STRUCTURED ASSET MORTGAGE INVESTMENTS INC.,
Seller,
XXXXX FARGO BANK MINNESOTA, NATIONAL ASSOCIATION,
Master Servicer
and
BANKERS TRUST COMPANY OF CALIFORNIA, N.A.
Trustee
POOLING AND SERVICING AGREEMENT
Dated as of January 1, 2001
Structured Asset Mortgage Investments Inc.
Bear Xxxxxxx ARM Trust, Mortgage Pass-Through Certificates
Series 2001-1
TABLE OF CONTENTS
Page
ARTICLE I DEFINITIONS.............................................................................................2
ARTICLE II CONVEYANCE OF MORTGAGE LOANS; ORIGINAL ISSUANCE OF CERTIFICATES......................................28
Section 2.01. Conveyance of Mortgage Loans to Trustee...........................................................28
Section 2.02. Acceptance of Mortgage Loans by Trustee...........................................................30
Section 2.03. Assignment of Interest in the Mortgage Loan Purchase Agreement and other Agreements...............32
Section 2.04. Substitution of Mortgage Loans....................................................................34
Section 2.05. Repurchase Of Foreclosure Restricted Loans........................................................35
Section 2.06. Issuance of Certificates..........................................................................36
Section 2.07. Representations and Warranties of the Trustee.....................................................36
Section 2.08. Representations and Warranties Concerning the Seller..............................................37
Section 2.09. Representations and Warranties of the Master Servicer.............................................38
ARTICLE III ADMINISTRATION AND SERVICING OF MORTGAGE LOANS.......................................................41
Section 3.01. Duties of the Master Servicer.....................................................................41
Section 3.02. Monitoring of Servicers' Performance..............................................................41
Section 3.03. Master Servicer Fidelity Bond and Master Servicer Errors and Omissions Insurance Policy...........42
Section 3.04. Master Servicer's Financial Statements and Related Information....................................43
Section 3.05. Power to Act; Procedures..........................................................................43
Section 3.06. Reserved..........................................................................................43
Section 3.07. "Due on Sale" Clauses; Assumption Agreements......................................................43
Section 3.08. Release of Mortgage Files.........................................................................44
Section 3.09. Documents, Records and Funds in Possession of Master Servicer To Be Held for Trustee..............45
Section 3.10. Reserved..........................................................................................45
Section 3.11. Standard Hazard and Flood Insurance Policies......................................................45
Section 3.12. Presentment of Claims and Collection of Proceeds..................................................46
Section 3.13. Maintenance of the Primary Mortgage Insurance Policies............................................46
Section 3.14. Trustee To Retain Possession of Certain Insurance Policies and Documents..........................47
Section 3.15. Realization Upon Defaulted Mortgage Loans.........................................................47
Section 3.16. Compensation to the Master Servicer...............................................................47
Section 3.17. REO Property......................................................................................48
Section 3.18. Annual Officer's Certificate as to Compliance.....................................................48
Section 3.19. Annual Independent Accountants' Servicing Report..................................................49
ARTICLE IV ACCOUNTS..............................................................................................50
Section 4.01. Protected Accounts................................................................................50
Section 4.02. Certificate Account...............................................................................51
Section 4.03. Permitted Withdrawals and Transfers from the Certificate Account..................................53
Page
ARTICLE V CERTIFICATES...........................................................................................56
Section 5.01. Certificates......................................................................................56
Section 5.02. Registration of Transfer and Exchange of Certificates.............................................61
Section 5.03. Mutilated, Destroyed, Lost or Stolen Certificates.................................................65
Section 5.04. Persons Deemed Owners.............................................................................65
Section 5.05. Transfer Restrictions on Residual Certificates....................................................66
Section 5.06. Restrictions on Transferability of Certificates...................................................67
Section 5.07. ERISA Restrictions................................................................................67
Section 5.08. Rule 144A Information.............................................................................68
ARTICLE VI PAYMENTS TO CERTIFICATEHOLDERS........................................................................69
Section 6.01. Distributions on the Certificates.................................................................69
Section 6.02. Allocation of Losses..............................................................................72
Section 6.03. Payments..........................................................................................74
Section 6.04. Statements to Certificateholders..................................................................74
Section 6.05. Monthly Advances..................................................................................77
Section 6.06. Compensating Interest Payments....................................................................77
Section 6.07. Reports of Foreclosures and Abandonment of Mortgaged Property.....................................78
ARTICLE VII THE MASTER SERVICER..................................................................................79
Section 7.01. Liabilities of the Master Servicer................................................................79
Section 7.02. Merger or Consolidation of the Master Servicer....................................................79
Section 7.03. Indemnification of the Trustee....................................................................79
Section 7.04. Limitation on Liability of the Master Servicer and Others.........................................80
Section 7.05. Master Servicer Not to Resign.....................................................................81
Section 7.06. Successor Master Servicer.........................................................................81
Section 7.07. Sale and Assignment of Master Servicing...........................................................81
ARTICLE VIII DEFAULT.............................................................................................83
Section 8.01. Events of Default.................................................................................83
Section 8.02. Trustee to Act; Appointment of Successor..........................................................84
Section 8.03. Notification to Certificateholders................................................................85
Section 8.04. Waiver of Defaults................................................................................85
Section 8.05. List of Certificateholders........................................................................86
ARTICLE IX CONCERNING THE TRUSTEE................................................................................87
Section 9.01. Duties of Trustee.................................................................................87
Section 9.02. Certain Matters Affecting the Trustee.............................................................88
Section 9.03. Trustee Not Liable for Certificates or Mortgage Loans.............................................90
Section 9.04. Trustee May Own Certificates......................................................................90
Section 9.05. Trustee's Fees and Expenses.......................................................................91
Section 9.06. Eligibility Requirements for Trustee..............................................................91
Section 9.07. Insurance.........................................................................................92
Section 9.08. Resignation and Removal of the Trustee............................................................92
Section 9.09. Successor Trustee.................................................................................92
Section 9.10. Merger or Consolidation of Trustee................................................................93
Section 9.11. Appointment of Co-Trustee or Separate Trustee.....................................................93
Section 9.12. Master Servicer Shall Provide Information as Reasonably Required..................................94
Section 9.13. Federal Information Returns and Reports to Certificateholders; REMIC Administration...............95
Section 9.14. Reports Filed with Securities and Exchange Commission.............................................98
Section 9.15. Appointment of Custodians.........................................................................98
Page
ARTICLE X TERMINATION............................................................................................99
Xxxxxxx 00.00. Xxxxxxxxxxx Xxxx Xxxxxxxxxx by the Seller or its Designee or Liquidation of the Mortgage Loans...99
Section 10.02. Additional Termination Requirements.............................................................101
ARTICLE XI MISCELLANEOUS PROVISIONS...............................................................................1
Section 11.01. Intent of Parties.................................................................................1
Section 11.02. Amendment.........................................................................................1
Section 11.03. Recordation of Agreement..........................................................................2
Section 11.04. Limitation on Rights of Certificateholders........................................................2
Section 11.05. Acts of Certificateholders........................................................................3
Section 11.06. Governing Law.....................................................................................3
Section 11.07. Notices...........................................................................................3
Section 11.08. Severability of Provisions........................................................................4
Section 11.09. Successors and Assigns............................................................................4
Section 11.10. Article and Section Headings......................................................................4
Section 11.11. Counterparts......................................................................................4
Section 11.12. Notice to Rating Agencies.........................................................................4
Page
EXHIBITS
Exhibit A-1 - Form of Class X-0, X-0, X-0, X-0, X-0 and A-6 Certificates
Exhibit A-2 - Form of Class X-0, X-0, X-0, X-0, B-5 and B-6 Certificates
Exhibit A-3 - Form of Class R-I and R-II Certificates
Exhibit B-1 - Group 1 Mortgage Loan Schedule
Exhibit B-2 - Group 2 Mortgage Loan Schedule
Exhibit B-3 - Group 3 Mortgage Loan Schedule
Exhibit B-4 - Group 4 Mortgage Loan Schedule
Exhibit B-5 - Group 5 Mortgage Loan Schedule
Exhibit B-6 - Group 6 Mortgage Loan Schedule
Exhibit C - Representations and Warranties Concerning
the Mortgage Loans
Exhibit D - Request for Release of Documents
Exhibit E - Form of Affidavit pursuant to Section 860E(e)(4)
Exhibit F-1 - Form of Investment Letter
Exhibit F-2 - Form of Rule 144A and Related Matters Certificate
Exhibit G - Form of Custodial Agreement
Exhibit H - Reserved
Exhibit I - Reserved
Exhibit J - Reserved
Exhibit K - List of Mortgage Loans for which Mortgage Notes are Lost
Exhibit L - Reserved
Exhibit M - Reserved
Exhibit N - Servicing Agreements
N-1 - Alliance Servicing Agreement
N-2 - Atlantic Mortgage Servicing Agreement
N-3 - Cendant Servicing Agreement
N-4 - Charter Southwest Servicing Agreement
N-5 - Countrywide Servicing Agreement
N-6 - First Indiana Servicing Agreement
N-7 - First Union Servicing Agreement
N-8 - GMAC Mortgage Servicing Agreement
N-9 - HomeSide Servicing Agreement
N-10 - National City Servicing Agreement
N-11 - PNC Servicing Agreement
N-12 - RFC Servicing Agreement
N-13 - Xxxxx Fargo Mortgage Servicing Agreement
N-14 - Wilmington Servicing Agreement
Exhibit O - Assignment, Assumption and Recognition Agreements
Exhibit P - PMI Policy from PMI Insurer
Schedule A . - First Horizon Mortgage Loans
Schedule B.. - Foreclosure Restricted Loans
Schedule C.. - Xxxxxx Mortgage Loans
POOLING AND SERVICING AGREEMENT
Pooling and Servicing Agreement dated as of January 1, 2001, among
Structured Asset Mortgage Investments Inc., a Delaware corporation, as the
seller (the "Seller"), Xxxxx Fargo Bank Minnesota, National Association, a
national banking association, as the master servicer (in such capacity, the
"Master Servicer") and Bankers Trust Company of California, N.A., not in its
individual capacity but solely as trustee (the "Trustee").
PRELIMINARY STATEMENT
On or prior to the Closing Date, the Seller has acquired the Mortgage
Loans from EMC Mortgage Corporation (the "Mortgage Loan Seller" or "EMC"). On
the Closing Date, the Seller will sell the Mortgage Loans and certain other
property to the Trust Fund and receive in consideration therefor Certificates
evidencing the entire beneficial ownership interest in the Trust Fund.
The Trustee on behalf of the Trust shall make an election for the
assets constituting REMIC I to be treated for federal income tax purposes as a
REMIC. On the Startup Day, all of the Classes of REMIC I Regular Interests will
be designated "regular interests" in such REMIC and the Class R-I Certificate
will be designated the "residual interest" in such REMIC.
The Trustee on behalf of the Trust shall make an election for the
assets constituting REMIC II to be treated for federal income tax purposes as a
REMIC. On the Startup Day, all of the Classes of REMIC II Regular Certificates
will be designated "regular interests" in such REMIC and the Class R-II
Certificate will be designated the "residual interest" in such REMIC.
The Mortgage Loans will have an aggregate Outstanding Principal Balance
as of the Cut-off Date, after deducting all Scheduled Principal due on or before
the Cut-off Date, of $366,177,674.00. The initial principal amount of the
Certificates will not exceed the Outstanding Principal Balance of the Mortgage
Loans.
In consideration of the mutual agreements herein contained, the Seller,
the Master Servicer and the Trustee agree as follows:
1
ARTICLE I
DEFINITIONS
Whenever used in this Agreement, the following words and phrases,
unless otherwise expressly provided or unless the context otherwise requires,
shall have the meanings specified in this Article.
Accepted Master Servicing Practices: With respect to any Mortgage Loan,
as applicable, either (x) those customary mortgage servicing practices of
prudent mortgage servicing institutions that master service mortgage loans of
the same type and quality as such Mortgage Loan in the jurisdiction where the
related Mortgaged Property is located, to the extent applicable to the Trustee
or the Master Servicer (except in its capacity as successor to a Servicer), or
(y) as provided in the applicable Servicing Agreement, to the extent applicable
to any Servicer, but in no event below the standard set forth in clause (x).
Account: The Certificate Account and the Protected Accounts as the
context may require.
Accrued Certificate Interest: The "Accrued Certificate Interest" for
any Certificate for any Distribution Date, the interest accrued during the
related Interest Accrual Period at the applicable Pass-Through Rate on the
Current Principal Amount of such Certificate immediately prior to such
Distribution Date less (i) in the case of a Senior Certificate, such
Certificate's share of any Net Interest Shortfall from the related Mortgage
Loans and, after the Cross-Over Date, the interest portion of any Realized
Losses and (ii) in the case of a Subordinate Certificate, such Certificate's
share of any Net Interest Shortfall and the interest portion of any Realized
Losses.
Advancing Date: The Business Day preceding the related Distribution
Date.
Affiliate: As to any Person, any other Person controlling, controlled
by or under common control with such Person. "Control" means the power to direct
the management and policies of a Person, directly or indirectly, whether through
ownership of voting securities, by contract or otherwise. "Controlled" and
"Controlling" have meanings correlative to the foregoing. The Trustee may
conclusively presume that a Person is not an Affiliate of another Person unless
a Responsible Officer of the Trustee has actual knowledge to the contrary.
Agreement: This Pooling and Servicing Agreement and all amendments
hereof and supplements hereto.
Allocable Share: With respect to each Class of Subordinate
Certificates:
2
(a) as to any Distribution Date and amounts distributable pursuant to
clauses (i) and (iii) of the Subordinate Optimal Principal Amount, the
fraction, expressed as a percentage, the numerator of which is the
Current Principal Amount of such Class and the denominator of which is
the aggregate Current Principal Amount of all Classes of the
Subordinate Certificates; and
(b) as to any Distribution Date and amounts distributable pursuant to
clauses (ii), (iv) and (v) of the Subordinate Optimal Principal Amount,
and as to each Class of Subordinate Certificates (other than the Class
of Subordinate Certificates having the lowest numerical designation as
to which the Class Prepayment Distribution Trigger shall not be
applicable) for which (x) the related Class Prepayment Distribution
Trigger has been satisfied on such Distribution Date, the fraction,
expressed as a percentage, the numerator of which is the Current
Principal Amount of such Class and the denominator of which is the
aggregate Current Principal Amount of all such Classes of Subordinate
Certificates and (y) the related Class Prepayment Distribution Trigger
has not been satisfied on such Distribution Date, 0%; provided that if
on a Distribution Date, the Current Principal Amount of any Class of
Subordinate Certificates for which the related Class Prepayment
Distribution Trigger was satisfied on such Distribution Date is reduced
to zero, any amounts distributed pursuant to this clause (b), to the
extent of such Class' remaining Allocable Share, shall be distributed
to the remaining Classes of Subordinate Certificates which satisfy the
related Class Prepayment Distribution Trigger and to the Class of
Subordinate Certificates having the lowest numerical designation in
reduction of their respective Current Principal Amounts in the order of
their numerical Class designations.
Applicable Credit Rating: A credit rating of AAA, in the case of S&P or
Fitch, for any long-term deposit or security, or a rating of A-1 in the case of
S&P, or F-1 in the case of Fitch, for any short-term deposit or security.
Applicable State Law: For purposes of 9.13(d), the Applicable State Law
shall be (a) the law of the State of New York and (b) such other state law whose
applicability shall have been brought to the attention of the Trustee by either
(i) an Opinion of Counsel delivered to it or (ii) written notice from the
appropriate taxing authority as to the applicability of such state law.
Appraised Value: For any Mortgaged Property related to a Mortgage Loan,
the amount set forth as the appraised value of such Mortgaged Property in an
appraisal made for the mortgage originator in connection with its origination of
the related Mortgage Loan.
Assignment, Assumption and Recognition Agreements: The assignment,
assumption and recognition agreements, dated January 31, 2001, between EMC and
GMAC Mortgage, or among EMC, GMAC Mortgage, the Seller and/or Xxxxxx, copies of
which are attached hereto as Exhibit O.
3
Assumed Final Distribution Date: The Distribution Date in December
2040.
Average Loss Severity: With respect to any period and each Mortgage
Loan Group, the fraction obtained by dividing (x) the aggregate amount of
Realized Losses for the related Mortgage Loans for such period by (y) the number
of related Mortgage Loans which had Realized Losses for such period.
Bankruptcy Code: The United States Bankruptcy Code, as amended as
codified in 11 X.X.X.xx.xx. 101-1330.
Bankruptcy Loss: With respect to any Mortgage Loan, a Deficient
Valuation or Debt Service Reduction, as reported by the applicable Servicer.
Book-Entry Certificates: All Classes of Certificates other than the
Private Certificates.
Business Day: Any day other than (i) a Saturday or a Sunday, or (ii) a
day on which the New York Stock Exchange is closed or on which banking
institutions in New York City, or any jurisdiction in which the Master Servicer,
Trustee or any Servicer is located, are authorized or obligated by law or
executive order to be closed.
Certificate: Any mortgage pass-through certificate evidencing a
beneficial ownership interest in the Trust Fund signed and countersigned by the
Trustee in substantially the forms annexed hereto as Exhibits X-0, X-0 and A-3,
with the blanks therein appropriately completed.
Certificate Account: A Rating Agency Eligible Account created and
maintained pursuant to Section 4.02, which shall be denominated "Bankers Trust
Company of California, N.A., as Trustee f/b/o holders of Bear Xxxxxxx ARM Trust,
Mortgage Pass-Through Certificates, Series 2001-1- Certificate Account."
Certificate Account Advance: As of any Determination Date, the amount
on deposit in a Protected Account which is not required to be transferred to the
Certificate Account for distribution during the calendar month in which such
Determination Date occurs but which is deposited in the Certificate Account and
used to make a Monthly Advance.
Certificate Group: The Group 1 Certificates, Group 2 Certificates,
Group 3 Certificates, Group 4 Certificates, Group 5 Certificates or Group 6
Certificates, as applicable.
Certificate Owner: Any Person who is the beneficial owner of a
Certificate registered in the name of the Depository or its nominee.
Certificate Register: The register maintained pursuant to Section 5.02.
Certificateholder: A Holder of a Certificate.
4
Class: With respect to the Certificates, X-0, X-0, X-0, X-0, X-0, X-0,
X-0, X-0, X-0, X-0, X-0, X-0, R-I and R-II.
Class A Certificates: The Class A-1, Class A-2, Class A-3, Class A-4,
Class A-5 and Class A-6 Certificates.
Class Prepayment Distribution Trigger: For a class of Subordinate
Certificates for any Distribution Date, the Class Prepayment Distribution
Trigger is satisfied in the fraction (expressed as a percentage), the numerator
of which is the aggregate Current Principal Amount of such Class and each class
of Subordinate Certificates subordinated thereto, if any, and the denominator of
which is the Scheduled Principal Balances of all of the Mortgage loans as of the
related Due Date, equals or exceeds such percentage calculated as of the Closing
Date.
Class R Certificate: Any of the Class R-I or Class R-II Certificates.
Closing Date: January 31, 2001.
Code: The Internal Revenue Code of 1986.
Compensating Interest Payments: As defined in Section 6.06.
Corporate Trust Office: The office of the Trustee at which at any
particular time its corporate trust business is administered, which office, at
the date of the execution of this Agreement, is located at 0000 Xxxx Xx. Xxxxxx
Xxxxx, Xxxxx Xxx, Xxxxxxxxxx 00000, Attention: Corporate Trust-BART 2001-1.
Corresponding Classes: The Classes of Certificates corresponding to the
REMIC I Regular Interests, as set forth in Section 5.01.
Cross-Over Date: The first Distribution Date on which the aggregate
Current Principal Amount of the Subordinate Certificates has been reduced to
zero (giving effect to all distributions on such Distribution Date).
Current Principal Amount: With respect to any Certificate as of any
Distribution Date the Current Principal Amount will equal such Certificate's
initial principal amount on the Closing Date, as reduced by (i) all amounts
distributed on previous Distribution Dates on such Certificate on account of
principal, (ii) the principal portion of all Realized Losses previously
allocated to such Certificate (taking account of the Loss Allocation Limitation)
and (iii) in the case of a Subordinate Certificate, such Certificate's pro rata
share, if any, of the Subordinate Certificate Writedown Amount for previous
Distribution Dates. With respect to any Class of Certificates, the Current
Principal Amount thereof will equal the sum of the Current Principal Amounts of
all Certificates in such Class. Notwithstanding the foregoing, solely for
purposes of giving consents, directions, waivers, approvals, requests and
notices, the Class R Certificates after the Distribution Date on which they
receive the distribution of the last dollar of their original principal amount
shall be deemed to have a Current Principal Amount equal to their Current
Principal Amount on the day immediately preceding such Distribution Date.
5
Custodial Agreement: An agreement, dated as of the Closing Date among
the Seller, the Master Servicer, the Trustee and the Custodian in substantially
the form of Exhibit G hereto.
Custodian: Xxxxx Fargo Bank Minnesota, National Association, or any
successor custodian appointed pursuant to the provisions hereof and of the
Custodial Agreement.
Cut-off Date: January 1, 2001.
Debtor Relief Laws: Any applicable liquidation, conservatorship,
receivership, bankruptcy, insolvency, rearrangement, moratorium, reorganization,
or similar debtor relief laws affecting the rights of creditors generally from
time to time in effect.
Debt Service Reduction: Any reduction of the Scheduled Payments which a
Mortgagor is obligated to pay with respect to a Mortgage Loan as a result of any
proceeding under the Bankruptcy Code or any other similar state law or other
proceeding.
Deficient Valuation: With respect to any Mortgage Loan, a valuation of
the Mortgaged Property by a court of competent jurisdiction in an amount less
than the then outstanding indebtedness under the Mortgage Loan, which valuation
results from a proceeding initiated under the Bankruptcy Code or any other
similar state law or other proceeding.
Depository: The Depository Trust Company, the nominee of which is Cede
& Co., or any successor thereto.
Depository Agreement: The meaning specified in Subsection 5.01(a)
hereof.
Depository Participant: A broker, dealer, bank or other financial
institution or other Person for whom from time to time the Depository effects
book-entry transfers and pledges of securities deposited with the Depository.
Designated Depository Institution: A depository institution (commercial
bank, federal savings bank, mutual savings bank or savings and loan association)
or trust company (which may include the Trustee and the Master Servicer), the
deposits of which are fully insured by the FDIC to the extent provided by law.
Determination Date: With respect to each Mortgage Loan, the
Determination Date as defined in the related Servicing Agreement.
6
Disqualified Organization: Any of the following: (i) the United States,
any State or political subdivision thereof, any possession of the United States,
or any agency or instrumentality of any of the foregoing (other than an
instrumentality which is a corporation if all of its activities are subject to
tax and, except for the Xxxxxxx Mac or any successor thereto, a majority of its
board of directors is not selected by such governmental unit), (ii) any foreign
government, any international organization, or any agency or instrumentality of
any of the foregoing, (iii) any organization (other than certain farmers'
cooperatives described in Section 521 of the Code) which is exempt from the tax
imposed by Chapter 1 of the Code (including the tax imposed by Section 511 of
the Code on unrelated business taxable income), (iv) rural electric and
telephone cooperatives described in Section 1381(a)(2)(C) of the Code or (v) any
other Person so designated by the Trustee based upon an Opinion of Counsel that
the holding of an ownership interest in a Residual Certificate by such Person
may cause the Trust or any Person having an ownership interest in the Residual
Certificate (other than such Person) to incur a liability for any federal tax
imposed under the Code that would not otherwise be imposed but for the transfer
of an ownership interest in a Residual Certificate to such Person. The terms
"United States," "State" and "international organization" shall have the
meanings set forth in Section 7701 of the Code or successor provisions.
Distribution Date: The 25th day of any month, beginning in the month
immediately following the month of the Closing Date, or, if such 25th day is not
a Business Day, the Business Day immediately following.
DTC Custodian: Bankers Trust Company of California, N.A., or its
successors in interest as custodian for the Depository.
Due Date: With respect to each Mortgage Loan, the date in each month on
which its Scheduled Payment is due if such due date is the first day of a month
and otherwise is deemed to be the first day of the following month, or such
other date specified in the related Servicing Agreement.
Due Period: With respect to any Distribution Date and each Mortgage
Loan, the period commencing on the second day of the month preceding the month
in which the Distribution Date occurs and ending at the close of business on the
first day of the month in which the Distribution Date occurs.
EMC: EMC Mortgage Corporation and its successors and assigns.
ERISA: The Employee Retirement Income Security Act of 1974, as amended.
Event of Default: An event described in Section 8.01.
Excess Liquidation Proceeds: To the extent that such amount is not
required by law to be paid to the related Mortgagor, the amount, if any, by
which Liquidation Proceeds with respect to a Liquidated Mortgage Loan exceed the
sum of (i) the Outstanding Principal Balance of such Mortgage Loan and accrued
but unpaid interest at the related Mortgage Interest Rate through the last day
of the month in which the related Liquidation Date occurs, plus (ii) related
Liquidation Expenses.
7
Xxxxxx Xxx: Xxxxxx Xxx (formerly known as the Federal National Mortgage
Association) or any successor thereto.
FDIC: Federal Deposit Insurance Corporation, or any successor thereto.
FHA: The Federal Housing Authority, or any successor thereto.
First Horizon: First Horizon Home Loan Corporation, and its successors
and assigns.
First Horizon Mortgage Loans: The Mortgage Loans described on Schedule
A attached hereto, as amended from time to time to reflect the repurchase or
substitution of Mortgage Loans pursuant to this Agreement and the First Horizon
Purchase Agreement.
First Horizon Purchase Agreement: The Mortgage Loan Purchase and
Interim Servicing Agreement, dated as of November 1, 2000, between EMC and First
Horizon, as assigned by EMC to GMAC Mortgage and by GMAC Mortgage to the Seller,
pursuant to the Assignment, Assumption and Recognition Agreements, and by the
Seller to the Trust pursuant to this Agreement.
Fitch: Fitch, Inc. and its successors in interest.
Foreclosure Restricted Loan: Each Mortgage Loan which was between 60
and 89 days delinquent as of the Cut-off Date, as indicated on Schedule B
attached hereto; provided, that if any such Mortgage Loan becomes current for
three consecutive Scheduled Payments, such Mortgage Loan shall no longer be a
Foreclosure Restricted Loan.
Fractional Undivided Interest: With respect to any Class of
Certificates, the fractional undivided interest evidenced by any Certificate of
such Class the numerator of which is the Current Principal Amount of such
Certificate and the denominator of which is the Current Principal Amount of such
Class. With respect to the Certificates in the aggregate, the fractional
undivided interest evidenced by (i) a Class R-I or Class R-II Certificate will
each be deemed to equal 0.50% multiplied by a fraction, the numerator of which
is the Current Principal Amount of such Certificate and the denominator of which
is the aggregate Current Principal Amount of such respective Class and (ii) a
Certificate of any other Class will be deemed to equal 99.0% multiplied by a
fraction, the numerator of which is the Current Principal Amount of such
Certificate and the denominator of which is the Current Principal Amount of all
the Certificates (other than the Class R Certificates).
Xxxxxxx Mac: The Federal Home Loan Mortgage Corporation, or any
successor thereto.
Funds Transfer Date: As to any Distribution Date, the immediately
preceding Business Day.
8
Global Certificate: Any Class B-4, Class B-5 or Class B-6 Certificate
registered in the name of the Depository or its nominee, beneficial interests in
which are reflected on the books of the Depository or on the books of a Person
maintaining an account with such Depository (directly or as an indirect
participant in accordance with the rules of such depository).
GMAC Mortgage: GMAC Mortgage Corporation, and its successors and
assigns.
GMAC Servicing Agreement: The Servicing Agreement between the Seller
and GMAC Mortgage.
Gross Margin: As to each Mortgage Loan, the fixed percentage set forth
in the related Mortgage Note and indicated on the Mortgage Loan Schedule which
percentage is added to the related Index on each Interest Rate Adjustment Date
to determine (subject to rounding, the minimum and maximum Mortgage Interest
Rate and the Periodic Rate Cap) the Mortgage Interest Rate until the next
Interest Rate Adjustment Date.
Group Available Funds: With respect to any Distribution Date, an amount
equal to the aggregate of the following amounts with respect to the Mortgage
Loans in Loan Group 1, Loan Group 2, Loan Group 3, Loan Group 4, Loan Group 5 or
Loan Group 6, respectively: (a) all previously undistributed payments on account
of principal (including the principal portion of Monthly Payments, Principal
Payments and the principal amount of Liquidation Proceeds) and all previously
undistributed payments on account of interest received after the Cut-off Date
and on or prior to the related Determination Date, (b) any Monthly Advances and
Compensating Interest Payments by the Master Servicer and the Servicers and (c)
any amount reimbursed by the Master Servicer in connection with losses on
Permitted Investments with respect to the Certificate Account and Protected
Accounts, except:
(i) all payments that were due on or before the Cut-off Date;
(ii) all Principal Prepayments and Liquidation Proceeds received after the
applicable Prepayment Period (other than such Principal Prepayments and
Liquidation Proceeds with respect to the Mortgage Loans serviced by
National City Mortgage that the Master Servicer has received after the
end of such Prepayment Period, but has elected to deem received in such
Prepayment Period);
(iii) all payments, other than Principal Prepayments, that represent early
receipt of Scheduled Payments due on a date or dates subsequent to the
related Due Date;
(iv) amounts received on particular Mortgage Loans as late payments of
principal or interest and respecting which, and to the extent that,
there are any unreimbursed Monthly Advances or Certificate Account
Advances;
9
(v) amounts representing Monthly Advances or Certificate Account Advances
determined to be Nonrecoverable Advances;
(vi) the PMI Insurance Premium payable to the PMI Insurer under the PMI
Policy for such Distribution Date;
(vii) amounts permitted to be withdrawn from the Certificate Account pursuant
to Section 4.03(a); and
(viii) amounts permitted to be retained by the Master Servicer, the Servicers
and the Trustee pursuant to Section 4.01(a).
Group 1 Certificates: The Group 1 Senior Certificates and the
Subordinate Certificates.
Group 2 Certificates: The Class A-2 Certificates and the Subordinate
Certificates.
Group 3 Certificates: The Class A-3 Certificates and the Subordinate
Certificates.
Group 4 Certificates: The Class A-4 Certificates and the Subordinate
Certificates.
Group 5 Certificates: The Class A-5 Certificates and the Subordinate
Certificates.
Group 6 Certificates: The Class A-6 Certificates and the Subordinate
Certificates.
Group 1 Cut-off Date Balance: $46,035,698.00.
Group 2 Cut-off Date Balance: $52,308,017.00.
Group 3 Cut-off Date Balance: $73,614,337.00.
Group 4 Cut-off Date Balance: $76,578,677.00.
Group 5 Cut-off Date Balance: $57,648,285.00.
Group 6 Cut-off Date Balance: $59,992,661.00.
Group 1 Mortgage Loan: Any Mortgage Loan identified on the Mortgage
Loan Schedule as belonging to Loan Group 1.
Group 2 Mortgage Loan: Any Mortgage Loan identified on the Mortgage
Loan Schedule as belonging to Loan Group 2.
Group 3 Mortgage Loan: Any Mortgage Loan identified on the Mortgage
Loan Schedule as belonging to Loan Group 3.
10
Group 4 Mortgage Loan: Any Mortgage Loan identified on the Mortgage
Loan Schedule as belonging to Loan Group 4.
Group 5 Mortgage Loan: Any Mortgage Loan identified on the Mortgage
Loan Schedule as belonging to Loan Group 5.
Group 6 Mortgage Loan: Any Mortgage Loan identified on the Mortgage
Loan Schedule as belonging to Loan Group 6.
Group 1 Senior Certificates: The Class A-1, R-I and R-II Certificates.
Holder: The Person in whose name a Certificate is registered in the
Certificate Register, except that, subject to Subsections 11.02(b) and 11.05(e),
solely for the purpose of giving any consent pursuant to this Agreement, any
Certificate registered in the name of the Seller, the Master Servicer or the
Trustee or any Affiliate thereof shall be deemed not to be outstanding and the
Fractional Undivided Interest evidenced thereby shall not be taken into account
in determining whether the requisite percentage of Fractional Undivided
Interests necessary to effect any such consent has been obtained.
Indemnified Persons: The Trustee, the Custodian and the DTC Custodian,
and their respective officers, directors, agents and employees, and any separate
co-trustee and its officers, directors, agents and employees.
Independent: When used with respect to any specified Person, this term
means that such Person (a) is in fact independent of the Seller or the Master
Servicer and of any Affiliate of the Seller or the Master Servicer, (b) does not
have any direct financial interest or any material indirect financial interest
in the Seller or the Master Servicer or any Affiliate of the Seller or the
Master Servicer and (c) is not connected with the Seller or the Master Servicer
or any Affiliate as an officer, employee, promoter, underwriter, trustee,
partner, director or person performing similar functions.
Individual Certificate: Any Certificate registered in the name of the
Holder other than the Depository or its nominee.
Institutional Accredited Investor: Any Person meeting the requirements
of Rule 501(a)(l), (2), (3) or (7) of Regulation D under the Securities Act or
any entity all of the equity holders in which come within such paragraphs.
Insurance Policy: With respect to any Mortgage Loan, any standard
hazard insurance policy, flood insurance policy, Primary Mortgage Insurance
Policy or title insurance policy.
Insurance Proceeds: Amounts paid by the insurer under any Insurance
Policy covering any Mortgage Loan or Mortgaged Property other than amounts
required to be paid over to the Mortgagor pursuant to law or the related
Mortgage Note or Security Instrument and other than amounts used to repair or
restore the Mortgaged Property or to reimburse Insured Expenses.
11
Insured Expenses: Expenses covered by any Insurance Policy.
Insurer: Any issuer of an Insurance Policy.
Interest Accrual Period: With respect to each Distribution Date, for
each Class of Certificates, the calendar month preceding the month in which such
Distribution Date occurs.
Interest Rate Adjustment Date: With respect to each Mortgage Loan, the
date on which the Mortgage Interest Rate is adjusted.
Interest Shortfall: With respect to any Distribution Date and each
Mortgage Loan that during the related Prepayment Period was the subject of a
Principal Prepayment, or constitutes a Relief Act Mortgage Loan, an amount
determined as follows:
(a) partial principal prepayments: The difference between (i) one month's
interest at the applicable Net Rate on the amount of such prepayment
and (ii) the amount of interest for the calendar month of such
prepayment (adjusted to the applicable Net Rate) received at the time
of such prepayment;
(b) principal prepayments in full received during the relevant Prepayment
Period (other than principal prepayments in full with respect to
Mortgage Loans serviced by National City Mortgage that the Master
Servicer has received after the end of such Prepayment Period but
elects to deem received in such Prepayment Period): The difference
between (i) one month's interest at the applicable Net Rate on the
Scheduled Principal Balance of such Mortgage Loan immediately prior to
such prepayment and (ii) the amount of interest for the calendar month
of such prepayment (adjusted to the applicable Net Rate) received at
the time of such prepayment;
(c) Relief Act Mortgage Loans: As to any Relief Act Mortgage Loan, the
excess of (i) 30 days' interest (or, in the case of a principal
prepayment in full, interest to the date of prepayment) on the
Scheduled Principal Balance thereof (or, in the case of a principal
prepayment in part, on the amount so prepaid) at the related Net Rate
over (ii) 30 days' interest (or, in the case of a principal prepayment
in full, interest to the date of prepayment) on such Scheduled
Principal Balance (or, in the case of a Principal Prepayment in part,
on the amount so prepaid) at the Net Rate required to be paid by the
Mortgagor as limited by application of the Relief Act.
Investment Letter: The letter to be furnished by each Institutional
Accredited Investor which purchases any Class of Certificates in connection with
such purchase, substantially in the form set forth as Exhibit F-1 hereto.
12
Liquidated Mortgage Loan: Any Mortgage Loan as to which the Master
Servicer or applicable Servicer has determined that all amounts it expects to
recover from or on account of such Mortgage Loan have been recovered.
Liquidation Date: With respect to any Liquidated Mortgage Loan, the
date on which the Master Servicer or related Servicer has certified that such
Mortgage Loan has become a Liquidated Mortgage Loan.
Liquidation Expenses: With respect to a Mortgage Loan in liquidation,
unreimbursed expenses paid or incurred by or for the account of the Master
Servicer or the related Servicer and not recovered by the Master Servicer or the
related Servicer under any FHA insurance, VA guarantee or Primary Mortgage
Insurance Policy for reasons other than the Master Servicer's or the related
Servicer's failure to ensure the maintenance of or compliance with any related
FHA insurance, VA guarantee or Primary Mortgage Insurance Policy, such expenses
including (a) property protection expenses, (b) property sales expenses, (c)
foreclosure and sale costs, including court costs and reasonable attorneys'
fees, and (d) similar expenses reasonably paid or incurred in connection with
liquidation.
Liquidation Proceeds: Cash received in connection with the liquidation
of a Mortgage Loan, whether through trustee's sale, foreclosure sale, Insurance
Proceeds, condemnation proceeds or otherwise, including any FHA insurance or VA
guarantee.
Loan Group: Loan Group 1, Loan Group 2, Loan Group 3, Loan Group 4,
Loan Group 5 or Loan Group 6.
Loan Group 1: The group of Mortgage Loans designated as belonging to
Loan Group 1 on the Mortgage Loan Schedule.
Loan Group 2: The group of Mortgage Loans designated as belonging to
Loan Group 2 on the Mortgage Loan Schedule.
Loan Group 3: The group of Mortgage Loans designated as belonging to
Loan Group 3 on the Mortgage Loan Schedule.
Loan Group 4: The group of Mortgage Loans designated as belonging to
Loan Group 4 on the Mortgage Loan Schedule.
Loan Group 5: The group of Mortgage Loans designated as belonging to
Loan Group 5 on the Mortgage Loan Schedule.
Loan Group 6: The group of Mortgage Loans designated as belonging to
Loan Group 6 on the Mortgage Loan Schedule.
Loan Summary and Remittance Report: The report to be submitted by the
Master Servicer to the Trustee pursuant to Subsection 6.04(a).
13
Loan-to-Value Ratio: With respect to any Mortgage Loan, the fraction,
expressed as a percentage, the numerator of which is the original principal
balance of the related Mortgage Loan and the denominator of which is the
Original Value of the related Mortgaged Property.
Loss Allocation Limitation: The meaning specified in Section 6.02
hereof.
Lost Notes: The original Mortgage Notes that have been lost, as
indicated on Exhibit K hereto.
Master Servicer: As of the Closing Date, Xxxxx Fargo Bank Minnesota,
National Association and, thereafter, its respective successors in interest who
meet the qualifications pursuant to this Agreement.
Master Servicing Fee: As to any Mortgage Loan and Distribution Date, an
amount equal to the product of (i) the Scheduled Principal Balance of such
Mortgage Loan as of the Due Date in the preceding calendar month and (ii) the
Master Servicing Fee Rate.
Master Servicing Fee Rate: As to any Mortgage Loan, a per annum rate
equal to 0.02%.
Monthly Advance: An advance (including a Certificate Account Advance)
of principal or interest required to be made by the applicable Servicer pursuant
to the related Servicing Agreement or the Master Servicer pursuant to Section
6.05.
Mortgage File: The mortgage documents listed in Section 2.01(b)
pertaining to a particular Mortgage Loan and any additional documents required
to be added to the Mortgage File pursuant to this Agreement.
Mortgage Interest Rate: The annual rate at which interest accrues from
time to time on any Mortgage Loan pursuant to the related Mortgage Note, which
rate is equal to the "Mortgage Interest Rate" set forth with respect thereto on
the Mortgage Loan Schedule.
Mortgage Loan: A mortgage loan (including Cooperative Loans)
transferred and assigned to the Trustee pursuant to Section 2.01 or Section 2.04
and held as a part of the Trust Fund, as identified in the Mortgage Loan
Schedule, including a mortgage loan the property securing which has become an
REO Property.
