BEAR XXXXXXX ASSET BACKED SECURITIES, INC.,
Depositor
EMC MORTGAGE CORPORATION,
Seller and Company
XXXXX FARGO BANK MINNESOTA, NATIONAL ASSOCIATION,
Master Servicer and Securities Administrator
and
JPMORGAN CHASE BANK,
Trustee
--------------------
POOLING AND SERVICING AGREEMENT
Dated as of September 1, 2003
----------------------------------------
BEAR XXXXXXX ASSET BACKED SECURITIES TRUST 2003-AC5
ASSET-BACKED CERTIFICATES, SERIES 2003-AC5
TABLE OF CONTENTS
Page
----
ARTICLE I
DEFINITIONS
Section 1.01 Defined Terms............................................................................. -4-
Section 1.02 Allocation of Certain Interest Shortfalls................................................. -40-
ARTICLE II
CONVEYANCE OF TRUST FUND
REPRESENTATIONS AND WARRANTIES
Section 2.01 Conveyance of Trust Fund.................................................................. -42-
Section 2.02 Acceptance of the Mortgage Loans.......................................................... -43-
Section 2.03 Representations, Warranties and Covenants of the Company and the Seller................... -45-
Section 2.04 Representations and Warranties of the Depositor........................................... -55-
Section 2.05 Delivery of Opinion of Counsel in Connection with Substitutions and Repurchases........... -56-
Section 2.06 Countersignature and Delivery of Certificates............................................. -57-
ARTICLE III
ADMINISTRATION AND SERVICING OF EMC MORTGAGE LOANS BY COMPANY
Section 3.01 The Company............................................................................... -58-
Section 3.02 Due-on-Sale Clauses; Assumption Agreements................................................ -59-
Section 3.03 Subservicers.............................................................................. -60-
Section 3.04 Documents, Records and Funds in Possession of Company To Be Held for Trustee.............. -60-
Section 3.05 Maintenance of Hazard Insurance........................................................... -61-
Section 3.06 Presentment of Claims and Collection of Proceeds.......................................... -62-
Section 3.07 Maintenance of the Primary Mortgage Insurance Policies.................................... -62-
Section 3.08 Fidelity Bond, Errors and Omissions Insurance............................................. -62-
Section 3.09 Realization Upon Defaulted Mortgage Loans; Determination of Excess Liquidation
Proceeds and Realized Losses; Repurchases of Certain Mortgage Loans....................... -63-
Section 3.10 Servicing Compensation.................................................................... -65-
Section 3.11 REO Property.............................................................................. -66-
Section 3.12 Liquidation Reports....................................................................... -66-
Section 3.13 Annual Certificate as to Compliance....................................................... -67-
Section 3.14 Annual Independent Certified Public Accountants' Servicing Report......................... -67-
i
Section 3.15 Books and Records......................................................................... -68-
ARTICLE IV
ADMINISTRATION AND MASTER SERVICING OF MORTGAGE LOANS BY MASTER
SERVICER
Section 4.01 Master Servicer........................................................................... -69-
Section 4.02 REMIC-Related Covenants................................................................... -70-
Section 4.03 Monitoring of Company and Servicer........................................................ -70-
Section 4.04 Fidelity Bond............................................................................. -71-
Section 4.05 Power to Act; Procedures.................................................................. -71-
Section 4.06 Due-on-Sale Clauses; Assumption Agreements................................................ -72-
Section 4.07 Release of Mortgage Files................................................................. -72-
Section 4.08 Documents, Records and Funds in Possession of Master Servicer, Company and Servicer
To Be Held for Trustee.................................................................... -73-
Section 4.09 Standard Hazard Insurance and Flood Insurance Policies.................................... -74-
Section 4.10 Presentment of Claims and Collection of Proceeds.......................................... -75-
Section 4.11 Maintenance of the Primary Mortgage Insurance Policies.................................... -75-
Section 4.12 Trustee to Retain Possession of Certain Insurance Policies and Documents.................. -75-
Section 4.13 Realization Upon Defaulted Mortgage Loans................................................. -76-
Section 4.14 Compensation for the Master Servicer...................................................... -76-
Section 4.15 REO Property.............................................................................. -76-
Section 4.16 Annual Officer's Certificate as to Compliance............................................. -77-
Section 4.17 Annual Independent Accountant's Servicing Report.......................................... -77-
Section 4.18 Reports Filed with Securities and Exchange Commission..................................... -78-
Section 4.19 EMC....................................................................................... -79-
Section 4.20 UCC....................................................................................... -79-
Section 4.21 Optional Purchase of Certain Mortgage Loans............................................... -79-
ARTICLE V
ACCOUNTS
Section 5.01 Collection of Mortgage Loan Payments; Protected Account................................... -80-
Section 5.02 Permitted Withdrawals From the Protected Account.......................................... -81-
Section 5.02A Reports to Master Servicer................................................................ -83-
Section 5.03 Collection of Taxes; Assessments and Similar Items; Escrow Accounts....................... -84-
Section 5.04 Servicer Protected Accounts............................................................... -84-
Section 5.05 Master Servicer Collection Account........................................................ -85-
Section 5.06 Permitted Withdrawals and Transfers from the Master Servicer Collection Account........... -87-
Section 5.07 Distribution Account...................................................................... -87-
Section 5.08 Permitted Withdrawals and Transfers from the Distribution Account......................... -88-
ii
ARTICLE VI
DISTRIBUTIONS AND ADVANCES
Section 6.01 Advances.................................................................................. -90-
Section 6.02 Compensating Interest Payments............................................................ -91-
Section 6.03 REMIC Distributions....................................................................... -91-
Section 6.04 Distributions............................................................................. -91-
Section 6.04A Allocation of Realized Losses............................................................. -94-
Section 6.05 Monthly Statements to Certificateholders.................................................. -95-
Section 6.06 REMIC Designations and REMIC I Allocations............................................... -98-
Section 6.07 REMIC II Allocations...................................................................... -99-
Section 6.08 Net WAC Reserve Fund...................................................................... -100-
Section 6.09 Class P Certificate Account............................................................... -100-
ARTICLE VII
THE CERTIFICATES
Section 7.01 The Certificates.......................................................................... -102-
Section 7.02 Certificate Register; Registration of Transfer and Exchange of Certificates............... -102-
Section 7.03 Mutilated, Destroyed, Lost or Stolen Certificates......................................... -106-
Section 7.04 Persons Deemed Owners..................................................................... -107-
Section 7.05 Access to List of Certificateholders' Names and Addresses................................. -107-
Section 7.06 Book-Entry Certificates................................................................... -107-
Section 7.07 Notices to Depository..................................................................... -108-
Section 7.08 Definitive Certificates................................................................... -108-
Section 7.09 Maintenance of Office or Agency........................................................... -109-
ARTICLE VIII
THE COMPANY AND THE MASTER SERVICER
Section 8.01 Liabilities of the Depositor, the Company and the Master Servicer......................... -110-
Section 8.02 Merger or Consolidation of the Depositor, the Company or the Master Servicer.............. -110-
Section 8.03 Indemnification of the Trustee, the Master Servicer and the Securities Administrator...... -110-
Section 8.04 Limitations on Liability of the Depositor, the Company, the Master Servicer and Others.... -111-
iii
Section 8.05 Master Servicer and Company Not to Resign................................................. -112-
Section 8.06 Successor Master Servicer................................................................. -113-
Section 8.07 Sale and Assignment of Master Servicing................................................... -113-
ARTICLE IX
DEFAULT; TERMINATION OF MASTER SERVICER;
TERMINATION OF COMPANY
Section 9.01 Events of Default......................................................................... -115-
Section 9.02 Trustee to Act; Appointment of Successor.................................................. -116-
Section 9.03 Notification to Certificateholders........................................................ -118-
Section 9.04 Waiver of Defaults........................................................................ -118-
Section 9.05 Company Default........................................................................... -118-
Section 9.06 Waiver of Company Defaults................................................................ -120-
ARTICLE X
CONCERNING THE TRUSTEE AND THE SECURITIES ADMINISTRATOR
Section 10.01 Duties of Trustee and Securities Administrator............................................ -121-
Section 10.02 Certain Matters Affecting the Trustee and the Securities Administrator.................... -123-
Section 10.03 Trustee and Securities Administrator Not Liable for Certificates or Mortgage Loans........ -124-
Section 10.04 Trustee and Securities Administrator May Own Certificates................................. -125-
Section 10.05 Trustee's and Securities Administrator's Fees and Expenses................................ -125-
Section 10.06 Eligibility Requirements for Trustee and Securities Administrator......................... -125-
Section 10.07 Insurance................................................................................. -126-
Section 10.08 Resignation and Removal of Trustee and Securities Administrator........................... -126-
Section 10.09 Successor Trustee or Securities Administrator............................................. -127-
Section 10.10 Merger or Consolidation of Trustee or Securities Administrator............................ -128-
Section 10.11 Appointment of Co-Trustee or Separate Trustee............................................. -128-
Section 10.12 Tax Matters............................................................................... -129-
ARTICLE XI
TERMINATION
Section 11.01 Termination upon Liquidation or Repurchase of all Mortgage Loans.......................... -133-
Section 11.02 Final Distribution on the Certificates.................................................... -133-
Section 11.03 Additional Termination Requirements....................................................... -135-
iv
ARTICLE XII
MISCELLANEOUS PROVISIONS
Section 12.01 Amendment................................................................................. -136-
Section 12.02 Recordation of Agreement; Counterparts.................................................... -137-
Section 12.03 Governing Law............................................................................. -137-
Section 12.04 Intention of Parties...................................................................... -138-
Section 12.05 Notices................................................................................... -138-
Section 12.06 Severability of Provisions................................................................ -139-
Section 12.07 Assignment................................................................................ -139-
Section 12.08 Limitation on Rights of Certificateholders................................................ -139-
Section 12.09 Inspection and Audit Rights............................................................... -140-
Section 12.10 Certificates Nonassessable and Fully Paid................................................. -140-
v
Exhibits
Exhibit A-1 Form of Class A-[1][2][3][5] Certificates
Exhibit A-2 Form of Class A-4 Certificates
Exhibit A-3 Form of Class M-[1][2] Certificates
Exhibit A-4 Form of Class B Certificates
Exhibit A-5 Form of Class C Certificates
Exhibit A-6 Form of Class P Certificates
Exhibit A-7 Form of Class R Certificates
Exhibit B Mortgage Loan Schedule
Exhibit C-1 Form of Initial Certification
Exhibit C-2 Form of Interim Certification
Exhibit C-3 Form of Final Certification
Exhibit D Form of Transfer Affidavit
Exhibit E Form of Transferor Certificate
Exhibit F Form of Investment Letter (Non-Rule 144A)
Exhibit G Form of Rule 144A Investment Letter
Exhibit H Form of Request for Release
Exhibit I DTC Letter of Representations
Exhibit J Schedule of Mortgage Loans with Lost Notes
Exhibit K Form of Custodial Agreement
Exhibit L Form of Company Certification
vi
POOLING AND SERVICING AGREEMENT, dated as of September 1, 2003, among BEAR
XXXXXXX ASSET BACKED SECURITIES, INC., a Delaware corporation, as depositor (the
"Depositor"), EMC MORTGAGE CORPORATION, a Delaware corporation, as seller (in
such capacity, the "Seller") and as company (in such capacity, the "Company"),
XXXXX FARGO BANK MINNESOTA, NATIONAL ASSOCIATION, a national banking
association, as master servicer (in such capacity, the "Master Servicer") and as
securities administrator (in such capacity, the "Securities Administrator") and
JPMORGAN CHASE BANK, a New York banking corporation, not in its individual
capacity, but solely as trustee (the "Trustee").
PRELIMINARY STATEMENT
The Depositor is the owner of the Trust Fund that is hereby conveyed to
the Trustee in return for the Certificates.
REMIC I
As provided herein, the Trustee will make an election to treat the
segregated pool of assets consisting of the Mortgage Loans and certain other
related assets subject to this Agreement as a real estate mortgage investment
conduit (a "REMIC") for federal income tax purposes, and such segregated pool of
assets will be designated as "REMIC I." The Class R-1 Certificates will
represent the sole class of "residual interests" in REMIC I for purposes of the
REMIC Provisions (as defined herein) under federal income tax law. The following
table irrevocably sets forth the designation, the Uncertificated REMIC I
Pass-Through Rate, the initial Uncertificated Principal Balance, and solely for
purposes of satisfying Treasury regulation Section 1.860G-1(a)(4)(iii), the
"latest possible maturity date" for each of the REMIC I Regular Interests. None
of the REMIC I Regular Interests will be certificated.
Uncertificated
Initial Uncertificated REMIC I Pass- Assumed Final
Designation Principal Balance Through Rate Maturity Date(1)
----------- ---------------------- -------------- ----------------
LTI-AA $ 577,433,769.55 Variable (2) October 25, 2033
LTI-A1 $ 1,400,000.00 Variable (2) October 25, 2033
LTI-A2 $ 1,682,654.17 Variable (2) October 25, 2033
LTI-A3 $ 425,695.83 Variable (2) October 25, 2033
LTI-A5 $ 1,500,000.00 Variable (2) October 25, 2033
LTI-M1 $ 397,720.00 Variable (2) October 25, 2033
LTI-M2 $ 353,530.00 Variable (2) October 25, 2033
LTI-B $ 132,581.32 Variable (2) October 25, 2033
LTI-ZZ $ 5,892,181.32 Variable (2) October 25, 2033
LTI-P $ 100.00 Fixed (2) October 25, 2033
(1) Solely for purposes of Section 1.860G-1(a)(4)(iii) of the Treasury
regulations, the Distribution Date in the month following the maturity
date for the Mortgage Loan with the latest maturity date has been
designated as the "latest possible maturity date" for each Class of
Certificates that represents one or more of the "regular interests" in
REMIC I.
(2) Calculated in accordance with the definition of "Uncertificated REMIC I
Pass-Through Rate" herein.
-1-
REMIC II
As provided herein, the Trustee will make an election to treat the
segregated pool of assets consisting of the REMIC I Regular Interests as a REMIC
for federal income tax purposes, and such segregated pool of assets will be
designated as "REMIC II". The Class R-2 Certificates will represent the sole
class of "residual interests" in REMIC II for purposes of the REMIC Provisions.
The following table irrevocably sets forth the designation, the Uncertificated
REMIC II Pass-Through Rate, the initial Uncertificated Principal Balance, and
solely for purposes of satisfying Treasury regulation Section
1.860G-1(a)(4)(iii), the "latest possible maturity date" for each of the REMIC
II Regular Interests. None of the REMIC II Regular Interests will be
certificated.
Uncertificated
Initial Uncertificated REMIC I Pass- Assumed Final
Designation Principal Balance Through Rate Maturity Date(1)
----------- ---------------------- -------------- ----------------
LTII-A1 $ 140,000,000.00 Xxxxxxxx(0) Xxxxxxx 00, 0000
XXXX-X0 $ 168,265,417.00 Xxxxxxxx(0) Xxxxxxx 00, 0000
XXXX-X0 $ 42,569,583.00 Xxxxxxxx(0) Xxxxxxx 00, 0000
XXXX-X0 $ 150,000,000.00 Xxxxxxxx(0) Xxxxxxx 00, 0000
XXXX-X0 $ 39,772,000.00 Xxxxxxxx(0) Xxxxxxx 00, 0000
XXXX-X0 $ 35,353,000.00 Xxxxxxxx(0) Xxxxxxx 00, 0000
XXXX-X $ 13,258,132.00 Xxxxxxxx(0) Xxxxxxx 00, 0000
XXXX-X $ 0.19 Variable(3) October 25, 2033
LTII-P $ 100.00 Variable(4) October 25, 2033
----------
(1) Solely for purposes of Section 1.860G-1(a)(4)(iii) of the Treasury
regulations, the Distribution Date in the month following the maturity
date for the Mortgage Loan with the latest maturity date has been
designated as the "latest possible maturity date" for each Class of
Certificates that represents one or more of the "regular interests" in
REMIC II.
(2) Calculated in accordance with the definition of "Uncertificated REMIC II
Pass-Through Rate" herein.
(3) REMIC II Regular Interest LTII-C will not accrue interest on its
Uncertificated Principal Balance, but will accrue interest at the related
Uncertificated REMIC II Pass-Through Rate on its Uncertificated Notional
Balance which shall equal the aggregate of the Uncertificated Principal
Balances of the REMIC I Regular Interests other than REMIC I Regular
Interest LTI-P.
(4) REMIC II Regular Interest LTII-P is not entitled to distributions in
respect of interest.
REMIC III
As provided herein, the Trustee will make an election to treat the
segregated pool of assets consisting of the REMIC II Regular Interests as a
REMIC for federal income tax purposes, and such segregated pool of assets will
be designated as "REMIC III". The Class R-3 Certificates will represent the sole
class of "residual interests" in REMIC III for purposes of the REMIC Provisions.
The following table irrevocably sets forth the Class designation,
Pass-Through Rate and Initial Certificate Principal Balance for each Class of
Certificates that represents one or more of the "regular interests" in REMIC III
created hereunder.
-2-
Initial Certificate Assumed Final
Class Designation Principal Balance Pass-Through Rate Maturity Date(1)
----------------- ------------------- --------------------------- ----------------
Class A-1 $140,000,000 Class A-1 Pass-Through Rate October 25, 2033
Class A-2 $168,265,417 Class A-2 Pass-Through Rate October 25, 2033
Class A-3(2) $ 42,569,583 Class A-3 Pass-Through Rate October 25, 2033
Class A-4(3) N/A(4) Class A-4 Pass-Through Rate October 25, 2033
Class A-5 $150,000,000 Class A-5 Pass-Through Rate October 25, 2033
Class M-1 $ 39,772,000 Class M-1 Pass Through Rate October 25, 2033
Class M-2 $ 35,353,000 Class M-2 Pass-Through Rate October 25, 2033
Class B $ 13,258,132 Class B Pass Through Rate October 25, 2033
Class C $ 0.19 N/A(5) October 25, 2033
Class P $ 100 N/A(6) October 25, 2033
----------
(1) Solely for purposes of Section 1.860G-1(a)(4)(iii) of the Treasury
regulations, the Distribution Date in the month following the maturity
date for the Mortgage Loan with the latest maturity date has been
designated as the "latest possible maturity date" for each Class of
Certificates that represents one or more of the "regular interests" in
REMIC III.
(2) The Class A-3 Certificates represent ownership of REMIC III Regular
Interest A-3, a regular interest in REMIC III, as well as the obligation
to make payments in respect of the Class A-3/A-4 Net WAC Pass-Through
Amount to the Net WAC Reserve Account for distribution in respect of the
Class A-4 Certificates, which obligation shall not be an interest in any
REMIC but a contractual obligation of the holders of the Class A-3
Certificates.
(3) The Class A-4 Certificates represent ownership of REMIC III Regular
Interest A-4, a regular interest in REMIC III, as well as the right to
receive payments from the Net WAC Reserve Account in respect of Class
A-3/A-4 Net WAC Pass-Through Amount, which payments shall not be in
respect of an interest in any REMIC.
(4) The Class A-4 Certificates will accrue interest at the Class A-4
Pass-Through Rate on the Certificate Notional Balance of the Class A-4
Certificates calculated in accordance with the definition of "Certificate
Notional Balance" herein. The Class A-4 Certificates will not be entitled
to distributions in respect of principal.
(5) The Class C Certificates will not accrue interest on their Certificate
Principal Balance, but will be entitled to 100% of amounts distributed on
REMIC II Regular Interest LTII-C.
(6) The Class P Certificates are not entitled to distributions in respect of
interest.
The Trust Fund shall be named, and may be referred to as, the "Bear
Xxxxxxx Asset Backed Securities Trust 2003-AC5." The Certificates issued
hereunder may be referred to as "Asset-Backed Certificates Series 2003-AC5"
(including for purposes of any endorsement or assignment of a Mortgage Note or
Mortgage).
In consideration of the mutual agreements herein contained, the Depositor,
the Master Servicer, the Securities Administrator, the Seller, the Company and
the Trustee agree as follows:
-3-
ARTICLE I
DEFINITIONS
Section 1.01 Defined Terms.
In addition to those terms defined in Section 1.02, whenever used in this
Agreement, the following words and phrases, unless the context otherwise
requires, shall have the following meanings:
Accepted Master Servicing Practices: With respect to any Mortgage Loan, as
applicable, either (a) those customary mortgage servicing practices of prudent
mortgage servicing institutions that master service mortgage loans of the same
type and quality as such Mortgage Loan in the jurisdiction where the related
Mortgaged Property is located, to the extent applicable to the Trustee or the
Master Servicer (except in its capacity as successor to the Company or the
related Servicer), or (b) as provided in Section 3.01 hereof or as provided in
the related Servicing Agreement, but, in each case, in no event below the
standard set forth in clause (a).
Accepted Servicing Practices: With respect to each EMC Mortgage Loan,
those mortgage servicing practices (including collection procedures) that are in
accordance with all applicable statutes, regulations and prudent mortgage
banking practices for similar mortgage loans.
Account: The Distribution Account, the Master Servicer Collection Account,
the Net WAC Reserve Fund and any Protected Account.
Accrual Period: With respect to the Class X-0, Xxxxx X-0, Class A-5, Class
M-1 and Class C Certificates and any Distribution Date, the calendar month
immediately preceding such Distribution Date. With respect to the Class X-0,
Xxxxx X-0, Class M-2 and Class B Certificates and any Distribution Date, the
period from and including the 25th day of the calendar month preceding the
calendar month in which the Distribution Date occurs (or with respect to the
first Accrual Period, the Closing Date) to and including the 24th day of the
calendar month in which such Distribution Date occurs. All calculations of
interest on the Certificates (other than the Class M-2, Class B, Class P and
Class R Certificates) will be made on the basis of a 360-day year consisting of
twelve 30-day months. All calculations of interest on the Class M-2 Certificates
and Class B Certificates will be made on the basis of the actual number of days
elapsed in the related Accrual Period.
Advance: An advance of delinquent payments of principal or interest in
respect of a Mortgage Loan required to be made by the Company as provided in
Section 6.01(a) hereof, by the related Servicer in accordance with the related
Servicing Agreement or by the Master Servicer as provided in Section 6.01(b)
hereof.
Agreement: This Pooling and Servicing Agreement and any and all amendments
or supplements hereto made in accordance with the terms herein.
Amount Held for Future Distribution: As to any Distribution Date, the
aggregate amount held in the Company's or the related Sevicer's Protected
Account at the close of business on the
-4-
immediately preceding Determination Date on account of (i) all Scheduled
Payments or portions thereof received in respect of the Mortgage Loans due after
the related Due Period and (ii) Principal Prepayments, Liquidation Proceeds and
Insurance Proceeds received in respect of such Mortgage Loans after the last day
of the related Prepayment Period.
Applied Realized Loss Amount: With respect to any Distribution Date and a
Class of Subordinated Certificates the sum of the Realized Losses with respect
to the Mortgage Loans which have been applied in reduction of the Certificate
Principal Balance of that Class of Certificates pursuant to Section 6.04A of
this Agreement, which have not previously been reimbursed.
Appraised Value: With respect to any Mortgage Loan originated in
connection with a refinancing, the appraised value of the Mortgaged Property
based upon the appraisal made at the time of such refinancing or, with respect
to any other Mortgage Loan, the lesser of (x) the appraised value of the
Mortgaged Property based upon the appraisal made by a fee appraiser at the time
of the origination of the related Mortgage Loan, and (y) the sales price of the
Mortgaged Property at the time of such origination.
Assignment Agreement: Shall mean, collectively, the Union Federal
Assignment Agreement, the HSBC Assignment Agreement and the CitiMortgage
Assignment Agreement.
Available Funds: The sum of Interest Funds and Principal Funds with
respect to the Mortgage Loans.
Bankruptcy Code: Title 11 of the United States Code.
Basic Principal Distribution Amount: Shall mean, with respect to any
Distribution Date, the lesser of (a) the excess of (i) the Available Funds for
such Distribution Date over (ii) the aggregate Monthly Interest Distributable
Amount for the Certificates (other than the Class P, Class C and Class R
Certificates) for such Distribution Date and (b) the excess of (i) the Principal
Remittance Amount for such Distribution Date over (ii) the Overcollateralization
Release Amount, if any, for such Distribution Date.
Book-Entry Certificates: Any of the Certificates that shall be registered
in the name of the Depository or its nominee, the ownership of which is
reflected on the books of the Depository or on the books of a person maintaining
an account with the Depository (directly, as a "Depository Participant", or
indirectly, as an indirect participant in accordance with the rules of the
Depository and as described in Section 7.06). As of the Closing Date, each Class
of Regular Certificates constitutes a Class of Book-Entry Certificates.
Business Day: Any day other than (i) a Saturday or a Sunday, or (ii) a day
on which banking institutions in The City of New York, New York, Minneapolis,
Minnesota, Columbia, Maryland or the city in which the Corporate Trust Office of
the Trustee or the principal office of the Company or the Master Servicer is
located are authorized or obligated by law or executive order to be closed.
Certificate: Any one of the certificates of any Class executed and
authenticated by the Trustee in substantially the forms attached hereto as
Exhibits A-1 through A-7.
-5-
Certificate Notional Balance: As to any Class A-4 Certificate and any
Distribution Date, the Certificate Principal Balance of the Class A-3
Certificates; for federal income tax purposes, however, the equivalent of the
foregoing, expressed as the Uncertificated Principal Balance of REMIC II Regular
Interest LTII-A3. As to the Class C Certificates and any Distribution Date, an
amount equal to the Stated Principal Balance of the Mortgage Loans; for federal
income tax purposes, however, the Class C Certificates will not have a
Certificate Notional Balance, but the Class C Distribution Amount for any
Distribution Date will be an amount equal to 100% of amounts deemed distributed
with respect to REMIC II Regular Interest LTII-C for such Distribution Date.
Certificate Owner: With respect to a Book-Entry Certificate, the Person
that is the beneficial owner of such Book-Entry Certificate.
Certificate Principal Balance: As to any Certificate (other than any Class
A-4, Class C or Class R Certificate) and as of any Distribution Date, the
Initial Certificate Principal Balance of such Certificate less the sum of (i)
all amounts distributed with respect to such Certificate in reduction of the
Certificate Principal Balance thereof on previous Distribution Dates pursuant to
Section 6.04, and (ii) in the case of any Subordinated Certificate, any Applied
Realized Loss Amounts allocated to such Certificate on previous Distribution
Dates.
Certificate Register: The register maintained pursuant to Section 7.02
hereof.
Certificateholder or Holder: The person in whose name a Certificate is
registered in the Certificate Register (initially, Cede & Co., as nominee for
the Depository, in the case of any Book- Entry Certificates).
CitiMortgage: CitiMortgage, Inc., and any successor thereto.
CitiMortgage Assignment Agreement: The Assignment, Assumption and
Recognition Agreement, dated as of September 30, 2003, by and among and the
Seller, CitiMortgage and the Trustee evidencing the assignment of the
CitiMortgage Servicing Agreement to the Trust.
CitiMortgage Loans: Those Mortgage Loans subject to this Agreement which
were purchased by the Seller from CitiMortgage pursuant to the CitiMortgage
Servicing Agreement.
CitiMortgage Servicing Agreement: Shall mean collectively, the Mortgage
Loan Purchase and Servicing Agreements, dated as of August 1, 2003, by and among
the Seller and CitiMortgage, as modified by the CitiMortgage Assignment
Agreement..
Class: All Certificates bearing the same Class designation as set forth in
Section 7.01 hereof.
Class A-1 Certificate: Any Certificate designated as a "Class A-1
Certificate" on the face thereof, in the form of Exhibit A-1 hereto,
representing the right to the Percentage Interest of distributions provided for
the Class A-1 Certificates as set forth herein and evidencing a Regular Interest
in REMIC III.
-6-
Class A-1 Pass-Through Rate: Shall mean (i) on any Distribution Date which
occurs on or prior to the Optional Termination Date, 5.250% per annum and (ii)
for each Distribution Date thereafter, 5.750% per annum, in each case subject to
a cap equal to the related Net WAC Rate Cap for such Distribution Date; for
federal income tax purposes, however, the equivalent of the foregoing, stated as
the weighted average of the Uncertificated REMIC II Pass-Through Rate for REMIC
II Regular Interest LTII-A1, weighted on the basis of the Uncertificated
Prinicpal Balance thereof immediately prior to such Distribution Date.
Class A-2 Certificate: Any Certificate designated as a "Class A-2
Certificate" on the face thereof, in the form of Exhibit A-1 hereto,
representing the right to the Percentage Interest of distributions provided for
the Class A-2 Certificates as set forth herein and evidencing a Regular Interest
in REMIC III.
Class A-2 Pass-Through Rate: Shall mean (i) on any Distribution Date which
occurs on or prior to the Optional Termination Date, 5.000% per annum, subject
to a cap equal to the product of (x) the related Net WAC Rate Cap for such
Distribution Date and (y) 95.2380952381% and (ii) for each Distribution Date
thereafter, 5.500% per annum, subject to a cap equal to the product of (x) the
related Net WAC Rate Cap for such Distribution Date and (y) 95.6521739130%; for
federal income tax purposes, however, the equivalent of the foregoing, stated as
the weighted average of the Uncertificated REMIC II Pass-Through Rate for REMIC
II Regular Interest LTII-A2, weighted on the basis of the Uncertificated
Prinicpal Balance thereof immediately prior to such Distribution Date.
Class A-3 Certificate: Any Certificate designated as a "Class A-3
Certificate" on the face thereof, in the form of Exhibit A-1 hereto,
representing the right to the Percentage Interest of distributions provided for
the Class A-3 Certificates as set forth herein and evidencing a Regular Interest
in REMIC III.
Class A-3 Pass-Through Rate: Shall mean (i) on any Distribution Date which
occurs on or prior to the Optional Termination Date, One-Month LIBOR plus 0.60%
per annum and (ii) for each Distribution Date thereafter, the One-Month LIBOR
plus 1.10% per annum, in each case with a maximum rate of 8.00% per annum on or
prior to the Optional Termination Date and 8.50% per annum after the Optional
Termination Date and a minimum rate of 0.60%, in each case subject to a cap
equal to the related Net WAC Rate Cap for such Distribution Date.
Class A-3/A-4 Net WAC Pass-Through Amount: With respect to any
Distribution Date, the excess, if any, of (A) the amount of interest the Class
A-3 Certificates would have been entitled to receive if the related Net WAC Rate
Cap did not apply, over (B) the amount of interest the Class A-3 Certificates
would been entitled to receive if reductions under the related Net WAC Rate Cap
were allocated as provided in the definition thereof; provided, however, that if
One-Month LIBOR plus the applicable margin for the Class A-3 Certificates for
such Distribution Date is equal to or greater than the rate of interest for the
Class A-3 Certificates determined as if reductions under the Net WAC Rate Cap
allocable to the Class A-3 Certificates and Class A-4 Certificates were
allocated to the Class A-3 Certificates, the amount determined under clause (A)
would be determined as if reductions under the Net WAC Rate Cap allocable to the
Class A-3 Certificates and Class A-4 Certificates were allocated to the Class
A-3 Certificates.
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Class A-4 Certificate: Any Certificate designated as a "Class A-4
Certificate" on the face thereof, in the form of Exhibit A-2 hereto,
representing the right to the Percentage Interest of distributions provided for
the Class A-4 Certificates as set forth herein and evidencing a Regular Interest
in REMIC III.
Class A-4 Pass-Through Rate: On any Distribution Date, shall mean 7.40%
per annum minus One-Month LIBOR, with a maximum rate of 7.40% and a minimum rate
of 0.00% and subject to a cap equal to the related Net WAC Rate Cap for such
Distribution Date.
Class A-5 Certificate: Any Certificate designated as a "Class A-5
Certificate" on the face thereof, in the form of Exhibit A-1 hereto,
representing the right to the Percentage Interest of distributions provided for
the Class A-5 Certificates as set forth herein and evidencing a Regular Interest
in REMIC III.
Class A-5 Pass-Through Rate: Shall mean (i) on any Distribution Date which
occurs on or prior to the Optional Termination Date, 4.750% per annum, subject
to a cap equal to the product of (x) the related Net WAC Rate Cap for such
Distribution Date and (y) 90.4761904762% and (ii) for each Distribution Date
thereafter, 5.250% per annum, subject to a cap equal to the product of (x) the
related Net WAC Rate Cap for such Distribution Date and (y) 91.3043478261%; for
federal income tax purposes, however, the equivalent of the foregoing, stated as
the weighted average of the Uncertificated REMIC II Pass-Through Rate for REMIC
II Regular Interest LTII-A5, weighted on the basis of the Uncertificated
Prinicpal Balance thereof immediately prior to such Distribution Date.
Class B Certificate: Any Certificate designated as a "Class B Certificate"
on the face thereof, in the form of Exhibit A-4 hereto, representing the right
to the Percentage Interest of distributions provided for the Class B
Certificates as set forth herein and evidencing a Regular Interest in REMIC III.
Class B Pass-Through Rate: Shall mean (i) on any Distribution Date which
occurs on or prior to the Optional Termination Date, One-Month LIBOR plus 3.25%
per annum and (ii) for each Distribution Date thereafter, the One-Month LIBOR
plus 5.00% per annum, in each case subject to a cap equal to the related Net WAC
Rate Cap for such Distribution Date ; for federal income tax purposes, however,
the equivalent of the foregoing, stated as the weighted average of the
Uncertificated REMIC II Pass-Through Rate for REMIC II Regular Interest LTII-B,
weighted on the basis of the Uncertificated Prinicpal Balance thereof
immediately prior to such Distribution Date.
Class C Certificate: Any Certificate designated as a "Class C Certificate"
on the face thereof, in the form of Exhibit A-6 hereto, representing the right
to its Percentage Interest of distributions provided for the Class C
Certificates herein and evidencing a Regular Interest in REMIC III.
Class C Distribution Amount: With respect to any Distribution Date, the
sum of (i) the Monthly Interest Distributable Amount for the Class C
Certificates for such Distribution Date and (ii) any Overcollateralization
Release Amount for such Distribution Date; provided, however that on and after
the Distribution Date on which the Certificate Principal Balance of the
Certificates has been reduced to zero, the Class C Distribution Amount shall
include the Overcollateralized Amount.
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Class C Pass-Through Rate: The Class C Certificates will not have a
Pass-Through Rate, but the Class C Distribution Amount for the Class C
Certificates for any Distribution Date shall be an amount equal to 100% of the
amounts distributed in respect of REMIC II Regular Interest LTII-C on such
Distribution Date.
Class M-1 Certificate: Any Certificate designated as a "Class M-1
Certificate" on the face thereof, in the form of Exhibit A-3 hereto,
representing the right to the Percentage Interest of distributions provided for
the Class M-1 Certificates as set forth herein and evidencing a Regular Interest
in REMIC III.
Class M-1 Pass-Through Rate: Shall mean (i) on any Distribution Date which
occurs on or prior to the Optional Termination Date, 5.250% per annum and (ii)
for each Distribution Date thereafter, 5.750% per annum, in each case subject to
a cap equal to the related Net WAC Rate Cap for such Distribution Date; for
federal income tax purposes, however, the equivalent of the foregoing, stated as
the weighted average of the Uncertificated REMIC II Pass-Through Rate for REMIC
II Regular Interest LTII-M1, weighted on the basis of the Uncertificated
Prinicpal Balance thereof immediately prior to such Distribution Date.
Class M-2 Certificate: Any Certificate designated as a "Class M-2
Certificate" on the face thereof, in the form of Exhibit A-3 hereto,
representing the right to the Percentage Interest of distributions provided for
the Class M-2 Certificates as set forth herein and evidencing a Regular Interest
in REMIC III.
Class M-2 Pass-Through Rate: Shall mean (i) on any Distribution Date which
occurs on or prior to the Optional Termination Date, One-Month LIBOR plus 1.70%
per annum and (ii) for each Distribution Date thereafter, One-Month LIBOR plus
2.70% per annum, in each case subject to a cap equal to the related Net WAC Rate
Cap for such Distribution Date; for federal income tax purposes, however, the
equivalent of the foregoing, stated as the weighted average of the
Uncertificated REMIC II Pass-Through Rate for REMIC II Regular Interest LTII-M2,
weighted on the basis of the Uncertificated Prinicpal Balance thereof
immediately prior to such Distribution Date.
Class P Certificate: Any Certificate designated as a "Class P Certificate"
on the face thereof, in the form of Exhibit A-6 hereto, representing the right
to its Percentage Interest of distributions provided for the Class P
Certificates as set forth herein and evidencing a Regular Interest in REMIC III.
Class P Certificate Account: The account established and maintained by the
Trustee pursuant to Section 6.09 hereof.
Class R-1 Certificate: Any Certificate designated a "Class R-1
Certificate" on the face thereof, in substantially the form set forth in Exhibit
A-7 hereto, evidencing the Residual Interest in REMIC I and representing the
right to the Percentage Interest of distributions provided for the Class R-1
Certificates as set forth herein.
Class R-2 Certificate: Any Certificate designated a "Class R-2
Certificate" on the face thereof, in substantially the form set forth in Exhibit
A-7 hereto, evidencing the Residual Interest in REMIC
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II and representing the right to the Percentage Interest of distributions
provided for the Class R-2 Certificates as set forth herein.
Class R-3 Certificate: Any Certificate designated a "Class R-3
Certificate" on the face thereof, in substantially the form set forth in Exhibit
A-7 hereto, evidencing the Residual Interest in REMIC III and representing the
right to the Percentage Interest of distributions provided for the Class R-3
Certificates as set forth herein.
Closing Date: September 30, 2003.
Code: The Internal Revenue Code of 1986, including any successor or
amendatory provisions.
Company: EMC.
Compensating Interest: An amount, not to exceed the Servicing Fee, to be
deposited in the Master Servicer Collection Account by the Company or the
related Servicer to the payment of a Prepayment Interest Shortfall on a Mortgage
Loan subject to this Agreement; provided that in the event the Company or the
related Servicer fails to make such payment, the Master Servicer shall be
obligated to do so pursuant to Section 6.02(c) hereof.
Corporate Trust Office: The designated office of the Trustee where at any
particular time its corporate trust business with respect to this Agreement
shall be administered, which office at the date of the execution of this
Agreement is located at 0 Xxx Xxxx Xxxxx, 0xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000,
Attention: Institutional Trust Services/Structured Finance Services, Bear
Xxxxxxx Asset Backed Securities, Inc., Series 2003-AC5, or at such other address
as the Trustee may designate from time to time.
Corresponding Certificate: With respect to:
(i) REMIC II Regular Interest LTII-A1, the Class A-1
Certificates,
(ii) REMIC II Regular Interest LTII-A2, the Class A-2
Certificates,
(iii) REMIC II Regular Interest LTII-A3, the Class A-3
Certificates and Class A-4 Certificates ,
(iv) REMIC II Regular Interest LTII-A5, the Class A-5
Certificates,
(v) REMIC II Regular Interest LTII-M1 the Class M-1
Certificates,
(vi) REMIC II Regular Interest LTII-M2, the Class M-2
Certificates,
(vii) REMIC II Regular Interest LTII-B, the Class B
Certificates,
(viii) REMIC II Regular Interest LTII-C, the Class C
Certificates, and
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(ix) REMIC II Regular Interest LTII-P, the Class P
Certificates.
Corresponding Interest: With respect to:
(i) REMIC I Regular Interest LTI-A1, REMIC II Regular
Interest LTII-A1,
(ii) REMIC I Regular Interest LTI-A2, REMIC II Regular
Interest LTII-A2,
(iii) REMIC I Regular Interest LTI-A3, REMIC II Regular
Interest LTII-A3,
(iv) REMIC I Regular Interest LTI-A5, REMIC II Regular
Interest LTII-A5,
(v) REMIC I Regular Interest LTI-M1 REMIC II Regular
Interest LTII-M1,
(vi) REMIC I Regular Interest LTI-M2, REMIC II Regular
Interest LTII-M2,
(vii) REMIC I Regular Interest LTI-B, REMIC II Regular
Interest LTII-B, and
(viii) REMIC I Regular Interest LTI-P, REMIC II Regular
Interest LTII-P.
Cross-Over Date: The first Distribution Date on which the aggregate
Certificate Principal Balance of the Subordinated Certificates has been reduced
to zero (giving effect to all distributions on such Distribution Date).
Custodial Agreement: An agreement dated as of the Closing Date among the
Depositor, the Seller, the Trustee and the Custodian in substantially the form
of Exhibit K hereto.
Custodian: Xxxxx Fargo Bank Minnesota, National Association, or any
successor custodian appointed pursuant to the provisions hereof and the
Custodial Agreement.
Cut-off Date: The close of business on September 1, 2003.
Cut-off Date Principal Balance: As to any Mortgage Loan, the unpaid
principal balance thereof as of the close of business on the Cut-off Date after
application of all Principal Prepayments received prior to the Cut-off Date and
scheduled payments of principal due on or before the Cut-off Date, whether or
not received, but without giving effect to any installments of principal
received in respect of Due Dates after the Cut-off Date.
Debt Service Reduction: With respect to any Mortgage Loan, a reduction by
a court of competent jurisdiction in a proceeding under the Bankruptcy Code in
the Scheduled Payment for such Mortgage Loan that became final and
non-appealable, except such a reduction resulting from a Deficient Valuation or
any other reduction that results in a permanent forgiveness of principal.
Deficient Valuation: With respect to any Mortgage Loan, a valuation by a
court of competent jurisdiction of the Mortgaged Property in an amount less than
the then outstanding indebtedness under such Mortgage Loan, or any reduction in
the amount of principal to be paid in connection with any
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Scheduled Payment that results in a permanent forgiveness of principal, which
valuation or reduction results from an order of such court that is final and
non-appealable in a proceeding under the Bankruptcy Code.
Definitive Certificates: As defined in Section 7.06.
Deleted Mortgage Loan: A Mortgage Loan replaced or to be replaced by a
Replacement Mortgage Loan.
Delinquent: A Mortgage Loan is "delinquent" if any payment due thereon is
not made pursuant to the terms of such Mortgage Loan by the close of business on
the day such payment is scheduled to be due. A Mortgage Loan is "30 days
delinquent" if such payment has not been received by the close of business on
the corresponding day of the month immediately succeeding the month in which
such payment was due, or, if there is no such corresponding day (e.g., as when a
30-day month follows a 31-day month in which a payment was due on the 31st day
of such month), then on the last day of such immediately succeeding month.
Similarly for "60 days delinquent," "90 days delinquent" and so on.
Denomination: With respect to each Certificate, the amount set forth on
the face thereof as the "Initial Principal Balance of this Certificate".
Depositor: Bear Xxxxxxx Asset Backed Securities, Inc., a Delaware
corporation, or its successor in interest.
Depository: The initial Depository shall be The Depository Trust Company
("DTC"), the nominee of which is Cede & Co., or any other organization
registered as a "clearing agency" pursuant to Section 17A of the Securities
Exchange Act of 1934, as amended. The Depository shall initially be the
registered Holder of the Book-Entry Certificates. The Depository shall at all
times be a "clearing corporation" as defined in Section 8-102(a)(5) of the
Uniform Commercial Code of the State of New York.
Depository Agreement: With respect to the Class of Book-Entry
Certificates, the agreement among the Depositor, the Trustee and the initial
Depository, dated as of the Closing Date, substantially in the form of Exhibit
I.
Depository Participant: A broker, dealer, bank or other financial
institution or other Person for whom from time to time a Depository effects
book-entry transfers and pledges of securities deposited with the Depository.
Determination Date: With respect to any Distribution Date, the 15th day of
the month of such Distribution Date or, if such 15th day is not a Business Day,
the immediately preceding Business Day.
Distribution Account: The separate Eligible Account created and maintained
by the Trustee pursuant to Section 5.07 in the name of the Trustee for the
benefit of the Certificateholders and designated "JPMorgan Chase Bank, in trust
for registered holders of Bear Xxxxxxx Asset Backed
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Securities, Inc., Asset-Backed Certificates, Series 2003-AC5" shall be held in
trust for the Certificateholders for the uses and purposes set forth in this
Agreement.
Distribution Account Deposit Date: As to any Distribution Date, on or
before 3:00 p.m. Eastern time on the Business Day immediately preceding such
Distribution Date.
Distribution Date: The 25th day of each calendar month after the initial
issuance of the Certificates, or if such 25th day is not a Business Day, the
next succeeding Business Day, commencing in October 2003.
Due Date: As to any Mortgage Loan, the date in each month on which the
related Scheduled Payment is due, as set forth in the related Mortgage Note.
Due Period: With respect to any Distribution Date, the period from the
second day of the calendar month preceding the calendar month in which such
Distribution Date occurs through close of business on the first day of the
calendar month in which such Distribution Date occurs.
Eligible Account: Any of (i) an account or accounts maintained with a
federal or state chartered depository institution or trust company, the
long-term unsecured debt obligations and short- term unsecured debt obligations
of which (or, in the case of a depository institution or trust company that is
the principal subsidiary of a holding company, the debt obligations of such
holding company, so long as Xxxxx'x is not a Rating Agency) are rated by each
Rating Agency in one of its two highest long-term and its highest short-term
rating categories respectively, at the time any amounts are held on deposit
therein, or (ii) an account or accounts in a depository institution or trust
company in which such accounts are insured by the FDIC (to the limits
established by the FDIC) and the uninsured deposits in which accounts are
otherwise secured such that, as evidenced by an Opinion of Counsel delivered to
the Trustee and to each Rating Agency, the Certificateholders have a claim with
respect to the funds in such account or a perfected first priority security
interest against any collateral (which shall be limited to Permitted
Investments) securing such funds that is superior to claims of any other
depositors or creditors of the depository institution or trust company in which
such account is maintained, or (iii) a trust account or accounts maintained with
the corporate trust department of a federal or state chartered depository
institution or trust company having capital and surplus of not less than
$50,000,000, acting in its fiduciary capacity or (iv) any other account
acceptable to the Rating Agencies. Eligible Accounts may bear interest, and may
include, if otherwise qualified under this definition, accounts maintained with
the Trustee.
EMC: EMC Mortgage Corporation, a Delaware corporation.
EMC Mortgage Loans: Shall mean those Mortgage Loans serviced by the
Company pursuant to the terms of this Agreement.
ERISA: The Employee Retirement Income Security Act of 1974, as amended.
ERISA Restricted Certificate: Each of the Class C, Class P and Residual
Certificates.
Event of Default: As defined in Section 9.01 hereof.
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Exemption: Prohibited Transaction Exemption 90-30, as amended from time to
time.
Excess Liquidation Proceeds: To the extent not required by law to be paid
to the related Mortgagor, the excess, if any, of any Liquidation Proceeds with
respect to a Mortgage Loan over the Stated Principal Balance of such Mortgage
Loan and accrued and unpaid interest at the related Mortgage Rate through the
last day of the month in which the Mortgage Loan has been liquidated.
Extra Principal Distribution Amount: With respect to any Distribution Date
(a) on or prior to the earlier of (1) the 20% Clean-Up Call Date and (2) the
Distribution Date in September 2013, the lesser of (x) the Net Monthly Excess
Cashflow for such Distribution Date and (y) the Overcollateralization Increase
Amount for such Distribution Date; and (b) thereafter, the Net Monthly Excess
Cashflow for such Distribution Date.
Xxxxxx Xxx: Xxxxxx Xxx (formerly, Federal National Mortgage Association),
or any successor thereto.
FDIC: The Federal Deposit Insurance Corporation, or any successor thereto.
Final Recovery Determination: With respect to any defaulted Mortgage Loan
or any REO Property (other than a Mortgage Loan or REO Property purchased by the
Seller or the Class C Certificateholder pursuant to or as contemplated by
Section 2.03(c) or Section 11.01), a determination made by the Company pursuant
to this Agreement or the applicable Servicer pursuant to the related Servicing
Agreement that all Insurance Proceeds, Liquidation Proceeds and other payments
or recoveries which the Company or such Servicer, in its reasonable good faith
judgment, expects to be finally recoverable in respect thereof have been so
recovered. The Master Servicer shall maintain records, based solely on
information provided by each Servicer, of each Final Recovery Determination made
thereby.
FIRREA: The Financial Institutions Reform, Recovery, and Enforcement Act
of 1989.
Xxxxxxx Mac: Xxxxxxx Mac (formerly The Federal Home Loan Mortgage
Corporation), or any successor thereto.
HSBC: HSBC Mortgage Corporation (USA), and any successor thereto.
HSBC Assignment Agreement: The Assignment, Assumption and Recognition
Agreement, dated as of September 30, 2003, by and among the Seller, HSBC and the
Trustee evidencing the assignment of the HSBC Servicing Agreement to the Trust.
HSBC Loans: Those Mortgage Loans subject to this Agreement which were
purchased by the Seller from HSBC pursuant to the HSBC Servicing Agreement.
HSBC Servicing Agreement: Shall mean the Purchase, Warranties and
Servicing Agreement, dated as of May 1, 2002, by and between the Seller and
HSBC, as modified by the HSBC Assignment Agreement.
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Indemnified Persons: The Trustee, the Master Servicer, the Company, the
Trust Fund and the Securities Administrator and their officers, directors,
agents and employees and, with respect to the Trustee, any separate co-trustee
and its officers, directors, agents and employees.
Initial Certificate Principal Balance: With respect to any Certificate,
the Certificate Principal Balance of such Certificate or any predecessor
Certificate on the Closing Date.
Insurance Policy: With respect to any Mortgage Loan included in the Trust
Fund, any insurance policy or LPMI Policy, including all riders and endorsements
thereto in effect with respect to such Mortgage Loan, including any replacement
policy or policies for any Insurance Policies.
Insurance Proceeds: Proceeds paid in respect of the Mortgage Loans
pursuant to any Insurance Policy or any other insurance policy covering a
Mortgage Loan, to the extent such proceeds are payable to the mortgagee under
the Mortgage, the Company, the related Servicer or the trustee under the deed of
trust and are not applied to the restoration of the related Mortgaged Property
or released to the Mortgagor in accordance with the procedures that the Company
or the related Servicer would follow in servicing mortgage loans held for its
own account, in each case other than any amount included in such Insurance
Proceeds in respect of Insured Expenses.
Insured Expenses: Expenses covered by an Insurance Policy or any other
insurance policy with respect to the Mortgage Loans.
Interest Determination Date: Shall mean the second LIBOR Business Day
preceding the commencement of each Accrual Period.
Interest Funds: For any Distribution Date, (i) the sum, without
duplication, of (a) all scheduled interest during the related Due Period with
respect to the related Mortgage Loans less the Servicing Fee and the LPMI Fee,
if any, (b) all Advances relating to interest with respect to the related
Mortgage Loans made on or prior to the related Distribution Account Deposit
Date, (c) all Compensating Interest with respect to the related Mortgage Loans
and required to be remitted by the Company or the Master Servicer pursuant to
this Agreement or the related Servicer pursuant to the related Servicing
Agreement with respect to such Distribution Date, (d) Liquidation Proceeds with
respect to the related Mortgage Loans collected during the related Prepayment
Period (to the extent such Liquidation Proceeds relate to interest), (e) all
amounts relating to interest with respect to each Mortgage Loan repurchased by
the Seller pursuant to Sections 2.02 and 2.03 and by EMC pursuant to Section
4.21 and (f) all amounts in respect of interest paid by the Master Servicer
pursuant to Section 11.01, in each case to the extent remitted by the Company or
the related Servicer, as applicable, to the Distribution Account pursuant to
this Agreement or the related Servicing Agreement minus (ii) all amounts
relating to interest required to be reimbursed pursuant to Sections 5.02, 5.04,
5.06 and 5.08 or as otherwise set forth in this Agreement.
Interest Shortfall: With respect to any Distribution Date, means the
aggregate shortfall, if any, in collections of interest (adjusted to the related
Net Mortgage Rates) on Mortgage Loans resulting from (a) Principal Prepayments
in full received during the related Prepayment Period, (b) the partial Principal
Prepayments received during the related Prepayment Period to the extent applied
prior to
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the Due Date in the month of the Distribution Date and (c) interest payments on
certain of the Mortgage Loans being limited pursuant to the provisions of the
Relief Act or similar state laws.
Last Scheduled Distribution Date: October 25, 2033.
Latest Possible Maturity Date: The Distribution Date following the final
scheduled maturity date of the Mortgage Loan in the Trust Fund having the latest
scheduled maturity date as of the Cut- off Date. For purposes of the Treasury
Regulations under Code section 860A through 860G, the latest possible maturity
date of each regular interest issued by REMIC I, REMIC II and REMIC III shall be
the Latest Possible Maturity Date.
LIBOR Business Day: Shall mean a day on which banks are open for dealing
in foreign currency and exchange in London and New York City.
Liquidated Loan: With respect to any Distribution Date, a defaulted
Mortgage Loan that has been liquidated through deed-in-lieu of foreclosure,
foreclosure sale, trustee's sale or other realization as provided by applicable
law governing the real property subject to the related Mortgage and any security
agreements and as to which the Company or the related Servicer has made a Final
Recovery Determination with respect thereto.
Liquidation Proceeds: Amounts, other than Insurance Proceeds, received in
connection with the partial or complete liquidation of a Mortgage Loan, whether
through trustee's sale, foreclosure sale or otherwise, or in connection with any
condemnation or partial release of a Mortgaged Property and any other proceeds
received with respect to an REO Property, less the sum of related unreimbursed
Advances, Servicing Fees and Servicing Advances and all expenses of liquidation,
including property protection expenses and foreclosure and sale costs, including
court and reasonable attorneys fees.
Loan-to-Value Ratio: The fraction, expressed as a percentage, the
numerator of which is the original principal balance of the related Mortgage
Loan and the denominator of which is the Appraised Value of the related
Mortgaged Property.
Loss Allocation Limitation: The meaning specified in Section 6.04A(c)
hereof.
LPMI Fee: Shall mean the fee payable to the insurer for each Mortgage Loan
subject to an LPMI Policy as set forth in such LPMI Policy.
LPMI Policy: A policy of mortgage guaranty insurance issued by an insurer
meeting the requirements of Xxxxxx Xxx and Xxxxxxx Mac in which the Company or
the related Servicer of the related Mortgage Loan is responsible for the payment
of the LPMI Fee thereunder from collections on the related Mortgage Loan.
Majority Class C Certificateholder: Shall mean the Holder of a 50.01% or
greater Percentage Interest in the Class C Certificates.
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Marker Rate: With respect to REMIC II Regular Interest LTII-C and any
Distribution Date, a per annum rate equal to two (2) times the weighted average
of the Uncertificated REMIC I Pass- Through Rates for REMIC I Regular Interest
LTI-A1, REMIC I Regular Interest LTI-A2, REMIC I Regular Interest LTI-A3, REMIC
I Regular Interest LTI-A5, REMIC I Regular Interest LTI-M1, REMIC I Regular
Interest LTI-M2, REMIC I Regular Interest LTI-B and REMIC I Regular Interest
LTI-ZZ, with the rate on such REMIC I Regular Interests (other than REMIC I
Regular Interest LTI- ZZ) subject to a cap equal to the Uncertificated REMIC II
Pass-Through Rate for the Corresponding Interest and with the rate on REMIC I
Regular Interest LTI-ZZ subject to a cap of zero for the purpose of this
calculation; provided, however, that for this purpose, the calculation of the
Uncertificated REMIC I Pass-Through Rate and the related cap with respect to
REMIC I Regular Interest LTI-M2 and REMIC I Regular Interest LTI-B shall be
multiplied by a fraction, the numerator of which is the actual number of days in
the Accrual Period and the denominator of which is 30.
Master Servicer: Xxxxx Fargo Bank Minnesota, National Association, in its
capacity as master servicer, and its successors and assigns.
Master Servicer Certification: A written certification covering servicing
of the Mortgage Loans by the Company and all Servicers and signed by an officer
of the Master Servicer that complies with (i) the Xxxxxxxx-Xxxxx Act of 2002, as
amended from time to time, and (ii) the February 21, 2003 Statement by the Staff
of the Division of Corporation Finance of the Securities and Exchange Commission
Regarding Compliance by Asset-Backed Issuers with Exchange Act Rules 13a-14 and
15d-14, as in effect from time to time; provided that if, after the Closing Date
(a) the Xxxxxxxx-Xxxxx Act of 2002 is amended, (b) the Statement referred to in
clause (ii) is modified or superceded by any subsequent statement, rule or
regulation of the Securities and Exchange Commission or any statement of a
division thereof, or (c) any future releases, rules and regulations are
published by the Securities and Exchange Commission from time to time pursuant
to the Xxxxxxxx-Xxxxx Act of 2002, which in any such case affects the form or
substance of the required certification and results in the required
certification being, in the reasonable judgment of the Master Servicer,
materially more onerous than the form of the required certification as of the
Closing Date, the Master Servicer Certification shall be as agreed to by the
Master Servicer, the Depositor and the Seller following a negotiation in good
faith to determine how to comply with any such new requirements.
Master Servicer Collection Account: The trust accounts or accounts created
and maintained pursuant to Section 5.05 hereof, which shall be entitled
"JPMorgan Chase Bank, as Trustee f/b/o holders of Bear Xxxxxxx Asset Backed
Securities, Inc., Asset Backed Certificates, Series 2003-AC5 - Master Servicer
Collection Account".
MERS: Mortgage Electronic Registration Systems, Inc., a corporation
organized and existing under the laws of the State of Delaware, or any successor
thereto.
MERS(R) System: The system of recording transfers of Mortgages
electronically maintained by MERS.
MIN: The Mortgage Identification Number for Mortgage Loans registered with
MERS on the MERS(R) System.
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MOM Loan: With respect to any Mortgage Loan, MERS acting as the mortgagee
of such Mortgage Loan, solely as nominee for the originator of such Mortgage
Loan and its successors and assigns, at the origination thereof.
Monthly Interest Distributable Amount: With respect to the Certificates
(other than the Class P Certificates and Class R Certificates) for any
Distribution Date, means an amount equal to the interest accrued during the
related Accrual Period at the applicable Pass-Through Rate on the Certificate
Principal Balance (or Certificate Notional Balance) of such Certificate
immediately prior to such Distribution Date less such Certificate's share of any
Unpaid Interest Shortfall and the interest portion of any Realized Losses on the
Mortgage Loans allocated to such Certificate pursuant to Section 1.02. The
Monthly Interest Distributable Amount with respect to the Class X-0, Xxxxx X-0,
Class A-3, Class A-4, Class A-5 and Class M-1 Certificates is calculated on the
basis of a 360-day year consisting of twelve 30-day months. The Monthly Interest
Distributable Amount with respect to the Class M-2 Certificates and Class B
Certificates is calculated on the basis of a 360-day year and the actual number
of days elapsed during the related Accrual Period. No Monthly Interest
Distributable Amount will be payable with respect to any Class of Certificates
after the Distribution Date on which the outstanding Certificate Principal
Balance of such Certificate has been reduced to zero.
Monthly Statement: The statement delivered to the Certificateholders
pursuant to Section 6.05.
Moody's: Xxxxx'x Investors Service, Inc.
Mortgage: The mortgage, deed of trust or other instrument creating a first
lien on or first priority ownership interest in an estate in fee simple in real
property securing a Mortgage Note.
Mortgage File: The mortgage documents listed in Section 2.01 hereof
pertaining to a particular Mortgage Loan and any additional documents delivered
to the Trustee to be added to the Mortgage File pursuant to this Agreement.
Mortgage Loans: Such of the Mortgage Loans transferred and assigned to the
Trustee pursuant to the provisions hereof, as from time to time are held as a
part of the Trust Fund (including any REO Property), the mortgage loans so held
being identified in the Mortgage Loan Schedule, notwithstanding foreclosure or
other acquisition of title of the related Mortgaged Property. Any mortgage loan
that was intended by the parties hereto to be transferred to the Trust Fund as
indicated by such Mortgage Loan Schedule which is in fact not so transferred for
any reason including, without limitation, a breach of the representation
contained in Section 2.03(b)(v) hereof, shall continue to be a Mortgage Loan
hereunder until the Purchase Price with respect thereto has been paid to the
Trust Fund.
Mortgage Loan Purchase Agreement: Shall mean the Mortgage Loan Purchase
Agreement dated as of September 30, 2003, between the Seller, as seller and the
Depositor, as purchaser.
Mortgage Loan Purchase Price: The price, calculated as set forth in
Section 11.01, to be paid in connection with the repurchase of the Mortgage
Loans pursuant to Section 11.01.
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Mortgage Loan Schedule: The list of Mortgage Loans (as from time to time
amended by the Company or the Master Servicer to reflect the deletion of Deleted
Mortgage Loans and the addition of Replacement Mortgage Loans pursuant to the
provisions of this Agreement) transferred to the Trustee as part of the Trust
Fund and from time to time subject to this Agreement, the initial Mortgage Loan
Schedule being attached hereto as Exhibit B, setting forth the following
information with respect to each Mortgage Loan:
(i) the loan number;
(ii) the Mortgage Rate in effect as of the Cut-off Date;
(iii) the Servicer (or the Company, if it services the
Mortgage Loan) and the Servicing Fee Rate;
(iv) the Net Mortgage Rate in effect as of the Cut-off Date;
(v) the maturity date;
(vi) the original principal balance;
(vii) the Cut-off Date Principal Balance;
(viii) the original term;
(ix) the remaining term;
(x) the property type; and
(xi) the MIN with respect to each Mortgage Loan.
Such schedule shall also set forth the aggregate Cut-off Date Principal Balance
for all of the Mortgage Loans.
Mortgage Note: The original executed note or other evidence of
indebtedness of a Mortgagor under a Mortgage Loan.
Mortgage Rate: The annual rate of interest borne by a Mortgage Note.
Mortgaged Property: The underlying property securing a Mortgage Loan.
Mortgagor: The obligors on a Mortgage Note.
Net Interest Shortfalls: Shall mean Interest Shortfalls net of payments by
the Company, the Servicer or the Master Servicer in respect of Compensating
Interest.
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Net Monthly Excess Cashflow: With respect to any Distribution Date, the
sum of (a) any Overcollateralization Release Amount and (b) the excess of (x)
the Available Funds for such Distribution Date over (y) the sum for such
Distribution Date of (A) the aggregate amount of the Monthly Interest
Distributable Amount for the Offered Certificates and (B) the Principal
Remittance Amount.
