trustee, the Master Servicer and the Securities
Administrator by the transferee's acceptance of an ERISA Restricted Certificate
(or the acceptance by a Certificate Owner of the beneficial interest in
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any such Class of ERISA Restricted Certificates) unless the Trustee, the Master
Servicer and the Securities Administrator shall have received from the
transferee an alternative representation acceptable in form and substance to the
Trustee, the Master Servicer, the Depositor and the Securities Administrator.
Notwithstanding anything else to the contrary herein, any purported transfer of
an ERISA Restricted Certificate to or on behalf of an employee benefit plan
subject to Section 406 of ERISA and/or a plan subject to Section 4975 of the
Code without the delivery to the Trustee, the Master Servicer and the Securities
Administrator of an Opinion of Counsel satisfactory to the Trustee, the Master
Servicer and the Securities Administrator as described above shall be void and
of no effect; provided that the restriction set forth in this sentence shall not
be applicable if there has been delivered to the Trustee, the Master Servicer
and the Securities Administrator an Opinion of Counsel meeting the requirements
of clause (ii) of the first sentence of this paragraph. None of the Trustee, the
Securities Administrator or the Master Servicer shall be required to monitor,
determine or inquire as to compliance with the transfer restrictions with
respect to any ERISA Restricted Certificate that is a Book-Entry Certificate,
and none of the Trustee, the Securities Administrator or the Master Servicer
shall have any liability for transfers of any such Book-Entry Certificates made
through the book-entry facilities of any Depository or between or among
participants of the Depository or Certificate Owners made in violation of the
transfer restrictions set forth herein. None of the Trustee, the Securities
Administrator or the Master Servicer shall be under any liability to any Person
for any registration of transfer of any ERISA Restricted Certificate that is in
fact not permitted by this Section 7.02(b) or for making any payments due on
such Certificate to the Holder thereof or taking any other action with respect
to such Holder under the provisions of this Agreement. The Trustee and the
Securities Administrator shall each be entitled, but not obligated, to recover
from any Holder of any ERISA Restricted Certificate that was in fact an employee
benefit plan subject to Section 406 of ERISA or a plan subject to Section 4975
of the Code or a Person acting on behalf of any such plan at the time it became
a Holder or, at such subsequent time as it became such a plan or Person acting
on behalf of such a plan, all payments made on such ERISA Restricted Certificate
at and after either such time. Any such payments so recovered by the Trustee or
the Securities Administrator shall be paid and delivered by the Trustee or the
Securities Administrator to the last preceding Holder of such Certificate that
is not such a plan or Person acting on behalf of a plan.
(c) Each Person who has or who acquires any Ownership Interest in a
Residual Certificate shall be deemed by the acceptance or acquisition of such
Ownership Interest to have agreed to be bound by the following provisions, and
the rights of each Person acquiring any Ownership Interest in a Residual
Certificate are expressly subject to the following provisions:
(i) Each Person holding or acquiring any Ownership Interest in a
Residual Certificate shall be a Permitted Transferee and shall promptly
notify the Trustee of any change or impending change in its status as a
Permitted Transferee.
(ii) No Ownership Interest in a Residual Certificate may be registered
on the Closing Date or thereafter transferred, and the Trustee shall not
register the Transfer of any Residual Certificate unless, in addition to
the certificates required to be delivered to the Trustee under subparagraph
(b) above, the Trustee shall have been furnished with an affidavit (a
"Transfer Affidavit") of the initial owner or the proposed transferee in
the form attached hereto as Exhibit D.
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(iii) Each Person holding or acquiring any Ownership Interest in a
Residual Certificate shall agree (A) to obtain a Transfer Affidavit from
any other Person to whom such Person attempts to Transfer its Ownership
Interest in a Residual Certificate, (B) to obtain a Transfer Affidavit from
any Person for whom such Person is acting as nominee, trustee or agent in
connection with any Transfer of a Residual Certificate and (C) not to
Transfer its Ownership Interest in a Residual Certificate or to cause the
Transfer of an Ownership Interest in a Residual Certificate to any other
Person if it has actual knowledge that such Person is not a Permitted
Transferee.
(iv) Any attempted or purported Transfer of any Ownership Interest in
a Residual Certificate in violation of the provisions of this Section
7.02(c) shall be absolutely null and void and shall vest no rights in the
purported Transferee. If any purported transferee shall become a Holder of
a Residual Certificate in violation of the provisions of this Section
6.02(c), then the last preceding Permitted Transferee shall be restored to
all rights as Holder thereof retroactive to the date of registration of
Transfer of such Residual Certificate. The Trustee shall be under no
liability to any Person for any registration of Transfer of a Residual
Certificate that is in fact not permitted by Section 7.02(b) and this
Section 7.02(c) or for making any payments due on such Certificate to the
Holder thereof or taking any other action with respect to such Holder under
the provisions of this Agreement so long as the Transfer was registered
after receipt of the related Transfer Affidavit. The Trustee shall be
entitled but not obligated to recover from any Holder of a Residual
Certificate that was in fact not a Permitted Transferee at the time it
became a Holder or, at such subsequent time as it became other than a
Permitted Transferee, all payments made on such Residual Certificate at and
after either such time. Any such payments so recovered by the Trustee shall
be paid and delivered by the Trustee to the last preceding Permitted
Transferee of such Certificate.
(v) The Master Servicer shall make available within 60 days of written
request from the Trustee, all information necessary to compute any tax
imposed under Section 860E(e) of the Code as a result of a Transfer of an
Ownership Interest in a Residual Certificate to any Holder who is not a
Permitted Transferee.
The restrictions on Transfers of a Residual Certificate set forth in
this Section 7.02(c) shall cease to apply (and the applicable portions of the
legend on a Residual Certificate may be deleted) with respect to Transfers
occurring after delivery to the Trustee of an Opinion of Counsel, which Opinion
of Counsel shall not be an expense of the Trustee, the Securities Administrator,
the Seller or the Master Servicer to the effect that the elimination of such
restrictions will not cause the REMIC I and/or REMIC II, as applicable, to fail
to qualify as a REMIC at any time that the Certificates are outstanding or
result in the imposition of any tax on the Trust Fund, a Certificateholder or
another Person. Each Person holding or acquiring any ownership Interest in a
Residual Certificate hereby consents to any amendment of this Agreement that,
based on an Opinion of Counsel furnished to the Trustee, is reasonably necessary
(a) to ensure that the record ownership of, or any beneficial interest in, a
Residual Certificate is not transferred, directly or indirectly, to a Person
that is not a Permitted Transferee and (b) to provide for a means to compel the
Transfer of a Residual Certificate that is held by a Person that is not a
Permitted Transferee to a Holder that is a Permitted Transferee.
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(d) The preparation and delivery of all certificates and opinions
referred to above in this Section 7.02 shall not be an expense of the Trust
Fund, the Trustee, the Depositor, the Seller, the Securities Administrator or
the Master Servicer.
Section 7.03 MUTILATED, DESTROYED, LOST OR STOLEN CERTIFICATES.
If (a) 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 of the ownership thereof and (b) there is delivered to
the Securities Administrator and the Trustee such security or indemnity as may
be required by them to save each of them harmless, then, in the absence of
notice to the Trustee that such Certificate has been acquired by a bona fide
purchaser, the Trustee shall execute, authenticate and deliver, in exchange for
or in lieu of any such mutilated, destroyed, lost or stolen Certificate, a new
Certificate of like Class, tenor and Percentage Interest. In connection with the
issuance of any new Certificate under this Section 7.03, 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 replacement
Certificate issued pursuant to this Section 7.03 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. All Certificates surrendered to the Trustee under the terms of this
Section 7.03 shall be canceled and destroyed by the Trustee in accordance with
its standard procedures without liability on its part.
Section 7.04 PERSONS DEEMED OWNERS.
The Securities Administrator, the Trustee and any agent of the
Securities Administrator or the Trustee may treat the person in whose name any
Certificate is registered as the owner of such Certificate for the purpose of
receiving distributions as provided in this Agreement and for all other purposes
whatsoever, and neither the Securities Administrator, the Trustee nor any agent
of the Securities Administrator or the Trustee shall be affected by any notice
to the contrary.
Section 7.05 ACCESS TO LIST OF CERTIFICATEHOLDERS' NAMES AND ADDRESSES.
If three or more Certificateholders (a) request such information in
writing from the Trustee, (b) state that such Certificateholders desire to
communicate with other Certificateholders with respect to their rights under
this Agreement or under the Certificates, and (c) provide a copy of the
communication that such Certificateholders propose to transmit or if the
Depositor or the Master Servicer shall request such information in writing from
the Trustee, then the Trustee shall, within ten Business Days after the receipt
of such request, provide the Depositor, the Master Servicer or such
Certificateholders at such recipients' expense the most recent list of the
Certificateholders of the Trust Fund held by the Trustee, if any. The Depositor
and every Certificateholder, by receiving and holding a Certificate, agree that
the Trustee shall not be held accountable by reason of the disclosure of any
such information as to the list of the Certificateholders hereunder, regardless
of the source from which such information was derived.
Section 7.06 BOOK-ENTRY CERTIFICATES.
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The Regular Certificates (other than the Class XP Certificates), upon
original issuance, shall be issued in the form of one or more typewritten
Certificates representing the Book- Entry Certificates, to be delivered to the
Depository by or on behalf of the Depositor. Such Certificates shall initially
be registered on the Certificate Register in the name of the Depository or its
nominee, and no Certificate Owner of such Certificates will receive a definitive
certificate representing such Certificate Owner's interest in such Certificates,
except as provided in Section 7.08. Unless and until definitive, fully
registered Certificates ("Definitive Certificates") have been issued to the
Certificate Owners of such Certificates pursuant to Section 7.08:
(a) the provisions of this Section shall be in full force and effect;
(b) the Depositor, the Securities Administrator and the Trustee may
deal with the Depository and the Depository Participants for all purposes
(including the making of distributions) as the authorized representative of the
respective Certificate Owners of such Certificates;
(c) registration of the Book-Entry Certificates may not be transferred
by the Trustee except to another Depository;
(d) the rights of the respective Certificate Owners of such
Certificates shall be exercised only through the Depository and the Depository
Participants and shall be limited to those established by law and agreements
between the Owners of such Certificates and the Depository and/or the Depository
Participants. Pursuant to the Depository Agreement, unless and until Definitive
Certificates are issued pursuant to Section 7.08, the Depository will make
book-entry transfers among the Depository Participants and receive and transmit
distributions of principal and interest on the related Certificates to such
Depository Participants;
(e) the Depository may collect its usual and customary fees, charges
and expenses from its Depository Participants;
(f) the Trustee may rely and shall be fully protected in relying upon
information furnished by the Depository with respect to its Depository
Participants; and
(g) to the extent that the provisions of this Section conflict with
any other provisions of this Agreement, the provisions of this Section shall
control.
For purposes of any provision of this Agreement requiring or
permitting actions with the consent of, or at the direction of,
Certificateholders evidencing a specified percentage of the aggregate unpaid
principal amount of any Class of Certificates, such direction or consent may be
given by Certificate Owners (acting through the Depository and the Depository
Participants) owning Book-Entry Certificates evidencing the requisite percentage
of principal amount of such Class of Certificates.
Section 7.07 NOTICES TO DEPOSITORY.
Whenever any notice or other communication is required to be given to
Certificateholders of a Class with respect to which Book-Entry Certificates have
been issued, unless
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and until Definitive Certificates shall have been issued to the related
Certificate Owners, the Trustee shall give all such notices and communications
to the Depository.
Section 7.08 DEFINITIVE CERTIFICATES.
If, after Book-Entry Certificates have been issued with respect to any
Certificates, (a) the Depositor or the Depository advises the Trustee that the
Depository is no longer willing or able to discharge properly its
responsibilities under the Depository Agreement with respect to such
Certificates and the Trustee or the Depositor is unable to locate a qualified
successor, (b) the Depositor, at its sole option, advises the Trustee that it
elects to terminate the book-entry system with respect to such Certificates
through the Depository or (c) after the occurrence and continuation of an Event
of Default, Certificate Owners of such Book-Entry Certificates having not less
than 51% of the Voting Rights evidenced by any Class of Book-Entry Certificates
advise the Trustee and the Depository in writing through the Depository
Participants that the continuation of a book-entry system with respect to
Certificates of such Class through the Depository (or its successor) is no
longer in the best interests of the Certificate Owners of such Class, then the
Trustee shall notify all Certificate Owners of such Certificates, through the
Depository, of the occurrence of any such event and of the availability of
Definitive Certificates to applicable Certificate Owners requesting the same.
The Depositor shall provide the Trustee with an adequate inventory of
certificates to facilitate the issuance and transfer of Definitive Certificates.
Upon surrender to the Trustee of any such Certificates by the Depository,
accompanied by registration instructions from the Depository for registration,
the Trustee shall countersign and deliver such Definitive Certificates. Neither
the Depositor nor the Trustee shall be liable for any delay in delivery of such
instructions and each may conclusively rely on, and shall be protected in
relying on, such instructions. Upon the issuance of such Definitive
Certificates, all references herein to obligations imposed upon or to be
performed by the Depository shall be deemed to be imposed upon and performed by
the Trustee, to the extent applicable with respect to such Definitive
Certificates and the Trustee shall recognize the Holders of such Definitive
Certificates as Certificateholders hereunder.
Section 7.09 MAINTENANCE OF OFFICE OR AGENCY.
The Trustee will maintain or cause to be maintained at its expense an
office or offices or agency or agencies at the Corporate Trust Office where
Certificates may be surrendered for registration of transfer or exchange. The
Trustee initially designates its Corporate Trust Office, as the office for such
purposes. The Trustee will give prompt written notice to the Certificateholders
of any change in such location of any such office or agency.
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ARTICLE VIII
THE COMPANY AND THE MASTER SERVICER
Section 8.01 LIABILITIES OF THE COMPANY AND THE MASTER SERVICER. Each of
the Company and 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 8.02 MERGER OR CONSOLIDATION OF THE COMPANY OR THE MASTER SERVICER.
(a) Each of the Company and 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 Company or the Master Servicer may be merged
or consolidated, or any corporation resulting from any merger or consolidation
to which the Company or the Master Servicer shall be a party, or any Person
succeeding to the business of the Company or the Master Servicer, shall be the
successor of the Company or 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 8.03 INDEMNIFICATION OF THE TRUSTEE, THE MASTER SERVICER, THE
SECURITIES ADMINISTRATOR AND THE COMPANY. (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 or the
Certificates (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. 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 Company agrees to indemnify the Indemnified Persons and to hold
them harmless from and against any and all claims, losses, damages, penalties,
fines, forfeitures, legal fees and related costs, judgments, and any other
costs, fees and expenses that the Indemnified Persons may sustain in any way
related to the failure of the Company to perform in any way its duties and
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service the EMC Mortgage Loans in strict compliance with the terms of this
Agreement and for breach of any representation or warranty of the Company
contained herein. The Company shall immediately notify the Master Servicer and
the Trustee if a claim is made by a third party with respect to this Agreement
or the EMC Mortgage Loans, assume (with the consent of the Master Servicer and
the Trustee and with counsel reasonably satisfactory to the Master Servicer and
the Trustee) the defense of any such claim and pay all expenses in connection
therewith, including counsel fees, and promptly pay, discharge and satisfy any
judgment or decree which may be entered against it or any Indemnified Person in
respect of such claim but failure to so notify the Company shall not limit its
obligations hereunder. The Company agrees that it will not enter into any
settlement of any such claim without the consent of the Indemnified Persons
unless such settlement includes an unconditional release of such Indemnified
Persons from all liability that is the subject matter of such claim. The
provisions of this Section 8.03(b) shall survive termination of this Agreement.
(b) The Seller will indemnify any Indemnified Person for any loss,
liability or expense of any Indemnified Person not otherwise referred to in
Subsections (a) or (b) above.
Section 8.04 LIMITATIONS ON LIABILITY OF THE COMPANY, THE MASTER SERVICER
AND OTHERS. Subject to the obligation of the Company and the Master Servicer to
indemnify the Indemnified Persons pursuant to Section 8.03:
(a) Neither the Company, the Master Servicer nor any of the directors,
officers, employees or agents of the Company and 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 Company, 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 Company, the Master Servicer and any director, officer, employee or
agent of the Company and 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 Company, the Master Servicer, the Custodian and any director,
officer, employee or agent of the Company, 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 with respect to the Master
Servicer only, to the extent that the Master Servicer is indemnified by the
Company under this Agreement or by the related Servicer under the applicable
Servicing Agreement), other than (i) any such loss, liability or expense related
to the Company's or the Master Servicer's failure to perform its respective
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
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to perform its duties under the Custodial Agreement, or (ii) any such loss,
liability or expense incurred by reason of the Company's, 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) Neither the Company nor the Master Servicer shall 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 5.05. Nothing in this
Subsection 8.04(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 4.01(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 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
the Company or any Servicer, except as otherwise expressly provided herein.
Section 8.05 MASTER SERVICER AND COMPANY NOT TO RESIGN. (a) Except as
provided in Section 8.07, 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 Counsel
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 9.02 hereof. The Trustee shall notify the Rating Agencies of the
resignation of the Master Servicer.
(b) The Company shall not resign from the obligations and duties hereby
imposed on it except upon the determination that its duties hereunder are no
longer permissible under applicable law and such incapacity cannot be cured by
the Company. Any such determination permitting the resignation of the Servicer
shall be evidenced by an Opinion of Counsel to such effect delivered to the
Master Servicer and the Trustee which Opinion of Counsel shall be in form and
substance acceptable to the Master Servicer and the Trustee. No such resignation
shall become effective until the Master Servicer shall have assumed the
Company's responsibilities and obligations hereunder.
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Section 8.06 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.
Section 8.07 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 Trustee an Officer's Certificate and an
Opinion of Counsel, 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 IX
DEFAULT; TERMINATION OF MASTER SERVICER;
TERMINATION OF COMPANY
Section 9.01 EVENTS OF DEFAULT.
"Event of Default," wherever used herein, means any one of the following
events:
(i) any failure by the Master Servicer to remit to the Trustee any
payment, including any Advance, required to be made pursuant to this
Agreement, which failure shall continue unremedied for five Business Days
after the date on which written notice of such failure shall have been
given to the Master Servicer by the Trustee or the Depositor, or to the
Trustee and the Master Servicer by the Holders of Certificates evidencing
not less than 25% of the Voting Rights evidenced by the Certificates; or
(ii) any failure by the Master Servicer to observe or perform in any
material respect any other of the covenants or agreements on the part of
the Master Servicer contained in this Agreement or any breach of a
representation or warranty by the Master Servicer, which failure or breach
shall continue unremedied for a period of 60 days after the date on which
written notice of such failure shall have been given to Master Servicer by
the Trustee or the Depositor, or to the Trustee and the Master Servicer by
the Holders of Certificates evidencing not less than 25% of the Voting
Rights evidenced by the Certificates; or
(iii) a decree or order of a court or agency or supervisory authority
having jurisdiction in the premises for the appointment of a receiver or
liquidator in any insolvency, readjustment of debt, marshalling of assets
and liabilities or similar proceedings, or for the winding-up or
liquidation of its affairs, shall have been entered against the Master
Servicer and such decree or order shall have remained in force undischarged
or unstayed for a period of 60 consecutive days; or
(iv) the Master Servicer shall consent to the appointment of a
receiver or liquidator in any insolvency, readjustment of debt, marshalling
of assets and liabilities or similar proceedings of or relating to the
Master Servicer or all or substantially all of the property of the Master
Servicer; or
(v) the Master Servicer shall admit in writing its inability to pay
its debts generally as they become due, file a petition to take advantage
of, or commence a voluntary case under, any applicable insolvency or
reorganization statute, make an assignment for the benefit of its
creditors, or voluntarily suspend payment of its obligations; or
(vi) the Master Servicer assigns or delegates its duties or rights
under this Agreement in contravention of the provisions permitting such
assignment or delegation under Sections 8.05 or 8.07.
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If an Event of Default shall occur, then, and in each and every such
case, so long as such Event of Default shall not have been remedied, the Trustee
may, and at the direction of the Holders of Certificates evidencing not less
than 25% of the Voting Rights evidenced by the Certificates, the Trustee shall,
by notice in writing to the Master Servicer (with a copy to each Rating Agency),
terminate all of the rights and obligations of the Master Servicer under this
Agreement and in and to the Mortgage Loans and the proceeds thereof, other than
its rights as a Certificateholder hereunder. On or after the receipt by the
Master Servicer of such written notice, all authority and power of the Master
Servicer hereunder, whether with respect to the Mortgage Loans or otherwise,
shall pass to and be vested in the Trustee, or any successor appointed pursuant
to Section 9.02 (a "Successor Master Servicer"). Such Successor Master Servicer
shall thereupon if such Successor Master Servicer is a successor to the Master
Servicer, make any Advance required by Article VI, subject, in the case of the
Trustee, to Section 9.02. The Trustee is hereby authorized and empowered to
execute and deliver, on behalf of the terminated 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 any Mortgage Loans and related documents, or
otherwise. Unless expressly provided in such written notice, no such termination
shall affect any obligation of the Master Servicer to pay amounts owed pursuant
to Article X. The Master Servicer agrees to cooperate with the Trustee in
effecting the termination of the Master Servicer's responsibilities and rights
hereunder, including, without limitation, the transfer to the applicable
Successor Master Servicer of all cash amounts which shall at the time be
credited to the Master Servicer Collection Account maintained pursuant to
Section 5.04, or thereafter be received with respect to the applicable Mortgage
Loans. The Trustee shall promptly notify the Rating Agencies of the occurrence
of an Event of Default known to the Trustee.
Notwithstanding any termination of the activities of the Master
Servicer hereunder, the Master Servicer shall be entitled to receive, out of any
late collection of a Scheduled Payment on a Mortgage Loan that was due prior to
the notice terminating the Master Servicer's rights and obligations as Master
Servicer hereunder and received after such notice, that portion thereof to which
the Master Servicer would have been entitled pursuant to Sections 5.05 and to
receive any other amounts payable to the Master Servicer hereunder the
entitlement to which arose prior to the termination of its activities hereunder.
Section 9.02 TRUSTEE TO ACT; APPOINTMENT OF SUCCESSOR.
On and after the time the Master Servicer receives a notice of
termination pursuant to Section 9.01 hereof the Trustee shall automatically
become the successor to the Master Servicer with respect to the transactions set
forth or provided for herein and after a transition period (not to exceed 90
days), shall be subject to all the responsibilities, duties and liabilities
relating thereto placed on the Master Servicer by the terms and provisions
hereof and applicable law including, if applicable, the obligation to make
Advances pursuant to Article VI except as otherwise provided herein. Effective
on the date of such notice of termination, as compensation therefor, the Trustee
shall be entitled to all fees, costs and expenses relating to the Mortgage Loans
that the Master Servicer would have been entitled to if it had continued to act
hereunder, provided, however, that the Trustee shall not be (i) liable for any
acts or omissions of the Master Servicer, (ii) obligated to make Advances if it
is prohibited from doing so under applicable law, (iii) responsible for expenses
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of the Master Servicer pursuant to Section 2.03 or (iv) obligated to deposit
losses on any Permitted Investment directed by the Master Servicer.
Notwithstanding the foregoing, the Trustee may, if it shall be unwilling to so
act, or shall, if it is prohibited by applicable law from making Advances
pursuant to Article VI or if it is otherwise unable to so act, appoint, or
petition a court of competent jurisdiction to appoint, any established mortgage
loan servicing institution the appointment of which does not adversely affect
the then current rating of the Certificates by each Rating Agency as the
successor to the Master Servicer hereunder in the assumption of all or any part
of the responsibilities, duties or liabilities of the Master Servicer hereunder.