Mortgage Loan Group: Any Loan Group.
Mortgage Loan Purchase Agreement: The Mortgage Loan Purchase Agreement
dated as of January 31, 2001, between EMC, as seller, and Structured Asset
Mortgage Investments Inc., as purchaser, and all amendments thereof and
supplements thereto.
14
Mortgage Loan Schedule: With respect to each Loan Group, the schedule,
attached hereto as Exhibits X-0, X-0, X-0, X-0, X-0 and B-6, respectively, with
respect to the Mortgage Loans in such Loan Group and as amended from time to
time to reflect the repurchase or substitution of Mortgage Loans pursuant to
this Agreement, such schedule setting forth the following information with
respect to each Mortgage Loan: (1) the Mortgage Loan identifying number; (2) the
Mortgagor's name; (3) the street address of the Mortgaged Property including the
city and the state code; (4) a code indicating whether the Mortgaged Property is
a single family residence, condominium, shares in a cooperative corporation, or
a 2-4 family residence; (5) the original months to maturity or the remaining
months to maturity from the Cut-off Date, in any case based on the original
amortization schedule, and if different, the maturity expressed in the same
manner but based on the actual amortization schedule; (6) the Loan-to-Value
Ratio at origination; (7) the Mortgage Interest Rate as of the origination and
Cut-off Date; (8) the date on which the Mortgage Loan was originated; (9) the
stated maturity date; (10) the amount of the Scheduled Payment; (11) the last
payment date on which a payment was actually applied to the Outstanding
Principal Balance; (12) the original principal amount of the Mortgage Loan; (13)
the principal balance of the Mortgage Loan as of the close of business on the
Cut-off Date, after deduction of the payments of principal due on or before the
Cut-off Date, whether or not collected; (14) the Index; (15) the next Interest
Rate Adjustment Date; (16) the Gross Margin; (17) the minimum and maximum
Mortgage Interest Rate under the terms of the Mortgage Note; (18) the date on
which the first Scheduled Payment was due; (19) the periodic rate cap; (20) a
code indicating whether the Mortgaged Property is owner-occupied, a second home
or an investment property; (21) a code indicating the purpose of the loan; (22)
the related Servicing Fee Rate; (23) the related Servicer; and (24) whether or
not such Mortgage Loan is 60 to 89 days delinquent. With respect to each Loan
Group in the aggregate, the Mortgage Loan Schedule shall set forth the following
information, as of the Cut-off Date: (1) the number of Mortgage Loans; (2) the
current aggregate Outstanding Principal Balance of the Mortgage Loans; and (3)
the weighted average Mortgage Interest Rate of the Mortgage Loans.
Mortgage Note: The originally executed note or other evidence of the
indebtedness of a Mortgagor under the related Mortgage Loan.
Mortgaged Property: Land and improvements securing the indebtedness of
a Mortgagor under the related Mortgage Loan or, in the case of REO Property,
such REO Property.
Mortgagor: The obligor on a Mortgage Note.
Net Interest Shortfall: With respect to any Distribution Date, the
Interest Shortfall, if any, for such Distribution Date net of Compensating
Interest Payments made with respect to such Distribution Date.
Net Liquidation Proceeds: As to any Liquidated Mortgage Loan,
Liquidation Proceeds net of (i) Liquidation Expenses which are payable therefrom
to the applicable Servicer in accordance with the related Servicing Agreement
and (ii) unreimbursed Monthly Advances.
15
Net Rate: With respect to each Mortgage Loan, the Mortgage Interest
Rate in effect from time to time less the sum of (i) the Master Servicing Fee
Rate, (ii) the related Servicing Fee Rate and (iii) in the case of a Group 2
Mortgage Loan, the applicable PMI Insurance Premiums.
Nonrecoverable Advance: Any advance or Monthly Advance (i) which was
previously made or is proposed to be made by the Master Servicer or applicable
Servicer and (ii) which, in the good faith judgment of the Master Servicer or
applicable Servicer, will not or, in the case of a proposed advance or Monthly
Advance, would not, be ultimately recoverable by the Master Servicer or
applicable Servicer from Liquidation Proceeds, Insurance Proceeds or future
payments on the Mortgage Loan for which such advance or Monthly Advance was
made.
Officer's Certificate: A certificate signed by the Chairman of the
Board, the Vice Chairman of the Board, the President or a Vice President or
Assistant Vice President or other authorized officer of the Master Servicer and
delivered to the Trustee, as required by this Agreement.
Opinion of Counsel: A written opinion of counsel who is or are
acceptable to the Trustee and who, unless required to be Independent (an
"Opinion of Independent Counsel"), may be internal counsel for the Master
Servicer or the Seller.
Original Subordinate Principal Balance: The sum of the aggregate
Current Principal Amounts of each Class of Subordinate Certificates as of the
Closing Date.
Original Value: The lesser of (i) the Appraised Value or (ii) sales
price of a Mortgaged Property at the time of origination of a Mortgage Loan,
except that in instances where either (i) or (ii) is unavailable, the other may
be used to determine Original Value, or if both (i) and (ii) are unavailable,
Original Value may be determined from other sources reasonably acceptable to the
Seller.
Outstanding Mortgage Loan: With respect to any Due Date, a Mortgage
Loan which, prior to such Due Date, was not the subject of a Principal
Prepayment in full, did not become a Liquidated Mortgage Loan and was not
purchased or replaced.
Outstanding Principal Balance: As of the time of any determination, the
principal balance of a Mortgage Loan remaining to be paid by the Mortgagor, or,
in the case of an REO Property, the principal balance of the related Mortgage
Loan remaining to be paid by the Mortgagor at the time such property was
acquired by the Trust Fund.
Pass-Through Rate: As to each Class of Certificates, the rate of
interest determined as provided with respect thereto in Section 5.01(d). Any
monthly calculation of interest at a stated rate shall be based upon annual
interest at such rate divided by twelve.
16
Permitted Investments: Any one or more of the following obligations or
securities held in the name of the Trustee for the benefit of the
Certificateholders:
(i) direct obligations of, and obligations the timely payment of which are
fully guaranteed by the United States of America or any agency or
instrumentality of the United States of America the obligations of
which are backed by the full faith and credit of the United States of
America;
(ii) (a) demand or time deposits, federal funds or bankers' acceptances
issued by any depository institution or trust company incorporated
under the laws of the United States of America or any state thereof
(including the Trustee or the Master Servicer acting in its commercial
banking capacity) and subject to supervision and examination by federal
and/or state banking authorities, provided that the commercial paper
and/or the short-term debt rating and/or the long-term unsecured debt
obligations of such depository institution or trust company at the time
of such investment or contractual commitment providing for such
investment have the Applicable Credit Rating or better from each Rating
Agency and (b) any other demand or time deposit or certificate of
deposit that is fully insured by the Federal Deposit Insurance
Corporation;
(iii) repurchase obligations with respect to (a) any security described in
clause (i) above or (b) any other security issued or guaranteed by an
agency or instrumentality of the United States of America, the
obligations of which are backed by the full faith and credit of the
United States of America, in either case entered into with a depository
institution or trust company (acting as principal) described in clause
(ii)(a) above where the Trustee holds the security therefor;
(iv) securities bearing interest or sold at a discount issued by any
corporation (including the Trustee or the Master Servicer) incorporated
under the laws of the United States of America or any state thereof
that have the Applicable Credit Rating or better from each Rating
Agency at the time of such investment or contractual commitment
providing for such investment; provided, however, that securities
issued by any particular corporation will not be Permitted Investments
to the extent that investments therein will cause the then outstanding
principal amount of securities issued by such corporation and held as
part of the Trust to exceed 10% of the aggregate Outstanding Principal
Balances of all the Mortgage Loans and Permitted Investments held as
part of the Trust;
(v) commercial paper (including both non-interest-bearing discount
obligations and interest-bearing obligations payable on demand or on a
specified date not more than one year after the date of issuance
thereof) having the Applicable Credit Rating or better from each Rating
Agency at the time of such investment;
17
(vi) a Reinvestment Agreement issued by any bank, insurance company or other
corporation or entity;
(vii) any other demand, money market or time deposit, obligation, security or
investment as may be acceptable to each Rating Agency as evidenced in
writing by each Rating Agency to the Trustee; and
(viii) any money market or common trust fund having the Applicable Credit
Rating or better from each Rating Agency, including any such fund for
which the Trustee or the Master Servicer or any affiliate of the
Trustee or the Master Servicer acts as a manager or an advisor;
provided, however, that no instrument or security shall be a Permitted
Investment if such instrument or security evidences a right to receive only
interest payments with respect to the obligations underlying such instrument or
if such security provides for payment of both principal and interest with a
yield to maturity in excess of 120% of the yield to maturity at par or if such
instrument or security is purchased at a price greater than par.
Permitted Transferee: Any Person other than a Disqualified Organization
or an "electing large partnership" (as defined by Section 775 of the Code).
Person: Any individual, corporation, partnership, joint venture,
association, limited liability company, joint-stock company, trust,
unincorporated organization or government or any agency or political subdivision
thereof.
PMI Insurance Premium: With respect to each Distribution Date, the
premium for the PMI Policy, equal to one month's interest at the PMI Insurance
Premium Rate on the Scheduled Principal Balance (as of the beginning of the
related Due Period) of the Mortgage Loans which were covered by the PMI Policy
as of the Cut-off Date, together with certain state taxes imposed on such
premiums, payable by the Trustee on each Distribution Date from amounts on
deposit in the Certificate Account in accordance with Section 4.02(b) of this
Agreement.
PMI Insurance Premium Rate: With respect to any Mortgage Loan covered
by the PMI Policy, the rate at which the premium on the PMI Policy accrues,
which is 0.50% per annum, together with any applicable state taxes imposed on
such premium..
PMI Insurer: Radian Guaranty Inc., its successors and assigns.
PMI Policy: The supplemental primary mortgage insurance policies of the
PMI Insurer attached hereto as Exhibit J, or any successor PMI Policy.
Prepayment Period: With respect to any Mortgage Loan and any
Distribution Date, the calendar month preceding the month in which such
Distribution Date occurs.
18
Primary Mortgage Insurance Policy: With respect to any Mortgage Loan,
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, including the PMI Policy, or any replacement policy therefor.
Principal Prepayment: Any payment (whether partial or full) or other
recovery of principal on a Mortgage Loan which is received in advance of its
scheduled Due Date to the extent that it is not accompanied by an amount as to
interest representing scheduled interest due on any date or dates in any month
or months subsequent to the month of prepayment, including Insurance Proceeds
and the purchase price in connection with any purchase of a Mortgage Loan, any
cash deposit in connection with the substitution of a Mortgage Loan, and the
principal portion of Net Liquidation Proceeds.
Private Certificates: The Class B-4, B-5 and B-6 Certificates.
Protected Account: An account established and maintained in the name of
the Trustee for the benefit of Certificateholders by the Master Servicer or any
Servicer with respect to the Mortgage Loans and with respect to REO Property in
a Designated Depository Institution or Rating Agency Eligible Account for
receipt of principal and interest and other amounts as described in Section
4.01.
QIB: A Qualified Institutional Buyer as defined in Rule 144A
promulgated under the Securities Act.
Qualified Insurer: Any insurance company duly qualified as such under
the laws of the state or states in which the related Mortgaged Property or
Mortgaged Properties is or are located, duly authorized and licensed in such
state or states to transact the type of insurance business in which it is
engaged and approved as an insurer by the Master Servicer, so long as the claims
paying ability of which is acceptable to the Rating Agencies for pass-through
certificates having the same rating as the Certificates rated by the Rating
Agencies as of the Closing Date.
Rating Agencies: S&P and Fitch.
Rating Agency Eligible Account: An account, including one maintained
with the Trustee or the Master Servicer, which either (i) is a trust account
maintained with the corporate trust department of a depository institution or
trust company (including, without limitation, the Trustee) organized under the
laws of the United States of America or any one of the states thereof or the
District of Columbia which is not affiliated with any Servicer, (ii) is
maintained with an entity which is an institution whose deposits are insured by
the FDIC, the unsecured and uncollateralized long-term debt obligations of which
shall be rated "A" or higher by S&P and Fitch, or one of the two highest
short-term ratings by each Rating Agency, and which is either (a) a federal
savings association duly organized, validly existing and in good standing under
the federal banking laws, (b) an institution duly organized, validly existing
and in good standing under the applicable banking laws of any state, (c) a
national banking association under the federal banking laws, or (d) a principal
subsidiary of a bank holding company, or (iii) otherwise meets the requirements
of each Rating Agency for the maintenance of the ratings on the Certificates.
19
Realized Loss: Any (i) Deficient Valuation or (ii) as to any Liquidated
Mortgage Loan, (x) the Outstanding Principal Balance of such Liquidated Mortgage
Loan plus accrued and unpaid interest thereon at the Mortgage Interest Rate
through the last day of the month of such liquidation, less (y) the related Net
Liquidation Proceeds with respect to such Mortgage Loan.
Record Date: With respect to any Distribution Date, the close of
business on the last Business Day of the month immediately preceding the month
of such Distribution Date.
Reinvestment Agreements: One or more reinvestment agreements,
acceptable to the Rating Agencies, from a bank, insurance company or other
corporation or entity (including the Trustee).
Relief Act: The Soldiers' and Sailors' Civil Relief Act of 1940, as
amended.
Relief Act Mortgage Loan: Any Mortgage Loan as to which the Scheduled
Payment thereof has been reduced due to the application of the Relief Act
REMIC: A real estate mortgage investment conduit, as defined in the
Code.
REMIC I: That group of assets contained in the Trust Fund designated as
a REMIC consisting of (i) the Mortgage Loans, (ii) the related Certificate
Account, (iii) any REO Property relating to the Mortgage Loans, (iv) the rights
with respect to any Servicing Agreement and (v) any proceeds of the foregoing.
REMIC I Interests: The REMIC I Regular Interests and the Class R-I
Certificates.
REMIC I Regular Interests: REMIC I Regular Interests 1A, 1B, 1C, 2A,
2B, 3A, 3B, 4A, 4B, 5A, 5B, 6A and 6B, with such terms as described in Section
5.01(e).
REMIC II: That group of assets contained in the Trust Fund designated
as a REMIC consisting of REMIC I Regular Interests.
REMIC II Certificates: The REMIC II Regular Certificates and the Class
R-II Certificates.
REMIC II Regular Certificates: As defined in Section 5.01(e).
REMIC Opinion: An Opinion of Independent Counsel, to the effect that
the proposed action described therein would not, under the REMIC Provisions, (i)
cause either REMIC I or REMIC II to fail to qualify as a REMIC while any regular
interest in such REMIC is outstanding, (ii) result in a tax on prohibited
transactions with respect to either REMIC I or REMIC II or (iii) constitute a
taxable contribution to either REMIC I or REMIC II after the Startup Day.
20
REMIC Provisions: The provisions of the federal income tax law relating
to the REMICs, which appear at Sections 860A through 860G of the Code, and
related provisions and regulations promulgated thereunder, as the foregoing may
be in effect from time to time.
REO Property: A Mortgaged Property acquired in the name of the Trustee,
for the benefit of Certificateholders, by foreclosure or deed-in-lieu of
foreclosure in connection with a defaulted Mortgage Loan.
Repurchase Price: With respect to any Mortgage Loan (or any property
acquired with respect thereto) required to be repurchased pursuant to Article II
an amount equal to the sum of (i) 100% of the Outstanding Principal Balance of
such Mortgage Loan as of the date of repurchase (or if the related Mortgaged
Property was acquired with respect thereto, 100% of the Outstanding Principal
Balance at the date of the acquisition), (ii) accrued but unpaid interest on the
Outstanding Principal Balance at the related Mortgage Interest Rate, through and
including the last day of the month of repurchase (or through the date of
repurchase, in the case of a Xxxxxx Mortgage Loan) and reduced by (iii) any
portion of the related Master Servicing Fees, Servicing Fees, Monthly Advances
and advances payable to the purchaser of the Mortgage Loan.
Request for Release: A request for release in the form attached hereto
as Exhibit D.
Required Insurance Policy: With respect to any Mortgage Loan, any
insurance policy which is required to be maintained from time to time under this
Agreement with respect to such Mortgage Loan.
Residual Certificates: The Class R-I and R-II Certificates.
Responsible Officer: Any Vice President, Assistant Vice President, any
Assistant Secretary, any trust officer or any other officer of the Trustee
customarily performing functions similar to those performed by any of the above
designated officers and having direct responsibility for the administration of
this Agreement or any other officer of the Trustee to whom matters under this
Agreement may be referred.
Roslyn: The Xxxxxx Savings Bank and its successors and assigns.
Roslyn Mortgage Loans: The Mortgage Loans described on Schedule C
attached hereto, as amended from time to time to reflect the purchase or
substitution of Mortgage Loans pursuant to this Agreement and the Xxxxxx
Purchase Agreement.
Roslyn Purchase Agreement. The Purchase, Warranties and Interim
Servicing Agreement, dated as of September 1, 2000, between EMC and Xxxxxx, as
assigned by EMC to GMAC Mortgage and by GMAC Mortgage to the Seller, pursuant to
the Assignment, Assumption and Recognition Agreements, and by the Seller to the
Trust pursuant to this Agreement.
21
Rule 144A Certificate: The certificate to be furnished by each
purchaser of a Certificate that is no longer a Book-Entry Certificate which is a
Qualified Institutional Buyer as defined under Rule 144A promulgated under the
Securities Act, substantially in the form set forth as Exhibit F-2 hereto.
S&P: Standard and Poor's, a division of The XxXxxx-Xxxx Companies,
Inc., and its successors in interest.
Scheduled Payment: With respect to any Mortgage Loan and any month, the
scheduled payment or payments of principal and interest due during such month on
such Mortgage Loan which either is payable by a Mortgagor in such month under
the related Mortgage Note or, in the case of REO Property, would otherwise have
been payable under the related Mortgage Note.
Scheduled Principal: The principal portion of any Scheduled Payment.
Scheduled Principal Balance: With respect to any Mortgage Loan on any
Distribution Date, (i) the unpaid principal balance of such Mortgage Loan as of
the close of business on the related Due Date (i.e., taking account of the
principal payment to be made on such Due Date and irrespective of any
delinquency in its payment), as specified in the amortization schedule at the
time relating thereto (before any adjustment to such amortization schedule by
reason of any bankruptcy or similar proceeding occurring after the Cut-off Date
(other than a Deficient Valuation) or any moratorium or similar waiver or grace
period) less (ii) any Principal Prepayments (including the principal portion of
Net Liquidation Proceeds) received during or prior to the related Prepayment
Period; provided that the Scheduled Principal Balance of a Liquidated Mortgage
Loan is zero.
Securities Act: The Securities Act of 1933, as amended.
Securities Legend: "THIS CERTIFICATE HAS NOT BEEN AND WILL NOT BE
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"),
OR UNDER ANY STATE SECURITIES LAWS. THE HOLDER HEREOF, BY PURCHASING THIS
CERTIFICATE, AGREES THAT THIS CERTIFICATE MAY BE REOFFERED, RESOLD, PLEDGED OR
OTHERWISE TRANSFERRED ONLY IN COMPLIANCE WITH THE SECURITIES ACT AND OTHER
APPLICABLE LAWS AND ONLY (1) PURSUANT TO RULE 144A UNDER THE SECURITIES ACT
("RULE 144A") TO A PERSON THAT THE HOLDER REASONABLY BELIEVES IS A QUALIFIED
INSTITUTIONAL BUYER WITHIN THE MEANING OF RULE 144A (A "QIB"), PURCHASING FOR
ITS OWN ACCOUNT OR A QIB PURCHASING FOR THE ACCOUNT OF A QIB, WHOM THE HOLDER
HAS INFORMED, IN EACH CASE, THAT THE REOFFER, RESALE, PLEDGE OR OTHER TRANSFER
IS BEING MADE IN RELIANCE ON RULE 144A, (2) PURSUANT TO AN EXEMPTION FROM
REGISTRATION PROVIDED BY RULE 144 UNDER THE SECURITIES ACT (IF AVAILABLE) OR (3)
IN CERTIFICATED FORM TO AN "INSTITUTIONAL ACCREDITED INVESTOR" WITHIN THE
MEANING THEREOF IN RULE 501(a)(1), (2), (3) or (7) OF REGULATION D UNDER THE ACT
OR ANY ENTITY IN WHICH ALL OF THE EQUITY OWNERS COME WITHIN SUCH PARAGRAPHS
PURCHASING NOT FOR DISTRIBUTION IN VIOLATION OF THE SECURITIES ACT, WHICH WILL
BE DEEMED REPRESENTED BY AN OWNER OF A BOOK-ENTRY CERTIFICATE OR A GLOBAL
CERTIFICATE OR, IN THE CASE OF AN INDIVIDUAL CERTIFICATE, 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."
22
Security Instrument: A written instrument creating a valid first lien
on a Mortgaged Property securing a Mortgage Note, which may be any applicable
form of mortgage, deed of trust, deed to secure debt or security deed, including
any riders or addenda thereto.
Seller: Structured Asset Mortgage Investments Inc., a Delaware
corporation, or its successors in interest.
Senior Certificates: The Class X-0, X-0, X-0, X-0, X-0, X-0, R-I and
R-II Certificates.
Senior Optimal Principal Amount: With respect to each Loan Group, an
amount equal to the sum, without duplication, of:
(i) the applicable Senior Percentage of the principal portion
of all Monthly Payments due on the Mortgage Loans in the
related Mortgage 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 Senior Prepayment Percentage of the
Scheduled Principal Balance of each Mortgage Loan in the
related Mortgage Loan Group which was the subject of a
prepayment in full received by the Master Servicer during the
applicable Prepayment Period;
(iii) the applicable Senior Prepayment Percentage of all
partial prepayments allocated to principal received during the
applicable Prepayment Period;
(iv) the lesser of (a) the applicable Senior Prepayment
Percentage of the sum of (A) all Net Liquidation Proceeds
allocable to principal received in respect of each Mortgage
Loan in the related Mortgage Loan Group which became a
Liquidated Mortgage Loan during the related Prepayment Period
(other than Mortgage Loans described in the immediately
following clause (B)) and (B) the Scheduled Principal Balance
of each such Mortgage Loan in the related Mortgage Loan Group
purchased by an insurer from the Trustee during the related
Prepayment Period pursuant to the related Primary Mortgage
Insurance Policy, if any, or otherwise; and (b) the applicable
Senior Percentage of the sum of (A) the Scheduled Principal
Balance of each Mortgage Loan in the related Mortgage Loan
Group which became a Liquidated Mortgage Loan during the
related Prepayment Period (other than the Mortgage Loans
described in the immediately following clause (B)) and (B) the
Scheduled Principal Balance of each such Mortgage Loan in the
related Mortgage Loan Group that was purchased by an insurer
from the Trustee during the related Prepayment Period pursuant
to the Primary Mortgage Insurance Policy, if any or otherwise;
and
23
(v) the applicable Senior Prepayment Percentage of the sum of
(a) the Scheduled Principal Balance of each Mortgage Loan in
the related Mortgage Loan Group which was repurchased by the
Mortgage Loan Seller in connection with such Distribution Date
and (b) the excess, if any, of the Scheduled Principal Balance
of a Mortgage Loan in the related Mortgage Loan Group that has
been replaced by the Mortgage Loan Seller with a Substitute
Mortgage Loan in connection with such Distribution Date over
the Scheduled Principal Balance of such Substitute Mortgage
Loan.
Senior Percentage: With respect to each Group, initially 96%. The
applicable Senior Percentage for the Senior Certificates of each Certificate
Group 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
Current Principal Amount of all the Senior Certificates of such Certificate
Group immediately preceding such Distribution Date by the aggregate Scheduled
Principal Balance of the Mortgage Loans in the related Mortgage Loan Group as of
the beginning of the related Due Period.
Senior Prepayment Percentage: With respect to each Mortgage Loan Group
on any Distribution Date occurring during the periods set forth below will be as
follows:
Period (dates inclusive) Senior Prepayment Percentage
------------------------ ----------------------------
February 25, 2001 - January 25, 2011 100%
January 25, 2011 - January 25, 2012 the applicable Senior Percentage plus 70% of the
applicable Subordinate Percentage
February 25, 2012 - January 25, 2013 the applicable Senior Percentage plus 60% of the
applicable Subordinate Percentage
February 25, 2013 - January 25, 2014 the applicable Senior Percentage plus 40% of the
applicable Subordinate Percentage
February 25, 2014 - January 25, 2015 the applicable Senior Percentage plus 20% of the
applicable Subordinate Percentage
February 25, 2015 and thereafter the applicable Senior Percentage
Notwithstanding the foregoing, if on any Distribution Date the weighted
average current Senior Percentage (weighted on the basis of the Scheduled
Principal Balances of the Mortgage Loans in each Mortgage Loan Group) exceeds
the weighted average Senior Percentage as of the Cut-off Date, the Senior
Prepayment Percentage with respect to each Mortgage Loan Group for such
Distribution Date will equal 100%. Upon reduction of the Current Principal
Amounts of any Class of Class A Certificates to zero, the related Senior
Prepayment Percentage with respect to the related Mortgage Loan Group will equal
0%; provided, however, that in the circumstances described in paragraph (H)
under Section 6.01, prepayments resulting from Mortgage Loans in one Mortgage
Loan Group and otherwise distributable to the Subordinate Certificates will be
distributed pro rata to the other Senior Certificates related to the other
Mortgage Loan Groups.
24
In addition, no reduction of a Senior Prepayment Percentage shall occur
on any Distribution Date (such limitation being the "Senior Prepayment
Percentage Stepdown Limitation") unless, as of the last day of the month
preceding such Distribution Date, (i) the aggregate Scheduled Principal Balance
of the Mortgage Loans in all Mortgage Loan Groups delinquent 60 days or more
(including for this purpose any such Mortgage Loans in foreclosure and Mortgage
Loans with respect to which the related Mortgaged Property has been acquired by
the Trust), averaged over the last six months, as a percentage of the sum of the
aggregate Current Principal Amount of the Subordinate Certificates does not
exceed 50%, and (ii) cumulative Realized Losses on the Mortgage Loans in all
Mortgage Loan Groups do not exceed (a) 30% of the Original Subordinate Principal
Balance if such Distribution Date occurs between and including February 2011 and
January 2012, (b) 35% of the Original Subordinate Principal Balance if such
Distribution Date occurs between and including February 2012 and January 2013,
(c) 40% of the Original Subordinate Principal Balance if such Distribution Date
occurs between and including February 2013 and January 2014, (d) 45% of the
Original Subordinate Principal Balance if such Distribution Date occurs between
and including February 2014 and January 2015, and (e) 50% of the Original
Subordinate Principal Balance if such Distribution Date occurs during or after
February 2015.
In addition, on or after February 25, 2004, if on any Distribution Date
the applicable weighted average current Subordinate Percentage (weighted on the
basis of the Scheduled Principal Balances of the Mortgage Loans in each Mortgage
Loan Group) is equal to or greater than two (2) times the weighted average
Subordinate Percentage as of the Cut-off Date, and (a) the aggregate Scheduled
Principal Balance of Mortgage Loans in all Mortgage Loan Groups delinquent 60
days or more (including for this purpose any Mortgage Loans in foreclosure and
Mortgage Loans with respect to which the related Mortgaged Property has been
acquired by the Trust), averaged over the last six months, as a percentage of
the aggregate Current Principal Amount of the Subordinate Certificates (after
giving effect to distributions in such month) does not exceed 50% and (b)
cumulative Realized Losses on the Mortgage Loans in all Mortgage Loan Groups
does not exceed 10% of the Original Subordinate Principal Balance, then the
applicable Senior Prepayment Percentage for any Mortgage Loan Group for such
Distribution Date will equal the applicable related Senior Percentage (such
test, the "Two-Times Test").
Series REMIC: REMIC I or REMIC II.
Servicer Remittance Date: With respect to each Mortgage Loan, the date
set forth in the related Servicing Agreement.
Servicer: The Servicer under each of the Servicing Agreements.
Servicing Agreement: One of the agreements for the servicing of the
Mortgage Loans, copies of which are attached hereto as Exhibits N-1 through
N-14.
25
Servicing Fee: As to any Mortgage Loan and Distribution Date, an amount
equal to the product of (i) the Scheduled Principal Balance of such Mortgage
Loan as of the Due Date in the preceding calendar month and (ii) the applicable
Servicing Fee Rate.
Servicing Fee Rate: A per annum rate with respect to each Mortgage
Loan, as set forth on the Mortgage Loan Schedule.
Servicing Officer: Any officer of the Master Servicer or any Servicer
involved in, or responsible for, the administration and servicing of the
Mortgage Loans whose name and specimen signature has been furnished to the
Trustee and the Custodian in an Officer's Certificate.
Startup Day: January 31, 2001.
Subordinate Certificates: The Class B-1, Class B-2, Class B-3, Class
B-4, Class B-5 and Class B-6 Certificates.
Subordinate Certificate Writedown Amount: As of any Distribution Date,
the amount by which (a) the sum of the Current Principal Amounts of all of the
Certificates (after giving effect to the distribution of principal and the
allocation of Realized Losses in reduction of the Current Principal Amounts of
the Certificates on such Distribution Date) exceeds (b) the aggregate Scheduled
Principal Balances of the Mortgage Loans on the first day of the month of such
Distribution Date, less any Deficient Valuation occurring prior to such
Distribution Date.
Subordinate Optimal Principal Amount: As to any Distribution Date, an
amount equal to the sum, without duplication, of the following (but in no event
greater than the aggregate Current Principal Amounts of the Subordinate
Certificates immediately prior to such Distribution Date):
(i) the applicable Subordinate Percentage of the principal
portion of all Monthly Payments due on each Mortgage Loan in the
related Mortgage 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) with respect to each Mortgage Loan in the related
Mortgage Loan Group, the applicable Subordinate Prepayment Percentage
of (a) the amount of all Principal Prepayments in part on each such
Mortgage Loan and (b) the Scheduled Principal Balance of each such
Mortgage Loan which was the subject of a Principal Prepayment in full,
in each case received by the Master Servicer during the applicable
Prepayment Period;
(iii) the excess, if any, of the sum of (a) all Net
Liquidation Proceeds allocable to principal received during the related
Prepayment Period in respect of each Liquidated Mortgage Loan in the
related Mortgage Loan Group (other than Mortgage Loans described in
clause (b)) and (b) the principal balance of each Mortgage Loan in the
related Mortgage Loan Group that was purchased by a private mortgage
insurer during the related Prepayment Period as an alternative to
paying a claim under the related insurance policy over (c) the sum of
the amounts distributable pursuant to clause (iv) of the definition of
Senior Optimal Principal Amount on such Distribution Date;
26
(iv) the applicable Subordinate Prepayment Percentage of the
sum of (a) the Scheduled Principal Balance of each Mortgage Loan in the
related Mortgage Loan Group which was repurchased by the Mortgage Loan
Seller in connection with such Distribution Date and (b) the
difference, if any, between the Scheduled Principal Balance of a
Mortgage Loan in the related Mortgage Loan Group that has been replaced
by the Mortgage Loan Seller with a Substitute Mortgage Loan on such
Distribution Date and the Scheduled Principal Balance of such
Substitute Mortgage Loan; and
(v) on the Distribution Date on which the Current Principal
Amounts of the Senior Certificates have all been reduced to zero, 100%
of any Senior Optimal Principal Amount remaining undistributed on such
date.
After the aggregate current Principal Amounts of the Subordinate Certificates
has been reduced to zero, the Subordinate Optimal Principal Amount shall be
zero.
Subordinate Percentage: With respect to each Mortgage Loan Group, (a)
initially 3.50% and (b) for each Distribution Date, 100% minus the Senior
Percentage for such Distribution Date.
Substitute Mortgage Loan: A mortgage loan tendered to the Trustee
pursuant to Section 2.04, in each case, (i) which has an Outstanding Principal
Balance not materially greater nor materially less than the Mortgage Loan for
which it is to be substituted; (ii) which has a Mortgage Interest Rate and Net
Rate not less than, and not materially greater than, such Mortgage Loan; (iii)
which has a maturity date not materially earlier or later than such Mortgage
Loan and not later than the latest maturity date of any Mortgage Loan; (iv)
which is of the same property type and occupancy type as such Mortgage Loan; (v)
which has a Loan-to-Value Ratio not greater than the Loan-to-Value Ratio of such
Mortgage Loan; (vi) which is current in payment of principal and interest as of
the date of substitution; and (vii) as to which the payment terms do not vary in
any material respect from the payment terms of the Mortgage Loan for which it is
to be substituted.
Tax Administration and Tax Matters Person: The Master Servicer or any
successor thereto or assignee thereof shall serve as tax administrator hereunder
and as agent for each Tax Matters Person. The Holder of each Class of Residual
Certificates shall be the Tax Matters Person for the respective REMIC created by
this Agreement, as more particularly set forth in Section 9.13 hereof.
Trust Fund or Trust: The corpus of the trust created by this Agreement,
consisting of the Mortgage Loans and the other assets described in Section
2.01(a).
Trustee: Bankers Trust Company of California, N.A., or its successor in
interest, or any successor trustee appointed as herein provided.
Uninsured Cause: Any cause of damage to a Mortgaged Property or REO
Property such that the complete restoration of such Mortgaged Property or REO
Property is not fully reimbursable by the hazard insurance policies required to
be maintained pursuant to Section 3.11, without regard to whether or not such
policy is maintained.
United States Person: A citizen or resident of the United States, a
corporation or partnership (including an entity treated as a corporation or
partnership for federal income tax purposes) created or organized in, or under
the laws of, the United States or any state thereof or the District of Columbia
(except, in the case of a partnership, to the extent provided in regulations) or
an estate whose income is subject to United States federal income tax regardless
of its source, or a trust if a court within the United States is able to
exercise primary supervision over the administration of the trust and one or
more such United States Persons have the authority to control all substantial
decisions of the trust. To the extent prescribed in regulations by the Secretary
of the Treasury, which have not yet been issued, a trust which was in existence
on August 20, 1996 (other than a trust treated as owned by the grantor under
subpart E of part I of subchapter J of chapter 1 of the Code), and which was
treated as a United States person on August 20, 1996 may elect to continue to be
treated as a United States person notwithstanding the previous sentence.
VA: United States Department of Veteran's Affairs, or any successor
thereto.
27
ARTICLE II
CONVEYANCE OF MORTGAGE LOANS;
ORIGINAL ISSUANCE OF CERTIFICATES
Section 2.01.00 Conveyance of Mortgage Loans to Trustee.
(a) The Seller concurrently with the execution and delivery of
this Agreement, sells, transfers and assigns to the Trust without recourse all
its right, title and interest in and to (i) the Mortgage Loans identified in the
Mortgage Loan Schedule, including all interest and principal due with respect to
the Mortgage Loans after the Cut-off Date, but excluding any payments of
principal and interest due on or prior to the Cut-off Date, and including the
proceeds from the liquidation of Additional Collateral for any Additional
Collateral Mortgage Loans; (ii) such assets as shall from time to time be
credited or are required by the terms of this Agreement to be credited to the
Certificate Account (subject to the right of the Master Servicer to receive all
income from Permitted Investments under Section 4.02(c)), (iii) such assets
relating to the Mortgage Loans as from time to time may be held by the Master
Servicer or the Servicers in servicing accounts or Protected Accounts for the
benefit of the holder of the Mortgage Loans, (iv) any REO Property, (v) the
Radian PMI Policy, the Required Insurance Policies and any amounts paid or
payable by the insurer under any such policy (to the extent the mortgagee has a
claim thereto), (vi) the rights with respect to the Servicing Agreements as
assigned to the Seller on behalf of the Certificateholders by the Mortgage Loan
Purchase Agreement, and the rights under the GMAC Servicing Agreement, (vii) the
Mortgage Loan Purchase Agreement and the Assignment, Assumption and Recognition
Agreements, to the extent provided in Subsection 2.03(a), (viii) the proceeds
from any insurance provided by the FHA and VA, and (ix) any proceeds of the
foregoing. Although it is the intent of the parties to this Agreement that the
conveyance of the Seller's right, title and interest in and to the Mortgage
Loans and other assets in the Trust Fund pursuant to this Agreement shall
constitute a purchase and sale and not a loan, in the event that such conveyance
is deemed to be a loan, it is the intent of the parties to this Agreement that
the Seller shall be deemed to have granted to the Trustee a first priority
perfected security interest in all of the Seller's right, title and interest in,
to and under the Mortgage Loans and other assets in the Trust Fund, and that
this Agreement shall constitute a security agreement under applicable law.
28
(b) In connection with the above transfer and assignment, the
Seller hereby deposits with the Trustee or Custodian, with respect to (A) each
Mortgage Loan, other than Cooperative Loans (i) the original Mortgage Note,
endorsed without recourse to the order of the Trustee and showing an unbroken
chain of endorsements from the original payee thereof to the Person endorsing it
to the Trustee, (ii) the original Security Instrument, which shall have been
recorded, with evidence of such recording indicated thereon, (iii) a certified
copy of the assignment (which may be in the form of a blanket assignment if
permitted in the jurisdiction in which the Mortgaged Property is located) to the
Trustee of the Security Instrument, with evidence of recording with respect to
each Mortgage Loan in the name of the Trustee thereon (or if clause (x) in the
proviso below applies, shall be in recordable form), (iv) all intervening
assignments of the Security Instrument, if applicable and only to the extent
available to the Seller, with evidence of recording thereon, (v) the original
policy of title insurance or mortgagee's certificate of title insurance or
commitment or binder for title insurance and (vi) originals of all modification
agreements, if applicable and available and (B) each Cooperative Loan (i) the
original Mortgage Note, endorsed, without recourse to the order of the Trustee,
and showing, to the extent available, an unbroken chain of title from the
originator to the Trustee or, in the case of a Mortgage Loan that is subject to
the terms of a consolidation and modification agreement, an assignment of such
agreement to the Trustee; (ii) the original duly executed assignment of security
agreement to the Trustee; (iii) the original Mortgage; (iv) the acknowledgment
copy of the original executed Form UCC-1 (or certified copy thereof) with
respect to the security agreement, and any required continuation statements,
with evidence of filing indicated thereon; (v) the acknowledgment copy of the
original executed Form UCC-3 with respect to the security agreement, indicating
the Trustee as the assignee of the secured party, with evidence of filing
indicated thereon; (vi) the stock certificate representing the stock allocated
to the cooperative unit, with a stock power in blank attached; (vii) the
original collateral assignment of the lease by Mortgagor to the originator and
the assignment of the collateral assignment of the lease to the Trustee (which
may be in blanket form), accompanied by the original lease; (viii) a copy of the
recognition agreement; (ix) if applicable and to the extent available, the
original intervening assignments, including warehousing assignments, if any,
showing, to the extent available, an unbroken chain of the related Mortgage Loan
to the Trustee, together with a copy of the related Form UCC-3 with evidence of
filing thereon; (x) the originals of each assumption, modification or
substitution agreement, if any, relating to the Mortgage Loan; and (xi) the
certificate of primary mortgage insurance, if applicable; provided, however,
that in lieu of the foregoing, the Seller may deliver to the Trustee or the
Custodian, as applicable, the following documents, under the circumstances set
forth below: (x) in lieu of the original Security Instrument, assignments to the
Trustee or intervening assignments thereof which have been delivered, are being
delivered or will, upon receipt of recording information relating to the
Security Instrument required to be included thereon, be delivered to recording
offices for recording and have not been returned to the Seller in time to permit
their delivery as specified above, the Seller may deliver a true copy thereof
with a certification by the Seller or the related Servicer, on the face of such
copy, substantially as follows: "Certified to be a true and correct copy of the
original, which has been transmitted for recording"; (y) in lieu of the Security
Instrument, assignment to the Trustee or intervening assignments thereof, if the
applicable jurisdiction retains the originals of such documents (as evidenced by
a certification from the Seller or the related Servicer, to such effect) the
Seller may deliver photocopies of such documents containing an original
certification by the judicial or other governmental authority of the
jurisdiction where such documents were recorded; and (z) in lieu of the Mortgage
Notes relating to the Mortgage Loans, each as identified in the list delivered
by the Seller to the Trustee or Custodian on the Closing Date and set forth in
Exhibit K hereto, the Seller may deliver a lost note affidavit and, if
available, a copy of each original Mortgage Note; and provided, further,
however, that in the case of Mortgage Loans which have been prepaid in full
after the Cut-off Date and prior to the Closing Date, the Seller, in lieu of
delivering the above documents, may deliver to the Trustee or Custodian a
certification to such effect and shall deposit all amounts paid in respect of
such Mortgage Loans in the Certificate Account on the Closing Date. The Seller
shall deliver such original documents (including any original documents as to
which certified copies had previously been delivered) to the Trustee or
Custodian promptly after they are received. The Seller shall cause, at its
expense, the assignment of the Security Instrument to the Trustee to be recorded
not later than 180 days after the Closing Date. With respect to the Cooperative
Loans, the Seller will, promptly after the Closing Date, cause the related
financing statements (if not yet filed) and an assignment thereof from the
Seller to the Trustee to be filed in the appropriate offices. Notwithstanding
the foregoing, if the Seller fails to pay the cost of recording the assignments,
such expense will be paid by the Trustee and reimbursed by the Trust.