Net Mortgage Rate: As to each Mortgage Loan, and at any time, the per
annum rate equal to the related Mortgage Rate less the sum of (i) the Servicing
Fee Rate and (ii) the rate at which the LPMI Fee is calculated, if any.
Net WAC Rate Cap: With respect to the Class A-1, Class A-2, Class A-5 and
Class M-1 Certificates shall mean the weighted average of the Net Mortgage Rates
of the Mortgage Loans.
With respect to the Class A-3 Certificates and Class A-4 Certificates will
be calculated based on an assumed certificate with a principal balance equal to
the Certificate Principal Balance of the Class A-3 Certificates and a fixed
pass-through rate of (i) on any Distribution Date which occurs on or prior to
the Optional Termination Date, 8.000% per annum, subject to a cap equal to the
product of (x) the weighted average of the Net Mortgage Rates of the Mortgage
Loans and (y) 152.3809523810% and (ii) for each Distribution Date thereafter,
8.500% per annum, subject to a cap equal to the product of (x) the weighted
average of the Net Mortgage Rates of the Mortgage Loans and (y) 147.8260869565%.
If the weighted average of the Net Mortgage Rates of the Mortgage Loans is less
than 5.25% per annum (or, after the Optional Termination Date, 5.75% per annum),
the amount of the shortfall which would occur with respect to the assumed
certificate as a result of the cap will be allocated among the Class A-3
Certificates and Class A-4 Certificates in proportion to their current
entitlements to interest calculated without regard to this cap. Accordingly, in
such event the Net WAC Rate Cap for the Class A-3 Certificates would be equal to
the Class A-3 Pass-Through Rate (determined without regard to the Net WAC Rate
Cap) less the amount allocable to the Class A-3 Certificates pursuant to the
preceding sentence, and the Net WAC Rate Cap for the Class A-4 Certificates
would be equal to the Class A-4 Pass-Through Rate (determined without regard to
the Net WAC Rate Cap) less the amount allocable to the Class A-4 Certificates
pursuant to the preceding sentence.
For federal income tax purposes, the Net WAC Rate Cap shall equal (i) with
respect to each of the Class A-1, Class X-0, Xxxxx X-0, Class M-1, Class M-2 and
Class B Certificates, the weighted average of the Uncertificated REMIC II
Pass-Through Rate on the REMIC II Regular Interest for which such Certificate is
the Corresponding Certificate and (ii) with respect to the Class A-3
Certificates and Class A-4 Certificates, if the weighted average of the Net
Mortgage Rates of the Mortgage Loans is less than 5.25% per annum (or, after the
Optional Termination Date, 5.75% per annum), the equivalent of the rates
determined in the preceding paragraph, calculated using the weighted average of
the Uncertificated REMIC II Pass-Through Rate on REMIC II Regular Interest
LTII-A1 in place of the weighted average of the Net Mortgage Rates of the
Mortgage Loans.
Net WAC Rate Carryover Amount: With respect each Class of Offered
Certificates and any Distribution Date on which the related Pass-Through Rate is
reduced by the Net WAC Rate Cap, an amount equal to the sum of (i) the excess of
(x) the amount of interest such Class would have been entitled to receive on
such Distribution Date if the Pass-Through Rate applicable to such Class would
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not have been reduced by the Net WAC Rate Cap on such Distribution Date over (y)
the amount of interest paid on such Distribution Date plus (ii) the related Net
WAC Rate Carryover Amount for the previous Distribution Date not previously
distributed together with interest thereon at a rate equal to the Pass-Through
Rate for such Class for the most recently ended Accrual Period.
Net WAC Reserve Fund: Shall mean the separate trust account created and
maintained by the Trustee pursuant to Section 6.08 hereof.
Non-Book-Entry Certificate: Any Certificate other than a Book-Entry
Certificate.
Nonrecoverable Advance: Any portion of an Advance previously made or
proposed to be made by the Company or the Master Servicer pursuant to this
Agreement or the related Servicer pursuant to the related Servicing Agreement,
that, in the good faith judgment of the Company, the Master Servicer or the
related Servicer, will not or, in the case of a proposed advance, would not, be
ultimately recoverable by it from the related Mortgagor, related Liquidation
Proceeds, Insurance Proceeds or otherwise.
Offered Certificates: The Class A-1, Class A-2, Class A-3, Class A-4,
Class A-5, Class M-1, Class M-2 and Class B Certificates.
Officer's Certificate: A certificate (i) signed by the Chairman of the
Board, the Vice Chairman of the Board, the President, a Vice President (however
denominated), an Assistant Vice President, the Treasurer, the Secretary, or one
of the assistant treasurers or assistant secretaries of the Depositor or the
Master Servicer (or any other officer customarily performing functions similar
to those performed by any of the above designated officers and also to whom,
with respect to a particular matter, such matter is referred because of such
officer's knowledge of and familiarity with a particular subject) or (ii), if
provided for in this Agreement, signed by a Servicing Officer, as the case may
be, and delivered to the Depositor, the Seller, the Securities Administrator,
the Master Servicer and/or the Trustee, as the case may be, as required by this
Agreement.
One-Month LIBOR: With respect to any Accrual Period, the rate determined
by the Securities Administrator on the related Interest Determination Date on
the basis of the rate for U.S. dollar deposits for one month that appears on
Telerate Screen Page 3750 as of 11:00 a.m. (London time) on such Interest
Determination Date; provided that the parties hereto acknowledge that One-Month
LIBOR for the first Accrual Period shall equal 1.12% per annum. If such rate
does not appear on such page (or such other page as may replace that page on
that service, or if such service is no longer offered, such other service for
displaying One-Month LIBOR or comparable rates as may be reasonably selected by
the Securities Administrator), One-Month LIBOR for the applicable Accrual Period
will be the Reference Bank Rate. If no such quotations can be obtained by the
Securities Administrator and no Reference Bank Rate is available, One-Month
LIBOR will be One-Month LIBOR applicable to the preceding Accrual Period. The
establishment of One-Month LIBOR on each Interest Determination Date by the
Securities Administrator and the Securities Administrator's calculation of the
rate of interest applicable to the Class X-0, Xxxxx X-0, Class M-2 and Class B
Certificates for the related Accrual Period shall, in the absence of manifest
error, be final and binding.
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Opinion of Counsel: A written opinion of counsel, who may be counsel for
the Seller, the Depositor, the Company or the Master Servicer, reasonably
acceptable to each addressee of such opinion; provided that with respect to
Section 2.05, 8.05, 8.07 or 12.01, or the interpretation or application of the
REMIC Provisions, such counsel must (i) in fact be independent of the Seller,
Depositor, the Company and the Master Servicer, (ii) not have any direct
financial interest in the Seller, Depositor, the Company or the Master Servicer
or in any affiliate of either, and (iii) not be connected with the Seller,
Depositor, the Company or the Master Servicer as an officer, employee, promoter,
underwriter, trustee, partner, director or person performing similar functions.
Optional Termination: The termination of the Trust Fund created hereunder
as a result of the purchase of all of the Mortgage Loans and any REO Property
pursuant to the last sentence of Section 11.01 hereof.
Optional Termination Date: The first Distribution Date on which the Trust
Fund may be terminated at the option of the Majority Class C Certificateholder
as described under Section 11.01.
Original Value: The value of the property underlying a Mortgage Loan
based, in the case of the purchase of the underlying Mortgaged Property, on the
lower of an appraisal or the sales price of such property or, in the case of a
refinancing, on an appraisal.
Originator: With respect to each Mortgage Loan, shall mean the originator
set forth in the Mortgage Loan Schedule for such Mortgage Loan.
OTS: The Office of Thrift Supervision.
Outstanding: With respect to the Certificates as of any date of
determination, all Certificates theretofore executed and authenticated under
this Agreement except:
(a) Certificates theretofore canceled by the Trustee or delivered to
the Trustee for cancellation; and
(b) Certificates in exchange for which or in lieu of which other
Certificates have been executed and delivered by the Trustee pursuant to this
Agreement.
Outstanding Mortgage Loan: As of any date of determination, a Mortgage
Loan with a Stated Principal Balance greater than zero that was not the subject
of a Principal Prepayment in full, and that did not become a Liquidated Loan,
prior to the end of the related Prepayment Period.
Overcollateralized Amount: With respect to any Distribution Date, is the
excess, if any, of (a) the aggregate Stated Principal Balances of the Mortgage
Loans as of the last day of the related Due Period over (b) the aggregate
Certificate Principal Balance of the Offered Certificates on such Distribution
Date (after taking into account the payment of principal other than any Extra
Principal Distribution Amount on such Certificates).
Overcollateralization Increase Amount: As of any Distribution Date, the
excess, if any, of (a) the Overcollateralization Target Amount over (b) the
Overcollateralized Amount on such Distribution
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Date (after taking into account payments to the Offered Certificates of the
Basic Principal Distribution Amount on such Distribution Date).
Overcollateralization Release Amount: With respect to any Distribution
Date, the lesser of (x) the Principal Remittance Amount for such Distribution
Date and (y) the excess, if any, of (i) the Overcollateralized Amount for such
Distribution Date (assuming that 100% of the Principal Remittance Amount is
applied as a principal payment on such Distribution Date) over (ii) the
Overcollateralization Target Amount for such Distribution Date.
Overcollateralization Target Amount: With respect to any Distribution
Date, $7,365,227.
Ownership Interest: As to any Certificate, any ownership interest in such
Certificate including any interest in such Certificate as the Holder thereof and
any other interest therein, whether direct or indirect, legal or beneficial.
Pass-Through Rate: With respect to each Class of Certificates, the
applicable Pass-Through Rate for each such Class as set forth in the Preliminary
Statement.
Percentage Interest: With respect to any Certificate of a specified Class,
the Percentage Interest set forth on the face thereof or the percentage obtained
by dividing the Denomination of such Certificate by the aggregate of the
Denominations of all Certificates of the such Class.
Permitted Investments: At any time, any one or more of the following
obligations and securities:
(i) obligations of the United States or any agency thereof, provided
such obligations are backed by the full faith and credit of the United
States;
(ii) general obligations of or obligations guaranteed by any state
of the United States or the District of Columbia receiving the highest
long-term debt rating of each Rating Agency, or such lower rating as will
not result in the downgrading or withdrawal of the ratings then assigned
to the Certificates by each Rating Agency;
(iii) [Reserved];
(iv) commercial or finance company paper which is then receiving the
highest commercial or finance company paper rating of each Rating Agency,
or such lower rating as will not result in the downgrading or withdrawal
of the ratings then assigned to the Certificates by each Rating Agency;
(v) certificates of deposit, demand or time deposits, or bankers'
acceptances issued by any depository institution or trust company
incorporated under the laws of the United States or of any state thereof
and subject to supervision and examination by federal and/or state banking
authorities (including the Trustee in its commercial banking capacity),
provided that the commercial paper and/or long term unsecured debt
obligations of such depository institution or trust company are then rated
one of the two highest long-term and the highest
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short-term ratings of each such Rating Agency for such securities, or such
lower ratings as will not result in the downgrading or withdrawal of the
rating then assigned to the Certificates by any Rating Agency;
(vi) demand or time deposits or certificates of deposit issued by
any bank or trust company or savings institution to the extent that such
deposits are fully insured by the FDIC;
(vii) guaranteed reinvestment agreements issued by any bank,
insurance company or other corporation containing, at the time of the
issuance of such agreements, such terms and conditions as will not result
in the downgrading or withdrawal of the rating then assigned to the
Certificates by any such Rating Agency;
(viii) repurchase obligations with respect to any security described
in clauses (i) and (ii) above, in either case entered into with a
depository institution or trust company (acting as principal) described in
clause (v) above;
(ix) securities (other than stripped bonds, stripped coupons or
instruments sold at a purchase price in excess of 115% of the face amount
thereof) bearing interest or sold at a discount issued by any corporation
incorporated under the laws of the United States or any state thereof
which, at the time of such investment, have one of the two highest long
term ratings of each Rating Agency (except if the Rating Agency is
Moody's, such rating shall be the highest commercial paper rating of
Moody's for any such securities), or such lower rating as will not result
in the downgrading or withdrawal of the rating then assigned to the
Certificates by any Rating Agency, as evidenced by a signed writing
delivered by each Rating Agency;
(x) interests in any money market fund (including any such fund
managed or advised by the Trustee or Master Servicer or any affiliate
thereof) which at the date of acquisition of the interests in such fund
and throughout the time such interests are held in such fund has the
highest applicable long term rating by each Rating Agency or such lower
rating as will not result in the downgrading or withdrawal of the ratings
then assigned to the Certificates by each Rating Agency;
(xi) short term investment funds sponsored by any trust company or
banking association incorporated under the laws of the United States or
any state thereof (including any such fund managed or advised by the
Trustee or any affiliate thereof) which on the date of acquisition has
been rated by each Rating Agency in their respective highest applicable
rating category or such lower rating as will not result in the downgrading
or withdrawal of the ratings then assigned to the Certificates by each
Rating Agency; and
(xii) such other investments having a specified stated maturity and
bearing interest or sold at a discount acceptable to each Rating Agency as
will not result in the downgrading or withdrawal of the rating then
assigned to the Certificates by any Rating Agency, as evidenced by a
signed writing delivered by each Rating Agency;
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provided, that no such instrument shall be a Permitted Investment if such
instrument (i) evidences the right to receive interest only payments with
respect to the obligations underlying such instrument, (ii) is purchased at a
premium or (iii) is purchased at a deep discount; provided further that no such
instrument shall be a Permitted Investment (A) if such instrument evidences
principal and interest payments derived from obligations underlying such
instrument and the interest payments with respect to such instrument provide a
yield to maturity of greater than 120% of the yield to maturity at par of such
underlying obligations, or (B) if it may be redeemed at a price below the
purchase price (the foregoing clause (B) not to apply to investments in units of
money market funds pursuant to clause (vii) above); provided further that no
amount beneficially owned by any REMIC may be invested in investments (other
than money market funds) treated as equity interests for federal income tax
purposes, unless the Master Servicer shall receive an Opinion of Counsel, at the
expense of the Master Servicer, to the effect that such investment will not
adversely affect the status of any such REMIC as a REMIC under the Code or
result in imposition of a tax on any such REMIC. Permitted Investments that are
subject to prepayment or call may not be purchased at a price in excess of par.
Permitted Transferee: Any person other than (i) the United States, any
State or political subdivision thereof, any possession of the United States or
any agency or instrumentality of any of the foregoing, (ii) a foreign
government, International Organization or any agency or instrumentality of
either of the foregoing, (iii) an organization (except certain farmers'
cooperatives described in section 521 of the Code) that is exempt from tax
imposed by Chapter 1 of the Code (including the tax imposed by section 511 of
the Code on unrelated business taxable income) on any excess inclusions (as
defined in section 860E(c)(1) of the Code) with respect to any Residual
Certificate, (iv) rural electric and telephone cooperatives described in section
1381(a)(2)(C) of the Code, (v) a Person that is not a citizen or resident of the
United States, a corporation, partnership (other than a partnership that has any
direct or indirect foreign partners) or other entity (treated as a corporation
or a partnership for federal income tax purposes), created or organized in or
under the laws of the United States, any state thereof or the District of
Columbia, an estate whose income from sources without the United States is
includible in gross income for United States federal income tax purposes
regardless of its connection with the conduct of a trade or business within the
United States, or a trust if a court within the United States is able to
exercise primary supervision over the administration of the trust and one or
more United States persons have authority to control all substantial decisions
of the trustor and (vi) any other Person so designated by the Trustee based upon
an Opinion of Counsel addressed to the Trustee (which shall not be an expense of
the Trustee) that states that the Transfer of an Ownership Interest in a
Residual Certificate to such Person may cause REMIC I, REMIC II or REMIC III to
fail to qualify as a REMIC at any time that any Certificates are Outstanding.
The terms "United States," "State" and "International Organization" shall have
the meanings set forth in section 7701 of the Code or successor provisions. A
corporation will not be treated as an instrumentality of the United States or of
any State or political subdivision thereof for these purposes if all of its
activities are subject to tax and, with the exception of Xxxxxxx Mac, a majority
of its board of directors is not selected by such government unit.
Person: Any individual, corporation, partnership, joint venture,
association, joint- stock company, limited liability company, trust,
unincorporated organization or government, or any agency or political
subdivision thereof.
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Prepayment Assumption: The applicable rate of prepayment, as described in
the Prospectus Supplement relating to each Class of Offered Certificates.
Prepayment Charge: Any prepayment premium, penalty or charge payable by a
Mortgagor in connection with any Principal Prepayment on a Mortgage Loan
pursuant to the terms of the related Mortgage Note.
Prepayment Interest Excess: With respect to any Distribution Date, for
each EMC Mortgage Loan that was the subject of a Principal Prepayment in full or
in part during the portion of the related Prepayment Period occurring between
the first day of the calendar month in which such Distribution Date occurs and
the Determination Date of the calendar month in which such Distribution Date
occurs, an amount equal to interest (to the extent received) at the applicable
Net Mortgage Rate on the amount of such Principal Prepayment for the number of
days commencing on the first day of the calendar month in which such
Distribution Date occurs and ending on the last date through which interest is
collected from the related Mortgagor.
Prepayment Interest Shortfall: With respect to any Distribution Date, for
each Mortgage Loan that was the subject of a partial Principal Prepayment, a
Principal Prepayment in full, or that became a Liquidated Loan during the
related Prepayment Period, (other than a Principal Prepayment in full resulting
from the purchase of a Mortgage Loan pursuant to Section 2.02, 2.03, 4.21 or
11.01 hereof), the amount, if any, by which (i) one month's interest at the
applicable Net Mortgage Rate on the Stated Principal Balance of such Mortgage
Loan immediately prior to such prepayment (or liquidation) or in the case of a
partial Principal Prepayment on the amount of such prepayment (or liquidation
proceeds) exceeds (ii) the amount of interest paid or collected in connection
with such Principal Prepayment or such liquidation proceeds less the sum of (a)
the related Servicing Fee and (b) the LPMI Fee, if any.
Prepayment Period: As to any Distribution Date and (i) each EMC Mortgage
Loan, the period commencing on the 16th day of the month prior to the month in
which the related Distribution Date occurs and ending on the 15th day of the
month in which such Distribution Date occurs and (ii) any other Mortgage Loan,
the period set forth in the related Servicing Agreement.
Primary Mortgage Insurance Policy: Any primary mortgage guaranty insurance
policy issued in connection with a Mortgage Loan which provides compensation to
a Mortgage Note holder in the event of default by the obligor under such
Mortgage Note or the related security instrument, if any or any replacement
policy therefor through the related Accrual Period for such Class relating to a
Distribution Date.
Principal Distribution Amount: With respect to each Distribution Date, is
equal to the sum of the Basic Principal Distribution Amount for such
Distribution Date, plus any Extra Principal Distribution Amount for such
Distribution Date.
Principal Funds: With respect to any Distribution Date, (i) the sum,
without duplication, of (a) all scheduled principal collected during the related
Due Period, (b) all Advances relating to principal made on or prior to the
Distribution Account Deposit Date, (c) Principal Prepayments exclusive of
Prepayment Charges or penalties collected during the related Prepayment Period,
(d) the
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Stated Principal Balance of each Mortgage Loan that was repurchased by the
Seller pursuant to Sections 2.02 or 2.03 or by EMC pursuant to Section 4.21, (e)
the aggregate of all Substitution Adjustment Amounts for the related
Determination Date in connection with the substitution of Mortgage Loans
pursuant to Section 2.03(c), (e) all Liquidation Proceeds collected during the
related Prepayment Period (to the extent such Liquidation Proceeds relate to
principal) and remitted by the Company or the related Servicer to the
Distribution Account pursuant to this Agreement or the related Servicing
Agreement and (f) amounts in respect of principal paid by the Majority Class C
Certificateholder pursuant to Section 11.01 minus (ii) all amounts required to
be reimbursed pursuant to Sections 5.02, 5.04, 5.06 and 5.08 or as otherwise set
forth in this Agreement.
Principal Remittance Amount: With respect to each Distribution Date, the
sum of the amounts listed in clauses (a) through (e) of the definition of
Principal Funds.
Principal Prepayment: Any Mortgagor payment or other recovery of (or
proceeds with respect to) principal on a Mortgage Loan (including loans
purchased or repurchased under Sections 2.02, 2.03, 4.21 and 11.01 hereof) that
is received in advance of its scheduled Due Date and is not accompanied by an
amount as to interest representing scheduled interest due on any date or dates
in any month or months subsequent to the month of prepayment. Partial Principal
Prepayments shall be applied by the Company or the related Servicer, as
appropriate, in accordance with the terms of the related Mortgage Note.
Private Certificate: Each of the Class P, Class C and Residual
Certificates.
Prospectus Supplement: The Prospectus Supplement dated September 30, 2003
relating to the public offering of the Offered Certificates.
Protected Account: Each account established and maintained by the Company
with respect to receipts on the Mortgage Loans and REO Property in accordance
with Section 5.01 hereof or by the related Servicer in accordance with the
related Servicing Agreement.
PUD: A Planned Unit Development.
Purchase Price: With respect to any Mortgage Loan required to be
repurchased by the Seller pursuant to Section 2.02 or 2.03 hereof, an amount
equal to the sum of (i) 100% of the outstanding principal balance of the
Mortgage Loan as of the date of such purchase plus (ii) accrued interest thereon
at the applicable Mortgage Rate through the first day of the month in which the
Purchase Price is to be distributed to Certificateholders, reduced by any
portion of the Servicing Fee, Servicing Advances and Advances payable to the
purchaser of the Mortgage Loan plus and (iii) any costs and damages (if any)
incurred by the Trust in connection with any violation of such Mortgage Loan of
any predatory or abusive lending laws.
Rating Agency: Each of Xxxxx'x and S&P. If any such organization or its
successor is no longer in existence, "Rating Agency" shall be a nationally
recognized statistical rating organization, or other comparable Person,
designated by the Depositor, notice of which designation shall be given to the
Trustee. References herein to a given rating category of a Rating Agency shall
mean such rating category without giving effect to any modifiers.
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Realized Loss: With respect to each Mortgage Loan as to which a Final
Recovery Determination has been made, an amount (not less than zero) equal to
(i) the unpaid principal balance of such Mortgage Loan as of the commencement of
the calendar month in which the Final Recovery Determination was made, plus (ii)
accrued interest from the Due Date as to which interest was last paid by the
Mortgagor through the end of the calendar month in which such Final Recovery
Determination was made, calculated in the case of each calendar month during
such period (A) at an annual rate equal to the annual rate at which interest was
then accruing on such Mortgage Loan and (B) on a principal amount equal to the
Stated Principal Balance of such Mortgage Loan as of the close of business on
the Distribution Date during such calendar month, minus (v) the proceeds, if
any, received in respect of such Mortgage Loan during the calendar month in
which such Final Recovery Determination was made, net of amounts that are
payable therefrom to the Company pursuant to this Agreement or the applicable
Servicer pursuant to the related Servicing Agreement.
With respect to any REO Property as to which a Final Recovery
Determination has been made, an amount (not less than zero) equal to (i) the
unpaid principal balance of the related Mortgage Loan as of the date of
acquisition of such REO Property on behalf of REMIC I, plus (ii) accrued
interest from the Due Date as to which interest was last paid by the Mortgagor
in respect of the related Mortgage Loan through the end of the calendar month
immediately preceding the calendar month in which such REO Property was
acquired, calculated in the case of each calendar month during such period (A)
at an annual rate equal to the annual rate at which interest was then accruing
on the related Mortgage Loan and (B) on a principal amount equal to the Stated
Principal Balance of the related Mortgage Loan as of the close of business on
the Distribution Date during such calendar month, plus (iii) REO Imputed
Interest for such REO Property for each calendar month commencing with the
calendar month in which such REO Property was acquired and ending with the
calendar month in which such Final Recovery Determination was made, minus (iv)
the aggregate of all unreimbursed Advances and Servicing Advances.
With respect to each Mortgage Loan which has become the subject of a
Deficient Valuation, the difference between the principal balance of the
Mortgage Loan outstanding immediately prior to such Deficient Valuation and the
principal balance of the Mortgage Loan as reduced by the Deficient Valuation.
With respect to each Mortgage Loan which has become the subject of a Debt
Service Reduction, the portion, if any, of the reduction in each affected
Monthly Payment attributable to a reduction in the Mortgage Rate imposed by a
court of competent jurisdiction. Each such Realized Loss shall be deemed to have
been incurred on the Due Date for each affected Monthly Payment.
Record Date: With respect to the Certificates (other than the Class A-3,
Class A-4, Class M-2 and Class B Certificates) and any Distribution Date, the
close of business on the last Business Day of the month preceding the month in
which such Distribution Date occurs. With respect to any Distribution Date and
the Class A-3, Class A-4, Class M-2 and Class B Certificates, so long as such
Certificates are Book-Entry Certificates, the Business Day preceding such
Distribution Date, and otherwise, the close of business on the last Business Day
of the month preceding the month in which such Distribution Date occurs.
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Reference Banks: Shall mean leading banks selected by the Securities
Administrator and engaged in transactions in Eurodollar deposits in the
international Eurocurrency market (i) with an established place of business in
London, (ii) which have been designated as such by the Securities Administrator
and (iii) which are not controlling, controlled by, or under common control
with, the Depositor, the Seller or the Master Servicer.
Reference Bank Rate: With respect to any Accrual Period shall mean the
arithmetic mean, rounded upwards, if necessary, to the nearest whole multiple of
0.03125%, of the offered rates for United States dollar deposits for one month
that are quoted by the Reference Banks as of 11:00 a.m., New York City time, on
the related Interest Determination Date to prime banks in the London interbank
market for a period of one month in an amount approximately equal to the
aggregate Certificate Principal Balance of the Class A-3, Class M-2 and Class B
Certificates for such Accrual Period, provided that at least two such Reference
Banks provide such rate. If fewer than two offered rates appear, the Reference
Bank Rate will be the arithmetic mean, rounded upwards, if necessary, to the
nearest whole multiple of 0.03125%, of the rates quoted by one or more major
banks in New York City, selected by the Securities Administrator, as of 11:00
a.m., New York City time, on such date for loans in United States dollars to
leading European banks for a period of one month in amounts approximately equal
to the aggregate Certificate Principal Balance of the Class A-3, Class M-2 and
Class B Certificates for such Accrual Period.
Regular Certificate: Any Certificate other than a Residual Certificate.
Relief Act: The Soldiers' and Sailors' Civil Relief Act of 1940, as
amended or any similar state law.
REMIC: A "real estate mortgage investment conduit" within the meaning of
section 860D of the Code.
REMIC I: The segregated pool of assets described in Section 6.06(a).
REMIC I Interest Loss Allocation Amount": With respect to any Distribution
Date, an amount equal to (a) the product of (i) the aggregate Stated Principal
Balance of the Mortgage Loans and REO Properties then outstanding and (ii) the
REMIC I Remittance Rate for REMIC I Regular Interest LTI- AA minus the Marker
Rate, divided by (b) 12.
REMIC I Interests: The REMIC I Regular Interests and the Class R-1
Certificates.
REMIC I Overcollateralization Amount: With respect to any date of
determination, (i) 1% of the aggregate Uncertificated Principal Balances of the
REMIC I Regular Interests minus (ii) the aggregate of the Uncertificated
Balances of REMIC I Regular Interest LTI-A1, REMIC I Regular Interest LTI-A2,
REMIC I Regular Interest LTI-A3, REMIC I Regular Interest LTI-A5, REMIC I
Regular Interest LTI-M1, REMIC I Regular Interest LTI-M2, REMIC I Regular
Interest LTI-B and REMIC Regular Interest LTI-P, in each case as of such date of
determination.
REMIC I Overcollateralization Target Amount: 1% of the
Overcollateralization Target Amount.
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REMIC I Principal Loss Allocation Amount: With respect to any Distribution
Date, an amount equal to (a) the product of (i) the aggregate Stated Principal
Balance of the Mortgage Loans and REO Properties then outstanding and (ii) 1
minus a fraction, the numerator of which is two times the aggregate of the
Uncertificated Principal Balances of REMIC I Regular Interest LTI-A1, REMIC I
Regular Interest LTI-A2, REMIC I Regular Interest LTI-A3, REMIC I Regular
Interest LTI-A5, REMIC I Regular Interest LTI-M1, REMIC I Regular Interest
LTI-M2 and REMIC I Regular Interest LTI-B and the denominator of which is the
aggregate of the Uncertificated Balances of REMIC I Regular Interest LTI-A1,
REMIC I Regular Interest LTI-A2, REMIC I Regular Interest LTI-A3, REMIC I
Regular Interest LTI-A5, REMIC I Regular Interest LTI-M1, REMIC I Regular
Interest LTI- M2, REMIC I Regular Interest LTI-B and REMIC I Regular Interest
LTI-ZZ.
REMIC I Regular Interest LTI-ZZ Maximum Interest Deferral Amount: With
respect to any Distribution Date, the excess of (i) accrued interest at the
Uncertificated REMIC I Pass-Through Rate applicable to REMIC I Regular Interest
LTI-ZZ for such Distribution Date on a balance equal to the Uncertificated
Principal Balance of REMIC I Regular Interest LTI-ZZ minus the REMIC I
Overcollateralization Amount, in each case for such Distribution Date, over (ii)
Uncertificated Accrued Interest on REMIC I Regular Interest LTI-A1, REMIC I
Regular Interest LTI-A2, REMIC I Regular Interest LTI-A3, REMIC I Regular
Interest LTI-A5, REMIC I Regular Interest LTI-M1, REMIC I Regular Interest
LTI-M2 and REMIC I Regular Interest LTI-B for such Distribution Date, with the
rate on each such REMIC I Regular Interest subject to a cap equal to the related
Pass- Through Rate.
REMIC I Regular Interests: REMIC I Regular Interest LTI-AA, REMIC I
Regular Interest LTI-A1, REMIC I Regular Interest LTI-A2, REMIC I Regular
Interest LTI-A3, REMIC I Regular Interest LTI-A5, REMIC I Regular Interest
LTI-M1, REMIC I Regular Interest LTI-M2, REMIC I Regular Interest LTI-B, REMIC I
Regular Interest LTI-ZZ and REMIC I Regular Interest LTI-P.
REMIC I Regular Interest LTI-AA: One of the separate non-certificated
beneficial ownership interests in REMIC I issued hereunder and designated as a
Regular Interest in REMIC I. REMIC I Regular Interest LTI-AA shall accrue
interest at the related Uncertificated REMIC I Pass-Through Rate in effect from
time to time, and shall be entitled to distributions of principal, subject to
the terms and conditions hereof, in an aggregate amount equal to its initial
Uncertificated Principal Balance as set forth in the Preliminary Statement
hereto.
REMIC I Regular Interest LTI-A1: One of the separate non-certificated
beneficial ownership interests in REMIC I issued hereunder and designated as a
Regular Interest in REMIC I. REMIC I Regular Interest LTI-A1 shall accrue
interest at the related Uncertificated REMIC I Pass-Through Rate in effect from
time to time, and shall be entitled to distributions of principal, subject to
the terms and conditions hereof, in an aggregate amount equal to its initial
Uncertificated Principal Balance as set forth in the Preliminary Statement
hereto.
REMIC I Regular Interest LTI-A2: One of the separate non-certificated
beneficial ownership interests in REMIC I issued hereunder and designated as a
Regular Interest in REMIC I. REMIC I Regular Interest LTI-A2 shall accrue
interest at the related Uncertificated REMIC I Pass-Through Rate in effect from
time to time, and shall be entitled to distributions of principal, subject to
the terms
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and conditions hereof, in an aggregate amount equal to its initial
Uncertificated Principal Balance as set forth in the Preliminary Statement
hereto.
REMIC I Regular Interest LTI-A3: One of the separate non-certificated
beneficial ownership interests in REMIC I issued hereunder and designated as a
Regular Interest in REMIC I. REMIC I Regular Interest LTI-A3 shall accrue
interest at the related Uncertificated REMIC I Pass-Through Rate in effect from
time to time, and shall be entitled to distributions of principal, subject to
the terms and conditions hereof, in an aggregate amount equal to its initial
Uncertificated Principal Balance as set forth in the Preliminary Statement
hereto.
REMIC I Regular Interest LTI-A5: One of the separate non-certificated
beneficial ownership interests in REMIC I issued hereunder and designated as a
Regular Interest in REMIC I. REMIC I Regular Interest LTI-A5 shall accrue
interest at the related Uncertificated REMIC I Pass-Through Rate in effect from
time to time, and shall be entitled to distributions of principal, subject to
the terms and conditions hereof, in an aggregate amount equal to its initial
Uncertificated Principal Balance as set forth in the Preliminary Statement
hereto.
REMIC I Regular Interest LTI-B: One of the separate non-certificated
beneficial ownership interests in REMIC I issued hereunder and designated as a
Regular Interest in REMIC I. REMIC I Regular Interest LTI-B shall accrue
interest at the related Uncertificated REMIC I Pass-Through Rate in effect from
time to time, and shall be entitled to distributions of principal, subject to
the terms and conditions hereof, in an aggregate amount equal to its initial
Uncertificated Principal Balance as set forth in the Preliminary Statement
hereto.
REMIC I Regular Interest LTI-M1: One of the separate non-certificated
beneficial ownership interests in REMIC I issued hereunder and designated as a
Regular Interest in REMIC I. REMIC I Regular Interest LTI-M1 shall accrue
interest at the related Uncertificated REMIC I Pass-Through Rate in effect from
time to time, and shall be entitled to distributions of principal, subject to
the terms and conditions hereof, in an aggregate amount equal to its initial
Uncertificated Principal Balance as set forth in the Preliminary Statement
hereto.
REMIC I Regular Interest LTI-M2: One of the separate non-certificated
beneficial ownership interests in REMIC I issued hereunder and designated as a
Regular Interest in REMIC I. REMIC I Regular Interest LTI-M2 shall accrue
interest at the related Uncertificated REMIC I Pass-Through Rate in effect from
time to time, and shall be entitled to distributions of principal, subject to
the terms and conditions hereof, in an aggregate amount equal to its initial
Uncertificated Principal Balance as set forth in the Preliminary Statement
hereto.
REMIC I Regular Interest LTI-P: One of the separate non-certificated
beneficial ownership interests in REMIC I issued hereunder and designated as a
Regular Interest in REMIC I. REMIC I Regular Interest LTI-P shall accrue
interest at the related Uncertificated REMIC I Pass-Through Rate in effect from
time to time, and shall be entitled to distributions of principal, subject to
the terms and conditions hereof, in an aggregate amount equal to its initial
Uncertificated Principal Balance as set forth in the Preliminary Statement
hereto.
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REMIC I Regular Interest LTI-ZZ: One of the separate non-certificated
beneficial ownership interests in REMIC I issued hereunder and designated as a
Regular Interest in REMIC I. REMIC I Regular Interest LTI-ZZ shall accrue
interest at the related Uncertificated REMIC I Pass-Through Rate in effect from
time to time, and shall be entitled to distributions of principal, subject to
the terms and conditions hereof, in an aggregate amount equal to its initial
Uncertificated Principal Balance as set forth in the Preliminary Statement
hereto.
REMIC II: The segregated pool of assets described in the Preliminary
Statement, consisting of the REMIC I Regular Interests.
REMIC II Interests: The REMIC II Regular Interests and the Class R-2
Certificates.
REMIC II Regular Interests: REMIC II Regular Interest LTII-A1, REMIC II
Regular Interest LTII-A2, REMIC II Regular Interest LTII-A3, REMIC II Regular
Interest LTII-A5, REMIC II Regular Interest LTII-M1, REMIC II Regular Interest
LTII-M2, REMIC II Regular Interest LTII-B, REMIC II Regular Interest LTII-C and
REMIC II Regular Interest LTII-X.
XXXXX XX Regular Interest LTII-A1: One of the separate non-certificated
beneficial ownership interests in REMIC II issued hereunder and designated as a
Regular Interest in REMIC II. REMIC II Regular Interest LTII-A1 shall accrue
interest at the related Uncertificated REMIC II Pass-Through Rate in effect from
time to time, and shall be entitled to distributions of principal, subject to
the terms and conditions hereof, in an aggregate amount equal to its initial
Uncertificated Principal Balance as set forth in the Preliminary Statement
hereto.
REMIC II Regular Interest LTII-A2: One of the separate non-certificated
beneficial ownership interests in REMIC II issued hereunder and designated as a
Regular Interest in REMIC II. REMIC II Regular Interest LTII-A2 shall accrue
interest at the related Uncertificated REMIC II Pass-Through Rate in effect from
time to time, and shall be entitled to distributions of principal, subject to
the terms and conditions hereof, in an aggregate amount equal to its initial
Uncertificated Principal Balance as set forth in the Preliminary Statement
hereto.
REMIC II Regular Interest LTII-A3: One of the separate non-certificated
beneficial ownership interests in REMIC II issued hereunder and designated as a
Regular Interest in REMIC II. REMIC II Regular Interest LTII-A3 shall accrue
interest at the related Uncertificated REMIC II Pass-Through Rate in effect from
time to time, and shall be entitled to distributions of principal, subject to
the terms and conditions hereof, in an aggregate amount equal to its initial
Uncertificated Principal Balance as set forth in the Preliminary Statement
hereto.
REMIC II Regular Interest LTII-A5: One of the separate non-certificated
beneficial ownership interests in REMIC II issued hereunder and designated as a
Regular Interest in REMIC II. REMIC II Regular Interest LTII-A5 shall accrue
interest at the related Uncertificated REMIC II Pass-Through Rate in effect from
time to time, and shall be entitled to distributions of principal, subject to
the terms and conditions hereof, in an aggregate amount equal to its initial
Uncertificated Principal Balance as set forth in the Preliminary Statement
hereto.
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REMIC II Regular Interest LTII-B: One of the separate non-certificated
beneficial ownership interests in REMIC II issued hereunder and designated as a
Regular Interest in REMIC II. REMIC II Regular Interest LTII-B shall accrue
interest at the related Uncertificated REMIC II Pass-Through Rate in effect from
time to time, and shall be entitled to distributions of principal, subject to
the terms and conditions hereof, in an aggregate amount equal to its initial
Uncertificated Principal Balance as set forth in the Preliminary Statement
hereto.
REMIC II Regular Interest LTII-C: One of the separate non-certificated
beneficial ownership interests in REMIC II issued hereunder and designated as a
Regular Interest in REMIC II. REMIC II Regular Interest LTII-C shall accrue
interest at the related Uncertificated REMIC II Pass-Through Rate in effect from
time to time, and shall be entitled to distributions of principal, subject to
the terms and conditions hereof, in an aggregate amount equal to its initial
Uncertificated Principal Balance as set forth in the Preliminary Statement
hereto.
REMIC II Regular Interest LTII-C Distribution Amount: With respect to any
Distribution Date, the sum of (i) the Uncertificated Accrued Interest for REMIC
II Regular Interest LTII-C for such Distribution Date and (ii) any
Overcollateralization Release Amount for such Distribution Date; provided,
however that on and after the Distribution Date on which the Certificate
Principal Balance of the Certificates has been reduced to zero, the REMIC II
Regular Interest LTII-C Distribution Amount shall include the Overcollateralized
Amount.
REMIC II Regular Interest LTII-M1: One of the separate non-certificated
beneficial ownership interests in REMIC II issued hereunder and designated as a
Regular Interest in REMIC II. REMIC II Regular Interest LTII-M1 shall accrue
interest at the related Uncertificated REMIC II Pass-Through Rate in effect from
time to time, and shall be entitled to distributions of principal, subject to
the terms and conditions hereof, in an aggregate amount equal to its initial
Uncertificated Principal Balance as set forth in the Preliminary Statement
hereto.
REMIC II Regular Interest LTII-M2: One of the separate non-certificated
beneficial ownership interests in REMIC II issued hereunder and designated as a
Regular Interest in REMIC II. REMIC II Regular Interest LTII-M2 shall accrue
interest at the related Uncertificated REMIC II Pass-Through Rate in effect from
time to time, and shall be entitled to distributions of principal, subject to
the terms and conditions hereof, in an aggregate amount equal to its initial
Uncertificated Principal Balance as set forth in the Preliminary Statement
hereto.
REMIC II Regular Interest LTII-P: One of the separate non-certificated
beneficial ownership interests in REMIC II issued hereunder and designated as a
Regular Interest in REMIC II. REMIC II Regular Interest LTII-P shall accrue
interest at the related Uncertificated REMIC II Pass-Through Rate in effect from
time to time, and shall be entitled to distributions of principal, subject to
the terms and conditions hereof, in an aggregate amount equal to its initial
Uncertificated Principal Balance as set forth in the Preliminary Statement
hereto.
REMIC III: The segregated pool of assets described in the Preliminary
Statement, consisting of the REMIC II Regular Interests.
REMIC III Certificates: The Regular Certificates and the Class R-3
Certificates.
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REMIC III Regular Interest A-3: One of the separate non-certificated
beneficial ownership interests in REMIC III issued hereunder and designated as a
Regular Interest in REMIC III. REMIC III Regular Interest A-3 shall accrue
interest at the related Uncertificated REMIC III Pass-Through Rate in effect
from time to time, and shall be deemed to receive distributions of principal,
subject to the terms and conditions hereof, in an aggregate amount equal to its
initial Uncertificated Principal Balance as set forth in the Preliminary
Statement hereto, as such amounts are distributed in respect of the Class A-3
Certificates.
REMIC III Regular Interest A-4: One of the separate non-certificated
beneficial ownership interests in REMIC III issued hereunder and designated as a
Regular Interest in REMIC III. REMIC III Regular Interest A-4 shall accrue
interest at the related Uncertificated REMIC III Pass-Through Rate in effect
from time to time, and shall not be entitled to distributions of principal.
REMIC Opinion: Shall mean an Opinion of Counsel to the effect that the
proposed action will not have an adverse affect on any REMIC created hereunder.
REMIC Provisions: Provisions of the federal income tax law relating to
real estate mortgage investment conduits, which appear at sections 860A through
860G of Subchapter M of Chapter 1 of the Code, and related provisions, and
proposed, temporary and final regulations and published rulings, notices and
announcements promulgated thereunder, as the foregoing may be in effect from
time to time as well as provisions of applicable state laws.
REMIC Regular Interest: A REMIC I Regular Interest, REMIC II Regular
Interest, REMIC III Regular Interest A-3, REMIC III Regular Interest A-4 or
Regular Certificate (other than the Class A-3 Certificates and Class A-4
Certificates).
Remittance Date: Shall mean (i) with respect to the Company, the Business
Day immediately preceding the Distribution Account Deposit Date and (ii) with
respect to the related Servicer, the date specified in the related Servicing
Agreement.
Remittance Report: As defined in Section 6.04(d).
REO Imputed Interest: As to any REO Property, for any calendar month
during which such REO Property was at any time part of REMIC I, one month's
interest at the applicable Net Mortgage Rate on the Stated Principal Balance of
such REO Property (or, in the case of the first such calendar month, of the
related Mortgage Loan, if appropriate) as of the close of business on the
Distribution Date in such calendar month.
REO Property: A Mortgaged Property acquired by the Company or the related
Servicer through foreclosure or deed-in-lieu of foreclosure in connection with a
defaulted Mortgage Loan.
Replacement Mortgage Loan: A Mortgage Loan or Mortgage Loans in the
aggregate substituted by the Seller for a Deleted Mortgage Loan, which must, on
the date of such substitution, as confirmed in a Request for Release, (i) have a
Stated Principal Balance, after deduction of the principal portion of the
Scheduled Payment due in the month of substitution, not in excess of, and not
less than 90% of, the Stated Principal Balance of the Deleted Mortgage Loan;
(ii) have a fixed
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Mortgage Rate not less than or more than 1% per annum higher than the Mortgage
Rate of the Deleted Mortgage Loan; (iii) have the same or higher credit quality
characteristics than that of the Deleted Mortgage Loan; (iv) have a
Loan-to-Value Ratio no higher than that of the Deleted Mortgage Loan; (v) have a
remaining term to maturity no greater than (and not more than one year less
than) that of the Deleted Mortgage Loan; (vi) not permit conversion of the
Mortgage Rate from a fixed rate to a variable rate; (vii) have the same lien
priority as the Deleted Mortgage Loan; (viii) constitute the same occupancy type
as the Deleted Mortgage Loan or be owner occupied; and (ix) comply with each
representation and warranty set forth in Section 2.03 hereof.
Repurchase Price: With respect to each Mortgage Loan, a price equal to (i)
the outstanding principal balance of such Mortgage Loan, plus (ii) interest on
such outstanding principal balance at the Mortgage Rate (net of the Servicing
Fee Rate) from the last date through which interest has been paid to the end of
the month of repurchase, less (iii) amounts advanced by the Company or the
related Servicer in respect of such repurchased Mortgage Loan which are being
held in the Master Servicer Collection Account for remittance to the Trustee
plus (iv) any costs and damages (if any) incurred by the Trust in connection
with any violation of such Mortgage Loan of any predatory or abusive lending
laws.
Request for Release: The Request for Release to be submitted by the
Seller, the Company, the related Servicer or the Master Servicer to the
Custodian substantially in the form of Exhibit H. Each Request for Release
furnished to the Custodian by the Seller, the Company, the related Servicer or
the Master Servicer shall be in duplicate and shall be executed by an officer of
such Person or a Servicing Officer (or, if furnished electronically to the
Custodian, shall be deemed to have been sent and executed by an officer of such
Person or a Servicing Officer) of the Company or the related Servicer, as
applicable.
Required Insurance Policy: With respect to any Mortgage Loan, any
insurance policy that is required to be maintained from time to time under this
Agreement or the related Servicing Agreement.
Residual Certificates: The Class R-1, Class R-2 and Class R-3 Certificates
each evidencing the sole class of "residual interests" (within the meaning of
Section 860G(a)(2) of the Code) in the related REMIC.
Responsible Officer: With respect to the Trustee, any Vice President, any
Assistant Vice President, the Secretary, any Assistant Secretary, or any Trust
Officer with specific responsibility for the transactions contemplated hereby,
any other officer customarily performing functions similar to those performed by
any of the above designated officers or other officers of the Trustee specified
by the Trustee, as to whom, with respect to a particular matter, such matter is
referred because of such officer's knowledge of and familiarity with the
particular subject.
S&P: Standard & Poor's, a division of The XxXxxx-Xxxx Companies, Inc.
Scheduled Payment: The scheduled monthly payment on a Mortgage Loan due on
any Due Date allocable to principal and/or interest on such Mortgage Loan.
Securities Act: The Securities Act of 1933, as amended.
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Securities Administrator: Xxxxx Fargo Bank Minnesota, National
Association, in its capacity as securities administrator hereunder, and its
successors and assigns.
Seller: EMC Mortgage Corporation, a Delaware corporation, and its
successors and assigns, in its capacity as seller of the Mortgage Loans to the
Depositor.
Senior Certificates: The Class A-1, Class A-2, Class A-3, Class A-4 and
Class A-5 Certificates.
Servicer: Shall mean either HSBC, CitiMortgage or Union Federal.
Servicing Advances: All customary, reasonable and necessary "out of
pocket" costs and expenses (including reasonable legal fees) incurred in the
performance by the Company or the related Servicer of its servicing obligations
hereunder or under the related Servicing Agreement, including, but not limited
to, the cost of (i) the preservation, restoration and protection of a Mortgaged
Property, (ii) any enforcement or judicial proceedings, including foreclosures,
and including any expenses incurred in relation to any such proceedings that
result from the Mortgage Loan being registered in the MERS(R) System, (iii) the
management and liquidation of any REO Property (including, without limitation,
realtor's commissions) and (iv) compliance with any obligations under Section
3.07 hereof to cause insurance to be maintained.
Servicing Agreement: Shall mean either the HSBC Servicing Agreement, the
CitiMortgage Servicing Agreement or the Union Federal Servicing Agreement.
Servicing Fee: As to each Mortgage Loan and any Distribution Date, an
amount equal to 1/12th of the Servicing Fee Rate multiplied by the Stated
Principal Balance of such Mortgage Loan as of the last day of the related Due
Period or, in the event of any payment of interest that accompanies a Principal
Prepayment in full during the related Due Period made by the Mortgagor
immediately prior to such prepayment, interest at the Servicing Fee Rate on the
Stated Principal Balance of such Mortgage Loan for the period covered by such
payment of interest.
Servicing Fee Rate: 0.25% per annum.
Servicing Modification: With respect to any Mortgage Loan that is in
default or, in the reasonable judgment of the Company or the related Servicer,
as to which default is reasonably foreseeable, any modification which is
effected by the Company or the related Servicer in accordance with the terms of
this Agreement or the related Servicing Agreement which results in any change in
the outstanding Stated Principal Balance, any change in the Mortgage Rate or any
extension of the term of such Mortgage Loan.
Servicing Officer: Any officer of the Company or the related Servicer
involved in, or responsible for, the administration and servicing of the
Mortgage Loans (i) in the case of the Company, whose name and facsimile
signature appear on a list of servicing officers furnished to the Trustee by the
Company on the Closing Date pursuant to this Agreement, as such list may from
time to time be amended and (ii) in the case of the related Servicer, as to
which evidence reasonably
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acceptable to the Trustee, as applicable, of due authorization, by such party
has been furnished from time to time to the Trustee.
Startup Day: The Startup Day for each REMIC formed hereunder shall be the
Closing Date.
Stated Principal Balance: With respect to any Mortgage Loan or related REO
Property and any Distribution Date, the Cut-off Date Principal Balance thereof
minus the sum of (i) the principal portion of the Scheduled Payments due with
respect to such Mortgage Loan during each Due Period ending prior to such
Distribution Date (and irrespective of any delinquency in their payment), (ii)
all Principal Prepayments with respect to such Mortgage Loan received prior to
or during the related Prepayment Period, and all Liquidation Proceeds to the
extent applied by the Company or the related Servicer as recoveries of principal
in accordance with Section 3.09 or the related Servicing Agreement with respect
to such Mortgage Loan, that were received by the Company or the related Servicer
as of the close of business on the last day of the Prepayment Period related to
such Distribution Date and (iii) any Realized Losses on such Mortgage Loan
incurred during the related Prepayment Period. The Stated Principal Balance of a
Liquidated Loan equals zero.
Subordinated Certificates: The Class M-1, Class M-2 and Class B
Certificates.
Subservicing Agreement: Any agreement entered into between the Company and
a subservicer with respect to the subservicing of any Mortgage Loan hereunder by
such subservicer.
Substitution Adjustment Amount: The meaning ascribed to such term pursuant
to Section 2.03(c).
Successor Master Servicer: The meaning ascribed to such term pursuant to
Section 9.01.
Target Rate: Shall mean (A) for distribution dates on or prior to the
optional termination date, 5.25% per annum and (B) for distribution dates
thereafter, 5.75% per annum.
Tax Matters Person: The person designated as "tax matters person" in the
manner provided under Treasury regulation ss. 1.860F-4(d) and temporary Treasury
regulation ss. 301.6231(a)(7)-1T. The holder of the greatest Percentage Interest
in a Class of Residual Certificates shall be the Tax Matters Person for the
related REMIC. The Securities Administrator, or any successor thereto or
assignee thereof shall serve as tax administrator hereunder and as agent for the
related Tax Matters Person.
Transfer Affidavit: As defined in Section 7.02(c).
Transfer: Any direct or indirect transfer or sale of any Ownership
Interest in a Certificate.
Trust Fund: The corpus of the trust created hereunder consisting of (i)
the Mortgage Loans and all interest accruing and principal due with respect
thereto after the Cut-off Date to the extent not applied in computing the
Cut-off Date Principal Balance thereof; (ii) the Class P Certificate Account,
the Net WAC Reserve Fund, the Distribution Account, the Master Servicer
Collection Account maintained by the Master Servicer and the Protected Accounts
maintained by the Company and the Servicers and all amounts deposited therein
pursuant to the applicable provisions of this Agreement
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and the Servicing Agreements; (iii) property that secured a Mortgage Loan and
has been acquired by foreclosure, deed in lieu of foreclosure or otherwise; (iv)
the mortgagee's rights under the Insurance Policies with respect to the Mortgage
Loans; (v) the Servicing Agreement and the Assignment Agreements; (vi) the
rights under the Mortgage Loan Purchase Agreement, and (vii) all proceeds of the
foregoing, including proceeds of conversion, voluntary or involuntary, of any of
the foregoing into cash or other liquid property. The Net WAC Reserve Fund shall
constitute an asset of the Trust Fund but will not be included in REMIC I, REMIC
II or REMIC III.
Trustee: JPMorgan Chase Bank, a New York banking corporation, not in its
individual capacity, but solely in its capacity as trustee for the benefit of
the Certificateholders under this Agreement, and any successor thereto, and any
corporation or national banking association resulting from or surviving any
consolidation or merger to which it or its successors may be a party and any
successor trustee as may from time to time be serving as successor trustee
hereunder.
20% Clean-up Call Date: Shall mean the first Distribution Date upon which
the Stated Principal Balance of the Mortgage Loans as of the end of the related
Due Period is less than or equal to 20% of the aggregate Cut-off Date Principal
Balance of the Mortgage Loans.
Uncertificated Accrued Interest: With respect to each Uncertificated REMIC
Regular Interest on each Distribution Date, an amount equal to one month's
interest at the related Uncertificated Pass- Through Rate on the Uncertificated
Principal Balance or Uncertificated Notional Amount, as applicable, of such
REMIC Regular Interest. In each case, Uncertificated Accrued Interest will be
reduced by any Prepayment Interest Shortfalls and shortfalls resulting from
application of the Relief Act (allocated to such REMIC Regular Interests as set
forth in Sections 1.02 and 6.07).
Uncertificated Notional Amount: With respect to REMIC II Regular Interest
LTII-C, the aggregate Uncertificated Principal Balance of the REMIC I Regular
Interests (other than REMIC I Regular Interest LTI-P). With respect to REMIC III
Regular Interest A-4, the aggregate Uncertificated Principal Balance of REMIC II
Regular Interest LTII-A3.
Uncertificated Pass-Through Rate: Any Uncertificated REMIC I Pass-Through
Rate, Uncertificated REMIC II Pass-Through Rate or Uncertificated REMIC III
Pass-Through Rate.
Uncertificated Principal Balance: With respect to each REMIC Regular
Interest, the principal amount of such REMIC Regular Interest outstanding as of
any date of determination. As of the Closing Date, the Uncertificated Principal
Balance of each REMIC Regular Interest shall equal the amount set forth in the
Preliminary Statement hereto as its initial Uncertificated Principal Balance. On
each Distribution Date, the Uncertificated Principal Balance of each REMIC
Regular Interest shall be reduced by all distributions of principal made on such
REMIC Regular Interest on such Distribution Date pursuant to Sections 6.06 and
6.07 and, if and to the extent necessary and appropriate, shall be further
reduced on such Distribution Date by Realized Losses as provided in Sections
6.06 and 6.07. The Uncertificated Principal Balance of each REMIC Regular
Interest shall never be less than zero.
Uncertificated REMIC I Pass-Through Rate: With respect to any REMIC I
Regular Interest other than REMIC I Regular Interest LTI-P and any Distribution
Date, a per annum rate equal to the
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average of the Net Mortgage Rates of the Mortgage Loans as of the first day of
the related Due Period, weighted on the basis of the Stated Principal Balances
as of the first day of the related Due Period. With respect to REMIC I Regular
Interest LTI-P and any Distribution Date, 0.00%.
Uncertificated REMIC II Pass-Through Rate:
With respect to REMIC II Regular Interest LTII-A1 and REMIC II Regular
Interest LTII-M1 and (i) any Distribution Date which occurs on or prior to the
Optional Termination Date, 5.250% per annum and (ii) for each Distribution Date
thereafter, 5.750% per annum, in each case subject to a cap equal to the
weighted average of the REMIC I Pass-Through Rates on the REMIC I Regular
Interests, weighted on the basis of the Uncertificated Principal Balance of each
such REMIC I Regular Interest.
With respect to REMIC II Regular Interest LTII-A2 and (i) any Distribution
Date which occurs on or prior to the Optional Termination Date, the lesser of
(a) 5.000% per annum and (b) the product of (x) 00.0000000000% and (y) the
weighted average of the REMIC I Pass-Through Rates on the REMIC I Regular
Interests, weighted on the basis of the Uncertificated Principal Balance of each
such REMIC I Regular Interest and (ii) for each Distribution Date thereafter,
the lesser of (a) 5.500% per annum and (b) the product of (x) 00.0000000000% and
(y) the weighted average of the REMIC I Pass-Through Rates on the REMIC I
Regular Interests, weighted on the basis of the Uncertificated Principal Balance
of each such REMIC I Regular Interest.
With respect to REMIC II Regular Interest LTII-A3 and (i) any Distribution
Date which occurs on or prior to the Optional Termination Date, the lesser of
(a) 8.000% per annum and (b) the product of (x) 000.0000000000% and (y) the
weighted average of the REMIC I Pass-Through Rates on the REMIC I Regular
Interests, weighted on the basis of the Uncertificated Principal Balance of each
such REMIC I Regular Interest and (ii) for each Distribution Date thereafter,
the lesser of (a) 8.500% per annum and (b) the product of (x) 000.0000000000%
and (y) the weighted average of the REMIC I Pass-Through Rates on the REMIC I
Regular Interests, weighted on the basis of the Uncertificated Principal Balance
of each such REMIC I Regular Interest.
With respect to REMIC II Regular Interest LTII-A5 and (i) any Distribution
Date which occurs on or prior to the Optional Termination Date, the lesser of
(a) 4.750% per annum and (b) the product of (x) 00.0000000000% and (y) the
weighted average of the REMIC I Pass-Through Rates on the REMIC I Regular
Interests, weighted on the basis of the Uncertificated Principal Balance of each
such REMIC I Regular Interest and (ii) for each Distribution Date thereafter,
the lesser of (a) 5.250% per annum and (b) the product of (x) 00.0000000000% and
(y) the weighted average of the REMIC I Pass-Through Rates on the REMIC I
Regular Interests, weighted on the basis of the Uncertificated Principal Balance
of each such REMIC I Regular Interest.
With respect to REMIC II Regular Interest LTII-M2 and (i) any Distribution
Date which occurs on or prior to the Optional Termination Date, One-Month LIBOR
plus 1.70% per annum and (ii) for each Distribution Date thereafter, One-Month
LIBOR plus 2.70% per annum, in each case subject to a cap equal to the weighted
average of the REMIC I Pass-Through Rates on the REMIC I Regular Interests,
weighted on the basis of the Uncertificated Principal Balance of each such REMIC
I Regular Interest.
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With respect to REMIC II Regular Interest LTII-B and (i) any Distribution
Date which occurs on or prior to the Optional Termination Date, One-Month LIBOR
plus 3.25% per annum and (ii) for each Distribution Date thereafter, One-Month
LIBOR plus 5.00% per annum, in each case subject to a cap equal to the weighted
average of the REMIC I Pass-Through Rates on the REMIC I Regular Interests,
weighted on the basis of the Uncertificated Principal Balance of each such REMIC
I Regular Interest.
With respect to REMIC II Regular Interest LTII-C, a per annum rate equal
to the percentage equivalent of a fraction, the numerator of which is (x) the
sum of the amounts calculated pursuant to clauses (A) through (I) below, and the
denominator of which is (y) the aggregate of the Uncertificated Principal
Balances of the REMIC I Regular Interests (other than REMIC I Regular Interest
LTI-P). For purposes of calculating the Uncertificated REMIC II Pass-Through
Rate for REMIC II Regular Interest LTII-C, the numerator is equal to the sum of
the following components:
(A) the Uncertificated REMIC I Pass-Through Rate for REMIC I Regular
Interest LTI-AA minus the Marker Rate, applied to an amount equal to the
Uncertificated Principal Balance of REMIC I Regular Interest LTI-AA;
(B) the Uncertificated REMIC I Pass-Through Rate for REMIC I Regular
Interest LTI-A1 minus the Marker Rate, applied to an amount equal to the
Uncertificated Principal Balance of REMIC I Regular Interest LTI-A1;
(C) the Uncertificated REMIC I Pass-Through Rate for REMIC I Regular
Interest LTI-A2 minus the Marker Rate, applied to an amount equal to the
Uncertificated Principal Balance of REMIC I Regular Interest LTI-A2;
(D) the Uncertificated REMIC I Pass-Through Rate for REMIC I Regular
Interest LTI-A3 minus the Marker Rate, applied to an amount equal to the
Uncertificated Principal Balance of REMIC I Regular Interest LTI-A3;
(E) the Uncertificated REMIC I Pass-Through Rate for REMIC I Regular
Interest LTI-A5 minus the Marker Rate, applied to an amount equal to the
Uncertificated Principal Balance of REMIC I Regular Interest LTI-A5;
(F) the Uncertificated REMIC I Pass-Through Rate for REMIC I Regular
Interest LTI-M1 minus the Marker Rate, applied to an amount equal to the
Uncertificated Principal Balance of REMIC I Regular Interest LTI-M1;
(G) the Uncertificated REMIC I Pass-Through Rate for REMIC I Regular
Interest LTI-M2 minus the Marker Rate, applied to an amount equal to the
Uncertificated Principal Balance of REMIC I Regular Interest LTI-M2
(H) the Uncertificated REMIC I Pass-Through Rate for REMIC I Regular
Interest LTI-B minus the Marker Rate, applied to an amount equal to the
Uncertificated Principal Balance of REMIC I Regular Interest LTI-B; and
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(I) the Uncertificated REMIC I Pass-Through Rate for REMIC I Regular
Interest LTI-ZZ minus the Marker Rate, applied to an amount equal to the
Uncertificated Principal Balance of REMIC I Regular Interest LTI-ZZ.
Uncertificated REMIC III Pass-Through Rate:
With respect to REMIC III Regular Interest A-3,(i) on any Distribution
Date which occurs on or prior to the Optional Termination Date, One-Month LIBOR
plus 0.60% per annum and (ii) for each Distribution Date thereafter, the
One-Month LIBOR plus 1.10% per annum, in each case subject to a cap equal to the
weighted average of the Uncertificated REMIC II Pass-Through Rate with respect
to REMIC II Regular Interest LTII-A3, weighted on the basis of the
Uncertificated Principal Balance thereof immediately prior to such Distribution
Date.