Any Successor Master Servicer shall (i) be an institution that is a Xxxxxx Xxx
and Xxxxxxx Mac approved seller/servicer in good standing, that has a net worth
of at least $15,000,000 and (ii) be willing to act as successor servicer of any
Mortgage Loans under this Agreement or any Servicing Agreement with respect to
which the Company or the original Servicer has been terminated as servicer, and
shall have executed and delivered to the Depositor and the Trustee an agreement
accepting such delegation and assignment, that contains an assumption by such
Person of the rights, powers, duties, responsibilities, obligations and
liabilities of the Master Servicer (other than any liabilities of the Master
Servicer hereof incurred prior to termination of the Master Servicer under
Section 9.01 or as otherwise set forth herein), with like effect as if
originally named as a party to this Agreement, provided that each Rating Agency
shall have acknowledged in writing that its rating of the Certificates in effect
immediately prior to such assignment and delegation will not be qualified or
reduced as a result of such assignment and delegation. If the Trustee assumes
the duties and responsibilities of the Master Servicer in accordance with this
Section 9.02, the Trustee shall not resign as Master Servicer until a Successor
Master Servicer has been appointed and has accepted such appointment. Pending
appointment of a successor to the Master Servicer hereunder, the Trustee, unless
the Trustee is prohibited by law from so acting, shall, subject to Section 4.04
hereof, act in such capacity as hereinabove provided. In connection with such
appointment and assumption, the Trustee may make such arrangements for the
compensation of such successor out of payments on Mortgage Loans or otherwise as
it and such successor shall agree; provided that no such compensation shall be
in excess of that permitted the Master Servicer hereunder. The Trustee and such
successor shall take such action, consistent with this Agreement, as shall be
necessary to effectuate any such succession. Neither the Trustee nor any other
Successor Master Servicer shall be deemed to be in default hereunder by reason
of any failure to make, or any delay in making, any distribution hereunder or
any portion thereof or any failure to perform, or any delay in performing, any
duties or responsibilities hereunder, in either case caused by the failure of
the Master Servicer to deliver or provide, or any delay in delivering or
providing, any cash, information, documents or records to it.
The costs and expenses of the Trustee in connection with the
termination of the Master Servicer, appointment of a Successor Master Servicer
and, if applicable, any transfer of servicing, including, without limitation,
all costs and expenses associated with the complete transfer of all servicing
data and the completion, correction or manipulation of such servicing data as
may be required by the Trustee to correct any errors or insufficiencies in the
servicing data or otherwise to enable the Trustee or the Successor Master
Servicer to service the related Mortgage Loans properly and effectively, to the
extent not paid by the terminated Master Servicer, shall be payable to the
Trustee pursuant to Section 10.05. Any successor to the Master Servicer as
successor servicer under any Subservicing Agreement shall give notice to the
applicable Mortgagors of such change of servicer and shall, during the term of
its service as successor servicer maintain in force the policy or policies that
the Master Servicer is required to maintain pursuant to Section 4.04.
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Section 9.03 NOTIFICATION TO CERTIFICATEHOLDERS.
(a) Upon any termination of or appointment of a successor to the
Master Servicer, the Trustee shall give prompt written notice thereof to
Certificateholders and to each Rating Agency.
(b) Within 60 days after the occurrence of any Event of Default, the
Trustee shall transmit by mail to all Certificateholders notice of each such
Event of Default hereunder known to the Trustee, unless such Event of Default
shall have been cured or waived.
Section 9.04 WAIVER OF DEFAULTS.
The Trustee shall transmit by mail to all Certificateholders, within
60 days after the occurrence of any Event of Default known to the Trustee,
unless such Event of Default shall have been cured, notice of each such Event of
Default hereunder known to the Trustee. 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. 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 9.04 COMPANY DEFAULT.
In case one or more of the following events of default by the Company
(each, a "Company Default") shall occur and be continuing, that is to say:
(i) any failure by the Company to remit to the Master Servicer any
payment required to be made under the terms of this Agreement which continues
unremedied for a period of one Business Day; or
(ii) failure on the part of the Company duly to observe or perform in
any material respect any other of the covenants or agreements on the part of the
Company set forth in this Agreement, the breach of which has a material adverse
effect and which continue unremedied for a period of sixty days (except that
such number of days shall be fifteen in the case of a failure to pay any premium
for any insurance policy required to be maintained under this Agreement and such
failure shall be deemed to have a material adverse effect) after the date on
which written notice of such failure, requiring the same to be remedied, shall
have been given to the Company by the Master Servicer; or
(iii) a decree or order of a court or agency or supervisory authority
having jurisdiction for the appointment of a conservator or receiver or
liquidator in any insolvency,
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bankruptcy, readjustment of debt, marshaling of assets and liabilities or
similar proceedings, or for the winding-up or liquidation of its affairs, shall
have been entered against the Company and such decree or order shall have
remained in force undischarged or unstayed for a period of sixty days; or
(iv) the Company shall consent to the appointment of a conservator or
receiver or liquidator in any insolvency, bankruptcy, readjustment of debt,
marshaling of assets and liabilities or similar proceedings of or relating to
the Company or of or relating to all or substantially all of its property; or
(v) the Company shall admit in writing its inability to pay its debts
generally as they become due, file a petition to take advantage of any
applicable insolvency or reorganization statute, make an assignment for the
benefit of its creditors, or voluntarily suspend payment of its obligations; or
(vi) the Company attempts to assign its right to servicing
compensation hereunder or the Company attempts to sell or otherwise dispose of
all or substantially all of its property or assets or to assign this Agreement
or the servicing responsibilities hereunder or to delegate its duties hereunder
or any portion thereof except as otherwise permitted herein; or
(vii) the Company ceases to be qualified to transact business in any
jurisdiction where it is currently so qualified, but only to the extent such
non-qualification materially and adversely affects the Company's ability to
perform its obligations hereunder;
then, and in each and every such case, so long as a Company Default shall
not have been remedied, the Master Servicer, by notice in writing to the Company
may, in addition to whatever rights the Master Servicer and the Trustee on
behalf of the Certificateholders may have under Section 8.03 and at law or
equity to damages, including injunctive relief and specific performance,
terminate all the rights and obligations of the Company under this Agreement and
in and to the EMC Mortgage Loans and the proceeds thereof without compensating
the Company for the same. On or after the receipt by the Company of such written
notice, all authority and power of Company under this Agreement, whether with
respect to the EMC Mortgage Loans or otherwise, shall pass to and be vested in
the Master Servicer. Upon written request from the Master Servicer, the Company
shall prepare, execute and deliver, any and all documents and other instruments,
place in the Master Servicer's possession all Mortgage Files relating to the EMC
Mortgage Loans, and 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 EMC Mortgage Loans
and related documents, or otherwise, at the Company's sole expense. The Company
agrees to cooperate with the Master Servicer in effecting the termination of the
Company's responsibilities and rights hereunder, including, without limitation,
the transfer to such successor for administration by it of all cash amounts
which shall at the time be credited by the Company to its Protected Account or
Escrow Account or thereafter received with respect to the EMC Mortgage Loans or
any related REO Property.
Section 9.04 WAIVER OF COMPANY DEFAULTS.
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The Master Servicer, with the consent of the Trustee, may waive only by
written notice any default by the Company in the performance of its obligations
hereunder and its consequences. Upon any such waiver of a past default, such
default shall cease to exist, and any Company Default arising therefrom shall be
deemed to have been remedied for every purpose of this Agreement. No such waiver
shall extend to any subsequent or other default or impair any right consequent
thereon except to the extent expressly so waived in writing.
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ARTICLE X
CONCERNING THE TRUSTEE AND THE SECURITIES ADMINISTRATOR
Section 10.01 DUTIES OF TRUSTEE AND SECURITIES ADMINISTRATOR.
(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 the same degree of
care and skill in their exercise, as a prudent person would exercise under the
circumstances in the conduct of such Person's 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 or the Securities Administrator pursuant
to any provision of this Agreement, the Trustee or 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 by the Master Servicer; 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 6.04 and 11.01 herein based the
applicable Remittance Report.
(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 with
respect to the Trustee and at all times with respect to the Securities
Administrator, 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
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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 Responsible Officers of the Trustee or an
officer or officers 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 not less than 25% of the aggregate Voting Rights of
the Certificates, 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 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 Master Servicer, the
Seller, the Depositor 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.
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
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obligations of the Master Servicer or the Company hereunder or any Servicer
under the applicable Servicing Agreement.
(e) All funds received by the Trustee and required to be deposited in
the Distribution Account pursuant to this Agreement will be promptly so
deposited by the Trustee.
Section 10.02 CERTAIN MATTERS AFFECTING THE TRUSTEE AND THE SECURITIES
ADMINISTRATOR.
(a) Except as otherwise provided in Section 10.01:
(i) The Trustee and the Securities Administrator may rely and shall be
protected in acting or refraining from acting in reliance on any resolution
or certificate of the Seller, the Company, the Master Servicer or any
Servicer, any certificates 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 or the Securities
Administrator, as applicable, 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 has actual knowledge (which has not been
cured or waived), to exercise such of the rights and powers vested in it by
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
with respect to the Trustee and at all times with respect to the Securities
Administrator, 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;
(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
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document, unless requested in writing to do so by Holders of Certificates
evidencing not less than 25% of the aggregate Voting Rights of the
Certificates 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 paying agent other than the Securities
Administrator to perform any 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 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 to be unclear, the Trustee or the
Securities Administrator, respectively, may require prior to such action
that it be provided by the Depositor with reasonable further instructions;
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;
(viii) 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 10.07; and
(ix) 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 any Person
pursuant to this Agreement, or the eligibility of any Mortgage Loan for
purposes of this Agreement.
Section 10.03 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 Depositor, 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
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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 2.06 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 2.05 of this Agreement.
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 Depositor of any of the Certificates or of the
proceeds of such Certificates, or for the use or application of any funds paid
to the Depositor with respect to the Mortgage Loans. Subject to the provisions
of Section 2.06, neither the Trustee nor the Securities Administrator shall 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 10.04 TRUSTEE AND SECURITIES ADMINISTRATOR MAY OWN CERTIFICATES.
Each of the Trustee and the Securities Administrator in its individual
capacity or in any capacity other than as Trustee or Securities Administrator
hereunder may become the owner or pledgee of any Certificates with the same
rights it would have if it were not the Trustee or the Securities Administrator,
as applicable, and may otherwise deal with the parties hereto.
Section 10.05 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. In addition, the
Trustee and the Securities Administrator will be entitled to recover from the
Master Servicer Collection Account pursuant to Section 5.06 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 or the Trust Fund hereunder. If funds
in the Master Servicer Collection Account are insufficient therefor, the Trustee
and the Securities Administrator shall recover such expenses from the Depositor.
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.
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Section 10.06 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 a 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 Fitch with respect to their long-term rating
and rated "BBB" or higher by Standard & Poor's 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 10.10, rated in one of the two highest long-term debt
categories of, or otherwise acceptable to, each of the Rating Agencies. The
Trustee shall not be an Affiliate of the Master Servicer. 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 10.06 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, as applicable,
shall cease to be eligible in accordance with the provisions of this Section
10.06, the Trustee or the Securities Administrator shall resign immediately in
the manner and with the effect specified in Section 10.08.
Section 10.07 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 10.07 shall be furnished to any
Certificateholder upon reasonable written request.
Section 10.08 RESIGNATION AND REMOVAL OF TRUSTEE AND SECURITIES
ADMINISTRATOR.
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 Depositor, the Seller, the Securities Administrator (or the Trustee, if
the Securities Administrator resigns) and the Master Servicer, with a copy to
the Rating Agencies. Upon receiving such notice of resignation, the Depositor
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, and the successor trustee or securities
administrator, as applicable. If no successor trustee or successor securities
administrator shall have been so appointed and have accepted appointment within
30 days after the giving of such
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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.
If at any time (i) the Trustee or the Securities Administrator shall
cease to be eligible in accordance with the provisions of Section 9.06 hereof
and shall fail to resign after written request thereto by the Depositor, (ii)
the Trustee or the Securities Administrator shall become incapable of acting, or
shall be adjudged as bankrupt or insolvent, or a receiver of the Trustee or the
Securities Administrator or of its property shall be appointed, or any public
officer shall take charge or control of the Trustee or the Securities
Administrator or of its property or affairs for the purpose of rehabilitation,
conservation or liquidation, or (iii)(A) a tax is imposed with respect to the
Trust Fund by any state in which the Trustee or the Securities Administrator or
the Trust Fund is located, (B) the imposition of such tax would be avoided by
the appointment of a different trustee or securities administrator and (C) the
Trustee or the Securities Administrator, as applicable fails to indemnify the
Trust Fund against such tax, then the Depositor or the Master Servicer may
remove the Trustee or the Securities Administrator, as applicable, and appoint a
successor trustee or successor securities administrator, as applicable, by
written instrument, in multiple copies, a copy of which instrument shall be
delivered to the Trustee, the Securities Administrator, each Master Servicer and
the successor trustee or successor securities administrator, as applicable.
The Holders evidencing at least 51% of the Voting Rights of each Class
of Certificates may at any time remove the Trustee or Securities Administrator
and appoint a successor trustee or securities administrator by written
instrument or instruments, in multiple copies, signed by such Holders or their
attorneys-in-fact duly authorized, one complete set of which instruments shall
be delivered by the successor trustee or successor securities administrator to
each of the Master Servicer, the Trustee or Securities Administrator so removed
and the successor trustee or securities administrator so appointed. Notice of
any removal of the Trustee or Securities Administrator shall be given to each
Rating Agency by the Trustee or successor trustee.
Any resignation or removal of the Trustee or Securities Administrator
and appointment of a successor trustee or securities administrator pursuant to
any of the provisions of this Section 10.08 shall become effective upon
acceptance of appointment by the successor trustee or securities administrator
as provided in Section 10.09 hereof.
Section 10.09 SUCCESSOR TRUSTEE OR SECURITIES ADMINISTRATOR.
Any successor trustee or securities administrator appointed as
provided in Section 10.08 hereof shall execute, acknowledge and deliver to the
Depositor and to its predecessor trustee or predecessor securities
administrator, as applicable, and the Master Servicer an instrument accepting
such appointment hereunder and thereupon the resignation or removal of the
predecessor trustee or securities administrator shall 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 the like effect as if originally
named as trustee or securities administrator herein.
No successor trustee or securities administrator shall accept
appointment as provided in this Section 10.09 unless at the time of such
acceptance such successor trustee or securities
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administrator shall be eligible under the provisions of Section 10.07 hereof and
its appointment shall not adversely affect the then current rating of the
Certificates.
Upon acceptance of appointment by a successor trustee or securities
administrator as provided in this Section 10.09, the successor trustee or
securities administrator shall mail notice of the succession of such trustee or
securities administrator hereunder to all Holders of Certificates. If the
successor trustee or securities administrator fails to mail such notice within
ten days after acceptance of appointment, the Depositor shall cause such notice
to be mailed at the expense of the Trust Fund.
Section 10.10 MERGER OR CONSOLIDATION OF TRUSTEE OR SECURITIES
ADMINISTRATOR.
Any corporation, state bank 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 corporation, state bank or national banking
association resulting from any merger, conversion or consolidation to which the
Trustee or the Securities Administrator shall be a party, or any corporation,
state bank or national banking association succeeding to substantially all of
the corporate trust business of the Trustee or of the business of the Securities
Administrator, shall be the successor of the Trustee or the Securities
Administrator hereunder, provided that such corporation shall be eligible under
the provisions of Section 9.06 hereof without the execution or filing of any
paper or further act on the part of any of the parties hereto, anything herein
to the contrary notwithstanding.
Section 10.11 APPOINTMENT OF CO-TRUSTEE OR SEPARATE TRUSTEE.
Notwithstanding any other provisions of this Agreement, at any time,
for the purpose of meeting any legal requirements of any jurisdiction in which
any part of the Trust Fund or property securing any Mortgage Note may at the
time be located, the Master Servicer and the Trustee acting jointly shall have
the power and shall execute and deliver all instruments to appoint one or more
Persons approved by the Trustee to act as co-trustee or co-trustees jointly with
the Trustee, or separate trustee or separate trustees, of all or any part of the
Trust Fund, and to vest in such Person or Persons, in such capacity and for the
benefit of the Certificateholders, such title to the Trust Fund or any part
thereof, whichever is applicable, and, subject to the other provisions of this
Section 10.11, such powers, duties, obligations, rights and trusts as the Master
Servicer and the Trustee may consider necessary or desirable. If the Master
Servicer shall not have joined in such appointment within 15 days after the
receipt by it of a request to do so, or in the case an Event of Default shall
have occurred and be continuing, the Trustee alone shall have the power to make
such appointment. No co-trustee or separate trustee hereunder shall be required
to meet the terms of eligibility as a successor trustee under Section 10.06 and
no notice to Certificateholders of the appointment of any co-trustee or separate
trustee shall be required under Section 10.09.
Every separate trustee and co-trustee shall, to the extent permitted
by law, be appointed and act subject to the following provisions and conditions:
(i) All rights, powers, duties and obligations conferred or imposed
upon the Trustee, except for the obligation of the Trustee under this
Agreement to advance funds on
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behalf of the Master Servicer, shall be conferred or imposed upon and
exercised or performed by the Trustee and such separate trustee or
co-trustee jointly (it being understood that such separate trustee or
co-trustee is not authorized to act separately without the Trustee joining
in such act), except to the extent that under any law of any jurisdiction
in which any particular act or acts are to be performed (whether a Trustee
hereunder or as a Successor Master Servicer hereunder), the Trustee shall
be incompetent or unqualified to perform such act or acts, in which event
such rights, powers, duties and obligations (including the holding of title
to the Trust Fund or any portion thereof in any such jurisdiction) shall be
exercised and performed singly by such separate trustee or co-trustee, but
solely at the direction of the Trustee;
(ii) No trustee hereunder shall be held personally liable by reason of
any act or omission of any other trustee hereunder; and
(iii) The Trustee may at any time accept the resignation of or remove
any separate trustee or co-trustee.
Any notice, request or other writing given to the Trustee shall be
deemed to have been given to each of the 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 X. Each separate trustee and co-trustee, upon its acceptance of
the trusts conferred, shall be vested with the estates or property specified in
its instrument of appointment, either jointly with the Trustee or separately, as
may be provided therein, subject to all the provisions of this Agreement,
specifically including every provision of this Agreement relating to the conduct
of, affecting the liability of, or affording protection to, the Trustee. Every
such instrument shall be filed with the Trustee and a copy thereof given to the
Master Servicer and the Depositor.
Any separate trustee or co-trustee may, at any time, constitute the
Trustee its agent or attorney-in-fact, with full power and authority, to the
extent not prohibited by law, to do any lawful act under or in respect of this
Agreement on its behalf and in its name. If any separate trustee or co- trustee
shall die, become incapable of acting, resign or be removed, all of its estates,
properties, rights, remedies and trusts shall vest in and be exercised by the
Trustee, to the extent permitted by law, without the appointment of a new or
successor trustee.
Section 10.12 TAX MATTERS.
It is intended that the Trust Fund shall constitute, and that the
affairs of the Trust Fund shall be conducted so that each REMIC formed hereunder
qualifies as, a "real estate mortgage investment conduit" as defined in and in
accordance with the REMIC Provisions. In furtherance of such intention, the
Securities Administrator covenants and agrees that it shall act as agent (and
the Securities Administrator is hereby appointed to act as agent) on behalf of
the Trust Fund. The Trustee and/or the Securities Administrator, as agent on
behalf of the Trust Fund, shall do or refrain from doing, as applicable, the
following: (a) the Securities Administrator shall prepare and file, or cause to
be prepared and filed, in a timely manner, U.S. Real Estate Mortgage Investment
Conduit Income Tax Returns (Form 1066 or any successor form adopted by the
Internal Revenue Service) and prepare and file or cause to be prepared and filed
with the Internal Revenue Service and
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applicable state or local tax authorities income tax or information returns for
each taxable year with respect to each such REMIC containing such information
and at the times and in the manner as may be required by the Code or state or
local tax laws, regulations, or rules, and furnish or cause to be furnished to
Certificateholders the schedules, statements or information at such times and in
such manner as may be required thereby; (b) the Securities Administrator shall
apply for an employer identification number with the Internal Revenue Service
via a Form SS-4 or other comparable method for each REMIC that is or becomes a
taxable entity, and within thirty days of the Closing Date, furnish or cause to
be furnished to the Internal Revenue Service, on Forms 8811 or as otherwise may
be required by the Code, the name, title, address, and telephone number of the
person that the holders of the Certificates may contact for tax information
relating thereto, together with such additional information as may be required
by such Form, and update such information at the time or times in the manner
required by the Code for the Trust Fund; (c) the Trustee shall make or cause to
be made elections, on behalf of each REMIC formed hereunder to be treated as a
REMIC on the federal tax return of such REMIC for its first taxable year (and,
if necessary, under applicable state law); (d) the Securities Administrator
shall prepare and forward, or cause to be prepared and forwarded, to the
Certificateholders and to the Internal Revenue Service and, if necessary, state
tax authorities, all information returns and reports as and when required to be
provided to them in accordance with the REMIC Provisions, including without
limitation, the calculation of any original issue discount using the Prepayment
Assumption; (e) the Securities Administrator shall provide information necessary
for the computation of tax imposed on the transfer of a Residual Certificate to
a Person that is not a Permitted Transferee, or an agent (including a broker,
nominee or other middleman) of a Person that is not a Permitted Transferee, or a
pass-through entity in which a Person that is not a Permitted Transferee is the
record holder of an interest (the reasonable cost of computing and furnishing
such information may be charged to the Person liable for such tax); (f) each of
the Securities Administrator and the Trustee shall, to the extent under its
control, conduct the affairs of the Trust Fund at all times that any
Certificates are outstanding so as to maintain the status of each REMIC formed
hereunder as a REMIC under the REMIC Provisions; (g) neither the Trustee nor the
Securities Administrator shall knowingly or intentionally take any action or
omit to take any action that would cause the termination of the REMIC status of
any REMIC formed hereunder; (h) the Trustee shall pay, from the sources
specified in the last paragraph of this Section 10.12, as directed by the
Securities Administrator in its Remittance Report, the amount of any federal,
state and local taxes, including prohibited transaction taxes as described
below, imposed on any REMIC formed hereunder prior to the termination of the
Trust Fund when and as the same shall be due and payable (but such obligation
shall not prevent the Trustee, the Securities Administrator at the written
request of the Trustee, or any other appropriate Person from contesting any such
tax in appropriate proceedings and shall not prevent the Securities
Administrator from withholding payment of such tax, if permitted by law, pending
the outcome of such proceedings); (i) the Trustee shall sign or cause to be
signed federal, state or local income tax or information returns or any other
document prepared by the Securities Administrator pursuant to this Section 10.12
requiring a signature thereon by the Trustee; (j) the Securities Administrator
shall maintain records relating to each REMIC formed hereunder including but not
limited to the income, expenses, assets and liabilities of each such REMIC and
adjusted basis of the Trust Fund property determined at such intervals as may be
required by the Code, as may be necessary to prepare the foregoing returns,
schedules, statements or information; (k) the Securities Administrator shall,
for federal income tax purposes, maintain books and records with respect to the
REMICs on a calendar year and on an accrual basis; (l) neither the Trustee nor
the Master Servicer shall enter into any arrangement not otherwise provided for
in
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this Agreement by which the REMICs will receive a fee or other compensation for
services nor permit the REMICs to receive any income from assets other than
"qualified mortgages" as defined in Section 860G(a)(3) of the Code or "permitted
investments" as defined in Section 860G(a)(5) of the Code; and (m) as and when
necessary and appropriate, the Trustee, or at the written request of the
Trustee, the Securities Administrator, shall represent the Trust Fund in any
administrative or judicial proceedings relating to an examination or audit by
any governmental taxing authority, request an administrative adjustment as to
any taxable year of any REMIC formed hereunder, enter into settlement agreements
with any governmental taxing agency, extend any statute of limitations relating
to any tax item of the Trust Fund, and otherwise act on behalf of each REMIC
formed hereunder in relation to any tax matter involving any such REMIC.
In order to enable each of the Trustee and the Securities
Administrator to perform its duties as set forth herein, the Depositor shall
provide, or cause to be provided, to the Trustee or the Securities Administrator
within 10 days after the Closing Date all information or data that the Trustee
or the Securities Administrator requests in writing and determines to be
relevant for tax purposes to the valuations and offering prices of the
Certificates, including, without limitation, the price, yield, prepayment
assumption and projected cash flows of the Certificates and the Mortgage Loans.