29
Section 2.02.00 Acceptance of Mortgage Loans by Trustee.
(a) The Trustee acknowledges the sale, transfer and assignment of
the Trust to it by the Seller and declares that it will hold (or cause the
Custodian as its agent to hold) all the documents (or certified copies thereof)
delivered to it pursuant to Section 2.01 and any amendments, replacements or
supplements thereto and all other assets of the Trust Fund delivered to it as
Trustee, or the Custodian as its agent, constituting the Mortgage Files, and
that it, or the Custodian as its agent, holds or will hold such other assets
included in the definition of "Trust Fund" (to the extent assigned to the
Trustee and delivered to the Trustee or the Custodian). On the Closing Date, the
Custodian, with respect to the Mortgage Loans, shall acknowledge with respect to
each Mortgage Loan by an Initial Certification substantially in the form of
Exhibit One to the Custodial Agreement receipt of the Mortgage File, but without
review of such Mortgage File, except to the extent necessary to confirm that
such Mortgage File contains the related Mortgage Note or lost note affidavit. No
later than 45 days after the Closing Date (or, with respect to any Substitute
Mortgage Loan, within five Business Days after the receipt by the Trustee or
Custodian thereof), the Trustee agrees, for the benefit of the
Certificateholders, to review or cause to be reviewed by the Custodian on its
behalf (under the Custodial Agreement), each Mortgage File delivered to it and
to execute and deliver, or cause to be executed and delivered, to the Seller and
the Master Servicer an Interim Certification substantially in the form annexed
as Exhibit Two to the Custodial Agreement. In conducting such review, the
Trustee or Custodian will ascertain whether all required documents have been
executed and received, and based on the Mortgage Loan Schedule, whether those
documents relate, determined on the basis of the Mortgagor name, original
principal balance and loan number, to the Mortgage Loans it has received, as
identified in the Mortgage Loan Schedule. In performing any such review, the
Trustee or 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 Custodian 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 the Mortgage Loan Schedule or to
appear to be defective on its face, the Trustee or Custodian (the Custodian
being so obligated under the Custodial Agreement) shall promptly notify Xxxxxx,
with respect to a Xxxxxx Mortgage Loan, First Horizon, with respect to a First
Horizon Mortgage Loan, or the Mortgage Loan Seller, with respect to any other
Mortgage Loan. With respect to any Mortgage Loan other than a Xxxxxx Mortgage
Loan or a First Horizon Mortgage Loan, the Mortgage Loan Seller shall correct or
cure any such defect within 90 days from the date of notice from the Trustee or
Custodian of the defect and if the Mortgage Loan Seller fails to correct or cure
the defect within such period, and such defect materially and adversely affects
the interests of the Certificateholders in the related Mortgage Loan, the
Mortgage Loan Seller will, subject to Section 2.04, within 90 days from the
Trustee's or Custodian's notification purchase such Mortgage Loan at the
Repurchase Price; provided, however, that if such defect relates solely to the
inability of the Mortgage Loan Seller to deliver the original Security
Instrument or intervening assignments thereof, or a certified copy because the
originals of such documents, or a certified copy have not been returned by the
applicable jurisdiction, the Mortgage Loan Seller shall not be required to
purchase such Mortgage Loan if the Mortgage Loan Seller delivers such original
documents or certified copy promptly upon receipt, but in no event later than
360 days after the Closing Date. The foregoing repurchase obligation shall not
apply in the event that the Mortgage Loan Seller cannot deliver such original or
copy of any document submitted for recording to the appropriate recording office
in the applicable jurisdiction because such document has not been returned by
such office; provided that the Mortgage Loan Seller shall instead deliver a
recording receipt of such recording office or, if such receipt is not available,
a certificate confirming that such documents have been accepted for recording,
and delivery to the Trustee or Custodian shall be effected by the Mortgage Loan
Seller within thirty days of its receipt of the original recorded document. With
respect to a Xxxxxx Mortgage Loan or a First Horizon Mortgage Loan, the Trustee
shall enforce the obligation of Xxxxxx or First Horizon, as applicable, to cure,
repurchase or substitute for the related Mortgage Loan under the Xxxxxx Purchase
Agreement or the First Horizon Purchase Agreement, as applicable (subject to
Section 2.04 hereof in the case of substitutions).
30
(b) No later than 180 days after the Closing Date, the Trustee or
Custodian will review, for the benefit of the Certificateholders, the Mortgage
Files delivered to it and will execute and deliver or cause to be executed and
delivered to the Seller and the Master Servicer a Final Certification
substantially in the form annexed Exhibit Three to the Custodial Agreement. In
conducting such review, the Trustee or Custodian will ascertain whether an
original of each document required to be recorded has been returned from the
recording office with evidence of recording thereon or a certified copy has been
obtained from the recording office. If the Trustee or Custodian finds any
document constituting part of the Mortgage File has not been received, or to be
unrelated, determined on the basis of the Mortgagor name, original principal
balance and loan number, to the Mortgage Loans identified in Exhibit B or to
appear defective on its face, the Trustee or Custodian shall promptly notify the
Mortgage Loan Seller, with respect to any Mortgage Loan other than a Xxxxxx
Mortgage Loan or First Horizon Mortgage Loan, or Xxxxxx or First Horizon, as
applicable, with respect to a Xxxxxx Mortgage Loan or a First Horizon Mortgage
Loan. With respect to any Mortgage Loan other than a Xxxxxx Mortgage Loan or a
First Horizon Mortgage Loan, the Mortgage Loan Seller shall correct or cure any
such defect or shall deliver to the Trustee or Custodian 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 90 days from the
date of notice from the Trustee or Custodian of the defect and if the Mortgage
Loan Seller is unable to cure such defect within such period, and if such defect
materially and adversely affects the interests of the Certificateholders in the
related Mortgage Loan, the Mortgage Loan Seller shall, subject to Section 2.04,
within 90 days from the Trustee's or Custodian's notification purchase such
Mortgage Loan at the Repurchase Price, provided, however, that if such defect
relates solely to the inability of the Mortgage Loan Seller to deliver the
original Security Instrument or intervening assignments thereof, or a certified
copy, because the originals of such documents, or a certified copy, have not
been returned by the applicable jurisdiction, the Mortgage Loan Seller shall not
be required to purchase such Mortgage Loan, if the Mortgage Loan Seller delivers
such original documents or certified copy promptly upon receipt, but in no event
later than 360 days after the Closing Date. With respect to a Xxxxxx Mortgage
Loan or a First Horizon Mortgage Loan, the Trustee shall enforce the obligations
of Xxxxxx or First Horizon, as applicable, to cure, repurchase or substitute for
the related Mortgage Loan under the Xxxxxx Purchase Agreement or the First
Horizon Purchase Agreement, as applicable (subject to Section 2.04 hereof in the
case of substitutions).
31
(c) In the event that a Mortgage Loan is purchased by the Mortgage
Loan Seller in accordance with Subsections 2.02(a) or (b) above, the Mortgage
Loan Seller shall provide the Repurchase Price to the Trustee for deposit in the
Certificate Account and shall provide to the Trustee written notification
detailing the components of the Repurchase Price. Upon deposit of the Repurchase
Price in the Certificate Account, the Trustee shall release or direct the
Custodian to release to the Mortgage Loan Seller the related Mortgage File and
shall execute and deliver all instruments of transfer or assignment, without
recourse, furnished to it by the Mortgage Loan Seller as are necessary to vest
in the Mortgage Loan Seller title to and rights under the Mortgage Loan. Such
purchase shall be deemed to have occurred on the date on which the Repurchase
Price in available funds is received by the Trustee. The Master Servicer shall
amend the Mortgage Loan Schedule, to reflect such repurchase and shall promptly
notify the Trustee, the Custodian and the Rating Agencies of such amendment. The
obligation of the Mortgage Loan Seller to repurchase any Mortgage Loan other
than a Xxxxxx Mortgage Loan or a First Horizon Mortgage Loan as to which such a
defect in a constituent document exists shall be the sole remedy respecting such
defect available to the Certificateholders or to the Trustee on their behalf.
(d) In the event that a Xxxxxx Mortgage Loan or a First Horizon
Mortgage Loan is purchased by Xxxxxx or First Horizon, as applicable, in
accordance with Sections 2.02(a) or (b) above, the Trustee shall deposit the
proceeds in the Certificate Account. Upon deposit of such proceeds in the
Certificate Account, the Trustee shall release or direct the Custodian to
release to Xxxxxx or First Horizon, as applicable, the related Mortgage File and
shall execute and deliver all instruments of transfer or assignment, without
recourse, furnished to it by Xxxxxx or First Horizon, as applicable, as are
necessary to vest in such Person title to and rights under the related Mortgage
Loan. Such purchase shall be deemed to have occurred on the date on which the
purchase proceeds in available funds are received by the Trustee. The Master
Servicer shall amend the Mortgage Loan Schedule to reflect such repurchase and
shall promptly notify the Trustee, the Custodian and the Rating Agencies of such
amendment. The obligation of Xxxxxx or First Horizon, as applicable, to
repurchase any Mortgage Loan as to which such a defect in a constituent document
exists shall be the sole remedy respecting such defect available to the
Certificateholders or to the Trustee on their behalf.
Section 2.03.00 Assignment of Interest in the Mortgage Loan Purchase
Agreement and other Agreements.
32
(a) The Seller hereby assigns to the Trustee all of its right,
title and interest in (i) the Mortgage Loan Purchase Agreement (but none of its
obligations) insofar as such contract relates to the representations and
warranties set forth in Exhibit C hereto regarding the Mortgage Loans (including
the substitution and repurchase obligations of the Mortgage Loan Seller), (ii)
the Servicing Agreements, as assigned to the Seller pursuant to the Mortgage
Loan Purchase Agreement and the GMAC Servicing Agreement, and (iii) the
Assignment, Assumption and Recognition Agreements, insofar as such agreements
relate to the representations and warranties set forth in Exhibit C hereto
regarding the Xxxxxx Mortgage Loans and the First Horizon Mortgage Loans
(including the assignment of the obligations of Xxxxxx and First Horizon to
cure, substitute or repurchase the Xxxxxx Mortgage Loans and the First Horizon
Mortgage Loans, respectively); provided that the obligations of the Mortgage
Loan Seller, Xxxxxx or First Horizon to cure, substitute (subject to Section
2.04) or repurchase a Mortgage Loan shall be the Trustee's and the
Certificateholders' sole remedy for any breach thereof. At the request of the
Trustee, the Seller (or the Master Servicer, in the case of the Servicing
Agreements, as agent for the Trustee) shall take such actions as may be
necessary to enforce the above right, title and interest on behalf of the
Trustee and the Certificateholders or shall execute such further documents as
the Trustee may reasonably require in order to enable the Trustee to carry out
such enforcement; provided, however, that the Master Servicer shall not be
required to enforce any representations and warranties in the Servicing
Agreements with respect to any Mortgage Loans.
(b) If the Master Servicer, Seller, Trustee or Custodian discovers
a breach of any of the representations and warranties of the Mortgage Loan
Seller set forth in Exhibit C with respect to a Mortgage Loan, which breach
materially and adversely affects the value of the interests of
Certificateholders or the Trustee in the related Mortgage Loan, the party
discovering the breach shall give prompt written notice of the breach to the
other parties and to the Mortgage Loan Seller. The Mortgage Loan Seller within
90 days of its discovery or receipt of notice that such breach has occurred
(whichever occurs earlier), shall cure the breach in all material respects or,
subject to Section 2.04, shall purchase such Mortgage Loan or any property
acquired with respect thereto from the Trustee at the Repurchase Price;
provided, however, that if there is a breach of any representation set forth in
Exhibit C and such Mortgage Loan or the related property acquired with respect
thereto has been sold, then the Mortgage Loan Seller shall pay, in lieu of the
Repurchase Price, any excess of the Repurchase Price over the Net Liquidation
Proceeds received upon such sale. (If the Net Liquidation Proceeds exceed the
Repurchase Price, any excess shall be paid to the Mortgage Loan Seller to the
extent not required by law to be paid to the borrower.) Any such purchase by the
Mortgage Loan Seller shall be made by providing an amount equal to the
Repurchase Price to the Trustee for deposit in the Certificate Account and upon
deposit of the Repurchase Price in the Certificate Account and of written
notification detailing the components of such Repurchase Price, the Trustee
shall release or direct the Custodian to release to the Mortgage Loan Seller the
related Mortgage File and shall execute and deliver all instruments of transfer
or assignment furnished to it by the Mortgage Loan Seller, without recourse, as
are necessary to vest in the Mortgage Loan Seller title to and rights under the
Mortgage Loan or any property acquired with respect thereto. Such purchase shall
be deemed to have occurred on the date on which the Repurchase Price in
available funds is received by the Trustee. The Master Servicer shall amend the
Mortgage Loan Schedule to reflect such repurchase and shall promptly notify the
Trustee, the Custodian and the Rating Agencies of such amendment. Enforcement of
the obligation of the Mortgage Loan Seller, to purchase (or, subject to Section
2.04, substitute a Substitute Mortgage Loan for) any such Mortgage Loan or any
property acquired with respect thereto (or pay the Repurchase Price as set forth
in the above proviso) as to which breach by the Mortgage Loan Seller has
occurred and is continuing shall constitute the sole remedy respecting such
breach available to the Certificateholders or the Trustee on their behalf.
33
(c) If the Master Servicer, Seller, Trustee or Custodian discovers
a breach of any of the representations and warranties set forth in Exhibit C
made by Xxxxxx or First Horizon, respectively, with respect to a Xxxxxx Mortgage
Loan or a First Horizon Mortgage Loan, which breach materially and adversely
affects the value of the interests of Certificateholders or the Trustee in such
Mortgage Loan, the party discovering the breach shall give prompt written notice
of the breach to the other parties and to Xxxxxx or First Horizon, as
applicable. The Trustee shall enforce the obligation of Xxxxxx or First Horizon,
as applicable, to cure, substitute (subject to the provisions of Section
2.04(b)) or purchase the related Mortgage Loan under the Xxxxxx Purchase
Agreement or the First Horizon Purchase Agreement, as applicable. The proceeds
of any purchase by Xxxxxx or First Horizon shall be deposited by the Trustee in
the Certificate Account and upon deposit of such proceeds in the Certificate
Account and of written notification detailing the components of such proceeds,
the Trustee shall release or direct the Custodian to release to Xxxxxx or First
Horizon, as applicable, the related Mortgage File and shall execute and deliver
all instruments of transfer or assignment furnished to it by Xxxxxx or First
Horizon, as applicable, without recourse, as are necessary to vest in such
Person title to and rights under the related Mortgage Loan or any property
acquired with respect thereto. Such purchase shall be deemed to have occurred on
the date on which the related proceeds in available funds is received by the
Trustee. The Master Servicer shall amend the Mortgage Loan Schedule to reflect
such repurchase and shall promptly notify the Trustee, the Custodian and the
Rating Agencies of such amendment. Enforcement of the obligations of Xxxxxx or
First Horizon, as applicable, to purchase (or, subject to Section 2.04)
substitute a Substitute Mortgage Loan for) any Mortgage Loan or any property
acquired with respect thereto (or pay the Repurchase Price as set forth in the
above proviso) as to which a breach has occurred and is continuing shall
constitute the sole remedy respecting such breach available to the
Certificateholders or the Trustee on their behalf.
34
Section 2.04.00 Substitution of Mortgage Loans.
(a) Notwithstanding anything to the contrary in this Agreement, in
lieu of purchasing a Mortgage Loan pursuant to Sections 2.02 or 2.03, the
Mortgage Loan Seller may, no later than the date by which such purchase by the
Mortgage Loan Seller would otherwise be required, tender to the Trustee a
Substitute Mortgage Loan accompanied by a certificate of an authorized officer
of the Mortgage Loan Seller that such Substitute Mortgage Loan conforms to the
requirements set forth in the definition of "Substitute Mortgage Loan";
provided, however, that substitution pursuant to this Section 2.04 in lieu of
purchase shall not be permitted after the termination of the two-year period
beginning on the Startup Day. The Trustee or Custodian shall examine the
Mortgage File for any such Substitute Mortgage Loan in the manner set forth in
Section 2.02(a) and shall notify the Mortgage Loan Seller and the Master
Servicer in writing, within five Business Days after receipt, whether or not the
documents relating to such Substitute Mortgage Loan satisfy the requirements of
the third sentence of Subsection 2.02(a). Within two Business Days after such
notification, the Mortgage Loan Seller shall provide to the Trustee for deposit
in the Certificate Account the amount, if any, by which the Outstanding
Principal Balance as of the next preceding Due Date of the Mortgage Loan for
which substitution is being made, after giving effect to Scheduled Principal due
on such date, exceeds the Outstanding Principal Balance as of such date of the
Substitute Mortgage Loan, after giving effect to Scheduled Principal due on such
date, which amount shall be treated for the purposes of this Agreement as if it
were the payment by the Mortgage Loan Seller of the Repurchase Price for the
purchase of a Mortgage Loan by the Mortgage Loan Seller. After such notification
to the Mortgage Loan Seller and, if any such excess exists, upon receipt of such
deposit, the Trustee shall accept such Substitute Mortgage Loan which shall
thereafter be deemed to be a Mortgage Loan hereunder. In the event of such a
substitution, accrued interest on the Substitute Mortgage Loan for the month in
which the substitution occurs and any Principal Prepayments made thereon during
such month shall be the property of the Trust Fund and accrued interest for such
month on the Mortgage Loan for which the substitution is made and any Principal
Prepayments made thereon during such month shall be the property of the Mortgage
Loan Seller. The Scheduled Principal on a Substitute Mortgage Loan due on the
Due Date in the month of substitution shall be the property of the Mortgage Loan
Seller and the Scheduled Principal on the Mortgage Loan for which the
substitution is made due on such Due Date shall be the property of the Trust
Fund. Upon acceptance of the Substitute Mortgage Loan, the Trustee shall release
or direct the Custodian to release to the Mortgage Loan Seller the related
Mortgage File related to any Mortgage Loan released pursuant to this Section
2.04 and shall execute and deliver all instruments of transfer or assignment,
without recourse, in form as provided to it as are necessary to vest in the
Mortgage Loan Seller title to and rights under any Mortgage Loan released
pursuant to this Section 2.04. The Mortgage Loan Seller shall deliver the
documents related to the Substitute Mortgage Loan in accordance with the
provisions of Subsections 2.01(b) and 2.02(b), with the date of acceptance of
the Substitute Mortgage Loan deemed to be the Closing Date for purposes of the
time periods set forth in those Subsections. The representations and warranties
set forth in Exhibit C shall be deemed to have been made by the Mortgage Loan
Seller with respect to each Substitute Mortgage Loan as of the date of
acceptance by the Trustee of such Mortgage Loan. The Master Servicer shall amend
the Mortgage Loan Schedule to reflect such substitution and shall provide a copy
of such amended Mortgage Loan Schedule to the Trustee, the Custodian and the
Rating Agencies.
35
(b) Notwithstanding anything to the contrary in this Agreement, in
lieu of purchasing a Xxxxxx Mortgage Loan or a First Horizon Mortgage Loan
pursuant to Sections 2.02 or 2.03, Xxxxxx or First Horizon, as applicable, may
substitute a Substitute Mortgage Loan for the related Mortgage Loan in
accordance with the Xxxxxx Purchase Agreement or the First Horizon Purchase
Agreement, as applicable; provided, however, that substitution in lieu of
purchase shall not be permitted after the two-year period beginning on the
Startup Day. Upon acceptance of such Substitute Mortgage Loan, the Trustee shall
release or direct the Custodian to release to Xxxxxx or First Horizon, as
applicable, the related Mortgage File related to any related Mortgage Loan
released pursuant to this Section 2.04 and shall execute and deliver all
instruments of transfer or assignment, without recourse, in form as provided to
it as are necessary to vest in Xxxxxx or First Horizon, as applicable, title to
and rights under any related Mortgage Loan released pursuant to this Section
2.04. The Master Servicer shall amend the Mortgage Loan Schedule to reflect such
substitution and shall provide a copy of such amended Mortgage Loan Schedule to
the Trustee, the Custodian and the Rating Agencies.
Section 2.05.00 Repurchase Of Foreclosure Restricted Loans.
The Seller agrees that it will repurchase from the Trust Fund at the
Repurchase Price any Foreclosure Restricted Loan for which (i) it receives
notice from the Master Servicer or the related Servicer that title is about to
be taken to the related Mortgaged Property as REO Property on behalf of the
Trust Fund and (ii) the Foreclosure Balance of such Foreclosure Restricted Loan,
when added to the aggregate Foreclosure Balances as previously determined by the
Master Servicer for Foreclosure Restricted Loans that are currently held as REO
Property, exceed 0.75% of the then current aggregate tax basis of the assets of
the REMIC in which the Foreclosure Restricted Loan is held. The aggregate tax
basis of the assets of a REMIC for this purpose is the aggregate basis of all
the REMIC's assets as determined for purposes of the most recent Form 1066 (and
in the case of any period prior to the first filing of Form 1066, the aggregate
issue price of all interests issued by the REMIC), properly adjusted for
estimated changes to such basis. Any such purchase shall be accomplished as
provided in Section 2.03 hereof. As used in this Section 2.05, "Foreclosure
Balance" shall mean, as of any date of determination, the outstanding principal
balance of a Foreclosure Restricted Loan (or, if greater, the fair market value
of the related Mortgaged Property upon foreclosure).
Section 2.06.00 Issuance of Certificates.
The Trustee acknowledges the assignment to it of the Mortgage Loans and
the other assets comprising the Trust and, concurrently therewith, has signed,
and countersigned and delivered to the Seller, in exchange therefor,
Certificates in such authorized denominations representing such Fractional
Undivided Interests as the Seller has requested. The Custodian agrees that it
will hold the Mortgage Files and the Trustee also agrees to hold the Mortgage
Loans and such other assets as may from time to time be delivered to it
segregated on the books of the Trustee or Custodian in trust for the benefit of
the Certificateholders.
36
Section 2.07.00 Representations and Warranties of the Trustee.
The Trustee hereby represents, warrants and covenants to the Seller and
the Master Servicer as of the Closing Date (and in the case of paragraphs (iv)
and (v) below throughout the term of the Agreement), that:
(i) The Trustee is a bank duly organized, validly existing and
in good standing under the laws of the United States of America with a
principal place of business in Santa Ana, California.
(ii) Subject to the right of the Trustee to appoint a
co-trustee or separate trustee under Section 9.11 hereof in order to
meet the legal requirements of FHA or a particular jurisdiction, the
Trustee has full power, authority and legal right to execute and
deliver this Agreement and to perform its obligations under this
Agreement and has taken all necessary action to authorize the
execution, delivery and performance by it of this Agreement and the
Certificates;
(iii) To the best of the Trustee's knowledge, after reasonable
investigation, the execution and delivery by the Trustee of this
Agreement and the Certificates and the performance by the Trustee of
its obligations under this Agreement and the Certificates will not
violate any provision of the Trustee's Restated Organizational
Certificate or By-Laws or any law or regulation governing the Trustee
or any order, writ, judgment or decree of any court, arbitrator or
governmental authority or agency applicable to the Trustee or any of
its assets. To the best of the Trustee's knowledge, after reasonable
investigation, such execution, delivery and performance will not
require the authorization, consent or approval of, the giving of notice
to, the filing or registration with, or the taking of any other action
with respect to, any governmental authority or agency regulating the
fiduciary activities of a New York State bank. To the best of the
Trustee's knowledge, after reasonable investigation, such execution,
delivery and performance will not conflict with, or result in a breach
or violation of, any material indenture, mortgage, deed of trust, lease
or other agreement or instrument to which the Trustee is a party or by
which it or its properties is bound;
(iv) This Agreement has been duly executed and delivered by
the Trustee. This Agreement, when executed and delivered by the other
parties hereto, will constitute the valid, legal and binding obligation
of the Trustee, enforceable against the Trustee in accordance with its
terms, except as the enforcement thereof may be limited by applicable
Debtor Relief Laws and that certain equitable remedies may not be
available regardless of whether enforcement is sought in equity or at
law; and
37
(v) All funds received by the Trustee and required to be
deposited in the Certificate Account pursuant to this Agreement will be
promptly so deposited.
Section 2.08.00 Representations and Warranties Concerning the Seller.
The Seller hereby represents and warrants to the Trustee and the Master
Servicer as follows:
(i) the Seller (a) is a corporation duly organized, validly
existing and in good standing under the laws of the State of Delaware
and (b) is qualified and in good standing as a foreign corporation to
do business in each jurisdiction where such qualification is necessary,
except where the failure so to qualify would not reasonably be expected
to have a material adverse effect on the Seller's business as presently
conducted or on the Purchaser's ability to enter into this Agreement
and to consummate the transactions contemplated hereby;
(ii) the Seller has full corporate power to own its property,
to carry on its business as presently conducted and to enter into and
perform its obligations under this Agreement;
(iii) the execution and delivery by the Seller of this
Agreement have been duly authorized by all necessary corporate action
on the part of the Seller; and neither the execution and delivery of
this Agreement, nor the consummation of the transactions herein
contemplated, nor compliance with the provisions hereof, will conflict
with or result in a breach of, or constitute a default under, any of
the provisions of any law, governmental rule, regulation, judgment,
decree or order binding on the Seller or its properties or the articles
of incorporation or by-laws of the Seller, except those conflicts,
breaches or defaults which would not reasonably be expected to have a
material adverse effect on the Seller's ability to enter into this
Agreement and to consummate the transactions contemplated hereby;
(iv) the execution, delivery and performance by the Seller of
this Agreement and the consummation of the transactions contemplated
hereby do not require the consent or approval of, the giving of notice
to, the registration with, or the taking of any other action in respect
of, any state, federal or other governmental authority or agency,
except those consents, approvals, notices, registrations or other
actions as have already been obtained, given or made;
(v) this Agreement has been duly executed and delivered by the
Seller and, assuming due authorization, execution and delivery by the
other parties hereto, constitutes a valid and binding obligation of the
Seller enforceable against it in accordance with its terms (subject to
applicable bankruptcy and insolvency laws and other similar laws
affecting the enforcement of the rights of creditors generally);
38
(vi) there are no actions, suits or proceedings pending or, to
the knowledge of the Seller, threatened against the Seller, before or
by any court, administrative agency, arbitrator or governmental body
(i) with respect to any of the transactions contemplated by this
Agreement or (ii) with respect to any other matter which in the
judgment of the Seller will be determined adversely to the Seller and
will if determined adversely to the Seller materially and adversely
affect the Seller's ability to enter into this Agreement or perform its
obligations under this Agreement; and the Seller is not in default with
respect to any order of any court, administrative agency, arbitrator or
governmental body so as to materially and adversely affect the
transactions contemplated by this Agreement; and
(vii) immediately prior to the transfer and assignment to the
Trustee, each Mortgage Note and each Mortgage were not subject to an
assignment or pledge, and the Seller had good and marketable title to
and was the sole owner thereof and had full right to transfer and sell
such Mortgage Loan to the Trustee free and clear of any encumbrance,
equity, lien, pledge, charge, claim or security interest.
Section 2.09.00 Representations and Warranties of the Master Servicer.
(a) The Master Servicer hereby represents and warrants to the
Seller and the Trustee, for the benefit of the Certificateholders, as of the
Closing Date that:
(i) it is validly existing and in good standing under the laws
of the United States of America as a national banking association, and
as Master Servicer has full power and authority to transact any and all
business contemplated by this Agreement and to execute, deliver and
comply with its obligations under the terms of this Agreement, the
execution, delivery and performance of which have been duly authorized
by all necessary corporate action on the part of the Master Servicer;
(ii) the execution and delivery of this Agreement by the
Master Servicer and its performance and compliance with the terms of
this Agreement will not (A) violate the Master Servicer's charter or
bylaws, (B) violate any law or regulation or any administrative decree
or order to which it is subject or (C) constitute a default (or an
event which, with notice or lapse of time, or both, would constitute a
default) under, or result in the breach of, any material contract,
agreement or other instrument to which the Master Servicer is a party
or by which it is bound or to which any of its assets are subject,
which violation, default or breach would materially and adversely
affect the Master Servicer's ability to perform its obligations under
this Agreement;
39
(iii) this Agreement constitutes, assuming due authorization,
execution and delivery hereof by the other respective parties hereto, a
legal, valid and binding obligation of the Master Servicer, enforceable
against it in accordance with the terms hereof, except as such
enforcement may be limited by bankruptcy, insolvency, reorganization,
moratorium and other laws affecting the enforcement of creditors'
rights in general, and by general equity principles (regardless of
whether such enforcement is considered in a proceeding in equity or at
law);
(iv) the Master Servicer is not in default with respect to any
order or decree of any court or any order or regulation of any federal,
state, municipal or governmental agency to the extent that any such
default would materially and adversely affect its performance
hereunder;
(v) the Master Servicer is not a party to or bound by any
agreement or instrument or subject to any charter provision, bylaw or
any other corporate restriction or any judgment, order, writ,
injunction, decree, law or regulation that may materially and adversely
affect its ability as Master Servicer to perform its obligations under
this Agreement or that requires the consent of any third person to the
execution of this Agreement or the performance by the Master Servicer
of its obligations under this Agreement;
(vi) no litigation is pending or, to the best of the Master
Servicer's knowledge, threatened against the Master Servicer which
would prohibit its entering into this Agreement or performing its
obligations under this Agreement;
(vii) the Master Servicer, or an affiliate thereof the primary
business of which is the servicing of conventional residential mortgage
loans, is a Xxxxxx Xxx- and Xxxxxxx Mac-approved seller/servicer;
(viii) no consent, approval, authorization or order of any
court or governmental agency or body is required for the execution,
delivery and performance by the Master Servicer of or compliance by the
Master Servicer with this Agreement or the consummation of the
transactions contemplated by this Agreement, except for such consents,
approvals, authorizations and orders (if any) as have been obtained;
(ix) the consummation of the transactions contemplated by this
Agreement are in the ordinary course of business of the Master
Servicer; and
(x) the Master Servicer has obtained an errors and omissions
insurance policy and a fidelity bond, each of which is in full force
and effect, and each of which provides at least such coverage as is
required hereunder.
40
(b) It is understood and agreed that the representations and
warranties set forth in this Section 2.09 shall survive the execution and
delivery of this Agreement.
(c) Any cause of action against the Master Servicer relating to or
arising out of the breach of any representations and warranties made in this
Section shall accrue upon discovery of such breach by either the Seller, the
Master Servicer or the Trustee or notice thereof by any one of such parties to
the other parties.
41
ARTICLE III
ADMINISTRATION AND SERVICING OF MORTGAGE LOANS
Section 3.01.00 Duties of the Master Servicer.
The Master Servicer shall supervise, monitor and oversee the obligation
of the Servicers to service and administer their respective Mortgage Loans in
accordance with the terms of the applicable Servicing Agreement and shall have
full power and authority to do any and all things which it may deem necessary or
desirable in connection with such master servicing and administration. In
performing its obligations hereunder, the Master Servicer shall act in a manner
consistent with Accepted Master Servicing Practices. Furthermore, the Master
Servicer shall oversee and consult with each Servicer as necessary from
time-to-time to carry out the Master Servicer's obligations hereunder, shall
receive, review and evaluate all reports, information and other data provided to
the Master Servicer by each Servicer and shall cause each Servicer to perform
and observe the covenants, obligations and conditions to be performed or
observed by such Servicer under the applicable Servicing Agreement. The Master
Servicer shall independently and separately monitor each Servicer's servicing
activities with respect to each related Mortgage Loan, reconcile the results of
such monitoring with such information provided in the previous sentence on a
monthly basis and coordinate corrective adjustments to the Servicers' and Master
Servicer's records, and based on such reconciled and corrected information,
prepare the statements specified in Section 6.03 and any other information and
statements required hereunder. The Master Servicer shall reconcile the results
of its Mortgage Loan monitoring with the actual remittances of the Servicers to
the Protected Account pursuant to the applicable Servicing Agreements.
Section 3.02.00 Monitoring of Servicers' Performance.
(a) The Master Servicer shall be responsible for reporting to the
Trustee and the Seller the compliance by each Servicer with its duties under the
related Servicing Agreement. In the review of each Servicer's activities, the
Master Servicer may rely upon an officer's certificate of the Servicer with
regard to such Servicer's compliance with the terms of its Servicing Agreement.
In the event that the Master Servicer, in its judgment, determines that a
Servicer should be terminated in accordance with its Servicing Agreement, or
that a notice should be sent pursuant to such Servicing Agreement with respect
to the occurrence of an event that, unless cured, would constitute grounds for
such termination, the Master Servicer shall notify the Seller and the Trustee
thereof and the Master Servicer shall issue such notice or take such other
action as it deems appropriate.
(b) The Master Servicer, for the benefit of the Trustee and the
Certificateholders, shall enforce the obligations of each Servicer under the
related Servicing Agreement, and shall, in the event that a Servicer fails to
perform its obligations in accordance with the related Servicing Agreement,
subject to the preceding paragraph, terminate the rights and obligations of such
Servicer thereunder and act as servicer of the related Mortgage Loans or to
cause the Trustee to enter in to a new Servicing Agreement with a successor
Servicer selected by the Master Servicer; provided, however, it is understood
and acknowledged by the parties hereto that there will be a period of transition
(not to exceed 90 days) before the actual servicing functions can be fully
transferred to such successor Servicer. Such enforcement, including, without
limitation, the legal prosecution of claims, termination of Servicing Agreements
and the pursuit of other appropriate remedies, shall be in such form and carried
out to such an extent and at such time as the Master Servicer, in its good faith
business judgment, would require were it the owner of the related Mortgage
Loans. The Master Servicer shall pay the costs of such enforcement at its own
expense, provided that the Master Servicer shall not be required to prosecute or
defend any legal action except to the extent that the Master Servicer shall have
received reasonable indemnity for its costs and expenses in pursuing such
action.
42
(c) To the extent that the costs and expenses of the Master
Servicer related to any termination of a Servicer, appointment of a successor
Servicer or the transfer and assumption of servicing by the Master Servicer with
respect to any Servicing Agreement (including, without limitation, (i) all legal
costs and expenses and all due diligence costs and expenses associated with an
evaluation of the potential termination of the Servicer as a result of an event
of default by such Servicer and (ii) all costs and expenses associated with the
complete transfer of servicing, including all servicing files and all servicing
data and the completion, correction or manipulation of such servicing data as
may be required by the successor servicer to correct any errors or
insufficiencies in the servicing data or otherwise to enable the successor
service to service the Mortgage Loans in accordance with the related Servicing
Agreement) are not fully and timely reimbursed by the terminated Servicer, the
Master Servicer shall be entitled to reimbursement of such costs and expenses
from the Protected Account.
(d) The Master Servicer shall require each Servicer to comply with
the remittance requirements and other obligations set forth in the related
Servicing Agreement.
(e) If the Master Servicer acts as Servicer, it will not assume
liability for the representations and warranties of the Servicer, if any, that
it replaces. The Master Servicer shall use reasonable efforts to have the
successor Servicer assume liability for the representations and warranties made
by the terminated Servicer in respect of the related Mortgage Loans, and in the
event of any such assumption by the successor Servicer, the Trustee or the
Master Servicer, as applicable, may, in the exercise of its business judgment,
release the terminated Servicer from liability for such representations and
warranties.
Section 3.03.00 Master Servicer Fidelity Bond and Master Servicer
Errors and Omissions Insurance Policy.
The Master Servicer, at its expense, shall maintain in effect a blanket
fidelity bond and an errors and omissions insurance policy, affording coverage
with respect to all directors, officers, employees and other Persons acting on
such Master Servicer's behalf, and covering errors and omissions in the
performance of the Master Servicer's obligations hereunder. The errors and
omissions insurance policy and the fidelity bond shall be in such form and
amount generally acceptable for entities serving as master servicers or
trustees.
Section 3.04.00 Master Servicer's Financial Statements and Related
Information.
For each year this Agreement is in effect, the Master Servicer will
make available to the Trustee, each Rating Agency and the Seller a copy of the
Master Servicer's annual audited financial statements on or prior to May 31 of
each year, which may be in the form of the consolidated financial statements of
the Master Servicer's corporate parent. Such financial statements shall include
a balance sheet, income statement and statement of retained earnings.
43
Section 3.05.00 Power to Act; Procedures.
The Master Servicer shall master service the Mortgage Loans and shall
have full power and authority, subject to the REMIC Provisions and the
provisions of Article X hereof, to do any and all things that it may deem
necessary or desirable in connection with the master servicing and
administration of the Mortgage Loans, including but not limited to the power and
authority (i) to execute and deliver, on behalf of the Certificateholders and
the Trustee, customary consents or waivers and other instruments and documents,
(ii) to consent to transfers of any Mortgaged Property and assumptions of the
Mortgage Notes and related Mortgages, (iii) to collect any Insurance Proceeds
and Liquidation Proceeds, and (iv) to effectuate foreclosure or other conversion
of the ownership of the Mortgaged Property securing any Mortgage Loan, in each
case, in accordance with the provisions of this Agreement and the related
Servicing Agreement, as applicable. The Trustee shall furnish the Master
Servicer, upon written request from a Servicing Officer, with any powers of
attorney empowering the Master Servicer or any Servicer to execute and deliver
instruments of satisfaction or cancellation, or of partial or full release or
discharge, and to foreclose upon or otherwise liquidate Mortgaged Property, and
to appeal, prosecute or defend in any court action relating to the Mortgage
Loans or the Mortgaged Property, in accordance with the applicable Servicing
Agreement and this Agreement, and the Trustee shall execute and deliver such
other documents, as the Master Servicer may request, to enable the Master
Servicer to master service and administer the Mortgage Loans and carry out its
duties hereunder, in each case in accordance with Accepted Master Servicing
Practices (and the Trustee shall have no liability for misuse of any such powers
of attorney by the Master Servicer or any Servicer). If the Master Servicer or
the Trustee has been advised that it is likely that the laws of the state in
which action is to be taken prohibit such action if taken in the name of the
Trustee or that the Trustee would be adversely affected under the "doing
business" or tax laws of such state if such action is taken in its name, the
Master Servicer shall join with the Trustee in the appointment of a co-trustee
pursuant to Section 9.11 hereof. In the performance of its duties hereunder, the
Master Servicer shall be an independent contractor and shall not, except in
those instances where it is taking action in the name of the Trustee, be deemed
to be the agent of the Trustee.
Section 3.06.00 Reserved.
Section 3.07.00 "Due on Sale" Clauses; Assumption Agreements.
To the extent provided in the applicable Servicing Agreement, to the
extent Mortgage Loans contain enforceable due-on-sale clauses, the Master
Servicer shall cause the Servicers to enforce such clauses in accordance with
the applicable Servicing Agreement. If applicable law prohibits the enforcement
of a due-on-sale clause or such clause is otherwise not enforced in accordance
with the applicable Servicing Agreement, and, as a consequence, a Mortgage Loan
is assumed, the original Mortgagor may be released from liability in accordance
with the applicable Servicing Agreement.