With respect to REMIC III Regular Interest A-4, on any Distribution Date,
the excess, if any, of (A) the Uncertificated REMIC II Pass-Through Rate with
respect to REMIC II Regular Interest LTII-A3 over (B) the lesser of (x) (i) on
any Distribution Date which occurs on or prior to the Optional Termination Date,
One-Month LIBOR plus 0.60% per annum and (ii) for each Distribution Date
thereafter, the One-Month LIBOR plus 1.10% per annum, and (y) an amount equal to
the weighted average of the Uncertificated REMIC II Pass-Through Rate with
respect to REMIC II Regular Interest LTII-A3, weighted on the basis of the
Uncertificated Principal Balance thereof immediately prior to such Distribution
Date.
Uncertificated REMIC Regular Interest: The REMIC I Regular Interests, the
REMIC II - Regular Interests, REMIC III Regular Interest A-3 and REMIC III
Regular Interest A-4.
Union Federal: Union Federal Bank of Indianapolis.
Union Federal Assignment Agreement: Shall mean the Assignment, Assumption
and Recognition Agreement, dated September 30, 2003, by and among the Seller,
Union Federal and the Trustee acknowledging the assignment of the Union Federal
Servicing Agreement and the Union Federal Loans to the Trust.
Union Federal Loans: Those Mortgage Loans subject to this Agreement which
were purchased by the Seller from Union Federal pursuant to the Union Federal
Servicing Agreement.
Union Federal Servicing Agreement: Shall mean the Amended and Restated
Forward Commitment Flow Mortgage Loan Purchase and Servicing Agreement, dated as
of March 4, 2003, between the Seller and Union Federal, as modified by the Union
Federal Assignment Agreement.
Unpaid Interest Shortfalls: Shall mean Interest Shortfalls net of payments
by the Company, the related Servicer or the Master Servicer in respect of
Compensating Interest.
Voting Rights: The portion of the voting rights of all the Certificates
that is allocated to any Certificate for purposes of the voting provisions
hereunder. Voting Rights shall be allocated (i) 94.50% to the Certificates
(other than the Class C, Class P and the Residual Certificates), (ii) 1% to the
Class P Certificates, (iii) 3% to the Class C Certificates and (iv) 0.50% to
each Class of Residual
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Certificates, with the allocation among the Certificates other than the Class C,
Class P and Residual Certificates to be in proportion to the Certificate
Principal Balance of each Class relative to the Certificate Principal Balance of
all other such Classes. Voting Rights will be allocated among the Certificates
of each such Class in accordance with their respective Percentage Interests.
Section 1.02 Allocation of Certain Interest Shortfalls.
For purposes of calculating the amount of the Monthly Interest
Distributable Amount for the Class A-1, Class A-2, Class A-3, Class X-0, Xxxxx
X-0, Class M-1, Class M-2, Class B and Class C Certificates for any Distribution
Date, (1) the aggregate amount of any Unpaid Interest Shortfalls in respect of
the Mortgage Loans for any Distribution Date shall be allocated first, in
reduction of amounts otherwise distributable to the Class C Certificates and
Class R Certificates, and thereafter among the Offered Certificates in
proportion to the amount of the Monthly Interest Distributable Amount that would
have been allocated to such Certificates in the absence of such Unpaid Interest
Shortfalls and (2) the interest portion of Realized Losses for the Mortgage
Loans will be allocated first, to the Class C Certificates based on, and to the
extent of, one month's interest at the then applicable Pass-Through Rate on the
Certificate Notional Balance thereof, second to the Class B Certificates, third
to the Class M-2 Certificates, and fourth to the Class M-1 Certificates, and
following the Cross-Over Date to the Senior Certificates, on a pro rata basis.
For purposes of calculating the amount of Uncertificated Accrued Interest
for the REMIC I Regular Interests for any Distribution Date, the aggregate
amount of any Unpaid Interest Shortfalls incurred in respect of the Mortgage
Loans for any Distribution Date shall be allocated first, to Uncertificated
Accrued Interest payable to REMIC I Regular Interest LTI-AA and REMIC I Regular
Interest LTI-ZZ up to an aggregate amount equal to the REMIC I Interest Loss
Allocation Amount, 98% and 2%, respectively, and thereafter among REMIC I
Regular Interest LTI-A1, REMIC I Regular Interest LTI-A2, REMIC I Regular
Interest LTI-A3, REMIC I Regular Interest LTI-A4, REMIC I Regular Interest
LTI-A5, REMIC I Regular Interest LTI-M1, REMIC I Regular Interest LTI-M2, REMIC
I Regular Interest LTI-B and REMIC I Regular Interest LTI-ZZ, pro rata based on,
and to the extent of, one month's interest at the then applicable respective
Uncertificated REMIC I Pass- Through Rate on the respective Uncertificated
Principal Balance of each such REMIC I Regular Interest.
For purposes of calculating the amount of Uncertificated Accrued Interest
for the REMIC II Regular Interests for any Distribution Date, the aggregate
amount of any Unpaid Interest Shortfalls incurred in respect of the Mortgage
Loans for any Distribution Date shall be allocated first to REMIC II Regular
Interest LTII-C, and then, pro rata, to REMIC II Regular Interest LTII-A1, REMIC
II Regular Interest LTII-A2, REMIC II Regular Interest LTII-A3, REMIC I Regular
Interest LTI-A4, REMIC I Regular Interest LTI-A5, REMIC II Regular Interest
LTII-M1, REMIC II Regular Interest LTII-M2, REMIC II Regular Interest LTII-B, in
each case to the extent of one month's interest at the then applicable
respective REMIC II Remittance Rate on the respective Uncertificated Balance of
each such REMIC II Regular Interest.
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ARTICLE II
CONVEYANCE OF TRUST FUND
REPRESENTATIONS AND WARRANTIES
Section 2.01 Conveyance of Trust Fund.
The Seller hereby sells, transfers, assigns, sets over and otherwise
conveys to the Depositor, without recourse, all the right, title and interest of
the Seller in and to the assets in the Trust Fund.
The Seller has entered into this Agreement in consideration for the
purchase of the Mortgage Loans by the Depositor and has agreed to take the
actions specified herein.
The Depositor, concurrently with the execution and delivery hereof,
hereby sells, transfers, assigns, sets over and otherwise conveys to the Trustee
for the use and benefit of the Certificateholders, without recourse, all the
right, title and interest of the Depositor in and to the Trust Fund.
In connection with such sale, the Depositor has delivered to, and
deposited with, the Trustee or the Custodian, as its agent, the following
documents or instruments with respect to each Mortgage Loan so assigned: (i) the
original Mortgage Note, including any riders thereto, endorsed without recourse
to the order of "JPMorgan Chase Bank, as Trustee for certificateholders of Bear
Xxxxxxx Asset Backed Securities, Inc. Asset Backed Certificates, Series
2003-AC5," and showing to the extent available to the Seller an unbroken chain
of endorsements from the original payee thereof to the Person endorsing it to
the Trustee, (ii) the original Mortgage and, if the related Mortgage Loan is a
MOM Loan, noting the presence of the MIN and language indicating that such
Mortgage Loan is a MOM Loan, which shall have been recorded (or if the original
is not available, a copy), with evidence of such recording indicated thereon (or
if clause (x) in the proviso below applies, shall be in recordable form), (iii)
unless the Mortgage Loan is a MOM Loan, the assignment (either an original or a
copy, which may be in the form of a blanket assignment if permitted in the
jurisdiction in which the Mortgaged Property is located) to the Trustee of the
Mortgage with respect to each Mortgage Loan in the name of "JPMorgan Chase Bank,
as Trustee for certificateholders of Bear Xxxxxxx Asset Backed Securities, Inc.
Asset Backed Certificates, Series 2003-AC5," which shall have been recorded (or
if clause (x) in the proviso below applies, shall be in recordable form) (iv) an
original or a copy of all intervening assignments of the Mortgage, if any, to
the extent available to the Seller, with evidence of recording thereon, (v) the
original policy of title insurance or mortgagee's certificate of title insurance
or commitment or binder for title insurance, if available, or a copy thereof,
or, in the event that such original title insurance policy is unavailable, a
photocopy thereof, or in lieu thereof, a current lien search on the related
Mortgaged Property and (vi) originals or copies of all available assumption,
modification or substitution agreements, if any; provided, however, that in lieu
of the foregoing, the Seller may deliver the following documents, under the
circumstances set forth below: (x) if any Mortgage, assignment thereof to the
Trustee or intervening assignments thereof have been delivered or are being
delivered to recording offices for recording and have not been returned in time
to permit their delivery as specified above, the Depositor may deliver a true
copy thereof with a
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certification by the Seller or the title company issuing the commitment for
title insurance, 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"; and (y) in lieu of the Mortgage Notes relating to the Mortgage Loans
identified in the list set forth in Exhibit J, the Depositor may deliver a lost
note affidavit and indemnity and a copy of the original note, if available; and
provided, further, however, that in the case of Mortgage Loans which have been
prepaid in full after the Cut-Off Date and prior to the Closing Date, the
Depositor, in lieu of delivering the above documents, may deliver to the Trustee
and its Custodian a certification of a Servicing Officer to such effect and in
such case shall deposit all amounts paid in respect of such Mortgage Loans, in
the Master Servicer Collection Account or in the Distribution Account on the
Closing Date. In the case of the documents referred to in clause (x) above, the
Depositor shall deliver such documents to the Trustee or its Custodian promptly
after they are received. The Seller shall cause, at its expense, the Mortgage
and intervening assignments, if any, and to the extent required in accordance
with the foregoing, the assignment of the Mortgage to the Trustee to be
submitted for recording promptly after the Closing Date; provided that the
Seller need not cause to be recorded any assignment (a) in any jurisdiction
under the laws of which, as evidenced by an Opinion of Counsel addressed to the
Trustee delivered by the Seller to the Trustee and the Rating Agencies, the
recordation of such assignment is not necessary to protect the Trustee's
interest in the related Mortgage Loan or (b) if MERS is identified on the
Mortgage or on a properly recorded assignment of the Mortgage as mortgagee of
record solely as nominee for Seller and its successors and assigns. In the event
that the Seller, the Depositor or the Master Servicer gives written notice to
the Trustee that a court has recharacterized the sale of the Mortgage Loans as a
financing, the Seller shall submit or cause to be submitted for recording as
specified above or, should the Seller fail to perform such obligations, the
Master Servicer shall cause each such previously unrecorded assignment to be
submitted for recording as specified above at the expense of the Trust. In the
event a Mortgage File is released to the Company or the Servicer as a result of
such Person having completed a Request for Release, the Custodian shall, if not
so completed, complete the assignment of the related Mortgage in the manner
specified in clause (iii) above.
In connection with the assignment of any Mortgage Loan registered on
the MERS(R) System, the Seller further agrees that it will cause, at the
Seller's own expense, within 30 days after the Closing Date, the MERS(R) System
to indicate that such Mortgage Loans have been assigned by the Seller to the
Depositor and by the Depositor to the Trustee in accordance with this Agreement
for the benefit of the Certificateholders by including (or deleting, in the case
of Mortgage Loans which are repurchased in accordance with this Agreement) in
such computer files (a) the code in the field which identifies the specific
Trustee and (b) the code in the field "Pool Field" which identifies the series
of the Certificates issued in connection with such Mortgage Loans. The Seller
further agrees that it will not, and will not permit the Company, any Servicer
or the Master Servicer to, and the Master Servicer agrees that it will not,
alter the codes referenced in this paragraph with respect to any Mortgage Loan
during the term of this Agreement unless and until such Mortgage Loan is
repurchased in accordance with the terms of this Agreement or the Mortgage Loan
Purchase Agreement.
Section 2.02 Acceptance of the Mortgage Loans.
(a) Based on the Initial Certification received by it from the
Custodian, the Trustee acknowledges receipt of, subject to the further review
and exceptions reported by the Custodian
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pursuant to the procedures described below, the documents (or certified copies
thereof) delivered to the Trustee or the Custodian on its behalf pursuant to
Section 2.01 and declares that it holds and will continue to hold directly or
through a custodian those documents and any amendments, replacements or
supplements thereto and all other assets of the Trust Fund delivered to it in
trust for the use and benefit of all present and future Holders of the
Certificates. On the Closing Date, the Trustee or the Custodian on its behalf
will deliver an Initial Certification in the form annexed hereto as Exhibit C-1
confirming whether or not it has received the Mortgage File for each Mortgage
Loan, but without review of such Mortgage File, except to the extent necessary
to confirm whether such Mortgage File contains the original Mortgage Note or a
lost note affidavit and indemnity in lieu thereof. No later than 90 days after
the Closing Date, the Trustee or the Custodian on its behalf shall, for the
benefit of the Certificateholders, review each Mortgage File delivered to it and
execute and deliver to the Seller and, if reviewed by the Custodian, the
Trustee, an Interim Certification substantially in the form annexed hereto as
Exhibit C-2. In conducting such review, the Trustee or the Custodian on its
behalf will ascertain whether all required documents have been executed and
received and whether those documents relate, determined on the basis of the
Mortgagor name, original principal balance and loan number, to the Mortgage
Loans identified in Exhibit B to this Agreement, as supplemented (provided,
however, that with respect to those documents described in subclauses (iv) and
(vi) of Section 2.01, such obligations shall extend only to documents actually
delivered pursuant to such subclauses). In performing any such review, the
Trustee and the Custodian may conclusively rely on the purported due execution
and genuineness of any such document and on the purported genuineness of any
signature thereon. If the Trustee or the Custodian on its behalf finds any
document constituting part of the Mortgage File not to have been executed or
received, or to be unrelated to the Mortgage Loans identified in Exhibit B or to
appear to be defective on its face, the Trustee or the Custodian on its behalf
shall include such information in the exception report attached to Exhibit C-2.
The Seller shall correct or cure any such defect or, if prior to the end of the
second anniversary of the Closing Date, the Seller may substitute for the
related Mortgage Loan a Replacement Mortgage Loan, which substitution shall be
accomplished in the manner and subject to the conditions set forth in Section
2.03 or shall deliver to the Trustee an Opinion of Counsel addressed to the
Trustee to the effect that such defect does not materially or adversely affect
the interests of the Certificateholders in such Mortgage Loan within 60 days
from the date of notice from the Trustee of the defect and if the Seller fails
to correct or cure the defect or deliver such opinion within such period, the
Seller will, subject to Section 2.03, within 90 days from the notification of
the Trustee purchase such Mortgage Loan at the Purchase Price; provided,
however, that if such defect relates solely to the inability of the Seller to
deliver the Mortgage, assignment thereof to the Trustee, or intervening
assignments thereof with evidence of recording thereon because such documents
have been submitted for recording and have not been returned by the applicable
jurisdiction, the Seller shall not be required to purchase such Mortgage Loan if
the Seller delivers such documents promptly upon receipt, but in no event later
than 360 days after the Closing Date.
(b) No later than 180 days after the Closing Date, the Trustee or
the Custodian on its behalf will review, for the benefit of the
Certificateholders, the Mortgage Files and will execute and deliver or cause to
be executed and delivered to the Seller and, if reviewed by the Custodian, the
Trustee, a Final Certification substantially in the form annexed hereto as
Exhibit C-3. In conducting such review, the Trustee or the Custodian on its
behalf will ascertain whether each document required to be recorded has been
returned from the recording office with evidence of recording thereon and the
Trustee or the Custodian on its behalf has received either an original or a copy
thereof, as required
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in Section 2.01 (provided, however, that with respect to those documents
described in subclauses (iv) and (vi) of Section 2.01, such obligations shall
extend only to documents actually delivered pursuant to such subclauses). If the
Trustee or the Custodian on its behalf finds any document with respect to a
Mortgage Loan has not been received, or to be unrelated, determined on the basis
of the Mortgagor name, original principal balance and loan number, to the
Mortgage Loans identified in Exhibit B or to appear defective on its face, the
Trustee or the Custodian on its behalf shall note such defect in the exception
report attached to the Final Certification and shall promptly notify the Seller.
The Seller shall correct or cure any such defect or, if prior to the end of the
second anniversary of the Closing Date, the Seller may substitute for the
related Mortgage Loan a Replacement Mortgage Loan, which substitution shall be
accomplished in the manner and subject to the conditions set forth in Section
2.03 or shall deliver to the Trustee an Opinion of Counsel addressed to the
Trustee to the effect that such defect does not materially or adversely affect
the interests of Certificateholders in such Mortgage Loan within 60 days from
the date of notice from the Trustee of the defect and if the Seller is unable
within such period to correct or cure such defect, or to substitute the related
Mortgage Loan with a Replacement Mortgage Loan or to deliver such opinion, the
Seller shall, subject to Section 2.03, within 90 days from the notification of
the Trustee, purchase such Mortgage Loan at the Purchase Price; provided,
however, that if such defect relates solely to the inability of the Seller to
deliver the Mortgage, assignment thereof to the Trustee or intervening
assignments thereof with evidence of recording thereon, because such documents
have not been returned by the applicable jurisdiction, the Seller shall not be
required to purchase such Mortgage Loan, if the Seller delivers such documents
promptly upon receipt, but in no event later than 360 days after the Closing
Date.
(c) In the event that a Mortgage Loan is purchased by the Seller in
accordance with subsections 2.02(a) or (b) above or Section 2.03, the Seller
shall remit the applicable Purchase Price to the Master Servicer for deposit in
the Master Servicer Collection Account and shall provide written notice to the
Trustee detailing the components of the Purchase Price, signed by a Servicing
Officer. Upon deposit of the Purchase Price in the Master Servicer Collection
Account and upon receipt of a Request for Release with respect to such Mortgage
Loan, the Trustee or the Custodian will release to the Seller the related
Mortgage File and the Trustee shall execute and deliver all instruments of
transfer or assignment, without recourse, representation or warranty furnished
to it by the Seller, as are necessary to vest in the Seller title to and rights
under the Mortgage Loan. Such purchase shall be deemed to have occurred on the
date on which the deposit into the Master Servicer Collection Account was made.
The Trustee shall promptly notify the Rating Agencies of such repurchase. The
obligation of the Seller to cure, repurchase or substitute for any Mortgage Loan
as to which a defect in a constituent document exists shall be the sole remedies
respecting such defect available to the Certificateholders or to the Trustee on
their behalf.
(d) The Seller shall deliver to the Trustee, and Trustee agrees to
accept the Mortgage Note and other documents constituting the Mortgage File with
respect to any Replacement Mortgage Loan, which the Trustee or the Custodian
will review as provided in subsections 2.02(a) and 2.02(b), provided, that the
Closing Date referred to therein shall instead be the date of delivery of the
Mortgage File with respect to each Replacement Mortgage Loan.
Section 2.03 Representations, Warranties and Covenants of the Company and
the Seller.
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(a) The Company hereby represents and warrants to the Master
Servicer, the Depositor, the Securities Administrator and the Trustee as
follows, as of the Closing Date:
(i) It is duly organized and is validly existing and in good
standing under the laws of the State of Delaware and is duly authorized
and qualified to transact any and all business contemplated by this
Agreement to be conducted by it in any state in which a Mortgaged Property
is located or is otherwise not required under applicable law to effect
such qualification and, in any event, is in compliance with the doing
business laws of any such state, to the extent necessary to ensure its
ability to enforce each Mortgage Loan, to service the Mortgage Loans in
accordance with the terms of this Agreement and to perform any of its
other obligations under this Agreement in accordance with the terms
hereof.
(ii) It has the full corporate power and authority to service each
Mortgage Loan, and to execute, deliver and perform, and to enter into and
consummate the transactions contemplated by this Agreement and has duly
authorized by all necessary corporate action on its part the execution,
delivery and performance of this Agreement; and this Agreement, assuming
the due authorization, execution and delivery hereof by the other parties
hereto, constitutes its legal, valid and binding obligation, enforceable
against it in accordance with its terms, except that (a) the
enforceability hereof may be limited by bankruptcy, insolvency,
moratorium, receivership and other similar laws relating to creditors'
rights generally and (b) the remedy of specific performance and injunctive
and other forms of equitable relief may be subject to equitable defenses
and to the discretion of the court before which any proceeding therefor
may be brought.
(iii) The execution and delivery of this Agreement by it, the
servicing of the EMC Mortgage Loans by it under this Agreement, the
consummation of any other of the transactions contemplated by this
Agreement, and the fulfillment of or compliance with the terms hereof are
in its ordinary course of business and will not (A) result in a material
breach of any term or provision of its charter or by-laws or (B)
materially conflict with, result in a material breach, violation or
acceleration of, or result in a material default under, the terms of any
other material agreement or instrument to which it is a party or by which
it may be bound, or (C) constitute a material violation of any statute,
order or regulation applicable to it of any court, regulatory body,
administrative agency or governmental body having jurisdiction over it;
and it is not in breach or violation of any material indenture or other
material agreement or instrument, or in violation of any statute, order or
regulation of any court, regulatory body, administrative agency or
governmental body having jurisdiction over it which breach or violation
may materially impair its ability to perform or meet any of its
obligations under this Agreement.
(iv) It is an approved servicer of conventional mortgage loans for
Xxxxxx Xxx or Xxxxxxx Mac and is a mortgagee approved by the Secretary of
Housing and Urban Development pursuant to sections 203 and 211 of the
National Housing Act.
(v) No litigation is pending or, to the best of its knowledge,
threatened, against it that would materially and adversely affect the
execution, delivery or enforceability of this
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Agreement or its ability to service the EMC Mortgage Loans or to perform
any of its other obligations under this Agreement in accordance with the
terms hereof.
(vi) No consent, approval, authorization or order of any court or
governmental agency or body is required for its execution, delivery and
performance of, or compliance with, this Agreement or the consummation of
the transactions contemplated hereby, or if any such consent, approval,
authorization or order is required, it has obtained the same.
(b) The Seller hereby represents and warrants to the Depositor, the
Securities Administrator, the Master Servicer and the Trustee as follows, as of
the Closing Date:
(i) The Seller is duly organized as a Delaware corporation and is
validly existing and in good standing under the laws of the State of
Delaware and is duly authorized and qualified to transact any and all
business contemplated by this Agreement to be conducted by the Seller in
any state in which a Mortgaged Property is located or is otherwise not
required under applicable law to effect such qualification and, in any
event, is in compliance with the doing business laws of any such state, to
the extent necessary to ensure its ability to enforce each Mortgage Loan,
to sell the Mortgage Loans in accordance with the terms of this Agreement
and to perform any of its other obligations under this Agreement in
accordance with the terms hereof.
(ii) The Seller has the full corporate power and authority to sell
each Mortgage Loan, and to execute, deliver and perform, and to enter into
and consummate the transactions contemplated by this Agreement and has
duly authorized by all necessary corporate action on the part of the
Seller the execution, delivery and performance of this Agreement; and this
Agreement, assuming the due authorization, execution and delivery hereof
by the other parties hereto, constitutes a legal, valid and binding
obligation of the Seller, enforceable against the Seller in accordance
with its terms, except that (a) the enforceability hereof may be limited
by bankruptcy, insolvency, moratorium, receivership and other similar laws
relating to creditors' rights generally and (b) the remedy of specific
performance and injunctive and other forms of equitable relief may be
subject to equitable defenses and to the discretion of the court before
which any proceeding therefor may be brought.
(iii) The execution and delivery of this Agreement by the Seller,
the sale of the Mortgage Loans by the Seller under this Agreement, the
consummation of any other of the transactions contemplated by this
Agreement, and the fulfillment of or compliance with the terms hereof are
in the ordinary course of business of the Seller and will not (A) result
in a material breach of any term or provision of the charter or by-laws of
the Seller or (B) materially conflict with, result in a material breach,
violation or acceleration of, or result in a material default under, the
terms of any other material agreement or instrument to which the Seller is
a party or by which it may be bound, or (C) constitute a material
violation of any statute, order or regulation applicable to the Seller of
any court, regulatory body, administrative agency or governmental body
having jurisdiction over the Seller; and the Seller is not in breach or
violation of any material indenture or other material agreement or
instrument, or in violation of any statute, order or regulation of any
court, regulatory body, administrative agency or governmental body having
jurisdiction over it which breach or
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violation may materially impair the Seller's ability to perform or meet
any of its obligations under this Agreement.
(iv) The Seller is an approved seller of conventional mortgage loans
for Xxxxxx Mae or Xxxxxxx Mac and is a mortgagee approved by the Secretary
of Housing and Urban Development pursuant to sections 203 and 211 of the
National Housing Act.
(v) No litigation is pending or, to the best of the Seller's
knowledge, threatened, against the Seller that would materially and
adversely affect the execution, delivery or enforceability of this
Agreement or the ability of the Seller to sell the Mortgage Loans or to
perform any of its other obligations under this Agreement in accordance
with the terms hereof.
(vi) No consent, approval, authorization or order of any court or
governmental agency or body is required for the execution, delivery and
performance by the Seller of, or compliance by the Seller with, this
Agreement or the consummation of the transactions contemplated hereby, or
if any such consent, approval, authorization or order is required, the
Seller has obtained the same.
(vii) With respect to each Mortgage Loan as of the Cut-off Date
(unless otherwise expressly provided):
(A) The information set forth in the Mortgage Loan Schedule on the
Closing Date is complete, true and correct.
(B) All payments required to be made prior to the Cut-off Date with
respect to each Mortgage Loan have been made and no Mortgage Loan is delinquent
sixty or more days; and the Seller has not advanced funds, or induced, solicited
or knowingly received any advance of funds from a party other than the owner of
the Mortgaged Property subject to the Mortgage, directly or indirectly, for the
payment of any amount required under any Mortgage Loan.
(C) Except with respect to taxes, insurance and other amounts
previously advanced by a prior servicer with respect to any Mortgage Loan, to
the best of Seller's knowledge, there are no delinquent taxes, water charges,
sewer rents, assessments, insurance premiums, leasehold payments, including
assessments payable in future installments, or other outstanding charges
affecting the related Mortgaged Property.
(D) The terms of the Mortgage Note and the Mortgage have not been
impaired, waived, altered or modified in any respect, except by written
instruments which in the case of the Mortgage Loans are in the Mortgage File and
have been or will be recorded, if necessary to protect the interests of the
Trustee, and which have been or will be delivered to the Trustee, all in
accordance with this Agreement. The substance of any such waiver, alteration or
modification has been approved by the title insurer, to the extent required by
the related policy. No Mortgagor has been released, in whole or in part, except
in connection with an assumption agreement approved by the title insurer, to the
extent required by the policy, and which assumption agreement in the case of the
Mortgage Loans is part of the Mortgage File.
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(E) The Mortgage Note and the Mortgage are not subject to any right
of rescission, set-off, counterclaim or defense, including the defense of usury,
nor will the operation of any of the terms of the Mortgage Note and the
Mortgage, or the exercise of any right thereunder, render the Mortgage
unenforceable, in whole or in part, or subject to any right of rescission,
set-off, counterclaim or defense, including the defense of usury and no such
right of rescission, set-off, counterclaim or defense has been asserted with
respect thereto.
(F) All buildings upon, or comprising part of, the Mortgaged
Property are insured by an insurer acceptable to Xxxxxx Mae and Xxxxxxx Mac
against loss by fire, hazards of extended coverage and such other hazards as are
customary in the area where the Mortgaged Property is located, and such insurer
is licensed to do business in the state where the Mortgaged Property is located.
All such insurance policies contain a standard mortgagee clause naming the
originator, its successors and assigns as mortgagee and Seller has received no
notice that all premiums thereon have not been paid. If upon origination of the
Mortgage Loan, the Mortgaged Property was, or was subsequently deemed to be, in
an area identified in the Federal Register by the Federal Emergency Management
Agency as having special flood hazards (and such flood insurance has been made
available), which require under applicable law that a flood insurance policy
meeting the requirements of the current guidelines of the Federal Insurance
Administration (or any successor thereto) be obtained, such flood insurance
policy is in effect which policy is with a generally acceptable carrier in an
amount representing coverage not less than the least of (A) the Stated Principal
Balance of the related Mortgage Loan, (B) the minimum amount required to
compensate for damage or loss on a replacement cost basis, or (C) the maximum
amount of insurance that is available under the Flood Disaster Protection Act of
1973. The Mortgage obligates the Mortgagor thereunder to maintain all such
insurance at Mortgagor's cost and expense and, on the Mortgagor's failure to do
so, authorizes the holder of the Mortgage to maintain such insurance at
Mortgagor's cost and expense and to obtain reimbursement therefor from the
Mortgagor.
(G) Any and all requirements of any federal, state or local law
including, usury, truth in lending, real estate settlement procedures including,
the Real Estate Settlement Procedures Act of 1974, as amended, consumer credit
protection, equal credit opportunity or disclosure laws applicable to the
Mortgage Loan have been complied with in all material respects.
(H) The Mortgage has not been satisfied, canceled, subordinated, or
rescinded, in whole or in part, and the Mortgaged Property has not been released
from the lien of the Mortgage, in whole or in part, nor has any instrument been
executed that would effect any such release, cancellation, subordination or
rescission.
(I) The Mortgage is a valid, existing and enforceable first on the
Mortgaged Property, including all improvements on the Mortgaged Property, if
any, subject only to (1) the lien of current real property taxes and assessments
not yet due and payable, (2) covenants, conditions and restrictions, rights of
way, easements and other matters of the public record as of the date of
recording being acceptable to mortgage lending institutions generally and
specifically referred to in the lender's title insurance policy delivered to the
originator of the Mortgage Loan and which do not adversely affect the Appraised
Value of the Mortgaged Property and (3) other matters to which like properties
are commonly subject which do not materially interfere with the benefits of the
security intended to
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be provided by the Mortgage. The Seller has full right to sell and assign the
Mortgage to the Depositor.
(J) The Mortgage Note and the related Mortgage are genuine and each
is the legal, valid and binding obligation of the maker thereof, enforceable in
accordance with its terms, except as the enforceability thereof may be limited
by bankruptcy, insolvency or reorganization or general principles of equity.
(K) All parties to the Mortgage Note and the Mortgage had the legal
capacity to enter into the Mortgage Loan transaction and to execute and deliver
the Mortgage Note and the Mortgage, and the Mortgage Note and the Mortgage have
been duly and properly executed by such parties.
(L) The proceeds of the Mortgage Loan have been fully disbursed and
there is no requirement for future advances thereunder and any and all
requirements as to completion of any on- site or off-site improvement and as to
disbursements of any escrow funds therefor have been complied with. All costs,
fees and expenses incurred in making or closing the Mortgage Loan and the
recording of the Mortgage were paid, and the Mortgagor is not entitled to any
refund of any amounts paid or due under the Mortgage Note or Mortgage.
(M) Immediately prior to the conveyance of the Mortgage Loans by the
Seller to the Depositor hereunder, the Seller was the sole owner and holder of
the Mortgage Loan; the related Originator or the Seller or the Servicer was the
custodian of the related escrow account, if applicable; the Mortgage Loan had
neither been assigned nor pledged, and the Seller had good and marketable title
thereto, and had full right to transfer and sell the Mortgage Loan and the
related servicing rights to the Depositor free and clear of any encumbrance,
equity, lien, pledge, charge, claim or security interest subject to the related
Servicing Agreement, if applicable, and had full right and authority subject to
no interest or participation of, or agreement with, any other party, to sell and
assign the Mortgage Loan and the related servicing rights to the Depositor
pursuant to the terms of this Agreement.
(N) All parties which have had any interest in the Mortgage, whether
as mortgagee, assignee, pledgee or otherwise, are (or, during the period in
which they held and disposed of such interest, were) (1) in compliance with any
and all applicable licensing requirements of the laws of the state wherein the
Mortgaged Property is located, and (2) organized under the laws of such state,
qualified to do business in such state, a federal savings and loan association
or national bank having principal offices in such state or not deemed to be
doing business in such state under applicable law.
(O) The Mortgage Loan is covered by an ALTA lender's title insurance
policy or equivalent form acceptable to the Department of Housing and Urban
Development, or any successor thereto, and qualified to do business in the
jurisdiction where the Mortgaged Property is located, insuring (subject to the
exceptions contained in clause (I) above) the Seller (as assignee), its
successors and assigns as to the first priority lien of the Mortgage in the
original principal amount of the Mortgage Loan and against any loss by reason of
the invalidity or unenforceability of the lien resulting from the provisions of
the Mortgage Note and/or Mortgage providing for adjustment in the Mortgage Rate
and monthly payment. Additionally, such lender's title insurance policy
affirmatively
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insures ingress and egress, and against encroachments by or upon the Mortgaged
Property or any interest therein. With respect to each Mortgage Loan, the Seller
(as assignee) is the sole insured of such lender's title insurance policy, and
such lender's title insurance policy is in full force and effect. No claims have
been made under such lender's title insurance policy, and no prior holder of the
related Mortgage, including the Seller in the case of a Mortgage Loan, has done,
by act or omission, anything which would impair the coverage of such lender's
title insurance policy. (P) Except as provided in clause (B), immediately prior
to the Cut-off Date, there was no default, breach, violation or event of
acceleration existing under the Mortgage or the Mortgage Note and there was no
event which, with the passage of time or with notice and the expiration of any
grace or cure period, would constitute a default, breach, violation or event of
acceleration, and the Seller has not waived any default, breach, violation or
event of acceleration.
(Q) There are no mechanics' or similar liens or claims which have
been filed for work, labor or material (and no rights are outstanding that under
law could give rise to such lien) affecting the related Mortgaged Property which
are or may be liens prior to or equal with, the lien of the related Mortgage.
(R) All improvements which were considered in any appraisal which
was used in determining the Appraised Value of the related Mortgaged Property
lay wholly within the boundaries and building restriction lines of the Mortgaged
Property, and no improvements on adjoining properties encroach upon the
Mortgaged Property.
(S) [Reserved]
(T) The origination, servicing and collection practices with respect
to each Mortgage Note and Mortgage including, the establishment, maintenance and
servicing of the escrow accounts and escrow payments, if any, since origination,
have been conducted in all respects in accordance with the terms of Mortgage
Note and in compliance with all applicable laws and regulations and, unless
otherwise required by law or Xxxxxx Xxx/Xxxxxxx Mac standard, in accordance with
the proper, prudent and customary practices in the mortgage origination and
servicing business. With respect to the escrow accounts and escrow payments, if
any, and any EMC Mortgage Loan all such payments are in the possession or under
the control of the Seller and there exists no deficiencies in connection
therewith for which customary arrangements for repayment thereof have not been
made. Any interest required to be paid pursuant to state and local law has been
properly paid and credited.
(U) The Mortgaged Property is free of material damage and waste and
there is no proceeding pending for the total or partial condemnation thereof.
(V) The Mortgage contains customary and enforceable provisions to
render the rights and remedies of the holder thereof adequate for the
realization against the Mortgaged Property of the benefits of the security
intended to be provided thereby, including, (1) in the case of a Mortgage
designated as a deed of trust, by trustee's sale, and (2) otherwise by judicial
foreclosure. There is no other exemption available to the Mortgagor which would
interfere with the right to sell the Mortgaged Property at a trustee's sale or
the right to foreclose the Mortgage. The Mortgagor has not notified the Seller
and the Seller has no knowledge of any relief requested or allowed to the
Mortgagor under the Relief Act.
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(W) The Mortgage Note is not and has not been secured by any
collateral except the lien of the applicable Mortgage.
(X) [Reserved]
(Y) In the event the Mortgage constitutes a deed of trust, a
trustee, duly qualified under applicable law to serve as such, has been properly
designated and currently so serves and is named in the Mortgage, and no fees or
expenses are or will become payable by the Certificateholders to the trustee
under the deed of trust, except in connection with a trustee's sale after
default by the Mortgagor.
(Z) No Mortgage Loan contains a permanent or temporary "buydown"
provision. The Mortgage Loan is not a graduated payment mortgage loan.
(AA) The Mortgagor has received all disclosure materials required by
applicable law with respect to the making of the Mortgage Loan.
(BB) No Mortgage Loan was made in connection with the construction
or rehabilitation of a Mortgaged Property.
(CC) To the best of Seller's knowledge, the Mortgaged Property is
lawfully occupied under applicable law and all inspections, licenses and
certificates required to be made or issued with respect to all occupied portions
of the Mortgaged Property and, with respect to the use and occupancy of the
same, including but not limited to certificates of occupancy, have been made or
obtained from the appropriate authorities.
(DD) The assignment of Mortgage with respect to a Mortgage Loan is
in recordable form and is acceptable for recording under the laws of the
jurisdiction in which the Mortgaged Property is located.
(EE) [Reserved].
(FF) [Reserved].
(GG) The Mortgaged Property consists of a single parcel of real
property with or without a detached single family residence erected thereon, or
an individual condominium unit, or a 2-4 family dwelling, or an individual unit
in a planned unit development as defined by Xxxxxx Xxx or a manufactured
dwelling which conforms with Xxxxxx Mae and Xxxxxxx Mac requirements regarding
such dwellings, or a townhouse, each structure of which is permanently affixed
to the Mortgaged Property, and is legally classified as real estate.
(HH) [Reserved]
(II) [Reserved]
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(JJ) Each Mortgage Loan at the time of origination was underwritten
in general in accordance with guidelines not inconsistent with the guidelines
set forth in the Prospectus Supplement and generally accepted prime credit
underwriting guidelines.
(KK) No error, omission, misrepresentation, fraud or similar
occurrence with respect to a Mortgage Loan has taken place on the part of the
Seller or the related Originator.
(LL) None of the Mortgage Loans are (a) loans subject to 12 CFR Part
226.31, 12 CFR Part 226.32 or 12 CFR Part 226.34 of Regulation Z, the regulation
implementing TILA, which implements HOEPA or (b) classified and/or defined as a
"high cost home loan" under any state or federal law, including, but not limited
to, the States of Georgia or North Carolina, or the laws of the City of New
York.
(c) Upon discovery by any of the parties hereto of a breach of a
representation or warranty set forth in Section 2.03(b)(vii) that materially and
adversely affects the interests of the Certificateholders in any Mortgage Loan,
the party discovering such breach shall give prompt written notice thereof to
the other parties. Any breach of a representation or warranty contained in
clause (LL) above, shall be automatically deemed to affect materially and
adversely the interests of the Certificateholders. The Seller hereby covenants
with respect to the representations and warranties set forth in Section
2.03(b)(vii), that within 90 days of the discovery of a breach of any
representation or warranty set forth therein that materially and adversely
affects the interests of the Certificateholders in any Mortgage Loan, it shall
cure such breach in all material respects and, if such breach is not so cured,
(i) if such 90-day period expires prior to the second anniversary of the Closing
Date, remove such Mortgage Loan (a "Deleted Mortgage Loan") from the Trust Fund
and substitute in its place a Replacement Mortgage Loan, in the manner and
subject to the conditions set forth in this Section; or (ii) repurchase the
affected Mortgage Loan or Mortgage Loans from the Trustee at the Purchase Price
in the manner set forth below; provided that any such substitution pursuant to
(i) above or repurchase pursuant to (ii) above shall not be effected prior to
the delivery to the Trustee of an Opinion of Counsel if required by Section 2.05
hereof and any such substitution pursuant to (i) above shall not be effected
prior to the additional delivery to the Trustee of a Request for Release. The
Seller shall promptly reimburse the Master Servicer and the Trustee for any
expenses reasonably incurred by the Master Servicer or the Trustee in respect of
enforcing the remedies for such breach. To enable the Securities Administrator
to amend the Mortgage Loan Schedule, the Seller shall, unless it cures such
breach in a timely fashion pursuant to this Section 2.03, promptly notify the
Securities Administrator whether it intends either to repurchase, or to
substitute for, the Mortgage Loan affected by such breach. With respect to the
representations and warranties in Section 2.03(b)(vii) that are made to the best
of the Seller's knowledge, if it is discovered by any of the Depositor, the
Master Servicer, the Seller, the Securities Administrator or the Trustee that
the substance of such representation and warranty is inaccurate and such
inaccuracy materially and adversely affects the value of the related Mortgage
Loan, notwithstanding the Seller's lack of knowledge with respect to the
substance of such representation or warranty, the Seller shall nevertheless be
required to cure, substitute for or repurchase the affected Mortgage Loan in
accordance with the foregoing.
With respect to any Replacement Mortgage Loan or Loans, the Seller
shall deliver to the Trustee for the benefit of the Certificateholders such
documents and agreements as are required by Section 2.01. No substitution will
be made in any calendar month after the Determination Date for
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such month. Scheduled Payments due with respect to Replacement Mortgage Loans in
the Due Period related to the Distribution Date on which such proceeds are to be
distributed shall not be part of the Trust Fund and will be retained by the
Seller. For the month of substitution, distributions to Certificateholders will
include the Scheduled Payment due on any Deleted Mortgage Loan for the related
Due Period and thereafter the Seller shall be entitled to retain all amounts
received in respect of such Deleted Mortgage Loan. The Securities Administrator
shall amend the Mortgage Loan Schedule for the benefit of the Certificateholders
to reflect the removal of such Deleted Mortgage Loan and the substitution of the
Replacement Mortgage Loan or Loans and the Securities Administrator shall
deliver the amended Mortgage Loan Schedule to the Trustee and the Custodian.
Upon such substitution, the Replacement Mortgage Loan or Loans shall be subject
to the terms of this Agreement in all respects, and the Seller shall be deemed
to have made with respect to such Replacement Mortgage Loan or Loans, as of the
date of substitution, the representations and warranties set forth in Section
2.03(b)(vii) with respect to such Mortgage Loan. Upon any such substitution and
the deposit into the Master Servicer Collection Account of the amount required
to be deposited therein in connection with such substitution as described in the
following paragraph and receipt by the Trustee of a Request for Release for such
Mortgage Loan, the Trustee or the Custodian shall release to the Seller the
Mortgage File relating to such Deleted Mortgage Loan and held for the benefit of
the Certificateholders and the Trustee shall execute and deliver at the Seller's
direction such instruments of transfer or assignment as have been prepared by
the Seller, in each case without recourse, representation or warranty as shall
be necessary to vest in the Seller, or its respective designee, title to the
Trustee's interest in any Deleted Mortgage Loan substituted for pursuant to this
Section 2.03.
For any month in which the Seller substitutes one or more
Replacement Mortgage Loans for a Deleted Mortgage Loan, the Master Servicer will
determine the amount (if any) by which the aggregate principal balance of all
the Replacement Mortgage Loans as of the date of substitution is less than the
Stated Principal Balance (after application of the principal portion of the
Scheduled Payment due in the month of substitution) of such Deleted Mortgage
Loan. An amount equal to the aggregate of such deficiencies, described in the
preceding sentence for any Distribution Date (such amount, the "Substitution
Adjustment Amount") shall be deposited into the Master Servicer Collection
Account, by the Seller delivering such Replacement Mortgage Loan on the
Determination Date for the Distribution Date relating to the Prepayment Period
during which the related Mortgage Loan became required to be purchased or
replaced hereunder.
In the event that the Seller shall have repurchased a Mortgage Loan,
the Purchase Price therefor shall be deposited into the Master Servicer
Collection Account maintained by the Master Servicer, on the Determination Date
for the Distribution Date in the month following the month during which the
Seller became obligated to repurchase or replace such Mortgage Loan and upon
such deposit of the Purchase Price, the delivery of an Opinion of Counsel if
required by Section 2.05 and the receipt of a Request for Release, the Trustee
or the Custodian shall release the related Mortgage File held for the benefit of
the Certificateholders to the Seller, and the Trustee shall execute and deliver
at such Person's direction the related instruments of transfer or assignment
prepared by the Seller, in each case without recourse, representation or
warranty as shall be necessary to transfer title from the Trustee for the
benefit of the Certificateholders and transfer the Trustee's interest to the
Seller to any Mortgage Loan purchased pursuant to this Section 2.03. It is
understood and agreed that the obligation under this Agreement of the Seller to
cure, repurchase or replace any Mortgage Loan
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as to which a breach has occurred and is continuing shall constitute the sole
remedies against the Seller respecting such breach available to
Certificateholders, the Depositor or the Trustee.
(d) The representations and warranties set forth in Section 2.03
hereof shall survive delivery of the respective Mortgage Loans and Mortgage
Files to the Trustee or the Custodian for the benefit of the Certificateholders.
Section 2.04 Representations and Warranties of the Depositor.
The Depositor hereby represents and warrants to the Master Servicer,
the Securities Administrator and the Trustee as follows, as of the date hereof
and as of the Closing Date:
(i) The Depositor is duly organized and is validly existing as a
corporation in good standing under the laws of the State of Delaware and
has full power and authority (corporate and other) necessary to own or
hold its properties and to conduct its business as now conducted by it and
to enter into and perform its obligations under this Agreement.
(ii) The Depositor has the full corporate power and authority to
execute, deliver and perform, and to enter into and consummate the
transactions contemplated by, this Agreement and has duly authorized, by
all necessary corporate action on its part, the execution, delivery and
performance of this Agreement; and this Agreement, assuming the due
authorization, execution and delivery hereof by the other parties hereto,
constitutes a legal, valid and binding obligation of the Depositor,
enforceable against the Depositor in accordance with its terms, subject,
as to enforceability, to (i) bankruptcy, insolvency, reorganization,
moratorium and other similar laws affecting creditors' rights generally
and (ii) general principles of equity, regardless of whether enforcement
is sought in a proceeding in equity or at law.
(iii) The execution and delivery of this Agreement by the Depositor,
the consummation of the transactions contemplated by this Agreement, and
the fulfillment of or compliance with the terms hereof are in the ordinary
course of business of the Depositor and will not (A) result in a material
breach of any term or provision of the charter or by-laws of the Depositor
or (B) materially conflict with, result in a material breach, violation or
acceleration of, or result in a material default under, the terms of any
other material agreement or instrument to which the Depositor is a party
or by which it may be bound or (C) constitute a material violation of any
statute, order or regulation applicable to the Depositor of any court,
regulatory body, administrative agency or governmental body having
jurisdiction over the Depositor; and the Depositor is not in breach or
violation of any material indenture or other material agreement or
instrument, or in violation of any statute, order or regulation of any
court, regulatory body, administrative agency or governmental body having
jurisdiction over it which breach or violation may materially impair the
Depositor's ability to perform or meet any of its obligations under this
Agreement.
(iv) No litigation is pending, or, to the best of the Depositor's
knowledge, threatened, against the Depositor that would materially and
adversely affect the execution,
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delivery or enforceability of this Agreement or the ability of the
Depositor to perform its obligations under this Agreement in accordance
with the terms hereof.
(v) No consent, approval, authorization or order of any court or
governmental agency or body is required for the execution, delivery and
performance by the Depositor of, or compliance by the Depositor with, this
Agreement or the consummation of the transactions contemplated hereby, or
if any such consent, approval, authorization or order is required, the
Depositor has obtained the same.
The Depositor hereby represents and warrants to the Trustee as of
the Closing Date, following the transfer of the Mortgage Loans to it by the
Seller, the Depositor had good title to the Mortgage Loans and the related
Mortgage Notes were subject to no offsets, claims, defenses or counterclaims.
It is understood and agreed that the representations and warranties
set forth in the immediately preceding paragraph shall survive delivery of the
Mortgage Files to the Trustee or the Custodian for the benefit of the
Certificateholders. Upon discovery by the Depositor or the Trustee of a breach
of such representations and warranties, the party discovering such breach shall
give prompt written notice to the others and to each Rating Agency.
Section 2.05 Delivery of Opinion of Counsel in Connection with
Substitutions and Repurchases.
(a) Notwithstanding any contrary provision of this Agreement, with
respect to any Mortgage Loan that is not in default or as to which default is
not imminent, no repurchase or substitution pursuant to Sections 2.02 or 2.03
shall be made unless the Seller delivers to the Trustee an Opinion of Counsel,
addressed to the Trustee, to the effect that such repurchase or substitution
would not (i) result in the imposition of the tax on "prohibited transactions"
of REMIC I, REMIC II or REMIC III or contributions after the Closing Date, as
defined in sections 860F(a)(2) and 860G(d) of the Code, respectively or (ii)
cause any of REMIC I, REMIC II or REMIC III to fail to qualify as a REMIC at any
time that any Certificates are outstanding. Any Mortgage Loan as to which
repurchase or substitution was delayed pursuant to this paragraph shall be
repurchased or the substitution therefor shall occur (subject to compliance with
Sections 2.02 or 2.03) upon the earlier of (a) the occurrence of a default or
imminent default with respect to such Mortgage Loan and (b) receipt by the
Trustee of an Opinion of Counsel addressed to the Trustee to the effect that
such repurchase or substitution, as applicable, will not result in the events
described in clause (i) or clause (ii) of the preceding sentence.
(b) Upon discovery by the Depositor, the Seller or the Master
Servicer that any Mortgage Loan does not constitute a "qualified mortgage"
within the meaning of section 860G(a)(3) of the Code, the party discovering such
fact shall promptly (and in any event within 5 Business Days of discovery) give
written notice thereof to the other parties and the Trustee. In connection
therewith, the Trustee shall require the Seller, at the Seller's option, to
either (i) substitute, if the conditions in Section 2.03(c) with respect to
substitutions are satisfied, a Replacement Mortgage Loan for the affected
Mortgage Loan, or (ii) repurchase the affected Mortgage Loan within 90 days of
such discovery in the same manner as it would a Mortgage Loan for a breach of
representation or warranty
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contained in Section 2.03. The Trustee shall reconvey to the Seller the Mortgage
Loan to be released pursuant hereto (and the Custodian shall deliver the related
Mortgage File) in the same manner, and on the same terms and conditions, as it
would a Mortgage Loan repurchased for breach of a representation or warranty
contained in Section 2.03.
Section 2.06 Countersignature and Delivery of Certificates.
(a) The Trustee acknowledges the sale, transfer and assignment to it of
the Trust Fund and, concurrently with such transfer and assignment, has
executed, countersigned and delivered, to or upon the order of the Depositor,
the Certificates in authorized denominations evidencing the entire ownership of
the Trust Fund. The Trustee agrees to hold the Trust Fund and exercise the
rights referred to above for the benefit of all present and future Holders of
the Certificates and to perform the duties set forth in this Agreement in
accordance with its terms.
(b) The Seller, concurrently with the execution and delivery hereof, does
hereby transfer, assign, set over and otherwise convey in trust to the Trustee
without recourse all the right, title and interest of the Seller in and to the
REMIC I Regular Interests, and the other assets of REMIC II for the benefit of
the holders of the REMIC II Interests. The Trustee acknowledges receipt of the
REMIC I Regular Interests (which are uncertificated) and the other assets of
REMIC II and declares that it holds and will hold the same in trust for the
exclusive use and benefit of the holders of the REMIC II Interests.
(c) The Seller, concurrently with the execution and delivery hereof, does
hereby transfer, assign, set over and otherwise convey in trust to the Trustee
without recourse all the right, title and interest of the Seller in and to the
REMIC II Regular Interests, and the other assets of REMIC III for the benefit of
the holders of the REMIC III Certificates. The Trustee acknowledges receipt of
the REMIC II Regular Interests (which are uncertificated) and the other assets
of REMIC III and declares that it holds and will hold the same in trust for the
exclusive use and benefit of the holders of the REMIC III Certificates.
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ARTICLE III
ADMINISTRATION AND SERVICING OF EMC MORTGAGE LOANS BY COMPANY
Section 3.01 The Company.
The Company shall service and administer the EMC Mortgage Loans in
accordance with customary and usual standards of practice of prudent mortgage
loan servicers in the respective states in which the related Mortgaged
Properties are located. In connection with such servicing and administration,
the Company shall have full power and authority, acting alone and/or through
subservicers as provided in Section 3.03, to do or cause to be done any and all
things that it may deem necessary or desirable in connection with such servicing
and administration, including but not limited to, the power and authority,
subject to the terms hereof (i) to execute and deliver, on behalf of the
Certificateholders and the Trustee, customary consents or waivers and other
instruments and documents, (ii) to consent to transfers of any related Mortgaged
Property and assumptions of the Mortgage Notes and related Mortgages (but only
in the manner provided herein), (iii) to collect any Insurance Proceeds and
other Liquidation Proceeds, and (iv) subject to Section 3.09, to effectuate
foreclosure or other conversion of the ownership of the Mortgaged Property
securing any EMC Mortgage Loan; provided that the Company shall take no action
that is inconsistent with or prejudices the interests of the Trust Fund or the
Certificateholders in any EMC Mortgage Loan or the rights and interests of the
Depositor and the Trustee under this Agreement.
Without limiting the generality of the foregoing, the Company, in
its own name or in the name of the Trust, the Depositor or the Trustee, is
hereby authorized and empowered by the Trust, the Depositor and the Trustee,
when the Company believes it appropriate in its reasonable judgment, to execute
and deliver, on behalf of the Trustee, the Depositor, the Certificateholders or
any of them, any and all instruments of satisfaction or cancellation, or of
partial or full release or discharge and all other comparable instruments, with
respect to the EMC Mortgage Loans, and with respect to the related Mortgaged
Properties held for the benefit of the Certificateholders. The Company shall
prepare and deliver to the Depositor and/or the Trustee such documents requiring
execution and delivery by any or all of them as are necessary or appropriate to
enable the Company to service and administer the EMC Mortgage Loans. Upon
receipt of such documents, the Depositor and/or the Trustee shall execute such
documents and deliver them to the Company.
In accordance with the standards of the first paragraph of this
Section 3.01, the Company shall advance or cause to be advanced funds as
necessary for the purpose of effecting the payment of taxes and assessments on
the Mortgaged Properties relating to the EMC Mortgage Loans, which advances
shall be reimbursable in the first instance from related collections from the
Mortgagors pursuant to Section 5.03, and further as provided in Section 5.02.
All costs incurred by the Company, if any, in effecting the timely payments of
taxes and assessments on the Mortgaged Properties relating to the EMC Mortgage
Loans and related insurance premiums shall not, for the purpose of calculating
monthly distributions to the Certificateholders, be added to the Stated
Principal Balance under the related EMC Mortgage Loans, notwithstanding that the
terms of such Mortgage Loans so permit.
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Section 3.02 Due-on-Sale Clauses; Assumption Agreements.
(a) Except as otherwise provided in this Section 3.02, when any
property subject to a Mortgage has been or is about to be conveyed by the
Mortgagor, the Company shall to the extent that it has knowledge of such
conveyance, enforce any due-on-sale clause contained in any Mortgage Note or
Mortgage, to the extent permitted under applicable law and governmental
regulations, but only to the extent that such enforcement will not adversely
affect or jeopardize coverage under any Required Insurance Policy.
Notwithstanding the foregoing, the Company is not required to exercise such
rights with respect to an EMC Mortgage Loan if the Person to whom the related
Mortgaged Property has been conveyed or is proposed to be conveyed satisfies the
terms and conditions contained in the Mortgage Note and Mortgage related thereto
and the consent of the mortgagee under such Mortgage Note or Mortgage is not
otherwise so required under such Mortgage Note or Mortgage as a condition to
such transfer. In the event that the Company is prohibited by law from enforcing
any such due-on-sale clause, or if coverage under any Required Insurance Policy
would be adversely affected, or if nonenforcement is otherwise permitted
hereunder, the Company is authorized, subject to Section 3.02(b), to take or
enter into an assumption and modification agreement from or with the person to
whom such property has been or is about to be conveyed, pursuant to which such
person becomes liable under the Mortgage Note and, unless prohibited by
applicable state law, the Mortgagor remains liable thereon, provided that the
Mortgage Loan shall continue to be covered (if so covered before the Company
enters such agreement) by the applicable Required Insurance Policies. The
Company, subject to Section 3.02(b), is also authorized with the prior approval
of the insurers under any Required Insurance Policies to enter into a
substitution of liability agreement with such Person, pursuant to which the
original Mortgagor is released from liability and such Person is substituted as
Mortgagor and becomes liable under the Mortgage Note. Notwithstanding the
foregoing, the Company shall not be deemed to be in default under this Section
3.02(a) by reason of any transfer or assumption that the Company reasonably
believes it is restricted by law from preventing.
(b) Subject to the Company's duty to enforce any due-on-sale clause
to the extent set forth in Section 3.02(a), in any case in which a Mortgaged
Property has been conveyed to a Person by a Mortgagor, and such Person is to
enter into an assumption agreement or modification agreement or supplement to
the Mortgage Note or Mortgage that requires the signature of the Trustee, or if
an instrument of release signed by the Trustee is required releasing the
Mortgagor from liability on the related EMC Mortgage Loan, the Company shall
prepare and deliver or cause to be prepared and delivered to the Trustee for
signature and shall direct, in writing, the Trustee to execute the assumption
agreement with the Person to whom the Mortgaged Property is to be conveyed and
such modification agreement or supplement to the Mortgage Note or Mortgage or
other instruments as are reasonable or necessary to carry out the terms of the
Mortgage Note or Mortgage or otherwise to comply with any applicable laws
regarding assumptions or the transfer of the Mortgaged Property to such Person.
In connection with any such assumption, no material term of the Mortgage Note
(including, but not limited to, the Mortgage Rate, the amount of the Scheduled
Payment and any other term affecting the amount or timing of payment on the
Mortgage Loan) may be changed. In addition, the substitute Mortgagor and the
Mortgaged Property must be acceptable to the Company in accordance with its
servicing standards as then in effect. The Company shall notify the Trustee that
any such substitution or assumption agreement has been completed by forwarding
to the Trustee the original of such substitution or assumption agreement, which
in the case of the original shall be added to the related Mortgage File and
shall, for all purposes, be considered a part of such Mortgage File
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to the same extent as all other documents and instruments constituting a part
thereof. Any fee collected by the Company for entering into an assumption or
substitution of liability agreement will be retained by the Company as
additional servicing compensation.
Section 3.03 Subservicers.
The Company shall perform all of its servicing responsibilities
hereunder or may cause a subservicer to perform any such servicing
responsibilities on its behalf, but the use by the Company of a subservicer
shall not release the Company from any of its obligations hereunder and the
Company shall remain responsible hereunder for all acts and omissions of each
subservicer as fully as if such acts and omissions were those of the Company.
The Company shall pay all fees of each subservicer from its own funds, and a
subservicer's fee shall not exceed the Servicing Fee payable to the Company
hereunder.
At the cost and expense of the Company, without any right of
reimbursement from its Protected Account, the Company shall be entitled to
terminate the rights and responsibilities of a subservicer and arrange for any
servicing responsibilities to be performed by a successor subservicer; provided,
however, that nothing contained herein shall be deemed to prevent or prohibit
the Company, at the Company's option, from electing to service the related EMC
Mortgage Loans itself. In the event that the Company's responsibilities and
duties under this Agreement are terminated pursuant to Section 9.03, the Company
shall at its own cost and expense terminate the rights and responsibilities of
each subservicer effective as of the date of termination of the Company. The
Company shall pay all fees, expenses or penalties necessary in order to
terminate the rights and responsibilities of each subservicer from the Company's
own funds without reimbursement from the Trust Fund.
Notwithstanding the foregoing, the Company shall not be relieved of
its obligations hereunder and shall be obligated to the same extent and under
the same terms and conditions as if it alone were servicing and administering
the EMC Mortgage Loans. The Company shall be entitled to enter into an agreement
with a subservicer for indemnification of the Company by the subservicer and
nothing contained in this Agreement shall be deemed to limit or modify such
indemnification.
Any subservicing agreement and any other transactions or services
relating to the EMC Mortgage Loans involving a subservicer shall be deemed to be
between such subservicer and the Company alone, and neither the Master Servicer
nor the Trustee shall have any obligations, duties or liabilities with respect
to such subservicer including any obligation, duty or liability of either the
Master Servicer or the Trustee to pay such subservicer's fees and expenses. For
purposes of remittances to the Master Servicer pursuant to this Agreement, the
Company shall be deemed to have received a payment on an EMC Mortgage Loan when
a subservicer has received such payment.
Section 3.04 Documents, Records and Funds in Possession of Company To Be
Held for Trustee.
Notwithstanding any other provisions of this Agreement, the Company
shall transmit to the Trustee as required by this Agreement all documents and
instruments in respect of an EMC Mortgage Loan coming into the possession of the
Company from time to time and shall account fully
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to the Trustee for any funds received by the Company or that otherwise are
collected by the Company as Liquidation Proceeds or Insurance Proceeds in
respect of any such Mortgage Loan. All Mortgage Files and funds collected or
held by, or under the control of, the Company in respect of any EMC Mortgage
Loans, whether from the collection of principal and interest payments or from
Liquidation Proceeds, including but not limited to, any funds on deposit in the
Protected Account maintained by the Company, shall be held by the Company for
and on behalf of the Trustee and shall be and remain the sole and exclusive
property of the Trustee, subject to the applicable provisions of this Agreement.
The Company also agrees that it shall not create, incur or subject any Mortgage
File or any funds that are deposited in the Protected Account maintained by the
Company or the Master Servicer Collection Account or in any Escrow Account, or
any funds that otherwise are or may become due or payable to the Trustee for the
benefit of the Certificateholders, to any claim, lien, security interest,
judgment, levy, writ of attachment or other encumbrance, or assert by legal
action or otherwise any claim or right of set off against any Mortgage File or
any funds collected on, or in connection with, an EMC Mortgage Loan, except,
however, that the Company shall be entitled to set off against and deduct from
any such funds any amounts that are properly due and payable to the Company
under this Agreement.
Section 3.05 Maintenance of Hazard Insurance.