Thereafter, the Depositor shall provide to the Trustee or the Securities
Administrator promptly upon written request therefor, any such additional
information or data that the Trustee or the Securities Administrator may, from
time to time, request in order to enable the Trustee or the Securities
Administrator to perform its duties as set forth herein. The Depositor hereby
indemnifies each of Trustee and the Securities Administrator for any losses,
liabilities, damages, claims or expenses of the Trustee or the Securities
Administrator arising from any errors or miscalculations of the Trustee or the
Securities Administrator, as applicable, that result from any failure of the
Depositor to provide, or to cause to be provided, accurate information or data
to the Trustee or the Securities Administrator, as applicable, on a timely
basis.
In the event that any tax is imposed on "prohibited transactions" of
any of REMIC I or REMIC II as defined in Section 860F(a)(2) of the Code, on the
"net income from foreclosure property" of the Trust Fund as defined in Section
860G(c) of the Code, on any contribution to any of REMIC I or REMIC II after the
startup day pursuant to Section 860G(d) of the Code, or any other tax is
imposed, including, without limitation, any federal, state or local tax or
minimum tax imposed upon any of REMIC I or REMIC II, and is not paid as
otherwise provided for herein, such tax shall be paid by (i) the Trustee or the
Securities Administrator, if any such other tax arises out of or results from a
breach by the Trustee or the Securities Administrator, respectively, of any of
its obligations under this Agreement, (ii) any party hereto (other than the
Trustee or the Securities Administrator) to the extent any such other tax arises
out of or results from a breach by such other party of any of its obligations
under this Agreement or (iii) in all other cases, or in the event that any
liable party hereto fails to honor its obligations under the preceding clauses
(i) or (ii), any such tax will be paid first with amounts otherwise to be
distributed to the Class R Certificateholders, and second with amounts otherwise
to be distributed to all other Certificateholders in the following order of
priority: first, to the Class B-6 Certificates, second, to the Class B-5
Certificates, third, to the Class B-4 Certificates, fourth to the Class B-3
Certificates, fifth to the Class B-2 Certificates, sixth to the Class B-1
Certificates and seventh, to the Senior Certificates (pro rata based on the
amounts to be distributed). Notwithstanding anything to the contrary contained
herein, to the extent that such tax is payable by the Holder of any
Certificates, the Trustee is hereby authorized to retain on any
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Distribution Date, from the Holders of the Class R Certificates (and, if
necessary, second, from the Holders of the other Certificates in the priority
specified in the preceding sentence), funds otherwise distributable to such
Holders in an amount sufficient to pay such tax. Following written notification
to the Securities Administrator by the Trustee of any amount payable out of
distributions to the Certificateholders pursuant to the preceding two sentences,
the Securities Administrator shall include in its Remittance Report instructions
as to distributions to such parties taking into account the priorities described
in the second preceding sentence. The Securities Administrator, on written
request by the Trustee, agrees to promptly notify in writing the party liable
for any such tax of the amount thereof and the due date for the payment thereof.
The Trustee and the Securities Administrator each agree that, in the
event it should obtain any information necessary for the other party to perform
its obligations pursuant to this Section 10.12, it will promptly notify and
provide such information to such other party. Notwithstanding anything in this
Agreement to the contrary, the Trustee agrees that, in the event that the
Trustee obtains actual knowledge that the Securities Administrator has breached
any of its obligations pursuant to this Section 10.12, the Trustee shall perform
such obligations on its behalf to the extent that the Trustee possesses all
documents necessary to so perform and receives reasonable compensation therefor,
provided, however, that the Trustee shall not be liable for any losses resulting
from any such breach.
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ARTICLE XI
TERMINATION
Section 11.01 TERMINATION UPON LIQUIDATION OR REPURCHASE OF ALL
MORTGAGE LOANS.
Subject to Section 11.03, the obligations and responsibilities of the
Depositor, the Master Servicer, the Securities Administrator, the Seller and the
Trustee created hereby with respect to the Trust Fund shall terminate upon the
earlier of (a) the purchase by the Company of all of the Mortgage Loans (and REO
Properties) remaining in the Trust Fund at a price equal to the sum of (i) 100%
of the Stated Principal Balance of each Mortgage Loan (other than in respect of
REO Property), (ii) accrued interest thereon at the applicable Mortgage Rate to,
but not including, the first day of the month of such purchase, (iii) the
appraised value of any REO Property in the Trust Fund (up to the Stated
Principal Balance of the related Mortgage Loan), such appraisal to be conducted
by an appraiser mutually agreed upon by the Company and the Securities
Administrator and (iv) unreimbursed out-of pocket costs of the Company, the
related Servicer or the Master Servicer, including unreimbursed servicing
advances and the principal portion of any unreimbursed Advances, made on the
Mortgage Loans prior to the exercise of such repurchase right and (v) any
unreimbursed costs and expenses of the Trustee and the Securities Administrator
payable pursuant to Section 10.05 and (b) the later of (i) the maturity or other
liquidation (or any Advance with respect thereto) of the last Mortgage Loan
remaining in the Trust Fund and the disposition of all REO Property and (ii) the
distribution to Certificateholders of all amounts required to be distributed to
them pursuant to this Agreement, as applicable. In no event shall the trusts
created hereby continue beyond the earlier of (i) 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. Xxxxx, living on the
date hereof and (ii) the Latest Possible Maturity Date.
The right to repurchase all Mortgage Loans and REO Properties pursuant
to clause (a) above shall be conditioned upon the Stated Principal Balance of
all of the Mortgage Loans in the Trust Fund, at the time of any such repurchase,
aggregating one percent or less of the aggregate Cut- off Date Principal Balance
of all of the Mortgage Loans.
Section 11.02 FINAL DISTRIBUTION ON THE CERTIFICATES.
If on any Determination Date, (i) the Master Servicer determines that
there are no Outstanding Mortgage Loans and no other funds or assets in the
Trust Fund other than the funds in the Master Servicer Collection Account, the
Master Servicer shall direct the Securities Administrator to send a final
distribution notice promptly to each Certificateholder or (ii) the Securities
Administrator determines that a Class of Certificates shall be retired after a
final distribution on such Class, the Securities Administrator shall notify the
Certificateholders within five (5) Business Days after such Determination Date
that the final distribution in retirement of such Class of Certificates is
scheduled to be made on the immediately following Distribution Date. Any final
distribution made pursuant to the immediately preceding sentence will be made
only upon presentation and surrender of the related Certificates at the
Corporate Trust Office of the Trustee. If the Company elects to terminate the
Trust Fund pursuant to Section 11.01, at least 20 days prior to the date notice
is to be
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mailed to the Certificateholders, the Company shall notify the Master Servicer,
the Depositor, the Securities Administrator, the Trustee and the Securities
Administrator of the date the Company intends to terminate the Trust Fund. The
Company shall remit the Mortgage Loan Repurchase Price to the Master Servicer on
the Business Day prior to the Distribution Date for such Optional Termination by
the Company.
Notice of any termination of the Trust Fund, specifying the
Distribution Date on which Certificateholders may surrender their Certificates
for payment of the final distribution and cancellation, shall be given promptly
by the Securities Administrator by letter to Certificateholders mailed not
earlier than the 10th day and no later than the 15th day of the month
immediately preceding the month of such final distribution. Any such notice
shall specify (a) the Distribution Date upon which final distribution on the
Certificates will be made upon presentation and surrender of Certificates at the
office therein designated, (b) the amount of such final distribution, (c) the
location of the office or agency at which such presentation and surrender must
be made and (d) that the Record Date otherwise applicable to such Distribution
Date is not applicable, distributions being made only upon presentation and
surrender of the Certificates at the office therein specified. The Securities
Administrator will give such notice to each Rating Agency at the time such
notice is given to Certificateholders.
In the event such notice is given, the Master Servicer shall cause all
funds in the Master Servicer Collection Account to be remitted to the Trustee
for deposit in the Distribution Account on the Business Day prior to the
applicable Distribution Date in an amount equal to the final distribution in
respect of the Certificates. Upon such final deposit with respect to the Trust
Fund and the receipt by the Trustee of a Request for Release therefor, the
Trustee shall promptly release to the Company or the related Servicer, as
applicable the Mortgage Files for the Mortgage Loans and any documents necessary
to transfer any REO Property.
Upon presentation and surrender of the Certificates, the Trustee shall
cause to be distributed to Certificateholders of each Class the amounts
allocable to such Certificates held in the Distribution Account in the order and
priority set forth in Section 6.04 hereof on the final Distribution Date and in
proportion to their respective Percentage Interests.
In the event that any affected Certificateholders shall not surrender
Certificates for cancellation within six months after the date specified in the
above mentioned written notice, the Securities Administrator shall give a second
written notice to the remaining Certificateholders to surrender their
Certificates for cancellation and receive the final distribution with respect
thereto. If within six months after the second notice all the applicable
Certificates shall not have been surrendered for cancellation, the Securities
Administrator may take appropriate steps, or may appoint an 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 that remain a part of the Trust Fund. If within one year
after the second notice all Certificates shall not have been surrendered for
cancellation, the Class R Certificateholders shall be entitled to all unclaimed
funds and other assets of the Trust Fund that remain subject hereto.
Section 11.03 ADDITIONAL TERMINATION REQUIREMENTS.
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(a) Upon exercise by the Company of its purchase option as provided in
Section 11.01, the Trust Fund shall be terminated in accordance with the
following additional requirements, unless each of the Trustee and the Securities
Administrator have been supplied with an Opinion of Counsel, at the expense of
the Company, to the effect that the failure of the Trust Fund to comply with the
requirements of this Section 11.03 will not (i) result in the imposition of
taxes on "prohibited transactions" of a REMIC, or (ii) cause a REMIC to fail to
qualify as a REMIC at any time that any Certificates are outstanding:
(1) The Company shall establish a 90-day liquidation period and notify
the Trustee and Securities Administrator thereof, and the Securities
Administrator shall in turn specify the first day of such period in a statement
attached to each of REMIC I and REMIC II's Tax Return pursuant to Treasury
Regulation Section 1.860F-1. The Company shall satisfy all the requirements of a
qualified liquidation under Section 860F of the Code and any regulations
thereunder, as evidenced by an Opinion of Counsel obtained at the expense of the
Company;
(2) During such 90-day liquidation period, and at or prior to the time
of making the final payment on the Certificates, the Company as agent of the
Trustee shall sell all of the assets of REMIC I for cash; and
(3) At the time of the making of the final payment on the
Certificates, the Securities Administrator as agent for the Trustee shall
distribute or credit, or cause to be distributed or credited, to the Holders of
the Residual Certificates all cash on hand (other than cash retained to meet
claims), and REMIC I shall terminate at that time.
(b) By their acceptance of the Certificates, the Holders thereof
hereby authorize the Company to specify the 90-day liquidation period for REMIC
I and REMIC II, which authorization shall be binding upon all successor
Certificateholders.
(c) The Securities Administrator as agent for each REMIC hereby agrees
to adopt and sign such a plan of complete liquidation upon the written request
of the Company, and the receipt of the Opinion of Counsel referred to in Section
11.03(a)(1) and to take such other action in connection therewith as may be
reasonably requested by the Company.
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ARTICLE XII
MISCELLANEOUS PROVISIONS
Section 12.01 AMENDMENT.
This Agreement may be amended from time to time by parties hereto,
without the consent of any of the Certificateholders to cure any ambiguity, to
correct or supplement any provisions herein (including to give effect to the
expectations of investors), to change the manner in which the Master Servicer
Collection Account maintained by the Master Servicer or the Protected Account
maintained by the Company is maintained or to make such other provisions with
respect to matters or questions arising under this Agreement as shall not be
inconsistent with any other provisions herein if such action shall not, as
evidenced by an Opinion of Counsel, adversely affect in any material respect the
interests of any Certificateholder; provided that any such amendment shall be
deemed not to adversely affect in any material respect the interests of the
Certificateholders and no such Opinion of Counsel shall be required if the
Person requesting such amendment obtains a letter from each Rating Agency
stating that such amendment would not result in the downgrading or withdrawal of
the respective ratings then assigned to the Certificates.
Notwithstanding the foregoing, without the consent of the
Certificateholders, the parties hereto may at any time and from time to time
amend this Agreement to modify, eliminate or add to any of its provisions to
such extent as shall be necessary or appropriate to maintain the qualification
of each of REMIC I and REMIC II as a REMIC under the Code or to avoid or
minimize the risk of the imposition of any tax on any of REMIC I or REMIC II
pursuant to the Code that would be a claim against any of REMIC I or REMIC II at
any time prior to the final redemption of the Certificates, provided that the
Trustee has been provided an Opinion of Counsel, which opinion shall be an
expense of the party requesting such opinion but in any case shall not be an
expense of the Trustee or the Securities Administrator, to the effect that such
action is necessary or appropriate to maintain such qualification or to avoid or
minimize the risk of the imposition of such a tax.
This Agreement may also be amended from time to time by the parties
hereto and the Holders of each Class of Certificates affected thereby evidencing
over 50% of the Voting Rights of 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 Holders of
Certificates; provided that no such amendment shall (i) reduce in any manner the
amount of, or delay the timing of, payments required to be distributed on any
Certificate without the consent of the Holder of such Certificate, (ii) cause
any of REMIC I's or REMIC II's REMIC election to fail to qualify or (iii) reduce
the aforesaid percentages of Certificates of each Class the Holders of which are
required to consent to any such amendment without the consent of the Holders of
all Certificates of such Class then outstanding.
Notwithstanding any contrary provision of this Agreement, the Trustee
shall not consent to any amendment to this Agreement unless it shall have first
received an Opinion of Counsel, which opinion shall be an expense of the party
requesting such amendment but in any case shall not be an expense of the Trustee
or the Securities Administrator, to the effect that such
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amendment will not (other than an amendment pursuant to clause (ii) of, and in
accordance with, the preceding paragraph) cause the imposition of any tax on
REMIC I or REMIC II or the Certificateholders or cause REMIC I's or REMIC II's
REMIC election to fail to qualify at any time that any Certificates are
outstanding. Further, nothing in this Agreement shall require the Trustee to
enter into an amendment without receiving an Opinion of Counsel, satisfactory to
the Trustee that (i) such amendment is permitted and is not prohibited by this
Agreement and that all requirements for amending this Agreement (including any
consent of the applicable Certificateholders) have been complied with.
Promptly after the execution of any amendment to this Agreement
requiring the consent of Certificateholders, the Trustee shall furnish written
notification of the substance of such amendment to each Certificateholder and
each Rating Agency.
It shall not be necessary for the consent of Certificateholders under
this Section to approve the particular form of any proposed amendment, but it
shall be sufficient if such consent shall approve the substance thereof. The
manner of obtaining such consents and of evidencing the authorization of the
execution thereof by Certificateholders shall be subject to such reasonable
regulations as the Trustee may prescribe.
Section 12.02 RECORDATION OF AGREEMENT; COUNTERPARTS.
To the extent permitted by applicable law, this Agreement is subject
to recordation in all appropriate public offices for real property records in
all of 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 Master Servicer shall effect such recordation at the
Trust's expense 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.
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 12.03 GOVERNING LAW.
THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY
THE SUBSTANTIVE LAWS OF THE STATE OF NEW YORK APPLICABLE TO AGREEMENTS MADE AND
TO BE PERFORMED IN THE STATE OF NEW YORK AND THE OBLIGATIONS, RIGHTS AND
REMEDIES OF THE PARTIES HERETO AND THE CERTIFICATEHOLDERS SHALL BE DETERMINED IN
ACCORDANCE WITH SUCH LAWS WITHOUT REGARD TO THE CONFLICTS OF LAWS PRINCIPLES
THEREOF.
Section 12.04 INTENTION OF PARTIES.
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It is the express intent of the parties hereto that the conveyance of
the Mortgage Notes, Mortgages, assignments of Mortgages, title insurance
policies and any modifications, extensions and/or assumption agreements and
private mortgage insurance policies relating to the Mortgage Loans by the Seller
to the Depositor, and by the Depositor to the Trustee be, and be construed as,
an absolute sale thereof to the Depositor or the Trustee, as applicable. It is,
further, not the intention of the parties that such conveyance be deemed a
pledge thereof by the Seller to the Depositor, or by the Depositor to the
Trustee. However, in the event that, notwithstanding the intent of the parties,
such assets are held to be the property of the Seller or the Depositor, as
applicable, or if for any other reason this Agreement is held or deemed to
create a security interest in such assets, then (i) this Agreement shall be
deemed to be a security agreement within the meaning of the Uniform Commercial
Code of the State of New York and (ii) each conveyance provided for in this
Agreement shall be deemed to be an assignment and a grant by the Seller or the
Depositor, as applicable , for the benefit of the Certificateholders, of a
security interest in all of the assets that constitute the Trust Fund, whether
now owned or hereafter acquired.
The Depositor for the benefit of the Certificateholders shall, to the
extent consistent with this Agreement, take such actions as may be necessary to
ensure that, if this Agreement were deemed to create a security interest in the
assets of the Trust Fund, 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 Agreement.
Section 12.05 NOTICES.
(a) The Trustee shall use its best efforts to promptly provide notice
to each Rating Agency with respect to each of the following of which it has
actual knowledge:
(i) Any material change or amendment to this Agreement;
(ii) The occurrence of any Event of Default that has not been cured;
(iii) The resignation or termination of the Master Servicer, the
Securities Administrator or the Trustee and the appointment of any
successor;
(iv) The repurchase or substitution of Mortgage Loans pursuant to
Sections 2.02, 2.03, 4.21 and 11.01; and
(v) The final payment to Certificateholders.
In addition, the Trustee shall promptly furnish to each Rating Agency
copies of the following:
(i) Each report to Certificateholders described in Section 6.05;
(ii) Each annual statement as to compliance described in Section 4.16;
and
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(iii) Each annual independent public accountants' servicing report
described in Section 4.17.
(b) All directions, demands and notices hereunder shall be in writing
and shall be deemed to have been duly given when delivered at or mailed by
registered mail, return receipt requested, postage prepaid, or by recognized
overnight courier, or by facsimile transmission to a number provided by the
appropriate party if receipt of such transmission is confirmed to (i) in the
case of the Depositor, Bear Xxxxxxx Asset Backed Securities, Inc., 000 Xxxx
Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Chief Counsel; (ii) in the case of
the Seller or the Company, EMC Mortgage Corporation, 000 Xxxxxx Xxxxx Xxxxx,
Xxxxxx, Xxxxx 00000, Attention: Xxxxxx Xxxxx or such other address as may be
hereafter furnished to the other parties hereto by the Master Servicer in
writing; (iv) in the case of the Trustee, at each Corporate Trust Office or such
other address as the Trustee may hereafter furnish to the other parties hereto;
(v) in the case of the Master Servicer or the Securities Administrator, 00000
Xxxxxx Xxxx Xxxxxxx, Xxxxxxxx, Xxxxxxxx 00000, Attention: BSABS 2002-AC1 or such
other address as may be hereafter furnished to the other parties hereto by the
Securities Administrator in writing and (vi) in the case of the Rating Agencies,
(x) Xxxxx'x Investors Service, Inc., 00 Xxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000,
Attention: Home Equity Monitoring and (y) Standard & Poor's, 00 Xxxxx Xxxxxx,
00xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Mortgage Surveillance Group.
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, whether or not the
Certificateholder receives such notice.
Section 12.06 SEVERABILITY OF PROVISIONS.
If any one or more of the covenants, agreements, provisions or terms
of this Agreement shall be for any reason whatsoever held invalid, then such
covenants, agreements, provisions or terms shall be deemed severable from the
remaining covenants, agreements, provisions or terms of this Agreement and shall
in no way affect the validity or enforceability of the other provisions of this
Agreement or of the Certificates or the rights of the Holders thereof.
Section 12.07 ASSIGNMENT.
Notwithstanding anything to the contrary contained herein, except as
provided pursuant to Section 8.02, this Agreement may not be assigned by the
Master Servicer, the Seller or the Depositor.
Section 12.08 LIMITATION ON RIGHTS OF CERTIFICATEHOLDERS.
The death or incapacity of any Certificateholder shall not operate to
terminate this Agreement or the Trust Fund, nor entitle such Certificateholder's
legal representative or heirs to claim an accounting or to take any action or
commence any proceeding in any court for a petition
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or winding up of the Trust Fund, or otherwise affect the rights, obligations and
liabilities of the parties hereto or any of them.
No Certificateholder shall have any right to vote (except as provided
herein) or in any manner otherwise control the operation and management of the
Trust Fund, or the obligations of the parties hereto, nor shall anything herein
set forth or contained in the terms of the Certificates be construed so as to
constitute the Certificateholders from time to time as partners or members of an
association; nor shall any Certificateholder be under any liability to any third
party by reason of any action taken by the parties to this Agreement pursuant to
any provision hereof.
No Certificateholder shall have any right by virtue or by availing
itself of any provisions of this Agreement to institute any suit, action or
proceeding in equity or at law upon or under or with respect to this Agreement,
unless such Holder previously shall have given to the Trustee or the Securities
Administrator, as appropriate, a written notice of an Event of Default and of
the continuance thereof, as hereinbefore provided, the Holders of Certificates
evidencing not less than 25% of the Voting Rights evidenced by the Certificates
shall also have made written request to the Trustee or the Securities
Administrator, as appropriate to institute such action, suit or proceeding in
its own name as Trustee or the Securities Administrator, as appropriate,
hereunder and shall have offered to the Trustee or the Securities Administrator,
as appropriate, such reasonable indemnity as it may require against the costs,
expenses, and liabilities to be incurred therein or thereby, and the Trustee or
the Securities Administrator, as appropriate, for 60 days after its receipt of
such notice, request and offer of indemnity shall have neglected or refused to
institute any such action, suit or proceeding; it being understood and intended,
and being expressly covenanted by each Certificateholder with every other
Certificateholder and the Trustee, that no one or more Holders of Certificates
shall have any right in any manner whatever by virtue or by availing itself or
themselves of any provisions of this Agreement to affect, disturb or prejudice
the rights of the Holders of any other of the Certificates, or to obtain or seek
to obtain priority over or preference to any other such Holder or to enforce any
right under this Agreement, except in the manner herein provided and for the
common benefit of all Certificateholders. For the protection and enforcement of
the provisions of this Section 12.08, each and every Certificateholder, the
Trustee or the Securities Administrator shall be entitled to such relief as can
be given either at law or in equity.
Section 12.09 INSPECTION AND AUDIT RIGHTS. The Master Servicer agrees that,
on reasonable prior notice, it will permit any representative of the Depositor
or the Trustee during the Master Servicer's normal business hours, to examine
all the books of account, records, reports and other papers of the Master
Servicer relating to the Mortgage Loans, to make copies and extracts therefrom,
to cause such books to be audited by independent certified public accountants
selected by the Depositor or the Trustee and to discuss its affairs, finances
and accounts relating to such Mortgage Loans with its officers, employees and
independent public accountants (and by this provision the Master Servicer hereby
authorizes such accountants to discuss with such representative such affairs,
finances and accounts), all at such reasonable times and as often as may be
reasonably requested. Any out-of-pocket expense incident to the exercise by the
Depositor or the Trustee of any right under this Section 12.09 shall be borne by
the party requesting such inspection.
-137-
Section 12.10 CERTIFICATES NONASSESSABLE AND FULLY PAID.
It is the intention of the Depositor that Certificateholders shall not
be personally liable for obligations of the Trust Fund, that the interests in
the Trust Fund represented by the Certificates shall be nonassessable for any
reason whatsoever, and that the Certificates, upon due authentication thereof by
the Trustee pursuant to this Agreement, are and shall be deemed fully paid.
* * *
-138-
IN WITNESS WHEREOF, the Depositor, the Master Servicer, the Seller,
the Company, the Securities Administrator and the Trustee have caused their
names to be signed hereto by their respective officers thereunto duly authorized
as of the day and year first above written.