44
Section 3.08.00 Release of Mortgage Files.
(a) Upon becoming aware of the payment in full of any Mortgage
Loan, or the receipt by any Servicer of a notification that payment in full has
been escrowed in a manner customary for such purposes for payment to
Certificateholders on the next Distribution Date, the Servicer will, if required
under the applicable Servicing Agreement, promptly furnish to the Trustee (or
the Custodian) two copies of a certification substantially in the form of
Exhibit D hereto signed by a Servicing Officer or in a mutually agreeable
electronic format which will, in lieu of a signature on its face, originate from
a Servicing Officer (which certification shall include a statement to the effect
that all amounts received in connection with such payment that are required to
be deposited in the Protected Account maintained by the Master Servicer pursuant
to Section 4.01 or by the applicable Servicer pursuant to its Servicing
Agreement have been or will be so deposited) and shall request that the Trustee
or the Custodian, deliver to the applicable Servicer the related Mortgage File.
Upon receipt of such certification and request, the Trustee or the Custodian
(with the consent, and at the direction of the Trustee), shall promptly release
the related Mortgage File to the applicable Servicer and the Trustee shall have
no further responsibility with regard to such Mortgage File. Upon any such
payment in full, each Servicer is authorized, to give, as agent for the Trustee,
as the mortgagee under the Mortgage that secured the Mortgage Loan, an
instrument of satisfaction (or assignment of mortgage without recourse)
regarding the Mortgaged Property subject to the Mortgage, which instrument of
satisfaction or assignment, as the case may be, shall be delivered to the Person
or Persons entitled thereto against receipt therefor of such payment, it being
understood and agreed that no expenses incurred in connection with such
instrument of satisfaction or assignment, as the case may be, shall be
chargeable to the Protected Account.
(b) From time to time and as appropriate for the servicing or
foreclosure of any Mortgage Loan and in accordance with the applicable Servicing
Agreement, the Trustee shall execute such documents as shall be prepared and
furnished to the Trustee by a Servicer or the Master Servicer (in form
reasonably acceptable to the Trustee) and as are necessary to the prosecution of
any such proceedings. The Trustee or the Custodian, shall, upon the request of a
Servicer or the Master Servicer, and delivery to the Trustee or the Custodian,
of two copies of a request for release signed by a Servicing Officer
substantially in the form of Exhibit D (or in a mutually agreeable electronic
format which will, in lieu of a signature on its face, originate from a
Servicing Officer), release the related Mortgage File held in its possession or
control to the Servicer or the Master Servicer, as applicable. Such trust
receipt shall obligate the Servicer or the Master Servicer to return the
Mortgage File to the Trustee or Custodian, as applicable, when the need therefor
by the Servicer or the Master Servicer no longer exists unless the Mortgage Loan
shall be liquidated, in which case, upon receipt of a certificate of a Servicing
Officer similar to that hereinabove specified, the Mortgage File shall be
released by the Trustee or Custodian, as applicable, to the Servicer or the
Master Servicer.
45
Section 3.09.00 Documents, Records and Funds in Possession of Master
Servicer To Be Held for Trustee.
(a) The Master Servicer shall transmit and each Servicer (to the
extent required by the related Servicing Agreement) shall transmit to the
Trustee or Custodian such documents and instruments coming into the possession
of the Master Servicer or such Servicer from time to time as are required by the
terms hereof, or in the case of the Servicers, the applicable Servicing
Agreement, to be delivered to the Trustee or Custodian. Any funds received by
the Master Servicer or by a Servicer in respect of any Mortgage Loan or which
otherwise are collected by the Master Servicer or by a Servicer as Liquidation
Proceeds or Insurance Proceeds in respect of any Mortgage Loan shall be held for
the benefit of the Trustee and the Certificateholders subject to the Master
Servicer's right to retain or withdraw from the Protected Account the Master
Servicing Fee and other amounts provided in this Agreement, and to the right of
each Servicer to retain its Servicing Fee and other amounts as provided in the
applicable Servicing Agreement. The Master Servicer shall, and (to the extent
provided in the applicable Servicing Agreement) shall cause each Servicer to,
provide access to information and documentation regarding the Mortgage Loans to
the Trustee, its agents and accountants at any time upon reasonable request and
during normal business hours, and to Certificateholders that are savings and
loan associations, banks or insurance companies, the Office of Thrift
Supervision, the FDIC and the supervisory agents and examiners of such Office
and Corporation or examiners of any other federal or state banking or insurance
regulatory authority if so required by applicable regulations of the Office of
Thrift Supervision or other regulatory authority, such access to be afforded
without charge but only upon reasonable request in writing and during normal
business hours at the offices of the Master Servicer designated by it. In
fulfilling such a request the Master Servicer shall not be responsible for
determining the sufficiency of such information.
(b) All Mortgage Files and funds collected or held by, or under
the control of, the Master Servicer, in respect of any Mortgage Loans, whether
from the collection of principal and interest payments or from Liquidation
Proceeds or Insurance Proceeds, shall be held by the Master Servicer for and on
behalf of the Trustee and the Certificateholders and shall be and remain the
sole and exclusive property of the Trustee; provided, however, that the Master
Servicer and each Servicer shall be entitled to setoff against, and deduct from,
any such funds any amounts that are properly due and payable to the Master
Servicer or such Servicer under this Agreement or the applicable Servicing
Agreement.
46
Section 3.10.00 Reserved.
Section 3.11.00 Standard Hazard and Flood Insurance Policies.
(a) For each Mortgage Loan, the Master Servicer shall enforce any
obligation of the Servicers under the related Servicing Agreements to maintain
or cause to be maintained standard fire and casualty insurance and, where
applicable, flood insurance, all in accordance with the provisions of the
related Servicing Agreements. It is understood and agreed that such insurance
shall be with insurers meeting the eligibility requirements set forth in the
applicable Servicing Agreement and that no earthquake or other additional
insurance is to be required of any Mortgagor or to be maintained on property
acquired in respect of a defaulted loan, other than pursuant to such applicable
laws and regulations as shall at any time be in force and as shall require such
additional insurance.
(b) Pursuant to Section 4.01, any amounts collected by the Master
Servicer, or by any Servicer, under any insurance policies (other than amounts
to be applied to the restoration or repair of the property subject to the
related Mortgage or released to the Mortgagor in accordance with the applicable
Servicing Agreement) shall be deposited into the Protected Account, subject to
withdrawal pursuant to Sections 4.02 and 4.03. Any cost incurred by the Master
Servicer or any Servicer in maintaining any such insurance if the Mortgagor
defaults in its obligation to do so shall be added to the amount owing under the
Mortgage Loan where the terms of the Mortgage Loan so permit; provided, however,
that the addition of any such cost shall not be taken into account for purposes
of calculating the distributions to be made to Certificateholders and shall be
recoverable by the Master Servicer or such Servicer pursuant to Sections 4.02
and 4.03.
Section 3.12.00 Presentment of Claims and Collection of Proceeds.
The Master Servicer shall (to the extent provided in the applicable
Servicing Agreement) cause the related Servicer to, prepare and present on
behalf of the Trustee and the Certificateholders all claims under the Insurance
Policies, including claims for FHA contracts of insurance with respect to the
Mortgage Loans and any claims under any VA guarantee, and take such actions
(including the negotiation, settlement, compromise or enforcement of the
insured's claim) as shall be necessary to realize recovery under such policies.
Any proceeds disbursed to the Master Servicer (or disbursed to a Servicer and
remitted to the Master Servicer) in respect of such policies, bonds or contracts
shall be promptly deposited in the Protected 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).
47
Section 3.13.00 Maintenance of the Primary Mortgage Insurance Policies.
(a) The Master Servicer shall not take, or permit any Servicer (to
the extent such action is prohibited under the applicable Servicing Agreement)
to take, any action that would result in noncoverage under any applicable
Primary Mortgage Insurance Policy of any loss which, but for the actions of such
Master Servicer or Servicer, would have been covered thereunder. The Master
Servicer shall use its best reasonable efforts to cause each Servicer (to the
extent required under the related Servicing Agreement) to keep in force and
effect (to the extent that the Mortgage Loan requires the Mortgagor to maintain
such insurance), primary mortgage insurance applicable to each Mortgage Loan in
accordance with the provisions of this Agreement and the related Servicing
Agreement, as applicable. The Master Servicer shall not, and shall not permit
any Servicer (to the extent required under the related Servicing Agreement) to,
cancel or refuse to renew any such Primary Mortgage Insurance Policy that is in
effect at the date of the initial issuance of the Mortgage Note and is required
to be kept in force hereunder except in accordance with the provisions of this
Agreement and the related Servicing Agreement, as applicable.
(b) The Master Servicer agrees to present, or to cause each
Servicer (to the extent required under the related Servicing Agreement) to
present, on behalf of the Trustee and the Certificateholders, claims to the
insurer under any Primary Mortgage Insurance Policies and, in this regard, to
take such reasonable action as shall be necessary to permit recovery under any
Primary Mortgage Insurance Policies respecting defaulted Mortgage Loans.
Pursuant to Section 4.01, any amounts collected by the Master Servicer or any
Servicer under any Primary Mortgage Insurance Policies shall be deposited in the
Protected Account, subject to withdrawal pursuant to Sections 4.02 and 4.03.
Section 3.14.00 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 the
PMI Policy or any other Primary Mortgage Insurance Policies, or certificate of
insurance if applicable, and any certificates of renewal as to the foregoing as
may be issued from time to time as contemplated by this Agreement. Until all
amounts distributable in respect of the Certificates have been distributed in
full and the Master Servicer otherwise has fulfilled its obligations under this
Agreement, the Trustee (or its Custodian, if any, as directed by the Trustee)
shall also retain possession and custody of each Mortgage File in accordance
with and subject to the terms and conditions of this Agreement. The Master
Servicer shall promptly deliver or cause to be delivered to the Trustee (or the
Custodian, as directed by the Trustee), upon the execution or receipt thereof
the originals of the PMI Policy or any other 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.
48
Section 3.15.00 Realization Upon Defaulted Mortgage Loans.
The Master Servicer shall cause each Servicer (to the extent required
under the related Servicing Agreement) to foreclose upon, repossess or otherwise
comparably convert the ownership of Mortgaged Properties securing such of the
Mortgage Loans as come into and continue in default and as to which no
satisfactory arrangements can be made for collection of delinquent payments, all
in accordance with the applicable Servicing Agreement.
Section 3.16.00 Compensation to the Master Servicer.
(a) The Master Servicer shall be entitled either (a) to pay
itself the Master Servicing Fee, as reduced pursuant to Section 6.06, in respect
of remittances from the Servicers prior to the deposit of such payment in the
Protected Account or, (b) to withdraw from the Protected Account, subject to
Section 4.02, the Master Servicing Fee. Servicing compensation in the form of
assumption fees, if any, late payment charges, as collected, if any, or
otherwise (but not including any prepayment premium or penalty) shall be
retained by the Master Servicer (or the applicable Servicer) and shall not be
deposited in the Protected Account. In addition, 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 Certificate Account. If the
Master Servicer does not retain or withdraw the Master Servicing Fee from the
Protected Account as provided herein, the Master Servicer shall be entitled to
direct the Trustee to pay the Master Servicing Fee to the Master Servicer by
withdrawal from the Certificate 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. Pursuant to Article IV all income and gain realized from any
investment of funds in the Protected Account and the Certificate Account shall
be for the benefit of the Master Servicer as additional compensation.
(b) The amount of the aggregate Master Servicing Fees payable to
the Master Servicer in respect of any Distribution Date shall be reduced in
accordance with Section 6.06.
Section 3.17.00 REO Property.
(a) In the event the Trust Fund acquires ownership of any REO
Property in respect of any related Mortgage Loan, the deed or certificate of
sale shall be issued to the Trustee, or to its nominee, on behalf of the related
Certificateholders. The Master Servicer shall, to the extent provided in the
applicable Servicing Agreement, cause the applicable Servicer to sell, any REO
Property as expeditiously as possible and in accordance with the provisions of
this Agreement and the related Servicing Agreement, as applicable. Pursuant to
its efforts to sell such REO Property, the Master Servicer shall cause the
applicable Servicer to protect and conserve, such REO Property in the manner and
to the extent required by the applicable Servicing Agreement, subject to the
REMIC Provisions.
49
(b) The Master Servicer shall, to the extent required by the
related Servicing Agreement, cause the applicable Servicer to deposit all funds
collected and received in connection with the operation of any REO Property in
the Protected Account.
(c) The Master Servicer and the applicable Servicer, upon the
final disposition of any REO Property, shall be entitled to reimbursement for
any related unreimbursed Monthly Advances and other unreimbursed advances as
well as any unpaid Master Servicing Fees or Servicing Fees from Liquidation
Proceeds received in connection with the final disposition of such REO Property;
provided, that any such unreimbursed Monthly Advances as well as any unpaid
Master Servicing Fees or Servicing Fees may be reimbursed or paid, as the case
may be, prior to final disposition, out of any net rental income or other net
amounts derived from such REO Property.
(d) The Liquidation Proceeds from the final disposition of the REO
Property, net of any payment to the Master Servicer and the applicable Servicer
as provided above shall be deposited in the Protected Account on or prior to the
Determination Date in the month following receipt thereof and be remitted by
wire transfer in immediately available funds to the Trustee for deposit into the
related Certificate Account on the next succeeding Funds Transfer Date.
Section 3.18.00 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, 2002, an
Officer's Certificate, certifying that with respect to the period ending
December 31 of the prior year: (i) such Servicing Officer has reviewed the
activities of such Master Servicer during the preceding calendar year or portion
thereof and its performance under this Agreement, (ii) to the best of such
Servicing Officer's knowledge, based on such review, such Master Servicer has
performed and fulfilled its duties, responsibilities and obligations under this
Agreement in all material respects throughout such year, or, if there has been a
default in the fulfillment of any such duties, responsibilities or obligations,
specifying each such default known to such Servicing Officer and the nature and
status thereof, (iii) nothing has come to the attention of such Servicing
Officer to lead such Servicing Officer to believe that any Servicer has failed
to perform any of its duties, responsibilities and obligations under its
Servicing Agreement in all material respects throughout such year, or, if there
has been a material default in the performance or fulfillment of any such
duties, responsibilities or obligations, specifying each such default known to
such Servicing Officer and the nature and status thereof.
(b) Copies of such statements shall be provided to any
Certificateholder upon request, by the Master Servicer or by the Trustee at the
Master Servicer's expense if the Master Servicer failed to provide such copies
(unless (i) the Master Servicer shall have failed to provide the Trustee with
such statement or (ii) the Trustee shall be unaware of the Master Servicer's
failure to provide such statement).
50
Section 3.19.00 Annual Independent Accountants' 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, 2002 to the
effect that, with respect to the most recently ended fiscal year, such firm has
examined certain records and documents relating to the Master Servicer's
performance of its servicing obligations under this Agreement and pooling and
servicing and trust agreements in material respects similar to this Agreement
and to each other and that, on the basis of such examination conducted
substantially in compliance with the audit program for mortgages serviced for
Xxxxxxx Mac or the Uniform Single Attestation Program for Mortgage Bankers, such
firm is of the opinion that the Master Servicer's activities have been conducted
in compliance with this Agreement, or that such examination has disclosed no
material items of noncompliance except for (i) such exceptions as such firm
believes to be immaterial, (ii) such other exceptions as are set forth in such
statement and (iii) such exceptions that the Uniform Single Attestation Program
for Mortgage Bankers or the Audit Program for Mortgages Serviced by Xxxxxxx Mac
requires it to report. Copies of such statements shall be provided to any
Certificateholder upon request by the Master Servicer, or by the Trustee at the
expense of the Master Servicer if the Master Servicer shall fail to provide such
copies. If such report discloses exceptions that are material, the Master
Servicer shall advise the Trustee whether such exceptions have been or are
susceptible of cure, and will take prompt action to do so.
51
ARTICLE IV
ACCOUNTS
Section 4.01.00 Protected Accounts.
(a) The Master Servicer shall establish and maintain a Protected
Account and shall enforce the obligation of each Servicer to establish and
maintain a servicing account in accordance with the applicable Servicing
Agreement, with records to be kept with respect thereto on a Mortgage Loan by
Mortgage Loan basis, into which accounts shall be deposited within 48 hours (or
as of such other time specified in the related Servicing Agreement) of receipt
all collections of principal and interest on any Mortgage Loan and with respect
to any REO Property received by the Master Servicer, or a Servicer, including
Principal Prepayments, Insurance Proceeds, Liquidation Proceeds, and advances
made from the Servicer's own funds (less servicing compensation as permitted by
Section 3.16, in the case of the Master Servicer, and by the applicable
Servicing Agreement in the case of any Servicer) and all other amounts to be
deposited in the Protected Account. The Master Servicer is hereby authorized to
make withdrawals from and deposits to the related Protected Account for purposes
required or permitted by this Agreement. The Protected Account shall be held in
a Designated Depository Institution and segregated on the books of such
institution or a Rating Agency Eligible Account in the name of the Trustee for
the benefit of Certificateholders. The Master Servicer may, and, to the extent
provided in the related Servicing Agreement, permit a Servicer to, transfer
funds to other accounts (which shall for purposes hereof be deemed to be
Protected Accounts), commingle accounts, or to establish Protected Accounts not
conforming to the foregoing requirements, to the extent that such other accounts
or Protected Accounts are Rating Agency Eligible Accounts.
(b) 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 withdrawn for deposit in the Certificate Account, and shall
be held until required for such deposit. The income earned from Permitted
Investments made pursuant to this Section 4.01 shall be paid to the Master
Servicer as additional compensation as provided in Section 3.16 of this
Agreement or by the related Servicer under the applicable Servicing Agreement,
and the risk of loss of moneys required to be distributed to the
Certificateholders resulting from such investments shall be borne by and be the
risk of the Master Servicer or the related Servicer. The Master Servicer shall
itself, or shall cause the related Servicer (to the extent provided in the
Servicing Agreement) to, deposit the amount of any such loss in the Protected
Account (or the Servicer's servicing 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.
52
(c) Subject to this Article IV, on or before each Funds Transfer
Date, the Master Servicer shall withdraw or shall cause to be withdrawn from the
Protected Accounts and shall immediately deposit or cause to be deposited in the
Certificate 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 Mortgage Loan Group:
(i) Scheduled Payments on the Mortgage Loans received or any
related portion thereof advanced by the Master Servicer pursuant to
Section 6.05 or Servicers which were due on or before the related Due
Date, net of the amount thereof comprising the Master Servicing Fee or
Servicing Fees;
(ii) Full Principal Prepayments and any Liquidation Proceeds
received by the Master Servicer or related 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 Master Servicing Fee or Servicing Fees;
(iii) Partial Principal Prepayments received by the Master
Servicer or related Servicers for such Mortgage Loans in the related
Prepayment Period; and
(iv) Any amount to be used as a Certificate Account Advance.
In addition, on or before each Advancing Date, the Master Servicer shall deposit
in the Certificate Account (or remit to the Trustee for deposit therein) any
Monthly Advances required to be made by the Master Servicer with respect to the
Mortgage Loans in each Mortgage Loan Group pursuant to Section 6.05.
(d) Withdrawals may be made from a Protected Account only to make
remittances as provided in Sections 4.01(b) or 4.03(c); to reimburse the Master
Servicer or a Servicer for Monthly 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 10.01. As provided in Sections 4.02(b) and
4.03 certain amounts otherwise due to the Master Servicer and the Servicers may
be retained by them and need not be deposited in the Certificate Account.
Section 4.02.00 Certificate Account.
(a) The Trustee shall establish and maintain in the name of the
Trustee, for the benefit of the Certificateholders, the Certificate Account as a
segregated trust account or accounts. The Trustee will deposit in the
Certificate Account, as received, the following amounts:
(i) Any amounts withdrawn from a Protected Account pursuant
to Subsection 4.01(b);
53
(ii) Any Monthly Advance and any Compensating Interest
Payments;
(iii) Any Insurance Proceeds or Liquidation Proceeds received
by the Master Servicer which were not deposited in a Protected Account;
(iv) The Repurchase Price with respect to any Mortgage Loans
purchased by the Mortgage Loan Seller pursuant to Sections 2.02 or
2.03, any amounts which are to be treated pursuant to Section 2.06 as
the payment of such a Repurchase Price, and all proceeds of any
Mortgage Loans or property acquired with respect thereto repurchased by
the Seller or its designee pursuant to Section 10.01; and
(v) Any other amounts received by the Trustee or the Master
Servicer upon receipt by the Trustee and required to be deposited in
the Certificate Account pursuant to this Agreement.
(b) All amounts deposited to the Certificate 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, subject to the right of the Master Servicer to require the Trustee to
make withdrawals therefrom as provided herein. The foregoing requirements for
crediting the Certificate Account shall be exclusive, it being understood and
agreed that, without limiting the generality of the foregoing, payments in the
nature of (i) prepayment or late payment charges or assumption, tax service,
statement account or payoff, substitution, satisfaction, release and other like
fees and charges and (ii) the items enumerated in Subsections 4.03(a)(i), (ii),
(iii), (iv), (vi), (vii), (ix) and (xi) need not be credited by the Master
Servicer or the related Servicer to the Certificate Account. In the event that
the Master Servicer shall deposit or cause to be deposited to the Certificate
Account any amount not required to be credited thereto, the Trustee, upon
receipt of a written request therefor signed by a Servicing Officer of the
Master Servicer, shall promptly transfer such amount to the Master Servicer, any
provision herein to the contrary notwithstanding.
(c) The amount at any time credited to the Certificate 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, or from the maturity of any Permitted Investment on the Business Day
prior to a Distribution Date through the distribution of such funds on such
Distribution Date or at such other time and in such amount as, in the judgment
of the Trustee, cannot reasonably be invested in accordance with this sentence,
held by the Trustee uninvested in such Certificate Account. All Permitted
Investments shall be payable on demand or mature or be subject to redemption or
withdrawal on or before, and shall be held until, the next succeeding
Distribution Date if the obligor for such Permitted Investment is the Trustee
or, if such obligor is any other Person, the Business Day preceding such
Distribution Date (except that any investment in the institution with which the
Certificate Account is maintained may mature on such Distribution Date). The
Master Servicer shall be entitled to all investment earnings on amounts in the
Certificate Account. The risk of loss of moneys required to be distributed to
the Certificateholders resulting from such investments shall be borne by and be
the risk of the Master Servicer. The Master Servicer shall deposit the amount of
any such loss in the Certificate 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.
54
Section 4.03.00 Permitted Withdrawals and Transfers from the
Certificate Account.
(a) The Trustee will, from time to time on demand of the Master
Servicer, make or cause to be made such withdrawals or transfers from the
Certificate Account as the Master Servicer has designated for such transfer or
withdrawal as specified in a certificate signed by a Servicing Officer (upon
which the Trustee may conclusively rely) for the following purposes (limited in
the case of amounts due the Master Servicer to those not withdrawn from the
Protected Account in accordance with the terms of this Agreement):
(i) to reimburse the Master Servicer or any Servicer for any
Monthly Advance of its own funds or any advance of such Servicer's own
funds, the right of the Master Servicer or a Servicer to reimbursement
pursuant to this subclause (i) being limited to amounts received on a
particular Mortgage Loan (including, for this purpose, the Repurchase
Price therefor, Insurance Proceeds and Liquidation Proceeds) which
represent late payments or recoveries of the principal of or interest
on such Mortgage Loan respecting which such Monthly Advance or advance
was made;
(ii) to reimburse the Master Servicer or any Servicer from
Insurance Proceeds or Liquidation Proceeds relating to a particular
Mortgage Loan for amounts expended by the Master Servicer or such
Servicer pursuant to Section 3.12 in good faith in connection with the
restoration of the related Mortgaged Property which was damaged by an
Uninsured Cause or in connection with the liquidation of such Mortgage
Loan;
(iii) to reimburse the Master Servicer or any Servicer from
Insurance Proceeds relating to a particular Mortgage Loan for Insured
Expenses incurred with respect to such Mortgage Loan and to reimburse
the Master Servicer or such Servicer from Liquidation Proceeds from a
particular Mortgage Loan for Liquidation Expenses incurred with respect
to such Mortgage Loan; provided that the Master Servicer shall not be
entitled to reimbursement for Liquidation Expenses with respect to a
Mortgage Loan to the extent that (i) any amounts with respect to such
Mortgage Loan were paid as Excess Liquidation Proceeds pursuant to
clause (xi) of this Subsection 4.03(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 or any Servicer (payment to
any Servicer to be subject to prior payment to the Master Servicer of
an amount equal to the Master Servicing Fee), as appropriate, from
Liquidation Proceeds or Insurance Proceeds received in connection with
the liquidation of any Mortgage Loan, the amount which it or such
Servicer would have been entitled to receive under subclause (ix) of
this Subsection 4.03(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;
55
(v) to pay the Master Servicer or any Servicer (payment to any
Servicer to be subject to prior payment to the Master Servicer of the
portion of the Master Servicing Fee which the Master Servicer is
entitled to retain) from the Repurchase Price for any Mortgage Loan,
the amount which it or such Servicer would have been entitled to
receive under subclause (ix) of this Subsection 4.03(a) as servicing
compensation;
(vi) to reimburse the Master Servicer or any Servicer for
advances of funds pursuant to Sections 3.11 and 3.12, 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 or any Servicer for any
Monthly Advance or advance, after a Realized Loss has been allocated
with respect to the related Mortgage Loan if the Monthly Advance or
advance has not been reimbursed pursuant to clauses (i) and (vi);
(viii) to pay the Master Servicer as set forth in Section
3.16;
(ix) to reimburse the Master Servicer for expenses, costs and
liabilities incurred by and reimbursable to it pursuant to Sections
3.02, 7.04(c) and (d) and 11.03;
(x) to pay to the Master Servicer, as additional servicing
compensation, any Excess Liquidation Proceeds to the extent not
retained by the related Servicer;
(xi) to reimburse or pay any Servicer any such amounts as are
due thereto under the applicable Servicing Agreement and have not been
retained by or paid to the Servicer, to the extent provided in the
related Servicing Agreement;
(xii) to reimburse the Trustee for expenses, costs and
liabilities incurred by or reimbursable to it pursuant to Section 9.05;
(xiii) to pay to the PMI Insurer the PMI Insurance Premium for
such Distribution Date, to the extent not paid by the related Servicer
pursuant to its Servicing Agreement;
(xiv) to remove amounts deposited in error; and
(xv) to clear and terminate the Certificate Account pursuant
to Section 10.01.
56
(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 Certificate 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 Certificate
Account under Section 4.02(b).
(c) On each Distribution Date, the Trustee shall distribute the
Group Available Funds for each Mortgage Loan Group to the Holders of the
Certificates in accordance with Section 6.01.
(d) Notwithstanding the provisions of this Section 4.03, the
Master Servicer may, but is not required to, allow the Servicers to deduct from
amounts received by them or from the related Protected Account, prior to deposit
in the Certificate Account, any portion to which such Servicers are entitled as
servicing compensation (including income on Permitted Investments) or
reimbursement of any reimbursable advances made by such Servicers.
57
ARTICLE V
CERTIFICATES
Section 5.01.00 Certificates.
(a) The Depository, the Seller and the Trustee have entered into a
Depository Agreement dated as of January 31, 2001 (the "Depository Agreement").
Except for the Residual Certificates and the Individual Certificates and as
provided in Section 5.01(b), the Certificates shall at all times remain
registered in the name of the Depository or its nominee and at all times: (i)
registration of such Certificates may not be transferred by the Trustee except
to a successor to the Depository; (ii) ownership and transfers of registration
of such Certificates on the books of the Depository shall be governed by
applicable rules established by the Depository; (iii) the Depository may collect
its usual and customary fees, charges and expenses from its Depository
Participants; (iv) the Trustee shall deal with the Depository as representative
of such Certificate Owners of the respective Class of Certificates for purposes
of exercising the rights of Certificateholders under this Agreement, and
requests and directions for and votes of such representative shall not be deemed
to be inconsistent if they are made with respect to different Certificate
Owners; and (v) the Trustee may rely and shall be fully protected in relying
upon information furnished by the Depository with respect to its Depository
Participants.
(b) The Residual Certificates and the Private Certificates are
initially Physical Certificates. If at any time the Holders of all of the
Certificates of one or more such Classes request that the Trustee cause such
Class to become Global Certificates, the Trustee and the Seller will take such
action as may be reasonably required to cause the Depository to accept such
Class or Classes for trading if it may legally be so traded.
(c) All transfers by Certificate Owners of such respective Classes
of Book-Entry Certificates and any Global Certificates shall be made in
accordance with the procedures established by the Depository Participant or
brokerage firm representing such Certificate Owners. Each Depository Participant
shall only transfer Book-Entry Certificates of Certificate Owners it represents
or of brokerage firms for which it acts as agent in accordance with the
Depository's normal procedures.
(d) If (i)(A) the Seller advises the Trustee in writing that the
Depository is no longer willing or able to properly discharge its
responsibilities as Depository and (B) the Trustee or the Seller is unable to
locate a qualified successor within 30 days or (ii) the Seller at its option
advises the Trustee in writing that it elects to terminate the book-entry system
through the Depository, the Trustee shall request that the Depository notify all
Certificate Owners of the occurrence of any such event and of the availability
of definitive, fully registered Certificates to Certificate Owners requesting
the same. Upon surrender to the Trustee of the Certificates by the Depository,
accompanied by registration instructions from the Depository for registration,
the Trustee shall issue the definitive Certificates. None of the Master
Servicer, the Seller nor the Trustee shall be liable for any delay in delivery
of such instructions and may conclusively rely on, and shall be protected in
relying on, such instructions.
58
(e) (i) REMIC I will be evidenced by (x) the REMIC I Regular
Interests, which will be uncertificated and non-transferable, are hereby
designated as the "regular interests" and (y) the Class R-I Certificate, which
is hereby designated as the single "residual interest" in REMIC I. The REMIC I
Regular Interests and the Class R-I Certificates will have the following
designations and pass-through rates, and distributions of principal and interest
thereon shall be allocated to the Corresponding Class of Certificates in the
following manner:
Corresponding Classes
of Certificates
REMIC I Initial Uncertificated Pass-Through Allocation of Allocation of
Interest Principal Balance ($) Rate Principal Interest
-------- --------------------- ---- --------- --------
1A $ 44,424,300.00 (1) X-0 X-0
0X $ 1,611,298.00 (1) (7) (7)
1C $ 50.00 (1) R-II R-II
2A $ 50,477,200.00 (2) A-2 A-2
2B $ 1,830,817.00 (2) (7) (7)
3A $ 71,037,800.00 (3) X-0 X-0
0X $ 2,576,537.00 (3) (7) (7)
4A $ 73,898,400.00 (4) X-0 X-0
0X $ 2,680.277.00 (4) (7) (7)
5A $ 55,630,500.00 (5) X-0 X-0
0X $ 2,017,785.00 (5) (7) (7)
6A $ 57,892,900.00 (6) X-0 X-0
0X $ 2,099,761.00 (6) (7) (7)
R-I $ 50.00 (1) N/A N/A
59
------------
(1) During each Interest Accrual Period, REMIC I Regular Interests 1A, 1B and 1C
and the Class R-II Certificates will bear interest at a variable Pass-Through
Rate equal to the weighted average of the Net Rates of the Group 1 Mortgage
Loans.
(2) During each Interest Accrual Period, REMIC I Regular Interests 2A and 2B
will bear interest at a variable Pass-Through Rate equal to the weighted average
of the Net Rates of the Group 2 Mortgage Loans.
(3) During each Interest Accrual Period, REMIC I Regular Interests 3A and 3B
will bear interest at a variable Pass-Through Rate equal to the weighted average
of the Net Rates of the Group 3 Mortgage Loans.
(4) During each Interest Accrual Period, REMIC I Regular Interests 4A and 4B
will bear interest at a variable Pass-Through Rate equal to the weighted average
of the Net Rates of the Group 4 Mortgage Loans.
(5) During each Interest Accrual Period, REMIC I Regular Interests 5A and 5B
will bear interest at a variable Pass-Through Rate equal to the weighted average
of the Net Rates of the Group 5 Mortgage Loans.
(6) During each Interest Accrual Period, REMIC I Regular Interests 6A and 6B
will bear interest at a variable Pass-Through Rate equal to the weighted average
of the Net Rates of the Group 6 Mortgage Loans.
(7) The corresponding Classes of Certificates for these REMIC I Regular
Interests are all the Class B Certificates. Principal and interest shall be
allocable to the Class B Certificates and shall be apportioned among such
Certificates in the same order and priority as payments are to be made on such
Certificates.
Principal and interest shall be payable to, and shortfalls, losses and
prepayments are allocable to, the REMIC I Regular Interests in the same order
and priority as payments are to be made on, and shortfalls, losses and
prepayments are allocable to, the Corresponding Classes of Certificates.
Principal and interest, shortfalls, losses and prepayments relating to the Group
1, Group 2, Group 3, Group 4, Group 5 and Group 6 Mortgage Loans not otherwise
allocated to the Class 1A REMIC I Regular Interest and the Class R-I
Certificates, and the 1C, 2A, 3A, 4A, 5A, and 6A REMIC I Regular Interests shall
be allocated to the Class 1B, 2B, 3B, 4B, 5B and 6B REMIC I Regular Interests,
respectively.
(ii) REMIC II will be evidenced by (x) the Certificates (other
than the Class R Certificates) (the "REMIC II Regular Certificates"), which are
hereby designated as the "regular interests" in REMIC II and have the principal
balances and accrue interest at the Pass-Through Rates equal to those set forth
in Section 5.01(d) and (y) the Class R-II Certificate, which is hereby
designated as the single "residual interest" in REMIC II.
60
(f) The Classes of the Certificates shall have the following
designations, initial principal amounts and Pass-Through Rates:
Initial Principal Amount or
Designation Notional Amount Pass-Through Rate
----------- --------------- -----------------
A-1 $ 44,424,300.00 (1)
A-2 $ 50,477,200.00 (2)
A-3 $ 71,037,800.00 (3)
A-4 $ 73,898,400.00 (4)
A-5 $ 55,630,500.00 (5)
A-6 $ 57,892,900.00 (6)
B-1 $ 4,943,100.00 (7)
B-2 $ 2,197,400.00 (7)
B-3 $ 1,830,800.00 (7)
B-4 $ 1,464,800.00 (7)
B-5 $ 1,098,400.00 (7)
B-6 $ 1,281,973.98 (7)
R-I $ 50.00 (1)
R-II $ 50.00 (1)
------------
(1) The Class A-1, Class R-I and R-II Certificates will bear interest at a
variable Pass-Through Rate equal to the weighted average of the Net Rates
of the Group 1 Mortgage Loans.
(2) The Class A-2 Certificates will bear interest at a variable Pass-Through
Rate equal to the weighted average of the Net Rates of the Group 2
Mortgage Loans.
(3) The Class A-3 Certificates will bear interest at a variable Pass-Through
Rate equal to the weighted average of the Net Rates of the Group 3
Mortgage Loans.
(4) The Class A-4 Certificates will bear interest at a variable Pass-Through
Rate equal to the weighted average of the Net Rates of the Group 4
Mortgage Loans.
(5) The Class A-5 Certificates will bear interest at a variable Pass-Through
Rate equal to the weighted average of the Net Rates of the Group 5
Mortgage Loans.
(6) The Class A-6 Certificates will bear interest at a variable Pass-Through
Rate equal to the weighted average of the Net Rates of the Group 6
Mortgage Loans.
(7) The Class X-0, X-0, X-0, X-0, X-0 and B-6 Certificates will bear interest
at a variable Pass-Through Rate equal to the weighted average of the
Pass-Through Rates on the REMIC I Regular Interests 1B, 2B, 3B, 4B, 5B and
6B, each weighted based on its Uncertificated Principal Balance.
61
(g) Solely for purposes of Section 1.860G-1(a)(4)(iii) of the Treasury
regulations, the "latest possible maturity date" for the Certificates and the
REMIC I Regular Interests is the Assumed Final Distribution Date, which is the
Distribution Date in December 2040.
(h) With respect to each Distribution Date, each Class of Certificates
shall accrue interest during the related Interest Accrual Period. With respect
to each Distribution Date and each such Class of Certificates, interest shall be
calculated, on the basis of a 360-day year comprised of twelve 30-day months,
based upon the respective Pass-Through Rate set forth, or determined as
provided, above and the Current Principal Amount of such Class applicable to
such Distribution Date.
(i) The Certificates shall be substantially in the forms set forth in
Exhibits X-0, X-0 and A-3. On original issuance, the Trustee shall sign,
countersign and shall deliver them at the direction of the Seller. Pending the
preparation of definitive Certificates of any Class, the Trustee may sign and
countersign temporary Certificates that are printed, lithographed or
typewritten, in authorized denominations for Certificates of such Class,
substantially of the tenor of the definitive Certificates in lieu of which they
are issued and with such appropriate insertions, omissions, substitutions and
other variations as the officers or authorized signatories executing such
Certificates may determine, as evidenced by their execution of such
Certificates. If temporary Certificates are issued, the Seller will cause
definitive Certificates to be prepared without unreasonable delay. After the
preparation of definitive Certificates, the temporary Certificates shall be
exchangeable for definitive Certificates upon surrender of the temporary
Certificates at the office of the Trustee, without charge to the Holder. Upon
surrender for cancellation of any one or more temporary Certificates, the
Trustee shall sign and countersign and deliver in exchange therefor a like
aggregate principal amount, in authorized denominations for such Class, of
definitive Certificates of the same Class. Until so exchanged, such temporary
Certificates shall in all respects be entitled to the same benefits as
definitive Certificates.
62
(j) Each Class of Book-Entry Certificates will be registered as a
single Certificate of such Class held by a nominee of the Depository or the DTC
Custodian, and beneficial interests will be held by investors through the
book-entry facilities of the Depository in minimum denominations of (i) in the
case of the Senior Certificates (other than the Residual Certificates), $1,000
and in each case increments of $1.00 in excess thereof, and (ii) in the case of
the Class B-1, Class B-2 and Class B-3 Certificates, $25,000 and increments of
$1.00 in excess thereof, except that one Certificate of each such Class may be
issued in a different amount so that the sum of the denominations of all
outstanding Certificates of such Class shall equal the Current Principal Amount
or Notional Amount of such Class on the Closing Date. On the Closing Date, the
Trustee shall execute and countersign Physical Certificates all in an aggregate
principal amount that shall equal the Current Principal Amount of such Class on
the Closing Date. The Private Certificates will be issued in certificated
fully-registered form in minimum denominations of $50,000 and increments of
$1.00 in excess thereof, except that one Certificate of each such Class may be
issued in a different amount so that the sum of the denominations of all
outstanding Certificates of such Class shall equal the Current Principal Amount
of such Class on the Closing Date. Each Class of Residual Certificates shall be
issued as a single certificate in fully-registered form in the denomination of
$50. Each Class of Global Certificates, if any, shall be issued in fully
registered form in minimum dollar denominations of $50,000 and integral
multiples of $1.00 in excess thereof, except that one Certificate of each Class
may be in a different denomination so that the sum of the denominations of all
outstanding Certificates of such Class shall equal the Current Principal Amount
of such Class on the Closing Date. On the Closing Date, the Trustee shall
execute and countersign (i) in the case of each Class of Offered Certificates,
the Certificate in the entire Current Principal Amount of the respective Class
and (ii) in the case of the Private Certificates all in an aggregate principal
amount that shall equal the Current Principal Amount of each such respective
Class on the Closing Date. The Certificates referred to in clause (i) and if at
any time there are to be Global Certificates, the Global Certificates shall be
delivered by the Seller to the Depository or pursuant to the Depository's
instructions, shall be delivered by the Seller on behalf of the Depository to
and deposited with the DTC Custodian. The Trustee shall sign the Certificates by
facsimile or manual signature and countersign them by manual signature on behalf
of the Trustee by one or more authorized signatories, each of whom shall be
Responsible Officers of the Trustee or its agent. A Certificate bearing the
manual and facsimile signatures of individuals who were the authorized
signatories of the Trustee or its agent at the time of issuance shall bind the
Trustee, notwithstanding that such individuals or any of them have ceased to
hold such positions prior to the delivery of such Certificate.