The Company shall cause to be maintained, for each EMC Mortgage
Loan, hazard insurance on buildings upon, or comprising part of, the Mortgaged
Property against loss by fire, hazards of extended coverage and such other
hazards as are customary in the area where the related Mortgaged Property is
located with an insurer which is licensed to do business in the state where the
related Mortgaged Property is located. Each such policy of standard hazard
insurance shall contain, or have an accompanying endorsement that contains, a
standard mortgagee clause. The Company shall also cause flood insurance to be
maintained on property acquired upon foreclosure or deed in lieu of foreclosure
of any EMC Mortgage Loan, to the extent described below. Pursuant to Section
5.01, any amounts collected by the Company under any such policies (other than
the amounts to be applied to the restoration or repair of the related Mortgaged
Property or property thus acquired or amounts released to the Mortgagor in
accordance with the Company's normal servicing procedures) shall be deposited in
the Protected Account maintained by the Company. Any cost incurred by the
Company in maintaining any such insurance shall not, for the purpose of
calculating monthly distributions to the Certificateholders or remittances to
the Trustee for their benefit, be added to the principal balance of the Mortgage
Loan, notwithstanding that the terms of the EMC Mortgage Loan so permit. Such
costs shall be recoverable by the Company out of late payments by the related
Mortgagor or out of Liquidation Proceeds to the extent permitted by Section
5.02. It is understood and agreed that no earthquake or other additional
insurance is to be required of any Mortgagor or maintained on property acquired
in respect of a Mortgage other than pursuant to such applicable laws and
regulations as shall at any time be in force and as shall require such
additional insurance. If the Mortgaged Property is located at the time of
origination of the EMC Mortgage Loan in a federally designated special flood
hazard area and such area is participating in the national flood insurance
program, the Company shall cause flood insurance to be maintained with respect
to such Mortgage Loan. Such flood insurance shall be in an amount equal to the
least of (i) the Stated Principal Balance of the related Mortgage Loan, (ii)
minimum amount required to compensate for damage or loss on a replacement cost
basis or (iii) the maximum amount of such insurance available for the related
Mortgaged Property under the Flood Disaster Protection Act of 1973, as amended.
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In the event that the Company shall obtain and maintain a blanket
policy insuring against hazard losses on all of the Mortgage Loans, it shall
conclusively be deemed to have satisfied its obligations as set forth in the
first sentence of this Section 3.05, it being understood and agreed that such
policy may contain a deductible clause on terms substantially equivalent to
those commercially available and maintained by comparable servicers. If such
policy contains a deductible clause, the Company shall, in the event that there
shall not have been maintained on the related Mortgaged Property a policy
complying with the first sentence of this Section 3.05, and there shall have
been a loss that would have been covered by such policy, deposit in the
Protected Account maintained by the Company the amount not otherwise payable
under the blanket policy because of such deductible clause. Such deposit shall
be from the Company's own funds without reimbursement therefor. In connection
with its activities as administrator and servicer of the EMC Mortgage Loans, the
Company agrees to present, on behalf of itself, the Depositor and the Trustee
for the benefit of the Certificateholders, claims under any such blanket policy.
Section 3.06 Presentment of Claims and Collection of Proceeds.
The Company shall prepare and present on behalf of the Trustee and
the Certificateholders all claims under the Insurance Policies and take such
actions (including the negotiation, settlement, compromise or enforcement of the
insured's claim) as shall be necessary to realize recovery under such Insurance
Policies. Any proceeds disbursed to the Company in respect of such Insurance
Policies shall be promptly deposited in the Protected Account maintained by the
Company upon receipt, except that any amounts realized that are to be applied to
the repair or restoration of the related Mortgaged Property as a condition
precedent to the presentation of claims on the related Mortgage Loan to the
insurer under any applicable Insurance Policy need not be so deposited (or
remitted).
Section 3.07 Maintenance of the Primary Mortgage Insurance Policies.
(a) The Company shall not take any action that would result in
noncoverage under any applicable Primary Mortgage Insurance Policy of any loss
which, but for the actions of the Company would have been covered thereunder.
The Company shall use its best efforts to keep in force and effect (to the
extent that the Mortgage Loan requires the Mortgagor to maintain such
insurance), Primary Mortgage Insurance applicable to each EMC Mortgage Loan. The
Company shall not cancel or refuse to renew any such Primary Mortgage Insurance
Policy that is in effect at the date of the initial issuance of the Mortgage
Note and is required to be kept in force hereunder.
(b) The Company agrees to present on behalf of the Trustee and the
Certificateholders, claims to the insurer under any Primary Mortgage Insurance
Policies and, in this regard, to take such reasonable action as shall be
necessary to permit recovery under any Primary Mortgage Insurance Policies
respecting defaulted Mortgage Loans. Pursuant to Section 5.01, any amounts
collected by the Company under any Primary Mortgage Insurance Policies shall be
deposited in the Protected Account maintained by the Company, subject to
withdrawal pursuant to Section 5.02 hereof.
Section 3.08 Fidelity Bond, Errors and Omissions Insurance.
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The Company shall maintain, at its own expense, a blanket fidelity
bond and an errors and omissions insurance policy, with broad coverage with
responsible companies on all officers, employees or other persons acting in any
capacity with regard to the EMC Mortgage Loans and who handle funds, money,
documents and papers relating to the EMC Mortgage Loans. The fidelity bond and
errors and omissions insurance shall be in the form of the Mortgage Banker's
Blanket Bond and shall protect and insure the Company against losses, including
forgery, theft, embezzlement, fraud, errors and omissions and negligent acts of
such persons. Such fidelity bond shall also protect and insure the Company
against losses in connection with the failure to maintain any insurance policies
required pursuant to this Agreement and the release or satisfaction of an EMC
Mortgage Loan which is not in accordance with Accepted Servicing Practices. No
provision of this Section 3.08 requiring the fidelity bond and errors and
omissions insurance shall diminish or relieve the Company from its duties and
obligations as set forth in this Agreement. The minimum coverage under any such
bond and insurance policy shall be at least equal to the corresponding amounts
required by Accepted Servicing Practices. The Company shall deliver to the
Master Servicer a certificate from the surety and the insurer as to the
existence of the fidelity bond and errors and omissions insurance policy and
shall obtain a statement from the surety and the insurer that such fidelity bond
or insurance policy shall in no event be terminated or materially modified
without thirty days prior written notice to the Master Servicer and the Trustee.
The Company shall notify the Master Servicer and the Trustee within five
business days of receipt of notice that such fidelity bond or insurance policy
will be, or has been, materially modified or terminated. The Trustee for the
benefit of the Certificateholders must be named as loss payees on the fidelity
bond and as additional insured on the errors and omissions policy.
Section 3.09 Realization Upon Defaulted Mortgage Loans; Determination of
Excess Liquidation Proceeds and Realized Losses; Repurchases
of Certain Mortgage Loans.
(a) The Company shall use reasonable efforts to foreclose upon or
otherwise comparably convert the ownership of properties securing such of the
EMC Mortgage Loans as come into and continue in default and as to which no
satisfactory arrangements can be made for collection of delinquent payments. In
connection with such foreclosure or other conversion, the Company shall follow
such practices and procedures as it shall deem necessary or advisable and as
shall be normal and usual in its general mortgage servicing activities and the
requirements of the insurer under any Required Insurance Policy; provided that
the Company shall not be required to expend its own funds in connection with any
foreclosure or towards the restoration of any property unless it shall determine
(i) that such restoration and/or foreclosure will increase the proceeds of
liquidation of the EMC Mortgage Loan after reimbursement to itself of such
expenses and (ii) that such expenses will be recoverable to it through Insurance
Proceeds or Liquidation Proceeds (respecting which it shall have priority for
purposes of withdrawals from the Protected Account maintained by the Company
pursuant to Section 5.02). If the Company reasonably believes that Liquidation
Proceeds with respect to any such Mortgage Loan would not be increased as a
result of such foreclosure or other action, such Mortgage Loan will be
charged-off and will become a Liquidated Loan. The Company will give notice of
any such charge-off to the Trustee and the Securities Administrator. The Company
shall be responsible for all other costs and expenses incurred by it in any such
proceedings; provided that such costs and expenses shall be Servicing Advances
and that it shall be entitled to reimbursement thereof from the proceeds of
liquidation of the related Mortgaged Property, as contemplated in Section 5.02.
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If the Company has knowledge that a Mortgaged Property that the Company is
contemplating acquiring in foreclosure or by deed- in-lieu of foreclosure is
located within a one-mile radius of any site with environmental or hazardous
waste risks known to the Company, the Company will, prior to acquiring the
Mortgaged Property, consider such risks and only take action in accordance with
its established environmental review procedures.
With respect to any REO Property, the deed or certificate of sale
shall be taken in the name of the Trustee for the benefit of the
Certificateholders (or the Trustee's nominee on behalf of the
Certificateholders). The Trustee's name shall be placed on the title to such REO
Property solely as the Trustee hereunder and not in its individual capacity. The
Company shall ensure that the title to such REO Property references this
Agreement and the Trustee's capacity hereunder. Pursuant to its efforts to sell
such REO Property, the Company shall either itself or through an agent selected
by the Company protect and conserve such REO Property in the same manner and to
such extent as is customary in the locality where such REO Property is located
and may, incident to its conservation and protection of the interests of the
Certificateholders, rent the same, or any part thereof, as the Company deems to
be in the best interest of the Company and the Certificateholders for the period
prior to the sale of such REO Property. The Company shall prepare for and
deliver to the Trustee and the Securities Administrator a statement with respect
to each REO Property that has been rented showing the aggregate rental income
received and all expenses incurred in connection with the management and
maintenance of such REO Property at such times as is necessary to enable the
Trustee to comply with the reporting requirements of the REMIC Provisions. The
net monthly rental income, if any, from such REO Property shall be deposited in
the Protected Account maintained by the Company no later than the close of
business on each Determination Date. The Company shall perform the tax reporting
and withholding related to foreclosures, abandonments and cancellation of
indebtedness income as specified by Sections 1445, 6050J and 6050P of the Code
by preparing and filing such tax and information returns, as may be required.
In the event that the Trust Fund acquires any Mortgaged Property as
aforesaid or otherwise in connection with a default or imminent default on an
EMC Mortgage Loan, the Company shall dispose of such Mortgaged Property prior to
three years after its acquisition by the Trust Fund or, at the expense of the
Trust Fund, request more than 60 days prior to the day on which such three- year
period would otherwise expire, an extension of the three-year grace period
unless the Trustee shall have been supplied with an Opinion of Counsel addressed
to the Trustee (such opinion not to be an expense of the Trustee) to the effect
that the holding by the Trust Fund of such Mortgaged Property subsequent to such
three-year period will not result in the imposition of taxes on "prohibited
transactions" of REMIC I, REMIC II or REMIC III as defined in section 860F of
the Code or cause either REMIC I, REMIC II or REMIC III to fail to qualify as a
REMIC at any time that any Certificates are outstanding, in which case the Trust
Fund may continue to hold such Mortgaged Property (subject to any conditions
contained in such Opinion of Counsel). Notwithstanding any other provision of
this Agreement, no Mortgaged Property acquired by the Trust Fund shall be rented
(or allowed to continue to be rented) or otherwise used for the production of
income by or on behalf of the Trust Fund in such a manner or pursuant to any
terms that would (i) cause such Mortgaged Property to fail to qualify as
"foreclosure property" within the meaning of section 860G(a)(8) of the Code or
(ii) subject any of REMIC I, REMIC II or REMIC III to the imposition of any
federal, state or local income taxes on the income earned from such Mortgaged
Property under section 860G(c) of
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the Code or otherwise, unless the Company has agreed to indemnify and hold
harmless the Trust Fund with respect to the imposition of any such taxes.
The decision of the Company to foreclose on a defaulted EMC Mortgage
Loan shall be subject to a determination by the Company that the proceeds of
such foreclosure would exceed the costs and expenses of bringing such a
proceeding. The income earned from the management of any Mortgaged Properties
acquired through foreclosure or other judicial proceeding, net of reimbursement
to the Company for expenses incurred (including any property or other taxes) in
connection with such management and net of unreimbursed Servicing Fees,
Advances, Servicing Advances and any management fee paid or to be paid with
respect to the management of such Mortgaged Property, shall be applied to the
payment of principal of, and interest on, the related defaulted EMC Mortgage
Loans (with interest accruing as though such Mortgage Loans were still current)
and all such income shall be deemed, for all purposes in the Agreement, to be
payments on account of principal and interest on the related Mortgage Notes and
shall be deposited into the Protected Account maintained by the Company. To the
extent the income received during a Prepayment Period is in excess of the amount
attributable to amortizing principal and accrued interest at the related
Mortgage Rate on the related EMC Mortgage Loan, such excess shall be considered
to be a partial Principal Prepayment for all purposes hereof.
The Liquidation Proceeds from any liquidation of a Mortgage Loan,
net of any payment to the Company as provided above, shall be deposited in the
Protected Account maintained by the Company on the next succeeding Determination
Date following receipt thereof for distribution on the related Distribution
Date, except that any Excess Liquidation Proceeds shall be retained by the
Company as additional servicing compensation.
The proceeds of any Liquidated Loan, as well as any recovery
resulting from a partial collection of Liquidation Proceeds or any income from
an REO Property, will be applied in the following order of priority: first, to
reimburse the Company for any related unreimbursed Servicing Advances and
Servicing Fees, pursuant to Section 5.02 or this Section 3.09; second, to
reimburse the Company for any unreimbursed Advances, pursuant to Section 5.02 or
this Section 3.09; third, to accrued and unpaid interest (to the extent no
Advance has been made for such amount) on the EMC Mortgage Loan or related REO
Property, at the Net Mortgage Rate to the first day of the month in which such
amounts are required to be distributed; and fourth, as a recovery of principal
of the Mortgage Loan.
(b) On each Determination Date, the Company shall determine the
respective aggregate amounts of Excess Liquidation Proceeds and Realized Losses,
if any, for the related Prepayment Period.
(c) The Company has no intent to foreclose on any EMC Mortgage Loan
based on the delinquency characteristics as of the Closing Date; provided, that
the foregoing does not prevent the Company from initiating foreclosure
proceedings on any date hereafter if the facts and circumstances of such
Mortgage Loans including delinquency characteristics in the Company's discretion
so warrant such action.
Section 3.10 Servicing Compensation.
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As compensation for its activities hereunder, the Company shall be
entitled to retain or withdraw from its Protected Account out of each payment of
interest on an EMC Mortgage Loan included in the Trust Fund an amount equal to
the Servicing Fee.
Additional servicing compensation in the form of any Excess
Liquidation Proceeds, assumption fees, late payment charges, all Prepayment
Interest Excess on any EMC Mortgage Loan, all income and gain net of any losses
realized from Permitted Investments with respect to funds in or credited to the
Protected Account maintained by the Company shall be retained by the Company to
the extent not required to be deposited in the Protected Account maintained by
the Company pursuant to Section 5.02. The Company shall be required to pay all
expenses incurred by it in connection with its servicing activities hereunder
(including payment of any premiums for hazard insurance, as required by Section
3.05 and maintenance of the other forms of insurance coverage required by
Section 3.07) and shall not be entitled to reimbursement therefor except as
specifically provided in Section 5.02.
EMC will be entitled to retain any Prepayment Interest Excess pursuant to
Section 5.06(e).
Section 3.11 REO Property.
(a) In the event the Trust Fund acquires ownership of any REO
Property in respect of any related EMC Mortgage Loan, the deed or certificate of
sale shall be issued to the Trustee, or to its nominee, on behalf of the related
Certificateholders. The Company shall sell any REO Property as expeditiously as
possible and in accordance with the provisions of this Agreement. Pursuant to
its efforts to sell such REO Property, the Company shall protect and conserve
such REO Property in the manner and to the extent required herein, in accordance
with the REMIC Provisions.
(b) The Company shall deposit all funds collected and received in
connection with the operation of any REO Property into the Protected Account
maintained by the Company.
(c) The Company, upon the final disposition of any REO Property,
shall be entitled to reimbursement for any related unreimbursed Advances,
unreimbursed Servicing Advances or Servicing Fees from Liquidation Proceeds
received in connection with the final disposition of such REO Property;
provided, that any such unreimbursed Advances or Servicing Fees as well as any
unpaid Servicing Fees may be reimbursed or paid, as the case may be, prior to
final disposition, out of any net rental income or other net amounts derived
from such REO Property.
Section 3.12 Liquidation Reports.
Upon the foreclosure of any Mortgaged Property relating to an EMC
Mortgage Loan or the acquisition thereof by the Trust Fund pursuant to a
deed-in-lieu of foreclosure, the Company shall submit a liquidation report to
the Master Servicer containing such information as shall be mutually acceptable
to the Company and the Master Servicer with respect to such Mortgaged Property.
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Section 3.13 Annual Certificate as to Compliance.
(a) The Company will deliver to the Master Servicer not later than
March 1, 2004 and not later than March 1 of each year thereafter, a certificate
of a Servicing Officer stating, as to each signatory thereof, that (i) a review
of the activities of the Company during the preceding calendar year and of
performance under this Agreement has been made under such officers' supervision,
and (ii) to the best of such officers' knowledge, based on such review, the
Company has fulfilled all of its obligations under this Agreement throughout
such year, or, if there has been a default in the fulfillment of any such
obligation, specifying each such default known to such officers and the nature
and status thereof except for such defaults as such officer in its good faith
judgment believe to be immaterial.
(b) (i) The Company will deliver to the Master Servicer, on or
before March 1 of each year beginning March 1, 2004 (or, if any such day is not
a Business Day, the immediately preceding Business Day), or on any alternative
date specified by the Master Servicer upon thirty (30) days written request, a
certification containing the information set forth in Exhibit L. Such
certification shall be signed by the senior officer in charge of servicing of
the Company. In addition, the Company shall provide such other information with
respect to the EMC Mortgage Loans and the servicing and administration thereof
within the control of the Company which shall be required to enable the Master
Servicer to comply with the reporting requirements of the Securities and
Exchange Act of 1934, as amended.
(ii) The Company shall indemnify and hold harmless the Master
Servicer and its officers, directors, agents and affiliates from and against any
losses, damages, penalties, fines, forfeitures, reasonable legal fees and
related costs, judgments and other costs and expenses arising out of or based
upon a breach by the Company or any of its officers, directors, agents or
affiliates of its obligations under this Section 3.13(b) or the Company's
negligence, bad faith or willful misconduct in connection therewith. If the
indemnification provided for herein is unavailable or insufficient to hold
harmless the Master Servicer, then the Company agrees that it shall contribute
to the amount paid or payable by the Master Servicer as a result of the losses,
claims, damages or liabilities of the Master Servicer in such proportion as is
appropriate to reflect the relative fault of the Master Servicer on the one hand
and the Company on the other in connection with a breach of the Company's
obligations under this Section 3.13(b).
Section 3.14 Annual Independent Certified Public Accountants' Servicing
Report.
Not later than March 1, 2004 and not later than March 1 of each year
thereafter, the Company at its expense shall cause a firm of independent public
accountants which is a member of the American Institute of Certified Public
Accountants to furnish a statement to the Master Servicer to the effect that,
with respect to the preceding calendar year such firm has examined certain
documents and records relating to the Company's servicing of mortgage loans of
the same type as the EMC Mortgage Loans pursuant to servicing agreements
substantially similar to this Agreement, which agreements may include this
Agreement, and that, on the basis of such an examination, conducted
substantially in compliance with the Uniform Single Attestation Program for
Mortgage Bankers, such firm is of the opinion that the Company's servicing has
been conducted in compliance with the agreements examined pursuant to this
Section 3.14, except for (i) such exceptions as such
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firm shall believe to be immaterial,(ii) such other exceptions as shall be set
forth in such statement and (iii) such exceptions that the Uniform Single
Attestation Program for Mortgage Bankers requires it to report.
Section 3.15 Books and Records.
The Company shall be responsible for maintaining, and shall
maintain, a complete set of books and records for the EMC Mortgage Loans which
shall be appropriately identified in the Company's computer system to clearly
reflect the ownership of the EMC Mortgage Loans by the Trust. In particular, the
Company shall maintain in its possession, available for inspection by the Master
Servicer and the Trustee and shall deliver to Master Servicer and the Trustee
upon demand, evidence of compliance with all federal, state and local laws,
rules and regulations. To the extent that original documents are not required
for purposes of realization of Liquidation Proceeds or Insurance Proceeds,
documents maintained by the Company may be in the form of microfilm or
microfiche or such other reliable means of recreating original documents,
including, but not limited to, optical imagery techniques so long as the Company
complies with the requirements of Accepted Servicing Practices.
The Company shall maintain with respect to each EMC Mortgage Loan
and shall make available for inspection by the Master Servicer and the Trustee
the related servicing file during the time such EMC Mortgage Loan is subject to
this Agreement and thereafter in accordance with applicable law.
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ARTICLE IV
ADMINISTRATION AND MASTER SERVICING OF MORTGAGE LOANS BY MASTER
SERVICER
Section 4.01 Master Servicer. The Master Servicer shall supervise, monitor
and oversee the obligation of the Company and the related Servicer to service
and administer their respective Mortgage Loans in accordance with the terms of
this Agreement and the related 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 the Company and the related Servicer as necessary from
time-to-time to carry out the Master Servicer's obligations hereunder, shall
receive, review and evaluate all reports, information and other data provided to
the Master Servicer by the Company and the related Servicer and shall cause the
Company and related Servicer to perform and observe the covenants, obligations
and conditions to be performed or observed by such Person under this Agreement
and the related Servicing Agreement. The Master Servicer shall independently and
separately monitor the Company and the related Servicer's servicing activities
with respect to each related Mortgage Loan, reconcile the results of such
monitoring with such information provided in the previous sentence on a monthly
basis and coordinate corrective adjustments to the Company's, the related
Servicer's and Master Servicer's records, and based on such reconciled and
corrected information, prepare the statements specified in Section 6.05 and any
other information and statements required hereunder. The Master Servicer shall
reconcile the results of its Mortgage Loan monitoring with the actual
remittances of the Company and the Servicer to the Protected Accounts pursuant
to this Agreement and the related Servicing Agreement.
The Trustee shall furnish the Company, the Servicers and the Master
Servicer with any powers of attorney and other documents in form as provided to
it necessary or appropriate to enable the Company, the Servicer and the Master
Servicer to service and administer the related Mortgage Loans and REO Property.
The Trustee and the Securities Administrator shall provide access to the
records and documentation in possession of the Trustee or the Securities
Administrator regarding the related Mortgage Loans and REO Property and the
servicing thereof to the Certificateholders, the FDIC, and the supervisory
agents and examiners of the FDIC, such access being afforded only upon
reasonable prior written request and during normal business hours at the office
of the Trustee or the Securities Administrator; provided, however, that, unless
otherwise required by law, neither the Trustee nor the Securities Administrator
shall be required to provide access to such records and documentation if the
provision thereof would violate the legal right to privacy of any Mortgagor. The
Trustee and the Securities Administrator shall allow representatives of the
above entities to photocopy any of the records and documentation and shall
provide equipment for that purpose at a charge that covers the Trustee's or the
Securities Administrator's actual costs.
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The Trustee shall execute and deliver to the Company or the related
Servicer and the Master Servicer any court pleadings, requests for trustee's
sale or other documents necessary or desirable to (i) the foreclosure or
trustee's sale with respect to a Mortgaged Property; (ii) any legal action
brought to obtain judgment against any Mortgagor on the Mortgage Note or
Security Instrument; (iii) obtain a deficiency judgment against the Mortgagor;
or (iv) enforce any other rights or remedies provided by the Mortgage Note or
Security Instrument or otherwise available at law or equity.
Section 4.02 REMIC-Related Covenants. For as long as each REMIC shall
exist, the Trustee and the Securities Administrator shall act in accordance
herewith to assure continuing treatment of such REMIC as a REMIC, and the
Trustee and the Securities Administrator shall comply with any directions of the
Seller, the Company, the Servicers or the Master Servicer to assure such
continuing treatment. In particular, the Trustee shall not (a) sell or permit
the sale of all or any portion of the Mortgage Loans or of any investment of
deposits in an Account unless such sale is as a result of a repurchase of the
Mortgage Loans pursuant to this Agreement or the Trustee has received a REMIC
Opinion addressed to the Trustee prepared at the expense of the Trust Fund; and
(b) other than with respect to a substitution pursuant to the Mortgage Loan
Purchase Agreement or Section 2.04 of this Agreement, as applicable, accept any
contribution to any REMIC after the Startup Day without receipt of a REMIC
Opinion.
Section 4.03 Monitoring of Company and Servicer. (a) The Master Servicer
shall be responsible for reporting to the Trustee and the Seller the compliance
by the Company and the related Servicer with its duties under this Agreement and
the related Servicing Agreement. In the review of the Company's and the related
Servicer's activities, the Master Servicer may rely upon an Officer's
Certificate of the Company and the related Servicer with regard to such Person's
compliance with the terms of this Agreement or the related Servicing Agreement.
In the event that the Master Servicer, in its judgment, determines that the
Company or the related Servicer should be terminated in accordance with this
Agreement or the related Servicing Agreement, or that a notice should be sent
pursuant to this Agreement or the related Servicing Agreement with respect to
the occurrence of an event that, unless cured, would constitute grounds for such
termination, the Master Servicer shall notify the Seller and the Trustee thereof
and the Master Servicer shall issue such notice or take such other action as it
deems appropriate.
(b) The Master Servicer, for the benefit of the Trustee and the
Certificateholders, shall enforce the obligations of the Company under this
Agreement and the related Servicer under the related Servicing Agreement, and
shall, in the event that the Company or the related Servicer fails to perform
its obligations in accordance with this Agreement or the related Servicing
Agreement, subject to the preceding paragraph, terminate the rights and
obligations of such Person thereunder and act as servicer of the related
Mortgage Loans or to cause the Trustee to enter in to a new Servicing Agreement
with a successor Servicer selected by the Master Servicer; provided, however, it
is understood and acknowledged by the parties hereto that there will be a period
of transition (not to exceed 90 days) before the actual servicing functions can
be fully transferred to such successor Servicer. Such enforcement, including,
without limitation, the legal prosecution of claims, termination of the related
Servicing Agreement and the pursuit of other appropriate remedies, shall be in
such form and carried out to such an extent and at such time as the Master
Servicer, in its good faith business judgment, would require were it the owner
of the related Mortgage Loans. The Master Servicer shall pay the costs of such
enforcement at its own expense, subject to its right of
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reimbursement pursuant to the provisions of this Agreement or the related
Servicing Agreement, provided that the Master Servicer shall not be required to
prosecute or defend any legal action except to the extent that the Master
Servicer shall have received reasonable indemnity for its costs and expenses in
pursuing such action.
(c) To the extent that the costs and expenses of the Master Servicer
related to any termination of the Company or the related Servicer, appointment
of a successor Servicer or the transfer and assumption of servicing by the
Master Servicer with respect to this Agreement or the related Servicing
Agreement (including, without limitation, (i) all legal costs and expenses and
all due diligence costs and expenses associated with an evaluation of the
potential termination of the Company or the related Servicer as a result of an
event of default by such Person and (ii) all costs and expenses associated with
the complete transfer of servicing, including all servicing files and all
servicing data and the completion, correction or manipulation of such servicing
data as may be required by the successor servicer to correct any errors or
insufficiencies in the servicing data or otherwise to enable the successor
service to service the Mortgage Loans in accordance with this Agreement or the
related Servicing Agreement) are not fully and timely reimbursed by the Company
or the terminated Servicer, the Master Servicer shall be entitled to
reimbursement of such costs and expenses from the Master Servicer Collection
Account.
(d) The Master Servicer shall require the Company and the related Servicer
to comply with the remittance requirements and other obligations set forth in
this Agreement or the related Servicing Agreement, as applicable.
(e) If the Master Servicer acts as a servicer, it will not assume
liability for the representations and warranties of the Company or the related
Servicer, if any, that it replaces.
Section 4.04 Fidelity Bond. The Master Servicer, at its expense, shall
maintain in effect a blanket fidelity bond and an errors and omissions insurance
policy, affording coverage with respect to all directors, officers, employees
and other Persons acting on such Master Servicer's behalf, and covering errors
and omissions in the performance of the Master Servicer's obligations hereunder.
The errors and omissions insurance policy and the fidelity bond shall be in such
form and amount generally acceptable for entities serving as master servicers or
trustees.
Section 4.05 Power to Act; Procedures. The Master Servicer shall master
service the Mortgage Loans and shall have full power and authority, subject to
the REMIC Provisions and the provisions of Article XI hereof, to do any and all
things that it may deem necessary or desirable in connection with the master
servicing and administration of the Mortgage Loans, including but not limited to
the power and authority (i) to execute and deliver, on behalf of the
Certificateholders and the Trustee, customary consents or waivers and other
instruments and documents, (ii) to consent to transfers of any Mortgaged
Property and assumptions of the Mortgage Notes and related Mortgages, (iii) to
collect any Insurance Proceeds and Liquidation Proceeds, and (iv) to effectuate
foreclosure or other conversion of the ownership of the Mortgaged Property
securing any Mortgage Loan, in each case, in accordance with the provisions of
this Agreement and the related Servicing Agreement, as applicable; provided,
however, that the Master Servicer shall not (and, consistent with its
responsibilities under Section 4.03, shall not permit the Company or the related
Servicer to) knowingly or intentionally take any action, or fail to take (or
fail to cause to be taken) any action
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reasonably within its control and the scope of duties more specifically set
forth herein, that, under the REMIC Provisions, if taken or not taken, as the
case may be, would cause REMIC I, REMIC II or REMIC III to fail to qualify as a
REMIC or result in the imposition of a tax upon the Trust Fund (including but
not limited to the tax on prohibited transactions as defined in Section
860F(a)(2) of the Code and the tax on contributions to a REMIC set forth in
Section 860G(d) of the Code) unless the Master Servicer has received an Opinion
of Counsel (but not at the expense of the Master Servicer) to the effect that
the contemplated action will not would cause REMIC I, REMIC II or REMIC III to
fail to qualify as a REMIC or result in the imposition of a tax upon REMIC I,
REMIC II or REMIC III, as the case may be. The Trustee shall furnish the Master
Servicer, upon written request from a Servicing Officer, with any powers of
attorney empowering the Master Servicer, the Company or the related 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
related Servicing Agreement and this Agreement, and the Trustee shall execute
and deliver such other documents, as the Master Servicer may request, to enable
the Master Servicer to master service and administer the Mortgage Loans and
carry out its duties hereunder, in each case in accordance with Accepted Master
Servicing Practices (and the Trustee shall have no liability for misuse of any
such powers of attorney by the Master Servicer, the Company or the related
Servicer). If the Master Servicer or the Trustee has been advised that it is
likely that the laws of the state in which action is to be taken prohibit such
action if taken in the name of the Trustee or that the Trustee would be
adversely affected under the "doing business" or tax laws of such state if such
action is taken in its name, the Master Servicer shall join with the Trustee in
the appointment of a co-trustee pursuant to Section 10.11 hereof. In the
performance of its duties hereunder, the Master Servicer shall be an independent
contractor and shall not, except in those instances where it is taking action in
the name of the Trustee, be deemed to be the agent of the Trustee.
Section 4.06 Due-on-Sale Clauses; Assumption Agreements. To the extent
provided in this Agreement or the related Servicing Agreement, to the extent
Mortgage Loans contain enforceable due-on-sale clauses, the Master Servicer
shall cause the Company and the related Servicer to enforce such clauses in
accordance with this Agreement or the related Servicing Agreement. If applicable
law prohibits the enforcement of a due-on-sale clause or such clause is
otherwise not enforced in accordance with this Agreement or the related
Servicing Agreement, and, as a consequence, a Mortgage Loan is assumed, the
original Mortgagor may be released from liability in accordance with this
Agreement or the related Servicing Agreement.
Section 4.07 Release of Mortgage Files. (a) Upon becoming aware of the
payment in full of any Mortgage Loan, or the receipt by the Company or the
related Servicer of a notification that payment in full has been escrowed in a
manner customary for such purposes for payment to Certificateholders on the next
Distribution Date, the Company or the related Servicer will, if required under
the related Servicing Agreement (or if the Company or the related Servicer does
not, the Master Servicer may), promptly furnish to the Custodian, on behalf of
the Trustee, two copies of a certification substantially in the form of Exhibit
H hereto signed by a Servicing Officer or in a mutually agreeable electronic
format which will, in lieu of a signature on its face, originate from a
Servicing Officer (which certification shall include a statement to the effect
that all amounts received in connection with such payment that are required to
be deposited in the Protected Account maintained by the Company or the Servicer
pursuant to Article V or by the related Servicer pursuant
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to the related Servicing Agreement have been or will be so deposited) and shall
request that the Custodian, on behalf of the Trustee, deliver to the Company or
the related Servicer the related Mortgage File. Upon receipt of such
certification and request, the Custodian, on behalf of the Trustee, shall
promptly release the related Mortgage File to the Company or the related
Servicer and the Trustee and Custodian shall have no further responsibility with
regard to such Mortgage File. Upon any such payment in full, the Company or the
related Servicer is authorized, to give, as agent for the Trustee, as the
mortgagee under the Mortgage that secured the Mortgage Loan, an instrument of
satisfaction (or assignment of mortgage without recourse, representation or
warranty) regarding the Mortgaged Property subject to the Mortgage, which
instrument of satisfaction or assignment, as the case may be, shall be delivered
to the Person or Persons entitled thereto against receipt therefor of such
payment, it being understood and agreed that no expenses incurred in connection
with such instrument of satisfaction or assignment, as the case may be, shall be
chargeable to the Protected Account.
(b) From time to time and as appropriate for the servicing or foreclosure
of any Mortgage Loan and in accordance with this Agreement or the related
Servicing Agreement, the Trustee shall execute such documents as shall be
prepared and furnished to the Trustee by the Company, the related Servicer or
the Master Servicer (in form reasonably acceptable to the Trustee) and as are
necessary to the prosecution of any such proceedings. The Custodian, on behalf
of the Trustee, shall, upon the request of the Company, the related Servicer or
the Master Servicer, and delivery to the Custodian, on behalf of the Trustee, of
two copies of a request for release signed by a Servicing Officer substantially
in the form of Exhibit H (or in a mutually agreeable electronic format which
will, in lieu of a signature on its face, originate from a Servicing Officer),
release the related Mortgage File held in its possession or control to the
Company, the related Servicer or the Master Servicer, as applicable. Such trust
receipt shall obligate the Company, the related Servicer or the Master Servicer
to return the Mortgage File to the Custodian on behalf of the Trustee, when the
need therefor by such Person no longer exists unless the Mortgage Loan shall be
liquidated, in which case, upon receipt of a certificate of a Servicing Officer
similar to that hereinabove specified, the Mortgage File shall be released by
the Custodian, on behalf of the Trustee, to the Company, the related Servicer or
the Master Servicer.
Section 4.08 Documents, Records and Funds in Possession of Master
Servicer, Company and Servicer To Be Held for Trustee.
(a) The Master Servicer shall transmit and the Company or the related
Servicer (to the extent required by this Agreement or the related Servicing
Agreement) shall transmit to the Trustee or Custodian such documents and
instruments coming into the possession of such Person from time to time as are
required by the terms hereof, or in the case of the related Servicer, the
related Servicing Agreement, to be delivered to the Trustee or Custodian. Any
funds received by the Master Servicer, the Company or by the related Servicer in
respect of any Mortgage Loan or which otherwise are collected by the Master
Servicer, the Company or by the related Servicer as Liquidation Proceeds or
Insurance Proceeds in respect of any Mortgage Loan shall be held for the benefit
of the Trustee and the Certificateholders subject to the Master Servicer's right
to retain or withdraw from the Master Servicer Collection Account amounts
provided in this Agreement, and to the right of the Company and the related
Servicer to retain its Servicing Fee and other amounts as provided in this
Agreement or the related Servicing Agreement. The Master Servicer shall, and (to
the extent provided in this
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Agreement or the related Servicing Agreement) shall cause the Company and the
related 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,
the Company and the related 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 related Servicing
Agreement.
Section 4.09 Standard Hazard Insurance and Flood Insurance Policies.
(a) For each Mortgage Loan, the Master Servicer shall enforce any
obligation of the Company and the related Servicer under this Agreement or the
related Servicing Agreement to maintain or cause to be maintained standard fire
and casualty insurance and, where applicable, flood insurance, all in accordance
with the provisions of this Agreement or the related Servicing Agreement. It is
understood and agreed that such insurance shall be with insurers meeting the
eligibility requirements set forth in this Agreement and the related Servicing
Agreement and that no earthquake or other additional insurance is to be required
of any Mortgagor or to be maintained on property acquired in respect of a
defaulted loan, other than pursuant to such applicable laws and regulations as
shall at any time be in force and as shall require such additional insurance.
(b) Pursuant to Sections 5.01, 5.03 and 5.04 any amounts collected by the
Company, the Servicers or the Master Servicer, or by the Company or the
Servicers, under any insurance policies (other than amounts to be applied to the
restoration or repair of the property subject to the related Mortgage or
released to the Mortgagor in accordance with this Agreement or the Servicing
Agreements) shall be deposited by the Company in its Protected Account or by the
related Servicer or the Master Servicer into the Master Servicer Collection
Account, subject to withdrawal pursuant to Sections 5.02, 5.03, 5.04 and 5.06,
as applicable. Any cost incurred by the Master Servicer, the Company or the
related Servicer in maintaining any such insurance if the Mortgagor defaults in
its obligation to do so shall be added to the amount owing under the Mortgage
Loan where the terms of the Mortgage Loan so permit; provided, however, that the
addition of any such cost shall not be taken into account for purposes of
calculating the distributions to be made to Certificateholders and shall be
recoverable by the Master Servicer, the Company or the related Servicer pursuant
to Sections 5.02, 5.03, 5.04 and 5.06, as applicable.
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Section 4.10 Presentment of Claims and Collection of Proceeds. The Master
Servicer shall (to the extent provided in this Agreement and the related
Servicing Agreement) cause the Company or the Servicer to, prepare and present
on behalf of the Trustee and the Certificateholders all claims under the
Insurance Policies and take such actions (including the negotiation, settlement,
compromise or enforcement of the insured's claim) as shall be necessary to
realize recovery under such policies. Any proceeds disbursed to the Master
Servicer (or disbursed to the Company or the related Servicer and remitted to
the Master Servicer) in respect of such policies, bonds or contracts shall be
promptly deposited in the Master Servicer Collection Account upon receipt,
except that any amounts realized that are to be applied to the repair or
restoration of the related Mortgaged Property as a condition precedent to the
presentation of claims on the related Mortgage Loan to the insurer under any
applicable Insurance Policy need not be so deposited (or remitted).
Section 4.11 Maintenance of the Primary Mortgage Insurance Policies.
(a) The Master Servicer shall not take, or permit the Company or the
related Servicer (to the extent such action is prohibited under this Agreement
or the related Servicing Agreement) to take, any action that would result in
noncoverage under any applicable Primary Mortgage Insurance Policy of any loss
which, but for the actions of the Master Servicer, the Company or the related
Servicer, would have been covered thereunder. The Master Servicer shall use its
best reasonable efforts to cause the Company and the related Servicer (to the
extent required under this Agreement and the related Servicing Agreement) to
keep in force and effect (to the extent that the Mortgage Loan requires the
Mortgagor to maintain such insurance), primary mortgage insurance applicable to
each Mortgage Loan (including any LPMI Policy) in accordance with the provisions
of this Agreement and the related Servicing Agreement, as applicable. The Master
Servicer shall not, and shall not permit the Company or the related Servicer (to
the extent required under this Agreement or the related Servicing Agreement) to,
cancel or refuse to renew any such Primary Mortgage Insurance Policy that is in
effect at the date of the initial issuance of the Mortgage Note and is required
to be kept in force hereunder except in accordance with the provisions of this
Agreement and the related Servicing Agreement, as applicable.
(b) The Master Servicer agrees to cause the Company and the related
Servicer (to the extent required under this Agreement and the related Servicing
Agreement) to present, on behalf of the Trustee and the Certificateholders,
claims to the insurer under any Primary Mortgage Insurance Policies and, in this
regard, to take such reasonable action as shall be necessary to permit recovery
under any Primary Mortgage Insurance Policies respecting defaulted Mortgage
Loans. Pursuant to Sections 5.01, 5.03 and 5.04, any amounts collected by the
Company or the related Servicer under any Primary Mortgage Insurance Policies
shall be deposited by the Company in its Protected Account or by the related
Servicer in the Master Servicer Collection Account, subject to withdrawal
pursuant to Section 5.03 or 5.04, as applicable.
Section 4.12 Trustee to Retain Possession of Certain Insurance Policies
and Documents.
The Trustee (or the Custodian, as directed by the Trustee), shall retain
possession and custody of the originals (to the extent available) of any Primary
Mortgage Insurance Policies, or certificate of insurance if applicable, and any
certificates of renewal as to the foregoing as may be issued from time to time
as contemplated by this Agreement. Until all amounts distributable in respect of
the
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Certificates have been distributed in full and the Master Servicer otherwise has
fulfilled its obligations under this Agreement, the Trustee (or its Custodian,
if any, as directed by the Trustee) shall also retain possession and custody of
each Mortgage File in accordance with and subject to the terms and conditions of
this Agreement. The Master Servicer shall promptly deliver or cause to be
delivered to the Trustee (or the Custodian, as directed by the Trustee), upon
the execution or receipt thereof the originals of any Primary Mortgage Insurance
Policies, any certificates of renewal, and such other documents or instruments
that constitute portions of the Mortgage File that come into the possession of
the Master Servicer from time to time.
Section 4.13 Realization Upon Defaulted Mortgage Loans. The Master
Servicer shall cause the Company and the related Servicer (to the extent
required under this Agreement and the related Servicing Agreement) to foreclose
upon, repossess or otherwise comparably convert the ownership of Mortgaged
Properties securing such of the Mortgage Loans as come into and continue in
default and as to which no satisfactory arrangements can be made for collection
of delinquent payments, all in accordance with this Agreement or the related
Servicing Agreement.
Section 4.14 Compensation for the Master Servicer.
The Master Servicer shall be entitled to all income and gain realized from
any investment of funds on Permitted Investments in the Master Servicer
Collection Account and Distribution Account as compensation for the performance
of its obligations hereunder. The Master Servicer will be entitled to retain, as
additional compensation, any interest remitted by the related Servicer in
connection with a Principal Prepayment in full or otherwise in excess of amounts
required to be remitted to the Master Servicer Collection Account. The Master
Servicer shall be required to pay all expenses incurred by it in connection with
its activities hereunder and shall not be entitled to reimbursement therefor
except as provided in this Agreement.
Section 4.15 REO Property.
(a) In the event the Trust Fund acquires ownership of any REO Property in
respect of any related Mortgage Loan, the deed or certificate of sale shall be
issued to the Trustee, or to its nominee, on behalf of the related
Certificateholders. The Master Servicer shall, to the extent provided in this
Agreement or the related Servicing Agreement, cause the Company or the related
Servicer to sell, any REO Property as expeditiously as possible and in
accordance with the provisions of this Agreement and the related Servicing
Agreement, as applicable. Pursuant to its efforts to sell such REO Property, the
Master Servicer shall cause the Company or the related Servicer to protect and
conserve, such REO Property in the manner and to the extent required by this
Agreement or the related Servicing Agreement, in accordance with the REMIC
Provisions and in a manner that does not result in a tax on "net income from
foreclosure property" or cause such REO Property to fail to qualify as
"foreclosure property" within the meaning of Section 860G(a)(8) of the Code.
(b) The Master Servicer shall, to the extent required by this Agreement or
the related Servicing Agreement, cause the Company or the related Servicer to
deposit all funds collected and received in connection with the operation of any
REO Property in the Protected Account.
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(c) The Master Servicer and the Company or the related Servicer, upon the
final disposition of any REO Property, shall be entitled to reimbursement for
any related unreimbursed Advances and other unreimbursed advances as well as any
unpaid Servicing Fees from Liquidation Proceeds received in connection with the
final disposition of such REO Property; provided, that any such unreimbursed
Monthly Advances as well as any unpaid Servicing Fees may be reimbursed or paid,
as the case may be, prior to final disposition, out of any net rental income or
other net amounts derived from such REO Property.
(d) To the extent provided in this Agreement or the related Servicing
Agreement, the Liquidation Proceeds from the final disposition of the REO
Property, net of any payment to the Master Servicer and the Company or the
related Servicer as provided above shall be deposited in the Protected Account
on or prior to the Determination Date in the month following receipt thereof and
be remitted by wire transfer in immediately available funds to the Master
Servicer for deposit into the related Master Servicer Collection Account on the
next succeeding Remittance Date.
Section 4.16 Annual Officer's Certificate as to Compliance.
(a) The Master Servicer shall deliver to the Securities Administrator, the
Trustee and the Rating Agencies on or before March 1 of each year, commencing on
March 1, 2004, an Officer's Certificate, certifying that with respect to the
period ending December 31 of the prior year: (i) such Servicing Officer has
reviewed the activities of such Master Servicer during the preceding calendar
year or portion thereof and its performance under this Agreement, (ii) to the
best of such Servicing Officer's knowledge, based on such review, such Master
Servicer has performed and fulfilled its duties, responsibilities and
obligations under this Agreement in all material respects throughout such year,
or, if there has been a default in the fulfillment of any such duties,
responsibilities or obligations, specifying each such default known to such
Servicing Officer and the nature and status thereof, (iii) nothing has come to
the attention of such Servicing Officer to lead such Servicing Officer to
believe that the Company or any Servicer has failed to perform any of its
duties, responsibilities and obligations under this Agreement or the related
Servicing Agreement in all material respects throughout such year, or, if there
has been a material default in the performance or fulfillment of any such
duties, responsibilities or obligations, specifying each such default known to
such Servicing Officer and the nature and status thereof.
(b) Copies of such statements shall be provided to any Certificateholder
upon request, by the Master Servicer or by the Trustee at the Master Servicer's
expense if the Master Servicer failed to provide such copies (unless (i) the
Master Servicer shall have failed to provide the Trustee with such statement or
(ii) the Trustee shall be unaware of the Master Servicer's failure to provide
such statement).
Section 4.17 Annual Independent Accountant's Servicing Report. If the
Master Servicer has, during the course of any fiscal year, directly serviced any
of the Mortgage Loans, then the Master Servicer at its expense shall cause a
nationally recognized firm of independent certified public accountants to
furnish a statement to the Securities Administrator, the Trustee, the Rating
Agencies and the Seller on or before March 1 of each year, commencing on March
1, 2004 to the effect that, with respect to the most recently ended fiscal year,
such firm has examined certain records and documents relating to the Master
Servicer's performance of its servicing obligations under this
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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 (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). If such
report discloses exceptions that are material, the Master Servicer shall advise
the Trustee whether such exceptions have been or are susceptible of cure, and
will take prompt action to do so.
Section 4.18 Reports Filed with Securities and Exchange Commission. Within
15 days after each Distribution Date, the Securities Administrator shall, in
accordance with industry standards, file with the Commission via the Electronic
Data Gathering and Retrieval System ("XXXXX"), a Form 8-K with a copy of the
statement to the Trustee who shall make available a copy of the monthly
statement to the Certificateholders for such Distribution Date as an exhibit
thereto. Prior to January 30 in each year, the Securities Administrator shall,
in accordance with industry standards and only if instructed by the Depositor,
file a Form 15 Suspension Notice with respect to the Trust Fund, if applicable.
Prior to (i) March 15, 2004 and (ii) unless and until a Form 15 Suspension
Notice shall have been filed, prior to March 15 of each year thereafter, the
Master Servicer shall provide the Securities Administrator with a Master
Servicer Certification, together with a copy of the annual independent
accountant's servicing report and annual statement of compliance of the Company
to be delivered pursuant to this Agreement and each Servicer, in each case,
required to be delivered pursuant to the related Servicing Agreement, and, if
applicable, the annual independent accountant's servicing report and annual
statement of compliance to be delivered by the Master Servicer pursuant to
Sections 4.16 and 4.17. Prior to (i) March 31, 2004 and (ii) unless and until a
Form 15 Suspension Notice shall have been filed, March 31 of each year
thereafter, the Securities Administrator shall file a Form 10-K, in substance
conforming to industry standards, with respect to the Trust. Such Form 10-K
shall include the Master Servicer Certification and other documentation provided
by the Master Servicer pursuant to the second preceding sentence. The Depositor
hereby grants to the Securities Administrator a limited power of attorney to
execute and file each such document on behalf of the Depositor. Such power of
attorney shall continue until either the earlier of (i) receipt by the
Securities Administrator from the Depositor of written termination of such power
of attorney and (ii) the termination of the Trust Fund. The Depositor agrees to
promptly furnish to the Securities Administrator, from time to time upon
request, such further information, reports and financial statements within its
control related to this Agreement, the Mortgage Loans as the Securities
Administrator reasonably deems appropriate to prepare and file all necessary
reports with the Commission. The Securities Administrator shall have no
responsibility to file any items other than those specified in this Section
4.18; provided, however, the Securities Administrator will cooperate with the
Depositor in connection with any additional filings with respect to the Trust
Fund as the Depositor deems necessary under the Securities Exchange Act of 1934,
as amended (xxx "Xxxxxxxx
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Xxx"). Copies of all reports filed by the Securities Administrator under the
Exchange Act shall be sent to: the Depositor 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 Securities Administrator
in connection with this Section 4.18 shall not be reimbursable from the Trust
Fund.
Section 4.19 EMC. On the Closing Date, EMC will receive from the Seller a
payment of $5,000.
Section 4.20 UCC. The Trustee agrees to file continuation statements for
any Uniform Commercial Code financing statements which the Seller has informed
the Trustee were filed on the Closing Date in connection with the Trust. The
Seller shall file any financing statements or amendments thereto required by any
change in the Uniform Commercial Code.
Section 4.21 Optional Purchase of Certain Mortgage Loans.
With respect to any Mortgage Loans which as of the first day of a Calendar
Quarter is delinquent in payment by 90 days or more or is an REO Property, EMC
shall have the right to purchase any Mortgage Loan from the Trust which becomes
90 days or more delinquent or becomes an REO Property at a price equal to the
Repurchase Price; provided however (i) that such Mortgage Loan is still 90 days
or more delinquent or is an REO Property as of the date of such purchase and
(ii) this purchase option, if not theretofore exercised, shall terminate on the
date prior to the last day of the related Calendar Quarter. This purchase
option, if not exercised, shall not be thereafter reinstated unless the
delinquency is cured and the Mortgage Loan thereafter again becomes 90 days or
more delinquent or becomes an REO Property, in which case the option shall again
become exercisable as of the first day of the related Calendar Quarter.
In addition, EMC shall, at its option, purchase any Mortgage Loan from the
Trust if the first Due Date for such Mortgage Loan is subsequent to the Cut-off
Date and the initial Monthly Payment is not made within thirty (30) days of such
Due Date. Such purchase shall be made at a price equal to the Repurchase Price.
If at any time EMC remits to the Master Servicer a payment for deposit in
the Master Servicer Collection Account covering the amount of the Repurchase
Price for such a Mortgage Loan, and EMC provides to the Trustee a certification
signed by a Servicing Officer stating that the amount of such payment has been
deposited in the Master Servicer Collection Account, then the Trustee shall
execute the assignment of such Mortgage Loan prepared and delivered to the
Trustee, at the request of EMC, without recourse, representation or warranty, to
EMC which shall succeed to all the Trustee's right, title and interest in and to
such Mortgage Loan, and all security and documents relative thereto. Such
assignment shall be an assignment outright and not for security. EMC will
thereupon own such Mortgage, and all such security and documents, free of any
further obligation to the Trustee or the Certificateholders with respect
thereto.
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ARTICLE V
ACCOUNTS
Section 5.01 Collection of Mortgage Loan Payments; Protected Account.
(a) The Company shall make reasonable efforts in accordance with
customary and usual standards of practice of prudent mortgage lenders in the
respective states in which the Mortgaged Properties are located to collect all
payments called for under the terms and provisions of the Mortgage Loans to the
extent such procedures shall be consistent with this Agreement and the terms and
provisions of any related Required Insurance Policy. Consistent with the
foregoing, the Company may in its discretion (i) waive any late payment charge
and (ii) extend the due dates for payments due on a Mortgage Note for a period
not greater than 125 days. In the event of any such arrangement, the Company
shall make Advances on the related Mortgage Loan during the scheduled period in
accordance with the amortization schedule of such Mortgage Loan without
modification thereof by reason of such arrangements, and shall be entitled to
reimbursement therefor in accordance with Section 6.01. The Company shall not be
required to institute or join in litigation with respect to collection of any
payment (whether under a Mortgage, Mortgage Note or otherwise or against any
public or governmental authority with respect to a taking or condemnation) if it
reasonably believes that enforcing the provision of the Mortgage or other
instrument pursuant to which such payment is required is prohibited by
applicable law. In addition, if (x) a Mortgage Loan is in default or default is
imminent or (y) the Company delivers to the Trustee a certification addressed to
the Trustee, based on the advice of counsel or certified public accountants, in
either case, that have a national reputation with respect to taxation of REMICs,
that a modification of such Mortgage Loan will not result in the imposition of
taxes on or disqualify any of REMIC I, REMIC II or REMIC III, the Company may,
(A) amend the related Mortgage Note to reduce the Mortgage Rate applicable
thereto, provided that such reduced Mortgage Rate shall in no event be lower
than 5.00% with respect to any Mortgage Loan and (B) amend any Mortgage Note to
extend to the maturity thereof.
(b) The Company shall establish and maintain a Protected Account
(which shall at all times be an Eligible Account) with a depository institution
in the name of the Company for the benefit of the Trustee on behalf of the
Certificateholders and designated "JPMorgan Chase Bank , in trust for registered
holders of Bear Xxxxxxx Asset Backed Securities, Inc., Asset-Backed Certificates
Series 2003-AC5". The Company shall deposit or cause to be deposited into the
Protected Account on a daily basis within one Business Day of receipt, except as
otherwise specifically provided herein, the following payments and collections
remitted by subservicers or received by it in respect of the EMC Mortgage Loans
subsequent to the Cut-off Date (other than in respect of principal and interest
due on the EMC Mortgage Loans on or before the Cut-off Date) and the following
amounts required to be deposited hereunder:
(i) all payments on account of principal, including Principal
Prepayments, on the EMC Mortgage Loans;
(ii) all payments on account of interest on the EMC Mortgage Loans
net of the related Servicing Fee permitted under Section 3.10 and LPMI
Fees, if any;
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(iii) all Liquidation Proceeds and Insurance Proceeds, other than
proceeds to be applied to the restoration or repair of the Mortgaged
Property or released to the Mortgagor in accordance with the Company's
normal servicing procedures;
(iv) any amount required to be deposited by the Company pursuant to
Section 5.01(c) in connection with any losses on Permitted Investments;
(v) any amounts required to be deposited by the Company pursuant to
Section 3.05;
(v) any Prepayment Charges collected on the EMC Mortgage Loans; and
(vii) any other amounts required to be deposited hereunder.
The foregoing requirements for remittance by the Company into the
Protected Account shall be exclusive, it being understood and agreed that,
without limiting the generality of the foregoing, payments in the nature of late
payment charges or assumption fees, if collected, need not be remitted by the
Company. In the event that the Company shall remit any amount not required to be
remitted and not otherwise subject to withdrawal pursuant to Section 5.02, it
may at any time withdraw or direct the institution maintaining the Protected
Account, to withdraw such amount from the Protected Account, any provision
herein to the contrary notwithstanding. Such withdrawal or direction may be
accomplished by delivering written notice thereof to the institution maintaining
the Protected Account, that describes the amounts deposited in error in the
Protected Account. The Company shall maintain adequate records with respect to
all withdrawals made pursuant to this Section. All funds deposited in the
Protected Account shall be held in trust for the Certificateholders until
withdrawn in accordance with Section 5.02.
(c) The institution that maintains the Protected Account shall
invest the funds in the Protected Account, in the manner directed by the
Company, in Permitted Investments which shall mature not later than the
Remittance Date and shall not be sold or disposed of prior to its maturity. All
such Permitted Investments shall be made in the name of the Trustee, for the
benefit of the Certificateholders. All income and gain net of any losses
realized from any such investment shall be for the benefit of the Company as
servicing compensation and shall be remitted to it monthly as provided herein.
The amount of any losses incurred in the Protected Account in respect of any
such investments shall be deposited by the Company into the Protected Account,
out of the Company's own funds.
(d) The Company shall give at least 30 days advance notice to the
Trustee, the Seller, the Master Servicer, each Rating Agency and the Depositor
of any proposed change of location of the Protected Account prior to any change
thereof.
Section 5.02 Permitted Withdrawals From the Protected Account.
(a) The Company may from time to time make withdrawals from the
Protected Account for the following purposes:
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(i) to pay itself (to the extent not previously paid to or withheld
by the Company), as servicing compensation in accordance with Section
3.10, that portion of any payment of interest that equals the Servicing
Fee for the period with respect to which such interest payment was made,
and, as additional servicing compensation, those other amounts set forth
in Section 3.10;
(ii) to reimburse the Company for Advances made by it with respect
to the Mortgage Loans, provided, however, that the Company's right of
reimbursement pursuant to this subclause (ii) shall be limited to amounts
received on particular Mortgage Loan(s) (including, for this purpose,
Liquidation Proceeds and Insurance Proceeds) that represent late
recoveries of payments of principal and/or interest on such particular
Mortgage Loan(s) in respect of which any such Advance was made;
(iii) to reimburse the Company for any previously made portion of a
Servicing Advance or an Advance made by the Company that, in the good
faith judgment of the Company, will not be ultimately recoverable by it
from the related Mortgagor, any related Liquidation Proceeds, Insurance
Proceeds or otherwise (a "Nonrecoverable Advance"), to the extent not
reimbursed pursuant to clause (ii) or clause (v);
(iv) to reimburse the Company from Insurance Proceeds for Insured
Expenses covered by the related Insurance Policy;
(v) to pay the Company any unpaid Servicing Fees and to reimburse it
for any unreimbursed Servicing Advances, provided, however, that the
Company's right to reimbursement for Servicing Advances pursuant to this
subclause (v) with respect to any Mortgage Loan shall be limited to
amounts received on particular Mortgage Loan(s) (including, for this
purpose, Liquidation Proceeds, Insurance Proceeds and purchase and
repurchase proceeds) that represent late recoveries of the payments for
which such Servicing Advances were made;
(vi) to pay to the Seller, the Depositor or itself, as applicable,
with respect to each Mortgage Loan or property acquired in respect thereof
that has been purchased pursuant to Section 2.02, 2.03 or 4.21 of this
Agreement, all amounts received thereon and not taken into account in
determining the related Stated Principal Balance of such repurchased
Mortgage Loan;
(vii) to pay any expenses recoverable by the Company pursuant to
Section 8.04 of this Agreement;
(viii) to withdraw pursuant to Section 5.01 any amount deposited in
the Protected Account and not required to be deposited therein; and
(ix) to clear and terminate the Protected Account upon termination
of this Agreement pursuant to Section 11.01 hereof.
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In addition, no later than 1:00 p.m. Eastern time on the Remittance
Date, the Company shall withdraw from the Protected Account and remit to the
Master Servicer the amount required to be withdrawn therefrom pursuant to
Section 5.04 hereof. In addition, on or before the Remittance Date, the Company
shall remit to the Master Servicer for deposit in the Master Servicer Collection
Account any Advances or any payments of Compensating Interest required to be
made by the Company with respect to the EMC Mortgage Loans.
The Company shall keep and maintain separate accounting, on a
Mortgage Loan by Mortgage Loan basis, for the purpose of justifying any
withdrawal from the Protected Account pursuant to subclauses (i), (ii), (iv),
(v) and (vi) above. Prior to making any withdrawal from the Protected Account
pursuant to subclause (iii), the Company shall deliver to the Trustee an
Officer's Certificate of a Servicing Officer indicating the amount of any
previous Advance or Servicing Advance determined by the Company to be a
Nonrecoverable Advance and identifying the related Mortgage Loan(s), and their
respective portions of such Nonrecoverable Advance.
Section 5.02A Reports to Master Servicer.
On or before the tenth calendar day of each month, the Company shall
furnish to the Master Servicer electronically in a format acceptable to the
Master Servicer loan accounting reports in the investor's assigned loan number
order to document the payment activity on each EMC Mortgage Loan on an
individual mortgage loan basis. With respect to each month, such loan accounting
reports shall contain the following:
(i) With respect to each Scheduled Payment (on both an actual and
scheduled basis with respect to mortgage loan balances and on an actual
basis with respect to paid-through dates), the amount of such remittance
allocable to principal (including a separate breakdown of any Principal
Prepayment, including the amount of any Prepayment Interest Shortfall);
(ii) with respect to each Monthly Payment, the amount of such
remittance allocable to scheduled interest;
(iii) the amount of servicing compensation received by the Company
during the prior calendar month;
(iv) the aggregate scheduled principal balance of the EMC Mortgage
Loans;
(v) the aggregate amount of Advances made by the Company pursuant to
Section 6.01;
(vi) the aggregate of any expenses reimbursed to the Company during
the prior calender month pursuant to Section 5.02;
(vii) the number and aggregate outstanding principal balances of EMC
Mortgage Loans (a) delinquent (1) 30 to 59 days, (2) 60 to 89 days, (3) 90
days or more; (b) as to which foreclosure has commenced; and (c) as to
which REO Property has been acquired; and
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(viii) the amount of any Prepayment Charges collected by the
Company.
Section 5.03 Collection of Taxes; Assessments and Similar Items; Escrow
Accounts.
With respect to each EMC Mortgage Loan, to the extent required by the
related Mortgage Note, the Company shall establish and maintain one or more
accounts (each, an "Escrow Account") and deposit and retain therein all
collections from the Mortgagors (or advances by the Company) for the payment of
taxes, assessments, hazard insurance premiums or comparable items for the
account of the Mortgagors. Nothing herein shall require the Company to compel a
Mortgagor to establish an Escrow Account in violation of applicable law.
Withdrawals of amounts so collected from the Escrow Accounts may be made
only to effect timely payment of taxes, assessments, hazard insurance premiums,
condominium or PUD association dues, or comparable items, to reimburse the
Company out of related collections for any payments made with respect to each
EMC Mortgage Loan pursuant to Section 3.01 (with respect to taxes and
assessments and insurance premiums) and Section 3.05 (with respect to hazard
insurance), to refund to any Mortgagors for any EMC Mortgage Loans any sums as
may be determined to be overages, to pay interest, if required by law or the
terms of the related Mortgage or Mortgage Note, to such Mortgagors on balances
in the Escrow Account or to clear and terminate the Escrow Account at the
termination of this Agreement in accordance with Section 11.01 thereof. The
Escrow Account shall not be a part of the Trust Fund.