BEAR XXXXXXX ASSET BACKED SECURITIES,
INC.,
as Depositor
By:
--------------------------------------
Name:
Title:
EMC MORTGAGE CORPORATION,
as Seller and Company
By:
--------------------------------------
Name:
Title:
XXXXX FARGO BANK MINNESOTA, NATIONAL
ASSOCIATION
as Securities Administrator and
Master Servicer
By:
--------------------------------------
Name:
Title:
BANK ONE, NATIONAL ASSOCIATION
as Trustee
By:
--------------------------------------
Name:
Title:
-139-
STATE OF NEW YORK )
) ss.:
COUNTY OF NEW YORK )
On this ___ day of February, 2002, before me, a notary public in and
for said State, appeared ______________, personally known to me on the basis of
satisfactory evidence to be an authorized representative of Bear Xxxxxxx Asset
Backed Securities, Inc., one of the corporations that executed the within
instrument, and also known to me to be the person who executed it on behalf of
such corporation and acknowledged to me that such corporation executed the
within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my
official seal the day and year in this certificate first above written.
----------------------------
Notary Public
[Notarial Seal]
-140-
STATE OF )
) ss.:
COUNTY OF )
On this ____ day of February, 2002, before me, a notary public in and
for said State, appeared _______________, personally known to me on the basis of
satisfactory evidence to be an authorized representative of Xxxxx Fargo Bank
Minnesota, National Association that executed the within instrument, and also
known to me to be the person who executed it on behalf of such corporation, and
acknowledged to me that such corporation executed the within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my
official seal the day and year in this certificate first above written.
----------------------------
Notary Public
[Notarial Seal]
-141-
STATE OF NEW YORK )
) ss.:
COUNTY OF NEW YORK )
On this ____ day of February, 2002, before me, a notary public in and
for said State, appeared _________________, personally known to me on the basis
of satisfactory evidence to be an authorized representative of EMC Mortgage
Corporation, one of the corporations that executed the within instrument, and
also known to me to be the person who executed it on behalf of such corporation
and acknowledged to me that such corporation executed the within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my
official seal the day and year in this certificate first above written.
----------------------------
Notary Public
[Notarial Seal]
-142-
STATE OF )
) ss.:
COUNTY OF )
On this ____ day of February, 2002, before me, a notary public in and
for said State, appeared _______________, personally known to me on the basis of
satisfactory evidence to be an authorized representative of Bank One, National
Association that executed the within instrument, and also known to me to be the
person who executed it on behalf of such corporation, and acknowledged to me
that such corporation executed the within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my
official seal the day and year in this certificate first above written.
----------------------------
Notary Public
[Notarial Seal]
-143-
EXHIBIT A-1
FORM OF CLASS I-A 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 CERTIFICATE PRINCIPAL BALANCE 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 CERTIFICATE
PRINCIPAL BALANCE OF THIS CERTIFICATE WILL BE DIFFERENT FROM THE DENOMINATION
SHOWN BELOW. ANYONE ACQUIRING THIS CERTIFICATE MAY ASCERTAIN ITS CERTIFICATE
PRINCIPAL BALANCE BY INQUIRY OF THE TRUSTEE NAMED HEREIN.
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY TO THE DEPOSITOR 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.
Certificate No.1 Pass-Through Rate: 8.00%
Class I-A Senior
Date of Pooling and Servicing Agreement and Aggregate Initial Certificate Principal Balance
Cut-off Date: of this Certificate as of the Cut-off Date:
January 1, 2002 $287,145,000.00
First Distribution Date: Initial Certificate Principal Balance of this
February 25, 2002 Certificate as of the Cut-off Date:
$287,145,000.00
Master Servicer:
Xxxxx Fargo Bank Minnesota, National
Association CUSIP: 07384Y BW 5
Assumed Final Distribution Date:
January 25, 2032
ASSET-BACKED CERTIFICATE
SERIES 2002-AC1
evidencing a fractional undivided interest in the distributions
allocable to the Class I-A Certificates with respect to a Trust Fund
consisting primarily of a pool of conventional one- to four-family
fixed interest rate mortgage loans sold by BEAR XXXXXXX ASSET BACKED
SECURITIES, INC.
This Certificate is payable solely from the assets of the
Trust Fund, and does not represent an obligation of or interest in Bear Xxxxxxx
Asset Backed Securities, Inc., the Master Servicer, the Trustee or the
Securities Administrator 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 Bear Xxxxxxx Asset Backed
Securities, Inc., the Master Servicer, the Trustee or the Securities
Administrator or any of their affiliates or any other person. None of Bear
Xxxxxxx Asset Backed Securities, 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
Percentage 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 conventional first lien, fixed rate mortgage loans
secured by one- to four- family residences, units in planned unit developments
and individual condominium units (collectively, the "Mortgage Loans") sold by
Bear Xxxxxxx Asset Backed Securities, Inc. ("BSABS"). The Mortgage Loans were
sold by EMC Mortgage Corporation
-2-
("EMC") to BSABS. Xxxxx Fargo Bank Minnesota, National Association 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 BSABS, as depositor
(the "Depositor"), EMC Mortgage Corporation as seller and company, Xxxxx Fargo
Bank Minnesota, National Association, as Master Servicer and securities
administrator (the "Securities Administrator") and Bank One, National
Association, 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 Certificate Principal Balance hereof at a per annum rate equal to the
Pass-Through Rate set forth above. 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 day (or if such last day is
not a Business Day, the Business Day immediately preceding such last day) of the
calendar month immediately preceding the month in which the Distribution Date
occurs, an amount equal to the product of the Percentage 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 following the latest scheduled maturity date of any Mortgage Loan and is
not likely to be the date on which the Certificate Principal Balance 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.
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 Certificate Principal Balance of this Certificate is set forth above.
The Certificate Principal Balance 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").
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.
-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 Depositor and the rights of the Certificateholders under the
Agreement from time to time by the parties thereto with the consent of the
Holders of Certificates evidencing Percentage Interests aggregating not less
than 66-2/3% (or in certain cases, Holders of Certificates of affected Classes
evidencing such percentage of the Percentage 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 Percentage 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 Percentage 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 Depositor, 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 Depositor, 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 Stated Principal Balance of the Mortgage Loans is less than the
percentage of the aggregate Stated Principal Balance specified in
-4-
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.
-5-
IN WITNESS WHEREOF, the Trustee has caused this Certificate to
be duly executed.
Dated: February 6, 2002 BANK ONE, NATIONAL ASSOCIATION,
not in its individual capacity but solely
as Trustee
By:
-------------------------------------
Authorized Signatory
CERTIFICATE OF AUTHENTICATION
This is one of the Class I-A Certificates referred to in the
within-mentioned Agreement.
BANK ONE, NATIONAL ASSOCIATION Authorized
signatory of Bank One, National
Association, 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 Percentage
Interest evidenced by the within Asset-Backed 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 II-A 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 CERTIFICATE PRINCIPAL BALANCE 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 CERTIFICATE
PRINCIPAL BALANCE OF THIS CERTIFICATE WILL BE DIFFERENT FROM THE DENOMINATION
SHOWN BELOW. ANYONE ACQUIRING THIS CERTIFICATE MAY ASCERTAIN ITS CERTIFICATE
PRINCIPAL BALANCE BY INQUIRY OF THE TRUSTEE NAMED HEREIN.
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY TO THE DEPOSITOR 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.
Certificate No.1 Pass-Through Rate: 8.00%
Class II-A Senior
Date of Pooling and Servicing Agreement and Aggregate Initial Certificate Principal Balance
Cut-off Date: of this Certificate as of the Cut-off Date:
January 1, 2002 $206,224,000.00
First Distribution Date: Initial Certificate Principal Balance of this
February 25, 2002 Certificate as of the Cut-off Date:
$206,224,000.00
Master Servicer:
Xxxxx Fargo Bank Minnesota, National
Association CUSIP: 07384Y BX 3
Assumed Final Distribution Date:
January 25, 2032
ASSET-BACKED CERTIFICATE
SERIES 2002-AC1
evidencing a fractional undivided interest in the distributions
allocable to the Class II-A Certificates with respect to a Trust Fund
consisting primarily of a pool of conventional one- to four-family
fixed interest rate mortgage loans sold by BEAR XXXXXXX ASSET BACKED
SECURITIES, INC.
This Certificate is payable solely from the assets of the
Trust Fund, and does not represent an obligation of or interest in Bear Xxxxxxx
Asset Backed Securities, Inc., the Master Servicer, the Trustee or the
Securities Administrator 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 Bear Xxxxxxx Asset Backed
Securities, Inc., the Master Servicer, the Trustee or the Securities
Administrator or any of their affiliates or any other person. None of Bear
Xxxxxxx Asset Backed Securities, 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
Percentage 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 conventional first lien, fixed rate mortgages loan
secured by one- to four- family residences, units in planned unit developments
and individual condominium units (collectively, the "Mortgage Loans") sold by
Bear Xxxxxxx Asset Backed Securities, Inc. ("BSABS"). The Mortgage Loans were
sold by EMC Mortgage Corporation
-2-
("EMC") to BSABS. Xxxxx Fargo Bank Minnesota, National Association 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 BSABS, as depositor
(the "Depositor"), EMC Mortgage Corporation as seller and company, Xxxxx Fargo
Bank Minnesota, National Association, as Master Servicer and securities
administrator (the "Securities Administrator") and Bank One, National
Association 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 Certificate Principal Balance hereof at a per annum rate equal to the
Pass-Through Rate set forth above. 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 day (or if such last day is
not a Business Day, the Business Day immediately preceding such last day) of the
calendar month immediately preceding the month in which the Distribution Date
occurs, an amount equal to the product of the Percentage 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 following the latest scheduled maturity date of any Mortgage Loan and is
not likely to be the date on which the Certificate Principal Balance 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.
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 Certificate Principal Balance of this Certificate is set forth above.
The Certificate Principal Balance 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").
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.
-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 Depositor and the rights of the Certificateholders under the
Agreement from time to time by the parties thereto with the consent of the
Holders of Certificates evidencing Percentage Interests aggregating not less
than 66-2/3% (or in certain cases, Holders of Certificates of affected Classes
evidencing such percentage of the Percentage 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 Percentage 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 Percentage 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 Depositor, 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 Depositor, 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 Stated Principal Balance of the Mortgage Loans is less than the
percentage of the aggregate Stated Principal Balance specified in
-4-
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.
-5-
IN WITNESS WHEREOF, the Trustee has caused this Certificate to
be duly executed.
Dated: February 6, 2002 BANK ONE, NATIONAL ASSOCIATION,
not in its individual capacity but solely
as Trustee
By:
-------------------------------------
Authorized Signatory
CERTIFICATE OF AUTHENTICATION
-----------------------------
This is one of the Class II-A Certificates referred to in the
within-mentioned Agreement.
BANK ONE, NATIONAL ASSOCIATION Authorized
signatory of Bank One, National
Association, 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 Percentage
Interest evidenced by the within Asset-Backed 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 PO-1 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 CERTIFICATE PRINCIPAL BALANCE 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 CERTIFICATE
PRINCIPAL BALANCE OF THIS CERTIFICATE WILL BE DIFFERENT FROM THE DENOMINATION
SHOWN BELOW. ANYONE ACQUIRING THIS CERTIFICATE MAY ASCERTAIN ITS CERTIFICATE
PRINCIPAL BALANCE BY INQUIRY OF THE TRUSTEE NAMED HEREIN.
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY TO THE DEPOSITOR 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.
Certificate No.1
Class PO-1 Senior
Date of Pooling and Servicing Agreement and Aggregate Initial Certificate Principal Balance
Cut-off Date: of this Certificate as of the Cut-off Date:
January 1, 2002 $7,073,728.00
First Distribution Date: Initial Certificate Principal Balance of this
February 25, 2002 Certificate as of the Cut-off Date:
$7,073,728.00
Master Servicer:
Xxxxx Fargo Bank Minnesota, National
Association CUSIP: 07384Y BY 1
Assumed Final Distribution Date:
January 25, 2032
ASSET-BACKED CERTIFICATE
SERIES 2002-AC1
evidencing a fractional undivided interest in the distributions
allocable to the Class PO-1 Certificates with respect to a Trust Fund
consisting primarily of a pool of conventional one- to four-family
fixed interest rate mortgage loans sold by BEAR XXXXXXX ASSET BACKED
SECURITIES, INC.
This Certificate is payable solely from the assets of the
Trust Fund, and does not represent an obligation of or interest in Bear Xxxxxxx
Asset Backed Securities, Inc., the Master Servicer, the Trustee or the
Securities Administrator 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 Bear Xxxxxxx Asset Backed
Securities, Inc., the Master Servicer, the Trustee or the Securities
Administrator or any of their affiliates or any other person. None of Bear
Xxxxxxx Asset Backed Securities, 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
Percentage 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 conventional first lien, fixed rate mortgage loans
secured by one- to four- family residences, units in planned unit developments
and individual condominium units (collectively, the "Mortgage Loans") sold by
Bear Xxxxxxx Asset Backed Securities, Inc. ("BSABS"). The Mortgage Loans were
sold by EMC Mortgage Corporation
-2-
("EMC") to BSABS. Xxxxx Fargo Bank Minnesota, National Association 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 BSABS, as depositor
(the "Depositor"), EMC Mortgage Corporation as seller and company, Xxxxx Fargo
Bank Minnesota, National Association, as Master Servicer and securities
administrator (the "Securities Administrator") and Bank One, National
Association 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.
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 Day (or if such last day is not a Business
Day, the Business Day immediately preceding such last day) of the calendar month
preceding the month of such Distribution Date, an amount equal to the product of
the Percentage Interest evidenced by this Certificate and the amount of
principal 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 January 2032. The Assumed Final Distribution Date is the
Distribution Date in the month following the latest scheduled maturity date of
any Mortgage Loan and is not likely to be the date on which the Certificate
Principal Balance 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.
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 Certificate Principal Balance of this Certificate is set forth above.
The Certificate Principal Balance 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").
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.
-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 Depositor and the rights of the Certificateholders under the
Agreement from time to time by the parties thereto with the consent of the
Holders of Certificates evidencing Percentage Interests aggregating not less
than 66-2/3% (or in certain cases, Holders of Certificates of affected Classes
evidencing such percentage of the Percentage 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 Percentage 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 Percentage 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 Depositor, 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 Depositor, 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 Stated Principal Balance of the Mortgage Loans is less than the
percentage of the aggregate Stated Principal Balance specified in
-4-
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.
-5-
IN WITNESS WHEREOF, the Trustee has caused this Certificate to
be duly executed.
Dated: February 6, 2002 BANK ONE, NATIONAL ASSOCIATION,
not in its individual capacity but solely
as Trustee
By:
-------------------------------------
Authorized Signatory
CERTIFICATE OF AUTHENTICATION
-----------------------------
This is one of the Class PO-1 Certificates referred to in the
within-mentioned Agreement.
BANK ONE, NATIONAL ASSOCIATION Authorized
signatory of Bank One, National
Association, 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 Percentage
Interest evidenced by the within Asset-Backed 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 PO-2 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 CERTIFICATE PRINCIPAL BALANCE 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 CERTIFICATE
PRINCIPAL BALANCE OF THIS CERTIFICATE WILL BE DIFFERENT FROM THE DENOMINATION
SHOWN BELOW. ANYONE ACQUIRING THIS CERTIFICATE MAY ASCERTAIN ITS CERTIFICATE
PRINCIPAL BALANCE BY INQUIRY OF THE TRUSTEE NAMED HEREIN.
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY TO THE DEPOSITOR 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.
Certificate No.1
Class PO-2 Senior
Date of Pooling and Servicing Agreement and Aggregate Initial Certificate Principal Balance
Cut-off Date: of this Certificate as of the Cut-off Date:
January 1, 2002 $7,643,009.00
First Distribution Date: Initial Certificate Principal Balance of this
February 25, 2002 Certificate as of the Cut-off Date:
$7,643,009.00
Master Servicer:
Xxxxx Fargo Bank Minnesota, National
Association CUSIP: 07384Y BZ 8
Assumed Final Distribution Date:
January 25, 2032
ASSET-BACKED CERTIFICATE
SERIES 2002-AC1
evidencing a fractional undivided interest in the distributions
allocable to the Class PO-2 Certificates with respect to a Trust Fund
consisting primarily of a pool of conventional one- to four-family
fixed interest rate mortgage loans sold by BEAR XXXXXXX ASSET BACKED
SECURITIES, INC.
This Certificate is payable solely from the assets of the
Trust Fund, and does not represent an obligation of or interest in Bear Xxxxxxx
Asset Backed Securities, Inc., the Master Servicer, the Trustee or the
Securities Administrator 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 Bear Xxxxxxx Asset Backed
Securities, Inc., the Master Servicer, the Trustee or the Securities
Administrator or any of their affiliates or any other person. None of Bear
Xxxxxxx Asset Backed Securities, 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
Percentage 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 conventional first lien, fixed rate mortgage loans
secured by one- to four- family residences, units in planned unit developments
and individual condominium units (collectively, the "Mortgage Loans") sold by
Bear Xxxxxxx Asset Backed Securities, Inc. ("BSABS"). The Mortgage Loans were
sold by EMC Mortgage Corporation
-2-
("EMC") to BSABS. Xxxxx Fargo Bank Minnesota, National Association 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 BSABS, as depositor
(the "Depositor"), EMC Mortgage Corporation as seller and company, Xxxxx Fargo
Bank Minnesota, National Association, as Master Servicer and securities
administrator (the "Securities Administrator") and Bank One, National
Association 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.
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 Day (or if such last day is not a Business
Day, the Business Day immediately preceding such last day) of the calendar month
preceding the month of such Distribution Date, an amount equal to the product of
the Percentage Interest evidenced by this Certificate and the amount of
principal 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 January 2032. The Assumed Final Distribution Date is the
Distribution Date in the month following the latest scheduled maturity date of
any Mortgage Loan and is not likely to be the date on which the Certificate
Principal Balance 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.
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 Certificate Principal Balance of this Certificate is set forth above.
The Certificate Principal Balance 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").
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.
-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 Depositor and the rights of the Certificateholders under the
Agreement from time to time by the parties thereto with the consent of the
Holders of Certificates evidencing Percentage Interests aggregating not less
than 66-2/3% (or in certain cases, Holders of Certificates of affected Classes
evidencing such percentage of the Percentage 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 Percentage 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 Percentage 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 Depositor, 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 Depositor, 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 Stated Principal Balance of the Mortgage Loans is less than the
percentage of the aggregate Stated Principal Balance specified in
-4-
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.
-5-
IN WITNESS WHEREOF, the Trustee has caused this Certificate to
be duly executed.
Dated: February 6, 2002 BANK ONE, NATIONAL ASSOCIATION,
not in its individual capacity but solely
as Trustee
By:
-------------------------------------
Authorized Signatory
CERTIFICATE OF AUTHENTICATION
-----------------------------
This is one of the Class PO-2 Certificates referred to in the
within-mentioned Agreement.
BANK ONE, NATIONAL ASSOCIATION Authorized
signatory of Bank One, National
Association, 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 Percentage
Interest evidenced by the within Asset-Backed 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-5
FORM OF CLASS X-1 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 DEPOSITOR 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.
Certificate No.1 0.312% Initial Pass-Through Rate
Class X-1 Senior
Date of Pooling and Servicing Agreement and Aggregate Initial Certificate Notional Balance
Cut-off Date: of this Certificate as of the Cut-off Date:
January 1, 2002 $322,431,426
First Distribution Date: Initial Certificate Notional Balance of this
February 25, 2002 Certificate as of the Cut-off Date:
$322,431,426
Master Servicer:
Xxxxx Fargo Bank Minnesota, National
Association
Assumed Final Distribution Date:
January 25, 2032 CUSIP: 07384Y CA 2
ASSET-BACKED CERTIFICATE
SERIES 2002-AC1
evidencing a fractional undivided interest in the distributions
allocable to the Class X-1 Certificates with respect to a Trust Fund
consisting primarily of a pool of conventional one- to four-family
fixed interest rate mortgage loans sold by BEAR XXXXXXX ASSET BACKED
SECURITIES, INC.
This Certificate is payable solely from the assets of the
Trust Fund, and does not represent an obligation of or interest in Bear Xxxxxxx
Asset Backed Securities, Inc., the Master Servicer, the Trustee or the
Securities Administrator 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 Bear Xxxxxxx Asset Backed
Securities, Inc., the Master Servicer, the Trustee or the Securities
Administrator or any of their affiliates or any other person. None of Bear
Xxxxxxx Asset Backed Securities, 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
Percentage 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 conventional first lien, fixed rate mortgage loans
secured by one- to four- family residences, units in planned unit developments
and individual condominium units (collectively, the "Mortgage Loans") sold by
Bear Xxxxxxx Asset Backed Securities, Inc. ("BSABS"). The Mortgage Loans were
sold by EMC Mortgage Corporation
-2-
("EMC") to BSABS. Xxxxx Fargo Bank Minnesota, National Association 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 BSABS, as depositor
(the "Depositor"), EMC Mortgage Corporation as seller and company, Xxxxx Fargo
Bank Minnesota, National Association, as Master Servicer and securities
administrator (the "Securities Administrator") and Bank One, National
Association 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 Principal Balance hereof at a per annum rate equal to the
Pass-Through Rate set forth above. 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 day (or if such last day is
not a Business Day, the Business Day immediately preceding such last day) of the
calendar month preceding the month of such Distribution Date, an amount equal to
the product of the Percentage Interest evidenced by this Certificate and the
amount of interest 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 January 2032.
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.
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
Class X-1 Certificates have no Certificate Principal Balance. The Initial
Certificate Notional Balance of this Certificate is set forth above.
This Certificate is one of a duly authorized issue of
Certificates designated as set forth on the face hereof (the "Certificates").
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.
-3-
The Agreement permits, with certain exceptions therein
provided, the amendment thereof and the modification of the rights and
obligations of the Depositor and the rights of the Certificateholders under the
Agreement from time to time by the parties thereto with the consent of the
Holders of Certificates evidencing Percentage Interests aggregating not less
than 66-2/3% (or in certain cases, Holders of Certificates of affected Classes
evidencing such percentage of the Percentage 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 Percentage 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 Percentage 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 Depositor, 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 Depositor, 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 Stated Principal Balance of the Mortgage Loans is less than the
percentage of the aggregate Stated 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.
-4-
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.
-5-
IN WITNESS WHEREOF, the Trustee has caused this Certificate to
be duly executed.
Dated: February 6, 2002 BANK ONE, NATIONAL ASSOCIATION,
not in its individual capacity but solely
as Trustee
By:
-------------------------------------
Authorized Signatory
CERTIFICATE OF AUTHENTICATION
-----------------------------
This is one of the Class X-1 Certificates referred to in the
within-mentioned Agreement.
BANK ONE, NATIONAL ASSOCIATION Authorized
signatory of Bank One, National
Association, 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 Percentage
Interest evidenced by the within Asset-Backed 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-6
FORM OF CLASS X-2 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 DEPOSITOR 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.
Certificate No.1 0.192% Initial Pass-Through Rate
Class X-2 Senior
Date of Pooling and Servicing Agreement and Aggregate Initial Notional Amount of this
Cut-off Date: Certificate as of the Cut-off Date:
January 1, 2002 $234,375,033
First Distribution Date: Initial Notional Amount of this Certificate as
February 25, 2002 of the Cut-off Date:
$234,375,033
Master Servicer:
Xxxxx Fargo Bank Minnesota, National
Association
Assumed Final Distribution Date:
January 25, 2032 CUSIP: 07384Y CB 0
ASSET-BACKED CERTIFICATE
SERIES 2002-AC1
evidencing a fractional undivided interest in the distributions
allocable to the Class X-2 Certificates with respect to a Trust Fund
consisting primarily of a pool of conventional one- to four-family
fixed interest rate mortgage loans sold by Bear Xxxxxxx Asset Backed
Securities, Inc.