(k) No Certificate shall be entitled to any benefit under this
Agreement, or be valid for any purpose, unless there appears on such Certificate
the manually executed countersignature of the Trustee or its agent, and such
countersignature upon any Certificate shall be conclusive evidence, and the only
evidence, that such Certificate has been duly executed and delivered hereunder.
All Certificates issued on the Closing Date shall be dated the Closing Date. All
Certificates issued thereafter shall be dated the date of their
countersignature.
63
(l) The Closing Date is hereby designated as the "startup" day of each
Series REMIC within the meaning of Section 860G(a)(9) of the Code.
(m) For federal income tax purposes, each Series REMIC shall have a tax
year that is a calendar year and shall report income on an accrual basis.
(n) The Trustee on behalf of the Trust shall cause each Series REMIC to
elect to be treated as a real estate mortgage investment conduit under Section
860D of the Code. Any inconsistencies or ambiguities in this Agreement or in the
administration of any Trust established hereby shall be resolved in a manner
that preserves the validity of such elections.
Section 5.02.00 Registration of Transfer and Exchange of Certificates.
(a) The Trustee shall maintain a Certificate Register in which, subject
to such reasonable regulations as it may prescribe, the Trustee shall provide
for the registration of Certificates and of transfers and exchanges of
Certificates as herein provided.
(b) Subject to Subsection 5.01(a) and, in the case of any Global
Certificate or Private Certificate upon the satisfaction of the conditions set
forth below, upon surrender for registration of transfer of any Certificate at
any office or agency of the Trustee maintained for such purpose, the Trustee
shall sign, countersign and shall deliver, in the name of the designated
transferee or transferees, a new Certificate of a like Class and aggregate
Fractional Undivided Interest, but bearing a different number.
(c) By acceptance of an Individual Certificate, whether upon original
issuance or subsequent transfer, each holder of such a Certificate acknowledges
the restrictions on the transfer of such Certificate set forth in the Securities
Legend and agrees that it will transfer such a Certificate only as provided
herein. In addition to the provisions of Subsection 5.02(h), the following
restrictions shall apply with respect to the transfer and registration of
transfer of an Individual Certificate to a transferee that takes delivery in the
form of an Individual Certificate:
(i) The Trustee shall register the transfer of an Individual
Certificate if the requested transfer is being made to a transferee who
has provided the Trustee with a Rule 144A Certificate or comparable
evidence as to its QIB status.
(ii) The Trustee shall register the transfer of any Individual
Certificate if (x) the transferor has advised the Trustee in writing
that the Certificate is being transferred to an Institutional
Accredited Investor; and (y) prior to the transfer the transferee
furnishes to the Trustee an Investment Letter (and the Trustee shall be
fully protected in so doing), provided that, if based upon an Opinion
of Counsel to the effect that the delivery of (x) and (y) above are not
sufficient to confirm that the proposed transfer is being made pursuant
to an exemption from, or in a transaction not subject to, the
registration requirements of the Securities Act and other applicable
laws, the Trustee shall as a condition of the registration of any such
transfer require the transferor to furnish such other certifications,
legal opinions or other information prior to registering the transfer
of an Individual Certificate as shall be set forth in such Opinion of
Counsel.
64
(d) Subject to Subsection 5.02(h), so long as a Global Certificate of
such Class is outstanding and is held by or on behalf of the Depository,
transfers of beneficial interests in such Global Certificate, or transfers by
holders of Individual Certificates of such Class to transferees that take
delivery in the form of beneficial interests in the Global Certificate, may be
made only in accordance with this Section 5.02(d) and in accordance with the
rules of the Depository:
(i) In the case of a beneficial interest in the Global
Certificate being transferred to an Institutional Accredited Investor,
such transferee shall be required to take delivery in the form of an
Individual Certificate or Certificates and the Trustee shall register
such transfer only upon compliance with the provisions of Subsection
5.02(c)(ii).
(ii) In the case of a beneficial interest in a Class of Global
Certificates being transferred to a transferee that takes delivery in
the form of an Individual Certificate or Certificates of such Class,
except as set forth in clause (i) above, the Trustee shall register
such transfer only upon compliance with the provisions of Subsection
5.02(c)(i).
(iii) In the case of an Individual Certificate of a Class
being transferred to a transferee that takes delivery in the form of a
beneficial interest in a Global Certificate of such Class, the Trustee
shall register such transfer if the transferee has provided the Trustee
with a Rule 144A Certificate or comparable evidence as to its QIB
status.
(iv) No restrictions shall apply with respect to the transfer
or registration of transfer of a beneficial interest in the Global
Certificate of a Class to a transferee that takes delivery in the form
of a beneficial interest in the Global Certificate of such Class;
provided that each such transferee shall be deemed to have made such
representations and warranties contained in the Rule 144A Certificate
as are sufficient to establish that it is a QIB.
(e) Subject to Subsection 5.02(h), an exchange of a beneficial interest
in a Global Certificate of a Class for an Individual Certificate or Certificates
of such Class, an exchange of an Individual Certificate or Certificates of a
Class for a beneficial interest in the Global Certificate of such Class and an
exchange of an Individual Certificate or Certificates of a Class for another
Individual Certificate or Certificates of such Class (in each case, whether or
not such exchange is made in anticipation of subsequent transfer, and, in the
case of the Global Certificate of such Class, so long as such Certificate is
outstanding and is held by or on behalf of the Depository) may be made only in
accordance with this Subsection 5.02(e) and in accordance with the rules of the
Depository:
(i) A holder of a beneficial interest in a Global Certificate
of a Class may at any time exchange such beneficial interest for an
Individual Certificate or Certificates of such Class.
65
(ii) A holder of an Individual Certificate or Certificates of
a Class may exchange such Certificate or Certificates for a beneficial
interest in the Global Certificate of such Class if such holder
furnishes to the Trustee a Rule 144A Certificate or comparable evidence
as to its QIB status.
(iii) A holder of an Individual Certificate of a Class may
exchange such Certificate for an equal aggregate principal amount of
Individual Certificates of such Class in different authorized
denominations without any certification.
(iv) Upon acceptance for exchange or transfer of an Individual
Certificate of a Class for a beneficial interest in a Global
Certificate of such Class as provided herein, the Trustee shall cancel
such Individual Certificate and shall (or shall request the Depository
to) endorse on the schedule affixed to the applicable Global
Certificate (or on a continuation of such schedule affixed to the
Global Certificate and made a part thereof) or otherwise make in its
books and records an appropriate notation evidencing the date of such
exchange or transfer and an increase in the certificate balance of the
Global Certificate equal to the certificate balance of such Individual
Certificate exchanged or transferred therefor.
(v) Upon acceptance for exchange or transfer of a beneficial
interest in a Global Certificate of a Class for an Individual
Certificate of such Class as provided herein, the Trustee shall (or
shall request the Depository to) endorse on the schedule affixed to
such Global Certificate (or on a continuation of such schedule affixed
to such Global Certificate and made a part thereof) or otherwise make
in its books and records an appropriate notation evidencing the date of
such exchange or transfer and a decrease in the certificate balance of
such Global Certificate equal to the certificate balance of such
Individual Certificate issued in exchange therefor or upon transfer
thereof.
(f) With respect to any Class of Private Certificates, the Securities
Legend shall be placed on any Individual Certificate issued in exchange for or
upon transfer of another Individual Certificate or of a beneficial interest in a
Global Certificate.
(g) Subject to the restrictions on transfer and exchange set forth in
this Section 5.02, the holder of any Individual Certificate may transfer or
exchange the same in whole or in part (in an initial certificate balance equal
to the minimum authorized denomination set forth in Section 5.01(h) above or any
integral multiple of $1.00 in excess thereof) by surrendering such Certificate
at the Corporate Trust Office, or at the office of any transfer agent, together
with an executed instrument of assignment and transfer satisfactory in form and
substance to the Trustee in the case of transfer and a written request for
exchange in the case of exchange. The holder of a beneficial interest in a
Global Certificate may, subject to the rules and procedures of the Depository,
cause the Depository (or its nominee) to notify the Trustee in writing of a
request for transfer or exchange of such beneficial interest for an Individual
Certificate or Certificates. Following a proper request for transfer or
exchange, the Trustee shall, within five Business Days of such request made at
such Corporate Trust Office, sign, countersign and deliver at such Corporate
Trust Office, to the transferee (in the case of transfer) or holder (in the case
of exchange) or send by first class mail at the risk of the transferee (in the
case of transfer) or holder (in the case of exchange) to such address as the
transferee or holder, as applicable, may request, an Individual Certificate or
Certificates, as the case may require, for a like aggregate Fractional Undivided
Interest and in such authorized denomination or denominations as may be
requested. The presentation for transfer or exchange of any Individual
Certificate shall not be valid unless made at the Trustee's office located at
000 Xxxxxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000 by the registered holder in
person, or by a duly authorized attorney-in-fact.
66
(h) At the option of the Certificateholders, Certificates may be
exchanged for other Certificates of authorized denominations of a like Class and
aggregate Fractional Undivided Interest, upon surrender of the Certificates to
be exchanged at any such office or agency; provided, however, that no
Certificate may be exchanged for new Certificates unless the original Fractional
Undivided Interest represented by each such new Certificate (i) is at least
equal to the minimum authorized denomination or (ii) is acceptable to the Seller
as indicated to the Trustee in writing. Whenever any Certificates are so
surrendered for exchange, the Trustee shall sign and countersign and the Trustee
shall deliver the Certificates which the Certificateholder making the exchange
is entitled to receive.
(i) If the Trustee so requires, every Certificate presented or
surrendered for transfer or exchange shall be duly endorsed by, or be
accompanied by a written instrument of transfer, with a signature guarantee, in
form satisfactory to the Trustee, duly executed by the holder thereof or his or
her attorney duly authorized in writing.
(j) No service charge shall be made for any transfer or exchange of
Certificates, but the Trustee may require payment of a sum sufficient to cover
any tax or governmental charge that may be imposed in connection with any
transfer or exchange of Certificates.
(k) The Trustee shall cancel all Certificates surrendered for transfer
or exchange but shall retain such Certificates in accordance with its standard
retention policy or for such further time as is required by the record retention
requirements of the Securities Exchange Act of 1934, as amended, and thereafter
may destroy such Certificates.
(l) The following legend shall be placed on each Subordinate
Certificate, whether upon original issuance or upon issuance of any other
Certificate of any such Class in exchange therefor or upon transfer thereof:
THIS CERTIFICATE MAY NOT BE ACQUIRED DIRECTLY OR INDIRECTLY BY, OR ON
BEHALF OF, AN EMPLOYEE BENEFIT PLAN OR OTHER RETIREMENT ARRANGEMENT
WHICH IS SUBJECT TO TITLE I OF THE EMPLOYEE RETIREMENT INCOME SECURITY
ACT OF 1974, AS AMENDED, 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: (I) WILL NOT RESULT IN ANY PROHIBITED TRANSACTION
WHICH IS NOT COVERED UNDER AN INDIVIDUAL OR CLASS PROHIBITED
TRANSACTION EXEMPTION, INCLUDING, BUT NOT LIMITED TO, PROHIBITED
TRANSACTION EXEMPTION ("PTE") 84-14, XXX 00-00, XXX 00-0, XXX 95-60 OR
PTE 96-23 AND (II) WILL NOT GIVE RISE TO ANY ADDITIONAL FIDUCIARY
OBLIGATIONS ON THE PART OF THE SELLER, THE MASTER SERVICER OR THE
TRUSTEE, WHICH WILL BE DEEMED REPRESENTED BY AN OWNER OF A BOOK-ENTRY
CERTIFICATE OR A GLOBAL CERTIFICATE AND WILL BE EVIDENCED BY A
REPRESENTATION OR AN OPINION OF COUNSEL TO SUCH EFFECT BY OR ON BEHALF
OF AN INSTITUTIONAL ACCREDITED INVESTOR.
Section 5.03.00 Mutilated, Destroyed, Lost or Stolen Certificates.
(a) If (i) any mutilated Certificate is surrendered to the Trustee, or
the Trustee receives evidence to its satisfaction of the destruction, loss or
theft of any Certificate, and (ii) there is delivered to the Trustee such
security or indemnity as it may require to save it harmless, and (iii) the
Trustee has not received notice that such Certificate has been acquired by a
third Person, the Trustee shall sign, countersign and deliver, in exchange for
or in lieu of any such mutilated, destroyed, lost or stolen Certificate, a new
Certificate of like tenor and Fractional Undivided Interest but in each case
bearing a different number. The mutilated, destroyed, lost or stolen Certificate
shall thereupon be canceled of record by the Trustee and shall be of no further
effect and evidence no rights.
67
(b) Upon the issuance of any new Certificate under this Section 5.03,
the Trustee may require the payment of a sum sufficient to cover any tax or
other governmental charge that may be imposed in relation thereto and any other
expenses (including the fees and expenses of the Trustee) connected therewith.
Any duplicate Certificate issued pursuant to this Section 5.03 shall constitute
complete and indefeasible evidence of ownership in the Trust Fund, as if
originally issued, whether or not the lost, stolen or destroyed Certificate
shall be found at any time.
Section 5.04.00 Persons Deemed Owners.
Prior to due presentation of a Certificate for registration of
transfer, the Seller, the Master Servicer or the Trustee and any agent of the
Seller, the Master Servicer or the Trustee may treat the Person in whose name
any Certificate is registered as the owner of such Certificate for the purpose
of receiving distributions pursuant to Section 6.01 and for all other purposes
whatsoever. None of the Master Servicer, the Seller, the Trustee nor any agent
of the Master Servicer, the Seller or the Trustee shall be affected by notice to
the contrary. No Certificate shall be deemed duly presented for a transfer
effective on any Record Date unless the Certificate to be transferred is
presented no later than the close of business on the third Business Day
preceding such Record Date.
Section 5.05.00 Transfer Restrictions on Residual Certificates.
(a) Residual Certificates, or interests therein, may not be transferred
without the prior express written consent of the Tax Matters Person and the
Seller. As a prerequisite to such consent, the proposed transferee must provide
the Tax Matters Person, the Seller and the Trustee with an affidavit, with a
copy to the Master Servicer, that the proposed transferee is a Permitted
Transferee (and, unless the Tax Matters Person and the Seller consent to the
transfer to a person who is not a U.S. Person, an affidavit that it is a U.S.
Person) as provided in Subsection 5.05(b).
68
(b) No transfer, sale or other disposition of a Residual Certificate
(including a beneficial interest therein) may be made unless, prior to the
transfer, sale or other disposition of a Residual Certificate, the proposed
transferee (including the initial purchasers thereof) delivers to the Tax
Matters Person, the Trustee and the Seller an affidavit in the form attached
hereto as Exhibit E stating, among other things, that as of the date of such
transfer (i) such transferee is a Permitted Transferee and that (ii) such
transferee is not acquiring such Residual Certificate for the account of any
person who is not a Permitted Transferee. The Tax Matters Person shall not
consent to a transfer of a Residual Certificate if it has actual knowledge that
any statement made in the affidavit issued pursuant to the preceding sentence is
not true. Notwithstanding any transfer, sale or other disposition of a Residual
Certificate to any Person who is not a Permitted Transferee, such transfer, sale
or other disposition shall be deemed to be of no legal force or effect
whatsoever and such Person shall not be deemed to be a Holder of a Residual
Certificate for any purpose hereunder, including, but not limited to, the
receipt of distributions thereon. If any purported transfer shall be in
violation of the provisions of this Subsection 5.05(b), then the prior Holder
thereof shall, upon discovery that the transfer of such Residual Certificate was
not in fact permitted by this Subsection 5.05(b), be restored to all rights as a
Holder thereof retroactive to the date of the purported transfer. None of the
Trustee, the Tax Matters Person or the Seller shall be under any liability to
any Person for any registration or transfer of a Residual Certificate that is
not permitted by this Subsection 5.05(b) or for making payments due on such
Residual Certificate to the purported Holder thereof or taking any other action
with respect to such purported Holder under the provisions of this Agreement so
long as the written affidavit referred to above was received with respect to
such transfer, and the Tax Matters Person, a Responsible Officer of the Trustee,
or the Seller, as applicable, had no actual knowledge that it was untrue. The
prior Holder shall be entitled to recover from any purported Holder of a
Residual Certificate that was in fact not a permitted transferee under this
Subsection 5.05(b) at the time it became a Holder all payments made on such
Residual Certificate. Each Holder of a Residual Certificate, by acceptance
thereof, shall be deemed for all purposes to have consented to the provisions of
this Subsection 5.05(b) and to any amendment of this Agreement deemed necessary
(whether as a result of new legislation or otherwise) by counsel of the Tax
Matters Person or the Seller to ensure that the Residual Certificates are not
transferred to any Person who is not a Permitted Transferee and that any
transfer of such Residual Certificates will not cause the imposition of a tax
upon the Trust or cause any Series REMIC to fail to qualify as a REMIC.
(c) Unless the Tax Matters Person shall have consented in writing
(which consent may be withheld in the Tax Matters Person's sole discretion), the
Residual Certificates (including a beneficial interest therein) may not be
purchased by or transferred to any person who is not a United States Person.
(d) By accepting a Residual Certificate, the purchaser thereof agrees
to be a Tax Matters Person, and appoints the Master Servicer to act as its agent
with respect to all matters concerning the tax obligations of the Trust, other
than those matters regarding transfer restrictions contained in this Section
5.05.
69
Section 5.06.00 Restrictions on Transferability of Certificates.
(a) No offer, sale, transfer or other disposition (including pledge) of
any Certificate shall be made by any Holder thereof unless registered under the
Securities Act, or an exemption from the registration requirements of the
Securities Act and any applicable state securities or "Blue Sky" laws is
available and the prospective transferee (other than the Seller) of such
Certificate signs and delivers to the Trustee an Investment Letter, if the
transferee is an Institutional Accredited Investor, in the form set forth as
Exhibit F-1 hereto, or a Rule 144A Certificate, if the transferee is a QIB, in
the form set forth as Exhibit F-2 hereto. Notwithstanding the provisions of the
immediately preceding sentence, no restrictions shall apply with respect to the
transfer or registration of transfer of a beneficial interest in any Certificate
that is a Global Certificate of a Class to a transferee that takes delivery in
the form of a beneficial interest in the Global Certificate of such Class
provided that each such transferee shall be deemed to have made such
representations and warranties contained in the Rule 144A Certificate as are
sufficient to establish that it is a QIB. In the case of a proposed transfer of
any Certificate to a transferee other than a QIB, the Trustee may require an
Opinion of Counsel that such transaction is exempt from the registration
requirements of the Securities Act. The cost of such opinion shall not be an
expense of the Trustee or the Trust Fund.
(b) Each Class of Class B-4, B-5 and B-6 Certificates shall bear a
Securities Legend.
Section 5.07.00 ERISA Restrictions.
(a) Subject to the provisions of subsection (b), no Residual
Certificates nor any Subordinate Certificates may be acquired directly or
indirectly by, or on behalf of, an employee benefit plan or other retirement
arrangement which is subject to Title I of ERISA and/or Section 4975 of the
Code, unless the proposed transferee provides either (i) the Trustee and the
Master Servicer with an Opinion of Counsel satisfactory to the Trustee and the
Master Servicer, which opinion will not be at the expense of the Trustee or the
Master Servicer, that the purchase of such Certificates by or on behalf of such
Plan is permissible under applicable law, will not constitute or result in a
non-exempt prohibited transaction under ERISA or Section 4975 of the Code and
will not subject the Trustee or the Master Servicer to any obligation in
addition to those undertaken in the Agreement or (ii) a representation (which
shall be deemed to have been made by the transferee of any Subordinate
Certificate that is a Book-Entry Certificate or Global Certificate) or written
certification to the Trustee (in the case of an Individual Certificate), upon
which the Trustee is authorized to rely, to the effect that the proposed
transfer and/or holding of such a Certificate and the servicing, management and
operation of the Trust: (I) will not result in a prohibited transaction under
Section 406 of ERISA or Section 4975 of the Code which is not covered under an
individual or class prohibited transaction exemption including but not limited
to Department of Labor Prohibited Transaction Exemption ("PTE") 84-14 (Class
Exemption for Plan Asset Transactions Determined by Independent Qualified
Professional Asset Managers); PTE 91-38 (Class Exemption for Certain
Transactions Involving Bank Collective Investment Funds); PTE 90-1 (Class
Exemption for Certain Transactions Involving Insurance Company Pooled Separate
Accounts), PTE 95-60 (Class Exemption for Certain Transactions Involving
Insurance Company General Accounts), and PTCE 96-23 (Class Exemption for Plan
Asset Transactions Determined by In-House Asset Managers and (II) will not
subject the Seller, the Master Servicer or the Trustee to any obligation in
addition to those undertaken in the Agreement.
70
(b) Any Person acquiring an interest in a Book-Entry Certificate or a
Global Certificate which is a Subordinate Certificate, by acquisition of such
Certificate, shall be deemed to have represented to the Trustee that either: (i)
it is not acquiring an interest in such Certificate directly or indirectly by,
or on behalf of, an employee benefit plan or other retirement arrangement which
is subject to Title I of ERISA and/or Section 4975 of the Code, or (ii) the
transfer and/or holding of an interest in such Certificate to that Person and
the subsequent servicing, management and/or operation of the Trust and its
assets: (I) will not result in any prohibited transaction which is not covered
under an individual or class prohibited transaction exemption, including, but
not limited to, XXX 00-00, XXX 00-00, XXX 00-0, XXX 95-60 or PTE 96-23 and (II)
will not subject the Seller, the Master Servicer or the Trustee to any
obligation in addition to those undertaken in the Agreement.
(c) Any attempted or purported transfer of any Certificate in violation
of the provisions of Subsections (a) or (b) above shall be void ab initio and
such Certificate shall be considered to have been held continuously by the prior
permitted Certificateholder. Any transferor of any Certificate in violation of
such provisions, shall indemnify and hold harmless the Trustee and the Master
Servicer from and against any and all liabilities, claims, costs or expenses
incurred by the Trustee or the Master Servicer as a result of such attempted or
purported transfer.
Section 5.08.00 Rule 144A Information.
For so long as any Certificates are outstanding and are "restricted
securities" within the meaning of Rule 144(a)(3) of the Securities Act, (1) the
Seller will provide or cause to be provided to any holder of such Certificates
and any prospective purchaser thereof designated by such a holder, upon the
request of such holder or prospective purchaser, the information required to be
provided to such holder or prospective purchaser by Rule 144A(d)(4) under the
Securities Act; and (2) the Seller shall update such information from time to
time in order to prevent such information from becoming false and misleading and
will take such other actions as are necessary to ensure that the safe harbor
exemption from the registration requirements of the Securities Act under Rule
144A is and will be available for resales of such Certificates conducted in
accordance with Rule 144A. The Master Servicer shall cooperate with the Seller
and furnish the Seller such information in the Master Servicer's possession as
the Seller may reasonably request.
71
ARTICLE VI
PAYMENTS TO CERTIFICATEHOLDERS
Section 6.01.00 Distributions on the Certificates.
Interest and principal on the Certificates will be distributed by the
Trustee monthly on each Distribution Date, commencing in February 2001, in an
aggregate amount equal to the aggregate Group Available Funds for such
Distribution Date, as set forth in the statement prepared by the Master Servicer
for such Distribution Date in accordance with Section 6.04 and furnished by it
to the Trustee:
(A) On each Distribution Date, the Group 1 Available Funds will be
distributed in the following order of priority:
first, pro rata, the Accrued Certificate Interest on each
Class of Group 1 Senior Certificates for such Distribution
Date, any shortfall in available amounts being allocated among
such Classes in proportion to the amount of Accrued
Certificate Interest otherwise distributable thereon;
second, any Accrued Certificate Interest on each Class of
Group 1 Senior Certificates remaining undistributed from
previous Distribution Dates, to the extent of remaining Group
1 Available Funds, any shortfall in available amounts being
allocated among such Classes in proportion to the amount of
such Accrued Certificate Interest remaining undistributed for
each such Class for such Distribution Date;
third, to the Group 1 Senior Certificates, in reduction of the
Current Principal Amounts thereof, the Group 1 Senior Optimal
Principal Amount, sequentially, in the following order, to the
Class R-I, Class R-II and Class A-1 Certificates, in each case
until the Current Principal Amounts thereof have been reduced
to zero.
(B) On each Distribution Date, the Group 2 Available Funds will be
distributed in the following order of priority:
first, the Accrued Certificate Interest on the Class A-2
Certificates for such Distribution Date;
second, any Accrued Certificate Interest on the Class A-2
Certificates remaining undistributed from previous
Distribution Dates, to the extent of remaining Group 2
Available Funds;
third, to the Class A-2 Certificates in reduction of the
Current Principal Amount thereof until the Current Principal
Amount thereof has been reduced to zero, the Group 2 Senior
Optimal Principal Amount for such Distribution Date.
72
(C) On each Distribution Date, the Group 3 Available Funds will be
distributed in the following order of priority:
first, the Accrued Certificate Interest on the Class A-3
Certificates for such Distribution Date;
second, any Accrued Certificate Interest on the Class A-3
Certificates remaining undistributed from previous
Distribution Dates, to the extent of remaining Group 3
Available Funds;
third, to the Class A-3 Certificates in reduction of the
Current Principal Amount thereof until the Current Principal
Amount thereof has been reduced to zero, the Group 3 Senior
Optimal Principal Amount for such Distribution Date.
(D) On each Distribution Date, an amount equal to the Group 4
Available Funds will be distributed in the following order of
priority:
first, to the Class A-4 Certificates, the Accrued
Certificate Interest on such Class for such
Distribution Date;
second, to the Class A-4 Certificates, any Accrued
Certificate Interest thereon remaining undistributed
from previous Distribution Dates, to the extent of
remaining Group 4 Available Funds;
third, to the Class A-4 Certificates in reduction of
the Current Principal Amounts thereof, the Group 4
Senior Optimal Principal Amount for such Distribution
Date to the extent of remaining Group 4 Available
Funds, until the Current Principal Amount of such
Class has been reduced to zero.
(E) On each Distribution Date, an amount equal to the Group 5
Available Funds will be distributed in the following order of
priority:
first, to the Class A-5 Certificates, the Accrued
Certificate Interest on such Class for such
Distribution Date;
second, to the Class A-5 Certificates, any Accrued
Certificate Interest thereon remaining undistributed
from previous Distribution Dates, to the extent of
remaining Group 5 Available Funds;
third, to the Class A-5 Certificates in reduction of
the Current Principal Amounts thereof, the Group 5
Senior Optimal Principal Amount for such Distribution
Date to the extent of remaining Group 5 Available
Funds, until the Current Principal Amount of such
Class has been reduced to zero.
73
(F) On each Distribution Date, an amount equal to the Group 6
Available Funds will be distributed in the following order of
priority:
first, to the Class A-6 Certificates, the Accrued
Certificate Interest on such Class for such Distribution Date;
second, to the Class A-6 Certificates, any Accrued
Certificate Interest thereon remaining undistributed from
previous Distribution Dates, to the extent of remaining Group
6 Available Funds;
third, to the Class A-6 Certificates in reduction of
the Current Principal Amounts thereof, the Group 6 Senior
Optimal Principal Amount for such Distribution Date to the
extent of remaining Group 6 Available Funds, until the Current
Principal Amount of such Class has been reduced to zero.
(G) Subject to (H) and (I) below, on each Distribution Date on or
prior to the Cross-Over Date, an amount equal to any remaining
Available Funds following the distributions in (A) through (F)
above will be distributed sequentially, in the following
order, to the Class B-1, Class B-2, Class B-3, Class B-4,
Class B-5 and Class B-6 Certificates, in each case up to an
amount equal to and in the following order: (i) the Accrued
Certificate Interest thereon for such Distribution Date, (ii)
any Accrued Certificate Interest thereon remaining
undistributed from previous Distribution Dates and (iii) such
Class's Allocable Share for such Distribution Date.
(H) On each Distribution Date prior to the occurrence of the
Cross-Over Date but after the reduction of the Current
Principal Amount of any Class of Class A Certificates to zero,
the remaining Class or Classes of such Class A Certificates
will be entitled to receive in reduction of their Current
Principal Amounts, pro rata based upon their Current Principal
Amounts immediately prior to such Distribution Date, in
addition to any Principal Prepayments related to such
remaining Class A Certificates' respective Mortgage Loan Group
allocated to such Class A Certificates, 100% of the Principal
Prepayments on any Mortgage Loan in the Mortgage Loan Group
relating to the fully repaid Class A-1, Class X-0, Xxxxx X-0,
Class A-4, Class A-5 or Class A-6 Certificates; provided,
however, that if the Subordinate Percentage equals or exceeds
4.00% on such Distribution Date, then the additional
allocation of Principal Prepayments to the Senior Certificates
in accordance with this clause (H) will not be made.
74
(I) If on any Distribution Date on which the aggregate Current
Principal Amount of any Class or Classes of Class A
Certificates would be greater than the aggregate Scheduled
Principal Balance of the Mortgage Loans in its related
Mortgage Loan Group, and any Subordinate Certificates are
still outstanding, in each case after giving effect to
distributions to be made on such Distribution Date, (i) 100%
of the amounts otherwise allocable to the Subordinate
Certificates in respect of principal on the Mortgage Loans in
the other Mortgage Loan Groups will be distributed to such
Class or Classes of Class A Certificates in reduction of the
Current Principal Amounts thereof, until the aggregate Current
Principal Amount of such Class or Classes of Class A
Certificates is an amount equal to the aggregate Scheduled
Principal Balance of the Mortgage Loans in its related
Mortgage Loan Group, and (ii) the Accrued Certificate Interest
otherwise allocable to the Subordinate Certificates on such
Distribution Date will be reduced, if necessary, and
distributed to such Class or Classes of Class A Certificates
in an amount equal to the Accrued Certificate Interest for
such Distribution Date on the excess of (x) the aggregate
Current Principal Amount of such Class or Classes of Class A
Certificates over (y) the aggregate Scheduled Principal
Balance of the Mortgage Loans in the related Mortgage Loan
Group. Any such reduction in the Accrued Certificate Interest
on the Subordinate Certificates will be allocated in reverse
order of the Subordinate Certificates numerical designations,
commencing with the Class B-6 Certificates.
(J) On each Distribution Date, any Group Available Funds remaining
after payment of interest and principal to the Classes of
Certificates entitled thereto, as described in (A) through (I)
above, will be distributed to the Class R-II Certificates;
provided, however, that if on any Distribution Date there are
any Group Available Funds remaining after payment of interest
and principal to a Class or Classes of Certificates entitled
thereto, such Group Available Funds will be distributed to the
other Classes of Class A Certificates, pro rata, based upon
their Current Principal Amounts, until all amounts due to all
Classes of Class A Certificates have been paid in full, before
any amounts are distributed to the Class R-II Certificates.
(K) The expenses and fees of the Trust shall be paid by each of
the Series REMICs, to the extent that such expenses relate to
the assets of each of such respective Series REMICs, and all
other expenses and fees of the Trust shall be paid pro rata by
each of the Series REMICs.
75
Section 6.02.00 Allocation of Losses.
(a) On or prior to each Determination Date, the Master Servicer shall
determine the amount of any Realized Loss in respect of each Mortgage Loan that
occurred during the immediately preceding calendar month.
(b) (i) With respect to any Certificates on any Distribution Date prior
to the Cross-Over Date, the principal portion of each Realized Loss on a
Mortgage Loan shall be allocated as follows:
first, to the Class B-6 Certificates until the
Current Principal Amount thereof has been reduced to
zero;
second, to the Class B-5 Certificates until the
Current Principal Amount thereof has been reduced to
zero;
third, to the Class B-4 Certificates until the
Current Principal Amount thereof has been reduced to
zero;
fourth, to the Class B-3 Certificates until the
Current Principal Amount thereof has been reduced to
zero;
fifth, to the Class B-2 Certificates until the
Current Principal Amount thereof has been reduced to
zero; and
sixth, to the Class B-1 Certificates until the
Current Principal Amount thereof has been reduced to
zero.
(ii) With respect to any Certificates on any Distribution Date
on or after the Cross-Over Date, the principal portion of any Realized Loss
(other than a Debt Service Reduction) on a Mortgage Loan in a Mortgage Loan
Group shall be allocated among the outstanding related Class or Classes of
Senior Certificates for such Mortgage Loan Group pro rata based upon their
Current Principal Amounts.
(c) Notwithstanding the foregoing, no such allocation of any Realized
Loss shall be made on a Distribution Date to any Class of Certificates to the
extent that such allocation would result in the reduction of the aggregate
Current Principal Amounts of all the Certificates as of such Distribution Date,
after giving effect to all distributions and prior allocations of Realized
Losses on such date, to an amount less than the aggregate Scheduled Principal
Balance of all of the Mortgage Loans as of the first day of the month of such
Distribution Date (such limitation, the "Loss Allocation Limitation").
76
(d) Any Realized Losses allocated to a Class of Certificates shall be
allocated among the Certificates of such Class in proportion to their respective
Current Principal Amounts. Any allocation of Realized Losses shall be
accomplished by reducing the Current Principal Amount of the related
Certificates on the related Distribution Date.
(e) Realized Losses shall be allocated on the Distribution Date in the
month following the month in which such loss was incurred and, in the case of
the principal portion thereof, after giving effect to distributions made on such
Distribution Date.
(f) On each Distribution Date, the Master Servicer shall determine the
Subordinate Certificate Writedown Amount. Any such Subordinate Certificate
Writedown Amount shall effect a corresponding reduction in the Current Principal
Amount of (i) if prior to the Cross-Over Date, the Current Principal Amounts of
the Subordinate Certificates, in the reverse order of their numerical Class
designations and (ii) from and after the Cross-Over Date (subject to Section
6.02(a)(ii)), the Senior Certificates, pro rata based on their respective
Current Principal Amounts, which reduction shall occur on such Distribution Date
after giving effect to distributions made on such Distribution Date.
(g) Any Net Interest Shortfall will be allocated among the Classes of
Certificates in proportion to the respective amounts of Accrued Certificate
Interest that would have been allocated thereto in the absence of such Net
Interest Shortfall or the interest portion of any Realized Loss, for such
Distribution Date. The interest portion of any Realized Losses with respect to
the Mortgage Loans occurring on or prior to the Cross-Over Date will not be
allocated among any Certificates, but will reduce the amount of Available Funds
on the related Distribution Date. As a result of the subordination of the
Subordinate Certificates, in right of distribution, such Realized Losses will be
borne first by the Subordinate Certificates in inverse order of their numerical
Class designations. Following the Cross-Over Date, the interest portion of any
Realized Loss on a Mortgage Loan in a Mortgage Loan Group shall be allocated
among the outstanding related Classes of Senior Certificates for such Mortgage
Loan Group pro rata based upon their Current Principal Amounts.
Section 6.03.00 Payments.
(a) On each Distribution Date, other than the final Distribution Date,
the Trustee shall distribute to each Certificateholder of record on the directly
preceding Record Date the Certificateholder's pro rata share of its Class (based
on the aggregate Fractional Undivided Interest represented by such Holder's
Certificates) of all amounts required to be distributed on such Distribution
Date to such Class. The Master Servicer shall calculate the amount to be
distributed to each Class and, based on such amounts, the Trustee shall
determine the amount to be distributed to each Certificateholder. All of the
Trustee's calculations of payments shall be based solely on information provided
to the Trustee by the Master Servicer. The Trustee shall not be required to
confirm, verify or recompute any such information but shall be entitled to rely
conclusively on such information.
77
(b) Payment of the above amounts to each Certificateholder shall be
made (i) by check mailed to each Certificateholder entitled thereto at the
address appearing in the Certificate Register or (ii) upon receipt by the
Trustee on or before the fifth Business Day preceding the Record Date of written
instructions from a Certificateholder by wire transfer to a United States dollar
account maintained by the payee at any United States depository institution with
appropriate facilities for receiving such a wire transfer; provided, however,
that the final payment in respect of each Class of Certificates will be made
only upon presentation and surrender of such respective Certificates at the
office or agency of the Trustee specified in the notice to Certificateholders of
such final payment.
Section 6.04.00 Statements to Certificateholders.
(a) The Master Servicer shall prepare and deliver to the Trustee at
least two Business Days prior to each Distribution Date, with a copy to the
Seller and the Rating Agencies, a statement setting forth the following
information, expressed with respect to clauses (i) through (vi) in the aggregate
and as a Fractional Undivided Interest representing an initial Current Principal
Amount of $1,000, or in the case of the Residual Certificates, an initial
Current Principal Amount of $50 and expressed with respect to clauses (viii)
through (xv) and (xvii) with respect to each Loan Group separately:
(i) the Current Principal Amount of each Class of Certificates
immediately prior to such Distribution Date;
(ii) the amount of the distribution allocable to principal on
each applicable Class of Certificates;
(iii) the aggregate amount of interest accrued at the related
Pass-Through Rate with respect to each Class during the related
Interest Accrual Period;
(iv) the Net Interest Shortfall and any other adjustments to
interest at the related Pass-Through Rate necessary to account for any
difference between interest accrued and aggregate interest distributed
with respect to each Class of Certificates;
(v) the amount of the distribution allocable to interest on
each Class of Certificates;
(vi) the Pass-Through Rates for each Class of Certificates
with respect to such Distribution Date;
(vii) the Current Principal Amount of each Class of
Certificates after such Distribution Date;
(viii) the amount of any Monthly Advances, Compensating
Interest Payments and outstanding unreimbursed advances by the Master
Servicer or the related Servicers included in such distribution;
78
(ix) the amount of any Realized Losses during the related
Prepayment Period and cumulatively since the Cut-off Date and the
amount and source (separately identified) of any distribution in
respect thereof included in such distribution;
(x) the amount of Scheduled Principal and Principal
Prepayments, (including but separately identifying the principal amount
of principal prepayments, Insurance Proceeds, the purchase price in
connection with the purchase of Mortgage Loans, cash deposits in
connection with substitutions of Mortgage Loans and Net Liquidation
Proceeds) and the number and principal balance of Mortgage Loans
purchased or substituted for during the relevant period and
cumulatively since the Cut-off Date;
(xi) the number of Mortgage Loans (excluding REO Property)
remaining in the Trust Fund as of the end of the related Prepayment
Period;
(xii) information regarding any Mortgage Loan delinquencies as
of the end of the related Prepayment Period, including the aggregate
number, aggregate Outstanding Principal Balance and aggregate Scheduled
Principal Balance of Mortgage Loans delinquent one month, two months
and three months or more;
(xiii) the number of Mortgage Loans in the foreclosure process
as of the end of the related Due Period and the aggregate Outstanding
Principal Balance of such Mortgage Loans;
(xiv) the number and aggregate Outstanding Principal Balance
of all Mortgage Loans as to which the Mortgaged Property was REO
Property as of the end of the related Due Period;
(xv) the book value (the sum of (A) the Outstanding Principal
Balance of the Mortgage Loan, (B) accrued interest through the date of
foreclosure and (C) foreclosure expenses) of any REO Property; provided
that, in the event that such information is not available to the Master
Servicer and the Trustee on the Distribution Date, such information
shall be furnished promptly after it becomes available;
(xvi) the amount of Realized Losses allocated to each Class of
Certificates since the prior Distribution Date and in the aggregate for
all prior Distribution Dates;
(xvii) the Average Loss Severity for the prior calendar month;
(xviii) the then applicable Senior Percentages, Senior
Prepayment Percentages, Subordinate Percentages and Subordinate
Prepayment Percentages; and
79
(xix) with respect to each Mortgage Loan which incurred a
Realized Loss during the related Prepayment Period, (i) the loan
number, (ii) the Scheduled Principal Balance of such Mortgage Loan as
of the Cut-off Date, (iii) the Scheduled Principal Balance of such
Mortgage Loan as of the beginning of the related Due Period, (iv) the
Net Liquidation Proceeds with respect to such Mortgage Loan, (v) the
amount, if any, included in Net Liquidation Proceeds representing a
payment under the PMI Policy and (vi) the amount of the Realized Loss
with respect to such Mortgage Loan; and
(xx) with respect to the related Prepayment Period, (i) the
number of Mortgage Loans for which a payment was made by the PMI
Insurer under the PMI Policy and the aggregate amount of any such
payments, (ii) the number of Mortgage Loans for which a claim has been
presented to the PMI Insurer under the PMI Policy and the aggregate
amount of any such outstanding claims, and (iii) the number of Mortgage
Loans for which a claim was presented to the PMI Insurer under the PMI
Policy which claim was denied by the PMI Insurer and the aggregate
amount of any such denied claims.