Section 5.04 Servicer Protected Accounts. (a) The Master Servicer shall
enforce the obligation of the Company and the Servicers to establish and
maintain a Protected Account in accordance with this Agreement and the Servicing
Agreements, with records to be kept with respect thereto on a Mortgage Loan by
Mortgage Loan basis, into which accounts shall be deposited within one Business
Day (or as of such other time specified in the Servicing Agreements) of receipt
all collections of principal and interest on any Mortgage Loan and with respect
to any REO Property received by the Company or the related Servicer, including
Principal Prepayments, Insurance Proceeds, Liquidation Proceeds, and advances
made from the Company's or such Servicer's own funds (less servicing
compensation as permitted by this Agreement or the related Servicing Agreement)
and all other amounts to be deposited in the Protected Accounts. Each of the
Company and the Servicers are hereby authorized to make withdrawals from and
deposits to the related Protected Account for purposes required or permitted by
this Agreement. To the extent provided in this Agreement or any Servicing
Agreement, the Protected Account shall be held in a Designated Depository
Institution and segregated on the books of such institution in the name of the
Trustee for the benefit of Certificateholders.
(b) To the extent provided in this Agreement or any Servicing Agreement,
amounts on deposit in a Protected Account may be invested in Permitted
Investments in the name of the Trustee for the benefit of Certificateholders
and, except as provided in the preceding paragraph, not commingled with any
other funds, such Permitted Investments to mature, or to be subject to
redemption or withdrawal, no later than the date on which such funds are
required to be withdrawn for deposit in the Master Servicer Collection Account,
and shall be held until required for such deposit. The income earned from
Permitted Investments made pursuant to this Section 5.04 shall be paid to the
Company or the related Servicer under this Agreement or the related Servicing
Agreement,
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and the risk of loss of moneys required to be distributed to the
Certificateholders resulting from such investments shall be borne by and be the
risk of the Company or the related Servicer, as the case may be. The Company or
the related Servicer (to the extent provided in this Agreement or the related
Servicing Agreement) shall deposit the amount of any such loss in the Protected
Account within two Business Days of receipt of notification of such loss but not
later than the second Business Day prior to the Distribution Date on which the
moneys so invested are required to be distributed to the Certificateholders.
(c) To the extent provided in this Agreement or the related Servicing
Agreement and subject to this Article V, on or before each Remittance Date, the
Company or the related Servicer shall withdraw or shall cause to be withdrawn
from its Protected Account and shall immediately deposit or cause to be
deposited in the Master Servicer Collection Account amounts representing the
following collections and payments (other than with respect to principal of or
interest on the Mortgage Loans due on or before the Cut-off Date):
(i) Scheduled Payments on the Mortgage Loans received or any related
portion thereof advanced by the Company or the related Servicer pursuant to the
related Servicing Agreement which were due on or before the related Due Date,
net of the amount thereof comprising the Servicing Fees;
(ii) Full Principal Prepayments and any Liquidation Proceeds
received by the Company or the related Servicer with respect to such Mortgage
Loans in the related Prepayment Period, with interest to the date of prepayment
or liquidation, net of the amount thereof comprising the Servicing Fees and LPMI
Fees, if any;
(iii) Partial Principal Prepayments received by the Company or the
related Servicer for such Mortgage Loans in the related Prepayment Period;
(iv) Any amount to be used as an Advance; and
(v) The amount of any Prepayment Charges collected with respect to
the Mortgage Loans.
(d) Withdrawals may be made from a Protected Account by the Company as
described in Section 5.02 hereof and by the Master Servicer or the related
Servicer only to make remittances as provided in Section 5.04(c), 5.05 and 5.06;
to reimburse the Master Servicer or the Servicer for Advances which have been
recovered by subsequent collection from the related Mortgagor; to remove amounts
deposited in error; to remove fees, charges or other such amounts deposited on a
temporary basis; or to clear and terminate the account at the termination of
this Agreement in accordance with Section 11.01. As provided in Sections 5.04(c)
and 5.05(b) certain amounts otherwise due to the related Servicer may be
retained by the related Servicer and need not be deposited in the Master
Servicer Collection Account.
Section 5.05 Master Servicer Collection Account. (a) The Master Servicer
shall establish and maintain in the name of the Trustee, for the benefit of the
Certificateholders, the Master Servicer Collection Account which shall be an
Eligible Account. The Master Servicer will deposit in the
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Master Servicer Collection Account as identified by the Master Servicer and as
received by the Master Servicer, the following amounts:
(i) Any amounts withdrawn from a Protected Account;
(ii) Any Advance and any Compensating Interest Payments;
(iii) Any Insurance Proceeds or Liquidation Proceeds received by or
on behalf of the Master Servicer or which were not deposited in a Protected
Account;
(iv) The Repurchase Price with respect to any Mortgage Loans
purchased by the Seller or Section 2.02 or 2.03, any amounts which are to be
treated pursuant to Section 2.04 of this Agreement as the payment of such a
Repurchase Price, the Repurchase Price with respect to any Mortgage Loans
purchased by EMC pursuant to Section 4.21, and all proceeds of any Mortgage
Loans or property acquired with respect thereto repurchased by the Seller or its
designee pursuant to Section 11.01;
(v) Any amounts required to be deposited with respect to losses on
investments of deposits in an Account; and
(vi) Any other amounts received by or on behalf of the Master Servicer or
the Trustee and required to be deposited in the Master Servicer Collection
Account pursuant to this Agreement.
(b) All amounts deposited to the Master Servicer Collection Account shall
be held by the Master Servicer in the name of the Trustee in trust for the
benefit of the Certificateholders in accordance with the terms and provisions of
this Agreement. The requirements for crediting the Master Servicer Collection
Account or the Distribution Account shall be exclusive, it being understood and
agreed that, without limiting the generality of the foregoing, payments in the
nature of late payment charges or assumption, tax service, statement account or
payoff, substitution, satisfaction, release and other like fees and charges,
need not be credited by the Master Servicer or the related Servicer to the
Distribution Account or the Master Servicer Collection Account, as applicable.
In the event that the Master Servicer shall deposit or cause to be deposited to
the Distribution Account any amount not required to be credited thereto, the
Trustee, upon receipt of a written request therefor signed by a Servicing
Officer of the Master Servicer, shall promptly transfer such amount to the
Master Servicer, any provision herein to the contrary notwithstanding.
(c) The amount at any time credited to the Master Servicer Collection
Account may be invested, in the name of the Trustee, or its nominee, for the
benefit of the Certificateholders, in Permitted Investments or be held in cash
as directed by Master Servicer. All Permitted Investments shall mature or be
subject to redemption or withdrawal on or before, and shall be held until, the
next succeeding Distribution Account Deposit Date. Any and all investment
earnings from the Master Servicer Collection Account shall be paid to the Master
Servicer. The risk of loss of moneys required to be distributed to the
Certificateholders resulting from such investments shall be borne by and be the
risk of the Master Servicer. The Master Servicer shall deposit the amount of any
such loss in the Master Servicer Collection Account within two Business Days of
receipt of notification of such loss
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but not later than the second Business Day prior to the Distribution Date on
which the moneys so invested are required to be distributed to the
Certificateholders.
Section 5.06 Permitted Withdrawals and Transfers from the Master Servicer
Collection Account. (a) The Master Servicer will, from time to time on demand of
the Master Servicer or the Securities Administrator, make or cause to be made
such withdrawals or transfers from the Master Servicer Collection Account as the
Master Servicer has designated for such transfer or withdrawal pursuant to this
Agreement and the related Servicing Agreement. The Master Servicer may clear and
terminate the Master Servicer Collection Account pursuant to Section 11.01 and
remove amounts from time to time deposited in error. (iii) a (b) On an ongoing
basis, the Master Servicer shall withdraw from the Master Servicer Collection
Account to pay itself as provided in Section 4.14 and to pay any expenses
recoverable by the Trustee, the Master Servicer, the Custodian or the Securities
Administrator pursuant to Sections 4.03, 8.03, 8.04 and 10.05.
(c) In addition, on or before each Distribution Account Deposit Date, the
Master Servicer shall deposit in the Distribution Account (or remit to the
Trustee for deposit therein) any Advances required to be made by the Master
Servicer with respect to the Mortgage Loans.
(d) No later than 3:00 p.m. New York time on each Distribution Account
Deposit Date, the Master Servicer will transfer all available funds on deposit
in the Master Servicer Collection Account with respect to the related
Distribution Date to the Trustee for deposit in the Distribution Account.
Section 5.07 Distribution Account.
(a) The Trustee shall establish and maintain in the name of the
Trustee, for the benefit of the Certificateholders, the Distribution Account as
a segregated trust account or accounts.
(b) All amounts deposited to the Distribution Account shall be held
by the Trustee in the name of the Trustee in trust for the benefit of the
Certificateholders in accordance with the terms and provisions of this
Agreement.
(c) The Distribution Account shall constitute an Eligible Account of
the Trust Fund segregated on the books of the Trustee and held by the Trustee
and the Distribution Account and the funds deposited therein shall not be
subject to, and shall be protected from, all claims, liens, and encumbrances of
any creditors or depositors of the Trustee (whether made directly, or indirectly
through a liquidator or receiver of the Trustee). The amount at any time
credited to the Distribution Account may be, as directed by the Master Servicer,
held either uninvested in a trust or deposit account of the Trustee with no
liability for interest or other compensation thereof, except as otherwise agreed
in writing with the Master Servicer, or invested in the name of the Trustee, in
such Permitted Investments which mature not later than the Business Day next
preceding the succeeding Distribution Date, except if such Permitted Investment
is an obligation of or is managed by the institution that maintains such fund or
account, then such Permitted Investment shall mature not later than such
Distribution Date. Permitted Investments in respect of the Distribution Account
shall not be sold or
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disposed of prior to their maturity. All investment earnings on amounts on
deposit in the Distribution Account or benefit from funds uninvested therein
from time to time shall be for the account of the Master Servicer. The Master
Servicer shall be permitted to receive distribution of any and all investment
earnings from the Distribution Account on each Distribution Date. If there is
any loss on a Permitted Investment or demand deposit, the Master Servicer shall
deposit the amount of the loss in the Distribution Account. With respect to the
Distribution Account and the funds deposited therein, the Trustee shall take
such action as may be necessary to ensure that the Certificateholders shall be
entitled to the priorities afforded to such a trust account (in addition to a
claim against the estate of the Trustee) as provided by 12 U.S.C. ss. 92a(e),
and applicable regulations pursuant thereto, if applicable, or any applicable
comparable state statute applicable to state chartered banking corporations.
Section 5.08 Permitted Withdrawals and Transfers from the Distribution
Account.
(a) The Trustee will, from time to time on demand of the Master Servicer
or the Securities Administrator, make or cause to be made such withdrawals or
transfers from the Distribution Account as the Master Servicer has designated
for such transfer or withdrawal pursuant to this Agreement or any Servicing
Agreement or as the Securities Administrator has instructed hereunder for the
following purposes (limited in the case of amounts due the Master Servicer to
those not withdrawn from the Master Servicer Collection Account in accordance
with the terms of this Agreement; provided that the Trustee shall not be
responsible for such determination and may rely on the Master Servicer's or the
Securities Administrator's instructions under this Section 5.08):
(i) to reimburse the Master Servicer, the Company or the related
Servicer for any Advance or Servicing Advance of its own funds, the right of the
Master Servicer, the Company or the related Servicer to reimbursement pursuant
to this subclause (i) being limited to amounts received on a particular Mortgage
Loan (including, for this purpose, the Repurchase Price therefor, Insurance
Proceeds and Liquidation Proceeds) which represent late payments or recoveries
of the principal of or interest on such Mortgage Loan respecting which such
Advance or Servicing Advance was made;
(ii) to reimburse the Master Servicer, the Company or the related
Servicer from Insurance Proceeds or Liquidation Proceeds relating to a
particular Mortgage Loan for amounts expended by the Master Servicer, the
Company or the related Servicer in good faith in connection with the restoration
of the related Mortgaged Property which was damaged by an uninsured cause or in
connection with the liquidation of such Mortgage Loan;
(iii) to reimburse the Master Servicer, the Company or the related
Servicer from Insurance Proceeds relating to a particular Mortgage Loan for
insured expenses incurred with respect to such Mortgage Loan and to reimburse
the Master Servicer, the Company or the related 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 (x) of this Subsection
(a) to the Master Servicer; and (ii) such Liquidation Expenses were not included
in the computation of such Excess Liquidation Proceeds;
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(iv) [reserved];
(v) [reserved];
(vi) to reimburse the Master Servicer, the Company or a Servicer for
advances of funds pursuant to this Agreement or the related Servicing Agreement,
and the right to reimbursement pursuant to this subclause being limited to
amounts received on the related Mortgage Loan (including, for this purpose, the
Repurchase Price therefor, Insurance Proceeds and Liquidation Proceeds) which
represent late recoveries of the payments for which such advances were made;
(vii) to reimburse the Master Servicer, the Company or a Servicer
for any Advance or advance, after a Realized Loss has been allocated with
respect to the related Mortgage Loan if the Advance or advance has not been
reimbursed pursuant to clauses (i) and (vi);
(viii) to pay the Master Servicer as set forth in Section 4.14;
(ix) to reimburse the Master Servicer for expenses, costs and
liabilities incurred by and reimbursable to it pursuant to Sections 4.03,
8.04(c) and (d) and 12.02 or otherwise reimbursable to it pursuant to this
Agreement;
(x) to pay to the Master Servicer, as additional servicing
compensation, any Excess Liquidation Proceeds to the extent not retained by the
Company or the related Servicer;
(xi) to reimburse or pay the Company or the related Servicer any
such amounts as are due thereto under this Agreement or the related Servicing
Agreement and have not been retained by or paid to the Company or the related
Servicer, to the extent provided herein and in the related Servicing Agreement;
(xii) to reimburse the Trustee, the Custodian or the Securities
Administrator for expenses, costs and liabilities incurred by or reimbursable to
it pursuant to this Agreement (to the extent not reimbursed from the Master
Servicer Collection Account in accordance with Section 5.06);
(xiii) to remove amounts deposited in error; and
(xiv) to clear and terminate the Distribution Account pursuant to
Section 11.01.
(b) The Master Servicer shall keep and maintain separate accounting,
on a Mortgage Loan by Mortgage Loan basis, for the purpose of accounting for any
reimbursement from the Distribution Account pursuant to subclauses (i) through
(vi), inclusive, and (viii) or with respect to any such amounts which would have
been covered by such subclauses had the amounts not been retained by the Master
Servicer without being deposited in the Distribution Account under Section 5.06.
(c) On each Distribution Date, the Trustee shall distribute the
Available Funds to the extent of funds on deposit in the Distribution Account to
the holders of the Certificates in accordance with the Remittance Report upon
which the Trustee may conclusively rely.
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ARTICLE VI
DISTRIBUTIONS AND ADVANCES
Section 6.01 Advances.
(a) The Company shall make an Advance with respect to any EMC Mortgage
Loan and deposit such Advance in the Master Servicer Collection Account no later
than 1:00 p.m. Eastern time on the Remittance Date in immediately available
funds. The Master Servicer shall cause the related Servicer to remit any such
Advance required pursuant to the terms of the related Servicing Agreement. The
Company or the related Servicer, as applicable, shall be obligated to make any
such Advance only to the extent that such advance would not be a Nonrecoverable
Advance. If the Company or the related Servicer shall have determined that it
has made a Nonrecoverable Advance or that a proposed Advance or a lesser portion
of such Advance would constitute a Nonrecoverable Advance, the Company or the
related Servicer, as the case may be, shall deliver (i) to the Trustee for the
benefit of the Certificateholders funds constituting the remaining portion of
such Advance, if applicable, and (ii) to the Depositor, the Master Servicer,
each Rating Agency and the Trustee an Officer's Certificate setting forth the
basis for such determination.
In lieu of making all or a portion of such Advance from its own
funds, the Company may (i) cause to be made an appropriate entry in its records
relating to the Protected Account that any Amounts Held for Future Distribution
has been used by the Company in discharge of its obligation to make any such
Advance and (ii) transfer such funds from the Protected Account to the
Distribution Account. Any funds so applied and transferred shall be replaced by
the Company by deposit in the Distribution Account, no later than the close of
business on the Remittance Date immediately preceding the Distribution Date on
which such funds are required to be distributed pursuant to this Agreement.
The Company shall be entitled to be reimbursed from the Protected
Account for all Advances of its own funds made pursuant to this Section as
provided in Section 5.02. The obligation to make Advances with respect to any
Mortgage Loan shall continue until such Mortgage Loan is paid in full or the
related Mortgaged Property or related REO Property has been liquidated or until
the purchase or repurchase thereof (or substitution therefor) from the Trust
Fund pursuant to any applicable provision of this Agreement, except as otherwise
provided in this Section 6.01.
(b) If the Scheduled Payment on a Mortgage Loan that was due on a related
Due Date and is delinquent other than as a result of application of the Relief
Act and for which the Company or the related Servicer was required to make an
Advance pursuant to this Agreement or the related Servicing Agreement exceeds
the amount deposited in the Master Servicer Collection Account which will be
used for an Advance with respect to such Mortgage Loan, the Master Servicer will
deposit in the Master Servicer Collection Account not later than the
Distribution Account Deposit Date immediately preceding the related Distribution
Date an amount equal to such deficiency, net of the 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 Advance was made. Subject to
the foregoing, the Master Servicer shall continue to make such Advances through
the date that the Company or the related Servicer is required to do
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so under this Agreement or the related Servicing Agreement, as applicable. If
applicable, on the Distribution Account Deposit Date, the Master Servicer shall
present an Officer's Certificate to the Trustee (i) stating that the Master
Servicer elects not to make an Advance in a stated amount and (ii) detailing the
reason it deems the advance to be nonrecoverable.
Subject to and in accordance with the provisions of Article IX
hereof, in the event the Master Servicer fails to make such Advance, then the
Trustee, as Successor Master Servicer, shall be obligated to make such Advance,
subject to the provisions of this Section 6.01.
Section 6.02 Compensating Interest Payments.
(a) In the event that there is a Prepayment Interest Shortfall arising
from a voluntary Principal Prepayment in part or in full by the Mortgagor with
respect to any EMC Mortgage Loan, the Company shall, to the extent of the
Servicing Fee for such Distribution Date, deposit into the Master Servicer
Collection Account, as a reduction of the Servicing Fee for such Distribution
Date, no later than the close of business on the Remittance Date immediately
preceding such Distribution Date, an amount equal to the Prepayment Interest
Shortfall; and in case of such deposit, the Company shall not be entitled to any
recovery or reimbursement from the Depositor, the Trustee, the Seller, the
Securities Administrator, the Trust Fund or the Certificateholders.
(b) The Master Servicer shall cause each Servicer under the related
Servicing Agreement to remit any required Compensating Interest Payments to the
Master Servicer Collection Account on the Remittance Date.
(c) The Master Servicer shall be required to remit the amount of any such
Prepayment Interest Shortfalls, to the extent of amounts earned on Permitted
Investments in the Master Servicer Collection Account for such Distribution
Date, in the event the Company or the related Servicer is required to make such
payment but fails to do so.
Section 6.03 REMIC Distributions.
On each Distribution Date the Securities Administrator, as agent for
the Trustee, shall be deemed to make distributions (i) to the REMIC I Regular
Interests in accordance with Section 6.06 hereof and (ii) to the REMIC II
Regular Interests in accordance with Section 6.07 hereof.
Section 6.04 Distributions.
(a) On each Distribution Date, the Available Funds for such
Distribution Date shall be withdrawn by the Trustee to the extent of funds on
deposit in the Distribution Account and distributed as directed in accordance
with the Remittance Report for such Distribution Date, in the following order of
priority:
first, to pay accrued and unpaid interest on the Offered
Certificates as follows:
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1. To the holders of the Class A-1, Class X-0, Xxxxx X-0, Class A-4
Class A-5 Certificates, the Monthly Interest Distributable Amount for each
such Class for such Distribution Date, on a pro rata basis;
2. To the holders of the Class M-1 Certificates, the Monthly
Interest Distributable Amount for such Class for such Distribution Date;
3. To the holders of the Class M-2 Certificates, the Monthly
Interest Distributable Amount for such Class for such Distribution Date;
and
4. To the holders of the Class B Certificates, the Monthly Interest
Distributable Amount for such Class for such Distribution Date.
second, the Principal Distribution Amount for any Distribution Date
shall be distributed to the Offered Certificates (other than the Class A-4
Certificates) on a pro rata basis, based on the Certificate Principal Balance of
each such Class, until the Certificate Principal Balances thereof have been
reduced to zero.
third, after the payment of interest and principal to the
Certificates as described in clauses first and second above, any Net Monthly
Excess Cashflow for such Distribution Date will be distributed as follows:
1. To the holders of the Offered Certificates (other than the Class
A-4 Certificates), in an amount equal to any Extra Principal Distribution
Amount, payable to such holders as part of the Principal Distribution
Amount pursuant to clause second above;
2. To the holders of the Class A-1, Class A-2, Class A-3, Class A-4
and Class X- 0 Certificates, pro rata, then to the holders of the Class
M-1 Certificates, then to the holders of the Class M-2 Certificates, and
then to the holders of the Class B Certificates, any Unpaid Interest
Shortfall for such Classes of Certificates on such Distribution Date, to
the extent not previously reimbursed;
3. Sequentially to the holders of the Class M-1 Certificates and
Class M-2 Certificates, in an amount equal to the Applied Realized Loss
Amount for each such Class;
4. To the holders of the Class B Certificates, in an amount equal to
the Applied Realized Loss Amount for such Class;
5. From amounts otherwise distributable to the Class C Certificates,
to the Net WAC Reserve Fund, in respect of the Class X-0, Xxxxx X-0, Class
A-3, Class A-4 and Class A-5 Certificates, on a pro rata basis, the Net
WAC Rate Carryover Amount for each such Class for such Distribution Date
or any prior Distribution Dates to the extent unpaid;
6. From amounts otherwise distributable to the Class C Certificates,
to the Net WAC Reserve Fund, in respect of the Class M-1 Certificates, the
Net WAC Rate Carryover
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Amount for such Class for such Distribution Date or any prior Distribution
Dates to the extent unpaid;
7. From amounts otherwise distributable to the Class C Certificates,
to the Net WAC Reserve Fund, in respect of the Class M-2 Certificates, the
Net WAC Rate Carryover Amount for such Class for such Distribution Date or
any prior Distribution Dates to the extent unpaid;
8. From amounts otherwise distributable to the Class C Certificates,
to the Net WAC Reserve Fund, in respect of the Class B Certificates, the
Net WAC Rate Carryover Amount for such Class for such Distribution Date or
any prior Distribution Dates to the extent unpaid;
9. To the holders of the Class C Certificates, the Class C
Distribution Amount less amounts distributed pursuant to items 5, 6, 7 and 8
above; and
10. To the holders of the Class R-3 Certificates, any amount of Net
Monthly Excess Cashflow remaining after distributions pursuant to items 1
through 9 of this clause third.
(b) On each Distribution Date, all amounts representing Prepayment
Charges in respect of the Mortgage Loans received during the related Prepayment
Period and deposited in the Distribution Account will be withdrawn from the
Distribution Account and distributed by the Trustee in accordance with the
Remittance Report to the Class P Certificates and shall not be available for
distribution to the holders of any other Class of Certificates. The payment of
such Prepayment Charges shall not reduce the Certificate Principal Balance of
the Class P Certificates.
(c) Subject to Section 11.02 hereof respecting the final
distribution, on each Distribution Date the Trustee shall make distributions to
each Certificateholder of record on the preceding Record Date either by wire
transfer in immediately available funds to the account of such holder at a bank
or other entity having appropriate facilities therefor, if (i) such Holder has
so notified the Trustee at least 5 Business Days prior to the related Record
Date and (ii) such Holder shall hold Regular Certificates with aggregate
principal denominations of not less than $1,000,000 or evidencing a Percentage
Interest aggregating 10% or more with respect to such Class or, if not, by check
mailed by first class mail to such Certificateholder at the address of such
holder appearing in the Certificate Register. Notwithstanding the foregoing, but
subject to Section 11.02 hereof respecting the final distribution, distributions
with respect to Certificates registered in the name of a Depository shall be
made to such Depository in immediately available funds.
(d) On or before 5:00 p.m. Eastern time on the fifth Business Day
immediately preceding each Distribution Date, the Master Servicer shall deliver
a report to the Securities Administrator in the form of a computer readable
magnetic tape (or by such other means as the Master Servicer and the Securities
Administrator may agree from time to time) containing such data and information,
as agreed to by the Master Servicer and the Securities Administrator such as to
permit the Securities Administrator to prepare the Monthly Statement to
Certificateholders and to direct the Trustee in writing to make the required
distributions for the related Distribution Date (the "Remittance Report"). The
Securities Administrator shall deliver a Remittance Report to the Trustee
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on or before 5:00 p.m. Eastern time on the Business Day immediately preceding
each Distribution Date.
Section 6.04A Allocation of Realized Losses.
(a) On or prior to each Determination Date, the Master Servicer shall
determine the amount of any Realized Loss in respect of each Mortgage Loan that
occurred during the immediately preceding calendar month.
(b) The interest portion of Realized Losses shall be allocated to the
Certificates as described in Section 1.02 hereof.
(c) The principal portion of all Realized Losses on the Mortgage Loans
pursuant to Section 6.04(A)(d) shall be allocated on each Distribution Date as
follows: first, to Net Monthly Excess Cashflow; second, to the Class C
Certificates, until the Certificate Principal Balance thereof has been reduced
to zero; third, to the Class B Certificates, until the Certificate Principal
Balance thereof has been reduced to zero; fourth, to the Class M-2 Certificates,
until the Certificate Principal Balance thereof has been reduced to zero; and
fifth, to the Class M-1 Certificates, until the Certificate Principal Balance
thereof has been reduced to zero. All such Realized Losses to be allocated to
the Certificate Principal Balances of all Classes on any Distribution Date shall
be so allocated after the actual distributions to be made on such date as
provided above. All references above to the Certificate Principal Balance of any
Class of Certificates shall be to the Certificate Principal Balance of such
Class immediately prior to the relevant Distribution Date, before reduction
thereof by any Realized Losses, in each case to be allocated to such Class of
Certificates, on such Distribution Date.
Any allocation of the principal portion of Realized Losses to a
Subordinate Certificate on any Distribution Date shall be made by reducing the
Certificate Principal Balance thereof by the amount so allocated; any allocation
of Realized Losses to a Class C Certificates shall be made by reducing the
amount otherwise payable in respect thereof pursuant to Section 6.04(a) clause
third. No allocations of any Realized Losses shall be made to the Certificate
Principal Balances of the Senior Certificates or Class P Certificates.
All such Realized Losses and all other losses allocated to a Class
of Certificates hereunder will be allocated among the Certificates of such Class
in proportion to the Percentage Interests evidenced thereby.
(d) All Realized Losses on the Mortgage Loans shall be allocated on each
Distribution Date to the following REMIC I Regular Interests in the specified
percentages, as follows: first, to Uncertificated Accrued Interest payable to
the REMIC I Regular Interest LTI-AA and REMIC I Regular Interest LTI-ZZ up to an
aggregate amount equal to the REMIC I Interest Loss Allocation Amount, 98% and
2%, respectively; second, to the Uncertificated Principal Balances of the REMIC
I Regular Interest LTI-AA and REMIC I Regular Interest LTI-ZZ up to an aggregate
amount equal to the REMIC I Principal Loss Allocation Amount, 98% and 2%,
respectively; third, to the Uncertificated Principal Balances of REMIC I Regular
Interest LTI-AA, 98%, to REMIC I Regular Interest LTI-B, 1% and to REMIC I
Regular Interest LTI-ZZ, 1%, respectively, until the Uncertificated Principal
Balance of REMIC I Regular Interest LTI-B has been reduced to zero; fourth,
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to the Uncertificated Principal Balances of REMIC I Regular Interest LTI-AA,
REMIC I Regular Interest LTI-M2 and REMIC I Regular Interest LTI-ZZ, 98%, 1% and
1%, respectively, until the Uncertificated Principal Balance of REMIC I Regular
Interest LTI-M2 has been reduced to zero; and fifth, to the Uncertificated
Principal Balances of REMIC I Regular Interest LTI-AA, REMIC I Regular Interest
LTI-M1 and REMIC I Regular Interest LTI-ZZ, 98%, 1% and 1%, respectively, until
the Uncertificated Principal Balance of REMIC I Regular Interest LTI-M1 has been
reduced to zero.]
(e) All Realized Losses on the Mortgage Loans shall be allocated on each
Distribution Date to the REMIC II Regular Interests in the same manner as
Realized Losses are allocated to the Corresponding Certificates, pursuant to
Section 6.04A(c).
Section 6.05 Monthly Statements to Certificateholders.
(a) Not later than each Distribution Date, the Securities
Administrator shall prepare and make available to each Holder of Certificates,
the Trustee, the Master Servicer and the Depositor a statement setting forth for
the Certificates:
(i) the amount of the related distribution to Holders of each Class
allocable to principal, separately identifying (A) the aggregate amount of
any Principal Prepayments included therein, (B) the aggregate of all
scheduled payments of principal included therein and (C) Extra Principal
Distribution Amount (if any);
(ii) the amount of such distribution to Holders of each Class
allocable to interest;
(iii) the Certificate Principal Balance or Certificate Notional
Balance of each Class after giving effect (i) to all distributions
allocable to principal on such Distribution Date and (ii) the allocation
of any Applied Realized Loss Amounts for such Distribution Date;
(iv) the aggregate of the Stated Principal Balances of all of the
Mortgage Loans for the following Distribution Date;
(v) the Servicing Fees paid to or retained by the Company or the
related Servicer for the related Due Period;
(vi) the Pass-Through Rate for each Class of Certificates with
respect to the current Accrual Period, and, if applicable, whether such
Pass-Through Rate was limited by the Net WAC Rate Cap;
(vii) the amount of Advances included in the distribution on such
Distribution Date;
(viii) the cumulative amount of Applied Realized Loss Amounts to
date and, in addition, if the Certificate Principal Balances of the
Subordinate Certificates have all been reduced to zero, the cumulative
amount of any Realized Losses that have not been allocated to any
Certificates;
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(ix) the number and aggregate principal amounts of Mortgage Loans
(A) Delinquent (exclusive of Mortgage Loans in foreclosure and bankruptcy)
(1) 31 to 60 days, (2) 61 to 90 days and (3) 91 or more days, (B) in
foreclosure and delinquent (1) 31 to 60 days, (2) 61 to 90 days and (3) 91
or more days and (C) in bankruptcy and delinquent (1) 31 to 60 days, (2)
61 to 90 days and (3) 91 or more days, in each case as of the close of
business on the last day of the calendar month preceding such Distribution
Date;
(x) with respect to any Mortgage Loan that was liquidated during the
preceding calendar month, the loan number and Stated Principal Balance of,
and Realized Loss on, such Mortgage Loan as of the end of the related
Prepayment Period;
(xi) the total number and principal balance of any real estate owned
or REO Properties as of the end of the related Prepayment Period;
(xii) the three month rolling average of the percent equivalent of a
fraction, the numerator of which is the aggregate Stated Principal Balance
of the Mortgage Loans that are 60 days or more delinquent or are in
bankruptcy or foreclosure or are REO Properties, and the denominator of
which is the aggregate Stated Principal Balance of all of the Mortgage
Loans as of the last day of the calendar month preceding such Distribution
Date;
(xiii) the Realized Losses during the related Prepayment Period and
the cumulative Realized Losses through the end of the preceding month;
(xiv) the Net WAC Rate Carryover Amount for each Class of
Certificates and the amount on deposit in the Net WAC Reserve Fund; and
(xv) the amount of the distribution made on such Distribution Date
to the Holders of the Class P Certificates allocable to Prepayment
Charges.
The Securities Administrator may make the foregoing Monthly
Statement (and, at its option, any additional files containing the same
information in an alternative format) available each month to Certificateholders
via the Securities Administrator's internet website. The Securities
Administrator's internet website shall initially be located at
"xxx.xxxxxxx.xxx". Assistance in using the website can be obtained by calling
the Securities Administrator's customer service desk at (000) 000-0000. Parties
that are unable to use the above distribution options are entitled to have a
paper copy mailed to them via first class mail by calling the customer service
desk and indicating such. The Securities Administrator may change the way
Monthly Statements are distributed in order to make such distributions more
convenient or more accessible to the above parties.
To the extent timely received from the Securities Administrator, the
Trustee will also make the related Monthly Statements available to
Certificateholders via the Trustee's internet website. The Trustee's internet
website will initially be located at "xxx.xxxxxxxx.xxx/xxxxxx". Assistance in
using the Trustee's internet website can be obtained by calling the Trustee's
customer service desk at (000) 000-0000.
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(b) The Securities Administrator's responsibility for making the
above information available to the Certificateholders is limited to the
availability, timeliness and accuracy of the information derived from the Master
Servicer, the Company and the Servicers. The Securities Administrator will make
available a copy of each statement provided pursuant to this Section 6.05 to
each Rating Agency.
(c) Within a reasonable period of time after the end of each
calendar year, the Trustee shall cause to be furnished upon request to each
Person who at any time during the calendar year was a Certificateholder, based
on information provided by the Securities Administrator containing the
information set forth in clauses (a)(i) and (a)(ii) of this Section 6.05
aggregated for such calendar year or applicable portion thereof during which
such Person was a Certificateholder. Such obligation of the Trustee shall be
deemed to have been satisfied to the extent that substantially comparable
information shall be provided by the Trustee or the Securities Administrator
pursuant to any requirements of the Code as from time to time in effect.
(d) Upon filing with the Internal Revenue Service, the Securities
Administrator shall furnish to the Holders of the Residual Certificates the
applicable Form 1066 and each applicable Form 1066Q and shall respond promptly
to written requests made not more frequently than quarterly by any Holder of a
Residual Certificate with respect to the following matters:
(i) The original projected principal and interest cash flows on the
Closing Date on each Class of regular and residual interests created
hereunder and on the Mortgage Loans, based on the Prepayment Assumption;
(ii) The projected remaining principal and interest cash flows as of
the end of any calendar quarter with respect to each Class of regular and
residual interests created hereunder and the Mortgage Loans, based on the
Prepayment Assumption;
(iii) The applicable Prepayment Assumption and any interest rate
assumptions used in determining the projected principal and interest cash
flows described above;
(iv) The original issue discount (or, in the case of the Mortgage
Loans, market discount) or premium accrued or amortized through the end of
such calendar quarter with respect to each Class of regular or residual
interests created hereunder and to the Mortgage Loans, together with each
constant yield to maturity used in computing the same;
(v) The treatment of losses realized with respect to the Mortgage
Loans or the regular interests created hereunder, including the timing and
amount of any cancellation of indebtedness income of a REMIC with respect
to such regular interests or bad debt deductions claimed with respect to
the Mortgage Loans;
(vi) The amount and timing of any non-interest expenses of a REMIC;
and
(vii) Any taxes (including penalties and interest) imposed on the
REMIC, including, without limitation, taxes on "prohibited transactions,"
"contributions" or "net income from foreclosure property" or state or
local income or franchise taxes.
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The information pursuant to clauses (i), (ii), (iii) and (iv) above
shall be provided by the Depositor pursuant to Section 10.12.
Section 6.06 REMIC Designations and REMIC I Distributions.
(a) The Trustee shall elect that each of REMIC I, REMIC II and REMIC
III and shall be treated as a REMIC under Section 860D of the Code. Any
inconsistencies or ambiguities in this Agreement or in the administration of
this Agreement shall be resolved in a manner that preserves the validity of such
REMIC elections. The assets of REMIC I shall include the Mortgage Loans and all
interest owing in respect of and principal due thereon, the Distribution
Account, the Master Servicer Collection Account, the Protected Accounts
maintained by the Company and the Servicers, any REO Property, any proceeds of
the foregoing and any other assets subject to this Agreement (other than the Net
WAC Reserve Fund). The REMIC I Regular Interests shall constitute the assets of
REMIC II. The REMIC II Regular Interests shall constitute the assets of REMIC
III.
(b) On each Distribution Date, the Available Funds, in the following
order of priority and in accordance with the Remittance Report, shall be deemed
distributed by REMIC I to REMIC II on account of the REMIC I Regular Interests
or withdrawn from the Distribution Account and distributed to the Holders of the
Class R-1 Certificates, as the case may be:
(i) first, to the Holders of REMIC I Regular Interest LTI-AA,
REMIC Regular Interest LTI-A1, REMIC I Regular Interest LTI-A2, REMIC I Regular
Interest LTI-A3, REMIC I Regular Interest LTI-A4, REMIC I Regular Interest
LTI-A5, REMIC I Regular Interest LTI- M1, REMIC I Regular Interest LTI-M2, REMIC
I Regular Interest LTI-B, REMIC I Regular Interest LTI-ZZ and REMIC I Regular
Interest LTI-P, pro rata, in an amount equal to (A) the Uncertificated Accrued
Interest for each such REMIC I Regular Interest for such Distribution Date, plus
(B) any amounts in respect thereof remaining unpaid from previous Distribution
Dates. Amounts payable as Uncertificated Accrued Interest in respect of REMIC I
Regular Interest LTI-ZZ shall be reduced and deferred when the REMIC I
Overcollateralized Amount is less than the REMIC I Overcollateralization Target
Amount, by the lesser of (x) the amount of such difference and (y) the REMIC I
Regular Interest LTI-ZZ Maximum Interest Deferral Amount and such amount will be
payable to the Holders of REMIC Regular Interest LTI-A1, REMIC I Regular
Interest LTI-A2, REMIC I Regular Interest LTI-A3, REMIC I Regular Interest
LTI-A5, REMIC I Regular Interest LTI- M1, REMIC I Regular Interest LTI-M2 and
REMIC I Regular Interest LTI-B in the same proportion as the
Overcollateralization Increase Amount is allocated to the Corresponding
Interests;
(ii) second, to the Holders of REMIC I Regular Interests, in
an amount equal to the remainder of the Available Funds for such Distribution
Date after the distributions made pursuant to clause (i) above, allocated as
follows:
(A) to the Holders of REMIC I Regular Interest LTI-AA,
98.00% of such remainder (other than amounts payable under the proviso below),
until the Uncertificated Principal Balance of such REMIC I Regular Interest is
reduced to zero;
(B) to the Holders of REMIC Regular Interest LTI-A1,
REMIC I Regular Interest LTI-A2, REMIC I Regular Interest LTI-A3, REMIC I
Regular Interest LTI-A5,
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REMIC I Regular Interest LTI-M1, REMIC I Regular Interest LTI-M2 and REMIC I
Regular Interest LTI-B, 1.00% of such remainder (other than amounts payable
under the proviso below), in the same proportion as principal payments are
allocated to the Corresponding Certificates, until the Uncertificated Principal
Balances of such REMIC I Regular Interests are reduced to zero;
(C) to the Holders of REMIC I Regular Interest LTI-ZZ,
1.00% of such remainder (other than amounts payable under the proviso below),
until the Uncertificated Principal Balance of such REMIC I Regular Interest is
reduced to zero; then
(D) any remaining amount to the Holders of the Class R-1
Certificates;
provided, however, that 98.00% and 2.00% of any
principal payments that are attributable to an Overcollateralization Release
Amount shall be allocated to Holders of REMIC I Regular Interest LTI-AA and
REMIC I Regular Interest LTI-ZZ, respectively.
(c) On each Distribution Date, all amounts representing Prepayment
Charges deemed distributed in respect of REMIC II Regular Interest LTII-P shall
be deemed distributed in respect of REMIC I Regular Interest LTI-P, provided
that such amounts shall not reduce the Uncertificated Principal Balance of REMIC
I Regular Interest LTI-P. On the Distribution Date in September 2008, $100 shall
be deemed distributed in respect of REMIC I Regular Interest LTI-P in reduction
of the Uncertificated Principal Balance thereof.
Section 6.07 REMIC II Distributions and Certain REMIC III Distributions.
(a) On each Distribution Date, the Available Funds, in the following
order of priority and in accordance with the Remittance Report, shall be deemed
distributed by REMIC II to REMIC III on account of the REMIC II Regular
Interests or withdrawn from the Distribution Account and distributed to the
Holders of the Class R-2 Certificates, as the case may be:
(i) to the Holders of the REMIC II Regular Interests, in the same
manner and priority as paid to the Corresponding Certificates,
(A) the Uncertificated Accrued Interest (or, in the case of
REMIC II Regular Interest LTII-C, the REMIC II Regular Interest LTII-C
Distribution Amount) for such Distribution Date, plus
(B) any amounts in respect thereof remaining unpaid from
previous Distribution Dates and
(ii) to the Holders of REMIC II Regular Interests, in an amount
equal to the remainder of the Available Funds for such Distribution Date after
the distributions made pursuant to clause (i) above, allocated in the same
manner and priority as paid to the Corresponding Certificates, and any remaining
amount to the Holders of the Class R-2 Certificates.
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(b) On each Distribution Date, all amounts representing Prepayment
Charges distributed in respect of the Class P Certificates shall be deemed
distributed in respect of REMIC II Regular Interest LTII-P, provided that such
amounts shall not reduce the Uncertificated Principal Balance of REMIC II
Regular Interest LTII-P. On the Distribution Date in September 2008, $100 shall
be deemed distributed in respect of REMIC II Regular Interest LTII-P in
reduction of the Uncertificated Principal Balance thereof.
(c) On each Distribution Date, (i) the related Uncertificated
Accrued Interest for such Distribution Date, plus any amounts in respect thereof
remaining unpaid from previous Distribution Dates, shall be deemed distributed
in respect of REMIC III Regular Interest A-3 and REMIC III Regular Interest A-4
and (ii) amounts distributable in reduction of the Certifcate Principal Balance
of the Class A-3 Certificates shall be deemed distributed to the Holders of
REMIC III Regular Interest A-3 in reduction of the Uncertificated Principal
Balance thereof.
Section 6.08 Net WAC Reserve Fund and Class A-3/A-4 Net WAC Pass-Through
Amounts.
(a) The Trustee shall establish a Net WAC Reserve Fund on behalf of the
holders of the Offered Certificates. The Net WAC Reserve Fund must be an
Eligible Account. The Net WAC Reserve Fund shall be entitled "Net WAC Reserve
Fund, JPMorgan Chase Bank as Trustee for the benefit of holders of Bear Xxxxxxx
Asset Backed Securities, Inc., Asset-Backed Certificates, Series 2003-AC5, Class
A-1, Class X-0, Xxxxx X-0, Class A-4, Class A-5, Class M-1, Class M-2 and Class
B". On the Closing Date, the Depositor will deposit, or cause to be deposited,
into the Net WAC Reserve Fund $5,000. On each Distribution Date as to which
there is a Net WAC Rate Carryover Amount payable to any Class of Certificates,
the Trustee shall deposit the amounts pursuant to paragraphs 5, 6, 7, and 8 of
clause third of Section 6.04(a) into the Net WAC Reserve Fund and the Trustee
has been directed by the Class C Certificateholder to distribute such amounts to
the Holders of the Offered Certificates in the amounts and priorities set forth
in clause third of Section 6.04(a).
(b) The Net WAC Reserve Fund is an "outside reserve fund" within the
meaning of Treasury Regulation ss.1.860G-2(h) and shall be an asset of the Trust
Fund but not an asset of any REMIC. The Trustee on behalf of the Trust shall be
the nominal owner of the Net WAC Reserve Fund. The Class C Certificateholders
shall be the beneficial owners of the Net WAC Reserve Fund, subject to the power
of the Trustee to transfer amounts under Section 6.04(a). Amounts in the Net WAC
Reserve Fund shall be held either uninvested in a trust or deposit account of
the Trustee with no liability for interest or other compensation thereof or, at
the direction of the Majority Class C Certificateholder, be invested in
Permitted Investments that mature no later than the Business Day prior to the
next succeeding Distribution Date. All net income and gain from such investments
shall be distributed to the Majority Class C Certificateholder, not as a
distribution in respect of any interest in any REMIC, on such Distribution Date.
All amounts earned on amounts on deposit in the Net WAC Reserve Fund shall be
taxable to the Majority Class C Certificateholder. Any losses on such
investments shall be deposited in the Net WAC Reserve Fund by the Majority Class
C Certificateholder out of its own funds immediately as realized. In the event
that the Majority Class C Certificateholder shall fail to provide investment
instructions to the Trustee, the amounts on deposit in the Net WAC Reserve Fund
shall be held uninvested.
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(c) For federal tax return and information reporting, the right of the
holders of the Offered Certificates to receive payments from the Net WAC Reserve
Fund in respect of any Net WAC Rate Carryover Amount shall be assigned a value
of zero.
(d) With respect to each Distribution Date as to which there is a positive
Class A-3/A-4 Net WAC Pass-Through Amount, such amount shall be payable from the
Holders of the Class A-3 Certificates to the Holders of the Class A-4
Certificates. Accordingly, on each such Distribution Date the Trustee shall
deposit into the Net WAC Reserve Fund the Class A-3/A-4 Net WAC Pass-Through
Amount, rather than distributing such amount to the Class A-3
Certificateholders. Notwithstanding the foregoing, such Class A-3/A-4 Net WAC
Pass-Through Amount shall for federal, state and local tax purposes be deemed
distributed in respect of REMIC III Regular Interest A-3 and the Class A-3
Certificates.
On each such Distribution Date, the Trustee shall hold the Class A-3/A-4
Net WAC Pass- Through Amount for the benefit of the Holders of the Class A-4
Certificates, and shall distribute such amount to the Holders of the Class A-4
Certificates. Payments to the Holders of the Class A-4 Certificates of any Class
A-3/A-4 Net WAC Pass-Through Amount will not be payments with respect to a
"regular interest" in a REMIC within the meaning of Code Section 860G(a)(1).
By accepting a Class A-3 Certificate, each Class A-3 Certificateholder
thereby agrees to direct the Trustee, and the Trustee hereby is directed, to
deposit into the Net WAC Reserve Fund any Class A-3/A-4 Net WAC Pass-Through
Amount rather than distributing such amounts to the Class A-3 Certificateholders
and further agrees that such direction is given for good and valuable
consideration, the receipt and sufficiency of which is acknowledged by such
acceptance. By accepting a Class A-3 Certificate, each Class A-3
Certificateholder acknowledges that any such Class A-3/A-4 Net WAC Pass-Through
Amount shall for federal, state and local tax purposes be deemed distributed in
respect of REMIC III Regular Interest A-3 and the Class A-3 Certificates. By
accepting a Class A-4 Certificate, each Class A-4 Certificateholder acknowledges
that for federal, state and local tax purposes any payments of such Class
A-3/A-4 Net WAC Pass-Through Amount shall not be payments with respect to a
"regular interest" in a REMIC within the meaning of Code Section 860G(a)(1).
Section 6.09 Class P Certificate Account. The Trustee shall establish and
maintain with itself a separate, segregated trust account titled "Bear Xxxxxxx
ABS Trust 2003-AC5 Class P Certificate Account". On the Closing Date, the
Depositor will deposit, or cause to be deposited in the Class P Certificate
Account $100.00. The amount on deposit in the Class P Certificate Account shall
be held uninvested. On the September 2008 Distribution Date, the Trustee shall
withdraw the amount on deposit in the Class P Certificate Account and remit such
amount to the holders of the Class P Certificates in reduction of the
Certificate Principal Balance thereof.
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ARTICLE VII
THE CERTIFICATES
Section 7.01 The Certificates.
The Certificates shall be substantially in the forms attached hereto
as Exhibits A-1 through A-7. The Certificates shall be issuable in registered
form, in the minimum dollar denominations, integral dollar multiples in excess
thereof (except that one Certificate of each Class may be issued in a different
amount which must be in excess of the applicable minimum dollar denomination)
and aggregate dollar denominations as set forth in the following table:
Minimum Integral Multiple in Original Certificate
Class Denomination Excess of Minimum Principal Balance Pass Through Rate
------- -------------- ---------------------- ---------------------- -----------------------------
A-1 $25,000 $1,000 $140,000,000 Class A-1 Pass-Through Rate
A-2 $25,000 $1,000 $168,265,417 Class A-2 Pass-Through Rate
A-3 $25,000 $1,000 $ 42,569,583 Class A-3 Pass-Through Rate
A-4 $25,000 $1,000 N/A Class A-4 Pass-Through Rate
A-5 $25,000 $1,000 $150,000,000 Class A-5 Pass-Through Rate
M-1 $25,000 $1,000 $ 39,772,000 Class M-1 Pass-Through Rate
M-2 $25,000 $1,000 $ 35,353,000 Class M-2 Pass-Through Rate
B $25,000 $1,000 $ 13,258,132 Class B Pass-Through Rate
C $25,000 $1,000 N/A N/A
P $ 100 N/A $ 100.00 N/A
R-1 100% X/X X/X X/X
X-0 000% X/X X/X X/X
R-3 100% N/A N/A N/A
The Certificates shall be executed by manual or facsimile signature
on behalf of the Trustee by an authorized officer. Certificates bearing the
manual or facsimile signatures of individuals who were, at the time when such
signatures were affixed, authorized to sign on behalf of the Trustee shall bind
the Trustee, notwithstanding that such individuals or any of them have ceased to
be so authorized prior to the authentication and delivery of such Certificates
or did not hold such offices at the date of such authentication and delivery. No
Certificate shall be entitled to any benefit under this Agreement, or be valid
for any purpose, unless there appears on such Certificate the countersignature
of the Trustee by manual signature, and such countersignature upon any
Certificate shall be conclusive evidence, and the only evidence, that such
Certificate has been duly countersigned and delivered hereunder. All
Certificates shall be dated the date of their countersignature. On the Closing
Date, the Trustee shall authenticate the Certificates to be issued at the
written direction of the Depositor, or any affiliate thereof.
The Depositor shall provide, or cause to be provided, to the Trustee
on a continuous basis, an adequate inventory of Certificates to facilitate
transfers.
Section 7.02 Certificate Register; Registration of Transfer and Exchange
of Certificates.
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(a) The Trustee shall maintain, or cause to be maintained in
accordance with the provisions of Section 7.09 hereof, a Certificate Register
for the Trust Fund in which, subject to the provisions of subsections (b) and
(c) below and to such reasonable regulations as it may prescribe, the Trustee
shall provide for the registration of Certificates and of Transfers and
exchanges of Certificates as herein provided. Upon surrender for registration of
Transfer of any Certificate, the Trustee shall authenticate and deliver, in the
name of the designated transferee or transferees, one or more new Certificates
of the same Class and of like aggregate Percentage Interest.
At the option of a Certificateholder, Certificates may be exchanged
for other Certificates of the same Class in authorized denominations and
evidencing the same aggregate Percentage Interest upon surrender of the
Certificates to be exchanged at the office or agency of the Trustee. Whenever
any Certificates are so surrendered for exchange, the Trustee shall execute,
authenticate, and deliver the Certificates that the Certificateholder making the
exchange is entitled to receive. Every Certificate presented or surrendered for
registration of Transfer or exchange shall be accompanied by a written
instrument of Transfer in form satisfactory to the Trustee duly executed by the
holder thereof or his attorney duly authorized in writing.
No service charge to the Certificateholders shall be made for any
registration of Transfer or exchange of Certificates, but payment of a sum
sufficient to cover any tax or governmental charge that may be imposed in
connection with any Transfer or exchange of Certificates may be required.
All Certificates surrendered for registration of Transfer or
exchange shall be canceled and subsequently destroyed by the Trustee in
accordance with the Trustee's customary procedures.
(b) No Transfer of a Private Certificate shall be made unless such
Transfer is made pursuant to an effective registration statement under the
Securities Act and any applicable state securities laws or is exempt from the
registration requirements under the Securities Act and such state securities
laws. In the event that a Transfer is to be made in reliance upon an exemption
from the Securities Act and such laws, in order to assure compliance with the
Securities Act and such laws, the Certificateholder desiring to effect such
Transfer and such Certificateholder's prospective transferee shall each certify
to the Trustee and the Securities Administrator in writing the facts surrounding
the Transfer in substantially the forms set forth in Exhibit E (the "Transferor
Certificate") and (x) deliver a letter in substantially the form of either
Exhibit F (the "Investment Letter") or Exhibit G (the "Rule 144A Letter") or (y)
there shall be delivered to the Trustee and the Securities Administrator an
Opinion of Counsel addressed to the Trustee and the Securities Administrator
that such Transfer may be made pursuant to an exemption from the Securities Act,
which Opinion of Counsel shall not be an expense of the Depositor, the Seller,
the Master Servicer, the Securities Administrator or the Trustee. The Depositor
shall provide to any Holder of a Private Certificate and any prospective
transferee designated by any such Holder, information regarding the related
Certificates and the Mortgage Loans and such other information as shall be
necessary to satisfy the condition to eligibility set forth in Rule 144A(d)(4)
for Transfer of any such Certificate without registration thereof under the
Securities Act pursuant to the registration exemption provided by Rule 144A. The
Trustee, the Securities Administrator and the Master Servicer shall cooperate
with the Depositor in providing the Rule 144A information referenced in the
preceding sentence, including providing to the Depositor such information
regarding the Certificates, the Mortgage Loans and other
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matters regarding the Trust Fund as the Depositor shall reasonably request to
meet its obligation under the preceding sentence. Each Holder of a Private
Certificate desiring to effect such Transfer shall, and does hereby agree to,
indemnify the Trustee, the Depositor, the Seller, the Securities Administrator
and the Master Servicer against any liability that may result if the Transfer is
not so exempt or is not made in accordance with such federal and state laws.
No Transfer of an ERISA Restricted Certificate shall be made unless
either (i) the Trustee, the Master Servicer and the Securities Administrator
shall have received a representation from the transferee of such Certificate
acceptable to and in form and substance satisfactory to the Trustee, the Master
Servicer and the Securities Administrator, to the effect that such transferee is
not an employee benefit plan subject to Section 406 of ERISA and/or a plan
subject to Section 4975 of the Code, or a Person acting on behalf of any such
plan or using the assets of any such plan, or (ii) in the case of any such ERISA
Restricted Certificate presented for registration in the name of an employee
benefit plan subject to ERISA, or a plan subject to Section 4975 of the Code (or
comparable provisions of any subsequent enactments), or a trustee of any such
plan or any other person acting on behalf of any such plan, the Trustee shall
have received an Opinion of Counsel for the benefit of the Trustee, the Master
Servicer and the Securities Administrator and on which they may rely,
satisfactory to the Trustee, to the effect that the purchase and holding of such
ERISA Restricted Certificate will not constitute or result in the assets of the
Trust being deemed to be "plan assets" under ERISA or the Code, will not result
in any prohibited transactions under ERISA or Section 4975 of the Code and will
not subject the Trustee, the Master Servicer, the Depositor or the Securities
Administrator to any obligation in addition to those expressly undertaken in
this Agreement, which Opinion of Counsel shall not be an expense of the Trustee,
the Master Servicer, the Depositor or the Securities Administrator.
Notwithstanding anything else to the contrary herein, any purported transfer of
an ERISA Restricted Certificate to or on behalf of an employee benefit plan
subject to Section 406 of ERISA and/or a plan subject to Section 4975 of the
Code without the delivery of the Opinion of Counsel as described above shall be
void and of no effect; provided that the restriction set forth in this sentence
shall not be applicable if there has been delivered to the Trustee an Opinion of
Counsel meeting the requirements of clause (ii) of the first sentence of this
paragraph. None of the Trustee, the Securities Administrator or the Master
Servicer shall be required to monitor, determine or inquire as to compliance
with the transfer restrictions with respect to any ERISA Restricted Certificate
that is a Book-Entry Certificate, and none of the Trustee, the Securities
Administrator or the Master Servicer shall have any liability for transfers of
any such Book-Entry Certificates made through the book-entry facilities of any
Depository or between or among participants of the Depository or Certificate
Owners made in violation of the transfer restrictions set forth herein. None of
the Trustee, the Securities Administrator or the Master Servicer shall be under
any liability to any Person for any registration of transfer of any ERISA
Restricted Certificate that is in fact not permitted by this Section 7.02(b) or
for making any payments due on such Certificate to the Holder thereof or taking
any other action with respect to such Holder under the provisions of this
Agreement. The Trustee and the Securities Administrator shall each be entitled,
but not obligated, to recover from any Holder of any ERISA Restricted
Certificate that was in fact an employee benefit plan subject to Section 406 of
ERISA or a plan subject to Section 4975 of the Code or a Person acting on behalf
of any such plan at the time it became a Holder or, at such subsequent time as
it became such a plan or Person acting on behalf of such a plan, all payments
made on such ERISA Restricted Certificate at and after either such time. Any
such payments so recovered by the Trustee or the Securities Administrator shall
be
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paid and delivered by the Trustee or the Securities Administrator to the last
preceding Holder of such Certificate that is not such a plan or Person acting on
behalf of a plan.
Each beneficial owner of a Class M-1, Class M-2 or Class B Certificate or
any interest therein shall be deemed to have represented, by virtue of its
acquisition or holding of that certificate or interest therein, that either (i)
it is not a Plan or investing with "Plan Assets", (ii) it has acquired and is
holding such certificate in reliance on the Exemption, and that it understands
that there are certain conditions to the availability of the Exemption,
including that the certificate must be rated, at the time of purchase, not lower
than "BBB-" (or its equivalent) by S&P, Fitch or Xxxxx'x Investors Service,
Inc., and the certificate is so rated or (iii) (1) it is an insurance company,
(2) the source of funds used to acquire or hold the certificate or interest
therein is an "insurance company general account," as such term is defined in
Prohibited Transaction Class Exemption ("PTCE") 95-60, and (3) the conditions in
Sections I and III of PTCE 95-60 have been satisfied.
(c) Each Person who has or who acquires any Ownership Interest in a
Residual Certificate shall be deemed by the acceptance or acquisition of such
Ownership Interest to have agreed to be bound by the following provisions, and
the rights of each Person acquiring any Ownership Interest in a Residual
Certificate are expressly subject to the following provisions:
(i) Each Person holding or acquiring any Ownership Interest in a
Residual Certificate shall be a Permitted Transferee and shall promptly
notify the Trustee of any change or impending change in its status as a
Permitted Transferee.
(ii) No Ownership Interest in a Residual Certificate may be
registered on the Closing Date or thereafter transferred, and the Trustee
shall not register the Transfer of any Residual Certificate unless, in
addition to the certificates required to be delivered to the Trustee under
subparagraph (b) above, the Trustee shall have been furnished with an
affidavit (a "Transfer Affidavit") of the initial owner or the proposed
transferee in the form attached hereto as Exhibit D.
(iii) Each Person holding or acquiring any Ownership Interest in a
Residual Certificate shall agree (A) to obtain a Transfer Affidavit from
any other Person to whom such Person attempts to Transfer its Ownership
Interest in a Residual Certificate, (B) to obtain a Transfer Affidavit
from any Person for whom such Person is acting as nominee, trustee or
agent in connection with any Transfer of a Residual Certificate and (C)
not to Transfer its Ownership Interest in a Residual Certificate or to
cause the Transfer of an Ownership Interest in a Residual Certificate to
any other Person if it has actual knowledge that such Person is not a
Permitted Transferee.
(iv) Any attempted or purported Transfer of any Ownership Interest
in a Residual Certificate in violation of the provisions of this Section
7.02(c) shall be absolutely null and void and shall vest no rights in the
purported Transferee. If any purported transferee shall become a Holder of
a Residual Certificate in violation of the provisions of this Section
6.02(c), then the last preceding Permitted Transferee shall be restored to
all rights as Holder thereof retroactive to the date of registration of
Transfer of such Residual Certificate. The Trustee shall be under no
liability to any Person for any registration of Transfer of a Residual
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Certificate that is in fact not permitted by Section 7.02(b) and this
Section 7.02(c) or for making any payments due on such Certificate to the
Holder thereof or taking any other action with respect to such Holder
under the provisions of this Agreement so long as the Transfer was
registered after receipt of the related Transfer Affidavit. The Trustee
shall be entitled but not obligated to recover from any Holder of a
Residual Certificate that was in fact not a Permitted Transferee at the
time it became a Holder or, at such subsequent time as it became other
than a Permitted Transferee, all payments made on such Residual
Certificate at and after either such time. Any such payments so recovered
by the Trustee shall be paid and delivered by the Trustee to the last
preceding Permitted Transferee of such Certificate.
(v) The Master Servicer shall make available within 60 days of
written request from the Trustee, all information necessary to compute any
tax imposed under Section 860E(e) of the Code as a result of a Transfer of
an Ownership Interest in a Residual Certificate to any Holder who is not a
Permitted Transferee.
The restrictions on Transfers of a Residual Certificate set forth in
this Section 7.02(c) shall cease to apply (and the applicable portions of the
legend on a Residual Certificate may be deleted) with respect to Transfers
occurring after delivery to the Trustee of an Opinion of Counsel addressed to
the Trustee, which Opinion of Counsel shall not be an expense of the Trustee,
the Securities Administrator, the Seller or the Master Servicer to the effect
that the elimination of such restrictions will not cause REMIC I, REMIC II
and/or REMIC III, as applicable, to fail to qualify as a REMIC at any time that
the Certificates are outstanding or result in the imposition of any tax on the
Trust Fund, a Certificateholder or another Person. Each Person holding or
acquiring any ownership Interest in a Residual Certificate hereby consents to
any amendment of this Agreement that, based on an Opinion of Counsel addressed
to the Trustee and furnished to the Trustee, is reasonably necessary (a) to
ensure that the record ownership of, or any beneficial interest in, a Residual
Certificate is not transferred, directly or indirectly, to a Person that is not
a Permitted Transferee and (b) to provide for a means to compel the Transfer of
a Residual Certificate that is held by a Person that is not a Permitted
Transferee to a Holder that is a Permitted Transferee.
(d) The preparation and delivery of all certificates and opinions
referred to above in this Section 7.02 shall not be an expense of the Trust
Fund, the Trustee, the Depositor, the Seller, the Securities Administrator or
the Master Servicer.
Section 7.03 Mutilated, Destroyed, Lost or Stolen Certificates.