This Certificate is payable solely from the assets of the
Trust Fund, and does not represent an obligation of or interest in Bear Xxxxxxx
Asset Backed Securities, Inc., the Master Servicer, the Trustee or the
Securities Administrator 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 Bear Xxxxxxx Asset Backed
Securities, Inc., the Master Servicer, the Trustee or the Securities
Administrator or any of their affiliates or any other person. None of Bear
Xxxxxxx Asset Backed Securities, 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
Percentage 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 conventional first lien, fixed rate mortgages loans
secured by one- to four- family residences, units in planned unit developments
and individual condominium units (collectively, the "Mortgage Loans") sold by
Bear Xxxxxxx Asset Backed Securities, Inc. ("BSABS"). The Mortgage Loans were
sold by EMC Mortgage Corporation
-2-
("EMC") to BSABS. Xxxxx Fargo Bank Minnesota, National Association 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 BSABS, as depositor
(the "Depositor"), EMC Mortgage Corporation as seller and company, Xxxxx Fargo
Bank Minnesota, National Association, as Master Servicer and securities
administrator (the "Securities Administrator") and Bank One, National
Association 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 Principal Balance hereof at a per annum rate equal to the
Pass-Through Rate set forth above. 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 day (or if such last day is
not a Business Day, the Business Day immediately preceding such last day) of the
calendar month preceding the month of such Distribution Date, an amount equal to
the product of the Percentage Interest evidenced by this Certificate and the
amount of interest 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 January 2032.
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.
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
Class X-2 Certificates have no Certificate Principal Balance. The Initial
Certificate Notional Balance of this Certificate is set forth above
This Certificate is one of a duly authorized issue of
Certificates designated as set forth on the face hereof (the "Certificates").
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.
-3-
The Agreement permits, with certain exceptions therein
provided, the amendment thereof and the modification of the rights and
obligations of the Depositor and the rights of the Certificateholders under the
Agreement from time to time by the parties thereto with the consent of the
Holders of Certificates evidencing Percentage Interests aggregating not less
than 66-2/3% (or in certain cases, Holders of Certificates of affected Classes
evidencing such percentage of the Percentage 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 Percentage 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 Percentage 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 Depositor, 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 Depositor, 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 Stated Principal Balance of the Mortgage Loans is less than the
percentage of the aggregate Stated 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.
-4-
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.
-5-
IN WITNESS WHEREOF, the Trustee has caused this Certificate to
be duly executed.
Dated: February 6, 2002 BANK ONE, NATIONAL ASSOCIATION,
not in its individual capacity but solely
as Trustee
By:
-------------------------------------
Authorized Signatory
CERTIFICATE OF AUTHENTICATION
-----------------------------
This is one of the Class X-2 Certificates referred to in the
within-mentioned Agreement.
BANK ONE, NATIONAL ASSOCIATION Authorized
signatory of Bank One, National
Association, 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 Percentage
Interest evidenced by the within Asset-Backed 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-7
FORM OF CLASS X-3 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 DEPOSITOR 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.
Certificate No.1 1.00% Pass-Through Rate
Class X-3 Senior
Date of Pooling and Servicing Agreement and Aggregate Initial Notional Amount of this
Cut-off Date: Certificate as of the Cut-off Date:
January 1, 2002 $48,720,522
First Distribution Date: Initial Notional Amount of this Certificate as
February 25, 2002 of the Cut-off Date:
$48,720,522
Master Servicer:
Xxxxx Fargo Bank Minnesota, National
Association
Assumed Final Distribution Date:
January 25, 2032 CUSIP: 07384Y CC 8
ASSET-BACKED CERTIFICATE
SERIES 2002-AC1
evidencing a fractional undivided interest in the distributions
allocable to the Class X-3 Certificates with respect to a Trust Fund
consisting primarily of a pool of conventional one- to four-family
fixed interest rate mortgage loans sold by Bear Xxxxxxx Asset Backed
Securities, Inc.
This Certificate is payable solely from the assets of the
Trust Fund, and does not represent an obligation of or interest in Bear Xxxxxxx
Asset Backed Securities, Inc., the Master Servicer, the Trustee or the
Securities Administrator 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 Bear Xxxxxxx Asset Backed
Securities, Inc., the Master Servicer, the Trustee or the Securities
Administrator or any of their affiliates or any other person. None of Bear
Xxxxxxx Asset Backed Securities, 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
Percentage 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 conventional first lien, fixed rate mortgage loans
secured by one- to four- family residences, units in planned unit developments
and individual condominium units (collectively, the "Mortgage Loans") sold by
Bear Xxxxxxx Asset Backed Securities, Inc. ("BSABS"). The Mortgage Loans were
sold by EMC Mortgage Corporation
-2-
("EMC") to BSABS. Xxxxx Fargo Bank Minnesota, National Association 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 BSABS, as depositor
(the "Depositor"), EMC Mortgage Corporation as seller and company, Xxxxx Fargo
Bank Minnesota, National Association, as Master Servicer and securities
administrator (the "Securities Administrator") and Bank One, National
Association 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 Principal Balance hereof at a per annum rate equal to the
Pass-Through Rate set forth above. 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 Day (or if such last day is
not a Business Day, the Business Day immediately preceding such last day) of the
calendar month preceding the month of such Distribution Date, an amount equal to
the product of the Percentage Interest evidenced by this Certificate and the
amount of interest 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 January 2032.
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.
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
Class X-3 Certificates have no Certificate Principal Balance. The Initial
Certificate Notional Balance of this Certificate is set forth above
This Certificate is one of a duly authorized issue of
Certificates designated as set forth on the face hereof (the "Certificates").
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.
-3-
The Agreement permits, with certain exceptions therein
provided, the amendment thereof and the modification of the rights and
obligations of the Depositor and the rights of the Certificateholders under the
Agreement from time to time by the parties thereto with the consent of the
Holders of Certificates evidencing Percentage Interests aggregating not less
than 66-2/3% (or in certain cases, Holders of Certificates of affected Classes
evidencing such percentage of the Percentage 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 Percentage 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 Percentage 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 Depositor, 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 Depositor, 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 Stated Principal Balance of the Mortgage Loans is less than the
percentage of the aggregate Stated 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.
-4-
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.
-5-
IN WITNESS WHEREOF, the Trustee has caused this Certificate to
be duly executed.
Dated: February 6, 2002 BANK ONE, NATIONAL ASSOCIATION,
not in its individual capacity but solely
as Trustee
By:
-------------------------------------
Authorized Signatory
CERTIFICATE OF AUTHENTICATION
-----------------------------
This is one of the Class X-3 Certificates referred to in the
within-mentioned Agreement.
BANK ONE, NATIONAL ASSOCIATION Authorized
signatory of Bank One, National
Association, 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 Percentage
Interest evidenced by the within Asset-Backed 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-8
FORM OF CLASS B-1 CERTIFICATE
THIS CERTIFICATE IS SUBORDINATED IN RIGHT OF PAYMENT TO THE
SENIOR 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 CERTIFICATE PRINCIPAL BALANCE OF THIS CERTIFICATE WILL BE
DECREASED BY THE PRINCIPAL PAYMENTS HEREON AND REALIZED LOSSES AND CLASS PO
CERTIFICATE DEFERRED PAYMENT WRITEDOWN AMOUNTS ALLOCABLE HERETO AS DESCRIBED IN
THE AGREEMENT. ACCORDINGLY, FOLLOWING THE INITIAL ISSUANCE OF THE CERTIFICATES,
THE CERTIFICATE PRINCIPAL BALANCE OF THIS CERTIFICATE WILL BE DIFFERENT FROM THE
DENOMINATION SHOWN BELOW. ANYONE ACQUIRING THIS CERTIFICATE MAY ASCERTAIN ITS
CERTIFICATE PRINCIPAL BALANCE BY INQUIRY OF THE TRUSTEE NAMED HEREIN.
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY TO THE DEPOSITOR 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.
Certificate No.1 Pass-Through Rate: 7.00%
Class B-1 Subordinate
Date of Pooling and Servicing Agreement and Aggregate Initial Certificate Principal Balance
Cut-off Date: of this Certificate as of the Cut-off Date:
January 1, 2002 $19,488,000.00
First Distribution Date: Initial Certificate Principal Balance of this
February 25, 2002 Certificate as of the Cut-off Date:
$19,488,000.00
Master Servicer:
Xxxxx Fargo Bank Minnesota, National
Association CUSIP: 07384Y CD 6
Assumed Final Distribution Date:
January 25, 2032
ASSET-BACKED CERTIFICATE
SERIES 2002-AC1
evidencing a fractional undivided interest in the distributions
allocable to the Class B-1 Certificates with respect to a Trust Fund
consisting primarily of a pool of conventional one- to four-family
fixed interest rate mortgage loans sold by BEAR XXXXXXX ASSET BACKED
SECURITIES, INC.
This Certificate is payable solely from the assets of the
Trust Fund, and does not represent an obligation of or interest in Bear Xxxxxxx
Asset Backed Securities, Inc., the Master Servicer, the Trustee or the
Securities Administrator 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 Bear Xxxxxxx Asset Backed
Securities, Inc., the Master Servicer, the Trustee or the Securities
Administrator or any of their affiliates or any other person. None of Bear
Xxxxxxx Asset Backed Securities, 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
Percentage 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 conventional first lien, fixed rate mortgage loans
secured by one- to four- family residences, units in planned unit developments
and individual condominium units (collectively, the "Mortgage Loans") sold by
Bear Xxxxxxx Asset Backed Securities, Inc. ("BSABS"). The Mortgage Loans were
sold by EMC Mortgage Corporation
-9-
("EMC") to BSABS. Xxxxx Fargo Bank Minnesota, National Association 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 BSABS, as depositor
(the "Depositor"), EMC Mortgage Corporation as seller and company, Xxxxx Fargo
Bank Minnesota, National Association, as Master Servicer and securities
administrator (the "Securities Administrator") and Bank One, National
Association 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 Certificate Principal Balance hereof at a per annum rate equal to the
Pass-Through Rate set forth above. 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 day (or if such last day is
not a Business Day, the Business Day immediately preceding such last day) of the
calendar month immediately preceding the month in which the Distribution Date
occurs, an amount equal to the product of the Percentage 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 following the latest scheduled maturity date of any Mortgage Loan and is
not likely to be the date on which the Certificate Principal Balance 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.
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 Certificate Principal Balance of this Certificate is set forth above.
The Certificate Principal Balance hereof will be reduced to the extent of
distributions allocable to principal hereon and any Realized Losses and Class PO
Certificate Deferred Payment Writedown Amounts allocable hereto.
This Certificate is one of a duly authorized issue of
Certificates designated as set forth on the face hereof (the "Certificates").
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.
-10-
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 Depositor and the rights of the Certificateholders under the
Agreement from time to time by the parties thereto with the consent of the
Holders of Certificates evidencing Percentage Interests aggregating not less
than 66-2/3% (or in certain cases, Holders of Certificates of affected Classes
evidencing such percentage of the Percentage 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 Percentage 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 Percentage 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 Depositor, 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 Depositor, 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 Stated Principal Balance of the Mortgage Loans is less than the
percentage of the aggregate Stated Principal Balance specified in
-11-
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.
-12-
IN WITNESS WHEREOF, the Trustee has caused this Certificate to
be duly executed.
Dated: February 6, 2002 BANK ONE, NATIONAL ASSOCIATION,
not in its individual capacity but solely
as Trustee
By:
-------------------------------------
Authorized Signatory
CERTIFICATE OF AUTHENTICATION
-----------------------------
This is one of the Class B-1 Certificates referred to in the
within-mentioned Agreement.
BANK ONE, NATIONAL ASSOCIATION Authorized
signatory of Bank One, National
Association, 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 Percentage
Interest evidenced by the within Asset-Backed 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.
-1-
EXHIBIT A-9
FORM OF CLASS B-2 CERTIFICATE
THIS CERTIFICATE IS SUBORDINATED IN RIGHT OF PAYMENT TO THE
SENIOR CERTIFICATES AND THE CLASS B-1 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 CERTIFICATE PRINCIPAL BALANCE OF THIS CERTIFICATE WILL BE
DECREASED BY THE PRINCIPAL PAYMENTS HEREON AND REALIZED LOSSES AND CLASS PO
CERTIFICATE DEFERRED PAYMENT WRITEDOWN AMOUNTS ALLOCABLE HERETO AS DESCRIBED IN
THE AGREEMENT. ACCORDINGLY, FOLLOWING THE INITIAL ISSUANCE OF THE CERTIFICATES,
THE CERTIFICATE PRINCIPAL BALANCE OF THIS CERTIFICATE WILL BE DIFFERENT FROM THE
DENOMINATION SHOWN BELOW. ANYONE ACQUIRING THIS CERTIFICATE MAY ASCERTAIN ITS
CERTIFICATE PRINCIPAL BALANCE BY INQUIRY OF THE TRUSTEE NAMED HEREIN.
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY TO THE DEPOSITOR 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.
Certificate No.1 Pass-Through Rate: 7.00%
Class B-2 Subordinate
Date of Pooling and Servicing Agreement and Aggregate Initial Certificate Principal Balance
Cut-off Date: of this Certificate as of the Cut-off Date:
January 1, 2002 $9,744,100.00
First Distribution Date: Initial Certificate Principal Balance of this
February 25, 2002 Certificate as of the Cut-off Date:
$9,744,100.00
Master Servicer:
Xxxxx Fargo Bank Minnesota, National
Association CUSIP: 07384Y CE 4
Assumed Final Distribution Date:
January 25, 2032
ASSET-BACKED CERTIFICATE
SERIES 2002-AC1
evidencing a fractional undivided interest in the distributions
allocable to the Class B-2 Certificates with respect to a Trust Fund
consisting primarily of a pool of conventional one- to four-family
fixed interest rate mortgage loans sold by BEAR XXXXXXX ASSET BACKED
SECURITIES, INC.
This Certificate is payable solely from the assets of the
Trust Fund, and does not represent an obligation of or interest in Bear Xxxxxxx
Asset Backed Securities, Inc., the Master Servicer, the Trustee or the
Securities Administrator 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 Bear Xxxxxxx Asset Backed
Securities, Inc., the Master Servicer, the Trustee or the Securities
Administrator or any of their affiliates or any other person. None of Bear
Xxxxxxx Asset Backed Securities, 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
Percentage 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 conventional first lien, fixed rate mortgage loans
secured by one- to four- family residences, units in planned unit developments
and individual condominium units (collectively, the "Mortgage Loans") sold by
Bear Xxxxxxx Asset Backed Securities, Inc. ("BSABS"). The Mortgage Loans were
sold by EMC Mortgage Corporation
-2-
("EMC") to BSABS. Xxxxx Fargo Bank Minnesota, National Association 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 BSABS, as depositor
(the "Depositor"), EMC Mortgage Corporation as seller and company, Xxxxx Fargo
Bank Minnesota, National Association, as Master Servicer and securities
administrator (the "Securities Administrator") and Bank One, National
Association 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 Certificate Principal Balance hereof at a per annum rate equal to the
Pass-Through Rate set forth above. 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 day (or if such last day is
not a Business Day, the Business Day immediately preceding such last day) of the
calendar month immediately preceding the month in which the Distribution Date
occurs, an amount equal to the product of the Percentage 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 following the latest scheduled maturity date of any Mortgage Loan and is
not likely to be the date on which the Certificate Principal Balance 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.
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 Certificate Principal Balance of this Certificate is set forth above.
The Certificate Principal Balance hereof will be reduced to the extent of
distributions allocable to principal hereon and any Realized Losses and Class PO
Certificate Deferred Payment Writedown Amounts allocable hereto.
This Certificate is one of a duly authorized issue of
Certificates designated as set forth on the face hereof (the "Certificates").
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.
-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 Depositor and the rights of the Certificateholders under the
Agreement from time to time by the parties thereto with the consent of the
Holders of Certificates evidencing Percentage Interests aggregating not less
than 66-2/3% (or in certain cases, Holders of Certificates of affected Classes
evidencing such percentage of the Percentage 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 Percentage 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 Percentage 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 Depositor, 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 Depositor, 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 Stated Principal Balance of the Mortgage Loans is less than the
percentage of the aggregate Stated Principal Balance specified in
-4-
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.
-5-
IN WITNESS WHEREOF, the Trustee has caused this Certificate to
be duly executed.
Dated: February 6, 2002 BANK ONE, NATIONAL ASSOCIATION,
not in its individual capacity but solely
as Trustee
By:
-------------------------------------
Authorized Signatory
CERTIFICATE OF AUTHENTICATION
-----------------------------
This is one of the Class B-2 Certificates referred to in the
within-mentioned Agreement.
BANK ONE, NATIONAL ASSOCIATION Authorized
signatory of Bank One, National
Association, 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 Percentage
Interest evidenced by the within Asset-Backed 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-10
FORM OF CLASS B-3 CERTIFICATE
THIS CERTIFICATE IS SUBORDINATED IN RIGHT OF PAYMENT TO THE
SENIOR CERTIFICATES, THE CLASS B-1 CERTIFICATES AND THE CLASS B-2 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 CERTIFICATE PRINCIPAL BALANCE OF THIS CERTIFICATE WILL BE
DECREASED BY THE PRINCIPAL PAYMENTS HEREON AND REALIZED LOSSES AND THE CLASS PO
CERTIFICATE DEFERRED PAYMENT WRITEDOWN AMOUNTS ALLOCABLE HERETO AS DESCRIBED IN
THE AGREEMENT. ACCORDINGLY, FOLLOWING THE INITIAL ISSUANCE OF THE CERTIFICATES,
THE CERTIFICATE PRINCIPAL BALANCE OF THIS CERTIFICATE WILL BE DIFFERENT FROM THE
DENOMINATION SHOWN BELOW. ANYONE ACQUIRING THIS CERTIFICATE MAY ASCERTAIN ITS
CERTIFICATE PRINCIPAL BALANCE BY INQUIRY OF THE TRUSTEE NAMED HEREIN.
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY TO THE ISSUER 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.
Certificate No.1 Pass-Through Rate: 7.00%
Class B-3 Subordinate
Date of Pooling and Servicing Agreement and Aggregate Initial Certificate Principal Balance
Cut-off Date: of this Certificate as of the Cut-off Date:
January 1, 2002 $8,352,100.00
First Distribution Date: Initial Certificate Principal Balance of this
February 25, 2002 Certificate as of the Cut-off Date:
$8,352,100.00
Master Servicer:
Xxxxx Fargo Bank Minnesota, National
Association CUSIP: 07384Y CF 1
Assumed Final Distribution Date:
January 25, 2032
ASSET-BACKED CERTIFICATE
SERIES 2002-AC1
evidencing a fractional undivided interest in the distributions
allocable to the Class B-3 Certificates with respect to a Trust Fund
consisting primarily of a pool of conventional one- to four-family
fixed interest rate mortgage loans sold by BEAR XXXXXXX ASSET BACKED
SECURITIES, INC.
This Certificate is payable solely from the assets of the
Trust Fund, and does not represent an obligation of or interest in Bear Xxxxxxx
Asset Backed Securities, Inc., the Master Servicer, the Trustee or the
Securities Administrator 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 Bear Xxxxxxx Asset Backed
Securities, Inc., the Master Servicer, the Trustee or the Securities
Administrator or any of their affiliates or any other person. None of Bear
Xxxxxxx Asset Backed Securities, 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
Percentage 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 conventional first lien, fixed rate mortgage loans
secured by one- to four- family residences, units in planned unit developments
and individual condominium units (collectively, the "Mortgage Loans") sold by
Bear Xxxxxxx Asset Backed Securities, Inc. ("BSABS"). The Mortgage Loans were
sold by EMC Mortgage Corporation
-2-
("EMC") to BSABS. Xxxxx Fargo Bank Minnesota, National Association 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 BSABS, as depositor
(the "Depositor"), EMC Mortgage Corporation as seller and company, Xxxxx Fargo
Bank Minnesota, National Association, as Master Servicer and securities
administrator (the "Securities Administrator") and Bank One, National
Association 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 Certificate Principal Balance hereof at a per annum rate equal to the
Pass-Through Rate set forth above. 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 day (or if such last day is
not a Business Day, the Business Day immediately preceding such last day) of the
calendar month immediately preceding the month in which the Distribution Date
occurs, an amount equal to the product of the Percentage 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 following the latest scheduled maturity date of any Mortgage Loan and is
not likely to be the date on which the Certificate Principal Balance 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.
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 Certificate Principal Balance of this Certificate is set forth above.
The Certificate Principal Balance hereof will be reduced to the extent of
distributions allocable to principal hereon and any Realized Losses and Class PO
Certificate Deferred Payment Writedown Amounts allocable hereto.
This Certificate is one of a duly authorized issue of
Certificates designated as set forth on the face hereof (the "Certificates").
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.
-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 Depositor and the rights of the Certificateholders under the
Agreement from time to time by the parties thereto with the consent of the
Holders of Certificates evidencing Percentage Interests aggregating not less
than 66-2/3% (or in certain cases, Holders of Certificates of affected Classes
evidencing such percentage of the Percentage 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 Percentage 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 Percentage 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 Depositor, 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 Depositor, 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 Stated Principal Balance of the Mortgage Loans is less than the
percentage of the aggregate Stated Principal Balance specified in
-4-
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.
-5-
IN WITNESS WHEREOF, the Trustee has caused this Certificate to
be duly executed.
Dated: February 6, 2002 BANK ONE, NATIONAL ASSOCIATION,
not in its individual capacity but solely
as Trustee
By:
-------------------------------------
Authorized Signatory
CERTIFICATE OF AUTHENTICATION
-----------------------------
This is one of the Class B-3 Certificates referred to in the
within-mentioned Agreement.
BANK ONE, NATIONAL ASSOCIATION Authorized
signatory of Bank One, National
Association, 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 Percentage
Interest evidenced by the within Asset-Backed 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-11
FORM OF CLASS B-4 CERTIFICATE
THIS CERTIFICATE IS SUBORDINATED IN RIGHT OF PAYMENT TO THE
SENIOR CERTIFICATES, THE CLASS B-1 CERTIFICATES, THE CLASS B-2 CERTIFICATES AND
THE CLASS B-3 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 CERTIFICATE PRINCIPAL BALANCE OF THIS CERTIFICATE WILL BE
DECREASED BY THE PRINCIPAL PAYMENTS HEREON AND REALIZED LOSSES AND CLASS PO
CERTIFICATE DEFERRED PAYMENT AMOUNTS ALLOCABLE HERETO AS DESCRIBED IN THE
AGREEMENT. ACCORDINGLY, FOLLOWING THE INITIAL ISSUANCE OF THE CERTIFICATES, THE
CERTIFICATE PRINCIPAL BALANCE OF THIS CERTIFICATE WILL BE DIFFERENT FROM THE
DENOMINATION SHOWN BELOW. ANYONE ACQUIRING THIS CERTIFICATE MAY ASCERTAIN ITS
CERTIFICATE PRINCIPAL BALANCE BY INQUIRY OF THE TRUSTEE NAMED 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.
NO TRANSFER OF THIS CERTIFICATE MAY BE MADE TO ANY PERSON,
UNLESS THE TRANSFEREE PROVIDES EITHER A CERTIFICATION PURSUANT TO SECTION
7.02(B) OF THE AGREEMENT OR AN OPINION OF COUNSEL SATISFACTORY TO THE MASTER
SERVICER, THE TRUSTEE AND THE SECURITIES ADMINISTRATOR THAT THE PURCHASE OF THIS
CERTIFICATE WILL NOT CONSTITUTE OR RESULT IN A NON-EXEMPT PROHIBITED TRANSACTION
UNDER SECTION 406 OF THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS
AMENDED ("ERISA"), OR SECTION 4975 OF THE CODE AND WILL NOT SUBJECT THE MASTER
SERVICER, THE TRUSTEE OR THE SECURITIES ADMINISTRATOR TO ANY OBLIGATION OR
LIABILITY IN ADDITION TO THOSE UNDERTAKEN IN THE AGREEMENT.