(b) The information set forth above shall be reported by the Master
Servicer pursuant to this Section 6.04 based on information provided by the
Servicers. The information furnished by the Master Servicer shall be sufficient
for the Trustee to make any payments it is required to make upon which the
Trustee may conclusively rely and which the Trustee shall not be required to
confirm or verify.
(c) At the Trustee's request, the Master Servicer will make available
each month, to any interested party, the monthly statement to Certificateholders
(and, at the Master Servicer's option, any additional files containing the same
information in an alternative format) via the Master Servicer's internet
website. The Master Servicer's internet website will be located at
"xxx.xxxxxxx.xxx." Assistance in using the internet website can be obtained by
calling the Master Servicer'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 Master Servicer shall have the right to change the
way monthly statements are distributed in order to make such distribution more
convenient and/or more accessible to the above parties and the Master Servicer
shall provide timely and adequate notification to all above parties regarding
any such changes.
(d) By April 30 of each year beginning in 2002, the Trustee will
furnish a report to each Holder of the Certificates of record at any time during
the prior calendar year as to the aggregate of amounts reported pursuant to
subclauses (a)(ii) and (a)(v) above with respect to the Certificates, plus
information with respect to the amount of servicing compensation and such other
customary information as the Master Servicer determines and advises the Trustee
to be necessary and/or to be required by the Internal Revenue Service or by a
federal or state law or rules or regulations to enable such Holders to prepare
their tax returns for such calendar year. Such obligations shall be deemed to
have been satisfied to the extent that substantially comparable information
shall be provided by the Trustee pursuant to the requirements of the Code. The
Master Servicer shall supply to the Trustee in a timely manner the information
described in this Subsection (b).
80
Section 6.05.00 Monthly Advances.
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 related Servicer was required to make an advance pursuant
to the related Servicing Agreement (and for which no required advance has been
made by the related Servicer) exceeds the amount deposited in the Certificate
Account which will be used for a Certificate Account Advance with respect to
such Mortgage Loan, the Master Servicer will deposit in the Certificate Account
not later than the Advancing 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,
Insurance Proceeds or future payments on the Mortgage Loan for which such
Monthly Advance was made. Subject to the foregoing, the Master Servicer shall
continue to make such advances through the date that the related Servicer is
required to do so under its Servicing Agreement. Any amount used as a
Certificate Account Advance shall be replaced by the Master Servicer by deposit
in the Certificate Account on or before any future date on which and to the
extent that funds in the Certificate Account on such date are less than the
amount required to be transferred by the Master Servicer to such Certificate
Account. If applicable, on the fifth Business Day preceding each Distribution
Date, the Master Servicer shall present an Officer's Certificate to the Trustee
(i) stating that the Master Servicer elects not to make a Monthly Advance in a
stated amount and (ii) detailing the reason it deems the advance to be
nonrecoverable.
Section 6.06.00 Compensating Interest Payments.
The Master Servicer shall deposit in the Certificate Account not later
than each Funds Transfer Date an amount equal to the lesser of (i) the sum of
(A) the aggregate amounts required to be paid by the Servicers under the
Servicing Agreements with respect to subclauses (a) and (b) of the definition of
Interest Shortfall with respect to the Mortgage Loans for the related
Distribution Date, and not so paid by the related Servicers, and (B) the
aggregate amount with respect to subclause (b) of the definition of Interest
Shortfall with respect to the Mortgage Loans serviced by National City Mortgage
for the related Distribution Date, and (ii) the Master Servicing Fee for such
Distribution Date (such amount, the "Compensating Interest Payment"). The Master
Servicer shall not be entitled to any reimbursement of any Compensating Interest
Payment.
Section 6.07.00 Reports of Foreclosures and Abandonment of Mortgaged
Property.
Each year the Master Servicer shall report or cause to be reported by
the related Servicer to the Internal Revenue Service foreclosures and
abandonments of any Mortgaged Property as required by Section 6050J of the Code
and shall provide a copy of such report to the Trustee.
81
ARTICLE VII
THE MASTER SERVICER
Section 7.01.00 Liabilities of the Master Servicer.
The Master Servicer shall be liable in accordance herewith only to the
extent of the obligations specifically imposed upon and undertaken by it herein.
Section 7.02.00 Merger or Consolidation of the Master Servicer.
(a) The Master Servicer will keep in full force and effect its
existence, rights and franchises as a corporation under the laws of the state of
its incorporation, and will obtain and preserve its qualification to do business
as a foreign corporation in each jurisdiction in which such qualification is or
shall be necessary to protect the validity and enforceability of this Agreement,
the Certificates or any of the Mortgage Loans and to perform its duties under
this Agreement.
(b) Any Person into which the Master Servicer may be merged or
consolidated, or any corporation resulting from any merger or consolidation to
which the Master Servicer shall be a party, or any Person succeeding to the
business of the Master Servicer, shall be the successor of the Master Servicer
hereunder, without the execution or filing of any paper or further act on the
part of any of the parties hereto, anything herein to the contrary
notwithstanding.
Section 7.03.00 Indemnification of the Trustee.
(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.
(b) The Seller will indemnify any Indemnified Person for any loss,
liability or expense of any Indemnified Person not otherwise referred to in
Subsection (a) above.
82
Section 7.04.00 Limitation on Liability of the Master Servicer and
Others.
Subject to the obligation of the Master Servicer to indemnify the
Indemnified Persons pursuant to Section 7.03:
(a) Neither the Master Servicer nor any of the directors, officers,
employees or agents of the Master Servicer shall be under any liability to the
Indemnified Persons, the Seller, the Trust Fund or the Certificateholders for
taking any action or for refraining from taking any action in good faith
pursuant to this Agreement, or for errors in judgment; provided, however, that
this provision shall not protect the Master Servicer or any such Person against
any breach of warranties or representations made herein or any liability which
would otherwise be imposed by reason of such Person's willful misfeasance, bad
faith or gross negligence in the performance of duties or by reason of reckless
disregard of obligations and duties hereunder.
(b) The Master Servicer and any director, officer, employee or agent of
the Master Servicer may rely in good faith on any document of any kind prima
facie properly executed and submitted by any Person respecting any matters
arising hereunder.
(c) The Master Servicer, the Custodian and any director, officer,
employee or agent of the Master Servicer or the Custodian shall be indemnified
by the Trust and held harmless thereby against any loss, liability or expense
(including reasonable legal fees and disbursements of counsel) incurred on their
part that may be sustained in connection with, arising out of, or related to,
any claim or legal action (including any pending or threatened claim or legal
action) relating to this Agreement, the Certificates or any Servicing Agreement
(except to the extent that the Master Servicer is indemnified by the Servicer
thereunder), other than (i) any such loss, liability or expense related to the
Master Servicer's failure to perform its duties in compliance with this
Agreement (except as any such loss, liability or expense shall be otherwise
reimbursable pursuant to this Agreement), or to the Custodian's failure to
perform its duties under the Custodial Agreement, respectively, or (ii) any such
loss, liability or expense incurred by reason of the Master Servicer's or the
Custodian's willful misfeasance, bad faith or gross negligence in the
performance of duties hereunder or under the Custodial Agreement, as applicable,
or by reason of reckless disregard of obligations and duties hereunder or under
the Custodial Agreement, as applicable.
(d) The Master Servicer shall not be under any obligation to appear in,
prosecute or defend any legal action that is not incidental to its duties under
this Agreement and that in its opinion may involve it in any expense or
liability; provided, however, the Master Servicer may in its discretion, with
the consent of the Trustee (which consent shall not be unreasonably withheld),
undertake any such action which it may deem necessary or desirable with respect
to this Agreement and the rights and duties of the parties hereto and the
interests of the Certificateholders hereunder. In such event, the legal expenses
and costs of such action and any liability resulting therefrom shall be
expenses, costs and liabilities of the Trust Fund, and the Master Servicer shall
be entitled to be reimbursed therefor out of the Certificate Account as provided
by Subsection 4.03(a). Nothing in this Subsection 7.04(d) shall affect the
Master Servicer's obligation to supervise, or to take such actions as are
necessary to ensure, the servicing and administration of the Mortgage Loans
pursuant to Subsection 3.01(a).
83
(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 any Servicer, except as otherwise expressly provided herein.
Section 7.05.00 Master Servicer Not to Resign.
Except as provided in Section 7.07, the Master Servicer shall not
resign from the obligations and duties hereby imposed on it except upon a
determination that any such duties hereunder are no longer permissible under
applicable law and such impermissibility cannot be cured. Any such determination
permitting the resignation of the Master Servicer shall be evidenced by an
Opinion of Independent Counsel to such effect delivered to the Trustee. No such
resignation by the Master Servicer shall become effective until the Trustee or a
successor to the Master Servicer reasonably satisfactory to the Trustee shall
have assumed the responsibilities and obligations of the Master Servicer in
accordance with Section 8.02 hereof. The Trustee shall notify the Rating
Agencies of the resignation of the Master Servicer.
Section 7.06.00 Successor Master Servicer.
In connection with the appointment of any successor Master Servicer or
the assumption of the duties of the Master Servicer, the Trustee may make such
arrangements for the compensation of such successor master servicer out of
payments on the Mortgage Loans as the Trustee and such successor master servicer
shall agree; provided that the successor master servicer shall not be entitled
to any compensation in excess of the amount provided in Section 3.16.
84
Section 7.07.00 Sale and Assignment of Master Servicing.
The Master Servicer may sell and assign its rights and delegate its
duties and obligations in their entirety as Master Servicer under this
Agreement; 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); (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; and (iii) the Master Servicer assigning and
selling the master servicing shall deliver to the Trustee an Officer's
Certificate and an Opinion of Independent Counsel, each stating that all
conditions precedent to such action under this Agreement have been completed and
such action is permitted by and complies with the terms of this Agreement. No
such assignment or delegation shall affect any liability of the Master Servicer
arising prior to the effective date thereof.
85
ARTICLE VIII
DEFAULT
Section 8.01.00 Events of Default.
(a) "Event of Default," wherever used herein, means any one of the
following events (whatever the reason for such Event of Default and whether it
shall be voluntary or involuntary or be effected by operation of law or pursuant
to any judgment, decree or order of any court or any order, rule or regulation
of any administrative or governmental body) and only with respect to the
defaulting Master Servicer:
(i) The Master Servicer fails to cause to be deposited in the
Certificate Account any amount so required to be deposited pursuant to
this Agreement, and such failure continues unremedied for a period of
two Business Days after the date such deposit was required to be made;
or
(ii) The Master Servicer fails to observe or perform in any
material respect any other covenants and agreements set forth in the
Certificates or this Agreement to be performed by it, which covenants
and agreements materially affect the rights of Certificateholders, and
such failure continues unremedied for a period of 60 days after the
date on which written notice of such failure, properly requiring the
same to be remedied, shall have been given to the Master Servicer by
the Trustee or to the Master Servicer and the Trustee by the Holders of
Certificates evidencing Fractional Undivided Interests aggregating not
less than 25% of the Trust Fund; or
(iii) There is entered against the Master Servicer a decree or
order by a court or agency or supervisory authority having jurisdiction
in the premises for the appointment of a conservator, receiver or
liquidator in any insolvency, readjustment of debt, marshaling of
assets and liabilities or similar proceedings, or for the winding up or
liquidation of its affairs, and the continuance of any such decree or
order is unstayed and in effect for a period of 60 consecutive days, or
an involuntary case is commenced against the Master Servicer under any
applicable insolvency or reorganization statute and the petition is not
dismissed within 60 days after the commencement of the case; or
(iv) The Master Servicer consents to the appointment of a
conservator or receiver or liquidator in any insolvency, readjustment
of debt, marshaling of assets and liabilities or similar proceedings of
or relating to the Master Servicer or substantially all of its
property; or the Master Servicer admits in writing its inability to pay
its debts generally as they become due, files a petition to take
advantage of any applicable insolvency or reorganization statute, makes
an assignment for the benefit of its creditors, or voluntarily suspends
payment of its obligations; or
(v) The Master Servicer assigns or delegates its duties or
rights under this Agreement in contravention of the provisions
permitting such assignment or delegation under Sections 7.05 or 7.07.
86
(b) In each and every such case, so long as such Event of Default with
respect to the Master Servicer shall not have been remedied, either the Trustee
or the Holders of Certificates evidencing Fractional Undivided Interests
aggregating not less than 51% of the principal of the Trust Fund, by notice in
writing to the Master Servicer (and to the Trustee if given by such
Certificateholders), with a copy to the Rating Agencies, may terminate all of
the rights and obligations (but not the liabilities) of the Master Servicer
under this Agreement and in and to the Mortgage Loans and/or the REO Property
serviced by the Master Servicer and the proceeds thereof. Upon the receipt by
the Master Servicer of the written notice, all authority and power of the Master
Servicer under this Agreement, whether with respect to the Certificates, the
Mortgage Loans, REO Property or under any other related agreements (but only to
the extent that such other agreements relate to the Mortgage Loans or REO
Property) shall, subject to Section 8.02, automatically and without further
action pass to and be vested in the Trustee pursuant to this Section 8.01; and,
without limitation, the Trustee is hereby authorized and empowered to execute
and deliver, on behalf of the Master Servicer as attorney-in-fact or otherwise,
any and all documents and other instruments and to do or accomplish all other
acts or things necessary or appropriate to effect the purposes of such notice of
termination, whether to complete the transfer and endorsement or assignment of
the Mortgage Loans and related documents, or otherwise. The Master Servicer
agrees to cooperate with the Trustee in effecting the termination of the Master
Servicer's rights and obligations hereunder, including, without limitation, the
transfer to the Trustee of (i) the property and amounts which are then or should
be part of the Trust or which thereafter become part of the Trust; and (ii)
originals or copies of all documents of the Master Servicer reasonably requested
by the Trustee to enable it to assume the Master Servicer's duties thereunder.
In addition to any other amounts which are then, or, notwithstanding the
termination of its activities under this Agreement, may become payable to the
Master Servicer under this Agreement, the Master Servicer shall be entitled to
receive, out of any amount received on account of a Mortgage Loan or REO
Property, that portion of such payments which it would have received as
reimbursement under this Agreement if notice of termination had not been given.
The termination of the rights and obligations of the Master Servicer shall not
affect any obligations incurred by the Master Servicer prior to such
termination.
87
Section 8.02.00 Trustee to Act; Appointment of Successor.
(a) Upon the receipt by the Master Servicer of a notice of termination
pursuant to Section 8.01 or an Opinion of Independent Counsel pursuant to
Section 7.05 to the effect that the Master Servicer is legally unable to act or
to delegate its duties to a Person which is legally able to act, the Trustee
shall automatically become the successor in all respects to the Master Servicer
in its capacity under this Agreement and the transactions set forth or provided
for herein and shall thereafter be subject to all the responsibilities, duties,
liabilities and limitations on liabilities relating thereto placed on the Master
Servicer by the terms and provisions hereof; provided, however, that the Trustee
(i) shall be under no obligation to purchase any Mortgage Loan pursuant to
Section 10.01; and (ii) shall have no obligation whatsoever with respect to any
liability (other than advances deemed recoverable and not previously made)
incurred by the Master Servicer at or prior to the time of receipt by the Master
Servicer of such notice or by the Trustee of such Opinion of Independent
Counsel. As compensation therefor, but subject to Section 7.06, the Trustee
shall be entitled to all funds relating to the Mortgage Loans which the Master
Servicer would have been entitled to retain if the Master Servicer had continued
to act hereunder, except for those amounts due the Master Servicer as
reimbursement permitted under this Agreement for advances previously made or
expenses previously incurred. Notwithstanding the above, the Trustee may, if it
shall be unwilling so to act, or shall, if it is legally unable so to act,
appoint or petition a court of competent jurisdiction to appoint, any
established housing and home finance institution which is a Xxxxxx Mae- or
Xxxxxxx Mac-approved servicer, and with respect to a successor to the Master
Servicer only, having a net worth of not less than $10,000,000, as the successor
to the Master Servicer hereunder in the assumption of all or any part of the
responsibilities, duties or liabilities of the Master Servicer hereunder.
Pending appointment of a successor to the Master Servicer hereunder, the Trustee
shall act in such capacity as hereinabove provided. In connection with such
appointment and assumption, the Trustee may make such arrangements for the
compensation of such successor out of payments on the Mortgage Loans as it and
such successor shall agree; provided, however, that the provisions of Section
7.06 shall apply, no such compensation shall be in excess of that permitted the
Trustee under this Subsection 8.02(a), and that such successor shall undertake
and assume the obligations of the Master Servicer to pay compensation to any
third Person acting as an agent or independent contractor in the performance of
master servicing responsibilities hereunder. The Trustee and such successor
shall take such action, consistent with this Agreement, as shall be necessary to
effectuate any such succession.
(b) If the Trustee shall succeed to any duties of the Master Servicer
respecting the Mortgage Loans as provided herein, it shall do so in a separate
capacity and not in its capacity as Trustee and, accordingly, the provisions of
Article IX shall be inapplicable to the Trustee in its duties as the successor
to the Master Servicer in the servicing of the Mortgage Loans (although such
provisions shall continue to apply to the Trustee in its capacity as Trustee);
the provisions of Article VII, however, shall apply to it in its capacity as
successor master servicer.
88
Section 8.03.00 Notification to Certificateholders.
Upon any termination or appointment of a successor to the Master
Servicer, the Trustee shall give prompt written notice thereof to
Certificateholders at their respective addresses appearing in the Certificate
Register and to the Rating Agencies.
Section 8.04.00 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 8.05.00 List of Certificateholders.
Upon written request of three or more Certificateholders of record, for
purposes of communicating with other Certificateholders with respect to their
rights under this Agreement, the Trustee will afford such Certificateholders
reasonable access, during regular business hours upon two Business Days' advance
notice in writing, to the most recent list of Certificateholders held by the
Trustee.
89
ARTICLE IX
CONCERNING THE TRUSTEE
Section 9.01.00 Duties of Trustee.
(a) The Trustee, prior to the occurrence of an Event of Default and
after the curing or waiver of all Events of Default which may have occurred,
undertakes to perform such duties and only such duties as are specifically set
forth in this Agreement as duties of the Trustee. If an Event of Default has
occurred and has not been cured or waived, the Trustee shall exercise such of
the rights and powers vested in it by this Agreement, and subject to Section
8.02(b), shall use the same degree of care and skill in their exercise, as a
prudent person would exercise under the circumstances in the conduct of his own
affairs.
(b) Upon receipt of all resolutions, certificates, statements,
opinions, reports, documents, orders or other instruments which are specifically
required to be furnished to the Trustee pursuant to any provision of this
Agreement, the Trustee shall examine them to determine whether they are in the
form required by this Agreement; provided, however, that the Trustee shall not
be responsible for the accuracy or content of any resolution, certificate,
statement, opinion, report, document, order or other instrument furnished by the
Master Servicer; provided, further, that the Trustee shall not 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 Certificate Account as provided in Sections 6.01 and 10.01 herein.
(d) No provision of this Agreement shall be construed to relieve the
Trustee from liability for its own negligent action, its own negligent failure
to act or its own willful misconduct; provided, however, that:
(i) Prior to the occurrence of an Event of Default, and after
the curing or waiver of all such Events of Default which may have
occurred, the duties and obligations of the Trustee shall be determined
solely by the express provisions of this Agreement, the Trustee shall
not be liable except for the performance of such duties and obligations
as are specifically set forth in this Agreement, no implied covenants
or obligations shall be read into this Agreement against the Trustee
and, in the absence of bad faith on the part of the Trustee, the
Trustee may conclusively rely, as to the truth of the statements and
the correctness of the opinions expressed therein, upon any
certificates or opinions furnished to the Trustee and conforming to the
requirements of this Agreement;
(ii) The Trustee shall not 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, unless it shall be
proved that the Trustee was negligent in ascertaining the pertinent
facts;
90
(iii) The Trustee shall not be liable with respect to any
action taken, suffered or omitted to be taken by it in good faith in
accordance with the directions of the Holders of Certificates
evidencing Fractional Undivided Interests aggregating not less than 25%
of the Trust Fund, if such action or non-action relates to the time,
method and place of conducting any proceeding for any remedy available
to the Trustee, or exercising any trust or other power conferred upon
the Trustee, under this Agreement; and
(iv) The Trustee shall not be required to take notice or be
deemed to have notice or knowledge of any default or Event of Default
unless a Responsible Officer of the Trustee's Corporate Trust Office
shall have actual knowledge thereof. In the absence of such notice, the
Trustee may conclusively assume there is no such default or Event of
Default.
(e) The Trustee shall not 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 to perform, or be responsible for the manner of performance of, any
of the obligations of the Master Servicer under this Agreement or any Servicing
Agreement, except during such time, if any, as the Trustee shall be the
successor to, and be vested with the rights, duties, powers and privileges of,
the Master Servicer in accordance with the terms of this Agreement.
(f) All funds received by the Trustee and required to be deposited in
the Certificate Account pursuant to this Agreement will be promptly so deposited
by the Trustee. The Trustee shall not be liable for interest or other
compensation on uninvested funds held under this Agreement.
(g) Except for those actions that the Trustee is required to take
hereunder, the Trustee shall have no obligation or liability to take any action
or to refrain from taking any action hereunder in the absence of written
direction as provided hereunder.
Section 9.02.00 Certain Matters Affecting the Trustee.
Except as otherwise provided in Section 9.01:
(i) The Trustee may rely and shall be protected in acting or
refraining from acting in reliance on any resolution, certificate of a
Seller or Master Servicer, certificate of auditors or any other
certificate, statement, instrument, opinion, report, notice, request,
consent, order, appraisal, bond or other paper or document believed by
it to be genuine and to have been signed or presented by the proper
party or parties;
91
(ii) The Trustee 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) The Trustee shall be under no obligation to exercise any
of the trusts or powers vested in it by this Agreement, other than its
obligation to give notices pursuant to this Agreement, or to institute,
conduct or defend any litigation hereunder or in relation hereto at the
request, order or direction of any of the Certificateholders pursuant
to the provisions of this Agreement, unless such Certificateholders
shall have offered to the Trustee reasonable security or indemnity
against the costs, expenses and liabilities which may be incurred
therein or thereby. Nothing contained herein shall, however, relieve
the Trustee of the obligation, upon the occurrence of an Event of
Default of which a Responsible Officer of the Trustee's Corporate Trust
Office has actual knowledge (which has not been cured or waived),
subject to Section 8.02(b), to exercise such of the rights and powers
vested in it by this Agreement, 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) The Trustee shall not 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) The Trustee shall not be bound to make any investigation
into the facts or matters stated in any resolution, certificate,
statement, instrument, opinion, report, notice, request, consent,
order, approval, bond or other paper or document, unless requested in
writing to do so by Holders of Certificates evidencing Fractional
Undivided Interests aggregating not less than 25% of the Trust Fund and
provided that the payment within a reasonable time to the Trustee 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,
reasonably assured to the Trustee by the security afforded to it by the
terms of this Agreement. The Trustee may require reasonable indemnity
against such expense or liability as a condition to taking any such
action. The reasonable expense of every such examination shall be paid
by the Certificateholders requesting the investigation;
(vi) The Trustee may execute any of the trusts or powers
hereunder or perform any duties hereunder either directly or through
Affiliates; provided, however, that the Trustee may not appoint any
agent to perform its custodial functions with respect to the Mortgage
Files or paying agent functions under this Agreement without the
express written consent of the Master Servicer, which consent will not
be unreasonably withheld. The Trustee shall not be liable or
responsible for the misconduct or negligence of any of the Trustee's
agents or attorneys or a custodian or paying agent appointed hereunder
by the Trustee with due care and, when required, with the consent of
the Master Servicer;
92
(vii) Should the Trustee deem the nature of any action
required on its part, other than a payment or transfer under Subsection
4.01(b) or Section 4.02, to be unclear, the Trustee may require prior
to such action that it be provided by the Master Servicer with
reasonable further instructions;
(viii) The right of the Trustee to perform any discretionary
act enumerated in this Agreement shall not be construed as a duty, and
the Trustee shall not be accountable for other than its negligence or
willful misconduct in the performance of any such act;
(ix) The Trustee shall not be required to give any bond or
surety with respect to the execution of the trust created hereby or the
powers granted hereunder; and
(x) The Trustee shall have no duty to conduct any affirmative
investigation as to the occurrence of any condition requiring the
repurchase of any Mortgage Loan by the Mortgage Loan Seller pursuant to
this Agreement or the Mortgage Loan Purchase Agreement or the
eligibility of any Mortgage Loan for purposes of this Agreement.
Section 9.03.00 Trustee Not Liable for Certificates or Mortgage Loans.
The recitals contained herein and in the Certificates (other than the
signature and countersignature of the Trustee on the Certificates) shall be
taken as the statements of the Seller, and the Trustee shall have no
responsibility for their correctness. The Trustee makes no representation as to
the validity or sufficiency of the Certificates (other than the signature and
countersignature of the Trustee on the Certificates) or of any Mortgage Loan
except as expressly provided in Sections 2.02 and 2.04 hereof; provided,
however, that the foregoing shall not relieve the Trustee (when applicable) or
Custodian of the obligation to review the Mortgage Files pursuant to Sections
2.02 and 2.04. The Trustee's signature and countersignature (or countersignature
of its agent) on the Certificates shall be solely in its capacity as Trustee and
shall not constitute the Certificates an obligation of the Trustee in any other
capacity. The Trustee shall not be accountable for the use or application by the
Seller of any of the Certificates or of the proceeds of such Certificates, or
for the use or application of any funds paid to the Seller with respect to the
Mortgage Loans. Subject to the provisions of Section 2.06, the Trustee shall not
be responsible for the legality or validity of this Agreement or any document or
instrument relating to this Agreement, the validity of the execution of this
Agreement or of any supplement hereto or instrument of further assurance, or the
validity, priority, perfection or sufficiency of the security for the
Certificates issued hereunder or intended to be issued hereunder. The Trustee
shall at no 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. The Trustee shall have no
responsibility for filing any financing or continuation statement in any public
office at any time or to otherwise perfect or maintain the perfection of any
security interest or lien granted to it hereunder or to record this Agreement.
93
Section 9.04.00 Trustee May Own Certificates.
The Trustee in its individual capacity or in any capacity other than as
Trustee hereunder may become the owner or pledgee of any Certificates with the
same rights it would have if it were not Trustee, and may otherwise deal with
the parties hereto.
Section 9.05.00 Trustee's Fees and Expenses.
(a) The Trustee will be entitled to certain fees and reimbursement for
certain expenses for its services hereunder payable by the Master Servicer as
mutually agreed to between the Master Servicer and the Trustee. The Trust will
be liable for the Trustee's expenses, including all reasonable out-of-pocket
expenses, disbursements and advances incurred or made by the Trustee 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 Master Servicer
hereunder. 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.
(b) To the extent not otherwise indemnified against by the Master
Servicer or the Seller hereunder, the Trust shall indemnify the Indemnified
Persons and the Master Servicer for, and will hold them harmless against, any
loss, liability or expense incurred on their part, arising out of, or in
connection with, this Agreement and the Certificates, including the costs and
expenses (including reasonable legal fees and expenses) of defending themselves
against any such claim, other than (i) any loss, liability or expense related to
such Indemnified Person's failure to perform such Indemnified Person's duties in
strict compliance with this Agreement (except as any such loss, liability or
expense shall be otherwise reimbursable pursuant to this Agreement) and (ii) any
loss, liability or expense incurred by reason of such Indemnified Person's
willful misfeasance, bad faith or negligence in the performance of duties
hereunder or by reason of reckless disregard of obligations and duties
hereunder. This indemnity shall survive the resignation or removal of the
Trustee and the termination of this Agreement.
Section 9.06.00 Eligibility Requirements for Trustee.
The Trustee and any successor Trustee shall during the entire duration
of this Agreement be a state bank or trust company or a national banking
association organized and doing business under the laws of such state or the
United States of America, authorized under such laws to exercise corporate trust
powers, having a combined capital and surplus and undivided profits of at least
$40,000,000 or, in the case of a successor Trustee, $50,000,000, subject to
supervision or examination by federal or state authority and, in the case of a
successor Trustee other than pursuant to Section 9.10, rated in one of the two
highest long-term debt categories of, or otherwise acceptable to, each of the
Rating Agencies. The Trustee shall not be an Affiliate of the Master Servicer,
unless the Trustee acts as successor Master Servicer hereunder. If the Trustee
publishes reports of condition at least annually, pursuant to law or to the
requirements of the aforesaid supervising or examining authority, then for the
purposes of this Section 9.06 the combined capital and surplus of such
corporation shall be deemed to be its total equity capital (combined capital and
surplus) as set forth in its most recent report of condition so published. In
case at any time the Trustee shall cease to be eligible in accordance with the
provisions of this Section 9.06, the Trustee shall resign immediately in the
manner and with the effect specified in Section 9.08.
94
Section 9.07.00 Insurance.
The Trustee, at its 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 as to the Trustee's compliance with
this Section 9.07 shall be furnished to the Master Servicer or any
Certificateholder upon reasonable written request.
Section 9.08.00 Resignation and Removal of the Trustee.
(a) The Trustee may at any time resign and be discharged from the Trust
hereby created by giving written notice thereof to the Seller and the Master
Servicer, with a copy to the Rating Agencies. Upon receiving such notice of
resignation, the Master Servicer shall promptly appoint a successor Trustee by
written instrument, in triplicate, one copy of which instrument shall be
delivered to each of the resigning Trustee and the successor Trustee. If no
successor Trustee shall have been so appointed and have accepted appointment
within 30 days after the giving of such notice of resignation, the resigning
Trustee may petition any court of competent jurisdiction for the appointment of
a successor Trustee.
(b) If at any time the Trustee shall cease to be eligible in accordance
with the provisions of Section 9.06 and shall fail to resign after written
request therefor by the Seller or if at any time the Trustee shall become
incapable of acting, or shall be adjudged a bankrupt or insolvent, or a receiver
of the Trustee or of its property shall be appointed, or any public officer
shall take charge or control of the Trustee or of its property or affairs for
the purpose of rehabilitation, conservation or liquidation, then the Master
Servicer shall be entitled to remove the Trustee and appoint a successor Trustee
by written instrument, in triplicate, one copy of which instrument shall be
delivered to each of the Trustee so removed and the successor Trustee.
(c) The Holders of Certificates evidencing Fractional Undivided
Interests aggregating not less than 51% of the Trust Fund may at any time remove
the Trustee and appoint a successor Trustee by written instrument or
instruments, in quadruplicate, signed by such Holders or their attorneys-in-fact
duly authorized, one complete set of which instruments shall be delivered to
each of the Seller, the Master Servicer, the Trustee so removed and the
successor so appointed.
(d) No resignation or removal of the Trustee and appointment of a
successor Trustee pursuant to any of the provisions of this Section 9.08 shall
become effective except upon appointment of and acceptance of such appointment
by the successor Trustee as provided in Section 9.09.
95
Section 9.09.00 Successor Trustee.
(a) Any successor Trustee appointed as provided in Section 9.08 shall
execute, acknowledge and deliver to the Master Servicer, the Seller and to its
predecessor Trustee an instrument accepting such appointment hereunder. The
resignation or removal of the predecessor Trustee shall then become effective
and such successor Trustee, without any further act, deed or conveyance, shall
become fully vested with all the rights, powers, duties and obligations of its
predecessor hereunder, with like effect as if originally named as Trustee
herein. The predecessor Trustee shall after payment of its outstanding fees and
expenses promptly deliver to the successor Trustee all assets and records of the
Trust held by it hereunder, and the predecessor Trustee shall execute and
deliver such instruments and do such other things as may reasonably be required
for more fully and certainly vesting and confirming in the successor Trustee all
such rights, powers, duties and obligations.
(b) No successor Trustee shall accept appointment as provided in this
Section 9.09 unless at the time of such acceptance such successor Trustee shall
be eligible under the provisions of Section 9.06.
(c) Upon acceptance of appointment by a successor Trustee as provided
in this Section 9.09, the successor Trustee shall mail notice of the succession
of such Trustee hereunder to all Certificateholders at their addresses as shown
in the Certificate Register and to the Rating Agencies. The Mortgage Loan Seller
shall pay the cost of any mailing by the successor Trustee.
Section 9.10.00 Merger or Consolidation of Trustee.
Any state bank or trust company or national banking association into
which the Trustee may be merged or converted or with which it may be
consolidated or any state bank or trust company or national banking association
resulting from any merger, conversion or consolidation to which the Trustee
shall be a party, or any state bank or trust company or national banking
association succeeding to all or substantially all of the corporate trust
business of the Trustee, shall be the successor of the Trustee hereunder,
provided such state bank or trust company or national banking association shall
be eligible under the provisions of Section 9.06. Such succession shall be valid
without the execution or filing of any paper or any further act on the part of
any of the parties hereto, anything herein to the contrary notwithstanding.
96
Section 9.11.00 Appointment of Co-Trustee or Separate Trustee.
(a) Notwithstanding any other provisions hereof, at any time, for the
purpose of meeting any legal requirements of any jurisdiction in which any part
of the Trust or property constituting the same may at the time be located, the
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 and the Master Servicer to act as co-trustee or co-trustees, jointly
with the Trustee, or separate trustee or separate trustees, of all or any part
of the Trust, and to vest in such Person or Persons, in such capacity, such
title to the Trust, or any part thereof, and, subject to the other provisions of
this Section 9.11, such powers, duties, obligations, rights and trusts as the
Master Servicer and the Trustee may consider necessary or desirable.
(b) If the Master Servicer shall not have joined in such appointment
within 15 days after the receipt by it of a written request so to do, or in case
an Event of Default with respect to the Master Servicer shall have occurred and
be continuing, the Trustee shall have the power to make such appointment without
the Master Servicer.
(c) No co-trustee or separate trustee hereunder shall be required to
meet the terms of eligibility as a successor Trustee under Section 9.06
hereunder and no notice to Certificateholders of the appointment of
co-trustee(s) or separate trustee(s) shall be required under Section 9.08
hereof.
(d) In the case of any appointment of a co-trustee or separate trustee
pursuant to this Section 9.11, all rights, powers, duties and obligations
conferred or imposed upon the Trustee and required to be conferred on such
co-trustee shall be conferred or imposed upon and exercised or performed by the
Trustee and such separate trustee or co-trustee jointly, except to the extent
that under any law of any jurisdiction in which any particular act or acts are
to be performed (whether as Trustee hereunder or as successor to the Master
Servicer hereunder), the Trustee shall be incompetent or unqualified to perform
such act or acts, in which event such rights, powers, duties and obligations
(including the holding of title to the Trust or any portion thereof in any such
jurisdiction) shall be exercised and performed by such separate trustee or
co-trustee at the direction of the Trustee.
(e) Any notice, request or other writing given to the Trustee shall be
deemed to have been given to each of the then separate trustees and co-trustees,
as effectively as if given to each of them. Every instrument appointing any
separate trustee or co-trustee shall refer to this Agreement and the conditions
of this Article IX. Each separate trustee and co-trustee, upon its acceptance of
the trusts conferred, shall be vested with the estates or property specified in
its instrument of appointment, either jointly with the Trustee or separately, as
may be provided therein, subject to all the provisions of this Agreement,
specifically including every provision of this Agreement relating to the conduct
of, affecting the liability of, or affording indemnity or protection to, the
Trustee. Every such instrument shall be filed with the Trustee.
97
(f) To the extent not prohibited by law, any separate trustee or
co-trustee may, at any time, request the Trustee, its agent or attorney-in-fact,
with full power and authority, to do any lawful act under or with respect to
this Agreement on its behalf and in its name. If any separate trustee or
co-trustee shall die, become incapable of acting, resign or be removed, all of
its estates, properties rights, remedies and trusts shall vest in and be
exercised by the Trustee, to the extent permitted by law, without the
appointment of a new or successor Trustee.
(g) No trustee under this Agreement shall be personally liable by
reason of any act or omission of another trustee under this Agreement. The
Master Servicer and the Trustee acting jointly may at any time accept the
resignation of or remove any separate trustee or co-trustee, except that
following the occurrence of any Event of Default which has not been cured, the
Trustee acting alone may accept the resignation of or remove any separate
trustee or co-trustee.
Section 9.12.00 Master Servicer Shall Provide Information as Reasonably
Required.
The Master Servicer shall furnish to the Trustee, during the term of
this Agreement, such periodic, special, or other reports or information (and in
such electronic format or other means acceptable to the Trustee) as may
reasonably be requested by the Trustee in order to fulfill its duties and
obligations under this Agreement.
Section 9.13.00 Federal Information Returns and Reports to
Certificateholders; REMIC Administration.
(a) For federal income tax purposes, the taxable year of each Series
REMIC shall be a calendar year and the Master Servicer shall maintain or cause
the maintenance of the books of each Series REMIC on the accrual method of
accounting.
98
(b) The Master Servicer shall prepare and file or cause to be filed
with the Internal Revenue Service Federal tax information returns or elections
required to be made by the Trustee hereunder with respect to each Series REMIC
and the Certificates containing such information and at the times and in the
manner as may be required by the Code or applicable Treasury regulations, and
shall furnish to each Holder of Certificates at any time during the calendar
year for which such returns or reports are made such statements or information
at the times and in the manner as may be required thereby. In connection with
the foregoing, the Master Servicer shall provide the name and address of the
person who can be contacted to obtain information required to be reported to the
holders of regular interests in each Series REMIC (the "REMIC Reporting Agent")
as required by IRS Form 8811. The Master Servicer will apply for an Employee
Identification Number from the IRS under Form SS-4 or any other acceptable
method for all tax entities and will also file the IRS Form 8811. The Trustee
shall make the elections to treat REMIC I and REMIC II as a REMIC (which
election shall apply to the taxable period ending December 31, 2001 and each
calendar year thereafter) in such manner as the Code or applicable Treasury
regulations may prescribe. The Trustee shall sign all tax information returns
filed pursuant to this Section and any other returns as may be required by the
Code. The Holder of each Class of Class R Certificate is hereby designated as
the "Tax Matters Person" (within the meaning of Treas. Reg. xx.xx. 1.860F-4(d))
for each Series REMIC. The Master Servicer is hereby designated and appointed as
the agent of each such Tax Matters Person. Any Holder of a Residual Certificate
will by acceptance thereof appoint the Master Servicer as agent and
attorney-in-fact for the purpose of acting as Tax Matters Person for the related
Series REMIC during such time as the Master Servicer does not own any such
Residual Certificate. In the event that the Code or applicable Treasury
regulations prohibit the Trustee from signing tax or information returns or
other statements, or the Master Servicer from acting as agent for the Tax
Matters Person, the Master Servicer shall take whatever action that in its sole
good faith judgment is necessary for the proper filing of such information
returns or for the provision of a tax matters person, including designation of
the Holder of a Residual Certificate to sign such returns or act as tax matters
person. Each Holder of a Residual Certificate shall be bound by this Section.