If (a) any mutilated Certificate is surrendered to the Trustee, or
the Trustee receives evidence to its satisfaction of the destruction, loss or
theft of any Certificate and of the ownership thereof and (b) there is delivered
to the Securities Administrator and the Trustee such security or indemnity as
may be required by them to save each of them harmless, then, in the absence of
notice to the Trustee that such Certificate has been acquired by a bona fide
purchaser, the Trustee shall execute, authenticate and deliver, in exchange for
or in lieu of any such mutilated, destroyed, lost or stolen Certificate, a new
Certificate of like Class, tenor and Percentage Interest. In connection with the
issuance of any new Certificate under this Section 7.03, the Trustee may require
the payment of a sum sufficient to cover any tax or other governmental charge
that may be imposed in relation thereto and any other expenses (including the
fees and expenses of the Trustee) connected therewith. Any
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replacement Certificate issued pursuant to this Section 7.03 shall constitute
complete and indefeasible evidence of ownership in the Trust Fund, as if
originally issued, whether or not the lost, stolen or destroyed Certificate
shall be found at any time. All Certificates surrendered to the Trustee under
the terms of this Section 7.03 shall be canceled and destroyed by the Trustee in
accordance with its standard procedures without liability on its part.
Section 7.04 Persons Deemed Owners.
The Securities Administrator, the Trustee and any agent of the
Securities Administrator or the Trustee may treat the person in whose name any
Certificate is registered as the owner of such Certificate for the purpose of
receiving distributions as provided in this Agreement and for all other purposes
whatsoever, and neither the Securities Administrator, the Trustee nor any agent
of the Securities Administrator or the Trustee shall be affected by any notice
to the contrary.
Section 7.05 Access to List of Certificateholders' Names and Addresses.
If three or more Certificateholders (a) request such information in
writing from the Trustee, (b) state that such Certificateholders desire to
communicate with other Certificateholders with respect to their rights under
this Agreement or under the Certificates, and (c) provide a copy of the
communication that such Certificateholders propose to transmit or if the
Depositor or the Master Servicer shall request such information in writing from
the Trustee, then the Trustee shall, within ten Business Days after the receipt
of such request, provide the Depositor, the Master Servicer or such
Certificateholders at such recipients' expense the most recent list of the
Certificateholders of the Trust Fund held by the Trustee, if any. The Depositor
and every Certificateholder, by receiving and holding a Certificate, agree that
the Trustee shall not be held accountable by reason of the disclosure of any
such information as to the list of the Certificateholders hereunder, regardless
of the source from which such information was derived.
Section 7.06 Book-Entry Certificates.
The Regular Certificates, upon original issuance, shall be issued in
the form of one or more typewritten Certificates representing the Book- Entry
Certificates, to be delivered to the Depository by or on behalf of the
Depositor. Such Certificates shall initially be registered on the Certificate
Register in the name of the Depository or its nominee, and no Certificate Owner
of such Certificates will receive a definitive certificate representing such
Certificate Owner's interest in such Certificates, except as provided in Section
7.08. Unless and until definitive, fully registered Certificates ("Definitive
Certificates") have been issued to the Certificate Owners of such Certificates
pursuant to Section 7.08:
(a) the provisions of this Section shall be in full force and
effect;
(b) the Depositor, the Securities Administrator and the Trustee may
deal with the Depository and the Depository Participants for all purposes
(including the making of distributions) as the authorized representative of the
respective Certificate Owners of such Certificates;
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(c) registration of the Book-Entry Certificates may not be
transferred by the Trustee except to another Depository;
(d) the rights of the respective Certificate Owners of such
Certificates shall be exercised only through the Depository and the Depository
Participants and shall be limited to those established by law and agreements
between the Owners of such Certificates and the Depository and/or the Depository
Participants. Pursuant to the Depository Agreement, unless and until Definitive
Certificates are issued pursuant to Section 7.08, the Depository will make
book-entry transfers among the Depository Participants and receive and transmit
distributions of principal and interest on the related Certificates to such
Depository Participants;
(e) the Depository may collect its usual and customary fees, charges
and expenses from its Depository Participants;
(f) the Trustee may rely and shall be fully protected in relying
upon information furnished by the Depository with respect to its Depository
Participants; and
(g) to the extent that the provisions of this Section conflict with
any other provisions of this Agreement, the provisions of this Section shall
control.
For purposes of any provision of this Agreement requiring or
permitting actions with the consent of, or at the direction of,
Certificateholders evidencing a specified percentage of the aggregate unpaid
principal amount of any Class of Certificates, such direction or consent may be
given by Certificate Owners (acting through the Depository and the Depository
Participants) owning Book-Entry Certificates evidencing the requisite percentage
of principal amount of such Class of Certificates.
Section 7.07 Notices to Depository.
Whenever any notice or other communication is required to be given
to Certificateholders of a Class with respect to which Book-Entry Certificates
have been issued, unless and until Definitive Certificates shall have been
issued to the related Certificate Owners, the Trustee shall give all such
notices and communications to the Depository.
Section 7.08 Definitive Certificates.
If, after Book-Entry Certificates have been issued with respect to
any Certificates, (a) the Depositor or the Depository advises the Trustee that
the Depository is no longer willing or able to discharge properly its
responsibilities under the Depository Agreement with respect to such
Certificates and the Depositor is unable to locate a qualified successor, (b)
the Depositor, at its sole option, advises the Trustee that it elects to
terminate the book-entry system with respect to such Certificates through the
Depository or (c) after the occurrence and continuation of an Event of Default,
Certificate Owners of such Book-Entry Certificates having not less than 51% of
the Voting Rights evidenced by any Class of Book-Entry Certificates advise the
Trustee and the Depository in writing through the Depository Participants that
the continuation of a book-entry system with respect to Certificates of such
Class through the Depository (or its successor) is no longer in the best
interests
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of the Certificate Owners of such Class, then the Trustee shall notify all
Certificate Owners of such Certificates, through the Depository, of the
occurrence of any such event and of the availability of Definitive Certificates
to applicable Certificate Owners requesting the same. The Depositor shall
provide the Trustee with an adequate inventory of certificates to facilitate the
issuance and transfer of Definitive Certificates. Upon surrender to the Trustee
of any such Certificates by the Depository, accompanied by registration
instructions from the Depository for registration, the Trustee shall countersign
and deliver such Definitive Certificates. Neither the Depositor nor the Trustee
shall be liable for any delay in delivery of such instructions and each may
conclusively rely on, and shall be protected in relying on, such instructions.
Upon the issuance of such Definitive Certificates, all references herein to
obligations imposed upon or to be performed by the Depository shall be deemed to
be imposed upon and performed by the Trustee, to the extent applicable with
respect to such Definitive Certificates and the Trustee shall recognize the
Holders of such Definitive Certificates as Certificateholders hereunder.
Section 7.09 Maintenance of Office or Agency.
The Trustee will maintain or cause to be maintained at its expense
an office or offices or agency or agencies at 0000 Xxxxx Xxxxxx, 0xx Xxxxx,
Xxxxxx, Xxxxx 00000, Attention: ITS Transfer Department -BSABS 2003-AC5 where
Certificates may be surrendered for registration of transfer or exchange. The
Trustee will give prompt written notice to the Certificateholders of any change
in such location of any such office or agency.
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ARTICLE VIII
THE COMPANY AND THE MASTER SERVICER
Section 8.01 Liabilities of the Depositor, the Company and the Master
Servicer. Each of the Depositor, the Company and the Master Servicer shall be
liable in accordance herewith only to the extent of the obligations specifically
imposed upon and undertaken by it herein.
Section 8.02 Merger or Consolidation of the Depositor, the Company or the
Master Servicer.
(a) Each of the Depositor, the Company and the Master Servicer will
keep in full force and effect its existence, rights and franchises as a
corporation under the laws of the state of its incorporation, and will obtain
and preserve its qualification to do business as a foreign corporation in each
jurisdiction in which such qualification is or shall be necessary to protect the
validity and enforceability of this Agreement, the Certificates or any of the
Mortgage Loans and to perform its duties under this Agreement.
(b) Any Person into which the Depositor, the Company or the Master
Servicer may be merged or consolidated, or any corporation resulting from any
merger or consolidation to which the Depositor, the Company or the Master
Servicer shall be a party, or any Person succeeding to the business of the
Depositor, the Company or the Master Servicer, shall be the successor of the
Depositor, the Company or the Master Servicer hereunder, without the execution
or filing of any paper or further act on the part of any of the parties hereto,
anything herein to the contrary notwithstanding.
Section 8.03 Indemnification of the Trustee, the Master Servicer and the
Securities Administrator.
(a) The Master Servicer agrees to indemnify the Indemnified Persons
for, and to hold them harmless against, any loss, liability or expense
(including reasonable legal fees and disbursements of counsel) incurred on their
part that may be sustained in connection with, arising out of, or relating to,
any claim or legal action (including any pending or threatened claim or legal
action) relating to this Agreement, including the powers of attorney delivered
pursuant to Sections 4.01 and 4.05 hereof, the Assignment Agreements, the
Custodial 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; provided, however that the failure to give such notice shall not
relieve the Master Servicer of its indemnification obligations hereunder. This
indemnity shall survive the resignation
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or removal of the Trustee, Master Servicer or the Securities Administrator and
the termination of this Agreement.
(b) The Company agrees to indemnify the Indemnified Persons and to
hold them harmless from and against any and all claims, losses, damages,
penalties, fines, forfeitures, legal fees and related costs, judgments, and any
other costs, fees and expenses that the Indemnified Persons may sustain in any
way related to the failure of the Company to perform in any way its duties and
service the EMC Mortgage Loans in strict compliance with the terms of this
Agreement and for breach of any representation or warranty of the Company
contained herein. The Company shall immediately notify the Master Servicer and
the Trustee if a claim is made by a third party with respect to this Agreement
or the EMC Mortgage Loans, assume (with the consent of the Master Servicer and
the Trustee and with counsel reasonably satisfactory to the Master Servicer and
the Trustee) the defense of any such claim and pay all expenses in connection
therewith, including counsel fees, and promptly pay, discharge and satisfy any
judgment or decree which may be entered against it or any Indemnified Person in
respect of such claim but failure to so notify the Company shall not limit its
obligations hereunder. The Company agrees that it will not enter into any
settlement of any such claim without the consent of the Indemnified Persons
unless such settlement includes an unconditional release of such Indemnified
Persons from all liability that is the subject matter of such claim. The
provisions of this Section 8.03(b) shall survive termination of this Agreement.
(c) The Seller will indemnify any Indemnified Person for any loss,
liability or expense of any Indemnified Person not otherwise paid or covered
pursuant to Subsections (a) or (b) above.
Section 8.04 Limitations on Liability of the Depositor, the Company, the
Master Servicer and Others. Subject to the obligation of the Depositor, the
Company and the Master Servicer to indemnify the Indemnified Persons pursuant to
Section 8.03:
(a) Neither the Depositor, the Company, the Master Servicer nor any
of the directors, officers, employees or agents of the Depositor, the Company
and the Master Servicer shall be under any liability to the Indemnified Persons,
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
Depositor, the Company, the Master Servicer or any such Person against any
breach of warranties or representations made herein or any liability which would
otherwise be imposed by reason of such Person's willful misfeasance, bad faith
or gross negligence in the performance of duties or by reason of reckless
disregard of obligations and duties hereunder.
(b) The Depositor, the Company, the Master Servicer and any
director, officer, employee or agent of the Depositor, the Company and the
Master Servicer may rely in good faith on any document of any kind prima facie
properly executed and submitted by any Person respecting any matters arising
hereunder.
(c) The Depositor, the Company, the Master Servicer, the Trustee,
the Custodian and any director, officer, employee or agent of the Depositor, the
Company, the Master Servicer, the Trustee or the Custodian shall be indemnified
by the Trust and held harmless thereby against any loss,
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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 Assignment
Agreements, the Custodial Agreement, the Certificates or the Servicing
Agreements (except with respect to the Master Servicer only, to the extent that
the Master Servicer is indemnified by the Company under this Agreement or by the
related Servicer under the related Servicing Agreement), other than (i) any such
loss, liability or expense related to the Company's or the Master Servicer's
failure to perform its respective duties in compliance with this Agreement
(except as any such loss, liability or expense shall be otherwise reimbursable
pursuant to this Agreement), or to the Custodian's failure to perform its duties
under the Custodial Agreement, or (ii) any such loss, liability or expense
incurred by reason of the Company's, the Master Servicer's or the Custodian's
willful misfeasance, bad faith or gross negligence in the performance of duties
hereunder or under the Custodial Agreement, as applicable, or by reason of
reckless disregard of obligations and duties hereunder or under the Custodial
Agreement, as applicable.
(d) Neither the Depositor, the Company nor the Master Servicer shall
be under any obligation to appear in, prosecute or defend any legal action that
is not incidental to its duties under this Agreement and that in its opinion may
involve it in any expense or liability; provided, however, the Master Servicer
may in its discretion, with the consent of the Trustee (which consent shall not
be unreasonably withheld), undertake any such action which it may deem necessary
or desirable with respect to this Agreement and the rights and duties of the
parties hereto and the interests of the Certificateholders hereunder. In such
event, the legal expenses and costs of such action and any liability resulting
therefrom shall be expenses, costs and liabilities of the Trust Fund, and the
Master Servicer shall be entitled to be reimbursed therefor out of the Master
Servicer Collection Account as provided by Section 5.05. Nothing in this
Subsection 8.04(d) shall affect the Master Servicer's obligation to supervise,
or to take such actions as are necessary to ensure, the servicing and
administration of the Mortgage Loans pursuant to Subsection 4.01(a).
(e) In taking or recommending any course of action pursuant to this
Agreement, unless specifically required to do so pursuant to this Agreement, the
Master Servicer shall not be required to investigate or make recommendations
concerning potential liabilities which the Trust might incur as a result of such
course of action by reason of the condition of the Mortgaged Properties but
shall give notice to the Trustee if it has notice of such potential liabilities.
(f) The Master Servicer shall not be liable for any acts or
omissions of the Company or the Servicers, except as otherwise expressly
provided herein.
Section 8.05 Master Servicer and Company Not to Resign. (a) Except as
provided in Section 8.07, the Master Servicer shall not resign from the
obligations and duties hereby imposed on it except (i) with the prior written
consent of the Trustee (which consent shall not be unreasonably withheld) or
(ii) upon a determination that any such duties hereunder are no longer
permissible under applicable law and such impermissibility cannot be cured. Any
such determination permitting the resignation of the Master Servicer shall be
evidenced by an Opinion of Counsel to such effect, addressed to and delivered
to, the Trustee. No such resignation by the Master Servicer shall become
effective until EMC or the Trustee or a successor to the Master Servicer
reasonably satisfactory to the Trustee shall
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have assumed the responsibilities and obligations of the Master Servicer in
accordance with Section 9.02 hereof. The Trustee shall notify the Rating
Agencies of the resignation of the Master Servicer.
(b) The Company shall not resign from the obligations and duties
hereby imposed on it except (i) upon the assignment of its servicing duties with
respect to all or a portion of the EMC Mortgage Loans to an institution that is
a Xxxxxx Xxx and Xxxxxxx Mac approved seller/servicer in good standing that has
a net worth of not less than $10,000,000 and with the prior written consent of
the Master Servicer (which consent shall not be unreasonably withheld) or (ii)
upon the determination that its duties hereunder are no longer permissible under
applicable law and such incapacity cannot be cured by the Company. Any
determination permitting the resignation of the Company shall be evidenced by an
Opinion of Counsel to such effect addressed to and delivered, to the Master
Servicer and the Trustee which Opinion of Counsel shall be in form and substance
acceptable to the Master Servicer and the Trustee. No appointment of a successor
to the Company shall be effective hereunder unless (a) the Rating Agencies have
confirmed in writing that such appointment will not result in a downgrade,
qualification or withdrawal of the then current ratings assigned to the
Certificates, (b) such successor shall have represented that it is meets the
eligibility criteria set forth in clause (i) above and (c) such successor has
agreed to assume the obligations of the Company hereunder to the extent of the
EMC Mortgage Loans to be serviced by such successor. The Company shall provide a
copy of the written confirmation of the Rating Agencies and the agreement
executed by such successor to the Master Servicer and the Trustee. No such
resignation shall become effective until a Qualified Successor or the Master
Servicer shall have assumed the Company's responsibilities and obligations
hereunder. The Company shall notify the Master Servicer, the Trustee and the
Rating Agencies of the resignation of the Company or the assignment of all or a
portion of its servicing duties hereunder in accordance with this Section 8.05.
Section 8.06 Successor Master Servicer. In connection with the appointment
of any successor Master Servicer or the assumption of the duties of the Master
Servicer, EMC or the Trustee may make such arrangements for the compensation of
such successor master servicer out of payments on the Mortgage Loans as EMC or
the Trustee and such successor master servicer shall agree. If the successor
master servicer does not agree that such market value is a fair price, such
successor master servicer shall obtain two quotations of market value from third
parties actively engaged in the servicing of single-family mortgage loans. In no
event shall the compensation of any successor master servicer exceed that
permitted the Master Servicer without the consent of all of the
Certificateholders.
Section 8.07 Sale and Assignment of Master Servicing. The Master Servicer
may sell and assign its rights and delegate its duties and obligations in its
entirety as Master Servicer under this Agreement and EMC may terminate the
Master Servicer without cause and select a new Master Servicer; provided,
however, that: (i) the purchaser or transferee accepting such assignment and
delegation (a) shall be a Person which shall be qualified to service mortgage
loans for Xxxxxx Mae or Xxxxxxx Mac; (b) shall have a net worth of not less than
$10,000,000 (unless otherwise approved by each Rating Agency pursuant to clause
(ii) below); (c) shall be reasonably satisfactory to the Trustee (as evidenced
in a writing signed by the Trustee); and (d) shall execute and deliver to the
Trustee an agreement, in form and substance reasonably satisfactory to the
Trustee, which contains an assumption by such Person of the due and punctual
performance and observance of each covenant and condition to be performed or
observed by it as master servicer under this Agreement, any custodial agreement
from and after the effective date of such agreement; (ii) each Rating Agency
shall
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be given prior written notice of the identity of the proposed successor to the
Master Servicer and each Rating Agency's rating of the Certificates in effect
immediately prior to such assignment, sale and delegation will not be
downgraded, qualified or withdrawn as a result of such assignment, sale and
delegation, as evidenced by a letter to such effect delivered to the Master
Servicer and the Trustee; (iii) the Master Servicer assigning and selling the
master servicing shall deliver to the Trustee an Officer's Certificate and an
Opinion of Counsel addressed to the Trustee, each stating that all conditions
precedent to such action under this Agreement have been completed and such
action is permitted by and complies with the terms of this Agreement; and (iv)
in the event the Master Servicer is terminated without cause by EMC, EMC shall
pay, from its own funds and without any right of reimbursement, the terminated
Master Servicer a termination fee equal to 0.25% of the aggregate Stated
Principal Balance of the Mortgage Loans at the time the master servicing of the
Mortgage Loans is transferred to the successor Master Servicer. No such
assignment or delegation shall affect any liability of the Master Servicer
arising prior to the effective date thereof.
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ARTICLE IX
DEFAULT; TERMINATION OF MASTER SERVICER;
TERMINATION OF COMPANY
Section 9.01 Events of Default.
"Event of Default," wherever used herein, means any one of the following
events:
(i) any failure by the Master Servicer to remit to the Trustee any
amounts received or collected by the Master Servicer in respect of the
Mortgage Loans and required to be remitted by it hereunder or any Advance
required to be made by it pursuant to this Agreement, which failure shall
continue unremedied for one Business Day after the date on which written
notice of such failure shall have been given to the Master Servicer by the
Trustee or the Depositor, or to the Trustee and the Master Servicer by the
Holders of Certificates evidencing not less than 25% of the Voting Rights
evidenced by the Certificates; or
(ii) any failure by the Master Servicer to observe or perform in any
material respect any other of the covenants or agreements on the part of
the Master Servicer contained in this Agreement or any breach of a
representation or warranty by the Master Servicer, which failure or breach
shall continue unremedied for a period of 60 days after the date on which
written notice of such failure shall have been given to Master Servicer by
the Trustee or the Depositor, or to the Trustee and the Master Servicer by
the Holders of Certificates evidencing not less than 25% of the Voting
Rights evidenced by the Certificates; or
(iii) a decree or order of a court or agency or supervisory
authority having jurisdiction in the premises for the appointment of a
receiver or liquidator in any insolvency, readjustment of debt,
marshalling of assets and liabilities or similar proceedings, or for the
winding-up or liquidation of its affairs, shall have been entered against
the Master Servicer and such decree or order shall have remained in force
undischarged or unstayed for a period of 60 consecutive days; or
(iv) the Master Servicer shall consent to the appointment of a
receiver or liquidator in any insolvency, readjustment of debt,
marshalling of assets and liabilities or similar proceedings of or
relating to the Master Servicer or all or substantially all of the
property of the Master Servicer; or
(v) the Master Servicer shall admit in writing its inability to pay
its debts generally as they become due, file a petition to take advantage
of, or commence a voluntary case under, any applicable insolvency or
reorganization statute, make an assignment for the benefit of its
creditors, or voluntarily suspend payment of its obligations; or
(vi) the Master Servicer assigns or delegates its duties or rights
under this Agreement in contravention of the provisions permitting such
assignment or delegation under Sections 8.05 or 8.07.
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If an Event of Default shall occur, then, and in each and every such
case, so long as such Event of Default shall not have been remedied, the Trustee
may, and at the direction of the Holders of Certificates evidencing not less
than 25% of the Voting Rights evidenced by the Certificates, the Trustee shall,
by notice in writing to the Master Servicer (with a copy to each Rating Agency),
terminate all of the rights and obligations of the Master Servicer (and the
Securities Administrator if the Master Servicer and the Securities Administrator
are the same entity) under this Agreement and in and to the Mortgage Loans and
the proceeds thereof, other than its rights as a Certificateholder hereunder. On
or after the receipt by the Master Servicer of such written notice, all
authority and power of the Master Servicer (and, if applicable, the Securities
Administrator) hereunder, whether with respect to the Mortgage Loans or
otherwise, shall pass to and be vested in the Trustee, or any successor
appointed pursuant to Section 9.02 (a "Successor Master Servicer" and, if
applicable, "Successor Securities Administrator"). Such Successor Master
Servicer shall thereupon if such Successor Master Servicer is a successor to the
Master Servicer, make any Advance required by Article VI, subject, in the case
of the Trustee, to Section 9.02. The Trustee is hereby authorized and empowered
to execute and deliver, on behalf of the terminated Master Servicer and, if
applicable, the terminated Securities Administrator, as attorney- in-fact or
otherwise, any and all documents and other instruments, and to do or accomplish
all other acts or things necessary or appropriate to effect the purposes of such
notice of termination, whether to complete the transfer and endorsement or
assignment of any Mortgage Loans and related documents, or otherwise. Unless
expressly provided in such written notice, no such termination shall affect any
obligation of the Master Servicer to pay amounts owed pursuant to Article VIII
or Article X. The Master Servicer and, if applicable, the Securities
Administrator agrees to cooperate with the Trustee in effecting the termination
of the Master Servicer's and, if applicable, the Securities Administrator's
responsibilities and rights hereunder, including, without limitation, the
transfer to the applicable Successor Master Servicer of all cash amounts which
shall at the time be credited to the Master Servicer Collection Account
maintained pursuant to Section 5.05, or thereafter be received with respect to
the applicable Mortgage Loans. The Trustee shall promptly notify the Rating
Agencies of the occurrence of an Event of Default known to the Trustee.
Notwithstanding any termination of the activities of the Master
Servicer hereunder, the Master Servicer shall be entitled to receive, out of any
late collection of a Scheduled Payment on a Mortgage Loan that was due prior to
the notice terminating the Master Servicer's rights and obligations as Master
Servicer hereunder and received after such notice, that portion thereof to which
the Master Servicer would have been entitled pursuant to Sections 5.05 and to
receive any other amounts payable to the Master Servicer hereunder the
entitlement to which arose prior to the termination of its activities hereunder.
Section 9.02 Trustee to Act; Appointment of Successor.
On and after the time the Master Servicer receives a notice of
termination pursuant to Section 9.01 hereof the Trustee shall automatically
become the successor to the Master Servicer with respect to the transactions set
forth or provided for herein and after a transition period (not to exceed 90
days), shall be subject to all the responsibilities, duties and liabilities
relating thereto placed on the Master Servicer by the terms and provisions
hereof; provided, however that, pursuant to Article VI hereof, the Trustee in
its capacity as successor Master Servicer shall be responsible for making any
Advances required to be made by the Master Servicer immediately upon the
termination of the Master
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Servicer and any such Advance shall be made on the Distribution Date on which
such Advance was required to be made by the predecessor Master Servicer.
Effective on the date of such notice of termination, as compensation therefor,
the Trustee shall be entitled to all compensation, reimbursement of expenses and
indemnifications that the Master Servicer would have been entitled to if it had
continued to act hereunder, provided, however, that the Trustee shall not be (i)
liable for any acts or omissions of the Master Servicer, (ii) obligated to make
Advances if it is prohibited from doing so under applicable law, (iii)
responsible for expenses of the Master Servicer pursuant to Section 2.03 or (iv)
obligated to deposit losses on any Permitted Investment directed by the Master
Servicer. Notwithstanding the foregoing, the Trustee may, if it shall be
unwilling to so act, or shall, if it is prohibited by applicable law from making
Advances pursuant to Article VI or if it is otherwise unable to so act, appoint,
or petition a court of competent jurisdiction to appoint, any established
mortgage loan servicing institution the appointment of which does not adversely
affect the then current rating of the Certificates by each Rating Agency as the
successor to the Master Servicer hereunder in the assumption of all or any part
of the responsibilities, duties or liabilities of the Master Servicer hereunder.
Any Successor Master Servicer shall (i) be an institution that is a Xxxxxx Xxx
and Xxxxxxx Mac approved seller/servicer in good standing, that has a net worth
of at least $15,000,000 and (ii) be willing to act as successor servicer of any
Mortgage Loans under this Agreement or the related Servicing Agreement with
respect to which the Company or the original Servicer has been terminated as
servicer, and shall have executed and delivered to the Depositor and the Trustee
an agreement accepting such delegation and assignment, that contains an
assumption by such Person of the rights, powers, duties, responsibilities,
obligations and liabilities of the Master Servicer (other than any liabilities
of the Master Servicer hereof incurred prior to termination of the Master
Servicer under Section 9.01 or as otherwise set forth herein), with like effect
as if originally named as a party to this Agreement, provided that each Rating
Agency shall have acknowledged in writing that its rating of the Certificates in
effect immediately prior to such assignment and delegation will not be qualified
or reduced as a result of such assignment and delegation. If the Trustee assumes
the duties and responsibilities of the Master Servicer in accordance with this
Section 9.02, the Trustee shall not resign as Master Servicer until a Successor
Master Servicer has been appointed and has accepted such appointment. Pending
appointment of a successor to the Master Servicer hereunder, the Trustee, unless
the Trustee is prohibited by law from so acting, shall, subject to Section 4.04
hereof, act in such capacity as hereinabove provided. In connection with such
appointment and assumption, the Trustee may make such arrangements for the
compensation of such successor out of payments on Mortgage Loans or otherwise as
it and such successor shall agree; provided that no such compensation unless
agreed to by the Certificateholders shall be in excess of that permitted the
Master Servicer hereunder. The Trustee and such successor shall take such
action, consistent with this Agreement, as shall be necessary to effectuate any
such succession. Neither the Trustee nor any other Successor Master Servicer
shall be deemed to be in default hereunder by reason of any failure to make, or
any delay in making, any distribution hereunder or any portion thereof or any
failure to perform, or any delay in performing, any duties or responsibilities
hereunder, in either case caused by the failure of the Master Servicer and the
Securities Administrator to deliver or provide, or any delay in delivering or
providing, any cash, information, documents or records to it.
The costs and expenses of the Trustee in connection with the
termination of the Master Servicer, appointment of a Successor Master Servicer
and, if applicable, any transfer of servicing, including, without limitation,
all costs and expenses associated with the complete transfer of all servicing
data and the completion, correction or manipulation of such servicing data as
may be
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required by the Trustee to correct any errors or insufficiencies in the
servicing data or otherwise to enable the Trustee or the Successor Master
Servicer to service the related Mortgage Loans properly and effectively, to the
extent not paid by the terminated Master Servicer, shall be payable to the
Trustee pursuant to Section 10.05. Any successor to the Master Servicer as
successor servicer under any Subservicing Agreement shall give notice to the
applicable Mortgagors of such change of servicer and shall, during the term of
its service as successor servicer maintain in force the policy or policies that
the Master Servicer is required to maintain pursuant to Section 4.04.
Section 9.03 Notification to Certificateholders.
(a) Upon any termination of or appointment of a successor to the
Master Servicer, the Trustee shall give prompt written notice thereof to
Certificateholders and to each Rating Agency.
(b) Within 60 days after the occurrence of any Event of Default, the
Trustee shall transmit by mail to all Certificateholders notice of each such
Event of Default hereunder actually known to a Responsible Officer of the
Trustee, unless such Event of Default shall have been cured or waived.
Section 9.04 Waiver of Defaults.
The Trustee shall transmit by mail to all Certificateholders, within
60 days after the occurrence of any Event of Default actually known to a
Responsible Officer of the Trustee, unless such Event of Default shall have been
cured, notice of each such Event of Default hereunder known to the Trustee. The
Holders of Certificates evidencing not less than 51% of the Voting Rights 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 of any required
distribution on the Certificates. Upon any such waiver of a past default, such
default shall be deemed to cease to exist, and any Event of Default arising
therefrom shall be deemed to have been timely remedied for every purpose of this
Agreement. No such waiver shall extend to any subsequent or other default or
impair any right consequent thereon except to the extent expressly so waived.
The Trustee shall give notice of any such waiver to the Rating Agencies.
Section 9.05 Company Default.
In case one or more of the following events of default by the
Company (each, a "Company Default") shall occur and be continuing, that is to
say:
(i) any failure by the Company to remit to the Master Servicer any
payment required to be made under the terms of this Agreement on any Remittance
Date; or
(ii) failure on the part of the Company duly to observe or perform
in any material respect any other of the covenants or agreements on the part of
the Company set forth in this Agreement, the breach of which has a material
adverse effect and which continue unremedied for a period of sixty days (except
that such number of days shall be fifteen in the case of a failure to pay any
premium for any insurance policy required to be maintained under this Agreement
and such failure shall be deemed to have a material adverse effect) after the
date on which written notice of
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such failure, requiring the same to be remedied, shall have been given to the
Company by the Master Servicer; or
(iii) a decree or order of a court or agency or supervisory
authority having jurisdiction for the appointment of a conservator or receiver
or liquidator in any insolvency, bankruptcy, readjustment of debt, marshaling of
assets and liabilities or similar proceedings, or for the winding-up or
liquidation of its affairs, shall have been entered against the Company and such
decree or order shall have remained in force undischarged or unstayed for a
period of sixty days; or
(iv) the Company shall consent to the appointment of a conservator
or receiver or liquidator in any insolvency, bankruptcy, readjustment of debt,
marshaling of assets and liabilities or similar proceedings of or relating to
the Company or of or relating to all or substantially all of its property; or
(v) the Company shall admit in writing its inability to pay its
debts generally as they become due, file a petition to take advantage of any
applicable insolvency or reorganization statute, make an assignment for the
benefit of its creditors, or voluntarily suspend payment of its obligations; or
(vi) the Company attempts to assign its right to servicing
compensation hereunder or the Company attempts to sell or otherwise dispose of
all or substantially all of its property or assets or to assign this Agreement
or the servicing responsibilities hereunder or to delegate its duties hereunder
or any portion thereof except as otherwise permitted herein; or
(vii) the Company ceases to be qualified to transact business in any
jurisdiction where it is currently so qualified, but only to the extent such
non-qualification materially and adversely affects the Company's ability to
perform its obligations hereunder;
then, and in each and every such case, so long as a Company Default shall
not have been remedied, the Master Servicer, by notice in writing to the Company
may, in addition to whatever rights the Master Servicer and the Trustee on
behalf of the Certificateholders may have under Section 8.03 and at law or
equity to damages, including injunctive relief and specific performance,
terminate all the rights and obligations of the Company under this Agreement and
in and to the EMC Mortgage Loans and the proceeds thereof without compensating
the Company for the same. On or after the receipt by the Company of such written
notice, all authority and power of Company under this Agreement, whether with
respect to the EMC Mortgage Loans or otherwise, shall pass to and be vested in
the Master Servicer. Upon written request from the Master Servicer, the Company
shall prepare, execute and deliver, any and all documents and other instruments,
place in the Master Servicer's possession all Mortgage Files relating to the EMC
Mortgage Loans, and do or accomplish all other acts or things necessary or
appropriate to effect the purposes of such notice of termination, whether to
complete the transfer and endorsement or assignment of the EMC Mortgage Loans
and related documents, or otherwise, at the Company's sole expense. The Company
agrees to cooperate with the Master Servicer in effecting the termination of the
Company's responsibilities and rights hereunder, including, without limitation,
the transfer to such successor for administration by it of all cash amounts
which shall at the time be credited by the Company to its Protected Account or
Escrow Account or thereafter received with respect to the EMC Mortgage Loans or
any related REO Property.
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Section 9.06 Waiver of Company Defaults.
The Master Servicer, with the consent of the Trustee, may waive only by
written notice any default by the Company in the performance of its obligations
hereunder and its consequences. Upon any such waiver of a past default, such
default shall cease to exist, and any Company Default arising therefrom shall be
deemed to have been remedied for every purpose of this Agreement. No such waiver
shall extend to any subsequent or other default or impair any right consequent
thereon except to the extent expressly so waived in writing.
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ARTICLE X
CONCERNING THE TRUSTEE AND THE SECURITIES ADMINISTRATOR
Section 10.01 Duties of Trustee and Securities Administrator.
(a) The Trustee, prior to the occurrence of an Event of Default and
after the curing or waiver of all Events of Default which may have occurred, and
the Securities Administrator each undertake to perform such duties and only such
duties as are specifically set forth in this Agreement as duties of the Trustee
and the Securities Administrator, respectively. If an Event of Default has
occurred and has not been cured or waived, the Trustee shall exercise such of
the rights and powers vested in it by this Agreement, and the same degree of
care and skill in their exercise, as a prudent person would exercise under the
circumstances in the conduct of such Person's own affairs.
(b) Upon receipt of all resolutions, certificates, statements,
opinions, reports, documents, orders or other instruments which are specifically
required to be furnished to the Trustee or the Securities Administrator pursuant
to any provision of this Agreement, the Trustee or the Securities Administrator,
respectively, shall examine them to determine whether they are, on their face,
in the form required by this Agreement; provided, however, that neither the
Trustee nor the Securities Administrator shall be responsible for the accuracy
or content of any resolution, certificate, statement, opinion, report, document,
order or other instrument furnished by the Master Servicer; provided, further,
that neither the Trustee nor the Securities Administrator shall be responsible
for the accuracy or verification of any calculation provided to it pursuant to
this Agreement.
(c) On each Distribution Date, the Trustee shall make monthly
distributions and the final distribution to the Certificateholders from funds in
the Distribution Account as provided in Sections 6.04 and 11.01 herein based
solely on the applicable Remittance Report.
(d) No provision of this Agreement shall be construed to relieve the
Trustee or the Securities Administrator from liability for its own negligent
action, its own negligent failure to act or its own willful misconduct;
provided, however, that:
(i) Prior to the occurrence of an Event of Default, and after the
curing or waiver of all such Events of Default which may have occurred
with respect to the Trustee and at all times with respect to the
Securities Administrator, the duties and obligations of the Trustee and
the Securities Administrator shall be determined solely by the express
provisions of this Agreement, neither the Trustee nor the Securities
Administrator shall be liable except for the performance of their
respective duties and obligations as are specifically set forth in this
Agreement, no implied covenants or obligations shall be read into this
Agreement against the Trustee or the Securities Administrator and, in the
absence of bad faith on the part of the Trustee or the Securities
Administrator, respectively, the Trustee or the Securities Administrator,
respectively, may conclusively rely, as to the truth of the statements and
the correctness of the opinions expressed therein, upon any certificates
or opinions furnished to the Trustee or the Securities Administrator,
respectively, and conforming to the requirements of this Agreement;
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(ii) Neither the Trustee nor the Securities Administrator shall be
liable in its individual capacity for an error of judgment made in good
faith by a Responsible Officer or Responsible Officers of the Trustee or
an officer or officers of the Securities Administrator, respectively,
unless it shall be proved that the Trustee or the Securities
Administrator, respectively, was negligent in ascertaining the pertinent
facts;
(iii) Neither the Trustee nor the Securities Administrator shall be
liable with respect to any action taken, suffered or omitted to be taken
by it in good faith in accordance with the directions of the Holders of
Certificates evidencing not less than 25% of the aggregate Voting Rights
of the Certificates, if such action or non-action relates to the time,
method and place of conducting any proceeding for any remedy available to
the Trustee or the Securities Administrator, respectively, or exercising
any trust or other power conferred upon the Trustee or the Securities
Administrator, respectively, under this Agreement;
(iv) The Trustee shall not be required to take notice or be deemed
to have notice or knowledge of any default or Event of Default unless a
Responsible Officer of the Trustee shall have actual knowledge thereof. In
the absence of such notice, the Trustee may conclusively assume there is
no such default or Event of Default;
(v) The Trustee shall not in any way be liable by reason of any
insufficiency in any Account held by or in the name of Trustee unless it
is determined by a court of competent jurisdiction in a non-appealable
judgment that the Trustee's gross negligence or willful misconduct was the
primary cause of such insufficiency (except to the extent that the Trustee
is obligor and has defaulted thereon);
(vi) Anything in this Agreement to the contrary notwithstanding, in
no event shall the Trustee or the Securities Administrator be liable for
special, indirect or consequential loss or damage of any kind whatsoever
(including but not limited to lost profits), even if the Trustee or the
Securities Administrator, respectively, has been advised of the likelihood
of such loss or damage and regardless of the form of action; and
(vii) None of the Securities Administrator, the Master Servicer, the
Seller, the Depositor or the Trustee shall be responsible for the acts or
omissions of the other, it being understood that this Agreement shall not
be construed to render them partners, joint venturers or agents of one
another.
Neither the Trustee nor the Securities Administrator shall be required to expend
or risk its own funds or otherwise incur financial liability in the performance
of any of its duties hereunder, or in the exercise of any of its rights or
powers, if there is reasonable ground for believing that the repayment of such
funds or adequate indemnity against such risk or liability is not reasonably
assured to it, and none of the provisions contained in this Agreement shall in
any event require the Trustee or the Securities Administrator to perform, or be
responsible for the manner of performance of, any of the obligations of the
Master Servicer or the Company hereunder or any Servicer under the related
Servicing Agreement.
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(e) All funds received by the Trustee and required to be deposited
in the Distribution Account pursuant to this Agreement will be promptly so
deposited by the Trustee.
Section 10.02 Certain Matters Affecting the Trustee and the Securities
Administrator.
(a) Except as otherwise provided in Section 10.01:
(i) The Trustee and the Securities Administrator may rely and shall
be protected in acting or refraining from acting in reliance on any
resolution or certificate of the Seller, the Company, the Master Servicer
or the related Servicer, any certificates of auditors or any other
certificate, statement, instrument, opinion, report, notice, request,
consent, order, appraisal, bond or other paper or document believed by it
to be genuine and to have been signed or presented by the proper party or
parties;
(ii) The Trustee and the Securities Administrator may consult with
counsel and any advice of such counsel or any Opinion of Counsel shall be
full and complete authorization and protection with respect to any action
taken or suffered or omitted by it hereunder in good faith and in
accordance with such advice or Opinion of Counsel:
(iii) Neither the Trustee nor the Securities Administrator shall be
under any obligation to exercise any of the trusts or powers vested in it
by this Agreement, other than its obligation to give notices pursuant to
this Agreement, or to institute, conduct or defend any litigation
hereunder or in relation hereto at the request, order or direction of any
of the Certificateholders pursuant to the provisions of this Agreement,
unless such Certificateholders shall have offered to the Trustee or the
Securities Administrator, as applicable, reasonable security or indemnity
against the costs, expenses and liabilities which may be incurred therein
or thereby. Nothing contained herein shall, however, relieve the Trustee
of the obligation, upon the occurrence of an Event of Default of which a
Responsible Officer of the Trustee has actual knowledge (which has not
been cured or waived), to exercise such of the rights and powers vested in
it by this Agreement, and to use the same degree of care and skill in
their exercise, as a prudent person would exercise under the circumstances
in the conduct of his own affairs;
(iv) Prior to the occurrence of an Event of Default hereunder and
after the curing or waiver of all Events of Default which may have
occurred with respect to the Trustee and at all times with respect to the
Securities Administrator, neither the Trustee nor the Securities
Administrator shall be liable in its individual capacity for any action
taken, suffered or omitted by it in good faith and believed by it to be
authorized or within the discretion or rights or powers conferred upon it
by this Agreement;
(v) Neither the Trustee nor the Securities Administrator shall be
bound to make any investigation into the facts or matters stated in any
resolution, certificate, statement, instrument, opinion, report, notice,
request, consent, order, approval, bond or other paper or document, unless
requested in writing to do so by Holders of Certificates evidencing not
less than 25% of the aggregate Voting Rights of the Certificates and
provided that the payment within a reasonable time to the Trustee or the
Securities Administrator, as applicable, of the
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costs, expenses or liabilities likely to be incurred by it in the making
of such investigation is, in the opinion of the Trustee or the Securities
Administrator, as applicable, reasonably assured to the Trustee or the
Securities Administrator, as applicable, by the security afforded to it by
the terms of this Agreement. The Trustee or the Securities Administrator
may require reasonable indemnity against such expense or liability as a
condition to taking any such action. The reasonable expense of every such
examination shall be paid by the Certificateholders requesting the
investigation;
(vi) The Trustee and the Securities Administrator may execute any of
the trusts or powers hereunder or perform any duties hereunder either
directly or through Affiliates, agents or attorneys; provided, however,
that the Trustee may not appoint any paying agent other than the
Securities Administrator to perform any paying agent functions under this
Agreement without the express written consent of the Master Servicer,
which consent will not be unreasonably withheld. Neither the Trustee nor
the Securities Administrator shall be liable or responsible for the
misconduct or negligence of any of the Trustee's or the Securities
Administrator's agents or attorneys or paying agent appointed hereunder by
the Trustee or the Securities Administrator with due care and, when
required, with the consent of the Master Servicer;
(vii) Should the Trustee or the Securities Administrator deem the
nature of any action required on its part to be unclear, the Trustee or
the Securities Administrator, respectively, may require prior to such
action that it be provided by the Depositor with reasonable further
instructions; the right of the Trustee or the Securities Administrator to
perform any discretionary act enumerated in this Agreement shall not be
construed as a duty, and neither the Trustee nor the Securities
Administrator shall be accountable for other than its negligence or
willful misconduct in the performance of any such act;
(viii) Neither the Trustee nor the Securities Administrator shall be
required to give any bond or surety with respect to the execution of the
trust created hereby or the powers granted hereunder, except as provided
in Subsection 10.07; and
(ix) Neither the Trustee nor the Securities Administrator shall have
any duty to conduct any affirmative investigation as to the occurrence of
any condition requiring the repurchase of any Mortgage Loan by any Person
pursuant to this Agreement, or the eligibility of any Mortgage Loan for
purposes of this Agreement.
Section 10.03 Trustee and Securities Administrator Not Liable for
Certificates or Mortgage Loans.
The recitals contained herein and in the Certificates (other than
the signature and countersignature of the Trustee on the Certificates) shall be
taken as the statements of the Depositor, and neither the Trustee nor the
Securities Administrator shall have any responsibility for their correctness.
Neither the Trustee nor the Securities Administrator makes any representation as
to the validity or sufficiency of the Certificates (other than the signature and
countersignature of the Trustee on the Certificates) or of any Mortgage Loan
except as expressly provided in Sections 2.02 and 2.06 hereof; provided,
however, that the foregoing shall not relieve the Trustee of the obligation to
review
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the Mortgage Files pursuant to Sections 2.02 and 2.05 of this Agreement. The
Trustee's signature and countersignature (or countersignature of its agent) on
the Certificates shall be solely in its capacity as Trustee and shall not
constitute the Certificates an obligation of the Trustee in any other capacity.
Neither the Trustee or the Securities Administrator shall be accountable for the
use or application by the Depositor of any of the Certificates or of the
proceeds of such Certificates, or for the use or application of any funds paid
to the Depositor with respect to the Mortgage Loans. Subject to the provisions
of Section 2.06, neither the Trustee nor the Securities Administrator shall be
responsible for the legality or validity of this Agreement or any document or
instrument relating to this Agreement, the validity of the execution of this
Agreement or of any supplement hereto or instrument of further assurance, or the
validity, priority, perfection or sufficiency of the security for the
Certificates issued hereunder or intended to be issued hereunder. Neither the
Trustee nor the Securities Administrator shall at any time have any
responsibility or liability for or with respect to the legality, validity and
enforceability of any Mortgage or any Mortgage Loan, or the perfection and
priority of any Mortgage or the maintenance of any such perfection and priority,
or for or with respect to the sufficiency of the Trust Fund or its ability to
generate the payments to be distributed to Certificateholders, under this
Agreement. Neither the Trustee nor the Securities Administrator shall have any
responsibility for filing any financing or continuation statement in any public
office at any time or to otherwise perfect or maintain the perfection of any
security interest or lien granted to it hereunder or to record this Agreement.
Section 10.04 Trustee and Securities Administrator May Own Certificates.
Each of the Trustee and the Securities Administrator in its
individual capacity or in any capacity other than as Trustee or Securities
Administrator hereunder may become the owner or pledgee of any Certificates with
the same rights it would have if it were not the Trustee or the Securities
Administrator, as applicable, and may otherwise deal with the parties hereto.
Section 10.05 Trustee's and Securities Administrator's Fees and Expenses.
The fees and expenses of the Trustee and the Securities
Administrator shall be paid in accordance with a side letter agreement with the
Master Servicer and at the expense of the Master Servicer. In addition, the
Trustee and the Securities Administrator will be entitled to recover from the
Master Servicer Collection Account pursuant to Section 5.06 all reasonable
out-of-pocket expenses, disbursements and advances and the expenses of the
Trustee and the Securities Administrator, respectively, in connection with any
Event of Default, any breach of this Agreement or any claim or legal action
(including any pending or threatened claim or legal action) incurred or made by
the Trustee or the Securities Administrator, respectively, in the administration
of the trusts hereunder (including the reasonable compensation, expenses and
disbursements of its counsel) except any such expense, disbursement or advance
as may arise from its negligence or intentional misconduct or which is the
responsibility of the Certificateholders or the Trust Fund hereunder. If funds
in the Master Servicer Collection Account are insufficient therefor, the Trustee
and the Securities Administrator shall recover such expenses from the Depositor.
Such compensation and reimbursement obligation shall not be limited by any
provision of law in regard to the compensation of a trustee of an express trust.
Section 10.06 Eligibility Requirements for Trustee and Securities
Administrator.
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The Trustee and any successor Trustee and the Securities
Administrator and any successor Securities Administrator shall during the entire
duration of this Agreement be a state bank or trust company or a national
banking association organized and doing business under the laws of a state or
the United States of America, authorized under such laws to exercise corporate
trust powers, having a combined capital and surplus and undivided profits of at
least $40,000,000 or, in the case of a successor Trustee, $50,000,000, subject
to supervision or examination by federal or state authority and, in the case of
the Trustee, rated "BBB" or higher by Fitch with respect to their long- term
rating and rated "BBB" or higher by Standard & Poor's and "Baa2" or higher by
Moody's with respect to any outstanding long-term unsecured unsubordinated debt,
and, in the case of a successor Trustee or successor Securities Administrator
other than pursuant to Section 10.10, rated in one of the two highest long-term
debt categories of, or otherwise acceptable to, each of the Rating Agencies. The
Trustee shall not be an Affiliate of the Master Servicer. If the Trustee
publishes reports of condition at least annually, pursuant to law or to the
requirements of the aforesaid supervising or examining authority, then for the
purposes of this Section 10.06 the combined capital and surplus of such
corporation shall be deemed to be its total equity capital (combined capital and
surplus) as set forth in its most recent report of condition so published. In
case at any time the Trustee or the Securities Administrator, as applicable,
shall cease to be eligible in accordance with the provisions of this Section
10.06, the Trustee or the Securities Administrator shall resign immediately in
the manner and with the effect specified in Section 10.08.
Section 10.07 Insurance.
The Trustee and the Securities Administrator, at their own expense,
shall at all times maintain and keep in full force and effect: (i) fidelity
insurance, (ii) theft of documents insurance and (iii) forgery insurance (which
may be collectively satisfied by a "Financial Institution Bond" and/or a
"Bankers' Blanket Bond"). All such insurance shall be in amounts, with standard
coverage and subject to deductibles, as are customary for insurance typically
maintained by banks or their affiliates which act as custodians for
investor-owned mortgage pools. A certificate of an officer of the Trustee or the
Securities Administrator as to the Trustee's or the Securities Administrator's,
respectively, compliance with this Section 10.07 shall be furnished to any
Certificateholder upon reasonable written request.
Section 10.08 Resignation and Removal of Trustee and Securities
Administrator.
The Trustee and the Securities Administrator may at any time resign
(including, in the case of the Securities Administrator, in connection with the
resignation or termination of the Master Servicer) and be discharged from the
Trust hereby created by giving written notice thereof to the Depositor, the
Seller, the Securities Administrator (or the Trustee, if the Securities
Administrator resigns) and the Master Servicer, with a copy to the Rating
Agencies. Upon receiving such notice of resignation, the Depositor shall
promptly appoint a successor trustee or successor securities administrator, as
applicable, by written instrument, in triplicate, one copy of which instrument
shall be delivered to each of the resigning trustee or securities administrator,
as applicable, and the successor trustee or securities administrator, as
applicable. If no successor trustee or successor securities administrator shall
have been so appointed and have accepted appointment within 30 days after the
giving of such notice of resignation, the resigning Trustee or Securities
Administrator may
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petition any court of competent jurisdiction for the appointment of a successor
trustee or securities administrator.
If at any time (i) the Trustee or the Securities Administrator shall
cease to be eligible in accordance with the provisions of Section 10.06 hereof
and shall fail to resign after written request thereto by the Depositor, (ii)
the Trustee or the Securities Administrator shall become incapable of acting, or
shall be adjudged as bankrupt or insolvent, or a receiver of the Trustee or the
Securities Administrator or of its property shall be appointed, or any public
officer shall take charge or control of the Trustee or the Securities
Administrator or of its property or affairs for the purpose of rehabilitation,
conservation or liquidation, or (iii)(A) a tax is imposed with respect to the
Trust Fund by any state in which the Trustee or the Securities Administrator or
the Trust Fund is located, (B) the imposition of such tax would be avoided by
the appointment of a different trustee or securities administrator and (C) the
Trustee or the Securities Administrator, as applicable fails to indemnify the
Trust Fund against such tax, then the Depositor or the Master Servicer may
remove the Trustee or the Securities Administrator, as applicable, and appoint a
successor trustee or successor securities administrator, as applicable, by
written instrument, in multiple copies, a copy of which instrument shall be
delivered to the Trustee, the Securities Administrator, each Master Servicer and
the successor trustee or successor securities administrator, as applicable.
The Holders evidencing at least 51% of the Voting Rights of each
Class of Certificates may at any time remove the Trustee or Securities
Administrator and appoint a successor trustee or securities administrator by
written instrument or instruments, in multiple copies, signed by such Holders or
their attorneys-in-fact duly authorized, one complete set of which instruments
shall be delivered by the successor trustee or successor securities
administrator to each of the Master Servicer, the Trustee or Securities
Administrator so removed and the successor trustee or securities administrator
so appointed. Notice of any removal of the Trustee or Securities Administrator
shall be given to each Rating Agency by the Trustee or successor trustee.
Any resignation or removal of the Trustee or Securities
Administrator and appointment of a successor trustee or securities administrator
pursuant to any of the provisions of this Section 10.08 shall become effective
upon acceptance of appointment by the successor trustee or securities
administrator as provided in Section 10.09 hereof.
Section 10.09 Successor Trustee or Securities Administrator.
Any successor trustee or securities administrator appointed as
provided in Section 10.08 hereof shall execute, acknowledge and deliver to the
Depositor and to its predecessor trustee or predecessor securities
administrator, as applicable, and the Master Servicer an instrument accepting
such appointment hereunder and thereupon the resignation or removal of the
predecessor trustee or securities administrator shall become effective and such
successor trustee or securities administrator, without any further act, deed or
conveyance, shall become fully vested with all the rights, powers, duties and
obligations of its predecessor hereunder, with the like effect as if originally
named as trustee or securities administrator herein.
No successor trustee or securities administrator shall accept
appointment as provided in this Section 10.09 unless at the time of such
acceptance such successor trustee or securities
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administrator shall be eligible under the provisions of Section 10.07 hereof and
its appointment shall not adversely affect the then current rating of the
Certificates.
Upon acceptance of appointment by a successor trustee or securities
administrator as provided in this Section 10.09, the successor trustee or
securities administrator shall mail notice of the succession of such trustee or
securities administrator hereunder to all Holders of Certificates. If the
successor trustee or securities administrator fails to mail such notice within
ten days after acceptance of appointment, the Depositor shall cause such notice
to be mailed at the expense of the Trust Fund.
Section 10.10 Merger or Consolidation of Trustee or Securities
Administrator.
Any corporation, state bank or national banking association into
which the Trustee or the Securities Administrator may be merged or converted or
with which it may be consolidated or any corporation, state bank or national
banking association resulting from any merger, conversion or consolidation to
which the Trustee or the Securities Administrator shall be a party, or any
corporation, state bank or national banking association succeeding to
substantially all of the corporate trust business of the Trustee or of the
business of the Securities Administrator, shall be the successor of the Trustee
or the Securities Administrator hereunder, provided that such corporation shall
be eligible under the provisions of Section 10.06 hereof without the execution
or filing of any paper or further act on the part of any of the parties hereto,
anything herein to the contrary notwithstanding.
Section 10.11 Appointment of Co-Trustee or Separate Trustee.
Notwithstanding any other provisions of this Agreement, at any time,
for the purpose of meeting any legal requirements of any jurisdiction in which
any part of the Trust Fund or property securing any Mortgage Note may at the
time be located, the Master Servicer and the Trustee acting jointly shall have
the power and shall execute and deliver all instruments to appoint one or more
Persons approved by the Trustee to act as co-trustee or co-trustees jointly with
the Trustee, or separate trustee or separate trustees, of all or any part of the
Trust Fund, and to vest in such Person or Persons, in such capacity and for the
benefit of the Certificateholders, such title to the Trust Fund or any part
thereof, whichever is applicable, and, subject to the other provisions of this
Section 10.11, such powers, duties, obligations, rights and trusts as the Master
Servicer and the Trustee may consider necessary or desirable. If the Master
Servicer shall not have joined in such appointment within 15 days after the
receipt by it of a request to do so, or in the case an Event of Default shall
have occurred and be continuing, the Trustee alone shall have the power to make
such appointment. No co-trustee or separate trustee hereunder shall be required
to meet the terms of eligibility as a successor trustee under Section 10.06 and
no notice to Certificateholders of the appointment of any co-trustee or separate
trustee shall be required under Section 10.09.
Every separate trustee and co-trustee shall, to the extent permitted
by law, be appointed and act subject to the following provisions and conditions:
(i) All rights, powers, duties and obligations conferred or imposed
upon the Trustee, except for the obligation of the Trustee under this
Agreement to advance funds on behalf of the Master Servicer, shall be
conferred or imposed upon and exercised or performed
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by the Trustee and such separate trustee or co-trustee jointly (it being
understood that such separate trustee or co-trustee is not authorized to
act separately without the Trustee joining in such act), except to the
extent that under any law of any jurisdiction in which any particular act
or acts are to be performed (whether a Trustee hereunder or as a Successor
Master Servicer hereunder), the Trustee shall be incompetent or
unqualified to perform such act or acts, in which event such rights,
powers, duties and obligations (including the holding of title to the
Trust Fund or any portion thereof in any such jurisdiction) shall be
exercised and performed singly by such separate trustee or co-trustee, but
solely at the direction of the Trustee;
(ii) No trustee hereunder shall be held personally liable by reason
of any act or omission of any other trustee hereunder; and
(iii) The Trustee may at any time accept the resignation of or
remove any separate trustee or co-trustee.
Any notice, request or other writing given to the Trustee shall be
deemed to have been given to each of the then separate trustees and co-trustees,
as effectively as if given to each of them. Every instrument appointing any
separate trustee or co-trustee shall refer to this Agreement and the conditions
of this Article X. Each separate trustee and co-trustee, upon its acceptance of
the trusts conferred, shall be vested with the estates or property specified in
its instrument of appointment, either jointly with the Trustee or separately, as
may be provided therein, subject to all the provisions of this Agreement,
specifically including every provision of this Agreement relating to the conduct
of, affecting the liability of, or affording protection to, the Trustee. Every
such instrument shall be filed with the Trustee and a copy thereof given to the
Master Servicer and the Depositor.
Any separate trustee or co-trustee may, at any time, constitute the
Trustee its agent or attorney-in-fact, with full power and authority, to the
extent not prohibited by law, to do any lawful act under or in respect of this
Agreement on its behalf and in its name. If any separate trustee or co- trustee
shall die, become incapable of acting, resign or be removed, all of its estates,
properties, rights, remedies and trusts shall vest in and be exercised by the
Trustee, to the extent permitted by law, without the appointment of a new or
successor trustee.
Section 10.12 Tax Matters.
It is intended that the Trust Fund shall constitute, and that the
affairs of the Trust Fund shall be conducted so that each REMIC formed hereunder
qualifies as, a "real estate mortgage investment conduit" as defined in and in
accordance with the REMIC Provisions. In furtherance of such intention, the
Securities Administrator covenants and agrees that it shall act as agent for so
long as it is also Master Servicer (and the Securities Administrator is hereby
appointed to act as agent) on behalf of the Trust Fund. The Trustee and/or the
Securities Administrator, as agent on behalf of the Trust Fund, shall do or
refrain from doing, as applicable, the following: (a) the Securities
Administrator shall prepare and file, or cause to be prepared and filed, in a
timely manner, U.S. Real Estate Mortgage Investment Conduit Income Tax Returns
(Form 1066 or any successor form adopted by the Internal Revenue Service) and
prepare and file or cause to be prepared and filed with the Internal Revenue
Service and applicable state or local tax authorities income tax or information
returns for each taxable year with respect to each such REMIC containing such
information and at
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the times and in the manner as may be required by the Code or state or local tax
laws, regulations, or rules, and furnish or cause to be furnished to
Certificateholders the schedules, statements or information at such times and in
such manner as may be required thereby; (b) the Securities Administrator shall
apply for an employer identification number with the Internal Revenue Service
via a Form SS-4 or other comparable method for each REMIC that is or becomes a
taxable entity, and within thirty days of the Closing Date, furnish or cause to
be furnished to the Internal Revenue Service, on Forms 8811 or as otherwise may
be required by the Code, the name, title, address, and telephone number of the
person that the holders of the Certificates may contact for tax information
relating thereto, together with such additional information as may be required
by such Form, and update such information at the time or times in the manner
required by the Code for the Trust Fund; (c) the Trustee shall make or cause to
be made elections, on behalf of each REMIC formed hereunder to be treated as a
REMIC on the federal tax return of such REMIC for its first taxable year (and,
if necessary, under applicable state law); (d) the Securities Administrator
shall prepare and forward, or cause to be prepared and forwarded, to the
Certificateholders and to the Internal Revenue Service and, if necessary, state
tax authorities, all information returns and reports as and when required to be
provided to them in accordance with the REMIC Provisions, including without
limitation, the calculation of any original issue discount using the Prepayment
Assumption; (e) the Securities Administrator shall provide information necessary
for the computation of tax imposed on the transfer of a Residual Certificate to
a Person that is not a Permitted Transferee, or an agent (including a broker,
nominee or other middleman) of a Person that is not a Permitted Transferee, or a
pass-through entity in which a Person that is not a Permitted Transferee is the
record holder of an interest (the reasonable cost of computing and furnishing
such information may be charged to the Person liable for such tax); (f) each of
the Securities Administrator and the Trustee shall, to the extent under its
control, conduct the affairs of the Trust Fund at all times that any
Certificates are outstanding so as to maintain the status of each REMIC formed
hereunder as a REMIC under the REMIC Provisions; (g) neither the Trustee nor the
Securities Administrator shall knowingly or intentionally take any action or
omit to take any action that would cause the termination of the REMIC status of
any REMIC formed hereunder; (h) the Trustee shall pay, from the sources
specified in the penultimate paragraph of this Section 10.12, as directed by the
Securities Administrator in its Remittance Report, the amount of any federal,
state and local taxes, including prohibited transaction taxes as described
below, imposed on any REMIC formed hereunder prior to the termination of the
Trust Fund when and as the same shall be due and payable (but such obligation
shall not prevent the Trustee, the Securities Administrator at the written
request of the Trustee, or any other appropriate Person from contesting any such
tax in appropriate proceedings and shall not prevent the Securities
Administrator from withholding payment of such tax, if permitted by law, pending
the outcome of such proceedings); (i) the Trustee shall sign or cause to be
signed federal, state or local income tax or information returns or any other
document prepared by the Securities Administrator pursuant to this Section 10.12
requiring a signature thereon by the Trustee; (j) the Securities Administrator
shall maintain records relating to each REMIC formed hereunder including but not
limited to the income, expenses, assets and liabilities of each such REMIC and
adjusted basis of the Trust Fund property determined at such intervals as may be
required by the Code, as may be necessary to prepare the foregoing returns,
schedules, statements or information; (k) the Securities Administrator shall,
for federal income tax purposes, maintain books and records with respect to the
REMICs on a calendar year and on an accrual basis; (l) neither the Trustee nor
the Master Servicer shall enter into any arrangement not otherwise provided for
in this Agreement by which the REMICs will receive a fee or other compensation
for services nor permit the REMICs to receive any income from assets other than
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"qualified mortgages" as defined in Section 860G(a)(3) of the Code or "permitted
investments" as defined in Section 860G(a)(5) of the Code; and (m) as and when
necessary and appropriate, the Trustee, or at the written request of the
Trustee, the Securities Administrator, shall represent the Trust Fund in any
administrative or judicial proceedings relating to an examination or audit by
any governmental taxing authority, request an administrative adjustment as to
any taxable year of any REMIC formed hereunder, enter into settlement agreements
with any governmental taxing agency, extend any statute of limitations relating
to any tax item of the Trust Fund, and otherwise act on behalf of each REMIC
formed hereunder in relation to any tax matter involving any such REMIC.