Certificate No.1 Pass-Through Rate: 7.00%
Class B-4 Subordinate
Date of Pooling and Servicing Agreement and Aggregate Initial Certificate Principal Balance
Cut-off Date: of this Certificate as of the Cut-off Date:
January 1, 2002 $3,897,600.00
First Distribution Date: Initial Certificate Principal Balance of this
February 25, 2002 Certificate as of the Cut-off Date:
$3,897,600.00
Master Servicer:
Xxxxx Fargo Bank Minnesota, National
Association CUSIP: 07384Y CJ 3
Assumed Final Distribution Date:
January 25, 2032
ASSET-BACKED CERTIFICATE
SERIES 2002-AC1
evidencing a fractional undivided interest in the distributions
allocable to the Class B-4 Certificates with respect to a Trust Fund
consisting primarily of a pool of conventional one- to four-family
fixed interest rate mortgage loans sold by BEAR XXXXXXX ASSET BACKED
SECURITIES, INC.
This Certificate is payable solely from the assets of the
Trust Fund, and does not represent an obligation of or interest in Bear Xxxxxxx
Asset Backed Securities, Inc., the Master Servicer, the Trustee or the
Securities Administrator 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 Bear Xxxxxxx Asset Backed
Securities, Inc., the Master Servicer, the Trustee or the Securities
Administrator or any of their affiliates or any other person. None of Bear
Xxxxxxx Asset Backed Securities, 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 Corporation is
the registered owner of the Percentage 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 conventional
first lien, fixed rate mortgage loans secured by one- to four- family
residences, units in planned unit developments and individual condominium units
(collectively, the "Mortgage Loans") sold by Bear Xxxxxxx Asset Backed
Securities, Inc. ("BSABS"). The Mortgage Loans were sold by EMC Mortgage
-3-
Corporation ("EMC") to BSABS. Xxxxx Fargo Bank Minnesota, National Association
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 BSABS, as depositor
(the "Depositor"), EMC Mortgage Corporation as seller and company, Xxxxx Fargo
Bank Minnesota, National Association, as Master Servicer and securities
administrator (the "Securities Administrator") and Bank One, National
Association 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 Certificate Principal Balance hereof at a per annum rate equal to the
Pass-Through Rate set forth above. 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 day (or if such last day is
not a Business Day, the Business Day immediately preceding such last day) of the
calendar month immediately preceding the month in which the Distribution Date
occurs, an amount equal to the product of the Percentage 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 following the latest scheduled maturity date of any Mortgage Loan and is
not likely to be the date on which the Certificate Principal Balance 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.
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 Certificate Principal Balance of this Certificate is set forth above.
The Certificate Principal Balance hereof will be reduced to the extent of
distributions allocable to principal hereon and any Realized Losses and Class PO
Certificate Deferred Payment Writedown Amounts allocable hereto.
No transfer of this Certificate shall be made unless the
transfer is made pursuant to an effective registration statement under the
Securities Act of 1933, as amended (the "1933 Act"), and an effective
registration or qualification under applicable state securities laws, or is made
in a transaction that does not require such registration or qualification. In
the event that such a transfer of this Certificate is to be made without
registration or qualification, the Trustee shall require receipt of (i) if such
transfer is purportedly being made in reliance upon Rule 144A under the 1933
Act, written certifications from the Holder of the Certificate desiring to
effect the transfer, and from such Holder's prospective transferee,
substantially in the forms attached to the Agreement as Exhibits E,
-4-
and F or G, as applicable, and (ii) in all other cases, an Opinion of Counsel
satisfactory to it that such transfer may be made without such registration or
qualification (which Opinion of Counsel shall not be an expense of the Trust
Fund or of the Depositor, the Trustee, the Securities Administrator or the
Master Servicer in their respective capacities as such), together with copies of
the written certification(s) of the Holder of the Certificate desiring to effect
the transfer and/or such Holder's prospective transferee upon which such Opinion
of Counsel is based. Neither the Depositor nor the Trustee is obligated to
register or qualify the Class of Certificates specified on the face hereof under
the 1933 Act or any other securities law or to take any action not otherwise
required under the Agreement to permit the transfer of such Certificates without
registration or qualification. Any Holder desiring to effect a transfer of this
Certificate shall be required to indemnify the Trustee, the Securities
Administrator, the Depositor, the Seller and the Master Servicer against any
liability that may result if the transfer is not so exempt or is not made in
accordance with such federal and state laws.
No transfer of this Class B-4 Certificate will be made unless
the Trustee and the Securities Administrator have received either (i) an opinion
of counsel acceptable to and in form and substance satisfactory to the Trustee,
the Securities Administrator and the Master Servicer with respect to the
permissibility of such transfer under the Employee Retirement Income Security
Act of 1974, as amended ("ERISA"), and Section 4975 of the Internal Revenue Code
(the "Code") and stating, among other things, that the transferee's acquisition
of a Class B-4 Certificate will not constitute or result in a non-exempt
prohibited transaction under Section 406 of ERISA or Section 4975 of the Code or
(ii) a representation letter, in the form as described by the Agreement, stating
that the transferee is not an employee benefit or other plan subject to the
prohibited transaction provisions of ERISA or Section 4975 of the Code (a
"Plan"), or any other person (including an investment manager, a named fiduciary
or a trustee of any Plan) acting, directly or indirectly, on behalf of or
purchasing any Certificate with "plan assets" of any Plan.
This Certificate is one of a duly authorized issue of
Certificates designated as set forth on the face hereof (the "Certificates").
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 Depositor and the rights of the Certificateholders under the
Agreement from time to time by the parties thereto with the consent of the
Holders of Certificates evidencing Percentage Interests aggregating not less
than 66-2/3% (or in certain cases, Holders of Certificates of affected Classes
evidencing such percentage of the Percentage Interests thereof). Any such
consent by the Holder of this Certificate shall be conclusive
-5-
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 Percentage 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 Percentage 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 Depositor, 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 Depositor, 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 Stated Principal Balance of the Mortgage Loans is less than the
percentage of the aggregate Stated 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: February 6, 2002 BANK ONE, NATIONAL ASSOCIATION,
not in its individual capacity but solely
as Trustee
By:
-------------------------------------
Authorized Signatory
CERTIFICATE OF AUTHENTICATION
-----------------------------
This is one of the Class B-4 Certificates referred to in the
within-mentioned Agreement.
BANK ONE, NATIONAL ASSOCIATION Authorized
signatory of Bank One, National
Association, 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 Percentage
Interest evidenced by the within Asset-Backed 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-12
FORM OF CLASS B-5 CERTIFICATE
THIS CERTIFICATE IS SUBORDINATED IN RIGHT OF PAYMENT TO THE
SENIOR CERTIFICATES, THE CLASS B-1 CERTIFICATES, THE CLASS B-2 CERTIFICATES, THE
CLASS B-3 CERTIFICATES AND THE CLASS B-4 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 CERTIFICATE PRINCIPAL BALANCE OF THIS CERTIFICATE WILL BE
DECREASED BY THE PRINCIPAL PAYMENTS HEREON AND REALIZED LOSSES AND CLASS PO
CERTIFICATE DEFERRED PAYMENT WRITEDOWN AMOUNTS ALLOCABLE HERETO AS DESCRIBED IN
THE AGREEMENT. ACCORDINGLY, FOLLOWING THE INITIAL ISSUANCE OF THE CERTIFICATES,
THE CERTIFICATE PRINCIPAL BALANCE OF THIS CERTIFICATE WILL BE DIFFERENT FROM THE
DENOMINATION SHOWN BELOW. ANYONE ACQUIRING THIS CERTIFICATE MAY ASCERTAIN ITS
CERTIFICATE PRINCIPAL BALANCE BY INQUIRY OF THE TRUSTEE NAMED 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.
NO TRANSFER OF THIS CERTIFICATE MAY BE MADE TO ANY PERSON,
UNLESS THE TRANSFEREE PROVIDES EITHER A CERTIFICATION PURSUANT TO SECTION
7.02(B) OF THE AGREEMENT OR AN OPINION OF COUNSEL SATISFACTORY TO THE MASTER
SERVICER, THE TRUSTEE AND THE SECURITIES ADMINISTRATOR THAT THE PURCHASE OF THIS
CERTIFICATE WILL NOT CONSTITUTE OR RESULT IN A NON-EXEMPT PROHIBITED TRANSACTION
UNDER SECTION 406 OF THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS
AMENDED ("ERISA"), OR SECTION 4975 OF THE CODE AND WILL NOT SUBJECT THE MASTER
SERVICER, THE TRUSTEE OR THE SECURITIES ADMINISTRATOR TO ANY OBLIGATION OR
LIABILITY IN ADDITION TO THOSE UNDERTAKEN IN THE AGREEMENT.
Certificate No.1 Pass-Through Rate: 7.00%
Class B-5 Subordinate
Date of Pooling and Servicing Agreement and Aggregate Initial Certificate Principal Balance
Cut-off Date: of this Certificate as of the Cut-off Date:
January 1, 2002 $2,227,200.00
First Distribution Date: Initial Certificate Principal Balance of this
February 25, 2002 Certificate as of the Cut-off Date:
$2,227,200.00
Master Servicer:
Xxxxx Fargo Bank Minnesota, National
Association CUSIP: 07384Y CL 8
Assumed Final Distribution Date:
January 25, 2032
ASSET-BACKED CERTIFICATE
SERIES 2002-AC1
evidencing a fractional undivided interest in the distributions
allocable to the Class B-5 Certificates with respect to a Trust Fund
consisting primarily of a pool of conventional one- to four-family
fixed interest rate mortgage loans sold by BEAR XXXXXXX ASSET BACKED
SECURITIES, INC.
This Certificate is payable solely from the assets of the
Trust Fund, and does not represent an obligation of or interest in Bear Xxxxxxx
Asset Backed Securities, Inc., the Master Servicer, the Trustee or the
Securities Administrator 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 Bear Xxxxxxx Asset Backed
Securities, Inc., the Master Servicer, the Trustee or the Securities
Administrator or any of their affiliates or any other person. None of Bear
Xxxxxxx Asset Backed Securities, 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 Corporation is
the registered owner of the Percentage 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 conventional
first lien, fixed rate mortgage loans secured by one- to four- family
residences, units in planned unit developments and individual condominium units
(collectively, the "Mortgage Loans") sold by Bear Xxxxxxx Asset Backed
Securities, Inc. ("BSABS"). The Mortgage Loans were sold by EMC Mortgage
-3-
Corporation ("EMC") to BSABS. Xxxxx Fargo Bank Minnesota, National Association
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 BSABS, as depositor
(the "Depositor"), EMC Mortgage Corporation as seller and company, Xxxxx Fargo
Bank Minnesota, National Association, as Master Servicer and securities
administrator (the "Securities Administrator") and Bank One, National
Association 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 Certificate Principal Balance hereof at a per annum rate equal to the
Pass-Through Rate set forth above. 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 Day (or if such last day is
not a Business Day, the Business Day immediately preceding such last day) of the
calendar month immediately preceding the month in which the Distribution Date
occurs, an amount equal to the product of the Percentage 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 following the latest scheduled maturity date of any Mortgage Loan and is
not likely to be the date on which the Certificate Principal Balance 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.
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 Certificate Principal Balance of this Certificate is set forth above.
The Certificate Principal Balance hereof will be reduced to the extent of
distributions allocable to principal hereon and any Realized Losses and Class PO
Certificate Deferred Payment Amounts allocable hereto.
No transfer of this Certificate shall be made unless the
transfer is made pursuant to an effective registration statement under the
Securities Act of 1933, as amended (the "1933 Act"), and an effective
registration or qualification under applicable state securities laws, or is made
in a transaction that does not require such registration or qualification. In
the event that such a transfer of this Certificate is to be made without
registration or qualification, the Trustee shall require receipt of (i) if such
transfer is purportedly being made in reliance upon Rule 144A under the 1933
Act, written certifications from the Holder of the Certificate desiring to
effect the transfer, and from such
-4-
Holder's prospective transferee, substantially in the forms attached to the
Agreement as Exhibits E, and F or G, as applicable, and (ii) in all other cases,
an Opinion of Counsel satisfactory to it that such transfer may be made without
such registration or qualification (which Opinion of Counsel shall not be an
expense of the Trust Fund or of the Depositor, the Trustee, the Securities
Administrator or the Master Servicer in their respective capacities as such),
together with copies of the written certification(s) of the Holder of the
Certificate desiring to effect the transfer and/or such Holder's prospective
transferee upon which such Opinion of Counsel is based. Neither the Depositor
nor the Trustee is obligated to register or qualify the Class of Certificates
specified on the face hereof under the 1933 Act or any other securities law or
to take any action not otherwise required under the Agreement to permit the
transfer of such Certificates without registration or qualification. Any Holder
desiring to effect a transfer of this Certificate shall be required to indemnify
the Trustee, the Securities Administrator, the Depositor, the Seller and the
Master Servicer against any liability that may result if the transfer is not so
exempt or is not made in accordance with such federal and state laws.
No transfer of this Class B-5 Certificate will be made unless
the Trustee and the Securities Administrator have received either (i) an opinion
of counsel acceptable to and in form and substance satisfactory to the Trustee,
the Securities Administrator and the Master Servicer with respect to the
permissibility of such transfer under the Employee Retirement Income Security
Act of 1974, as amended ("ERISA"), and Section 4975 of the Internal Revenue Code
(the "Code") and stating, among other things, that the transferee's acquisition
of a Class B-5 Certificate will not constitute or result in a non-exempt
prohibited transaction under Section 406 of ERISA or Section 4975 of the Code or
(ii) a representation letter, in the form as described by the Agreement, stating
that the transferee is not an employee benefit or other plan subject to the
prohibited transaction provisions of ERISA or Section 4975 of the Code (a
"Plan"), or any other person (including an investment manager, a named fiduciary
or a trustee of any Plan) acting, directly or indirectly, on behalf of or
purchasing any Certificate with "plan assets" of any Plan.
This Certificate is one of a duly authorized issue of
Certificates designated as set forth on the face hereof (the "Certificates").
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 Depositor and the rights of the Certificateholders under the
Agreement from time to time by the parties thereto with the consent of the
Holders of Certificates evidencing Percentage Interests aggregating not less
than 66-2/3% (or in certain cases, Holders of Certificates of affected Classes
evidencing such percentage of the
-5-
Percentage 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 Percentage 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 Percentage 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 Depositor, 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 Depositor, 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 Stated Principal Balance of the Mortgage Loans is less than the
percentage of the aggregate Stated 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: February 6, 2002 BANK ONE, NATIONAL ASSOCIATION,
not in its individual capacity but solely
as Trustee
By:
-------------------------------------
Authorized Signatory
CERTIFICATE OF AUTHENTICATION
-----------------------------
This is one of the Class B-5 Certificates referred to in the
within-mentioned Agreement.
BANK ONE, NATIONAL ASSOCIATION Authorized
signatory of Bank One, National
Association, 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 Percentage
Interest evidenced by the within Asset-Backed 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-13
FORM OF CLASS B-6 CERTIFICATE
THIS CERTIFICATE IS SUBORDINATED IN RIGHT OF PAYMENT TO THE
SENIOR CERTIFICATES, THE CLASS B-1 CERTIFICATES, THE CLASS B-2 CERTIFICATES, THE
CLASS B-3 CERTIFICATES, THE CLASS B-4 CERTIFICATES AND THE CLASS B-5
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 CERTIFICATE PRINCIPAL BALANCE OF THIS CERTIFICATE WILL BE
DECREASED BY THE PRINCIPAL PAYMENTS HEREON AND REALIZED LOSSES AND CLASS PO
CERTIFICATE DEFERRED PAYMENT WRITEDOWN AMOUNTS ALLOCABLE HERETO AS DESCRIBED IN
THE AGREEMENT. ACCORDINGLY, FOLLOWING THE INITIAL ISSUANCE OF THE CERTIFICATES,
THE CERTIFICATE PRINCIPAL BALANCE OF THIS CERTIFICATE WILL BE DIFFERENT FROM THE
DENOMINATION SHOWN BELOW. ANYONE ACQUIRING THIS CERTIFICATE MAY ASCERTAIN ITS
CERTIFICATE PRINCIPAL BALANCE BY INQUIRY OF THE TRUSTEE NAMED 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.
NO TRANSFER OF THIS CERTIFICATE MAY BE MADE TO ANY PERSON,
UNLESS THE TRANSFEREE PROVIDES EITHER A CERTIFICATION PURSUANT TO SECTION
7.02(B) OF THE AGREEMENT OR AN OPINION OF COUNSEL SATISFACTORY TO THE MASTER
SERVICER, THE TRUSTEE AND THE SECURITIES ADMINISTRATOR THAT THE PURCHASE OF THIS
CERTIFICATE WILL NOT CONSTITUTE OR RESULT IN A NON-EXEMPT PROHIBITED TRANSACTION
UNDER SECTION 406 OF THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS
AMENDED ("ERISA"), OR SECTION 4975 OF THE CODE AND WILL NOT SUBJECT THE MASTER
SERVICER, THE TRUSTEE OR THE SECURITIES ADMINISTRATOR TO ANY OBLIGATION OR
LIABILITY IN ADDITION TO THOSE UNDERTAKEN IN THE AGREEMENT.
Certificate No.1 Pass-Through Rate: 7.00%
Class B-6 Subordinate
Date of Pooling and Servicing Agreement and Aggregate Initial Certificate Principal Balance
Cut-off Date: of this Certificate as of the Cut-off Date:
January 1, 2002 $5,011,522.27
First Distribution Date: Initial Certificate Principal Balance of this
February 25, 2002 Certificate as of the Cut-off Date:
$5,011,522.27
Master Servicer:
Xxxxx Fargo Bank Minnesota, National
Association CUSIP: 07384Y CN 4
Assumed Final Distribution Date:
January 25, 2032
ASSET-BACKED CERTIFICATE
SERIES 2002-AC1
evidencing a fractional undivided interest in the distributions
allocable to the Class B-6 Certificates with respect to a Trust Fund
consisting primarily of a pool of conventional one- to four-family
fixed interest rate mortgage loans sold by BEAR XXXXXXX ASSET BACKED
SECURITIES, INC.
This Certificate is payable solely from the assets of the
Trust Fund, and does not represent an obligation of or interest in Bear Xxxxxxx
Asset Backed Securities, Inc., the Master Servicer, the Trustee or the
Securities Administrator 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 Bear Xxxxxxx Asset Backed
Securities, Inc., the Master Servicer, the Trustee or the Securities
Administrator or any of their affiliates or any other person. None of Bear
Xxxxxxx Asset Backed Securities, 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 Corporation is
the registered owner of the Percentage 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 conventional
first lien, fixed rate mortgage loans secured by one- to four- family
residences, units in planned unit developments and individual condominium units
(collectively, the "Mortgage Loans") sold by Bear Xxxxxxx Asset Backed
Securities, Inc. ("BSABS"). The Mortgage Loans were sold by EMC Mortgage
-3-
Corporation ("EMC") to BSABS. Xxxxx Fargo Bank Minnesota, National Association
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 BSABS, as depositor
(the "Depositor"), EMC Mortgage Corporation as seller and company, Xxxxx Fargo
Bank Minnesota, National Association, as Master Servicer and securities
administrator (the "Securities Administrator") and Bank One, National
Association 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 Certificate Principal Balance hereof at a per annum rate equal to the
Pass-Through Rate set forth above. 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 day (or if such last day is
not a Business Day, the Business Day immediately preceding such last day) of the
calendar month immediately preceding the month in which the Distribution Date
occurs, an amount equal to the product of the Percentage 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 following the latest scheduled maturity date of any Mortgage Loan and is
not likely to be the date on which the Certificate Principal Balance 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.
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 Certificate Principal Balance of this Certificate is set forth above.
The Certificate Principal Balance hereof will be reduced to the extent of
distributions allocable to principal hereon and any Realized Losses and Class PO
Certificate Deferred Payment Writedown Amounts allocable hereto.
No transfer of this Certificate shall be made unless the
transfer is made pursuant to an effective registration statement under the
Securities Act of 1933, as amended (the "1933 Act"), and an effective
registration or qualification under applicable state securities laws, or is made
in a transaction that does not require such registration or qualification. In
the event that such a transfer of this Certificate is to be made without
registration or qualification, the Trustee shall require receipt of (i) if such
transfer is purportedly being made in reliance upon Rule 144A under the 1933
Act, written certifications from the Holder of the Certificate desiring to
effect the transfer, and from such Holder's prospective transferee,
substantially in the forms attached to the Agreement as Exhibits E,
-4-
and F or G, as applicable, and (ii) in all other cases, an Opinion of Counsel
satisfactory to it that such transfer may be made without such registration or
qualification (which Opinion of Counsel shall not be an expense of the Trust
Fund or of the Depositor, the Trustee, the Securities Administrator or the
Master Servicer in their respective capacities as such), together with copies of
the written certification(s) of the Holder of the Certificate desiring to effect
the transfer and/or such Holder's prospective transferee upon which such Opinion
of Counsel is based. Neither the Depositor nor the Trustee is obligated to
register or qualify the Class of Certificates specified on the face hereof under
the 1933 Act or any other securities law or to take any action not otherwise
required under the Agreement to permit the transfer of such Certificates without
registration or qualification. Any Holder desiring to effect a transfer of this
Certificate shall be required to indemnify the Trustee, the Securities
Administrator, the Depositor, the Seller and the Master Servicer against any
liability that may result if the transfer is not so exempt or is not made in
accordance with such federal and state laws.
No transfer of this Class B-6 Certificate will be made unless
the Trustee and the Securities Administrator have received either (i) an opinion
of counsel acceptable to and in form and substance satisfactory to the Trustee,
the Securities Administrator and the Master Servicer with respect to the
permissibility of such transfer under the Employee Retirement Income Security
Act of 1974, as amended ("ERISA"), and Section 4975 of the Internal Revenue Code
(the "Code") and stating, among other things, that the transferee's acquisition
of a Class B-6 Certificate will not constitute or result in a non-exempt
prohibited transaction under Section 406 of ERISA or Section 4975 of the Code or
(ii) a representation letter, in the form as described by the Agreement, stating
that the transferee is not an employee benefit or other plan subject to the
prohibited transaction provisions of ERISA or Section 4975 of the Code (a
"Plan"), or any other person (including an investment manager, a named fiduciary
or a trustee of any Plan) acting, directly or indirectly, on behalf of or
purchasing any Certificate with "plan assets" of any Plan.
This Certificate is one of a duly authorized issue of
Certificates designated as set forth on the face hereof (the "Certificates").
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 Depositor and the rights of the Certificateholders under the
Agreement from time to time by the parties thereto with the consent of the
Holders of Certificates evidencing Percentage Interests aggregating not less
than 66-2/3% (or in certain cases, Holders of Certificates of affected Classes
evidencing such percentage of the Percentage Interests thereof). Any such
consent by the Holder of this Certificate shall be conclusive
-5-
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 Percentage 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 Percentage 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 Depositor, 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 Depositor, 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 Stated Principal Balance of the Mortgage Loans is less than the
percentage of the aggregate Stated 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: February 6, 2002 BANK ONE, NATIONAL ASSOCIATION,
not in its individual capacity but solely
as Trustee
By:
-------------------------------------
Authorized Signatory
CERTIFICATE OF AUTHENTICATION
-----------------------------
This is one of the Class B-6 Certificates referred to in the
within-mentioned Agreement.
BANK ONE, NATIONAL ASSOCIATION Authorized
signatory of Bank One, National
Association, 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 Percentage
Interest evidenced by the within Asset-Backed 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-14
FORM OF CLASS XP 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").
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.
NO TRANSFER OF THIS CERTIFICATE MAY BE MADE TO ANY PERSON,
UNLESS THE TRANSFEREE PROVIDES EITHER A CERTIFICATION PURSUANT TO SECTION
7.02(B) OF THE AGREEMENT OR AN OPINION OF COUNSEL SATISFACTORY TO THE MASTER
SERVICER, THE TRUSTEE AND THE SECURITIES ADMINISTRATOR THAT THE PURCHASE OF THIS
CERTIFICATE WILL NOT CONSTITUTE OR RESULT IN A NON-EXEMPT PROHIBITED TRANSACTION
UNDER SECTION 406 OF THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS
AMENDED ("ERISA"), OR SECTION 4975 OF THE CODE AND WILL NOT SUBJECT THE MASTER
SERVICER, THE TRUSTEE OR THE SECURITIES ADMINISTRATOR TO ANY OBLIGATION OR
LIABILITY IN ADDITION TO THOSE UNDERTAKEN IN THE AGREEMENT.