(c) The Master Servicer shall provide upon request and upon reasonable
compensation such information (which shall be provided by the Master Servicer)
as required in Section 860D(a)(6)(B) of the Code to the Internal Revenue
Service, to any Person purporting to transfer a Residual Certificate to a Person
other than a transferee permitted by Section 5.05(b), and to any regulated
investment company, real estate investment trust, common trust fund,
partnership, trust, estate, organization described in Section 1381 of the Code,
or nominee holding an interest in a pass-through entity described in Section
860E(e)(6) of the Code, any record holder of which is not a transferee permitted
by Section 5.05(b) (or which is deemed by statute to be an entity with a
disqualified member).
99
(d) The Master Servicer shall prepare and file or cause to be filed any
state income tax returns required under Applicable State Law with respect to
each Series REMIC or the Trust Fund.
(e) To the extent that the affairs of the Trust Fund are within its
control and the scope of its specific responsibilities under this Agreement, the
Master Servicer shall take such action and shall cause each Series REMIC to take
such action as shall be reasonably necessary to create or maintain the status
thereof as a REMIC under the REMIC Provisions (and the Trustee shall assist it,
to the extent reasonably requested by it). Neither the Trustee nor the Master
Servicer shall knowingly or intentionally take any action, cause any Series
REMIC to take any action or fail to take (or fail to cause to be taken) any
action that, under the REMIC Provisions, if taken or not taken, as the case may
be, could (i) endanger the status of any Series REMIC as a REMIC or (ii) result
in the imposition of a tax upon any Series REMIC (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) (either such event, an "Adverse REMIC Event") unless the Master Servicer
and the Trustee have received an Opinion of Counsel to the effect that the
contemplated action will not, with respect to any Series REMIC created
hereunder, endanger such status or result in the imposition of such a tax. The
Master Servicer may consult with counsel as to the rendering of such written
advice, and the cost of such consultation and the production of any Opinions of
Counsel, or written advice, shall be borne by the party seeking to take the
action not otherwise permitted by this Agreement; provided, however that in no
event shall the Master Servicer or the Trustee be liable or responsible for such
costs. The Trustee and the Master Servicer may conclusively presume that any
action taken or omitted at the written direction or request of the holders of
the Residual Certificates or the Seller will not result in an Adverse REMIC
Event, and neither the Master Servicer nor the Trustee shall be liable or
responsible for any Adverse REMIC Event arising out of or resulting from any
such action or omission.
(f) In the event that any tax is imposed on "prohibited transactions"
of any Series REMIC created hereunder as defined in Section 860F(a)(2) of the
Code, on "net income from foreclosure property" of the REMIC, as defined in
Section 860G(c) of the Code, on any contributions to the REMIC after the Startup
Day pursuant to Section 860G(d) of the Code, or any other tax is imposed by the
Code or any applicable provisions of state or local tax laws, such tax shall be
charged (i) against the party the actions of which gave rise to such taxes
(subject, in the case of the Master Servicer, to Section 7.04) and (ii)
otherwise against amounts on deposit in the related Certificate Account and
shall be paid by withdrawal therefrom.
(g) On or before April 15 of each calendar year, commencing April 15,
2002, the Master Servicer shall deliver to the Trustee a Certificate from a
Responsible Officer of the Master Servicer stating the Master Servicer's
compliance during the preceding calendar year with this Section 9.13, without
regard to any actions taken by any party other than the Master Servicer.
100
(h) The Trustee and the Master Servicer shall, for federal income tax
purposes, maintain books and records with respect to each Series REMIC on a
calendar year and on an accrual basis, to the extent such books and records are
maintained pursuant to this Agreement.
(i) After the 90-day period commencing on the Startup Day, neither the
Master Servicer nor the Trustee shall accept any contributions of assets to any
Series REMIC, unless it shall have received an Opinion of Counsel (at the
expense of the person seeking to make such contribution) to the effect that the
inclusion of such assets in the Trust Fund will not cause any Series REMIC to
fail to qualify as a REMIC at any time that any Certificates are outstanding or
subject any Series REMIC to any tax under the REMIC Provisions or other
applicable provisions of federal, state and local law or ordinances.
(j) Neither the Master Servicer nor the Trustee shall enter into any
arrangement by which any Series REMIC will receive a fee or other compensation
for services nor permit any Series REMIC 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.
(k) Solely for purposes of Section 1.860G-1(a)(4)(iii) of the Treasury
regulations, the "latest possible maturity date" for the Certificates and the
REMIC I Regular Interests is the Assumed Final Distribution Date, which is the
Distribution Date in December 2040.
(l) Neither the Seller, the Trustee nor the Master Servicer shall sell,
dispose of or substitute for any of the Mortgage Loans (except in connection
with (i) the foreclosure of a Mortgage Loan, including but not limited to, the
acquisition or sale of a Mortgaged Property acquired by deed in lieu of
foreclosure, (ii) the bankruptcy of the Trust Fund, (iii) the termination of any
Series REMIC pursuant to Article X or (iv) a purchase of Mortgage Loans pursuant
to Articles II or III), nor acquire any assets for the Trust Fund, nor sell or
dispose of any investments in the Certificate Account for gain, nor accept any
contributions to any Series REMIC after the Closing Date unless it has received
an Opinion of Counsel (at the expense of the party seeking to cause such sale,
disposition, substitution or acquisition, which shall not in any event be an
expense of the Master Servicer or the Trustee) indicating that such sale,
disposition, substitution or acquisition will not (a) affect adversely the
status of any Series REMIC as a REMIC or (b) cause any Series REMIC to be
subject to a tax on "prohibited transactions", "contributions" or, except as
otherwise provided for in this Agreement, "net income from foreclosure property"
pursuant to the REMIC Provisions.
(m) Neither the Trustee nor the Master Servicer shall modify or consent
to or approve (if any such consent or approval is required) any modification of
a Mortgage Loan (including the Mortgage Interest Rate, the method of determining
the Mortgage Interest Rate, the Outstanding Principal Balance of the Mortgage
Loan, the amortization schedule, or any other term affecting the amount or
timing of payments on the Mortgage Loan or the collateral for the Mortgage
Loan), or any other material term of a Mortgage Loan unless the related
Mortgagor is in default with respect to the Mortgage Loan or such default is (in
the reasonable judgment of the Trustee or Master Servicer) reasonably
forseeable.
101
Section 9.14.00 Reports Filed with Securities and Exchange Commission.
Within 15 days after each Distribution Date, the Master Servicer 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 Certificateholders for such Distribution Date as an
exhibit thereto. Prior to January 30, 2002, the Master Servicer 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 30th of each year, commencing prior to March 30, 2002, the Master
Servicer shall, unless a Suspension Notice shall have been filed, file a Form
10-K, in substance conforming to industry standards, with respect to the Trust
Fund. The Seller hereby grants to the Master Servicer 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
Master Servicer 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 Master Servicer, 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 Master Servicer reasonably deems
appropriate to prepare and file all necessary reports with the Commission. The
Master Servicer shall have no responsibility to file any items other than those
specified in this Section 9.14; provided, however, the Master Servicer 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
Master Servicer 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 00000-0000. Fees and expenses
incurred by the Master Servicer in connection with this Section 9.14 shall not
be reimbursable from the Trust Fund.
Section 9.15.00 Appointment of Custodians.
The Trustee may, with the consent of the Master Servicer and the
Seller, appoint one or more Custodians who are not Affiliates of the Seller or
the Servicers to hold all or a portion of the Mortgage Files as agent for the
Trustee, by entering into a Custodial Agreement. The appointment of Xxxxx Fargo
Bank Minnesota, National Association as Custodian under the related Custodial
Agreement dated the Closing Date is hereby authorized. Subject to Article IX,
the Trustee agrees to comply with the terms of each Custodial Agreement and to
enforce the terms and provisions thereof against the Custodian for the benefit
of the Certificateholders. Each Custodian shall be a depository institution
subject to supervision by federal or state authority, shall have a combined
capital and surplus of at least $15,000,000 and shall be qualified to do
business in the jurisdiction in which it holds any Mortgage File. Each Custodial
Agreement may be amended only as provided in Section 11.02. The Trustee shall
notify the Certificateholders of the appointment of any Custodian (other than
the Custodian appointed as of the Closing Date) pursuant to this Section 9.15.
102
ARTICLE X
TERMINATION
Section 10.01.00 Termination Upon Repurchase by the Seller or its
Designee or Liquidation of the Mortgage Loans.
(a) Subject to Section 10.02, the respective obligations and
responsibilities of the Seller, the Master Servicer and the Trustee created
hereby, other than the obligation of the Trustee or the Master Servicer to make
payments to Certificateholders as hereinafter set forth and to the Trustee,
shall terminate with respect to the Mortgage Loans:
(i) upon the repurchase by or at the direction of the Seller
or its designee of all Mortgage Loans and all related REO Property
remaining in the Trust at a price equal to (a) 100% of the Outstanding
Principal Balance of each Mortgage Loan (other than a Mortgage Loan
related to REO Property) as of the date of repurchase, net of the
principal portion of any unreimbursed Monthly Advances made by the
purchaser, together with interest at the applicable Mortgage Interest
Rate accrued to, but not including, the first day of the month of
repurchase, plus (b) the appraised value of any related REO Property,
less the good faith estimate of the Seller of liquidation expenses to
be incurred in connection with its disposal thereof (but not more than
the Outstanding Principal Balance of the related Mortgage Loan,
together with interest at the applicable Mortgage Interest Rate accrued
on that balance to, but not including, the first day of the month of
repurchase), such appraisal to be calculated by an appraiser mutually
agreed upon by the Seller and the Trustee at the expense of the Seller;
or
(ii) upon the later of the making of the final payment or
other liquidation, or any advance with respect thereto, of the last
Mortgage Loan remaining in the Trust Fund or the disposition of all
property acquired with respect to any such Mortgage Loan; provided,
however, that in the event that an advance has been made, but not yet
recovered, at the time of such termination, the Person having made such
advance shall be entitled to receive, notwithstanding such termination,
any payments received subsequent thereto with respect to which such
advance was made.
(b) In no event, however, shall the Trust created hereby continue
beyond the expiration of 21 years from the death of the last survivor of the
descendants of Xxxxxx X. Xxxxxxx, the late Ambassador of the United States to
the Court of St. James's, living on the date of this Agreement.
103
(c) The right of the Seller or its designee to repurchase all the
Mortgage Loans pursuant to Subsection 10.01(a)(i) above shall be exercisable
only if (i) the aggregate Scheduled Principal Balance of the Mortgage Loans at
the time of any such repurchase is less than 10% of the portion of the Cut-off
Date Balance, or (ii) the Seller, based upon an Opinion of Counsel, has
determined that the REMIC status of any Series REMIC has been lost or that a
substantial risk exists that such REMIC status will be lost for the then-current
taxable year. At any time thereafter, the Seller may elect to terminate the
Series REMICs at any time, and upon such election, the Seller or its designee
shall repurchase all the Mortgage Loans.
(d) The Trustee shall give notice of any termination to the applicable
Certificateholders, as applicable, with a copy to the Rating Agencies, upon
which such Certificateholders shall surrender their Certificates to the Trustee
for payment of the final distribution and cancellation. Such notice shall be
given by letter, mailed not earlier than the 15th day and not later than the
25th day of the month next preceding the month of such final distribution, and
shall specify (i) the Distribution Date upon which final payment of such
Certificates will be made upon presentation and surrender of such Certificates
at the office of the Trustee therein designated, (ii) the amount of any such
final payment and (iii) that the Record Date otherwise applicable to such
Distribution Date is not applicable, payments being made only upon presentation
and surrender of such Certificates at the office of the Trustee therein
specified.
(e) If the option of the Seller to repurchase or cause the repurchase
of all the Mortgage Loans under Subsection 10.01(a)(i) above is exercised, the
Seller and/or its designee shall deliver to the Trustee for deposit in the
Certificate Account, by the Business Day prior to the applicable Distribution
Date, an amount equal to the repurchase price for the related Mortgage Loans
being purchased by it and all property acquired with respect to such Mortgage
Loans remaining in any Series REMIC. Upon the presentation and surrender of the
Certificates, the Trustee shall distribute to the Certificateholders an amount
equal to (i) the amount otherwise distributable with respect to each Certificate
(other than the Residual Certificates), on such Distribution Date, but for such
repurchase, (ii) the Current Principal Amount, plus with respect to each
Certificate (other than the Residual Certificates) any accrued but unpaid
interest at the applicable Pass-Through Rate (provided, however, that the amount
of interest to be paid to the Certificateholders of any Class pursuant to this
clause and clause (i) shall not exceed 30 days' interest on the Current
Principal Amount of such Class at the applicable Pass-Through Rate (and any
interest accrued thereon but remaining unpaid from any prior Distribution Date,
as provided in Section 6.01)); and (iii) the remainder to the holders of the
Class R-1 Certificates. If such amount is not sufficient to pay all of the
Certificates in full, any such deficiency will be allocated first to the
outstanding Class or Classes of Subordinate Certificates, respectively, having
the highest numerical designation and then to the Senior Certificates on a pro
rata basis or, if after the Cross-Over Date, to the Senior Certificates,
respectively, pro rata. Upon deposit of the required repurchase price and
following such final Distribution Date, the Trustee shall release or direct the
Custodian to release promptly to the Seller and/or its designee, as the case may
be, the Mortgage Files for the remaining applicable Mortgage Loans, and the
Accounts with respect thereto shall terminate, subject to the Trustee's
obligation to hold any amounts payable to Certificateholders in trust without
interest pending final distributions pursuant to Subsection 10.01(f).
104
(f) In the event that this Agreement is terminated by reason of the
payment or liquidation of all Mortgage Loans or the disposition of all property
acquired with respect to all Mortgage Loans under Subsection 10.01(a)(ii) above,
the Master Servicer shall deliver to the Trustee for deposit in the Certificate
Account all distributable amounts remaining in the Protected Account, and shall
cause any Servicers to, deliver to the Trustee for deposit in the Certificate
Account all distributable amounts remaining in their Protected Accounts. Upon
the presentation and surrender of the Certificates, the Trustee shall distribute
to the remaining Certificateholders, in accordance with their respective
interests, all distributable amounts remaining in the Certificate Account. Upon
deposit by any Servicers of such distributable amounts and delivery to the
Trustee of an Officer's Certificate from the Master Servicer certifying that
such deposit has been made, and following such final Distribution Date, the
Trustee shall release or direct the Custodian to release promptly to the Seller
or its designee the Mortgage Files for the remaining Mortgage Loans, and the
Accounts shall terminate, subject to the Trustee's obligation to hold any
amounts payable to the Certificateholders in trust without interest pending
final distributions pursuant to this Subsection 10.01(f).
(g) If not all of the Certificateholders shall surrender their
Certificates for cancellation within six months after the time specified in the
above-mentioned written notice, the Trustee shall give a second written notice
to the remaining Certificateholders to surrender their Certificates for
cancellation and receive the final distribution with respect thereto. If within
six months after the second notice, not all the Certificates shall have been
surrendered for cancellation, the Trustee may take appropriate steps, or appoint
any agent to take appropriate steps, to contact the remaining Certificateholders
concerning surrender of their Certificates, and the cost thereof shall be paid
out of the funds and other assets which remain subject to this Agreement. If
within two years after the second notice any Certificates shall not have been
surrendered for cancellation, the Trustee shall pay such funds to the Seller,
which shall, subject to applicable state law relating to escheatment, hold all
amounts distributable to such Holders for the benefit of such Holders. No
interest shall accrue on any amount held by the Trustee and not distributed to a
Certificateholder due to such Certificateholder's failure to surrender its
Certificate(s) for payment of the final distribution thereon in accordance with
this Section.
Section 10.02.00 Additional Termination Requirements.
(a) If the option of the Seller to repurchase all the Mortgage Loans
under Subsection 10.01(a)(i) above is exercised, the Trust Fund shall be
terminated in accordance with the following additional requirements, unless the
Trustee has been furnished with an Opinion of Counsel to the effect that the
failure of the Trust to comply with the requirements of this Section 10.02 will
not (i) result in the imposition of taxes on "prohibited transactions" as
defined in Section 860F of the Code on the REMIC or (ii) cause either Series
REMIC to fail to qualify as a REMIC at any time that any Regular Certificates
are outstanding:
105
(i) within 90 days prior to the final Distribution Date, at
the written direction of the Seller, the Master Servicer, as agent for
the respective Tax Matters Persons, shall adopt a plan of complete
liquidation of each Series REMIC provided to it by the Seller meeting
the requirements of a "Qualified Liquidation" under Section 860F of the
Code and any regulations thereunder.
(ii) at or after the time of adoption of such a plan of
complete liquidation of either Series REMIC and at or prior to the
final Distribution Date, the Trustee shall sell for cash all of the
assets of the Trust to or at the direction of the Seller.
(iii) at the time of the making of the final payment on any
such Certificates, the Trustee shall distribute or credit (or cause to
be distributed or credited) to the corresponding Residual
Certificateholder, all cash on hand (other than cash retained to meet
claims); and each Series REMIC shall terminate at such time.
(b) By their acceptance of the Residual Certificates, the Holders
thereof hereby (i) agree to adopt such a plan of complete liquidation of each
Series REMIC upon the written request of the Seller and to take such action in
connection therewith as may be reasonably requested by the Seller and (ii)
appoint the Master Servicer as their attorney-in-fact, with full power of
substitution, for purposes of adopting such a plan of complete liquidation. The
Master Servicer shall adopt such plan of liquidation by filing the appropriate
statement on the final tax return of each such Series REMIC.
106
ARTICLE XI
MISCELLANEOUS PROVISIONS
Section 11.01.00 Intent of Parties.
The parties intend that the Trust shall be treated as a REMIC for
federal income tax purposes and that the provisions of this Agreement should be
construed in furtherance of this intent.
Section 11.02.00 Amendment.
(a) This Agreement may be amended from time to time by the Seller, the
Trustee and the Master Servicer, without notice to or the consent of any of the
Certificateholders, to cure any ambiguity, to correct or supplement any
provisions herein that may be defective or inconsistent with any other
provisions herein, to comply with any changes in the Code or to make any other
provisions with respect to matters or questions arising under this Agreement
which shall not be inconsistent with the provisions of this Agreement; provided,
however, that such action shall not, as evidenced by an Opinion of Independent
Counsel, adversely affect in any material respect the interests of any
Certificateholder.
(b) This Agreement may also be amended from time to time by the Seller,
the Trustee and the Master Servicer, with the consent of the Holders of
Certificates evidencing Fractional Undivided Interests aggregating not less than
51% of the Trust Fund or of the applicable Class or Classes if such amendment
affects only such Class or Classes for the purpose of adding any provisions to
or changing in any manner or eliminating any of the provisions of this Agreement
or of modifying in any manner the rights of the Certificateholders; provided,
however, that no such amendment shall (i) reduce in any manner the amount of, or
delay the timing of, payments received on Mortgage Loans which are required to
be distributed on any Certificate without the consent of the Holder of such
Certificate, (ii) reduce the aforesaid percentage of Certificates the Holders of
which are required to consent to any such amendment, without the consent of the
Holders of all Certificates then outstanding, or (iii) cause any Series REMIC to
fail to qualify as a REMIC for federal income tax purposes, as evidenced by an
Opinion of Independent Counsel which shall be provided to the Trustee other than
at the Trustee's expense. Notwithstanding any other provision of this Agreement,
for purposes of the giving or withholding of consents pursuant to this Section
11.02(b), Certificates registered in the name of or held for the benefit of the
Seller, the Master Servicer, a Servicer or the Trustee or any Affiliate thereof
shall be entitled to vote their Fractional Undivided Interests with respect to
matters affecting such Certificates.
(c) Promptly after the execution of any such amendment, the Trustee
shall furnish a copy of such amendment or written notification of the substance
of such amendment to each Certificateholder, with a copy to the Rating Agencies.
(d) In the case of an amendment under Subsection 11.02(b) above, it
shall not be necessary for the Certificateholders to approve the particular form
of such an amendment. Rather, it shall be sufficient if the Certificateholders
approve the substance of the amendment. The manner of obtaining such consents
and of evidencing the authorization of the execution thereof by
Certificateholders shall be subject to such reasonable regulations as the
Trustee may prescribe.
107
(e) Prior to the execution of any amendment to this Agreement, the
Trustee shall be entitled to receive and rely upon an Opinion of Counsel stating
that the execution of such amendment is authorized or permitted by this
Agreement. The Trustee may, but shall not be obligated to, enter into any such
amendment which affects the Trustee's own rights, duties or immunities under
this Agreement.
(f) Notwithstanding any provision of this Agreement to the contrary,
this Agreement may not be amended, modified or waived in any manner than would
be adverse to any interest of the Master Servicer, without the Master Servicer's
prior written consent.
Section 11.03.00 Recordation of Agreement.
To the extent permitted by applicable law, this Agreement is subject to
recordation in all appropriate public offices for real property records in all
the counties or other comparable jurisdictions in which any or all of the
Mortgaged Properties are situated, and in any other appropriate public recording
office or elsewhere. The 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.
Section 11.04.00 Limitation on Rights of Certificateholders.
(a) The death or incapacity of any Certificateholder shall not
terminate this Agreement or the Trust, nor entitle such Certificateholder's
legal representatives or heirs to claim an accounting or to take any action or
proceeding in any court for a partition or winding up of the Trust, nor
otherwise affect the rights, obligations and liabilities of the parties hereto
or any of them.
(b) Except as expressly provided in this Agreement, no
Certificateholder shall have any right to vote or in any manner otherwise
control the operation and management of the Trust, or the obligations of the
parties hereto, nor shall anything herein set forth, or contained in the terms
of the Certificates, be construed so as to establish the Certificateholders from
time to time as partners or members of an association; nor shall any
Certificateholders be under any liability to any third Person by reason of any
action taken by the parties to this Agreement pursuant to any provision hereof.
(c) No Certificateholder shall have any right by virtue of any
provision of this Agreement to institute any suit, action or proceeding in
equity or at law upon, under or with respect to this Agreement against the
Seller, the Master Servicer or any successor to any such parties unless (i) such
Certificateholder previously shall have given to the Trustee a written notice of
a continuing default, as herein provided, (ii) the Holders of Certificates
evidencing Fractional Undivided Interests aggregating not less than 51% of the
Trust Fund shall have made written request upon the Trustee to institute such
action, suit or proceeding in its own name as Trustee hereunder and shall have
offered to the Trustee such reasonable indemnity as it may require against the
costs and expenses and liabilities to be incurred therein or thereby, and (iii)
the Trustee, for 60 days after its receipt of such notice, request and offer of
indemnity, shall have neglected or refused to institute any such action, suit or
proceeding.
108
(d) No one or more Certificateholders shall have any right by virtue of
any provision of this Agreement to affect the rights of any other
Certificateholders or to obtain or seek to obtain priority or preference over
any other such Certificateholder, or to enforce any right under this Agreement,
except in the manner herein provided and for the equal, ratable and common
benefit of all Certificateholders. For the protection and enforcement of the
provisions of this Section 11.04, each and every Certificateholder and the
Trustee shall be entitled to such relief as can be given either at law or in
equity.
Section 11.05.00 Acts of Certificateholders.
Any request, demand, authorization, direction, notice, consent, waiver
or other action provided by this Agreement to be given or taken by
Certificateholders may be embodied in and evidenced by one or more instruments
of substantially similar tenor signed by such Certificateholders in person or by
an agent duly appointed in writing. Except as herein otherwise expressly
provided, such action shall become effective when such instrument or instruments
are delivered to the Trustee and, where it is expressly required, to the Seller.
Proof of execution of any such instrument or of a writing appointing any such
agent shall be sufficient for any purpose of this Agreement and conclusive in
favor of the Trustee and the Seller, if made in the manner provided in this
Section 11.05.
Section 11.06.00 Governing Law.
THIS AGREEMENT AND THE CERTIFICATES SHALL BE CONSTRUED IN ACCORDANCE
WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT REFERENCE TO ITS CONFLICT OF LAWS
RULES AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE
DETERMINED IN ACCORDANCE WITH SUCH LAWS.
Section 11.07.00 Notices.
All demands and notices hereunder shall be in writing and shall be
deemed given when delivered at, mailed by registered mail, return receipt
requested, postage prepaid, or by recognized overnight courier, to or
transmitted by facsimile to (i) in the case of the Seller, 000 Xxxx Xxxxxx, Xxx
Xxxx, Xxx Xxxx 00000, Attention: Vice President-Servicing, telecopier number:
(000) 000-0000, or to such other address as may hereafter be furnished to the
other parties hereto in writing; (ii) in the case of the Trustee, 0000 X. Xx.
Xxxxxx Xxxxx, Xxxxx Xxx, Xxxxxxxxxx 00000, Attention: BART 2001-1), telecopier
number: (000) 000-0000, or such other address as may hereafter be furnished to
the other parties hereto in writing; (iii) in the case of the Master Servicer,
00000 Xxxxxx Xxxx Xxxxxxx, Xxxxxxxx, Xxxxxxxx 00000 (Attention: BART 2001-1),
telecopier number: (000) 000-0000; (iv) in the case of the Rating Agencies,
Standard & Poor's, 00 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx, 00000, Attention:
Residential Mortgage Surveillance, telecopier number: (000) 000-0000, and Fitch,
Inc., 0 Xxxxx Xxxxxx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: BART 2001-1; or
(v) in the case of the Custodian, Xxxxx Fargo Bank Minnesota, National
Association, 0000 00xx Xxxxxx, X.X., Xxxxxxxxxxx, Xxxxxxxxx 00000, Attention:
Inventory Control. Any notice delivered to the Seller, the Master Servicer, the
Custodian or the Trustee under this Agreement shall be effective only upon
receipt. Any notice required or permitted to be mailed to a Certificateholder,
unless otherwise provided herein, shall be given by first-class mail, postage
prepaid, at the address of such Certificateholder as shown in the Certificate
Register. Any notice so mailed within the time prescribed in this Agreement
shall be conclusively presumed to have been duly given when mailed, whether or
not the Certificateholder receives such notice.
Section 11.08.00 Severability of Provisions.
If any one or more of the covenants, agreements, provisions or terms of
this Agreement shall be for any reason whatsoever held invalid, then such
covenants, agreements, provisions or terms shall be deemed severed from the
remaining covenants, agreements, provisions or terms of this Agreement and shall
in no way affect the validity or enforceability of the other provisions of this
Agreement or of the Certificates or the rights of the holders thereof.
Section 11.09.00 Successors and Assigns.
The provisions of this Agreement shall be binding upon and inure to the
benefit of the respective successors and assigns of the parties hereto.
Section 11.10.00 Article and Section Headings.
The article and section headings herein are for convenience of
reference only, and shall not limit or otherwise affect the meaning hereof.
109
Section 11.11.00 Counterparts.
This Agreement may be executed in two or more counterparts each of
which when so executed and delivered shall be an original but all of which
together shall constitute one and the same instrument.
Section 11.12.00 Notice to Rating Agencies.
The article and section headings herein are for convenience of
reference only, and shall not limited or otherwise affect the meaning hereof.
The Trustee shall promptly provide notice to each Rating Agency with respect to
each of the following of which it has actual knowledge:
1. Any material change or amendment to this Agreement or any Servicing
Agreement (as reported to it by the Master Servicer);
2. The occurrence of any Event of Default that has not been cured;
3. The resignation or termination of the Master Servicer or the
Trustee;
4. The repurchase or substitution of Mortgage Loans;
5. The final payment to Certificateholders; and
6. Any change in the location of the Certificate Account.
In addition, in accordance with Section 6.03 and Section 3.19, the
Master Servicer shall promptly furnish to each Rating Agency copies of the
following:
1. Each report to Certificateholders described in Section 6.03; and
2. Each annual independent public accountants' servicing report as
described in Section 3.19.
110
IN WITNESS WHEREOF, the Seller, the Master Servicer 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.
STRUCTURED ASSET MORTGAGE INVESTMENTS INC., as Seller
By: /s/ Xxxxxx X. Jurkowki, Jr.
-------------------------------------------------
Name: Xxxxxx X. Jurkowki, Jr.
Title: Vice President
BANKERS TRUST COMPANY OF CALIFORNIA, N.A., as Trustee
By: /s/ Xxxxxxxxx X. Xxxxxxxxxxx
---------------------------------------------------
Name: Xxxxxxxxx X. Xxxxxxxxxxx
Title: Vice President
XXXXX FARGO BANK MINNESOTA,
NATIONAL ASSOCIATION, as
Master Servicer
By: /s/ Xxxxx X. Xxxxxxxxx
---------------------------------------------------
Name: Xxxxx X. Xxxxxxxxx
Title: Vice President
Accepted and Agreed:
EMC MORTGAGE CORPORATION
By /s/ Xxxxxxxx Xxxxxx
-----------------------------------------------
Name: Xxxxxxxx Xxxxxx
Title: Attorney-in-Fact
111
>
STATE OF NEW YORK )
) ss.:
COUNTY OF NEW YORK )
On the 30th day of January, 2001 before me, a notary public in and for
said State, personally appeared Xxxxxx X. Xxxxxxxxx, Xx., known to me to be a
President of Structured Asset Mortgage Investments Inc., the corporation that
executed the within instrument, and also known to me to be the person who
executed it on behalf of said corporation, and acknowledged to me that such
corporation executed the within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official
seal the day and year in this certificate first above written.
/s/ Xxxxx X. Xxxxxxxxx
---------------------------
Notary Public
[Notarial Seal]
STATE OF CALIFORNIA )
) ss.:
COUNTY OF ORANGE )
On the 29th day of January, 2001 before me, a notary public in and for
said State, personally appeared Xxxxxxxxx X. Xxxxxxxxxxx, known to me to be a
Vice President of Bankers Trust Company of California, N.A., the corporation
that executed the within instrument, and also known to me to be the person who
executed it on behalf of said corporation, and acknowledged to me that such
corporation executed the within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official
seal the day and year in this certificate first above written.
/s/ Xxxxx X. Xxxxx
----------------------------------
Notary Public
[Notarial Seal]
000
XXXXX XX XXXXXXXX )
) ss.:
COUNTY OF BALTIMORE CITY )
On the 31st day of January, 2001 before me, a notary public in and for
said State, personally appeared Xxxxx X. Xxxxxxxxx, known to me to be a Vice
President of Xxxxx Fargo Bank Minnesota, National Association, the corporation
that executed the within instrument, and also known to me to be the person who
executed it on behalf of said corporation, and acknowledged to me that such
corporation executed the within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official
seal the day and year in this certificate first above written.
/s/ Xxxx X. Xxxxx
---------------------------------
Notary Public
[Notarial Seal]
STATE OF NEW YORK )
) ss.:
COUNTY OF NEW YORK )
On the ____ day of January, 2001 before me, a notary public in and for
said State, personally appeared ______________________________, known to me to
be a _______________________ of EMC Mortgage Corporation, the corporation that
executed the within instrument, and also known to me to be the person who
executed it on behalf of said corporation, and acknowledged to me that such
corporation executed the within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official
seal the day and year in this certificate first above written.
Notary Public
[Notarial Seal]
113
EXHIBIT A-1
CLASS 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 CURRENT PRINCIPAL AMOUNT OF THIS CERTIFICATE WILL BE DECREASED BY
THE PRINCIPAL PAYMENTS HEREON AND REALIZED LOSSES ALLOCABLE HERETO. ACCORDINGLY,
FOLLOWING THE INITIAL ISSUANCE OF THE CERTIFICATES, THE CURRENT PRINCIPAL AMOUNT
OF THIS CERTIFICATE WILL BE DIFFERENT FROM THE DENOMINATION SHOWN BELOW. ANYONE
ACQUIRING THIS CERTIFICATE MAY ASCERTAIN ITS CURRENT PRINCIPAL AMOUNT BY INQUIRY
OF THE TRUSTEE NAMED HEREIN.
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF
THE DEPOSITORY TRUST COMPANY TO THE 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.
A-1-1
Certificate No. __ Variable Pass-Through Rate
Class A[-_] Senior Aggregate Initial Current Principal Amount of this
Certificate as of the Cut-off Date: $___________________
Date of Pooling and Servicing Agreement and Cut-off Date: Initial Current Principal Amount of this Certificate as
January 1, 2001 of the Cut-off Date: $___________________
First Distribution Date: February 25, 2001
Master Servicer: Xxxxx Fargo Bank Minnesota, National
Association
Assumed Final Distribution Date: December 25, 2040 CUSIP __________
MORTGAGE PASS-THROUGH CERTIFICATE
SERIES 2001-1
evidencing a fractional undivided interest in the distributions
allocable to the Class A[-_] Certificates with respect to a Trust Fund
consisting primarily of a pool of conventional one- to four-family
adjustable interest rate mortgage loans sold by STRUCTURED ASSET
MORTGAGE INVESTMENTS INC.
This Certificate is payable solely from the assets of the Trust Fund,
and does not represent an obligation of or interest in Structured Asset Mortgage
Investments Inc., the Master Servicer or the Trustee referred to below or any of
their affiliates or any other person. Neither this Certificate nor the
underlying Mortgage Loans are guaranteed or insured by any governmental entity
or by Structured Asset Mortgage Investments Inc., the Master Servicer or the
Trustee or any of their affiliates or any other person. None of Structured Asset
Mortgage Investments Inc., the Master Servicer or any of their affiliates will
have any obligation with respect to any certificate or other obligation secured
by or payable from payments on the Certificates.
This certifies that:
CEDE & CO.
is the registered owner of the Fractional Undivided Interest evidenced hereby in
the beneficial ownership interest of Certificates of the same Class as this
Certificate in a trust (the "Trust Fund") generally consisting of conventional
first lien, adjustable rate mortgages loans secured by one- to four- family
residences, units in planned unit developments and individual condominium and
cooperative units (collectively, the "Mortgage Loans") sold by Structured Asset
Mortgage Investments Inc. ("SAMI"). Xxxxx Fargo Bank Minnesota, National
Association ("Xxxxx Fargo") will act as master servicer of the Mortgage Loans
(the "Master Servicer," which term includes any successors thereto under the
Agreement referred to below). The Trust Fund was created pursuant to the Pooling
and Servicing Agreement dated as of the Cut-off Date specified above (the
"Agreement"), among SAMI, as seller (the "Seller"), Xxxxx Fargo, as master
servicer and Bankers Trust Company of California, NA, 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.
A-1-2
Interest on this Certificate will accrue during the month prior to the
month in which a Distribution Date (as hereinafter defined) occurs on the
Current Principal Amount hereof at a per annum rate equal to the Pass-Through
Rate set forth above. The Trustee will distribute on the 25th day of each month,
or, if such 25th day is not a Business Day, the immediately following Business
Day (each, a "Distribution Date"), commencing on the First Distribution Date
specified above, to the Person in whose name this Certificate is registered at
the close of business on the last Business Day (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 Fractional Undivided Interest evidenced by this Certificate
and the amount (of interest and principal, if any) required to be distributed to
the Holders of Certificates of the same Class as this Certificate. The Assumed
Final Distribution Date is the first anniversary of the Distribution Date
immediately following the latest scheduled maturity date of any Mortgage Loan
and is not likely to be the date on which the Current Principal Amount of this
Class of Certificates will be reduced to zero.
Distributions on this Certificate will be made by the Trustee by check
mailed to the address of the Person entitled thereto as such name and address
shall appear on the Certificate Register or, if such Person so requests by
notifying the Trustee in writing as specified in the Agreement. Notwithstanding
the above, the final distribution on this Certificate will be made after due
notice by the Trustee of the pendency of such distribution and only upon
presentation and surrender of this Certificate at the office or agency appointed
by the Trustee for that purpose and designated in such notice. The Initial
Current Principal Amount of this Certificate is set forth above. The Current
Principal Amount hereof will be reduced to the extent of distributions allocable
to principal hereon and any Realized Losses allocable hereto.
This Certificate is one of a duly authorized issue of Certificates
designated as set forth on the face hereof (the "Certificates"), issued in
fourteen Classes. The Certificates, in the aggregate, evidence the entire
beneficial ownership interest in the Trust Fund formed pursuant to the
Agreement.
The Certificateholder, by its acceptance of this Certificate, agrees
that it will look solely to the Trust Fund for payment hereunder and that the
Trustee is not liable to the Certificateholders for any amount payable under
this Certificate or the Agreement or, except as expressly provided in the
Agreement, subject to any liability under the Agreement.
This Certificate does not purport to summarize the Agreement and
reference is made to the Agreement for the interests, rights and limitations of
rights, benefits, obligations and duties evidenced hereby, and the rights,
duties and immunities of the Trustee.
A-1-3
The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Seller and the rights of the Certificateholders under the Agreement from time to
time by the Seller and the Trustee with the consent of the Holders of
Certificates evidencing Fractional Undivided Interests aggregating not less than
51% (or in certain cases, Holders of Certificates of affected Classes evidencing
such percentage of the Fractional Undivided Interests thereof). Any such consent
by the Holder of this Certificate shall be conclusive and binding on such Holder
and upon all future Holders of this Certificate and of any Certificate issued
upon the transfer hereof or in lieu hereof whether or not notation of such
consent is made upon this Certificate. The Agreement also permits the amendment
thereof, in certain limited circumstances, without the consent of the Holders of
any of the Certificates.
As provided in the Agreement and subject to certain limitations therein
set forth, the transfer of this Certificate is registrable with the Trustee upon
surrender of this Certificate for registration of transfer at the offices or
agencies maintained by the Trustee for such purposes, duly endorsed by, or
accompanied by a written instrument of transfer in form satisfactory to the
Trustee duly executed by the Holder hereof or such Holder's attorney duly
authorized in writing, and thereupon one or more new Certificates in authorized
denominations representing a like aggregate Fractional Undivided Interest will
be issued to the designated transferee.
The Certificates are issuable only as registered Certificates without
coupons in the Classes and denominations specified in the Agreement. As provided
in the Agreement and subject to certain limitations therein set forth, this
Certificate is exchangeable for one or more new Certificates evidencing the same
Class and in the same aggregate Fractional Undivided Interest, as requested by
the Holder surrendering the same.
No service charge will be made to the Certificateholders for any such
registration of transfer, but the Trustee may require payment of a sum
sufficient to cover any tax or other governmental charge payable in connection
therewith. The Seller, the Master Servicer, the Trustee and any agent of any of
them may treat the Person in whose name this Certificate is registered as the
owner hereof for all purposes, and none of Seller, the Master Servicer, the
Trustee or any such agent shall be affected by notice to the contrary.
The obligations created by the Agreement and the Trust Fund created
thereby (other than the obligations to make payments to Certificateholders with
respect to the termination of the Agreement) shall terminate upon the earlier of
(i) the later of the (A) final payment or other liquidation (or Advance with
respect thereto) of the last Mortgage Loan remaining in the Trust Fund and (B)
disposition of all property acquired upon foreclosure or deed in lieu of
foreclosure of any Mortgage Loan and the remittance of all funds due under the
Agreement, or (ii) the optional repurchase by the party named in the Agreement
of all the Mortgage Loans and other assets of the Trust Fund in accordance with
the terms of the Agreement. Such optional repurchase may be made only on or
after the Distribution Date on which the aggregate unpaid principal balance of
the Mortgage Loans is less than the percentage of the aggregate Outstanding
Principal Balance specified in the Agreement of the Mortgage Loans at the
Cut-off Date. The exercise of such right will effect the early retirement of the
Certificates. In no event, however, will the Trust Fund created by the Agreement
continue beyond the expiration of 21 years after the death of certain persons
identified in the Agreement.
Unless this Certificate has been countersigned by an authorized
signatory of the Trustee by manual signature, this Certificate shall not be
entitled to any benefit under the Agreement, or be valid for any purpose.
A-1-4
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed.
Dated: ______________ BANKERS TRUST COMPANY OF CALIFORNIA, NA
Not in its individual capacity but solely as Trustee
By:__________________________________________
Authorized Signatory
CERTIFICATE OF AUTHENTICATION
This is one of the Class A[-_] Certificates referred to in the
within-mentioned Agreement.