In order to enable each of the Trustee and the Securities
Administrator to perform its duties as set forth herein, the Depositor shall
provide, or cause to be provided, to the Trustee or the Securities Administrator
within 10 days after the Closing Date all information or data that the Trustee
or the Securities Administrator requests in writing and determines to be
relevant for tax purposes to the valuations and offering prices of the
Certificates, including, without limitation, the price, yield, prepayment
assumption and projected cash flows of the Certificates and the Mortgage Loans.
Thereafter, the Depositor shall provide to the Trustee or the Securities
Administrator promptly upon written request therefor, any such additional
information or data that the Trustee or the Securities Administrator may, from
time to time, request in order to enable the Trustee or the Securities
Administrator to perform its duties as set forth herein. The Depositor hereby
indemnifies each of Trustee and the Securities Administrator for any losses,
liabilities, damages, claims or expenses of the Trustee or the Securities
Administrator arising from any errors or miscalculations of the Trustee or the
Securities Administrator, as applicable, that result from any failure of the
Depositor to provide, or to cause to be provided, accurate information or data
to the Trustee or the Securities Administrator, as applicable, on a timely
basis.
In the event that any tax is imposed on "prohibited transactions" of
any of REMIC I, REMIC II or REMIC III as defined in Section 860F(a)(2) of the
Code, on the "net income from foreclosure property" of the Trust Fund as defined
in Section 860G(c) of the Code, on any contribution to any of REMIC I, REMIC II
or REMIC III after the startup day pursuant to Section 860G(d) of the Code, or
any other tax is imposed, including, without limitation, any federal, state or
local tax or minimum tax imposed upon any of REMIC I, REMIC II or REMIC III, and
is not paid as otherwise provided for herein, such tax shall be paid by (i) the
Trustee or the Securities Administrator, if any such other tax arises out of or
results from a breach by the Trustee or the Securities Administrator,
respectively, of any of its obligations under this Agreement, (ii) any party
hereto (other than the Trustee or the Securities Administrator) to the extent
any such other tax arises out of or results from a breach by such other party of
any of its obligations under this Agreement or (iii) in all other cases, or in
the event that any liable party hereto fails to honor its obligations under the
preceding clauses (i) or (ii), any such tax will be paid first with amounts
otherwise to be distributed to the Class R Certificateholders, and second with
amounts otherwise to be distributed to all other Certificateholders in the
following order of priority: first, to the Class B Certificates, second, to the
Class M-2 Certificates, third, to the Class M-1 Certificates and fourth to the
Senior Certificates (pro rata based on the amounts to be distributed).
Notwithstanding anything to the contrary contained herein, to the extent that
such tax is payable by the Holder of any Certificates, the Trustee is hereby
authorized to retain on any Distribution Date, from the Holders of the Class R
Certificates (and, if necessary, second, from the Holders of the other
Certificates in the priority specified in the preceding sentence), funds
otherwise distributable to such Holders in an amount sufficient to pay such tax.
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Following written notification to the Securities Administrator by the Trustee of
any amount payable out of distributions to the Certificateholders pursuant to
the preceding two sentences, the Securities Administrator shall include in its
Remittance Report instructions as to distributions to such parties taking into
account the priorities described in the second preceding sentence. The
Securities Administrator, on written request by the Trustee, agrees to promptly
notify in writing the party liable for any such tax of the amount thereof and
the due date for the payment thereof.
The Trustee and the Securities Administrator each agree that, in the
event it should obtain any information necessary for the other party to perform
its obligations pursuant to this Section 10.12, it will promptly notify and
provide such information to such other party. Notwithstanding anything in this
Agreement to the contrary, the Trustee agrees that, in the event that the
Trustee obtains actual knowledge that the Securities Administrator has breached
any of its obligations pursuant to this Section 10.12, the Trustee shall perform
such obligations on its behalf to the extent that the Trustee possesses all
documents necessary to so perform and receives reasonable compensation therefor,
provided, however, that the Trustee shall not be liable for any losses resulting
from any such breach.
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ARTICLE XI
TERMINATION
Section 11.01 Termination upon Liquidation or Repurchase of all Mortgage
Loans.
Subject to Section 11.03, the obligations and responsibilities of
the Depositor, the Master Servicer, the Securities Administrator, the Seller and
the Trustee created hereby with respect to the Trust Fund shall terminate upon
the earlier of (a) the purchase by the Majority Class C Certificateholder of all
of the Mortgage Loans (and REO Properties) remaining in the Trust Fund at a
price (the "Mortgage Loan Purchase Price") equal to the sum of (i) 100% of the
Stated Principal Balance of each Mortgage Loan (other than in respect of REO
Property), (ii) accrued interest thereon at the applicable Mortgage Rate to, but
not including, the first day of the month of such purchase, (iii) the appraised
value of any REO Property in the Trust Fund (up to the Stated Principal Balance
of the related Mortgage Loan), such appraisal to be conducted by an appraiser
mutually agreed upon by the Master Servicer and the Trustee and (iv)
unreimbursed out-of pocket costs of the Company, the Servicers or the Master
Servicer, including unreimbursed servicing advances and the principal portion of
any unreimbursed Advances, made on the Mortgage Loans prior to the exercise of
such repurchase right and (v) any unreimbursed costs and expenses of the Trustee
and the Securities Administrator payable pursuant to Section 10.05 and (b) the
later of (i) the maturity or other liquidation (or any Advance with respect
thereto) of the last Mortgage Loan remaining in the Trust Fund and the
disposition of all REO Property and (ii) the distribution to Certificateholders
of all amounts required to be distributed to them pursuant to this Agreement, as
applicable. In no event shall the trusts created hereby continue beyond the
earlier of (i) the expiration of 21 years from the death of the last survivor of
the descendants of Xxxxxx X. Xxxxxxx, the late Ambassador of the United States
to the Court of St. Xxxxx, living on the date hereof and (ii) the Latest
Possible Maturity Date.
The right to repurchase all Mortgage Loans and REO Properties
pursuant to clause (a) in the preceding paragraph shall be exercisable on or
after the earlier of (i) the 20% Clean-Up Call Date and (ii) the Distribution
Date in September 2013.
Section 11.02 Final Distribution on the Certificates.
If on any Determination Date, (i) the Master Servicer determines
that there are no Outstanding Mortgage Loans and no other funds or assets in the
Trust Fund other than the funds in the Master Servicer Collection Account, the
Master Servicer shall direct the Securities Administrator to send a final
distribution notice promptly to each Certificateholder or (ii) the Securities
Administrator determines that a Class of Certificates shall be retired after a
final distribution on such Class, the Securities Administrator shall notify the
Certificateholders within five (5) Business Days after such Determination Date
that the final distribution in retirement of such Class of Certificates is
scheduled to be made on the immediately following Distribution Date. Any final
distribution made pursuant to the immediately preceding sentence will be made
only upon presentation and surrender of the related Certificates at the office
of the Trustee specified in the final distribution notice to Certificateholders.
If the Class C Certificateholder elects to terminate the Trust Fund pursuant to
Section 11.01, at least 20 days prior to the date notice is to be mailed to the
Certificateholders, the
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Majority Class C Certificateholder shall notify the Depositor, the Securities
Administrator, the Trustee of the date the Majority Class C Certificateholder
intends to terminate the Trust Fund. The Master Servicer shall remit the
Mortgage Loan Purchase Price to the Trustee on the Business Day prior to the
Distribution Date for such Optional Termination by the Majority Class C
Certificateholder.
Notice of any termination of the Trust Fund, specifying the
Distribution Date on which Certificateholders may surrender their Certificates
for payment of the final distribution and cancellation, shall be given promptly
by the Securities Administrator by letter to Certificateholders mailed not
earlier than the 10th day and no later than the 15th day of the month
immediately preceding the month of such final distribution. Any such notice
shall specify (a) the Distribution Date upon which final distribution on the
Certificates will be made upon presentation and surrender of Certificates at the
office therein designated, (b) the amount of such final distribution, (c) the
location of the office or agency at which such presentation and surrender must
be made and (d) that the Record Date otherwise applicable to such Distribution
Date is not applicable, distributions being made only upon presentation and
surrender of the Certificates at the office therein specified. The Securities
Administrator will give such notice to each Rating Agency at the time such
notice is given to Certificateholders.
In the event such notice is given, the Master Servicer shall cause
all funds in the Master Servicer Collection Account to be remitted to the
Trustee for deposit in the Distribution Account on the Business Day prior to the
applicable Distribution Date in an amount equal to the final distribution in
respect of the Certificates. Upon such final deposit with respect to the Trust
Fund and the receipt by the Trustee of a Request for Release therefor, the
Trustee or the Custodian shall promptly release to the Master Servicer, as
applicable the Mortgage Files for the Mortgage Loans and the Trustee shall
execute and deliver any documents prepared and delivered to it which are
necessary to transfer any REO Property.
Upon presentation and surrender of the Certificates, the Trustee
shall cause to be distributed to Certificateholders of each Class in accordance
with the Remittance Report the amounts allocable to such Certificates held in
the Distribution Account in the order and priority set forth in Section 6.04
hereof on the final Distribution Date and in proportion to their respective
Percentage Interests.
In the event that any affected Certificateholders shall not
surrender Certificates for cancellation within six months after the date
specified in the above mentioned written notice, the Securities Administrator
shall give a second written notice to the remaining Certificateholders to
surrender their Certificates for cancellation and receive the final distribution
with respect thereto. If within six months after the second notice all the
applicable Certificates shall not have been surrendered for cancellation, the
Securities Administrator may take appropriate steps, or may appoint an agent to
take appropriate steps, to contact the remaining Certificateholders concerning
surrender of their Certificates, and the cost thereof shall be paid out of the
funds and other assets that remain a part of the Trust Fund. If within one year
after the second notice all Certificates shall not have been surrendered for
cancellation, the Class R Certificateholders shall be entitled to all unclaimed
funds and other assets of the Trust Fund that remain subject hereto.
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Section 11.03 Additional Termination Requirements.
(a) Upon exercise by the Majority Class C Certificateholder of its
purchase option as provided in Section 11.01, the Trust Fund shall be terminated
in accordance with the following additional requirements, unless each of the
Trustee and the Securities Administrator have been supplied with an Opinion of
Counsel addressed to the Trustee, at the expense of the Majority Class C
Certificateholder, to the effect that the failure of the Trust Fund to comply
with the requirements of this Section 11.03 will not (i) result in the
imposition of taxes on "prohibited transactions" of a REMIC, or (ii) cause a
REMIC to fail to qualify as a REMIC at any time that any Certificates are
outstanding:
(1) The Majority Class C Certificateholder shall establish a 90-day
liquidation period and notify the Trustee and Securities Administrator thereof,
and the Securities Administrator shall in turn specify the first day of such
period in a statement attached to the tax return for each of REMIC I, REMIC II
and REMIC III pursuant to Treasury Regulation Section 1.860F-1. The Majority
Class C Certificateholder shall satisfy all the requirements of a qualified
liquidation under Section 860F of the Code and any regulations thereunder, as
evidenced by an Opinion of Counsel addressed to the Trustee obtained at the
expense of the Majority Class C Certificateholder;
(2) During such 90-day liquidation period, and at or prior to the
time of making the final payment on the Certificates, the Securities
Administrator as agent of the Trustee shall sell all of the assets of REMIC I,
REMIC II and REMIC III for cash; and
(3) At the time of the making of the final payment on the
Certificates, the Securities Administrator as agent for the Trustee shall
distribute or credit, or cause to be distributed or credited, to the Holders of
the Residual Certificates all cash on hand (other than cash retained to meet
claims), and REMIC I shall terminate at that time.
(b) By their acceptance of the Certificates, the Holders thereof
hereby authorize the adoption of a 90-day liquidation period for REMIC I, REMIC
II and REMIC III, which authorization shall be binding upon all successor
Certificateholders.
(c) The Securities Administrator as agent for each REMIC hereby
agrees to adopt and sign such a plan of complete liquidation upon the written
request of the Majority Class C Certificateholder, and the receipt of the
Opinion of Counsel referred to in Section 11.03(a)(1) and to take such other
action in connection therewith as may be reasonably requested by the Majority
Class C Certificateholder.
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ARTICLE XII
MISCELLANEOUS PROVISIONS
Section 12.01 Amendment.
This Agreement may be amended from time to time by parties hereto,
without the consent of any of the Certificateholders to cure any ambiguity, to
correct or supplement any provisions herein (including to give effect to the
expectations of investors), to change the manner in which the Master Servicer
Collection Account maintained by the Master Servicer or the Protected Account
maintained by the Company is maintained or to make such other provisions with
respect to matters or questions arising under this Agreement as shall not be
inconsistent with any other provisions herein if such action shall not, as
evidenced by an Opinion of Counsel addressed to the Trustee, adversely affect in
any material respect the interests of any Certificateholder; provided that any
such amendment shall be deemed not to adversely affect in any material respect
the interests of the Certificateholders and no such Opinion of Counsel shall be
required if the Person requesting such amendment obtains a letter from each
Rating Agency stating that such amendment would not result in the downgrading or
withdrawal of the respective ratings then assigned to the Certificates.
Notwithstanding the foregoing, without the consent of the
Certificateholders, the parties hereto may at any time and from time to time
amend this Agreement to modify, eliminate or add to any of its provisions to
such extent as shall be necessary or appropriate to maintain the qualification
of each of REMIC I, REMIC II and REMIC III as a REMIC under the Code or to avoid
or minimize the risk of the imposition of any tax on any of REMIC I, REMIC II or
REMIC III pursuant to the Code that would be a claim against any of REMIC I,
REMIC II or REMIC III at any time prior to the final redemption of the
Certificates, provided that the Trustee has been provided an Opinion of Counsel
addressed to the Trustee, which opinion shall be an expense of the party
requesting such opinion but in any case shall not be an expense of the Trustee,
the Securities Administrator or the Trust Fund, to the effect that such action
is necessary or appropriate to maintain such qualification or to avoid or
minimize the risk of the imposition of such a tax.
This Agreement may also be amended from time to time by the parties
hereto and the Holders of each Class of Certificates affected thereby evidencing
over 50% of the Voting Rights of such Class or Classes for the purpose of adding
any provisions to or changing in any manner or eliminating any of the provisions
of this Agreement or of modifying in any manner the rights of the Holders of
Certificates; provided that no such amendment shall (i) reduce in any manner the
amount of, or delay the timing of, payments required to be distributed on any
Certificate without the consent of the Holder of such Certificate, (ii) cause
any of REMIC I, REMIC II or REMIC III to cease to qualify as a REMIC or (iii)
reduce the aforesaid percentages of Certificates of each Class the Holders of
which are required to consent to any such amendment without the consent of the
Holders of all Certificates of such Class then outstanding.
Notwithstanding any contrary provision of this Agreement, the
Trustee shall not consent to any amendment to this Agreement unless it shall
have first received an Opinion of Counsel addressed to the Trustee , which
opinion shall be an expense of the party requesting such amendment
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but in any case shall not be an expense of the Trustee or the Securities
Administrator, to the effect that such amendment will not (other than an
amendment pursuant to clause (ii) of, and in accordance with, the preceding
paragraph) cause the imposition of any tax on REMIC I, REMIC II or REMIC III or
the Certificateholders or cause REMIC I, REMIC II or REMIC III to cease to
qualify as a REMIC at any time that any Certificates are outstanding. Further,
nothing in this Agreement shall require the Trustee to enter into an amendment
without receiving an Opinion of Counsel, satisfactory to the Trustee that (i)
such amendment is permitted and is not prohibited by this Agreement and that all
requirements for amending this Agreement (including any consent of the
applicable Certificateholders) have been complied with.
Promptly after the execution of any amendment to this Agreement
requiring the consent of Certificateholders, the Trustee shall furnish written
notification of the substance of such amendment to each Certificateholder and
each Rating Agency.
It shall not be necessary for the consent of Certificateholders
under this Section to approve the particular form of any proposed amendment, but
it shall be sufficient if such consent shall approve the substance thereof. The
manner of obtaining such consents and of evidencing the authorization of the
execution thereof by Certificateholders shall be subject to such reasonable
regulations as the Trustee may prescribe.
Section 12.02 Recordation of Agreement; Counterparts.
To the extent permitted by applicable law, this Agreement is subject
to recordation in all appropriate public offices for real property records in
all of the counties or other comparable jurisdictions in which any or all of the
Mortgaged Properties are situated, and in any other appropriate public recording
office or elsewhere. The Master Servicer shall effect such recordation at the
Trust's expense upon the request in writing of a Certificateholder, but only if
such direction is accompanied by an Opinion of Counsel (provided at the expense
of the Certificateholder requesting recordation) to the effect that such
recordation would materially and beneficially affect the interests of the
Certificateholders or is required by law.
For the purpose of facilitating the recordation of this Agreement as
herein provided and for other purposes, this Agreement may be executed
simultaneously in any number of counterparts, each of which counterparts shall
be deemed to be an original, and such counterparts shall constitute but one and
the same instrument.
Section 12.03 Governing Law.
THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY
THE SUBSTANTIVE LAWS OF THE STATE OF NEW YORK APPLICABLE TO AGREEMENTS MADE AND
TO BE PERFORMED IN THE STATE OF NEW YORK AND THE OBLIGATIONS, RIGHTS AND
REMEDIES OF THE PARTIES HERETO AND THE CERTIFICATEHOLDERS SHALL BE DETERMINED IN
ACCORDANCE WITH SUCH LAWS WITHOUT REGARD TO THE CONFLICTS OF LAWS PRINCIPLES
THEREOF (OTHER THAN SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAWS).
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Section 12.04 Intention of Parties.
It is the express intent of the parties hereto that the conveyance
of the Mortgage Notes, Mortgages, assignments of Mortgages, title insurance
policies and any modifications, extensions and/or assumption agreements and
private mortgage insurance policies relating to the Mortgage Loans by the Seller
to the Depositor, and by the Depositor to the Trustee be, and be construed as,
an absolute sale thereof to the Depositor or the Trustee, as applicable. It is,
further, not the intention of the parties that such conveyance be deemed a
pledge thereof by the Seller to the Depositor, or by the Depositor to the
Trustee. However, in the event that, notwithstanding the intent of the parties,
such assets are held to be the property of the Seller or the Depositor, as
applicable, or if for any other reason this Agreement is held or deemed to
create a security interest in such assets, then (i) this Agreement shall be
deemed to be a security agreement within the meaning of the Uniform Commercial
Code of the State of New York and (ii) each conveyance provided for in this
Agreement shall be deemed to be an assignment and a grant by the Seller or the
Depositor, as applicable , for the benefit of the Certificateholders, of a
security interest in all of the assets that constitute the Trust Fund, whether
now owned or hereafter acquired.
The Depositor for the benefit of the Certificateholders shall, to
the extent consistent with this Agreement, take such actions as may be necessary
to ensure that, if this Agreement were deemed to create a security interest in
the assets of the Trust Fund, such security interest would be deemed to be a
perfected security interest of first priority under applicable law and will be
maintained as such throughout the term of the Agreement.
Section 12.05 Notices.
(a) The Trustee shall use its best efforts to promptly provide
notice to each Rating Agency with respect to each of the following of which a
Responsible Officer of the Trustee has actual knowledge:
(i) Any material change or amendment to this Agreement;
(ii) The occurrence of any Event of Default that has not been cured;
(iii) The resignation or termination of the Master Servicer, the
Securities Administrator or the Trustee and the appointment of any
successor;
(iv) The repurchase or substitution of Mortgage Loans pursuant to
Sections 2.02, 2.03, 4.21 and 11.01; and
(v) The final payment to Certificateholders.
(b) All directions, demands and notices hereunder shall be in
writing and shall be deemed to have been duly given when delivered at or mailed
by registered mail, return receipt requested, postage prepaid, or by recognized
overnight courier, or by facsimile transmission to a number provided by the
appropriate party if receipt of such transmission is confirmed to (i) in the
case of the Depositor, Bear Xxxxxxx Asset Backed Securities, Inc., 000 Xxxxxxx
Xxxxxx, Xxx Xxxx, New
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York 10179, Attention: Chief Counsel; (ii) in the case of the Seller or the
Company, EMC Mortgage Corporation, 000 Xxxxxx Xxxxx Xxxxx, Xxxxxx, Xxxxx 00000,
Attention: Xxxxxx Xxxxx or such other address as may be hereafter furnished to
the other parties hereto by the Master Servicer in writing; (iv) in the case of
the Trustee, at each Corporate Trust Office or such other address as the Trustee
may hereafter furnish to the other parties hereto; (v) in the case of the Master
Servicer or the Securities Administrator, P. O. Xxx 00, Xxxxxxxx, Xxxxxxxx 00000
(or, for overnight deliveries, 0000 Xxx Xxxxxxxxx Xxxx, Xxxxxxxx, Xxxxxxxx
21045), Attention: BSABS 2003-AC5 or such other address as may be hereafter
furnished to the other parties hereto by the Securities Administrator in writing
and (vi) in the case of the Rating Agencies, (x) Xxxxx'x Investors Service,
Inc., 00 Xxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Home Equity
Monitoring and (y) Standard & Poor's, 00 Xxxxx Xxxxxx, 00xx Xxxxx, Xxx Xxxx, Xxx
Xxxx 00000, Attention: Mortgage Surveillance Group. Any notice delivered to the
Seller, the Master Servicer, the Securities Administrator or the Trustee under
this Agreement shall be effective only upon receipt. Any notice required or
permitted to be mailed to a Certificateholder, unless otherwise provided herein,
shall be given by first-class mail, postage prepaid, at the address of such
Certificateholder as shown in the Certificate Register; any notice so mailed
within the time prescribed in this Agreement shall be conclusively presumed to
have been duly given, whether or not the Certificateholder receives such notice.
Section 12.06 Severability of Provisions.
If any one or more of the covenants, agreements, provisions or terms
of this Agreement shall be for any reason whatsoever held invalid, then such
covenants, agreements, provisions or terms shall be deemed severable from the
remaining covenants, agreements, provisions or terms of this Agreement and shall
in no way affect the validity or enforceability of the other provisions of this
Agreement or of the Certificates or the rights of the Holders thereof.
Section 12.07 Assignment.
Notwithstanding anything to the contrary contained herein, except as
provided pursuant to Section 8.02, this Agreement may not be assigned by the
Master Servicer, the Seller or the Depositor.
Section 12.08 Limitation on Rights of Certificateholders.
The death or incapacity of any Certificateholder shall not operate
to terminate this Agreement or the Trust Fund, nor entitle such
Certificateholder's legal representative or heirs to claim an accounting or to
take any action or commence any proceeding in any court for a petition or
winding up of the Trust Fund, or otherwise affect the rights, obligations and
liabilities of the parties hereto or any of them.
No Certificateholder shall have any right to vote (except as
provided herein) or in any manner otherwise control the operation and management
of the Trust Fund, or the obligations of the parties hereto, nor shall anything
herein set forth or contained in the terms of the Certificates be construed so
as to constitute the Certificateholders from time to time as partners or members
of an association; nor shall any Certificateholder be under any liability to any
third party by reason of any action taken by the parties to this Agreement
pursuant to any provision hereof.
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No Certificateholder shall have any right by virtue or by availing
itself of any provisions of this Agreement to institute any suit, action or
proceeding in equity or at law upon or under or with respect to this Agreement,
unless such Holder previously shall have given to the Trustee or the Securities
Administrator, as appropriate, a written notice of an Event of Default and of
the continuance thereof, as hereinbefore provided, the Holders of Certificates
evidencing not less than 25% of the Voting Rights evidenced by the Certificates
shall also have made written request to the Trustee or the Securities
Administrator, as appropriate to institute such action, suit or proceeding in
its own name as Trustee or the Securities Administrator, as appropriate,
hereunder and shall have offered to the Trustee or the Securities Administrator,
as appropriate, such reasonable indemnity as it may require against the costs,
expenses, and liabilities to be incurred therein or thereby, and the Trustee or
the Securities Administrator, as appropriate, for 60 days after its receipt of
such notice, request and offer of indemnity shall have neglected or refused to
institute any such action, suit or proceeding; it being understood and intended,
and being expressly covenanted by each Certificateholder with every other
Certificateholder and the Trustee, that no one or more Holders of Certificates
shall have any right in any manner whatever by virtue or by availing itself or
themselves of any provisions of this Agreement to affect, disturb or prejudice
the rights of the Holders of any other of the Certificates, or to obtain or seek
to obtain priority over or preference to any other such Holder or to enforce any
right under this Agreement, except in the manner herein provided and for the
common benefit of all Certificateholders. For the protection and enforcement of
the provisions of this Section 12.08, each and every Certificateholder, the
Trustee or the Securities Administrator shall be entitled to such relief as can
be given either at law or in equity.
Section 12.09 Inspection and Audit Rights. The Master Servicer agrees
that, on reasonable prior notice, it will permit any representative of the
Depositor or the Trustee during the Master Servicer's normal business hours, to
examine all the books of account, records, reports and other papers of the
Master Servicer relating to the Mortgage Loans, to make copies and extracts
therefrom, to cause such books to be audited by independent certified public
accountants selected by the Depositor or the Trustee and to discuss its affairs,
finances and accounts relating to such Mortgage Loans with its officers,
employees and independent public accountants (and by this provision the Master
Servicer hereby authorizes such accountants to discuss with such representative
such affairs, finances and accounts), all at such reasonable times and as often
as may be reasonably requested. Any out-of-pocket expense incident to the
exercise by the Depositor or the Trustee of any right under this Section 12.09
shall be borne by the party requesting such inspection, subject to such party's
right to reimbursement hereunder (in the case of the Trustee, pursuant to
Section 10.05 hereof).
Section 12.10 Certificates Nonassessable and Fully Paid.
It is the intention of the Depositor that Certificateholders shall
not be personally liable for obligations of the Trust Fund, that the interests
in the Trust Fund represented by the Certificates shall be nonassessable for any
reason whatsoever, and that the Certificates, upon due authentication thereof by
the Trustee pursuant to this Agreement, are and shall be deemed fully paid.
* * *
-141-
IN WITNESS WHEREOF, the Depositor, the Master Servicer, the Seller,
the Company, the Securities Administrator and the Trustee have caused their
names to be signed hereto by their respective officers thereunto duly authorized
as of the day and year first above written.
BEAR XXXXXXX ASSET BACKED SECURITIES,
INC.,
as Depositor
By:
----------------------------------
Name:
Title:
EMC MORTGAGE CORPORATION,
as Seller and Company
By:
----------------------------------
Name:
Title:
XXXXX FARGO BANK MINNESOTA, NATIONAL
ASSOCIATION,
as Securities Administrator and Master
Servicer
By:
----------------------------------
Name:
Title:
JPMORGAN CHASE BANK,
as Trustee
By:
----------------------------------
Name:
Title:
STATE OF NEW YORK )
) ss.:
COUNTY OF NEW YORK )
On this ___ day of September, 2003, before me, a notary public in
and for said State, appeared ______________, personally known to me on the basis
of satisfactory evidence to be an authorized representative of Bear Xxxxxxx
Asset Backed Securities, Inc., one of the corporations that executed the within
instrument, and also known to me to be the person who executed it on behalf of
such corporation and acknowledged to me that such corporation executed the
within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my
official seal the day and year in this certificate first above written.
----------------------------
Notary Public
[Notarial Seal]
STATE OF )
) ss.:
COUNTY OF )
On this ____ day of September, 2003, before me, a notary public in
and for said State, appeared _______________, personally known to me on the
basis of satisfactory evidence to be an authorized representative of Xxxxx Fargo
Bank Minnesota, National Association that executed the within instrument, and
also known to me to be the person who executed it on behalf of such corporation,
and acknowledged to me that such corporation executed the within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my
official seal the day and year in this certificate first above written.
----------------------------
Notary Public
[Notarial Seal]
STATE OF TEXAS )
) ss.:
COUNTY OF DALLAS )
On this ____ day of September, 2003, before me, a notary public in
and for said State, appeared Xxx Xxxxxxxx, personally known to me on the basis
of satisfactory evidence to be an authorized representative of EMC Mortgage
Corporation, one of the corporations that executed the within instrument, and
also known to me to be the person who executed it on behalf of such corporation
and acknowledged to me that such corporation executed the within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my
official seal the day and year in this certificate first above written.
----------------------------
Notary Public
[Notarial Seal]
STATE OF )
) ss.:
COUNTY OF )
On this ____ day of September, 2003, before me, a notary public in
and for said State, appeared _______________, personally known to me on the
basis of satisfactory evidence to be an authorized representative of JPMorgan
Chase Bank that executed the within instrument, and also known to me to be the
person who executed it on behalf of such corporation, and acknowledged to me
that such corporation executed the within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my
official seal the day and year in this certificate first above written.
----------------------------
Notary Public
[Notarial Seal]
EXHIBIT A-1
FORM OF CLASS A-1 CERTIFICATES
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A
"REGULAR INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT," AS THOSE
TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL
REVENUE CODE OF 1986 (THE "CODE").
THE CERTIFICATE PRINCIPAL BALANCE OF THIS CERTIFICATE WILL BE
DECREASED BY THE PRINCIPAL PAYMENTS HEREON. ACCORDINGLY, FOLLOWING THE INITIAL
ISSUANCE OF THE CERTIFICATES, THE CERTIFICATE PRINCIPAL BALANCE OF THIS
CERTIFICATE WILL BE DIFFERENT FROM THE DENOMINATION SHOWN BELOW. ANYONE
ACQUIRING THIS CERTIFICATE MAY ASCERTAIN ITS CERTIFICATE PRINCIPAL BALANCE BY
INQUIRY OF THE TRUSTEE NAMED HEREIN.
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE
OF THE DEPOSITORY TRUST COMPANY TO THE DEPOSITOR OR ITS AGENT FOR REGISTRATION
OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN
THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY AND ANY PAYMENT IS MADE TO CEDE &
CO., ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO
ANY PERSON IS WRONGFUL SINCE THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN
INTEREST HEREIN.
Certificate No.1 Pass-Through Rate: 5.250%
Class A-1 Senior
Date of Pooling and Servicing Agreement Aggregate Initial Certificate Principal Balance
and Cut-off Date: of this Certificate as of the Cut-off Date:
September 1, 2003 $140,000,000.00
First Distribution Date: Initial Certificate Principal Balance of this
October 27, 2003 Certificate as of the Cut-off Date:
$140,000,000.00
Master Servicer:
Xxxxx Fargo Bank Minnesota, National
Association CUSIP: 07384Y MA 1
Assumed Final Distribution Date:
October 25, 2033
ASSET-BACKED CERTIFICATE
SERIES 2003-AC5
evidencing a fractional undivided interest in the distributions allocable
to the Class A-1 Certificates with respect to a Trust Fund consisting
primarily of a pool of conventional one- to four-family fixed interest
rate mortgage loans sold by BEAR XXXXXXX ASSET BACKED SECURITIES, INC.
This Certificate is payable solely from the assets of the Trust
Fund, and does not represent an obligation of or interest in Bear Xxxxxxx Asset
Backed Securities, Inc., the Master Servicer, the Trustee or the Securities
Administrator referred to below or any of their affiliates or any other person.
Neither this Certificate nor the underlying Mortgage Loans are guaranteed or
insured by any governmental entity or by Bear Xxxxxxx Asset Backed Securities,
Inc., the Master Servicer, the Trustee or the Securities Administrator or any of
their affiliates or any other person. None of Bear Xxxxxxx Asset Backed
Securities, Inc., the Master Servicer or any of their affiliates will have any
obligation with respect to any certificate or other obligation secured by or
payable from payments on the Certificates.
This certifies that Cede & Co. is the registered owner of the
Percentage Interest evidenced hereby in the beneficial ownership interest of
Certificates of the same Class as this Certificate in a trust (the "Trust Fund")
generally consisting of conventional first lien, fixed rate mortgage loans
secured by one- to four- family residences (collectively, the "Mortgage Loans")
sold by Bear Xxxxxxx Asset Backed Securities, Inc. ("BSABS"). The Mortgage Loans
were sold by EMC Mortgage Corporation ("EMC") to BSABS. Xxxxx Fargo Bank
Minnesota, National Association will
A-1-2
act as master servicer of the Mortgage Loans (the "Master Servicer," which term
includes any successors thereto under the Agreement referred to below). The
Trust Fund was created pursuant to the Pooling and Servicing Agreement dated as
of the Cut-off Date specified above (the "Agreement"), among BSABS, as depositor
(the "Depositor"), EMC Mortgage Corporation as seller and company, Xxxxx Fargo
Bank Minnesota, National Association, as Master Servicer and securities
administrator (the "Securities Administrator") and JPMorgan Chase Bank, as
trustee (the "Trustee"), a summary of certain of the pertinent provisions of
which is set forth hereafter. To the extent not defined herein, capitalized
terms used herein shall have the meaning ascribed to them in the Agreement. This
Certificate is issued under and is subject to the terms, provisions and
conditions of the Agreement, to which Agreement the Holder of this Certificate
by virtue of its acceptance hereof assents and by which such Holder is bound.
Interest on this Certificate will accrue during the month prior to
the month in which a Distribution Date (as hereinafter defined) occurs on the
Certificate Principal Balance hereof at a per annum rate equal to the
Pass-Through Rate set forth above. The Trustee will distribute on the 25th day
of each month, or, if such 25th day is not a Business Day, the immediately
following Business Day (each, a "Distribution Date"), commencing on the First
Distribution Date specified above, to the Person in whose name this Certificate
is registered at the close of business on the last day (or if such last day is
not a Business Day, the Business Day immediately preceding such last day) of the
calendar month immediately preceding the month in which the Distribution Date
occurs, an amount equal to the product of the Percentage Interest evidenced by
this Certificate and the amount (of interest and principal, if any) required to
be distributed to the Holders of Certificates of the same Class as this
Certificate. The Assumed Final Distribution Date is the Distribution Date in the
month following the latest scheduled maturity date of any Mortgage Loan and is
not likely to be the date on which the Certificate Principal Balance of this
Class of Certificates will be reduced to zero.
Distributions on this Certificate will be made by the Trustee by
check mailed to the address of the Person entitled thereto as such name and
address shall appear on the Certificate Register or, if such Person so requests
by notifying the Trustee in writing as specified in the Agreement.
Notwithstanding the above, the final distribution on this Certificate will be
made after due notice by the Trustee of the pendency of such distribution and
only upon presentation and surrender of this Certificate at the office or agency
appointed by the Trustee for that purpose and designated in such notice. The
initial Certificate Principal Balance of this Certificate is set forth above.
The Certificate Principal Balance hereof will be reduced to the extent of
distributions allocable to principal hereon.
This Certificate is one of a duly authorized issue of Certificates
designated as set forth on the face hereof (the "Certificates"). The
Certificates, in the aggregate, evidence the entire beneficial ownership
interest in the Trust Fund formed pursuant to the Agreement.
The Certificateholder, by its acceptance of this Certificate, agrees
that it will look solely to the Trust Fund for payment hereunder and that the
Trustee is not liable to the Certificateholders for any amount payable under
this Certificate or the Agreement or, except as expressly provided in the
Agreement, subject to any liability under the Agreement.
A-1-3
This Certificate does not purport to summarize the Agreement and
reference is made to the Agreement for the interests, rights and limitations of
rights, benefits, obligations and duties evidenced hereby, and the rights,
duties and immunities of the Trustee.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Depositor and the rights of the Certificateholders under the Agreement from time
to time by the parties thereto with the consent of the Holders of each Class of
Certificates affected thereby evidencing over 50% of the Voting Rights of such
Class or Classes. Any such consent by the Holder of this Certificate shall be
conclusive and binding on such Holder and upon all future Holders of this
Certificate and of any Certificate issued upon the transfer hereof or in lieu
hereof whether or not notation of such consent is made upon this Certificate.
The Agreement also permits the amendment thereof, in certain limited
circumstances, without the consent of the Holders of any of the Certificates.
As provided in the Agreement and subject to certain limitations
therein set forth, the transfer of this Certificate is registrable with the
Trustee upon surrender of this Certificate for registration of transfer at the
offices or agencies maintained by the Trustee for such purposes, duly endorsed
by, or accompanied by a written instrument of transfer in form satisfactory to
the Trustee duly executed by the Holder hereof or such Holder's attorney duly
authorized in writing, and thereupon one or more new Certificates in authorized
denominations representing a like aggregate Percentage Interest will be issued
to the designated transferee.
The Certificates are issuable only as registered Certificates
without coupons in the Classes and denominations specified in the Agreement. As
provided in the Agreement and subject to certain limitations therein set forth,
this Certificate is exchangeable for one or more new Certificates evidencing the
same Class and in the same aggregate Percentage Interest, as requested by the
Holder surrendering the same.
No service charge will be made to the Certificateholders for any
such registration of transfer, but the Trustee may require payment of a sum
sufficient to cover any tax or other governmental charge payable in connection
therewith. The Depositor, the Master Servicer, the Trustee and any agent of any
of them may treat the Person in whose name this Certificate is registered as the
owner hereof for all purposes, and none of Depositor, the Master Servicer, the
Trustee or any such agent shall be affected by notice to the contrary.
The obligations created by the Agreement and the Trust Fund created
thereby (other than the obligations to make payments to Certificateholders with
respect to the termination of the Agreement) shall terminate upon the earlier of
(i) the later of (A) the maturity or other liquidation (or Advance with respect
thereto) of the last Mortgage Loan remaining in the Trust Fund and disposition
of all property acquired upon foreclosure or deed in lieu of foreclosure of any
Mortgage Loan and (B) 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
earlier of (i) the Distribution Date on which the aggregate Stated Principal
Balance of the Mortgage Loans is less than 20% of the aggregate Stated Principal
Balance of the Mortgage Loans at the Cut-off Date and (ii) the Distribution Date
in September 2013. The exercise of such right will
A-1-4
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-1-5
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be
duly executed.
Dated: September 30, 2003 JPMORGAN CHASE BANK,
not in its individual capacity but solely as
Trustee
By:
----------------------------------------
Authorized Signatory
CERTIFICATE OF AUTHENTICATION
This is one of the Class A-1 Certificates referred to in the
within-mentioned Agreement.
JPMORGAN CHASE BANK
Authorized signatory of JPMorgan Chase Bank,
not in its individual capacity but solely
as Trustee
By:
----------------------------------------
Authorized Signatory
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto __________________________________ (Please print or typewrite
name and address including postal zip code of assignee) a Percentage Interest
evidenced by the within Asset-Backed Certificate and hereby authorizes the
transfer of registration of such interest to assignee on the Certificate
Register of the Trust Fund.
I (We) further direct the Certificate Registrar to issue a new
Certificate of a like denomination and Class, to the above named assignee and
deliver such Certificate to the following address:
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
Dated:
--------------------------------------------------------------
Signature by or on behalf of assignor
-----------------------------------
Signature Guaranteed
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of
distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to _________________________________ for the account
of _________________________ account number _____________, or, if mailed by
check, to ______________________________. Applicable statements should be mailed
to _____________________________________________.
This information is provided by __________________, the assignee
named above, or ________________________, as its agent.
FORM OF CLASS A-2 CERTIFICATES
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A
"REGULAR INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT," AS THOSE
TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL
REVENUE CODE OF 1986 (THE "CODE").
THE CERTIFICATE PRINCIPAL BALANCE OF THIS CERTIFICATE WILL BE
DECREASED BY THE PRINCIPAL PAYMENTS HEREON. ACCORDINGLY, FOLLOWING THE INITIAL
ISSUANCE OF THE CERTIFICATES, THE CERTIFICATE PRINCIPAL BALANCE OF THIS
CERTIFICATE WILL BE DIFFERENT FROM THE DENOMINATION SHOWN BELOW. ANYONE
ACQUIRING THIS CERTIFICATE MAY ASCERTAIN ITS CERTIFICATE PRINCIPAL BALANCE BY
INQUIRY OF THE TRUSTEE NAMED HEREIN.
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE
OF THE DEPOSITORY TRUST COMPANY TO THE DEPOSITOR OR ITS AGENT FOR REGISTRATION
OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN
THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY AND ANY PAYMENT IS MADE TO CEDE &
CO., ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO
ANY PERSON IS WRONGFUL SINCE THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN
INTEREST HEREIN.
A-1-8
Certificate No.1 Pass-Through Rate: 5.000%
Class A-2 Senior
Date of Pooling and Servicing Agreement and Aggregate Initial Certificate Notional Amount
Cut-off Date: of this Certificate as of the Cut-off Date:
September 1, 2003 $168,265,417.00
First Distribution Date: Initial Certificate Notional Amount of this
October 27, 2003 Certificate as of the Cut-off Date:
$168,265,417.00
Master Servicer:
Xxxxx Fargo Bank Minnesota, National
Association CUSIP: 07384Y MB 9
Assumed Final Distribution Date:
October 25, 2033
ASSET-BACKED CERTIFICATE
SERIES 2003-AC5
evidencing a fractional undivided interest in the distributions allocable
to the Class A-2 Certificates with respect to a Trust Fund consisting
primarily of a pool of conventional one- to four-family fixed interest
rate mortgage loans sold by BEAR XXXXXXX ASSET BACKED SECURITIES, INC.
This Certificate is payable solely from the assets of the Trust
Fund, and does not represent an obligation of or interest in Bear Xxxxxxx Asset
Backed Securities, Inc., the Master Servicer, the Trustee or the Securities
Administrator referred to below or any of their affiliates or any other person.
Neither this Certificate nor the underlying Mortgage Loans are guaranteed or
insured by any governmental entity or by Bear Xxxxxxx Asset Backed Securities,
Inc., the Master Servicer, the Trustee or the Securities Administrator or any of
their affiliates or any other person. None of Bear Xxxxxxx Asset Backed
Securities, Inc., the Master Servicer or any of their affiliates will have any
obligation with respect to any certificate or other obligation secured by or
payable from payments on the Certificates.
This certifies that Cede & Co. is the registered owner of the
Percentage Interest evidenced hereby in the beneficial ownership interest of
Certificates of the same Class as this Certificate in a trust (the "Trust Fund")
generally consisting of conventional first lien, fixed rate mortgage loans
secured by one- to four- family residences (collectively, the "Mortgage Loans")
sold by Bear Xxxxxxx Asset Backed Securities, Inc. ("BSABS"). The Mortgage Loans
were sold by EMC Mortgage Corporation ("EMC") to BSABS. Xxxxx Fargo Bank
Minnesota, National Association will
A-1-9
act as master servicer of the Mortgage Loans (the "Master Servicer," which term
includes any successors thereto under the Agreement referred to below). The
Trust Fund was created pursuant to the Pooling and Servicing Agreement dated as
of the Cut-off Date specified above (the "Agreement"), among BSABS, as depositor
(the "Depositor"), EMC Mortgage Corporation as seller and company, Xxxxx Fargo
Bank Minnesota, National Association, as Master Servicer and securities
administrator (the "Securities Administrator") and JPMorgan Chase Bank, as
trustee (the "Trustee"), a summary of certain of the pertinent provisions of
which is set forth hereafter. To the extent not defined herein, capitalized
terms used herein shall have the meaning ascribed to them in the Agreement. This
Certificate is issued under and is subject to the terms, provisions and
conditions of the Agreement, to which Agreement the Holder of this Certificate
by virtue of its acceptance hereof assents and by which such Holder is bound.
Interest on this Certificate will accrue during the month prior to
the month in which a Distribution Date (as hereinafter defined) occurs on the
Certificate Notional 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 day (or if such last day is not a Business
Day, the Business Day immediately preceding such last day) of the calendar month
immediately preceding the month in which the Distribution Date occurs, an amount
equal to the product of the Percentage Interest evidenced by this Certificate
and the amount (of interest, if any) required to be distributed to the Holders
of Certificates of the same Class as this Certificate. The Assumed Final
Distribution Date is the Distribution Date in the month following the latest
scheduled maturity date of any Mortgage Loan and is not likely to be the date on
which the Certificate Principal Balance of this Class of Certificates will be
reduced to zero.
Distributions on this Certificate will be made by the Trustee by
check mailed to the address of the Person entitled thereto as such name and
address shall appear on the Certificate Register or, if such Person so requests
by notifying the Trustee in writing as specified in the Agreement.
Notwithstanding the above, the final distribution on this Certificate will be
made after due notice by the Trustee of the pendency of such distribution and
only upon presentation and surrender of this Certificate at the office or agency
appointed by the Trustee for that purpose and designated in such notice. The
Initial Certificate Principal Balance of this Certificate is set forth above.
The Certificate Principal Balance hereof will be reduced to the extent of
distributions allocable to principal hereon.
This Certificate is one of a duly authorized issue of Certificates
designated as set forth on the face hereof (the "Certificates"). The
Certificates, in the aggregate, evidence the entire beneficial ownership
interest in the Trust Fund formed pursuant to the Agreement.
The Certificateholder, by its acceptance of this Certificate, agrees
that it will look solely to the Trust Fund for payment hereunder and that the
Trustee is not liable to the Certificateholders for any amount payable under
this Certificate or the Agreement or, except as expressly provided in the
Agreement, subject to any liability under the Agreement.
A-1-10
This Certificate does not purport to summarize the Agreement and
reference is made to the Agreement for the interests, rights and limitations of
rights, benefits, obligations and duties evidenced hereby, and the rights,
duties and immunities of the Trustee.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Depositor and the rights of the Certificateholders under the Agreement from time
to time by the parties thereto with the consent of the Holders of the Class or
Classes of Certificates affected thereby evidencing over 50% of the Voting
Rights of such class or classes. Any such consent by the Holder of this
Certificate shall be conclusive and binding on such Holder and upon all future
Holders of this Certificate and of any Certificate issued upon the transfer
hereof or in lieu hereof whether or not notation of such consent is made upon
this Certificate. The Agreement also permits the amendment thereof, in certain
limited circumstances, without the consent of the Holders of any of the
Certificates.
As provided in the Agreement and subject to certain limitations
therein set forth, the transfer of this Certificate is registrable with the
Trustee upon surrender of this Certificate for registration of transfer at the
offices or agencies maintained by the Trustee for such purposes, duly endorsed
by, or accompanied by a written instrument of transfer in form satisfactory to
the Trustee duly executed by the Holder hereof or such Holder's attorney duly
authorized in writing, and thereupon one or more new Certificates in authorized
denominations representing a like aggregate Percentage Interest will be issued
to the designated transferee.
The Certificates are issuable only as registered Certificates
without coupons in the Classes and denominations specified in the Agreement. As
provided in the Agreement and subject to certain limitations therein set forth,
this Certificate is exchangeable for one or more new Certificates evidencing the
same Class and in the same aggregate Percentage Interest, as requested by the
Holder surrendering the same.
No service charge will be made to the Certificateholders for any
such registration of transfer, but the Trustee may require payment of a sum
sufficient to cover any tax or other governmental charge payable in connection
therewith. The Depositor, the Master Servicer, the Trustee and any agent of any
of them may treat the Person in whose name this Certificate is registered as the
owner hereof for all purposes, and none of Depositor, the Master Servicer, the
Trustee or any such agent shall be affected by notice to the contrary.
The obligations created by the Agreement and the Trust Fund created
thereby (other than the obligations to make payments to Certificateholders with
respect to the termination of the Agreement) shall terminate upon the earlier of
(i) the later of (A) the maturity or other liquidation (or Advance with respect
thereto) of the last Mortgage Loan remaining in the Trust Fund and disposition
of all property acquired upon foreclosure or deed in lieu of foreclosure of any
Mortgage Loan and (B) 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 (i) the
Distribution Date on which the aggregate Stated Principal Balance of the
Mortgage Loans is less than 20% of the aggregate Stated Principal Balance
specified in the Agreement of the Mortgage Loans at the Cut-off Date and (ii)
the Distribution Date in September 2013. The exercise of such
A-1-11
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-1-12
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be
duly executed.
Dated: September 30, 2003 JPMORGAN CHASE BANK,
not in its individual capacity but solely as
Trustee
By:
----------------------------------------
Authorized Signatory
CERTIFICATE OF AUTHENTICATION
This is one of the Class A-2 Certificates referred to in the
within-mentioned Agreement.
JPMORGAN CHASE BANK
Authorized signatory of JPMorgan Chase Bank,
not in its individual capacity but solely
as Trustee
By:
----------------------------------------
Authorized Signatory
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto __________________________________ (Please print or typewrite
name and address including postal zip code of assignee) a Percentage Interest
evidenced by the within Asset-Backed Certificate and hereby authorizes the
transfer of registration of such interest to assignee on the Certificate
Register of the Trust Fund.
I (We) further direct the Certificate Registrar to issue a new
Certificate of a like denomination and Class, to the above named assignee and
deliver such Certificate to the following address:
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
Dated:
-----------------------------------------------------
Signature by or on behalf of assignor
----------------------------------
Signature Guaranteed
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of
distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to _________________________________ for the account
of _________________________ account number _____________, or, if mailed by
check, to ______________________________. Applicable statements should be mailed
to _____________________________________________.
This information is provided by __________________, the assignee
named above, or ________________________, as its agent.
FORM OF CLASS A-3 CERTIFICATES
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A
"REGULAR INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT," AS THOSE
TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL
REVENUE CODE OF 1986 (THE "CODE").
THE CERTIFICATE PRINCIPAL BALANCE OF THIS CERTIFICATE WILL BE
DECREASED BY THE PRINCIPAL PAYMENTS HEREON. ACCORDINGLY, FOLLOWING THE INITIAL
ISSUANCE OF THE CERTIFICATES, THE CERTIFICATE PRINCIPAL BALANCE OF THIS
CERTIFICATE WILL BE DIFFERENT FROM THE DENOMINATION SHOWN BELOW. ANYONE
ACQUIRING THIS CERTIFICATE MAY ASCERTAIN ITS CERTIFICATE PRINCIPAL BALANCE BY
INQUIRY OF THE TRUSTEE NAMED HEREIN.
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE
OF THE DEPOSITORY TRUST COMPANY TO THE DEPOSITOR OR ITS AGENT FOR REGISTRATION
OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN
THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY AND ANY PAYMENT IS MADE TO CEDE &
CO., ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO
ANY PERSON IS WRONGFUL SINCE THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN
INTEREST HEREIN.
A-1-15
Certificate No.1 Variable Pass-Through Rate
Class A-3 Senior
Date of Pooling and Servicing Agreement and Aggregate Initial Certificate Principal Balance
Cut-off Date: of this Certificate as of the Cut-off Date:
September 1, 2003 $42,569,583.00
First Distribution Date: Initial Certificate Principal Balance of this
October 27, 2003 Certificate as of the Cut-off Date:
$42,569,583.00
Master Servicer:
Xxxxx Fargo Bank Minnesota, National
Association CUSIP: 07384Y MC 7
Assumed Final Distribution Date:
October 25, 2033
ASSET-BACKED CERTIFICATE
SERIES 2003-AC5
evidencing a fractional undivided interest in the distributions allocable
to the Class A-3 Certificates with respect to a Trust Fund consisting
primarily of a pool of conventional one- to four-family fixed interest
rate mortgage loans sold by BEAR XXXXXXX ASSET BACKED SECURITIES, INC.
This Certificate is payable solely from the assets of the Trust
Fund, and does not represent an obligation of or interest in Bear Xxxxxxx Asset
Backed Securities, Inc., the Master Servicer, the Trustee or the Securities
Administrator referred to below or any of their affiliates or any other person.
Neither this Certificate nor the underlying Mortgage Loans are guaranteed or
insured by any governmental entity or by Bear Xxxxxxx Asset Backed Securities,
Inc., the Master Servicer, the Trustee or the Securities Administrator or any of
their affiliates or any other person. None of Bear Xxxxxxx Asset Backed
Securities, Inc., the Master Servicer or any of their affiliates will have any
obligation with respect to any certificate or other obligation secured by or
payable from payments on the Certificates.
This certifies that Cede & Co. is the registered owner of the
Percentage Interest evidenced hereby in the beneficial ownership interest of
Certificates of the same Class as this Certificate in a trust (the "Trust Fund")
generally consisting of conventional first lien, fixed rate mortgage loans
secured by one- to four- family residences (collectively, the "Mortgage Loans")
sold by Bear Xxxxxxx Asset Backed Securities, Inc. ("BSABS"). The Mortgage Loans
were sold by EMC Mortgage Corporation ("EMC") to BSABS. Xxxxx Fargo Bank
Minnesota, National Association will
A-1-16
act as master servicer of the Mortgage Loans (the "Master Servicer," which term
includes any successors thereto under the Agreement referred to below). The
Trust Fund was created pursuant to the Pooling and Servicing Agreement dated as
of the Cut-off Date specified above (the "Agreement"), among BSABS, as depositor
(the "Depositor"), EMC Mortgage Corporation as seller and company, Xxxxx Fargo
Bank Minnesota, National Association, as Master Servicer and securities
administrator (the "Securities Administrator") and JPMorgan Chase Bank, as
trustee (the "Trustee"), a summary of certain of the pertinent provisions of
which is set forth hereafter. To the extent not defined herein, capitalized
terms used herein shall have the meaning ascribed to them in the Agreement. This
Certificate is issued under and is subject to the terms, provisions and
conditions of the Agreement, to which Agreement the Holder of this Certificate
by virtue of its acceptance hereof assents and by which such Holder is bound.
Interest on this Certificate will accrue during the month prior to
the month in which a Distribution Date (as hereinafter defined) occurs on the
Certificate Principal Balance hereof at a per annum rate equal to the
Pass-Through Rate set forth above. The Trustee will distribute on the 25th day
of each month, or, if such 25th day is not a Business Day, the immediately
following Business Day (each, a "Distribution Date"), commencing on the First
Distribution Date specified above, to the Person in whose name this Certificate
is registered at the close of business on the last day (or if such last day is
not a Business Day, the Business Day immediately preceding such last day) of the
calendar month immediately preceding the month in which the Distribution Date
occurs, an amount equal to the product of the Percentage Interest evidenced by
this Certificate and the amount (of interest and principal, if any) required to
be distributed to the Holders of Certificates of the same Class as this
Certificate. The Assumed Final Distribution Date is the Distribution Date in the
month following the latest scheduled maturity date of any Mortgage Loan and is
not likely to be the date on which the Certificate Principal Balance of this
Class of Certificates will be reduced to zero.
Distributions on this Certificate will be made by the Trustee by
check mailed to the address of the Person entitled thereto as such name and
address shall appear on the Certificate Register or, if such Person so requests
by notifying the Trustee in writing as specified in the Agreement.
Notwithstanding the above, the final distribution on this Certificate will be
made after due notice by the Trustee of the pendency of such distribution and
only upon presentation and surrender of this Certificate at the office or agency
appointed by the Trustee for that purpose and designated in such notice. The
initial Certificate Principal Balance of this Certificate is set forth above.
The Certificate Principal Balance hereof will be reduced to the extent of
distributions allocable to principal hereon.
This Certificate is one of a duly authorized issue of Certificates
designated as set forth on the face hereof (the "Certificates"). The
Certificates, in the aggregate, evidence the entire beneficial ownership
interest in the Trust Fund formed pursuant to the Agreement.
The Certificateholder, by its acceptance of this Certificate, agrees
that it will look solely to the Trust Fund for payment hereunder and that the
Trustee is not liable to the Certificateholders for any amount payable under
this Certificate or the Agreement or, except as expressly provided in the
Agreement, subject to any liability under the Agreement.
A-1-17
This Certificate does not purport to summarize the Agreement and
reference is made to the Agreement for the interests, rights and limitations of
rights, benefits, obligations and duties evidenced hereby, and the rights,
duties and immunities of the Trustee.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Depositor and the rights of the Certificateholders under the Agreement from time
to time by the parties thereto with the consent of the Holders of each Class of
Certificates affected thereby evidencing over 50% of the Voting Rights of such
Class or Classes. Any such consent by the Holder of this Certificate shall be
conclusive and binding on such Holder and upon all future Holders of this
Certificate and of any Certificate issued upon the transfer hereof or in lieu
hereof whether or not notation of such consent is made upon this Certificate.
The Agreement also permits the amendment thereof, in certain limited
circumstances, without the consent of the Holders of any of the Certificates.
As provided in the Agreement and subject to certain limitations
therein set forth, the transfer of this Certificate is registrable with the
Trustee upon surrender of this Certificate for registration of transfer at the
offices or agencies maintained by the Trustee for such purposes, duly endorsed
by, or accompanied by a written instrument of transfer in form satisfactory to
the Trustee duly executed by the Holder hereof or such Holder's attorney duly
authorized in writing, and thereupon one or more new Certificates in authorized
denominations representing a like aggregate Percentage Interest will be issued
to the designated transferee.
The Certificates are issuable only as registered Certificates
without coupons in the Classes and denominations specified in the Agreement. As
provided in the Agreement and subject to certain limitations therein set forth,
this Certificate is exchangeable for one or more new Certificates evidencing the
same Class and in the same aggregate Percentage Interest, as requested by the
Holder surrendering the same.
No service charge will be made to the Certificateholders for any
such registration of transfer, but the Trustee may require payment of a sum
sufficient to cover any tax or other governmental charge payable in connection
therewith. The Depositor, the Master Servicer, the Trustee and any agent of any
of them may treat the Person in whose name this Certificate is registered as the
owner hereof for all purposes, and none of Depositor, the Master Servicer, the
Trustee or any such agent shall be affected by notice to the contrary.
The obligations created by the Agreement and the Trust Fund created
thereby (other than the obligations to make payments to Certificateholders with
respect to the termination of the Agreement) shall terminate upon the earlier of
(i) the later of (A) the maturity or other liquidation (or Advance with respect
thereto) of the last Mortgage Loan remaining in the Trust Fund and disposition
of all property acquired upon foreclosure or deed in lieu of foreclosure of any
Mortgage Loan and (B) 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
earlier of (i) the Distribution Date on which the aggregate Stated Principal
Balance of the Mortgage Loans is less than 20% of the aggregate Stated Principal
Balance of the Mortgage Loans at the Cut-off Date and (ii) the Distribution Date
in September 2013. The exercise of such right will
A-1-18
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-1-19
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be
duly executed.
Dated: September 30, 2003 JPMORGAN CHASE BANK,
not in its individual capacity but solely as
Trustee
By:
----------------------------------------
Authorized Signatory
CERTIFICATE OF AUTHENTICATION
This is one of the Class A-3 Certificates referred to in the
within-mentioned Agreement.
JPMORGAN CHASE BANK
Authorized signatory of JPMorgan Chase Bank,
not in its individual capacity but solely
as Trustee
By:
----------------------------------------
Authorized Signatory
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto __________________________________ (Please print or typewrite
name and address including postal zip code of assignee) a Percentage Interest
evidenced by the within Asset-Backed Certificate and hereby authorizes the
transfer of registration of such interest to assignee on the Certificate
Register of the Trust Fund.
I (We) further direct the Certificate Registrar to issue a new
Certificate of a like denomination and Class, to the above named assignee and
deliver such Certificate to the following address:
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
Dated:
-----------------------------------------------------
Signature by or on behalf of assignor
----------------------------------
Signature Guaranteed
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of
distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to _________________________________ for the account
of _________________________ account number _____________, or, if mailed by
check, to ______________________________. Applicable statements should be mailed
to _____________________________________________.
This information is provided by __________________, the assignee
named above, or ________________________, as its agent.
FORM OF CLASS A-5 CERTIFICATES
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A
"REGULAR INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT," AS THOSE
TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL
REVENUE CODE OF 1986 (THE "CODE").
THE CERTIFICATE PRINCIPAL BALANCE OF THIS CERTIFICATE WILL BE
DECREASED BY THE PRINCIPAL PAYMENTS HEREON. ACCORDINGLY, FOLLOWING THE INITIAL
ISSUANCE OF THE CERTIFICATES, THE CERTIFICATE PRINCIPAL BALANCE OF THIS
CERTIFICATE WILL BE DIFFERENT FROM THE DENOMINATION SHOWN BELOW. ANYONE
ACQUIRING THIS CERTIFICATE MAY ASCERTAIN ITS CERTIFICATE PRINCIPAL BALANCE BY
INQUIRY OF THE TRUSTEE NAMED HEREIN.
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE
OF THE DEPOSITORY TRUST COMPANY TO THE DEPOSITOR OR ITS AGENT FOR REGISTRATION
OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN
THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY AND ANY PAYMENT IS MADE TO CEDE &
CO., ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO
ANY PERSON IS WRONGFUL SINCE THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN
INTEREST HEREIN.
A-1-22
Certificate No.1 Pass-Through Rate: 4.75%
Class A-5 Senior
Date of Pooling and Servicing Agreement and Aggregate Initial Certificate Principal Balance
Cut-off Date: of this Certificate as of the Cut-off Date:
September 1, 2003 $150,000,000.00
First Distribution Date: Initial Certificate Principal Balance of this
October 27, 2003 Certificate as of the Cut-off Date:
$150,000,000.00
Master Servicer:
Xxxxx Fargo Bank Minnesota, National
Association CUSIP: 07384Y NA 0
Assumed Final Distribution Date:
October 25, 2033
ASSET-BACKED CERTIFICATE
SERIES 2003-AC5
evidencing a fractional undivided interest in the distributions allocable
to the Class A-5 Certificates with respect to a Trust Fund consisting
primarily of a pool of conventional one- to four-family fixed interest
rate mortgage loans sold by BEAR XXXXXXX ASSET BACKED SECURITIES, INC.