Certificate No.1 Pass-Through Rate: 8.00%
Class XP Percentage Interest: 100%
Date of Pooling and Servicing Agreement and Aggregate Initial Certificate Principal Balance
Cut-off Date: of this Certificate as of the Cut-off Date:
January 1, 2002 $100.00
First Distribution Date: Initial Certificate Principal Balance of this
February 25, 2002 Certificate as of the Cut-off Date:
$100.00
Master Servicer:
Xxxxx Fargo Bank Minnesota, National
Association
Assumed Final Distribution Date:
January 25, 2032
ASSET-BACKED CERTIFICATE
SERIES 2002-AC1
evidencing a fractional undivided interest in the distributions
allocable to the Class XP Certificates with respect to a Trust Fund
consisting primarily of a pool of conventional one- to four-family
fixed interest rate mortgage loans sold by BEAR XXXXXXX ASSET BACKED
SECURITIES, INC.
This Certificate is payable solely from the assets of the
Trust Fund, and does not represent an obligation of or interest in Bear Xxxxxxx
Asset Backed Securities, Inc., the Master Servicer, the Trustee or the
Securities Administrator 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 Bear Xxxxxxx Asset Backed
Securities, Inc., the Master Servicer, the Trustee or the Securities
Administrator or any of their affiliates or any other person. None of Bear
Xxxxxxx Asset Backed Securities, 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 Corporation is
the registered owner of the Percentage 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 conventional
first lien, fixed rate mortgages loans secured by one- to four- family
residences, units in planned unit developments and individual condominium units
(collectively, the "Mortgage Loans") sold by Bear Xxxxxxx Asset Backed
Securities, Inc. ("BSABS"). The Mortgage Loans were sold by EMC Mortgage
-2-
Corporation ("EMC") to BSABS. Xxxxx Fargo Bank Minnesota, National Association
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 BSABS, as depositor
(the "Depositor"), EMC Mortgage Corporation as seller and company, Xxxxx Fargo
Bank Minnesota, National Association, as Master Servicer and securities
administrator (the "Securities Administrator") and Bank One, National
Association 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 Certificate Principal Balance hereof at a per annum rate equal to the
Pass-Through Rate set forth above. 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 day (or if such last day is
not a Business Day, the Business Day immediately preceding such last day) of the
calendar month immediately preceding the month in which the Distribution Date
occurs, an amount equal to the product of the Percentage Interest evidenced by
this Certificate and the amount 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 following the latest
scheduled maturity date of any Mortgage Loan.
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.
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.
No transfer of this Certificate shall be made unless the
transfer is made pursuant to an effective registration statement under the
Securities Act of 1933, as amended (the "1933 Act"), and an effective
registration or qualification under applicable state securities laws, or is made
in a transaction that does not require such registration or qualification. In
the event that such a transfer of this Certificate is to be made without
registration or qualification, the Trustee shall require receipt of (i) if such
transfer is purportedly being made in reliance upon Rule 144A under the 1933
Act, written certifications from the Holder of the Certificate desiring to
effect the transfer, and from such Holder's prospective transferee,
substantially in the forms attached to the Agreement as Exhibits E, and F or G,
as applicable, and (ii) in all other cases, an Opinion of Counsel satisfactory
to it that such transfer may be made without such registration or qualification
(which Opinion of Counsel shall not be an expense of the Trust Fund or of the
Depositor, the Trustee, the Securities Administrator or the Master Servicer in
their respective capacities as such), together with copies of the written
-3-
certification(s) of the Holder of the Certificate desiring to effect the
transfer and/or such Holder's prospective transferee upon which such Opinion of
Counsel is based. Neither the Depositor nor the Trustee is obligated to register
or qualify the Class of Certificates specified on the face hereof under the 1933
Act or any other securities law or to take any action not otherwise required
under the Agreement to permit the transfer of such Certificates without
registration or qualification. Any Holder desiring to effect a transfer of this
Certificate shall be required to indemnify the Trustee, the Securities
Administrator, the Depositor, the Seller and the Master Servicer against any
liability that may result if the transfer is not so exempt or is not made in
accordance with such federal and state laws.
No transfer of this Class XP Certificate will be made unless
the Trustee and the Securities Administrator have received either (i) an opinion
of counsel acceptable to and in form and substance satisfactory to the Trustee,
the Securities Administrator and the Master Servicer with respect to the
permissibility of such transfer under the Employee Retirement Income Security
Act of 1974, as amended ("ERISA"), and Section 4975 of the Internal Revenue Code
(the "Code") and stating, among other things, that the transferee's acquisition
of a Class XP Certificate will not constitute or result in a non-exempt
prohibited transaction under Section 406 of ERISA or Section 4975 of the Code or
(ii) a representation letter, in the form as described by the Agreement, stating
that the transferee is not an employee benefit or other plan subject to the
prohibited transaction provisions of ERISA or Section 4975 of the Code (a
"Plan"), or any other person (including an investment manager, a named fiduciary
or a trustee of any Plan) acting, directly or indirectly, on behalf of or
purchasing any Certificate with "plan assets" of any Plan.
This Certificate is one of a duly authorized issue of
Certificates designated as set forth on the face hereof (the "Certificates").
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 Depositor and the rights of the Certificateholders under the
Agreement from time to time by the parties thereto with the consent of the
Holders of Certificates evidencing Percentage Interests aggregating not less
than 66-2/3% (or in certain cases, Holders of Certificates of affected Classes
evidencing such percentage of the Percentage 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.
-4-
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 Percentage 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 Percentage 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 Depositor, 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 Depositor, 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 Stated Principal Balance of the Mortgage Loans is less than the
percentage of the aggregate Stated 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.
-5-
IN WITNESS WHEREOF, the Trustee has caused this Certificate to
be duly executed.
Dated: February 6, 2002 BANK ONE, NATIONAL ASSOCIATION,
not in its individual capacity but solely
as Trustee
By:
-------------------------------------
Authorized Signatory
CERTIFICATE OF AUTHENTICATION
-----------------------------
This is one of the Class XP Certificates referred to in the
within-mentioned Agreement.
BANK ONE, NATIONAL ASSOCIATION Authorized
signatory of Bank One, National
Association, 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 Percentage
Interest evidenced by the within Asset-Backed 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-15
FORM OF CLASS R-1 CERTIFICATE
THIS CERTIFICATE MAY NOT BE HELD BY OR TRANSFERRED TO A
NON-UNITED STATES PERSON 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").
NO TRANSFER OF THIS CERTIFICATE MAY BE MADE TO ANY PERSON,
UNLESS THE TRANSFEREE PROVIDES EITHER A CERTIFICATION PURSUANT TO SECTION
7.02(B) OF THE AGREEMENT OR AN OPINION OF COUNSEL SATISFACTORY TO THE MASTER
SERVICER, THE TRUSTEE AND THE SECURITIES ADMINISTRATOR THAT THE PURCHASE OF THIS
CERTIFICATE WILL NOT CONSTITUTE OR RESULT IN A NON-EXEMPT PROHIBITED TRANSACTION
UNDER SECTION 406 OF THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS
AMENDED ("ERISA"), OR SECTION 4975 OF THE CODE AND WILL NOT SUBJECT THE MASTER
SERVICER, THE TRUSTEE OR THE SECURITIES ADMINISTRATOR TO ANY OBLIGATION OR
LIABILITY IN ADDITION TO THOSE UNDERTAKEN IN THE AGREEMENT.
ANY RESALE, TRANSFER OR OTHER DISPOSITION OF THIS CERTIFICATE
MAY BE MADE ONLY IF THE PROPOSED TRANSFEREE PROVIDES A TRANSFER AFFIDAVIT TO THE
MASTER SERVICER AND THE TRUSTEE THAT (1) SUCH TRANSFEREE IS NOT (A) 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 XXXXXXX MAC, A MAJORITY OF ITS BOARD OF DIRECTORS IS NOT
SELECTED BY SUCH GOVERNMENTAL UNIT), (B) A FOREIGN GOVERNMENT, ANY INTERNATIONAL
ORGANIZATION, OR ANY AGENCY OR INSTRUMENTALITY OF EITHER OF THE FOREGOING, (C)
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
UNLESS SUCH ORGANIZATION IS SUBJECT TO THE TAX IMPOSED BY SECTION 511 OF THE
CODE (INCLUDING THE TAX IMPOSED BY SECTION 511 OF THE CODE ON UNRELATED BUSINESS
TAXABLE INCOME), (D) RURAL ELECTRIC AND TELEPHONE COOPERATIVES DESCRIBED IN
SECTION 1381(A)(2)(C) OF THE CODE, (E) AN ELECTING LARGE PARTNERSHIP UNDER
SECTION 775(A) OF THE CODE (ANY SUCH PERSON DESCRIBED IN THE FOREGOING CLAUSES
(A), (B), (C), (D) OR (E) BEING HEREIN REFERRED TO AS A "DISQUALIFIED
ORGANIZATION"), OR (F) 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.
Certificate No.1 Percentage Interest: 100%
Class R-1
Date of Pooling and Servicing Agreement and Aggregate Initial Certificate Principal Balance
Cut-off Date: of this Certificate as of the Cut-off Date:
January 1, 2002 $50.00
First Distribution Date: Initial Certificate Principal Balance of this
February 25, 2002 Certificate as of the Cut-off Date:
$50.00
Master Servicer:
Xxxxx Fargo Bank Minnesota, National
Association CUSIP: 07384Y CG 9
Assumed Final Distribution Date:
January 25, 2032
ASSET-BACKED CERTIFICATE
SERIES 2002-AC1
evidencing a fractional undivided interest in the distributions
allocable to the Class R-1 Certificates with respect to a Trust Fund
consisting primarily of a pool of conventional one- to four-family
fixed interest rate mortgage loans sold by BEAR XXXXXXX ASSET BACKED
SECURITIES, INC.
This Certificate is payable solely from the assets of the
Trust Fund, and does not represent an obligation of or interest in Bear Xxxxxxx
Asset Backed Securities, Inc., the Master Servicer, the Trustee or the
Securities Administrator 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 Bear Xxxxxxx Asset Backed
Securities, Inc., the Master Servicer, the Trustee or the Securities
Administrator or any of their affiliates or any other person. None of Bear
Xxxxxxx Asset Backed Securities, 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 Corporation is
the registered owner of the Percentage 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 conventional
first lien, fixed rate mortgage loans secured by one- to four- family
residences, units in planned unit developments and individual condominium units
(collectively, the "Mortgage Loans") sold by Bear Xxxxxxx Asset Backed
Securities, Inc. ("BSABS"). The Mortgage Loans were sold by EMC Mortgage
-3-
Corporation ("EMC") to BSABS. Xxxxx Fargo Bank Minnesota, National Association
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 BSABS, as depositor
(the "Depositor"), EMC Mortgage Corporation as seller and company, Xxxxx Fargo
Bank Minnesota, National Association, as Master Servicer and securities
administrator (the "Securities Administrator") and Bank One, National
Association 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.
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
the Trustee 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 Depositor 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 Depositor, which purchaser
may be the Depositor, or any affiliate of the Depositor, on such terms and
conditions as the Depositor may choose.
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 day (or if such last day is not a Business
Day, the Business Day immediately preceding such last day) of the calendar month
immediately preceding the month in which the Distribution Date occurs, an amount
equal to the product of the Percentage Interest evidenced by this Certificate
and the amounts required to be distributed to the Holders of Certificates of the
same Class as this Certificate. The Assumed Final Distribution Date is the first
anniversary of the Distribution Date in the month following the latest scheduled
maturity date of any Mortgage Loan.
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.
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.
-4-
No transfer of this Class R-1 Certificate will be made unless
the Trustee and the Securities Administrator have received either (i) an opinion
of counsel acceptable to and in form and substance satisfactory to the Trustee,
the Securities Administrator and the Master Servicer with respect to the
permissibility of such transfer under the Employee Retirement Income Security
Act of 1974, as amended ("ERISA"), and Section 4975 of the Internal Revenue Code
(the "Code") and stating, among other things, that the transferee's acquisition
of a Class R-1 Certificate will not constitute or result in a non-exempt
prohibited transaction under Section 406 of ERISA or Section 4975 of the Code or
(ii) a representation letter, in the form as described by the Agreement, stating
that the transferee is not an employee benefit or other plan subject to the
prohibited transaction provisions of ERISA or Section 4975 of the Code (a
"Plan"), or any other person (including an investment manager, a named fiduciary
or a trustee of any Plan) acting, directly or indirectly, on behalf of or
purchasing any Certificate with "plan assets" of any Plan.
This Certificate is one of a duly authorized issue of
Certificates designated as set forth on the face hereof (the "Certificates").
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 Depositor and the rights of the Certificateholders under the
Agreement from time to time by the parties thereto with the consent of the
Holders of Certificates evidencing Percentage Interests aggregating not less
than 66-2/3% (or in certain cases, Holders of Certificates of affected Classes
evidencing such percentage of the Percentage 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 Percentage Interest
will be issued to the designated transferee.
-5-
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 Percentage 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 Depositor, 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 Depositor, 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 Stated Principal Balance of the Mortgage Loans is less than the
percentage of the aggregate Stated 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: February 6, 2002 BANK ONE, NATIONAL ASSOCIATION,
not in its individual capacity but solely
as Trustee
By:
-------------------------------------
Authorized Signatory
CERTIFICATE OF AUTHENTICATION
-----------------------------
This is one of the Class R-1 Certificates referred to in the
within-mentioned Agreement.
BANK ONE, NATIONAL ASSOCIATION Authorized
signatory of Bank One, National
Association, 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 Percentage
Interest evidenced by the within Asset-Backed 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-16
FORM OF CLASS R-2 CERTIFICATE
THIS CERTIFICATE MAY NOT BE HELD BY OR TRANSFERRED TO A
NON-UNITED STATES PERSON 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").
NO TRANSFER OF THIS CERTIFICATE MAY BE MADE TO ANY PERSON,
UNLESS THE TRANSFEREE PROVIDES EITHER A CERTIFICATION PURSUANT TO SECTION
7.02(B) OF THE AGREEMENT OR AN OPINION OF COUNSEL SATISFACTORY TO THE MASTER
SERVICER, THE TRUSTEE AND THE SECURITIES ADMINISTRATOR THAT THE PURCHASE OF THIS
CERTIFICATE WILL NOT CONSTITUTE OR RESULT IN A NON-EXEMPT PROHIBITED TRANSACTION
UNDER SECTION 406 OF THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS
AMENDED ("ERISA"), OR SECTION 4975 OF THE CODE AND WILL NOT SUBJECT THE MASTER
SERVICER, THE TRUSTEE OR THE SECURITIES ADMINISTRATOR TO ANY OBLIGATION OR
LIABILITY IN ADDITION TO THOSE UNDERTAKEN IN THE AGREEMENT.
ANY RESALE, TRANSFER OR OTHER DISPOSITION OF THIS CERTIFICATE
MAY BE MADE ONLY IF THE PROPOSED TRANSFEREE PROVIDES A TRANSFER AFFIDAVIT TO THE
MASTER SERVICER AND THE TRUSTEE THAT (1) SUCH TRANSFEREE IS NOT (A) 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 XXXXXXX MAC, A MAJORITY OF ITS BOARD OF DIRECTORS IS NOT
SELECTED BY SUCH GOVERNMENTAL UNIT), (B) A FOREIGN GOVERNMENT, ANY INTERNATIONAL
ORGANIZATION, OR ANY AGENCY OR INSTRUMENTALITY OF EITHER OF THE FOREGOING, (C)
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
UNLESS SUCH ORGANIZATION IS SUBJECT TO THE TAX IMPOSED BY SECTION 511 OF THE
CODE (INCLUDING THE TAX IMPOSED BY SECTION 511 OF THE CODE ON UNRELATED BUSINESS
TAXABLE INCOME), (D) RURAL ELECTRIC AND TELEPHONE COOPERATIVES DESCRIBED IN
SECTION 1381(A)(2)(C) OF THE CODE, (E) AN ELECTING LARGE PARTNERSHIP UNDER
SECTION 775(A) OF THE CODE (ANY SUCH PERSON DESCRIBED IN THE FOREGOING CLAUSES
(A), (B), (C), (D) OR (E) BEING HEREIN REFERRED TO AS A "DISQUALIFIED
ORGANIZATION"), OR (F) 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.
Certificate No.1 Percentage Interest: 100%
Class R-2
Date of Pooling and Servicing Agreement and Aggregate Initial Certificate Principal Balance
Cut-off Date: of this Certificate as of the Cut-off Date:
January 1, 2002 $50.00
First Distribution Date: Initial Certificate Principal Balance of this
February 25, 2002 Certificate as of the Cut-off Date:
$50.00
Master Servicer:
Xxxxx Fargo Bank Minnesota, National
Association CUSIP: 07384Y CH 7
Assumed Final Distribution Date:
January 25, 2032
ASSET-BACKED CERTIFICATE
SERIES 2002-AC1
evidencing a fractional undivided interest in the distributions
allocable to the Class R-II Certificates with respect to a Trust Fund
consisting primarily of a pool of conventional one- to four-family
fixed interest rate mortgage loans sold by BEAR XXXXXXX ASSET BACKED
SECURITIES, INC.
This Certificate is payable solely from the assets of the
Trust Fund, and does not represent an obligation of or interest in Bear Xxxxxxx
Asset Backed Securities, Inc., the Master Servicer, the Trustee or the
Securities Administrator 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 Bear Xxxxxxx Asset Backed
Securities, Inc., the Master Servicer, the Trustee or the Securities
Administrator or any of their affiliates or any other person. None of Bear
Xxxxxxx Asset Backed Securities, 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 Corporation is
the registered owner of the Percentage 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 conventional
first lien, fixed rate mortgage loans secured by one- to four- family
residences, units in planned unit developments and individual condominium units
(collectively, the "Mortgage Loans") sold by Bear Xxxxxxx Asset Backed
Securities, Inc.("BSABS"). The Mortgage Loans were sold by EMC Mortgage
-3-
Corporation ("EMC") to BSABS. Xxxxx Fargo Bank Minnesota, National Association
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 BSABS, as depositor
(the "Depositor"), EMC Mortgage Corporation as seller and company, Xxxxx Fargo
Bank Minnesota, National Association, as Master Servicer and securities
administrator (the "Securities Administrator") and Bank One, National
Association 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.
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 the Trustee 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 Depositor 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 Depositor, which purchaser
may be the Depositor, or any affiliate of the Depositor, on such terms and
conditions as the Depositor may choose.
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 day (or if such last day is not a Business
Day, the Business Day immediately preceding such last day) of the calendar month
immediately preceding the month in which the Distribution Date occurs, an amount
equal to the product of the Percentage Interest evidenced by this Certificate
and the amounts 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 following the latest scheduled maturity date of
any Mortgage Loan.
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.
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.
-4-
No transfer of this Class R-2 Certificate will be made unless
the Trustee and the Securities Administrator have received either (i) an opinion
of counsel acceptable to and in form and substance satisfactory to the Trustee,
the Securities Administrator and the Master Servicer with respect to the
permissibility of such transfer under the Employee Retirement Income Security
Act of 1974, as amended ("ERISA"), and Section 4975 of the Internal Revenue Code
(the "Code") and stating, among other things, that the transferee's acquisition
of a Class R-2 Certificate will not constitute or result in a non-exempt
prohibited transaction under Section 406 of ERISA or Section 4975 of the Code or
(ii) a representation letter, in the form as described by the Agreement, stating
that the transferee is not an employee benefit or other plan subject to the
prohibited transaction provisions of ERISA or Section 4975 of the Code (a
"Plan"), or any other person (including an investment manager, a named fiduciary
or a trustee of any Plan) acting, directly or indirectly, on behalf of or
purchasing any Certificate with "plan assets" of any Plan.
This Certificate is one of a duly authorized issue of
Certificates designated as set forth on the face hereof (the "Certificates").
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 Depositor and the rights of the Certificateholders under the
Agreement from time to time by the parties thereto with the consent of the
Holders of Certificates evidencing Percentage Interests aggregating not less
than 66-2/3% (or in certain cases, Holders of Certificates of affected Classes
evidencing such percentage of the Percentage 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 Percentage Interest
will be issued to the designated transferee.
-5-
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 Percentage 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 Depositor, 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 Depositor, 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 Stated Principal Balance of the Mortgage Loans is less than the
percentage of the aggregate Stated 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: February 6, 2002 BANK ONE, NATIONAL ASSOCIATION,
not in its individual capacity but solely
as Trustee
By:
-------------------------------------
Authorized Signatory
CERTIFICATE OF AUTHENTICATION
-----------------------------
This is one of the Class R-2 Certificates referred to in the
within-mentioned Agreement.
BANK ONE, NATIONAL ASSOCIATION Authorized
signatory of Bank One, National
Association, 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 Percentage
Interest evidenced by the within Asset-Backed 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) the Mortgagor's name;
(c) the street address (including city, state and zip code) of the
Mortgaged Property;
(d) the property type;
(e) the Mortgage Rate;
(f) the Master 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 Mortgage Loan Group;
(s) the Gross Margin, if applicable;
(t) the Maximum Lifetime Mortgage Rate, if applicable;
(u) the Minimum Lifetime Mortgage Rate, if applicable;
(v) the Periodic Rate Cap, if applicable; and
(w) the number of days delinquent, if any.
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 (xi)
and (xiv) above, the weighted average by principal balance as of the Cut-off
Date of each of the rates described under (v), (vi) and (vii) above, and the
weighted average remaining term to maturity by unpaid principal balance as of
the Cut-off Date.
EXHIBIT C-1
FORM OF INITIAL CERTIFICATION
Bear Xxxxxxx Asset Backed Securities, Inc.
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Re: Pooling and Servicing Agreement, dated as of January 1, 2002,
among Bear Xxxxxxx Asset Backed Securities, Inc., as
depositor, EMC Mortgage Corporation, as seller and company,
Xxxxx Fargo Bank Minnesota, National Association, as master
servicer and securities administrator and Bank One, National
Association, as trustee, issuing Asset-Backed Certificates,
Series 2002-AC1
-------------------------------------------------------------
Ladies and Gentlemen:
In accordance with Section 2.02 of the above-captioned Pooling and
Servicing Agreement, the undersigned, hereby certifies that, except as otherwise
noted on the attached exception report, that as to each Mortgage Loan listed on
the Mortgage Loan Schedule (other than any Mortgage Loan paid in full or listed
on the attachment hereto) it has reviewed the Mortgage File and the Mortgage
Loan Schedule and has determined that: (i) all documents required to be included
in the Mortgage File pursuant to the Pooling and Servicing Agreement are in its
possession; (ii) such documents have been reviewed by it and appear regular on
their face, have, where applicable, been executed and relate to such Mortgage
Loan; and (iii) based on examination by it, and only as to such documents, the
information set forth in the Mortgage Loan Schedule as to Mortgagor Name,
original principal balance and loan number respecting such Mortgage Loan is
correct and accurately reflects the information in the Mortgage Loan File.
The undersigned has made no independent examination of any documents
contained in each Mortgage File beyond the review specifically required in the
above-referenced Pooling and Servicing Agreement. The undersigned makes no
representation that any documents specified in subclauses (iv), (v) and (vii) of
Section 2.01(b) should be included in any Mortgage File. The undersigned makes
no representations as to: (i) the validity, legality, enforceability or
genuineness of any of the documents contained in each Mortgage File of any of
the Mortgage Loans identified on the Mortgage Loan Schedule or (ii) the
collectability, insurability, effectiveness or suitability of any such Mortgage
Loan.
Capitalized words and phrases used herein shall have the respective
meanings assigned to them in the above-captioned Pooling and Servicing
Agreement.