BANKERS TRUST COMPANY OF CALIFORNIA, NA
Authorized signatory of Bankers Trust
Company of California, NA, not in its
individual capacity but solely as Trustee
By:
--------------------------------------
Authorized Signatory
A-1-5
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto (Please print or typewrite name and address including postal
zip code of assignee) a Fractional Undivided Interest evidenced by the within
Mortgage Pass-Through Certificate and hereby authorizes the transfer of
registration of such interest to assignee on the Certificate Register of the
Trust Fund.
I (We) further direct the Certificate Registrar to issue a new Certificate of a
like denomination and Class, to the above named
assignee and deliver such Certificate to the following address:
-------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
---------------------------
Dated:
----------------------------------------------
Signature by or on behalf of assignor
Signature Guaranteed
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to _________________________________________________
for the account of _______________________________ account number __________,
or, if mailed by check, to _________________________________________. Applicable
statements should be mailed to
-----------------------------------------------------------.
This information is provided by ______________________, the assignee
named above, or ____________________________, as its agent.
X-0-0
XXXXXXX X-0
CLASS B[-_] CERTIFICATE
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A
"REGULAR INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT," AS THOSE
TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL
REVENUE CODE OF 1986 (THE "CODE").
THE CURRENT PRINCIPAL AMOUNT OF THIS CERTIFICATE WILL BE DECREASED BY
THE PRINCIPAL PAYMENTS HEREON AND ANY REALIZED LOSSES ALLOCABLE HERETO.
ACCORDINGLY, FOLLOWING THE INITIAL ISSUANCE OF THE CERTIFICATES, THE CURRENT
PRINCIPAL AMOUNT OF THIS CERTIFICATE WILL BE DIFFERENT FROM THE DENOMINATION
SHOWN BELOW. ANYONE ACQUIRING THIS CERTIFICATE MAY ASCERTAIN ITS CURRENT
PRINCIPAL AMOUNT BY INQUIRY OF THE TRUSTEE NAMED HEREIN.
[UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE
OF THE DEPOSITORY TRUST COMPANY TO THE 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.] [INCLUDE IN CLASS X-0, X-0, X-0 CERTIFICATES ONLY]
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, WHICH WILL BE DEEMED
REPRESENTED BY AN OWNER OF A BOOK ENTRY CERTIFICATE OR GLOBAL CERTIFICATE, OR,
IN THE CASE OF THE TRANSFER OF AN INDIVIDUAL CERTIFICATE, 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.
A-2-1
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: (I) WILL NOT RESULT IN
ANY PROHIBITED TRANSACTION WHICH IS NOT COVERED UNDER AN INDIVIDUAL OR CLASS
PROHIBITED TRANSACTION EXEMPTION, INCLUDING, BUT NOT LIMITED TO, PROHIBITED
TRANSACTION EXEMPTION ("PTE") 84-14, XXX 00-00, XXX 00-0, XXX 95-60 OR PTE 96-23
AND (II) WILL NOT GIVE RISE TO ANY ADDITIONAL FIDUCIARY OBLIGATIONS ON THE PART
OF THE SELLER, THE MASTER SERVICER OR THE TRUSTEE, WHICH WILL BE DEEMED
REPRESENTED BY AN OWNER OF A BOOK-ENTRY CERTIFICATE OR A GLOBAL CERTIFICATE AND
WILL BE EVIDENCED BY A REPRESENTATION OR AN OPINION OF COUNSEL TO SUCH EFFECT BY
OR ON BEHALF OF AN INSTITUTIONAL ACCREDITED INVESTOR.
A-2-2
Certificate No. Variable Pass-Through Rate
Class B[-_] Aggregate Initial Current Principal of this
Certificate as of the Cut-off Date: $___________
Date of Pooling and Servicing Agreement and Cut-off Date: Initial Current Principal Amount of this Certificate
January 1, 2001 as of the Cut-off Date: $__________
First Distribution Date: February 25, 2001
Master Servicer: Xxxxx Fargo Bank Minnesota, National CUSIP __________
Association
Assumed Final Distribution Date: December 25, 2040
MORTGAGE PASS-THROUGH CERTIFICATE
SERIES 2001-1
evidencing a fractional undivided interest in the distributions
allocable to the Class B[-_] Certificates with respect to a Trust Fund
consisting primarily of a pool of conventional one- to four-family
adjustable interest rate mortgage loans sold by STRUCTURED ASSET
MORTGAGE INVESTMENTS INC.
This Certificate is payable solely from the assets of the Trust Fund,
and does not represent an obligation of or interest in Structured Asset Mortgage
Investments Inc., the Master Servicer or the Trustee referred to below or any of
their affiliates or any other person. Neither this Certificate nor the
underlying Mortgage Loans are guaranteed or insured by any governmental entity
or by Structured Asset Mortgage Investments Inc., the Master Servicer or the
Trustee or any of their affiliates or any other person. None of Structured Asset
Mortgage Investments Inc., the Master Servicer or any of their affiliates will
have any obligation with respect to any certificate or other obligation secured
by or payable from payments on the Certificates.
This certifies that
---------------
is the registered owner of the Fractional Undivided Interest evidenced
hereby in the beneficial ownership interest of Certificates of the same Class as
this Certificate in a trust (the "Trust Fund") generally consisting of
conventional first lien, adjustable rate mortgages loans secured by one- to
four- family residences, units in planned unit developments and individual
condominium and cooperative units (collectively, the "Mortgage Loans") sold by
Structured Asset Mortgage Investments Inc. ("SAMI"). The Mortgage Loans were
sold by EMC Mortgage Corporation ("EMC") to SAMI. Xxxxx Fargo Bank Minnesota,
National Association ("Xxxxx Fargo") will act as master servicer of the Mortgage
Loans (the "Master Servicer," which term includes any successors thereto under
the Agreement referred to below). The Trust Fund was created pursuant to the
Pooling and Servicing Agreement dated as of the Cut-off Date specified above
(the "Agreement"), among SAMI, as seller (the "Seller"), Bankers Trust Company
of California, N.A., as trustee (the "Trustee") and Xxxxx Fargo, as master
servicer (the "Master Servicer"), 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.
A-2-3
Interest on this Certificate will accrue during the month prior to the
month in which a Distribution Date (as hereinafter defined) occurs on the
Current Principal Amount hereof at a per annum rate equal to the Pass-Through
Rate set forth above. The Trustee will distribute on the 25th day of each month,
or, if such 25th day is not a Business Day, the immediately following Business
Day (each, a "Distribution Date"), commencing on the First Distribution Date
specified above, to the Person in whose name this Certificate is registered at
the close of business on the last Business Day (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 Fractional Undivided Interest evidenced by this Certificate
and the amount (of interest and principal, if any) required to be distributed to
the Holders of Certificates of the same Class as this Certificate. The Assumed
Final Distribution Date is the first anniversary of the Distribution Date
immediately following the latest scheduled maturity date of any Mortgage Loan
and is not likely to be the date on which the Current Principal Amount of this
Class of Certificates will be reduced to zero.
Distributions on this Certificate will be made by the Trustee by check
mailed to the address of the Person entitled thereto as such name and address
shall appear on the Certificate Register or, if such Person so requests by
notifying the Trustee in writing as specified in the Agreement. Notwithstanding
the above, the final distribution on this Certificate will be made after due
notice by the Trustee of the pendency of such distribution and only upon
presentation and surrender of this Certificate at the office or agency appointed
by the Trustee for that purpose and designated in such notice. The Initial
Current Principal Amount of this Certificate is set forth above. The Current
Principal Amount hereof will be reduced to the extent of distributions allocable
to principal hereon and any Realized Losses allocable hereto.
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: (i) will not result in
any prohibited transaction which is not covered under an individual or class
prohibited transaction exemption, including, but not limited to, Prohibited
Transaction Exemption ("PTE") 84-14, XXX 00-00, XXX 00-0, XXX 00-00 or PTE 96-23
and (ii) will not give rise to any additional fiduciary obligations on the part
of the Seller, the Master Servicer or the Trustee, which will be deemed
represented by an owner of a Book-Entry Certificate or a Global Certificate and
will be evidenced by a representation or an Opinion of Counsel to such effect by
or on behalf of an Institutional Accredited Investor.
This Certificate is one of a duly authorized issue of Certificates
designated as set forth on the face hereof (the "Certificates"), issued in
fourteen Classes. The Certificates, in the aggregate, evidence the entire
beneficial ownership interest in the Trust Fund formed pursuant to the
Agreement.
A-2-4
The Certificateholder, by its acceptance of this Certificate, agrees
that it will look solely to the Trust Fund for payment hereunder and that the
Trustee is not liable to the Certificateholders for any amount payable under
this Certificate or the Agreement or, except as expressly provided in the
Agreement, subject to any liability under the Agreement.
This Certificate does not purport to summarize the Agreement and
reference is made to the Agreement for the interests, rights and limitations of
rights, benefits, obligations and duties evidenced hereby, and the rights,
duties and immunities of the Trustee.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Seller and the rights of the Certificateholders under the Agreement from time to
time by the Seller and the Trustee with the consent of the Holders of
Certificates evidencing Fractional Undivided Interests aggregating not less than
51% (or in certain cases, Holders of Certificates of affected Classes evidencing
such percentage of the Fractional Undivided Interests thereof). Any such consent
by the Holder of this Certificate shall be conclusive and binding on such Holder
and upon all future Holders of this Certificate and of any Certificate issued
upon the transfer hereof or in lieu hereof whether or not notation of such
consent is made upon this Certificate. The Agreement also permits the amendment
thereof, in certain limited circumstances, without the consent of the Holders of
any of the Certificates.
As provided in the Agreement and subject to certain limitations therein
set forth, the transfer of this Certificate is registrable with the Trustee upon
surrender of this Certificate for registration of transfer at the offices or
agencies maintained by the Trustee for such purposes, duly endorsed by, or
accompanied by a written instrument of transfer in form satisfactory to the
Trustee duly executed by the Holder hereof or such Holder's attorney duly
authorized in writing, and thereupon one or more new Certificates in authorized
denominations representing a like aggregate Fractional Undivided Interest will
be issued to the designated transferee.
The Certificates are issuable only as registered Certificates without
coupons in the Classes and denominations specified in the Agreement. As provided
in the Agreement and subject to certain limitations therein set forth, this
Certificate is exchangeable for one or more new Certificates evidencing the same
Class and in the same aggregate Fractional Undivided Interest, as requested by
the Holder surrendering the same.
No service charge will be made to the Certificateholders for any such
registration of transfer, but the Trustee may require payment of a sum
sufficient to cover any tax or other governmental charge payable in connection
therewith. The Seller, the Master Servicer, the Trustee and any agent of any of
them may treat the Person in whose name this Certificate is registered as the
owner hereof for all purposes, and none of the Seller, the Master Servicer, the
Trustee or any such agent shall be affected by notice to the contrary.
A-2-5
The obligations created by the Agreement and the Trust Fund created
thereby (other than the obligations to make payments to Certificateholders with
respect to the termination of the Agreement) shall terminate upon the earlier of
(i) the later of the (A) final payment or other liquidation (or Advance with
respect thereto) of the last Mortgage Loan remaining in the Trust Fund and (B)
disposition of all property acquired upon foreclosure or deed in lieu of
foreclosure of any Mortgage Loan and the remittance of all funds due under the
Agreement, or (ii) the optional repurchase by the party named in the Agreement
of all the Mortgage Loans and other assets of the Trust Fund in accordance with
the terms of the Agreement. Such optional repurchase may be made only on or
after the Distribution Date on which the aggregate unpaid principal balance of
the Mortgage Loans is less than the percentage of the aggregate Outstanding
Principal Balance specified in the Agreement of the Mortgage Loans at the
Cut-off Date. The exercise of such right will effect the early retirement of the
Certificates. In no event, however, will the Trust Fund created by the Agreement
continue beyond the expiration of 21 years after the death of certain persons
identified in the Agreement.
Unless this Certificate has been countersigned by an authorized
signatory of the Trustee by manual signature, this Certificate shall not be
entitled to any benefit under the Agreement, or be valid for any purpose.
A-2-6
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed.
Dated: ________________________________________________
BANKERS TRUST COMPANY OF
CALIFORNIA, N.A.
Not in its individual capacity
but solely as Trustee
By:
-----------------------------
Authorized Signatory
A-2-7
CERTIFICATE OF AUTHENTICATION
This is one of the Class B[-_] Certificates referred to in the
within-mentioned Agreement.
BANKERS TRUST COMPANY OF
CALIFORNIA, N.A.
Authorized signatory of Bankers Trust Company
of California, N.A., not in its
individual capacity but solely as Trustee
By:_______________________________________
Authorized Signatory
A-2-8
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto (Please print or typewrite name and address including postal
zip code of assignee) a Fractional Undivided Interest evidenced by the within
Mortgage Pass-Through Certificate and hereby authorizes the transfer of
registration of such interest to assignee on the Certificate Register of the
Trust Fund.
I (We) further direct the Certificate Registrar to issue a new
Certificate of a like denomination and Class, to the above
named assignee and deliver such Certificate to the following address:
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
Dated:
-------------------------------------
Signature by or on behalf of assignor
------------------------------------------
Signature Guaranteed
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to _________________________________________________
for the account of _______________________________ account number __________,
or, if mailed by check, to _________________________________________. Applicable
statements should be mailed to
-----------------------------------------------------------.
This information is provided by ______________________, the assignee
named above, or ____________________________, as its agent.
X-0-0
XXXXXXX X-0
CLASS R[-_] CERTIFICATE
THIS CERTIFICATE MAY NOT BE HELD BY OR TRANSFERRED TO A NON-UNITED
STATES PERSON, A PUBLICLY TRADED PARTNERSHIP OR A DISQUALIFIED ORGANIZATION (AS
DEFINED BELOW).
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A
"RESIDUAL INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT" AS THOSE
TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL
REVENUE CODE OF 1986 (THE "CODE").
THIS CERTIFICATE MAY NOT BE ACQUIRED DIRECTLY OR INDIRECTLY BY, OR ON
BEHALF OF, AN EMPLOYEE BENEFIT PLAN OR OTHER RETIREMENT ARRANGEMENT WHICH IS
SUBJECT TO TITLE I OF THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS
AMENDED, AND/OR SECTION 4975 OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED,
UNLESS THE PROPOSED TRANSFER AND/OR HOLDING OF A 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 95-60 OR PTE 96-23
AND (II) WILL NOT GIVE RISE TO ANY ADDITIONAL FIDUCIARY OBLIGATIONS ON THE PART
OF THE SELLER, THE MASTER SERVICER OR THE TRUSTEE, WHICH WILL BE DEEMED
REPRESENTED BY AN OWNER OF A BOOK-ENTRY CERTIFICATE OR A GLOBAL CERTIFICATE AND
WILL BE EVIDENCED BY A REPRESENTATION OR AN OPINION OF COUNSEL TO SUCH EFFECT BY
OR ON BEHALF OF AN INSTITUTIONAL ACCREDITED INVESTOR.
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 FOREIGN GOVERNMENT, ANY
INTERNATIONAL ORGANIZATION, OR ANY AGENCY OR INSTRUMENTALITY OF ANY OF THE
FOREGOING, (B) ANY ORGANIZATION (OTHER THAN A COOPERATIVE DESCRIBED IN SECTION
521 OF THE CODE) WHICH IS EXEMPT FROM THE TAX IMPOSED BY CHAPTER 1 OF THE CODE
UNLESS SUCH ORGANIZATION IS SUBJECT TO THE TAX IMPOSED BY SECTION 511 OF THE
CODE, (C) ANY ORGANIZATION DESCRIBED IN SECTION 1381(a)(2)(C) OF THE CODE, (ANY
SUCH PERSON DESCRIBED IN THE FOREGOING CLAUSES (A), (B) OR (C) BEING HEREIN
REFERRED TO AS A "DISQUALIFIED ORGANIZATION") OR (D) AN AGENT OF A DISQUALIFIED
ORGANIZATION, (2) NO PURPOSE OF SUCH TRANSFER IS TO IMPEDE THE ASSESSMENT OR
COLLECTION OF TAX AND (3) SUCH TRANSFEREE SATISFIES CERTAIN ADDITIONAL
CONDITIONS RELATING TO THE FINANCIAL CONDITION OF THE PROPOSED TRANSFEREE.
NOTWITHSTANDING THE REGISTRATION IN THE CERTIFICATE REGISTER OR ANY TRANSFER,
SALE OR OTHER DISPOSITION OF THIS CERTIFICATE TO A DISQUALIFIED ORGANIZATION OR
AN AGENT OF A DISQUALIFIED ORGANIZATION, SUCH REGISTRATION SHALL BE DEEMED TO BE
OF NO LEGAL FORCE OR EFFECT WHATSOEVER AND SUCH PERSON SHALL NOT BE DEEMED TO BE
A CERTIFICATEHOLDER FOR ANY PURPOSE HEREUNDER, INCLUDING, BUT NOT LIMITED TO,
THE RECEIPT OF DISTRIBUTIONS ON THIS CERTIFICATE. EACH HOLDER OF THIS
CERTIFICATE BY ACCEPTANCE OF THIS CERTIFICATE SHALL BE DEEMED TO HAVE CONSENTED
TO THE PROVISIONS OF THIS PARAGRAPH.
A-2-10
Certificate No. 1 Variable Pass-Through Rate
Class R[-_] Senior
Date of Pooling and Servicing Aggregate Initial Current Principal Amount of
Agreement and Cut-off Date: this Certificate as of the Cut-off Date: $50.00
January 1, 2001
First Distribution Date: Initial Current Principal Amount of this
February 25, 2001 Certificate as of the Cut-off Date: $50.00
Master Servicer:
Xxxxx Fargo Bank Minnesota,
National Association
Assumed Final Distribution Date: CUSIP __________
December 25, 2040
BEAR XXXXXXX ARM TRUST
MORTGAGE PASS-THROUGH CERTIFICATE
SERIES 2001-1
evidencing a fractional undivided interest in the distributions
allocable to the Class R [-_] Certificates with respect to a Trust Fund
consisting primarily of a pool of conventional one- to four-family
adjustable interest rate mortgage loans sold by STRUCTURED ASSET
MORTGAGE INVESTMENTS INC.
This Certificate is payable solely from the assets of the Trust Fund,
and does not represent an obligation of or interest in Structured Asset Mortgage
Investments Inc., the Master Servicer or the Trustee referred to below or any of
their affiliates or any other person. Neither this Certificate nor the
underlying Mortgage Loans are guaranteed or insured by any governmental entity
or by Structured Asset Mortgage Investments Inc., the Master Servicer or the
Trustee or any of their affiliates or any other person. None of Structured Asset
Mortgage Investments Inc., the Master Servicer or any of their affiliates will
have any obligation with respect to any certificate or other obligation secured
by or payable from payments on the Certificates.
A-2-11
This certifies that ______________________________ is the registered
owner of the Fractional Undivided Interest evidenced hereby in the beneficial
ownership interest of Certificates of the same Class as this Certificate in a
trust (the "Trust Fund") generally consisting of conventional first lien,
adjustable rate mortgages loans secured by one- to four- family residences,
units in planned unit developments and individual condominium and cooperative
units (collectively, the "Mortgage Loans") sold by Structured Asset Mortgage
Investments Inc. ("SAMI"). Xxxxx Fargo Bank Minnesota, National Association
("Xxxxx Fargo") will act as master servicer of the Mortgage Loans (the "Master
Servicer," which term includes any successors thereto under the Agreement
referred to below). The Trust Fund was created pursuant to the Pooling and
Servicing Agreement dated as of the Cut-off Date specified above (the
"Agreement"), among SAMI, as seller (the "Seller"), Bankers Trust Company of
California, N.A., as trustee (the "Trustee") and the Master Servicer, a summary
of certain of the pertinent provisions of which is set forth hereafter. To the
extent not defined herein, capitalized terms used herein shall have the meaning
ascribed to them in the Agreement. This Certificate is issued under and is
subject to the terms, provisions and conditions of the Agreement, to which
Agreement the Holder of this Certificate by virtue of its acceptance hereof
assents and by which such Holder is bound.
Interest on this Certificate will accrue during the month prior to the
month in which a Distribution Date (as hereinafter defined) occurs on the
Current Principal Amount hereof at a per annum rate equal to the Pass-Through
Rate set forth above. The Trustee will distribute on the 25th day of each month,
or, if such 25th day is not a Business Day, the immediately following Business
Day (each, a "Distribution Date"), commencing on the First Distribution Date
specified above, to the Person in whose name this Certificate is registered at
the close of business on the last Business Day (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 Fractional Undivided Interest evidenced by this Certificate
and the amount (of interest and principal, if any) required to be distributed to
the Holders of Certificates of the same Class as this Certificate. The Assumed
Final Distribution Date is the first anniversary of the Distribution Date
immediately following the latest scheduled maturity date of any Mortgage Loan
and is not likely to be the date on which the Current Principal Amount of this
Class of Certificates will be reduced to zero.
Distributions on this Certificate will be made by the Trustee by check
mailed to the address of the Person entitled thereto as such name and address
shall appear on the Certificate Register. Notwithstanding the above, the final
distribution on this Certificate will be made after due notice by the Trustee of
the pendency of such distribution and only upon presentation and surrender of
this Certificate at the office or agency appointed by the Trustee for that
purpose and designated in such notice. The Initial Current Principal Amount of
this Certificate is set forth above. The Current Principal Amount hereof will be
reduced to the extent of distributions allocable to principal hereon and any
Realized Losses allocable hereto.
A-2-12
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 Seller will have the right, in its
sole discretion and without notice to the Holder of this Certificate, to sell
this Certificate to a purchaser selected by the Company, which purchaser may be
the Seller, or any affiliate of the Seller, on such terms and conditions as the
Seller may choose.
This Certificate may not be acquired directly or indirectly by, or on
behalf of, an employee benefit plan or other retirement arrangement which is
subject to Title I of the Employee Retirement Income Security Act of 1974, as
amended, and/or Section 4975 of the Internal Revenue Code of 1986, as amended,
unless the proposed transfer and/or holding of a 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 or PTE 96-23
and (ii) will not give rise to any additional fiduciary obligations on the part
of the Seller, the Master Servicer or the Trustee, which will be deemed
represented by an owner of a Book-Entry Certificate or a Global Certificate and
will be evidenced by a representation or an Opinion of Counsel to such effect by
or on behalf of an Institutional Accredited Investor.
This Certificate is one of a duly authorized issue of Certificates
designated as set forth on the face hereof (the "Certificates"), issued in
fourteen Classes. The Certificates, in the aggregate, evidence the entire
beneficial ownership interest in the Trust Fund formed pursuant to the
Agreement.
The Certificateholder, by its acceptance of this Certificate, agrees
that it will look solely to the Trust Fund for payment hereunder and that the
Trustee is not liable to the Certificateholders for any amount payable under
this Certificate or the Agreement or, except as expressly provided in the
Agreement, subject to any liability under the Agreement.
This Certificate does not purport to summarize the Agreement and
reference is made to the Agreement for the interests, rights and limitations of
rights, benefits, obligations and duties evidenced hereby, and the rights,
duties and immunities of the Trustee.
A-2-13
The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Seller and the rights of the Certificateholders under the Agreement from time to
time by the Seller and the Trustee with the consent of the Holders of
Certificates evidencing Fractional Undivided Interests aggregating not less than
51% (or in certain cases, Holders of Certificates of affected Classes evidencing
such percentage of the Fractional Undivided Interests thereof). Any such consent
by the Holder of this Certificate shall be conclusive and binding on such Holder
and upon all future Holders of this Certificate and of any Certificate issued
upon the transfer hereof or in lieu hereof whether or not notation of such
consent is made upon this Certificate. The Agreement also permits the amendment
thereof, in certain limited circumstances, without the consent of the Holders of
any of the Certificates.
As provided in the Agreement and subject to certain limitations therein
set forth, the transfer of this Certificate is registrable with the Trustee upon
surrender of this Certificate for registration of transfer at the offices or
agencies maintained by the Trustee for such purposes, duly endorsed by, or
accompanied by a written instrument of transfer in form satisfactory to the
Trustee duly executed by the Holder hereof or such Holder's attorney duly
authorized in writing, and thereupon one or more new Certificates in authorized
denominations representing a like aggregate Fractional Undivided Interest will
be issued to the designated transferee.
The Certificates are issuable only as registered Certificates without
coupons in the Classes and denominations specified in the Agreement. As provided
in the Agreement and subject to certain limitations therein set forth, this
Certificate is exchangeable for one or more new Certificates evidencing the same
Class and in the same aggregate Fractional Undivided Interest, as requested by
the Holder surrendering the same.
No service charge will be made to the Certificateholders for any such
registration of transfer, but the Trustee may require payment of a sum
sufficient to cover any tax or other governmental charge payable in connection
therewith. The Seller, the Master Servicer, the Trustee and any agent of any of
them may treat the Person in whose name this Certificate is registered as the
owner hereof for all purposes, and none of the Seller, the Master Servicer, the
Trustee or any such agent shall be affected by notice to the contrary.
The obligations created by the Agreement and the Trust Fund created
thereby (other than the obligations to make payments to Certificateholders with
respect to the termination of the Agreement) shall terminate upon the earlier of
(i) the later of the (A) final payment or other liquidation (or Advance with
respect thereto) of the last Mortgage Loan remaining in the Trust Fund and (B)
disposition of all property acquired upon foreclosure or deed in lieu of
foreclosure of any Mortgage Loan and the remittance of all funds due under the
Agreement, or (ii) the optional repurchase by the party named in the Agreement
of all the Mortgage Loans and other assets of the Trust Fund in accordance with
the terms of the Agreement. Such optional repurchase may be made only on or
after the Distribution Date on which the aggregate unpaid principal balance of
the Mortgage Loans is less than the percentage of the aggregate Outstanding
Principal Balance specified in the Agreement of the Mortgage Loans at the
Cut-off Date. The exercise of such right will effect the early retirement of the
Certificates. In no event, however, will the Trust Fund created by the Agreement
continue beyond the expiration of 21 years after the death of certain persons
identified in the Agreement.
Unless this Certificate has been countersigned by an authorized
signatory of the Trustee by manual signature, this Certificate shall not be
entitled to any benefit under the Agreement, or be valid for any purpose.
A-2-14
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed.
Dated: _____________________ BANKERS TRUST COMPANY OF
CALIFORNIA, N.A.
Not in its individual capacity but solely as Trustee
By:
--------------------------
Authorized Signatory
CERTIFICATE OF AUTHENTICATION
This is one of the Class R[-__] Certificates referred to in the
within-mentioned Agreement.
BANKERS TRUST COMPANY OF
CALIFORNIA, N.A.
Authorized signatory of Bankers Trust Company of California, N.A., not in its
individual capacity but solely as Trustee
By:
------------------------------
Authorized Signatory
A-2-15
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto (Please print or typewrite name and address including postal
zip code of assignee) a Fractional Undivided Interest evidenced by the within
Mortgage Pass-Through Certificate and hereby authorizes the transfer of
registration of such interest to assignee on the Certificate Register of the
Trust Fund.
I (We) further direct the Certificate Registrar to issue a new
Certificate of a like denomination and Class, to the above
named assignee and deliver such Certificate to the following address:
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
Dated:
------------------------------------------------------------
Signature by or on behalf of assignor
------------------------------------------
Signature Guaranteed
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to _________________________________________________
for the account of _______________________________ account number __________,
or, if mailed by check, to _________________________________________. Applicable
statements should be mailed to
-----------------------------------------------------------.
This information is provided by ______________________, the assignee
named above, or ____________________________, as its agent.
X-0-00
XXXXXXX X-0
GROUP 1 MORTGAGE LOAN SCHEDULE
(Available upon request)
B-1
EXHIBIT B-2
GROUP 2 MORTGAGE LOAN SCHEDULE
(Available upon request)
B-2
EXHIBIT B-3
GROUP 3 MORTGAGE LOAN SCHEDULE
(Available upon request)
B-3
EXHIBIT B-4
GROUP 4 MORTGAGE LOAN SCHEDULE
(Available upon request)
B-4
EXHIBIT B-5
GROUP 5 MORTGAGE LOAN SCHEDULE
(Available upon request)
B-5
EXHIBIT B-6
GROUP 6 MORTGAGE LOAN SCHEDULE
(Available upon requests)
B-6
EXHIBIT C
REPRESENTATIONS AND WARRANTIES OF EMC
CONCERNING THE MORTGAGE LOANS
1. With respect to representations and warranties made by EMC and (a) the
Mortgage Loans other than the Xxxxxx Mortgage Loans and the First
Horizon Mortgage Loans, Section 7 of the Mortgage Loan Purchase
Agreement, (b) the Xxxxxx Mortgage Loans, the representations and
warranties made by EMC in the related Assignment, Assumption and
Recognition Agreements, and (c) the First Horizon Mortgage Loans, the
representations and warranties made by EMC in the related Assignment,
Assumption and Recognition Agreements.
2. With respect to Roslyn and the Xxxxxx Mortgage Loans, the
representations and warranties made by Roslyn in the Xxxxxx Purchase
Agreement and in the related Assignment, Assumption and Recognition
Agreements.
3. With respect to First Horizon and the First Horizon Mortgage Loans,
the representations and warranties made by First Horizon in the First
Horizon Purchase Agreement.
C-1
EXHIBIT D
REQUEST FOR RELEASE OF DOCUMENTS
Xxxxx Fargo Bank Minnesota,
National Association
0000 00xx Xxxxxx, X.X.
Xxxxxxxxxxx, Xxxxxxxxx 00000
Attn: Inventory Control
RE: Custodial Agreement dated as of January 31, 2001, among
Structured Asset Mortgage Investments Inc., Xxxxx Fargo Bank
Minnesota, National Association, Inc., as Master Servicer and
Custodian, and Bankers Trust Company of California, N.A., as
Trustee, regarding Bear Xxxxxxx ARM Trust, Mortgage Pass-Through
Certificates, Series 2001-1
----------------------------------------------------------------
In connection with the administration of the Mortgage Loans held by
you, as Custodian, pursuant to the above-captioned Custodial 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):
______0.Xxxxxxxx Paid in Full and proceeds have been deposited into the
Custodial Account ______2.Foreclosure ______3.Substitution ______4.Other
Liquidation ______5.Nonliquidation ______6.Other Reason:
D-1
By:
------------------------------
(authorized signer)
Issuer:
--------------------------------------------------------
Address:
-------------------------------------------------------
-------------------------------------------------------
-------------------------------------------------------
Date:
---------------------------------------
D-2
Custodian
Xxxxx Fargo Bank Minnesota, National Association
Please acknowledge the execution of the above request by your signature
and date below:
----------------------------------
Signature
Date:
-----------------------------
----------------------------------
Custodian
Date:
----------------------------
EXHIBIT E
FORM OF AFFIDAVIT PURSUANT TO SECTION 860E(e)(4)
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/she 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/she 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 ARM Trust,
Mortgage Pass-Through Certificates, Series 2001-1, 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 Structured Asset Mortgage Investments Inc. (upon
advice of counsel) to constitute a reasonable arrangement to ensure that the
Residual Certificates will not be owned directly or indirectly by a disqualified
organization; and (iv) it will not transfer such Residual Certificates unless
(a) it has received from the transferee an affidavit in substantially the same
form as this affidavit containing these same four representations and (b) as of
the time of the transfer, it does not have actual knowledge that such affidavit
is false.
3. That the Investor is one of the following: (i) a citizen or resident
of the United States, (ii) a corporation, partnership or other entity taxable as
such created or organized in or under the laws of the United States or any
political subdivision thereof or (iii) an estate that is subject to U.S. federal
income tax regardless of the source of its income, or (iv) a trust other than a
"foreign trust," as defined in Section [7701 (a)(3 1 )] of the Code.
E-1
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 __________,200__.
[NAME OF INVESTOR]
By:
------------------------------------------------
[Name of Officer]
[Title of Officer]
[Address of Investor for receipt of distributions]
Address of Investor for receipt of tax information:
E-2
Personally appeared before me the above-named [Name of Officer], known
or proved to me to be the same person who executed the foregoing instrument and
to be the [Title of Officer] of the Investor, and acknowledged to me that he
executed the same as his free act and deed and the free act and deed of the
Investor.
Subscribed and sworn before me this ___ day of _____________, 200__.
NOTARY PUBLIC
COUNTY OF
----------------------------------
STATE OF
----------------------------
My commission expires the ___ day of _____________, 200__.
E-3
EXHIBIT F-1
FORM OF INVESTMENT LETTER
[Date]
Bankers Trust Company of California, N.A.
0000 Xx. Xxxxxx Xxxxx
Xxxxx Xxx, Xxxxxxxxxx 00000
Structured Asset Mortgage Investments Inc.
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Re: Bear Xxxxxxx ARM Trust, Mortgage Pass-Through Certificates,
Series 2001-1 (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;
F-1
(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 Bankers
Trust Company of California, N.A. (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.
F-2
(ix) We understand that each of the Class [B-4], [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, WHICH WILL BE DEEMED
REPRESENTED BY AN OWNER OF A BOOK ENTRY CERTIFICATE OR GLOBAL CERTIFICATE, OR,
IN THE CASE OF THE TRANSFER OF AN INDIVIDUAL CERTIFICATE, 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: (I) WILL NOT RESULT IN ANY PROHIBITED TRANSACTION WHICH IS NOT COVERED
UNDER AN INDIVIDUAL OR CLASS PROHIBITED TRANSACTION EXEMPTION, INCLUDING, BUT
NOT LIMITED TO, PROHIBITED TRANSACTION EXEMPTION ("PTE") 84-14, XXX 00-00, XXX
00-0, XXX 95-60 OR PTE 96-23 AND (II) WILL NOT GIVE RISE TO ANY ADDITIONAL
FIDUCIARY OBLIGATIONS ON THE PART OF THE SELLER, THE MASTER SERVICER OR THE
TRUSTEE, WHICH WILL BE DEEMED REPRESENTED BY AN OWNER OF A BOOK-ENTRY
CERTIFICATE OR A GLOBAL CERTIFICATE AND WILL BE EVIDENCED BY A REPRESENTATION OR
AN OPINION OF COUNSEL TO SUCH EFFECT BY OR ON BEHALF OF AN INSTITUTIONAL
ACCREDITED INVESTOR."
"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.
F-3
Terms not otherwise defined herein shall have the meanings assigned to
them in the Pooling and Servicing Agreement dated as of January 1, 2001 among
Structured Asset Mortgage Investments Inc., Xxxxx Fargo Bank Minnesota, National
Association, as Master Servicer, and Bankers Trust Company of California, N.A.,
as Trustee (the "Pooling and Servicing Agreement").
If the Purchaser proposes that its Certificates be registered in the
name of a nominee on its behalf, the Purchaser has identified such nominee
below, and has caused such nominee to complete the Nominee Acknowledgment at the
end of this letter.
Name of Nominee (if any):
-------------------------------------------------------
F-4
IN WITNESS WHEREOF, this document has been executed by the undersigned
who is duly authorized to do so on behalf of the undersigned Eligible Purchaser
on the____ day of _______, 200__.
Very truly yours,
[PURCHASER]
By:
-----------------------------------------
(Authorized Officer)
[By:
----------------------------------------
Attorney-in-fact]
F-5
Nominee Acknowledgment
The undersigned hereby acknowledges and agrees that as to the
Certificates being registered in its name, the sole beneficial owner thereof is
and shall be the Purchaser identified above, for whom the undersigned is acting
as nominee.
[NAME OF NOMINEE]
By:
------------------------------------------
(Authorized Officer)
[By:
-----------------------------------------
Attorney-in-fact]
EXHIBIT F-2
FORM OF RULE 144A AND RELATED MATTERS CERTIFICATE
[Date]
Bankers Trust Company of California, N.A.
0000 Xx. Xxxxxx Xxxxx
Xxxxx Xxx, Xxxxxxxxxx 00000
Structured Asset Mortgage Investments Inc.
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Re Bear Xxxxxxx ARM Trust, Mortgage Pass-Through Certificates,
Series 2001, 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: , 19__ (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:_an insurance company as defined in Section 2(13) of the
Act(1); or
b. 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 l940, which are
neither registered nor required to be registered thereunder, shall be deemed to
be a purchase for the account of such insurance company
F-2-1
c. 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 1) _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
2. a business development company as defined in Section 202(a)(22) of
the Investment Advisers Act of 1940; or
3. 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
4. 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
5. an investment adviser registered under the Investment Advisers Act;
or
6. greater than $10 million, and the undersigned is a broker-dealer
registered with the SEC; or
7. 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
8. 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
9. 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, 2001 among Structured Asset Mortgage
Investments Inc., Xxxxx Fargo Bank Minnesota, National Association, as Master
Servicer, and Bankers Trust Company of California, N.A., as Trustee, pursuant to
Certificates were issued.
F-2-2
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") 84-14, XXX 00-00, XXX 00-0, XXX 00-00, XXX 00-00 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.
F-2-3
Name of Nominee (if any):
IN WITNESS WHEREOF, this document has been executed by the undersigned
who is duly authorized to do so on behalf of the undersigned Eligible Purchaser
on the___ day of ________, 200__.
Very truly yours,
[PURCHASER]
By:
-----------------------------------------
(Authorized Officer)
[By:
----------------------------------------
Attorney-in-fact]
F-2-4
Nominee Acknowledgment
The undersigned hereby acknowledges and agrees that as to the
Certificates being registered in its name, the sole beneficial owner thereof is
and shall be the Purchaser identified above, for whom the undersigned is acting
as nominee.
[NAME OF NOMINEE]
By:
------------------------------------------
(Authorized Officer)
[By:
-----------------------------------------
Attorney-in-fact]
F-2-5
EXHIBIT G
FORM OF CUSTODIAL AGREEMENT
G-1
EXHIBIT H
[RESERVED]
H-1
EXHIBIT I
[RESERVED]
I-1
EXHIBIT J
[RESERVED]
J-1
EXHIBIT K
LIST OF MORTGAGE LOANS FOR WHICH MORTGAGE NOTES ARE LOST
(Available upon request)
K-1
EXHIBIT L
[RESERVED]
L-1
EXHIBIT M
[RESERVED]
M-1
EXHIBIT N-1
ALLIANCE SERVICING AGREEMENT
(Available upon request)
N-1
EXHIBIT N-2
ATLANTIC MORTGAGE SERVICING AGREEMENT
(Available upon request)
N-2
EXHIBIT N-3
CENDANT SERVICING AGREEMENT
(Available upon request)
N-3
EXHIBIT N-4
CHARTER SOUTHWEST SERVICING AGREEMENT
(Available upon request)
N-4
EXHIBIT N-5
COUNTRYWIDE SERVICING AGREEMENT
(Available upon request)
N-5
EXHIBIT N-6
FIRST INDIANA SERVICING AGREEMENT
(Available upon request)
N-6
EXHIBIT N-7
FIRST UNION SERVICING AGREEMENT
(Available upon request)
N-7
EXHIBIT N-8
GMAC MORTGAGE SERVICING AGREEMENT
(Available upon request)
N-8
EXHIBIT N-9
HOMESIDE SERVICING AGREEMENT
(Available upon request)
N-9
EXHIBIT N-10
NATIONAL CITY SERVICING AGREEMENT
(Available upon request)
N-10
EXHIBIT N-11
PNC SERVICING AGREEMENT
(Available upon request)
N-11
EXHIBIT N-12
RFC SERVICING AGREEMENT
(Available upon request)
N-12
EXHIBIT N-13
XXXXX FARGO MORTGAGE SERVICING AGREEMENT
(Available upon request)
N-13
EXHIBIT N-14
WILMINGTON SERVICING AGREEMENT
(Available upon request)
N-14
EXHIBIT O
ASSIGNMENT, ASSUMPTION AND
RECOGNITION AGREEMENTS
(Available upon request)
O-1
SCHEDULE A
FIRST HORIZON MORTGAGE LOANS
(Available upon request)
SCHEDULE B
FORECLOSURE RESTRICTED LOANS
Loan No. Loan Group
-------- ----------
403232 1
727637 1
402935 1
404523 3
715008 3
620364 3
154352 5
SCHEDULE C
XXXXXX MORTGAGE LOANS
(Available upon request)