BANK ONE, NATIONAL ASSOCIATION
By:
-------------------------------
Name:
Title:
EXHIBIT C-2
FORM OF INTERIM CERTIFICATION
Bear Xxxxxxx Asset Backed Securities, Inc.
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Re: Pooling and Servicing Agreement, dated as of January 1, 2002,
among Bear Xxxxxxx Asset Backed Securities, Inc., as
depositor, EMC Mortgage Corporation, as seller and company,
Xxxxx Fargo Bank Minnesota, National Association, as master
servicer and securities administrator and Bank One, National
Association, as trustee, issuing Asset-Backed Certificates,
Series 2002-AC1
-------------------------------------------------------------
Ladies and Gentlemen:
In accordance with Section 2.02 of the above-captioned Pooling and
Servicing Agreement, the undersigned, hereby certifies that, except as otherwise
noted on the attached exception report, that as to each Mortgage Loan listed on
the Mortgage Loan Schedule (other than any Mortgage Loan paid in full or listed
on the attachment hereto) it has reviewed the Mortgage File and the Mortgage
Loan Schedule and has determined that: (i) all documents required to be included
in the Mortgage File pursuant to the Pooling and Servicing Agreement are in its
possession; (ii) such documents have been reviewed by it and appear regular on
their face, have, where applicable, been executed and relate to such Mortgage
Loan; and (iii) based on examination by it, and only as to such documents, the
information set forth in the Mortgage Loan Schedule as to Mortgagor Name,
original principal balance and loan number respecting such Mortgage Loan is
correct and accurately reflects the information in the Mortgage Loan File.
The undersigned has made no independent examination of any documents
contained in each Mortgage File beyond the review specifically required in the
above-referenced Pooling and Servicing Agreement. The undersigned makes no
representation that any documents specified in subclauses (iv), (v) and (vii) of
Section 2.01(b) should be included in any Mortgage File. The undersigned makes
no representations as to: (i) the validity, legality, enforceability or
genuineness of any of the documents contained in each Mortgage File of any of
the Mortgage Loans identified on the Mortgage Loan Schedule or (ii) the
collectability, insurability, effectiveness or suitability of any such Mortgage
Loan.
Capitalized words and phrases used herein shall have the respective
meanings assigned to them in the above-captioned Pooling and Servicing
Agreement.
BANK ONE, NATIONAL ASSOCIATION
By:
----------------------------
Name:
Title:
EXHIBIT C-3
FORM OF FINAL CERTIFICATION
Bear Xxxxxxx Asset Backed Securities, Inc.
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Re: Pooling and Servicing Agreement, dated as of January 1, 2002,
among Bear Xxxxxxx Asset Backed Securities, Inc., as
depositor, EMC Mortgage Corporation, as seller and company,
Xxxxx Fargo Bank Minnesota, National Association, as master
servicer and securities administrator and Bank One, National
Association, as trustee, issuing Asset-Backed Certificates,
Series 2002-AC1
-------------------------------------------------------------
Ladies and Gentlemen:
In accordance with Section 2.02 of the above-captioned Pooling and
Servicing Agreement, the undersigned, hereby certifies that, except as otherwise
noted on the attached exception report, that as to each Mortgage Loan listed on
the Mortgage Loan Schedule (other than any Mortgage Loan paid in full or listed
on the attachment hereto) it has received the documents set forth in Section
2.01 and has determined that (i) all documents required to be included in the
Mortgage File pursuant to the Pooling and Servicing Agreement are in its
possession; (ii) such documents have been reviewed by it and appear regular on
their face, have, where applicable, been executed and relate to such Mortgage
Loan; and (iii) based on examination by it, and only as to such documents, the
information set forth in the Mortgage Loan Schedule as to Mortgagor name,
original principal balance and loan number respecting such Mortgage Loan is
correct and accurately reflects the information in the Mortgage Loan File.
The undersigned has made no independent examination of any documents
contained in each Mortgage File beyond the review specifically required in the
above-referenced Pooling and Servicing Agreement. The undersigned makes no
representation that any documents specified in subclauses (iv), (v) and (vii) of
Section 2.01(b) should be included in any Mortgage File. The undersigned makes
no representations as to: (i) the validity, legality, enforceability or
genuineness of any of the documents contained in each Mortgage File of any of
the Mortgage Loans identified on the Mortgage Loan Schedule or (ii) the
collectability, insurability, effectiveness or suitability of any such Mortgage
Loan.
Capitalized words and phrases used herein shall have the respective
meanings assigned to them in the above-captioned Pooling and Servicing
Agreement.
BANK ONE, NATIONAL ASSOCIATION
By:
-----------------------------
Name:
Title:
EXHIBIT D
FORM OF TRANSFER 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 Bear Xxxxxxx Asset-Backed
Securities, Inc. Asset-Backed Certificates, Series 2002-AC1, Class R-__
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 Bear Xxxxxxx Asset Backed
Securities, 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.
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:
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___.
EXHIBIT E
FORM OF TRANSFEROR CERTIFICATE
______________,200___
Bear Xxxxxxx Asset Backed Securities, Inc.
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Bank One, National Association
000 Xxxx 00xx Xxxxxx, 0xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Bear Xxxxxxx Asset Backed Securities Trust 2002-AC1
Re: Bear Xxxxxxx Asset Backed Securities, Inc.
Asset-Backed Certificates, Series 2002-AC1, Class__
---------------------------------------------------
Ladies and Gentlemen:
In connection with the sale by ___________ (the "Seller") to ________
(the "Purchaser") of $_________ Initial Certificate Principal Balance of
Asset-Backed Certificates, Series 2002-AC1, Class _____ (the "Certificates"),
issued pursuant to the Pooling and Servicing Agreement (the "Pooling and
Servicing Agreement"), dated as of January 1, 2002 among Bear Xxxxxxx
Asset-Backed Securities, Inc., as depositor (the "Depositor"), EMC Mortgage
Corporation, as seller and company, Xxxxx Fargo Bank Minnesota, National
Association, as master servicer and securities administrator, and Bank One,
National Association, as trustee (the "Trustee"). The Seller hereby certifies,
represents and warrants to, a covenants with, the Depositor and the Trustee
that:
Neither the Seller nor anyone acting on its behalf has (a) offered,
pledged, sold, disposed of or otherwise transferred any Certificate, any
interest in any Certificate or any other similar security to any person in any
manner, (b) has solicited any offer to buy or to accept a pledge, disposition or
other transfer of any Certificate, any interest in any Certificate or any other
similar security from any person in any manner, (c) has otherwise approached or
negotiated with respect to any Certificate, any interest in any Certificate or
any other similar security with any person in any manner, (d) has made any
general solicitation by means of general advertising or in any other manner, or
(e) has taken any other action, that (as to any of (a) through (e) above) would
constitute a distribution of the Certificates under the Securities Act of 1933
(the "Act"), that would render the disposition of any Certificate a violation of
Section 5 of the Act or any state securities law, or that would require
registration or qualification pursuant thereto. The Seller will not act in any
manner set forth in the foregoing sentence with respect to any Certificate. The
Seller has not and will not sell or otherwise transfer any of the Certificates,
except in compliance with the provisions of the Pooling and Servicing Agreement.
Very truly yours,
(Seller)
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
EXHIBIT F
FORM OF INVESTOR REPRESENTATION LETTER (NON-RULE 144A)
___________,200__
Bear Xxxxxxx Asset Backed Securities, Inc.
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Bank One, National Association
000 Xxxx 00xx Xxxxxx, 0xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Bear Xxxxxxx Asset Backed Securities Trust 2002-AC1
Re: Bear Xxxxxxx Asset-Backed Securities, Inc.
Asset-Backed Certificates, Series 2002-AC1, Class__
-------------------------------------------------
Ladies and Gentlemen:
______________ (the "Purchaser") intends to purchase from
______________ (the "Seller") $_________ Initial Certificate Principal Balance
of Asset-Backed Certificates, Series 2002-AC1, Class _____ (the "Certificates"),
issued pursuant to the Pooling and Servicing Agreement (the "Pooling and
Servicing Agreement"), dated as of January 1, 2002 among Bear Xxxxxxx Asset
Backed Securities, Inc., as depositor (the "Depositor"), EMC Mortgage
Corporation, as seller and company, Xxxxx Fargo Bank Minnesota, National
Association, as master servicer and securities administrator, and Bank One,
National Association, as trustee (the "Trustee"). All terms used herein and not
otherwise defined shall have the meanings set forth in the Pooling and Servicing
Agreement. The Purchaser hereby certifies, represents and warrants to, and
covenants with, the Depositor and the Trustee that:
1. The Purchaser understands that (a) the
Certificates have not been and will not be registered or
qualified under the Securities Act of 1933, as amended (the
"Act") or any state securities law, (b) the Depositor is not
required to so register or qualify the Certificates, (c) the
Certificates may be resold only if registered and qualified
pursuant to the provisions of the Act or any state securities
law, or if an exemption from such registration and
qualification is available, (d) the Pooling and Servicing
Agreement contains restrictions regarding the transfer of the
Certificates and (e) the Certificates will bear a legend to
the foregoing effect.
2. The Purchaser is acquiring the Certificates for
its own account for investment only and not with a view to or
for sale in connection with any distribution thereof in any
manner that would violate the Act or any applicable state
securities laws.
3. The Purchaser is (a) a substantial, sophisticated
institutional investor having such knowledge and experience in
financial and business matters, and, in particular, in such
matters related to securities similar to the Certificates,
such that it is capable of evaluating the merits and risks of
investment in the Certificates, (b) able to bear the economic
risks of such an investment and (c) an "accredited investor"
within the meaning of Rule 501 (a) promulgated pursuant to the
Act.
4. The Purchaser has been furnished with, and has had
an opportunity to review (a) [a copy of the Private Placement
Memorandum, dated February 6, 2002, relating to the
Certificates (b)] a copy of the Pooling and Servicing
Agreement and [(b)] [(c)] such other information concerning
the Certificates, the Mortgage Loans and the Depositor as has
been requested by the Purchaser from the Depositor or the
Seller and is relevant to the Purchaser's decision to purchase
the Certificates. The Purchaser has had any questions arising
from such review answered by the Depositor or the Seller to
the satisfaction of the Purchaser. [If the Purchaser did not
purchase the Certificates from the Seller in connection with
the initial distribution of the Certificates and was provided
with a copy of the Private Placement Memorandum (the
"Memorandum") relating to the original sale (the "Original
Sale") of the Certificates by the Depositor, the Purchaser
acknowledges that such Memorandum was provided to it by the
Seller, that the Memorandum was prepared by the Depositor
solely for use in connection with the Original Sale and the
Depositor did not participate in or facilitate in any way the
purchase of the Certificates by the Purchaser from the Seller,
and the Purchaser agrees that it will look solely to the
Seller and not to the Depositor with respect to any damage,
liability, claim or expense arising out of, resulting from or
in connection with (a) error or omission, or alleged error or
omission, contained in the Memorandum, or (b) any information,
development or event arising after the date of the
Memorandum.]
5. The Purchaser has not and will not nor has it
authorized or will it authorize any person to (a) offer,
pledge, sell, dispose of or otherwise transfer any
Certificate, any interest in any Certificate or any other
similar security to any person in any manner, (b) solicit any
offer to buy or to accept a pledge, disposition of other
transfer of any Certificate, any interest in any Certificate
or any other similar security from any person in any manner,
(c) otherwise approach or negotiate with respect to any
Certificate, any interest in any Certificate or any other
similar security with any person in any manner, (d) make any
general solicitation by means of general advertising or in any
other manner or (e) take any other action, that (as to any of
(a) through (e) above) would constitute a distribution of any
Certificate under the Act, that would render the disposition
of any Certificate a violation of Section 5 of the Act or any
state securities law, or that would require registration or
qualification pursuant thereto. The Purchaser will not sell or
otherwise transfer any of the Certificates, except in
compliance with the provisions of the Pooling and Servicing
Agreement.
Very truly yours,
(Purchaser)
By:
-------------------------------
Name:
-----------------------------
Title:
----------------------------
EXHIBIT G-1
FORM OF RULE 144A INVESTMENT LETTER
[Date]
[SELLER]
Bear Xxxxxxx Asset Backed Securities, Inc.
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Bank One, National Association
000 Xxxx 00xx Xxxxxx, 0xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Re: Bear Xxxxxxx Asset Backed Securities Trust 2002-AC1,
Asset-Backed Certificates, Series 2002-AC1 (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)
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 Xxxxx Fargo Bank Minnesota, National Association
(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, and/or section 4975 of the Internal
Revenue Code of 1986, as amended, or (ii) are
providing a representation or an opinion of counsel
to the effect that the proposed transfer and/or
holding of a Privately Offered Certificate and the
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, Prohibited Transaction Exemption
("PTE") 84-14, XXX 00-00, XXX 00-0, XXX 00-00, XXX
00-00 or Section 401(c) of ERISA and the regulations
promulgated thereunder and (II) will not give rise to
any additional fiduciary duties on the part of the
Seller, the Master Servicer or the Trustee.
(ix) We understand that each of the Class 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,
AND/OR SECTION 4975 OF THE INTERNAL REVENUE CODE OF
1986, AS AMENDED, UNLESS THE PROPOSED TRANSFER AND/OR
HOLDING OF A CERTIFICATE AND THE SERVICING,
MANAGEMENT AND/OR OPERATION OF THE TRUST 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 00-00, XXX
96-23 OR SECTION 401(C) OF ERISA AND THE REGULATIONS
TO BE PROMULGATED THEREUNDER AND (II) WILL NOT GIVE
RISE TO
ANY ADDITIONAL FIDUCIARY DUTIES 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 AND
WILL BE EVIDENCED BY A REPRESENTATION OR AN OPINION
OF COUNSEL TO SUCH EFFECT BY OR ON BEHALF OF A HOLDER
OF A PRIVATE CERTIFICATE."
"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 January 1, 2002,
between Bear Xxxxxxx Asset Backed Securities, Inc., as depositor, EMC Mortgage
Corporation, as seller and company, Xxxxx Fargo Bank Minnesota, National
Association, as master servicer and securities administrator, and Bank One,
National Association, 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):
---------------------------------
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]
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]
EXHIBIT G-2
FORM OF RULE 144A AND RELATED MATTERS CERTIFICATE
[SELLER] [Date]
Bear Xxxxxxx Asset Backed Securities, Inc.
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Bank One, National Association
000 Xxxx 00xx Xxxxxx, 0xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Re: Bear Xxxxxxx Asset Backed Securities Trust 2002-AC1
Asset-Backed Certificates, Series 2002-AC1, 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, 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
(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
--------
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.
(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.
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 January 1, 2002, between Bear Xxxxxxx
Asset-Backed Securities, Inc., EMC Mortgage Corporation, as seller and company,
Xxxxx Fargo Bank Minnesota, National Association, as master servicer and
securities administrator, and Bank One, National Association, 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, and/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/or holding of a Privately Offered Certificate and the
servicing, management and/or 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") 00- 00, XXX 00-00, XXX 00-0, XXX 95-60, PTE 96-23 or Section
401(c) of ERISA and the regulations to be promulgated thereunder and (II) will
not give rise to any additional fiduciary duties on the part of the Seller, the
Master Servicer or the Trustee.
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):
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]
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]
EXHIBIT H
REQUEST FOR RELEASE OF DOCUMENTS
To: Bank One, National Association
000 Xxxx 00xx Xxxxxx, 0xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
RE: Pooling and Servicing Agreement dated as of January 1, 2002, between
Bear Xxxxxxx Asset Backed Securities Inc., as Depositor, EMC Mortgage
Corporation, as seller and company, Xxxxx Fargo Bank Minnesota,
National Association, as master servicer and securities administrator,
and Bank One, National Association, 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:
----------------------------
EXHIBIT I
DTC Letter of Representations
[provided upon request]
EXHIBIT J
Schedule of Mortgage Loans with Lost Notes
[provided upon request]
EXHIBIT K
FORM OF CUSTODIAL AGREEMENT
THIS CUSTODIAL AGREEMENT (as amended and supplemented from
time to time, the "Agreement'), dated as of February 6, 2002, by and among BANK
ONE, NATIONAL ASSOCIATION, as trustee (including its successors under the
Pooling and Servicing Agreement defined below, the "Trustee"), BEAR XXXXXXX
ASSET BACKED SECURITIES, INC., as depositor (together with any successor in
interest, the "Depositor"), EMC MORTGAGE CORPORATION, as seller (the "Seller")
and company and XXXXX FARGO BANK MINNESOTA, NATIONAL ASSOCIATION, as master
servicer (together with any successor in interest or successor under the Pooling
and Servicing Agreement referred to below, the "Master Servicer"), securities
administrator and custodian (together with any successor in interest or any
successor appointed hereunder, the "Custodian").
WITNESSETH THAT:
---------------
WHEREAS, the Depositor, the Seller, the Master Servicer and
the Trustee have entered into a Pooling and Servicing Agreement, dated as of
January 1, 2002, relating to the issuance of Bear Xxxxxxx Asset Backed
Securities Trust 2002-AC1, Asset-Backed Certificates, Series 2002-AC1 (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 Depositor, the Seller 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
Depositor, the Seller, the Master Servicer and the Custodian hereby agree as
follows:
ARTICLE I.
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.
ARTICLE II.
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
any exceptions noted in the Initial Certification referred to in Section 23(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 that have not been recorded
pursuant to the provisions of Section 2.01 of the Pooling and Servicing
Agreement and the related Mortgaged Properties are located in jurisdictions
specifically excluded by the Opinion of Counsel delivered to the Trustee
pursuant to Section 2.01 of the Pooling and Servicing Agreement, each such
assignment shall be delivered by the Custodian to the Seller for the purpose of
recording it in the appropriate public office for real property records, and the
Seller, 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 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 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.
-3-
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 then contained in 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 Seller 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 Seller, the related Servicer (if applicable)
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 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 H to the Pooling and
Servicing Agreement signed by a Servicing Officer of the Company or the related
Servicer, as applicable, 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 Company or the
related Servicer, as applicable, the related Mortgage File. The Depositor 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
Replacement 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 Company or the related Servicer, as
applicable, 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 Company or the related Servicer, as applicable, 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 Company or the related Servicer, as applicable. The
Company or the related Servicer, as applicable, shall cause each Mortgage File
or any document therein so released to be returned to the Custodian when the
need therefore by the Company or the related Servicer, as applicable, 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 Company or the related
Servicer, as applicable, 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.
-4-
At any time that the Company or a Servicer is required to
deliver to the Custodian a Request for Release, the Company or the related
Servicer, as applicable, shall deliver two copies of the Request for Release if
delivered in hard copy or the Company or the Servicer, as applicable, 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. 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 Seller and the related Mortgage Note shall be endorsed without recourse
by the Trustee and be returned to the 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 Company or the related Servicer, as applicable.
Section 2.6. ASSUMPTION AGREEMENTS. In the event that any
assumption agreement or substitution of liability 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 Pooling and Servicing Agreement or
related Servicing Agreement, shall cause the Company or the related Servicer, as
applicable, 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.
ARTICLE III.
CONCERNING THE CUSTODIAN
Section 3.1. CUSTODIAN A 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
-5-
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 arise from its negligence or bad faith or to the extent that such cost or
expense is indemnified by the Depositor 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 Depositor, 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 Servicers, the Company and the Depositor.
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 Depositor 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 Depositor
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.
ARTICLE IV.
MISCELLANEOUS PROVISIONS
-6-
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
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 Depositor, 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 Depositor and at the Trust's expense on
direction by the Trustee, but only upon direction accompanied by an Opinion of
Counsel reasonably satisfactory to the Depositor 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.
-7-
IN WITNESS WHEREOF, this Agreement is executed as of the date
first above written.
Address: BANK ONE, NATIONAL ASSOCIATION,
as Trustee
000 Xxxx 00xx Xx., 0xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
By:____________________________
Attention: Name:
Telecopy: Title:
Confirmation:
Address: BEAR XXXXXXX ASSET BACKED
SECURITIES, INC.
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
By:____________________________
Name:
Title:
Address: EMC MORTGAGE CORPORATION
000 Xxxxxx Xxxxx Xxxxx, Xxxxx 000
Xxxxxx, Xxxxx 00000 By:____________________________
Name:
Title:
Address: XXXXX FARGO BANK MINNESOTA,
NATIONAL ASSOCIATION, as
0000 00 Xxxxxx Xxxxxxxxx, XX 0031 th Custodian
Xxxxxxxxxxx, Xxxxxxxxx 00000
By:____________________________
Name:
Title:
-0-
XXXXX XX XXXXXXXX )
)ss:
COUNTY OF NEW YORK )
On the ______ day of February, 2002 before me, a notary public
in and for said State, personally appeared _______________, known to me to be a
_________________of Bank One, 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 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 NEW YORK )
) ss:
COUNTY OF NEW YORK )
On the ___ day of February, 2002 before me, a notary public in
and for said State, personally appeared ________________, known to me to be a
_____________ of Bear Xxxxxxx Asset Backed Securities, Inc., 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 ___ day of February, 2002 before me, a notary public in
and for said State, personally appeared ________________, known to me to be a
__________________ of EMC Mortgage Corporation, 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 ____ day of February, 2002 before me, a notary public
in and for said State, personally appeared ____________, known to me to be a 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
February 6, 2002
Bank One, National Association
000 Xxxx 00xx Xx., 0xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Bear Xxxxxxx Asset Backed Securities, Inc., Series 2002-AC1
Re: Custodial Agreement, dated as of February 6, 2002, by
and among Bank One, National Association, Xxxxx Fargo
Bank Minnesota, National Association, Bear Xxxxxxx
Asset Backed Securities, Inc. and EMC Mortgage
Corporation relating to Bear Xxxxxxx Asset Backed
Securities Trust 2002-AC1, Asset- Backed
Certificates, Series 2002-AC1
-----------------------------------------------------
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
____________, 2002
Bank One, National Association
000 Xxxx 00xx Xx., 0xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Bear Xxxxxxx Asset Backed Securities, Inc., Series 2002-AC1
Re: Custodial Agreement, dated as of February 6, 2002, by
and among Bank One, National Association, Xxxxx Fargo
Bank Minnesota, National Association, Bear Xxxxxxx
Asset Backed Securities, Inc. and EMC Mortgage
Corporation relating to Bear Xxxxxxx Asset Backed
Securities Trust 2002-AC1, Asset-Backed Certificates,
Series 2002-AC1
-----------------------------------------------------
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
____________, 2002
Bank One, National Association
000 Xxxx 00xx Xx., 0xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Bear Xxxxxxx Asset Backed Securities, Inc., Series 2002-AC1
Re: Custodial Agreement, dated as of February 6, 2002, by
and among Bank One, National Association, Xxxxx Fargo
Bank Minnesota, National Association, Bear Xxxxxxx
Asset Backed Securities, Inc. and EMC Mortgage
Corporation relating to Bear Xxxxxxx Asset Backed
Securities Trust 2002-AC1, Asset-Backed Certificates,
Series 2002-AC1
-----------------------------------------------------
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 with respect to each Mortgage Loan listed in the
Mortgage Loan Schedule containing with respect to each such 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 originator thereof to the Person endorsing it to the Trustee
or an original lost note affidavit from the Seller stating that the
original Mortgage Note was lost, misplaced or destroyed, together with
a copy of the related Mortgage Note;
(ii) The original Mortgage with evidence of recording
indicated thereon or a copy of the Mortgage certified by the public
recording office in which such mortgage has been recorded;
(iii) An original Assignment of the Mortgage to the Trustee
with evidence of recording indicated thereon or a copy of such
assignment certified by the public recording office in which such
assignment has been recorded;
(iv) With respect to each Mortgage Loan, to the extent
available, the original recorded assignment or assignments of the
Mortgage showing an unbroken chain of title
from the originator thereof to the Person assigning it to the Trustee
or a copy of such assignment or assignments of the Mortgage certified
by the public recording office in which such assignment or assignments
have been recorded; and
(v) The original of each modification, assumption, extension
or guaranty agreement, if any, relating to such Mortgage Loan or a copy of each
modification, assumption, extension or guaranty agreement certified by the
public recording office in which such document has been recorded.
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:
---------------------------------