This Certificate is payable solely from the assets of the Trust
Fund, and does not represent an obligation of or interest in Bear Xxxxxxx Asset
Backed Securities, Inc., the Master Servicer, the Trustee or the Securities
Administrator referred to below or any of their affiliates or any other person.
Neither this Certificate nor the underlying Mortgage Loans are guaranteed or
insured by any governmental entity or by Bear Xxxxxxx Asset Backed Securities,
Inc., the Master Servicer, the Trustee or the Securities Administrator or any of
their affiliates or any other person. None of Bear Xxxxxxx Asset Backed
Securities, Inc., the Master Servicer or any of their affiliates will have any
obligation with respect to any certificate or other obligation secured by or
payable from payments on the Certificates.
This certifies that Cede & Co. is the registered owner of the
Percentage Interest evidenced hereby in the beneficial ownership interest of
Certificates of the same Class as this Certificate in a trust (the "Trust Fund")
generally consisting of conventional first lien, fixed rate mortgage loans
secured by one- to four- family residences (collectively, the "Mortgage Loans")
sold by Bear Xxxxxxx Asset Backed Securities, Inc. ("BSABS"). The Mortgage Loans
were sold by EMC Mortgage Corporation ("EMC") to BSABS. Xxxxx Fargo Bank
Minnesota, National Association will
A-1-23
act as master servicer of the Mortgage Loans (the "Master Servicer," which term
includes any successors thereto under the Agreement referred to below). The
Trust Fund was created pursuant to the Pooling and Servicing Agreement dated as
of the Cut-off Date specified above (the "Agreement"), among BSABS, as depositor
(the "Depositor"), EMC Mortgage Corporation as seller and company, Xxxxx Fargo
Bank Minnesota, National Association, as Master Servicer and securities
administrator (the "Securities Administrator") and JPMorgan Chase Bank, as
trustee (the "Trustee"), a summary of certain of the pertinent provisions of
which is set forth hereafter. To the extent not defined herein, capitalized
terms used herein shall have the meaning ascribed to them in the Agreement. This
Certificate is issued under and is subject to the terms, provisions and
conditions of the Agreement, to which Agreement the Holder of this Certificate
by virtue of its acceptance hereof assents and by which such Holder is bound.
Interest on this Certificate will accrue during the month prior to
the month in which a Distribution Date (as hereinafter defined) occurs on the
Certificate Principal Balance hereof at a per annum rate equal to the
Pass-Through Rate set forth above. The Trustee will distribute on the 25th day
of each month, or, if such 25th day is not a Business Day, the immediately
following Business Day (each, a "Distribution Date"), commencing on the First
Distribution Date specified above, to the Person in whose name this Certificate
is registered at the close of business on the last day (or if such last day is
not a Business Day, the Business Day immediately preceding such last day) of the
calendar month immediately preceding the month in which the Distribution Date
occurs, an amount equal to the product of the Percentage Interest evidenced by
this Certificate and the amount (of interest and principal, if any) required to
be distributed to the Holders of Certificates of the same Class as this
Certificate. The Assumed Final Distribution Date is the Distribution Date in the
month following the latest scheduled maturity date of any Mortgage Loan and is
not likely to be the date on which the Certificate Principal Balance of this
Class of Certificates will be reduced to zero.
Distributions on this Certificate will be made by the Trustee by
check mailed to the address of the Person entitled thereto as such name and
address shall appear on the Certificate Register or, if such Person so requests
by notifying the Trustee in writing as specified in the Agreement.
Notwithstanding the above, the final distribution on this Certificate will be
made after due notice by the Trustee of the pendency of such distribution and
only upon presentation and surrender of this Certificate at the office or agency
appointed by the Trustee for that purpose and designated in such notice. The
initial Certificate Principal Balance of this Certificate is set forth above.
The Certificate Principal Balance hereof will be reduced to the extent of
distributions allocable to principal hereon.
This Certificate is one of a duly authorized issue of Certificates
designated as set forth on the face hereof (the "Certificates"). The
Certificates, in the aggregate, evidence the entire beneficial ownership
interest in the Trust Fund formed pursuant to the Agreement.
The Certificateholder, by its acceptance of this Certificate, agrees
that it will look solely to the Trust Fund for payment hereunder and that the
Trustee is not liable to the Certificateholders for any amount payable under
this Certificate or the Agreement or, except as expressly provided in the
Agreement, subject to any liability under the Agreement.
A-1-24
This Certificate does not purport to summarize the Agreement and
reference is made to the Agreement for the interests, rights and limitations of
rights, benefits, obligations and duties evidenced hereby, and the rights,
duties and immunities of the Trustee.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Depositor and the rights of the Certificateholders under the Agreement from time
to time by the parties thereto with the consent of the Holders of each Class of
Certificates affected thereby evidencing over 50% of the Voting Rights of such
Class or Classes. Any such consent by the Holder of this Certificate shall be
conclusive and binding on such Holder and upon all future Holders of this
Certificate and of any Certificate issued upon the transfer hereof or in lieu
hereof whether or not notation of such consent is made upon this Certificate.
The Agreement also permits the amendment thereof, in certain limited
circumstances, without the consent of the Holders of any of the Certificates.
As provided in the Agreement and subject to certain limitations
therein set forth, the transfer of this Certificate is registrable with the
Trustee upon surrender of this Certificate for registration of transfer at the
offices or agencies maintained by the Trustee for such purposes, duly endorsed
by, or accompanied by a written instrument of transfer in form satisfactory to
the Trustee duly executed by the Holder hereof or such Holder's attorney duly
authorized in writing, and thereupon one or more new Certificates in authorized
denominations representing a like aggregate Percentage Interest will be issued
to the designated transferee.
The Certificates are issuable only as registered Certificates
without coupons in the Classes and denominations specified in the Agreement. As
provided in the Agreement and subject to certain limitations therein set forth,
this Certificate is exchangeable for one or more new Certificates evidencing the
same Class and in the same aggregate Percentage Interest, as requested by the
Holder surrendering the same.
No service charge will be made to the Certificateholders for any
such registration of transfer, but the Trustee may require payment of a sum
sufficient to cover any tax or other governmental charge payable in connection
therewith. The Depositor, the Master Servicer, the Trustee and any agent of any
of them may treat the Person in whose name this Certificate is registered as the
owner hereof for all purposes, and none of Depositor, the Master Servicer, the
Trustee or any such agent shall be affected by notice to the contrary.
The obligations created by the Agreement and the Trust Fund created
thereby (other than the obligations to make payments to Certificateholders with
respect to the termination of the Agreement) shall terminate upon the earlier of
(i) the later of (A) the maturity or other liquidation (or Advance with respect
thereto) of the last Mortgage Loan remaining in the Trust Fund and disposition
of all property acquired upon foreclosure or deed in lieu of foreclosure of any
Mortgage Loan and (B) 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
earlier of (i) the Distribution Date on which the aggregate Stated Principal
Balance of the Mortgage Loans is less than 20% of the aggregate Stated Principal
Balance of the Mortgage Loans at the Cut-off Date and (ii) the Distribution Date
in September 2013. The exercise of such right will
A-1-25
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-1-26
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be
duly executed.
Dated: September 30, 2003 JPMORGAN CHASE BANK,
not in its individual capacity but solely as
Trustee
By:
----------------------------------------
Authorized Signatory
CERTIFICATE OF AUTHENTICATION
This is one of the Class A-5 Certificates referred to in the
within-mentioned Agreement.
JPMORGAN CHASE BANK
Authorized signatory of JPMorgan Chase Bank,
not in its individual capacity but solely
as Trustee
By:
----------------------------------------
Authorized Signatory
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto __________________________________ (Please print or typewrite
name and address including postal zip code of assignee) a Percentage Interest
evidenced by the within Asset-Backed Certificate and hereby authorizes the
transfer of registration of such interest to assignee on the Certificate
Register of the Trust Fund.
I (We) further direct the Certificate Registrar to issue a new
Certificate of a like denomination and Class, to the above named assignee and
deliver such Certificate to the following address:
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
Dated:
-----------------------------------------------------
Signature by or on behalf of assignor
--------------------------------
Signature Guaranteed
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of
distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to _________________________________ for the account
of _________________________ account number _____________, or, if mailed by
check, to ______________________________. Applicable statements should be mailed
to _____________________________________________.
This information is provided by __________________, the assignee
named above, or ________________________, as its agent.
EXHIBIT A-2
FORM OF CLASS A-4 CERTIFICATES
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A
"REGULAR INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT," AS THOSE
TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL
REVENUE CODE OF 1986 (THE "CODE").
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE
OF THE DEPOSITORY TRUST COMPANY TO THE DEPOSITOR OR ITS AGENT FOR REGISTRATION
OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN
THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY AND ANY PAYMENT IS MADE TO CEDE &
CO., ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO
ANY PERSON IS WRONGFUL SINCE THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN
INTEREST HEREIN.
A-2-1
Certificate No.1 Variable Pass-Through Rate
Class A-4 Senior
Date of Pooling and Servicing Agreement and Aggregate Initial Certificate Notional Balance
Cut-off Date: of this Certificate as of the Cut-off Date:
September 1, 2003 $42,569,583.00
First Distribution Date: Initial Certificate Notionall Balance of this
October 27, 2003 Certificate as of the Cut-off Date:
$42,569,583.00
Master Servicer:
Xxxxx Fargo Bank Minnesota, National
Association CUSIP: 07384Y MD 5
Assumed Final Distribution Date:
October 25, 2033
ASSET-BACKED CERTIFICATE
SERIES 2003-AC5
evidencing a fractional undivided interest in the distributions allocable
to the Class A-4 Certificates with respect to a Trust Fund consisting
primarily of a pool of conventional one- to four-family fixed interest
rate mortgage loans sold by BEAR XXXXXXX ASSET BACKED SECURITIES, INC.
This Certificate is payable solely from the assets of the Trust
Fund, and does not represent an obligation of or interest in Bear Xxxxxxx Asset
Backed Securities, Inc., the Master Servicer, the Trustee or the Securities
Administrator referred to below or any of their affiliates or any other person.
Neither this Certificate nor the underlying Mortgage Loans are guaranteed or
insured by any governmental entity or by Bear Xxxxxxx Asset Backed Securities,
Inc., the Master Servicer, the Trustee or the Securities Administrator or any of
their affiliates or any other person. None of Bear Xxxxxxx Asset Backed
Securities, Inc., the Master Servicer or any of their affiliates will have any
obligation with respect to any certificate or other obligation secured by or
payable from payments on the Certificates.
This certifies that Cede & Co. is the registered owner of the
Percentage Interest evidenced hereby in the beneficial ownership interest of
Certificates of the same Class as this Certificate in a trust (the "Trust Fund")
generally consisting of conventional first lien, fixed rate mortgage loans
secured by one- to four- family residences (collectively, the "Mortgage Loans")
sold by Bear Xxxxxxx Asset Backed Securities, Inc. ("BSABS"). The Mortgage Loans
were sold by EMC Mortgage Corporation ("EMC") to BSABS. Xxxxx Fargo Bank
Minnesota, National Association will
A-2-2
act as master servicer of the Mortgage Loans (the "Master Servicer," which term
includes any successors thereto under the Agreement referred to below). The
Trust Fund was created pursuant to the Pooling and Servicing Agreement dated as
of the Cut-off Date specified above (the "Agreement"), among BSABS, as depositor
(the "Depositor"), EMC Mortgage Corporation as seller and company, Xxxxx Fargo
Bank Minnesota, National Association, as Master Servicer and securities
administrator (the "Securities Administrator") and JPMorgan Chase Bank, as
trustee (the "Trustee"), a summary of certain of the pertinent provisions of
which is set forth hereafter. To the extent not defined herein, capitalized
terms used herein shall have the meaning ascribed to them in the Agreement. This
Certificate is issued under and is subject to the terms, provisions and
conditions of the Agreement, to which Agreement the Holder of this Certificate
by virtue of its acceptance hereof assents and by which such Holder is bound.
Interest on this Certificate will accrue during the month prior to
the month in which a Distribution Date (as hereinafter defined) occurs on the
Certificate Principal Balance hereof at a per annum rate equal to the
Pass-Through Rate set forth above. The Trustee will distribute on the 25th day
of each month, or, if such 25th day is not a Business Day, the immediately
following Business Day (each, a "Distribution Date"), commencing on the First
Distribution Date specified above, to the Person in whose name this Certificate
is registered at the close of business on the last day (or if such last day is
not a Business Day, the Business Day immediately preceding such last day) of the
calendar month immediately preceding the month in which the Distribution Date
occurs, an amount equal to the product of the Percentage Interest evidenced by
this Certificate and the amount (of interest, if any) required to be distributed
to the Holders of Certificates of the same Class as this Certificate. The
Assumed Final Distribution Date is the Distribution Date in the month following
the latest scheduled maturity date of any Mortgage Loan and is not likely to be
the date on which the Certificate Notional Balance of this Class of Certificates
will be reduced to zero.
Distributions on this Certificate will be made by the Trustee by
check mailed to the address of the Person entitled thereto as such name and
address shall appear on the Certificate Register or, if such Person so requests
by notifying the Trustee in writing as specified in the Agreement.
Notwithstanding the above, the final distribution on this Certificate will be
made after due notice by the Trustee of the pendency of such distribution and
only upon presentation and surrender of this Certificate at the office or agency
appointed by the Trustee for that purpose and designated in such notice. The
initial Certificate Notional Balance of this Certificate is set forth above.
This Certificate is one of a duly authorized issue of Certificates
designated as set forth on the face hereof (the "Certificates"). The
Certificates, in the aggregate, evidence the entire beneficial ownership
interest in the Trust Fund formed pursuant to the Agreement.
The Certificateholder, by its acceptance of this Certificate, agrees
that it will look solely to the Trust Fund for payment hereunder and that the
Trustee is not liable to the Certificateholders for any amount payable under
this Certificate or the Agreement or, except as expressly provided in the
Agreement, subject to any liability under the Agreement.
A-2-3
This Certificate does not purport to summarize the Agreement and
reference is made to the Agreement for the interests, rights and limitations of
rights, benefits, obligations and duties evidenced hereby, and the rights,
duties and immunities of the Trustee.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Depositor and the rights of the Certificateholders under the Agreement from time
to time by the parties thereto with the consent of the Holders of each Class of
Certificates affected thereby evidencing over 50% of the Voting Rights of such
Class or Classes. Any such consent by the Holder of this Certificate shall be
conclusive and binding on such Holder and upon all future Holders of this
Certificate and of any Certificate issued upon the transfer hereof or in lieu
hereof whether or not notation of such consent is made upon this Certificate.
The Agreement also permits the amendment thereof, in certain limited
circumstances, without the consent of the Holders of any of the Certificates.
As provided in the Agreement and subject to certain limitations
therein set forth, the transfer of this Certificate is registrable with the
Trustee upon surrender of this Certificate for registration of transfer at the
offices or agencies maintained by the Trustee for such purposes, duly endorsed
by, or accompanied by a written instrument of transfer in form satisfactory to
the Trustee duly executed by the Holder hereof or such Holder's attorney duly
authorized in writing, and thereupon one or more new Certificates in authorized
denominations representing a like aggregate Percentage Interest will be issued
to the designated transferee.
The Certificates are issuable only as registered Certificates
without coupons in the Classes and denominations specified in the Agreement. As
provided in the Agreement and subject to certain limitations therein set forth,
this Certificate is exchangeable for one or more new Certificates evidencing the
same Class and in the same aggregate Percentage Interest, as requested by the
Holder surrendering the same.
No service charge will be made to the Certificateholders for any
such registration of transfer, but the Trustee may require payment of a sum
sufficient to cover any tax or other governmental charge payable in connection
therewith. The Depositor, the Master Servicer, the Trustee and any agent of any
of them may treat the Person in whose name this Certificate is registered as the
owner hereof for all purposes, and none of Depositor, the Master Servicer, the
Trustee or any such agent shall be affected by notice to the contrary.
The obligations created by the Agreement and the Trust Fund created
thereby (other than the obligations to make payments to Certificateholders with
respect to the termination of the Agreement) shall terminate upon the earlier of
(i) the later of (A) the maturity or other liquidation (or Advance with respect
thereto) of the last Mortgage Loan remaining in the Trust Fund and disposition
of all property acquired upon foreclosure or deed in lieu of foreclosure of any
Mortgage Loan and (B) 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
earlier of (i) the Distribution Date on which the aggregate Stated Principal
Balance of the Mortgage Loans is less than 20% of the aggregate Stated Principal
Balance of the Mortgage Loans at the Cut-off Date and (ii) the Distribution Date
in September 2013. The exercise of such right will
A-2-4
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-2-5
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be
duly executed.
Dated: September 30, 2003 JPMORGAN CHASE BANK,
not in its individual capacity but solely as
Trustee
By:
----------------------------------------
Authorized Signatory
CERTIFICATE OF AUTHENTICATION
This is one of the Class A-4 Certificates referred to in the
within-mentioned Agreement.
JPMORGAN CHASE BANK
Authorized signatory of JPMorgan Chase Bank,
not in its individual capacity but solely
as Trustee
By:
----------------------------------------
Authorized Signatory
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto __________________________________ (Please print or typewrite
name and address including postal zip code of assignee) a Percentage Interest
evidenced by the within Asset-Backed Certificate and hereby authorizes the
transfer of registration of such interest to assignee on the Certificate
Register of the Trust Fund.
I (We) further direct the Certificate Registrar to issue a new
Certificate of a like denomination and Class, to the above named assignee and
deliver such Certificate to the following address:
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
Dated:
-----------------------------------------------------
Signature by or on behalf of assignor
-----------------------------------
Signature Guaranteed
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of
distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to _________________________________ for the account
of _________________________ account number _____________, or, if mailed by
check, to ______________________________. Applicable statements should be mailed
to _____________________________________________.
This information is provided by __________________, the assignee
named above, or ________________________, as its agent.
EXHIBIT A-3
CLASS M-1 CERTIFICATE
THIS CERTIFICATE IS SUBORDINATED IN RIGHT OF PAYMENT TO THE SENIOR
CERTIFICATES AS DESCRIBED IN THE AGREEMENT (AS DEFINED BELOW).
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A
"REGULAR INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT," AS THOSE
TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL
REVENUE CODE OF 1986 (THE "CODE").
THE CERTIFICATE PRINCIPAL BALANCE OF THIS CERTIFICATE WILL BE
DECREASED BY THE PRINCIPAL PAYMENTS HEREON AND REALIZED LOSSES APPLICABLE
THERETO. ACCORDINGLY, FOLLOWING THE INITIAL ISSUANCE OF THE CERTIFICATES, THE
CERTIFICATE PRINCIPAL BALANCE OF THIS CERTIFICATE WILL BE DIFFERENT FROM THE
DENOMINATION SHOWN BELOW. ANYONE ACQUIRING THIS CERTIFICATE MAY ASCERTAIN ITS
CERTIFICATE PRINCIPAL BALANCE BY INQUIRY OF THE TRUSTEE NAMED HEREIN.
EACH BENEFICIAL OWNER OF A CERTIFICATE OR ANY INTEREST THEREIN SHALL
BE DEEMED TO HAVE REPRESENTED, BY VIRTUE OF ITS ACQUISITION OR HOLDING OF THAT
CERTIFICATE OR INTEREST THEREIN, THAT EITHER (I) IT IS NOT A PLAN OR INVESTING
WITH "PLAN ASSETS", (II) IT HAS ACQUIRED AND IS HOLDING SUCH CERTIFICATE IN
RELIANCE ON PROHIBITED TRANSACTION EXEMPTION 2002-41 AS AMENDED ("EXEMPTION"),
AND THAT IT UNDERSTANDS THAT THERE ARE CERTAIN CONDITIONS TO THE AVAILABILITY OF
THE EXEMPTION, INCLUDING THAT THE CERTIFICATE MUST BE RATED, AT THE TIME OF
PURCHASE, NOT LOWER THAN "BBB-" (OR ITS EQUIVALENT) BY S&P, FITCH RATINGS OR
XXXXX'X, AND THE CERTIFICATE IS SO RATED OR (III) (1) IT IS AN INSURANCE
COMPANY, (2) THE SOURCE OF FUNDS USED TO ACQUIRE OR HOLD THE CERTIFICATE OR
INTEREST THEREIN IS AN "INSURANCE COMPANY GENERAL ACCOUNT," AS SUCH TERM IS
DEFINED IN PROHIBITED TRANSACTION CLASS EXEMPTION ("PTCE") 95-60, AND (3) THE
CONDITIONS IN SECTIONS I AND III OF PTCE 95-60 HAVE BEEN SATISFIED.
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE
OF THE DEPOSITORY TRUST COMPANY TO THE DEPOSITOR OR ITS AGENT FOR REGISTRATION
OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN
THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY AND ANY PAYMENT IS MADE TO CEDE &
CO., ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
A-3-1
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL SINCE THE REGISTERED OWNER HEREOF,
CEDE & CO., HAS AN INTEREST HEREIN.
A-3-2
Certificate No.1 Pass-Through Rate: 5.250%
Class M-1 Subordinate
Date of Pooling and Servicing Agreement and Aggregate Initial Certificate Principal Balance
Cut-off Date: of this Certificate as of the Cut-off Date:
September 1, 2003 $39,772,000.00
First Distribution Date: Initial Certificate Principal Balance of this
October 27, 2003 Certificate as of the Cut-off Date:
$39,772,000.00
Master Servicer:
Xxxxx Fargo Bank Minnesota, National
Association CUSIP:07384Y ME 3
Assumed Final Distribution Date:
October 25, 2033
ASSET-BACKED CERTIFICATE
SERIES 2003-AC5
evidencing a fractional undivided interest in the distributions allocable
to the Class M-1 Certificates with respect to a Trust Fund consisting
primarily of a pool of conventional one- to four-family fixed interest
rate mortgage loans sold by BEAR XXXXXXX ASSET BACKED SECURITIES, INC.
This Certificate is payable solely from the assets of the Trust
Fund, and does not represent an obligation of or interest in Bear Xxxxxxx Asset
Backed Securities, Inc., the Master Servicer, the Trustee or the Securities
Administrator referred to below or any of their affiliates or any other person.
Neither this Certificate nor the underlying Mortgage Loans are guaranteed or
insured by any governmental entity or by Bear Xxxxxxx Asset Backed Securities,
Inc., the Master Servicer, the Trustee or the Securities Administrator or any of
their affiliates or any other person. None of Bear Xxxxxxx Asset Backed
Securities, Inc., the Master Servicer or any of their affiliates will have any
obligation with respect to any certificate or other obligation secured by or
payable from payments on the Certificates.
This certifies that Cede & Co. is the registered owner of the
Percentage Interest evidenced hereby in the beneficial ownership interest of
Certificates of the same Class as this Certificate in a trust (the "Trust Fund")
generally consisting of conventional first lien, fixed rate mortgage loans
secured by one- to four- family residences (collectively, the "Mortgage Loans")
sold by Bear Xxxxxxx Asset Backed Securities, Inc. ("BSABS"). The Mortgage Loans
were sold by EMC Mortgage Corporation ("EMC") to BSABS. Xxxxx Fargo Bank
Minnesota, National Association will
A-3-3
act as master servicer of the Mortgage Loans (the "Master Servicer," which term
includes any successors thereto under the Agreement referred to below). The
Trust Fund was created pursuant to the Pooling and Servicing Agreement dated as
of the Cut-off Date specified above (the "Agreement"), among BSABS, as depositor
(the "Depositor"), EMC Mortgage Corporation as seller and company, Xxxxx Fargo
Bank Minnesota, National Association, as Master Servicer and securities
administrator (the "Securities Administrator") and JPMorgan Chase Bank as
trustee (the "Trustee"), a summary of certain of the pertinent provisions of
which is set forth hereafter. To the extent not defined herein, capitalized
terms used herein shall have the meaning ascribed to them in the Agreement. This
Certificate is issued under and is subject to the terms, provisions and
conditions of the Agreement, to which Agreement the Holder of this Certificate
by virtue of its acceptance hereof assents and by which such Holder is bound.
Interest on this Certificate will accrue during the month prior to
the month in which a Distribution Date (as hereinafter defined) occurs on the
Certificate Principal Balance hereof at a per annum rate equal to the
Pass-Through Rate set forth above. The Trustee will distribute on the 25th day
of each month, or, if such 25th day is not a Business Day, the immediately
following Business Day (each, a "Distribution Date"), commencing on the First
Distribution Date specified above, to the Person in whose name this Certificate
is registered at the close of business on the last day (or if such last day is
not a Business Day, the Business Day immediately preceding such last day) of the
calendar month immediately preceding the month in which the Distribution Date
occurs, an amount equal to the product of the Percentage Interest evidenced by
this Certificate and the amount (of interest and principal, if any) required to
be distributed to the Holders of Certificates of the same Class as this
Certificate. The Assumed Final Distribution Date is the Distribution Date in the
month following the latest scheduled maturity date of any Mortgage Loan and is
not likely to be the date on which the Certificate Principal Balance of this
Class of Certificates will be reduced to zero.
Distributions on this Certificate will be made by the Trustee by
check mailed to the address of the Person entitled thereto as such name and
address shall appear on the Certificate Register or, if such Person so requests
by notifying the Trustee in writing as specified in the Agreement.
Notwithstanding the above, the final distribution on this Certificate will be
made after due notice by the Trustee of the pendency of such distribution and
only upon presentation and surrender of this Certificate at the office or agency
appointed by the Trustee for that purpose and designated in such notice. The
initial Certificate Principal Balance of this Certificate is set forth above.
The Certificate Principal Balance hereof will be reduced to the extent of
distributions allocable to principal hereon and any Realized Losses allocable
hereto.
This Certificate is one of a duly authorized issue of Certificates
designated as set forth on the face hereof (the "Certificates"). The
Certificates, in the aggregate, evidence the entire beneficial ownership
interest in the Trust Fund formed pursuant to the Agreement.
The Certificateholder, by its acceptance of this Certificate, agrees
that it will look solely to the Trust Fund for payment hereunder and that the
Trustee is not liable to the Certificateholders for any amount payable under
this Certificate or the Agreement or, except as expressly provided in the
Agreement, subject to any liability under the Agreement.
A-3-4
This Certificate does not purport to summarize the Agreement and
reference is made to the Agreement for the interests, rights and limitations of
rights, benefits, obligations and duties evidenced hereby, and the rights,
duties and immunities of the Trustee.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Depositor and the rights of the Certificateholders under the Agreement from time
to time by the parties thereto with the consent of the Holders of the Class or
Classes of Certificates affected thereby evidencing over 50% of the Voting
Rights of such Class or Classes. Any such consent by the Holder of this
Certificate shall be conclusive and binding on such Holder and upon all future
Holders of this Certificate and of any Certificate issued upon the transfer
hereof or in lieu hereof whether or not notation of such consent is made upon
this Certificate. The Agreement also permits the amendment thereof, in certain
limited circumstances, without the consent of the Holders of any of the
Certificates.
As provided in the Agreement and subject to certain limitations
therein set forth, the transfer of this Certificate is registrable with the
Trustee upon surrender of this Certificate for registration of transfer at the
offices or agencies maintained by the Trustee for such purposes, duly endorsed
by, or accompanied by a written instrument of transfer in form satisfactory to
the Trustee duly executed by the Holder hereof or such Holder's attorney duly
authorized in writing, and thereupon one or more new Certificates in authorized
denominations representing a like aggregate Percentage Interest will be issued
to the designated transferee.
Each beneficial owner of a Certificate or any interest therein shall
be deemed to have represented, by virtue of its acquisition or holding of that
certificate or interest therein, that either (i) it is not a Plan or investing
with "Plan Assets", (ii) it has acquired and is holding such certificate in
reliance on the Exemption, and that it understands that there are certain
conditions to the availability of the Exemption, including that the certificate
must be rated, at the time of purchase, not lower than "BBB-" (or its
equivalent) by S&P, Fitch Ratings or Xxxxx'x, and the certificate is so rated or
(iii) (1) it is an insurance company, (2) the source of funds used to acquire or
hold the certificate or interest therein is an "insurance company general
account," as such term is defined in Prohibited Transaction Class Exemption
("PTCE") 95-60, and (3) the conditions in Sections I and III of PTCE 95-60 have
been satisfied.
The Certificates are issuable only as registered Certificates
without coupons in the Classes and denominations specified in the Agreement. As
provided in the Agreement and subject to certain limitations therein set forth,
this Certificate is exchangeable for one or more new Certificates evidencing the
same Class and in the same aggregate Percentage Interest, as requested by the
Holder surrendering the same.
No service charge will be made to the Certificateholders for any
such registration of transfer, but the Trustee may require payment of a sum
sufficient to cover any tax or other governmental charge payable in connection
therewith. The Depositor, the Master Servicer, the Trustee and any agent of any
of them may treat the Person in whose name this Certificate is registered as the
owner hereof for all purposes, and none of the Depositor, the Master Servicer,
the Trustee or any such agent shall be affected by notice to the contrary.
A-3-5
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 (A) the maturity or other liquidation (or Advance with respect
thereto) of the last Mortgage Loan remaining in the Trust Fund and disposition
of all property acquired upon foreclosure or deed in lieu of foreclosure of any
Mortgage Loan and (B) 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
earlier of (i) the Distribution Date on which the aggregate Stated Principal
Balance of the Mortgage Loans is less than 20% of the aggregate Stated Principal
Balance of the Mortgage Loans at the Cut-off Date and (ii) the Distribution Date
in September 2013. 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-3-6
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be
duly executed.
Dated: September 30, 2003 JPMORGAN CHASE BANK,
not in its individual capacity but solely as
Trustee
By:
----------------------------------------
Authorized Signatory
CERTIFICATE OF AUTHENTICATION
This is one of the Class M-1 Certificates referred to in the
within-mentioned Agreement.
JPMORGAN CHASE BANK
Authorized signatory of JPMorgan Chase Bank,
not in its individual capacity but solely
as Trustee
By:
----------------------------------------
Authorized Signatory
A-3-7
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto __________________________________ (Please print or typewrite
name and address including postal zip code of assignee) a Percentage Interest
evidenced by the within Asset-Backed Certificate and hereby authorizes the
transfer of registration of such interest to assignee on the Certificate
Register of the Trust Fund.
I (We) further direct the Certificate Registrar to issue a new
Certificate of a like denomination and Class, to the above named assignee and
deliver such Certificate to the following address:
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
Dated:
-----------------------------------------------------
Signature by or on behalf of assignor
--------------------------------
Signature Guaranteed
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of
distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to _________________________________ for the account
of _________________________ account number _____________, or, if mailed by
check, to ______________________________. Applicable statements should be mailed
to _____________________________________________.
This information is provided by __________________, the assignee
named above, or ________________________, as its agent.
CLASS M-2 CERTIFICATE
THIS CERTIFICATE IS SUBORDINATED IN RIGHT OF PAYMENT TO THE SENIOR
CERTIFICATES AND THE CLASS M-1 CERTIFICATES AS DESCRIBED IN THE AGREEMENT (AS
DEFINED BELOW).
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A
"REGULAR INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT," AS THOSE
TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL
REVENUE CODE OF 1986 (THE "CODE").
THE CERTIFICATE PRINCIPAL BALANCE OF THIS CERTIFICATE WILL BE
DECREASED BY THE PRINCIPAL PAYMENTS HEREON AND REALIZED LOSSES ALLOCABLE HERETO.
ACCORDINGLY, FOLLOWING THE INITIAL ISSUANCE OF THE CERTIFICATES, THE CERTIFICATE
PRINCIPAL BALANCE OF THIS CERTIFICATE WILL BE DIFFERENT FROM THE DENOMINATION
SHOWN BELOW. ANYONE ACQUIRING THIS CERTIFICATE MAY ASCERTAIN ITS CERTIFICATE
PRINCIPAL BALANCE BY INQUIRY OF THE TRUSTEE NAMED HEREIN.
EACH BENEFICIAL OWNER OF A CERTIFICATE OR ANY INTEREST THEREIN SHALL
BE DEEMED TO HAVE REPRESENTED, BY VIRTUE OF ITS ACQUISITION OR HOLDING OF THAT
CERTIFICATE OR INTEREST THEREIN, THAT EITHER (I) IT IS NOT A PLAN OR INVESTING
WITH "PLAN ASSETS", (II) IT HAS ACQUIRED AND IS HOLDING SUCH CERTIFICATE IN
RELIANCE ON PROHIBITED TRANSACTION EXEMPTION 2002-41 AS AMENDED ("EXEMPTION"),
AND THAT IT UNDERSTANDS THAT THERE ARE CERTAIN CONDITIONS TO THE AVAILABILITY OF
THE EXEMPTION, INCLUDING THAT THE CERTIFICATE MUST BE RATED, AT THE TIME OF
PURCHASE, NOT LOWER THAN "BBB-" (OR ITS EQUIVALENT) BY S&P, FITCH RATINGS OR
XXXXX'X , AND THE CERTIFICATE IS SO RATED OR (III) (1) IT IS AN INSURANCE
COMPANY, (2) THE SOURCE OF FUNDS USED TO ACQUIRE OR HOLD THE CERTIFICATE OR
INTEREST THEREIN IS AN "INSURANCE COMPANY GENERAL ACCOUNT," AS SUCH TERM IS
DEFINED IN PROHIBITED TRANSACTION CLASS EXEMPTION ("PTCE") 95-60, AND (3) THE
CONDITIONS IN SECTIONS I AND III OF PTCE 95-60 HAVE BEEN SATISFIED.
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE
OF THE DEPOSITORY TRUST COMPANY TO THE DEPOSITOR OR ITS AGENT FOR REGISTRATION
OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN
THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY AND ANY PAYMENT IS MADE TO CEDE &
CO., ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO
ANY PERSON IS WRONGFUL SINCE THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN
INTEREST HEREIN.
A-3-9
Certificate No.1 Variable Pass-Through Rate
Class M-2 Subordinate
Date of Pooling and Servicing Agreement and Aggregate Initial Certificate Principal Balance
Cut-off Date: of this Certificate as of the Cut-off Date:
September 1, 2003 $35,353,000.00
First Distribution Date: Initial Certificate Principal Balance of this
October 27, 2003 Certificate as of the Cut-off Date:
$35,353,000.00
Master Servicer:
Xxxxx Fargo Bank Minnesota, National
Association CUSIP: 07384Y MF 0
Assumed Final Distribution Date:
October 25, 2033
ASSET-BACKED CERTIFICATE
SERIES 2003-AC5
evidencing a fractional undivided interest in the distributions allocable
to the Class M-2 Certificates with respect to a Trust Fund consisting
primarily of a pool of conventional one- to four-family fixed interest
rate mortgage loans sold by BEAR XXXXXXX ASSET BACKED SECURITIES, INC.
This Certificate is payable solely from the assets of the Trust
Fund, and does not represent an obligation of or interest in Bear Xxxxxxx Asset
Backed Securities, Inc., the Master Servicer, the Trustee or the Securities
Administrator referred to below or any of their affiliates or any other person.
Neither this Certificate nor the underlying Mortgage Loans are guaranteed or
insured by any governmental entity or by Bear Xxxxxxx Asset Backed Securities,
Inc., the Master Servicer, the Trustee or the Securities Administrator or any of
their affiliates or any other person. None of Bear Xxxxxxx Asset Backed
Securities, Inc., the Master Servicer or any of their affiliates will have any
obligation with respect to any certificate or other obligation secured by or
payable from payments on the Certificates.
This certifies that Cede & Co. is the registered owner of the
Percentage Interest evidenced hereby in the beneficial ownership interest of
Certificates of the same Class as this Certificate in a trust (the "Trust Fund")
generally consisting of conventional first lien, fixed rate mortgage loans
secured by one- to four- family residences (collectively, the "Mortgage Loans")
sold by Bear Xxxxxxx Asset Backed Securities, Inc. ("BSABS"). The Mortgage Loans
were sold by EMC Mortgage Corporation ("EMC") to BSABS. Xxxxx Fargo Bank
Minnesota, National Association will
A-3-10
act as master servicer of the Mortgage Loans (the "Master Servicer," which term
includes any successors thereto under the Agreement referred to below). The
Trust Fund was created pursuant to the Pooling and Servicing Agreement dated as
of the Cut-off Date specified above (the "Agreement"), among BSABS, as depositor
(the "Depositor"), EMC Mortgage Corporation as seller and company, Xxxxx Fargo
Bank Minnesota, National Association, as Master Servicer and securities
administrator (the "Securities Administrator") and JPMorgan Chase Bank as
trustee (the "Trustee"), a summary of certain of the pertinent provisions of
which is set forth hereafter. To the extent not defined herein, capitalized
terms used herein shall have the meaning ascribed to them in the Agreement. This
Certificate is issued under and is subject to the terms, provisions and
conditions of the Agreement, to which Agreement the Holder of this Certificate
by virtue of its acceptance hereof assents and by which such Holder is bound.
Interest on this Certificate will accrue from and including the 25th
day of the calendar month preceding the month in which a Distribution Date (as
hereinafter defined) occurs (or, with respect to the first accrual period, the
Closing Date) to and including the 24th day of the calendar month in which that
Distribution Date occurs on the Certificate Principal Balance hereof at a per
annum rate equal to the Pass-Through Rate set forth above. The Trustee will
distribute on the 25th day of each month, or, if such 25th day is not a Business
Day, the immediately following Business Day (each, a "Distribution Date"),
commencing on the First Distribution Date specified above, to the Person in
whose name this Certificate is registered at the close of business on the
Business Day immediately preceding such Distribution Date, an amount equal to
the product of the Percentage Interest evidenced by this Certificate and the
amount (of interest and principal, if any) required to be distributed to the
Holders of Certificates of the same Class as this Certificate. The Assumed Final
Distribution Date is the Distribution Date in the month following the latest
scheduled maturity date of any Mortgage Loan and is not likely to be the date on
which the Certificate Principal Balance of this Class of Certificates will be
reduced to zero.
Distributions on this Certificate will be made by the Trustee by
check mailed to the address of the Person entitled thereto as such name and
address shall appear on the Certificate Register or, if such Person so requests
by notifying the Trustee in writing as specified in the Agreement.
Notwithstanding the above, the final distribution on this Certificate will be
made after due notice by the Trustee of the pendency of such distribution and
only upon presentation and surrender of this Certificate at the office or agency
appointed by the Trustee for that purpose and designated in such notice. The
initial Certificate Principal Balance of this Certificate is set forth above.
The Certificate Principal Balance hereof will be reduced to the extent of
distributions allocable to principal hereon and any Realized Losses allocable
hereto.
This Certificate is one of a duly authorized issue of Certificates
designated as set forth on the face hereof (the "Certificates"). The
Certificates, in the aggregate, evidence the entire beneficial ownership
interest in the Trust Fund formed pursuant to the Agreement.
The Certificateholder, by its acceptance of this Certificate, agrees
that it will look solely to the Trust Fund for payment hereunder and that the
Trustee is not liable to the Certificateholders for any amount payable under
this Certificate or the Agreement or, except as expressly provided in the
Agreement, subject to any liability under the Agreement.
A-3-11
This Certificate does not purport to summarize the Agreement and
reference is made to the Agreement for the interests, rights and limitations of
rights, benefits, obligations and duties evidenced hereby, and the rights,
duties and immunities of the Trustee.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Depositor and the rights of the Certificateholders under the Agreement from time
to time by the parties thereto with the consent of the Holders of the Class or
Classes of Certificates affected thereby evidencing over 50% of the Voting
Rights of such Class or Classes. Any such consent by the Holder of this
Certificate shall be conclusive and binding on such Holder and upon all future
Holders of this Certificate and of any Certificate issued upon the transfer
hereof or in lieu hereof whether or not notation of such consent is made upon
this Certificate. The Agreement also permits the amendment thereof, in certain
limited circumstances, without the consent of the Holders of any of the
Certificates.
As provided in the Agreement and subject to certain limitations
therein set forth, the transfer of this Certificate is registrable with the
Trustee upon surrender of this Certificate for registration of transfer at the
offices or agencies maintained by the Trustee for such purposes, duly endorsed
by, or accompanied by a written instrument of transfer in form satisfactory to
the Trustee duly executed by the Holder hereof or such Holder's attorney duly
authorized in writing, and thereupon one or more new Certificates in authorized
denominations representing a like aggregate Percentage Interest will be issued
to the designated transferee.
Each beneficial owner of a Certificate or any interest therein shall
be deemed to have represented, by virtue of its acquisition or holding of that
certificate or interest therein, that either (i) it is not a Plan or investing
with "Plan Assets", (ii) it has acquired and is holding such certificate in
reliance on the Exemption, and that it understands that there are certain
conditions to the availability of the Exemption, including that the certificate
must be rated, at the time of purchase, not lower than "BBB-" (or its
equivalent) by S&P, Fitch Ratings or Xxxxx'x, and the certificate is so rated or
(iii) (1) it is an insurance company, (2) the source of funds used to acquire or
hold the certificate or interest therein is an "insurance company general
account," as such term is defined in Prohibited Transaction Class Exemption
("PTCE") 95-60, and (3) the conditions in Sections I and III of PTCE 95-60 have
been satisfied.
The Certificates are issuable only as registered Certificates
without coupons in the Classes and denominations specified in the Agreement. As
provided in the Agreement and subject to certain limitations therein set forth,
this Certificate is exchangeable for one or more new Certificates evidencing the
same Class and in the same aggregate Percentage Interest, as requested by the
Holder surrendering the same.
No service charge will be made to the Certificateholders for any
such registration of transfer, but the Trustee may require payment of a sum
sufficient to cover any tax or other governmental charge payable in connection
therewith. The Depositor, the Master Servicer, the Trustee and any agent of any
of them may treat the Person in whose name this Certificate is registered as the
owner hereof for all purposes, and none of the Depositor, the Master Servicer,
the Trustee or any such agent shall be affected by notice to the contrary.
A-3-12
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 (A) the maturity or other liquidation (or Advance with respect
thereto) of the last Mortgage Loan remaining in the Trust Fund and disposition
of all property acquired upon foreclosure or deed in lieu of foreclosure of any
Mortgage Loan and (B) 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
earlier of (i) the Distribution Date on which the aggregate Stated Principal
Balance of the Mortgage Loans is less than 20% of the aggregate Stated Principal
Balance specified in the Agreement of the Mortgage Loans at the Cut-off Date and
(ii) the Distribution Date in September 2013. 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-3-13
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be
duly executed.
Dated: September 30, 2003 JPMORGAN CHASE BANK,
not in its individual capacity but solely as
Trustee
By:
-----------------------------------------
Authorized Signatory
CERTIFICATE OF AUTHENTICATION
This is one of the Class M-2 Certificates referred to in the
within-mentioned Agreement.
JPMORGAN CHASE BANK
Authorized signatory of JPMorgan Chase Bank,
not in its individual capacity but solely
as Trustee
By:
----------------------------------------
Authorized Signatory
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto __________________________________ (Please print or typewrite
name and address including postal zip code of assignee) a Percentage Interest
evidenced by the within Asset-Backed Certificate and hereby authorizes the
transfer of registration of such interest to assignee on the Certificate
Register of the Trust Fund.
I (We) further direct the Certificate Registrar to issue a new
Certificate of a like denomination and Class, to the above named assignee and
deliver such Certificate to the following address:
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
Dated:
-----------------------------------------------------
Signature by or on behalf of assignor
--------------------------------
Signature Guaranteed
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of
distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to _________________________________ for the account
of _________________________ account number _____________, or, if mailed by
check, to ______________________________. Applicable statements should be mailed
to _____________________________________________.
This information is provided by __________________, the assignee
named above, or ________________________, as its agent.
EXHIBIT A-4
FORM OF CLASS B CERTIFICATE
THIS CERTIFICATE IS SUBORDINATED IN RIGHT OF PAYMENT TO THE SENIOR
CERTIFICATES, THE CLASS M-1 CERTIFICATES AND CLASS M-2 CERTIFICATES AS DESCRIBED
IN THE AGREEMENT (AS DEFINED BELOW).
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A
"REGULAR INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT," AS THOSE
TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL
REVENUE CODE OF 1986 (THE "CODE").
THE CERTIFICATE PRINCIPAL BALANCE OF THIS CERTIFICATE WILL BE
DECREASED BY THE PRINCIPAL PAYMENTS HEREON AND REALIZED LOSSES ALLOCABLE HERETO.
ACCORDINGLY, FOLLOWING THE INITIAL ISSUANCE OF THE CERTIFICATES, THE CERTIFICATE
PRINCIPAL BALANCE OF THIS CERTIFICATE WILL BE DIFFERENT FROM THE DENOMINATION
SHOWN BELOW. ANYONE ACQUIRING THIS CERTIFICATE MAY ASCERTAIN ITS CERTIFICATE
PRINCIPAL BALANCE BY INQUIRY OF THE TRUSTEE NAMED HEREIN.
EACH BENEFICIAL OWNER OF A CERTIFICATE OR ANY INTEREST THEREIN SHALL
BE DEEMED TO HAVE REPRESENTED, BY VIRTUE OF ITS ACQUISITION OR HOLDING OF THAT
CERTIFICATE OR INTEREST THEREIN, THAT EITHER (I) IT IS NOT A PLAN OR INVESTING
WITH "PLAN ASSETS", (II) IT HAS ACQUIRED AND IS HOLDING SUCH CERTIFICATE IN
RELIANCE ON PROHIBITED TRANSACTION EXEMPTION 2002-41 AS AMENDED ("EXEMPTION"),
AND THAT IT UNDERSTANDS THAT THERE ARE CERTAIN CONDITIONS TO THE AVAILABILITY OF
THE EXEMPTION, INCLUDING THAT THE CERTIFICATE MUST BE RATED, AT THE TIME OF
PURCHASE, NOT LOWER THAN "BBB-" (OR ITS EQUIVALENT) BY S&P, FITCH RATINGS OR
XXXXX'X, AND THE CERTIFICATE IS SO RATED OR (III) (1) IT IS AN INSURANCE
COMPANY, (2) THE SOURCE OF FUNDS USED TO ACQUIRE OR HOLD THE CERTIFICATE OR
INTEREST THEREIN IS AN "INSURANCE COMPANY GENERAL ACCOUNT," AS SUCH TERM IS
DEFINED IN PROHIBITED TRANSACTION CLASS EXEMPTION ("PTCE") 95-60, AND (3) THE
CONDITIONS IN SECTIONS I AND III OF PTCE 95-60 HAVE BEEN SATISFIED.
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE
OF THE DEPOSITORY TRUST COMPANY TO THE DEPOSITOR OR ITS AGENT FOR REGISTRATION
OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN
THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY AND ANY PAYMENT IS MADE TO CEDE &
CO., ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
A-4-1
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL SINCE THE REGISTERED OWNER HEREOF,
CEDE & CO., HAS AN INTEREST HEREIN.
A-4-2
Certificate No.1 Variable Pass-Through Rate
Class B Subordinate
Date of Pooling and Servicing Agreement and Aggregate Initial Certificate Principal Balance
Cut-off Date: of this Certificate as of the Cut-off Date:
September 1, 2003 $13,258,132.00
First Distribution Date: Initial Certificate Principal Balance of this
October 27, 2003 Certificate as of the Cut-off Date:
$13,258,132.00
Master Servicer:
Xxxxx Fargo Bank Minnesota, National
Association CUSIP: 07384Y MG 8
Assumed Final Distribution Date:
October 25, 2033
ASSET-BACKED CERTIFICATE
SERIES 2003-AC5
evidencing a fractional undivided interest in the distributions allocable
to the Class BA Certificates with respect to a Trust Fund consisting
primarily of a pool of conventional one- to four-family fixed interest
rate mortgage loans sold by BEAR XXXXXXX ASSET BACKED SECURITIES, INC.
This Certificate is payable solely from the assets of the Trust
Fund, and does not represent an obligation of or interest in Bear Xxxxxxx Asset
Backed Securities, Inc., the Master Servicer, the Trustee or the Securities
Administrator referred to below or any of their affiliates or any other person.
Neither this Certificate nor the underlying Mortgage Loans are guaranteed or
insured by any governmental entity or by Bear Xxxxxxx Asset Backed Securities,
Inc., the Master Servicer, the Trustee or the Securities Administrator or any of
their affiliates or any other person. None of Bear Xxxxxxx Asset Backed
Securities, Inc., the Master Servicer or any of their affiliates will have any
obligation with respect to any certificate or other obligation secured by or
payable from payments on the Certificates.
This certifies that Cede & Co. is the registered owner of the
Percentage Interest evidenced hereby in the beneficial ownership interest of
Certificates of the same Class as this Certificate in a trust (the "Trust Fund")
generally consisting of conventional first lien, fixed rate mortgage loans
secured by one- to four- family residences (collectively, the "Mortgage Loans")
sold by Bear Xxxxxxx Asset Backed Securities, Inc. ("BSABS"). The Mortgage Loans
were sold by EMC Mortgage Corporation ("EMC") to BSABS. Xxxxx Fargo Bank
Minnesota, National Association will
A-4-3
act as master servicer of the Mortgage Loans (the "Master Servicer," which term
includes any successors thereto under the Agreement referred to below). The
Trust Fund was created pursuant to the Pooling and Servicing Agreement dated as
of the Cut-off Date specified above (the "Agreement"), among BSABS, as depositor
(the "Depositor"), EMC Mortgage Corporation as seller and company, Xxxxx Fargo
Bank Minnesota, National Association, as Master Servicer and securities
administrator (the "Securities Administrator") and JPMorgan Chase Bank as
trustee (the "Trustee"), a summary of certain of the pertinent provisions of
which is set forth hereafter. To the extent not defined herein, capitalized
terms used herein shall have the meaning ascribed to them in the Agreement. This
Certificate is issued under and is subject to the terms, provisions and
conditions of the Agreement, to which Agreement the Holder of this Certificate
by virtue of its acceptance hereof assents and by which such Holder is bound.
Interest on this Certificate will accrue from and including the 25th
day of the calendar month preceding the month in which a Distribution Date (as
hereinafter defined) occurs (or, with respect to the first accrual period, the
Closing Date) to and including the 24th day of the calendar month in which that
Distribution Date occurs on the Certificate Principal Balance hereof at a per
annum rate equal to the Pass-Through Rate set forth above. The Trustee will
distribute on the 25th day of each month, or, if such 25th day is not a Business
Day, the immediately following Business Day (each, a "Distribution Date"),
commencing on the First Distribution Date specified above, to the Person in
whose name this Certificate is registered at the close of business on the
Business Day immediately preceding such Distribution Date, an amount equal to
the product of the Percentage Interest evidenced by this Certificate and the
amount (of interest and principal, if any) required to be distributed to the
Holders of Certificates of the same Class as this Certificate. The Assumed Final
Distribution Date is the Distribution Date in the month following the latest
scheduled maturity date of any Mortgage Loan and is not likely to be the date on
which the Certificate Principal Balance of this Class of Certificates will be
reduced to zero.
Distributions on this Certificate will be made by the Trustee by
check mailed to the address of the Person entitled thereto as such name and
address shall appear on the Certificate Register or, if such Person so requests
by notifying the Trustee in writing as specified in the Agreement.
Notwithstanding the above, the final distribution on this Certificate will be
made after due notice by the Trustee of the pendency of such distribution and
only upon presentation and surrender of this Certificate at the office or agency
appointed by the Trustee for that purpose and designated in such notice. The
initial Certificate Principal Balance of this Certificate is set forth above.
The Certificate Principal Balance hereof will be reduced to the extent of
distributions allocable to principal hereon and any Realized Losses allocable
hereto.
This Certificate is one of a duly authorized issue of Certificates
designated as set forth on the face hereof (the "Certificates"). The
Certificates, in the aggregate, evidence the entire beneficial ownership
interest in the Trust Fund formed pursuant to the Agreement.
The Certificateholder, by its acceptance of this Certificate, agrees
that it will look solely to the Trust Fund for payment hereunder and that the
Trustee is not liable to the Certificateholders for any amount payable under
this Certificate or the Agreement or, except as expressly provided in the
Agreement, subject to any liability under the Agreement.
A-4-4
This Certificate does not purport to summarize the Agreement and
reference is made to the Agreement for the interests, rights and limitations of
rights, benefits, obligations and duties evidenced hereby, and the rights,
duties and immunities of the Trustee.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Depositor and the rights of the Certificateholders under the Agreement from time
to time by the parties thereto with the consent of the Holders of the Class or
Classes of Certificates affected thereby evidencing over 50% of the Voting
Rights of such Class or Classes. Any such consent by the Holder of this
Certificate shall be conclusive and binding on such Holder and upon all future
Holders of this Certificate and of any Certificate issued upon the transfer
hereof or in lieu hereof whether or not notation of such consent is made upon
this Certificate. The Agreement also permits the amendment thereof, in certain
limited circumstances, without the consent of the Holders of any of the
Certificates.
As provided in the Agreement and subject to certain limitations
therein set forth, the transfer of this Certificate is registrable with the
Trustee upon surrender of this Certificate for registration of transfer at the
offices or agencies maintained by the Trustee for such purposes, duly endorsed
by, or accompanied by a written instrument of transfer in form satisfactory to
the Trustee duly executed by the Holder hereof or such Holder's attorney duly
authorized in writing, and thereupon one or more new Certificates in authorized
denominations representing a like aggregate Percentage Interest will be issued
to the designated transferee.
Each beneficial owner of a Certificate or any interest therein shall
be deemed to have represented, by virtue of its acquisition or holding of that
certificate or interest therein, that either (i) it is not a Plan or investing
with "Plan Assets", (ii) it has acquired and is holding such certificate in
reliance on the Exemption, and that it understands that there are certain
conditions to the availability of the Exemption, including that the certificate
must be rated, at the time of purchase, not lower than "BBB-" (or its
equivalent) by S&P, Fitch Ratings, and the certificate is so rated or (iii) (1)
it is an insurance company, (2) the source of funds used to acquire or hold the
certificate or interest therein is an "insurance company general account," as
such term is defined in Prohibited Transaction Class Exemption ("PTCE") 95-60,
and (3) the conditions in Sections I and III of PTCE 95-60 have been satisfied.
The Certificates are issuable only as registered Certificates
without coupons in the Classes and denominations specified in the Agreement. As
provided in the Agreement and subject to certain limitations therein set forth,
this Certificate is exchangeable for one or more new Certificates evidencing the
same Class and in the same aggregate Percentage Interest, as requested by the
Holder surrendering the same.
No service charge will be made to the Certificateholders for any
such registration of transfer, but the Trustee may require payment of a sum
sufficient to cover any tax or other governmental charge payable in connection
therewith. The Depositor, the Master Servicer, the Trustee and any agent of any
of them may treat the Person in whose name this Certificate is registered as the
owner hereof for all purposes, and none of the Depositor, the Master Servicer,
the Trustee or any such agent shall be affected by notice to the contrary.
A-4-5
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 (A) the maturity or other liquidation (or Advance with respect
thereto) of the last Mortgage Loan remaining in the Trust Fund and disposition
of all property acquired upon foreclosure or deed in lieu of foreclosure of any
Mortgage Loan and (B) 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
earlier of (i) the Distribution Date on which the aggregate Stated Principal
Balance of the Mortgage Loans is less than 20% of the aggregate Stated Principal
Balance of the Mortgage Loans at the Cut-off Date and (ii) the Distribution Date
in September 2013. 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-4-6
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be
duly executed.
Dated: September 30, 2003 JPMORGAN CHASE BANK,
not in its individual capacity but solely as
Trustee
By:
----------------------------------------
Authorized Signatory
CERTIFICATE OF AUTHENTICATION
This is one of the Class B Certificates referred to in the
within-mentioned Agreement.
JPMORGAN CHASE BANK
Authorized signatory of JPMorgan Chase Bank,
not in its individual capacity but solely
as Trustee
By:
----------------------------------------
Authorized Signatory
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto __________________________________ (Please print or typewrite
name and address including postal zip code of assignee) a Percentage Interest
evidenced by the within Asset-Backed Certificate and hereby authorizes the
transfer of registration of such interest to assignee on the Certificate
Register of the Trust Fund.
I (We) further direct the Certificate Registrar to issue a new
Certificate of a like denomination and Class, to the above named assignee and
deliver such Certificate to the following address:
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
Dated:
-----------------------------------------------------
Signature by or on behalf of assignor
--------------------------------
Signature Guaranteed
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of
distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to _________________________________ for the account
of _________________________ account number _____________, or, if mailed by
check, to ______________________________. Applicable statements should be mailed
to _____________________________________________.
This information is provided by __________________, the assignee
named above, or ________________________, as its agent.
EXHIBIT A-5
CLASS C CERTIFICATE
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A
"REGULAR INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT," AS THOSE
TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL
REVENUE CODE OF 1986 (THE "CODE").
THE CERTIFICATE PRINCIPAL BALANCE OF THIS CERTIFICATE WILL BE
DECREASED BY THE PRINCIPAL PAYMENTS HEREON AND REALIZED LOSSES ALLOCABLE HERETO.
ACCORDINGLY, FOLLOWING THE INITIAL ISSUANCE OF THE CERTIFICATES, THE CERTIFICATE
PRINCIPAL BALANCE OF THIS CERTIFICATE WILL BE DIFFERENT FROM THE DENOMINATION
SHOWN BELOW. ANYONE ACQUIRING THIS CERTIFICATE MAY ASCERTAIN ITS CERTIFICATE
PRINCIPAL BALANCE BY INQUIRY OF THE TRUSTEE NAMED HEREIN.
THIS CERTIFICATE HAS NOT BEEN AND WILL NOT BE REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR UNDER ANY STATE
SECURITIES LAWS. THE HOLDER HEREOF, BY PURCHASING THIS CERTIFICATE, AGREES THAT
THIS CERTIFICATE MAY BE REOFFERED, RESOLD, PLEDGED OR OTHERWISE TRANSFERRED ONLY
IN COMPLIANCE WITH THE SECURITIES ACT AND OTHER APPLICABLE LAWS AND ONLY (1)
PURSUANT TO RULE 144A UNDER THE SECURITIES ACT ("RULE 144A") TO A PERSON THAT
THE HOLDER REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER WITHIN THE
MEANING OF RULE 144A (A "QIB"), PURCHASING FOR ITS OWN ACCOUNT OR A QIB
PURCHASING FOR THE ACCOUNT OF A QIB, WHOM THE HOLDER HAS INFORMED, IN EACH CASE,
THAT THE REOFFER, RESALE, PLEDGE OR OTHER TRANSFER IS BEING MADE IN RELIANCE ON
RULE 144A, (2) PURSUANT TO AN EXEMPTION FROM REGISTRATION PROVIDED BY RULE 144
UNDER THE SECURITIES ACT (IF AVAILABLE) OR (3) IN CERTIFICATED FORM TO AN
"INSTITUTIONAL ACCREDITED INVESTOR" WITHIN THE MEANING THEREOF IN RULE
501(a)(1), (2), (3) or (7) OF REGULATION D UNDER THE ACT OR ANY ENTITY IN WHICH
ALL OF THE EQUITY OWNERS COME WITHIN SUCH PARAGRAPHS PURCHASING NOT FOR
DISTRIBUTION IN VIOLATION OF THE SECURITIES ACT, SUBJECT TO (A) THE RECEIPT BY
THE TRUSTEE OF A LETTER SUBSTANTIALLY IN THE FORM PROVIDED IN THE AGREEMENT AND
(B) THE RECEIPT BY THE TRUSTEE OF SUCH OTHER EVIDENCE ACCEPTABLE TO THE TRUSTEE
THAT SUCH REOFFER, RESALE, PLEDGE OR TRANSFER IS IN COMPLIANCE WITH THE
SECURITIES ACT AND OTHER APPLICABLE LAWS OR IN EACH CASE IN ACCORDANCE WITH ALL
APPLICABLE SECURITIES LAWS OF THE UNITED STATES AND ANY OTHER APPLICABLE
JURISDICTION.
A-5-1
NO TRANSFER OF THIS CERTIFICATE MAY BE MADE TO ANY PERSON, UNLESS
THE TRANSFEREE PROVIDES EITHER A CERTIFICATION PURSUANT TO SECTION 7.02(b) OF
THE AGREEMENT OR AN OPINION OF COUNSEL SATISFACTORY TO THE MASTER SERVICER, THE
TRUSTEE AND THE SECURITIES ADMINISTRATOR THAT THE PURCHASE OF THIS CERTIFICATE
WILL NOT CONSTITUTE OR RESULT IN A NON-EXEMPT PROHIBITED TRANSACTION UNDER
SECTION 406 OF THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED
("ERISA"), OR SECTION 4975 OF THE CODE AND WILL NOT SUBJECT THE TRUSTEE TO ANY
OBLIGATION OR LIABILITY IN ADDITION TO THOSE UNDERTAKEN IN THE AGREEMENT.
A-5-2
Certificate No.1 Percentage Interest: 100%
Class C Variable Pass-Through Rate
Date of Pooling and Servicing Agreement and Initial Certificate Principal Balance of this
Cut-off Date: Certificate as of the Cut-off Date:
September 1, 2003 $0
First Distribution Date: Initial Certificate Notional Balance of this
October 27, 2003 Certificate as of the Cut-off Date:
$589,218,132.19
Master Servicer:
Xxxxx Fargo Bank Minnesota, National
Association CUSIP: 07384Y MM5
Assumed Final Distribution Date:
October 25, 2033
ASSET-BACKED CERTIFICATE
SERIES 2003-AC5
evidencing a fractional undivided interest in the distributions allocable
to the Class C Certificates with respect to a Trust Fund consisting
primarily of a pool of conventional one- to four-family fixed interest
rate mortgage loans sold by BEAR XXXXXXX ASSET BACKED SECURITIES, INC.
This Certificate is payable solely from the assets of the Trust
Fund, and does not represent an obligation of or interest in Bear Xxxxxxx Asset
Backed Securities, Inc., the Master Servicer, the Trustee or the Securities
Administrator referred to below or any of their affiliates or any other person.
Neither this Certificate nor the underlying Mortgage Loans are guaranteed or
insured by any governmental entity or by Bear Xxxxxxx Asset Backed Securities,
Inc., the Master Servicer, the Trustee or the Securities Administrator or any of
their affiliates or any other person. None of Bear Xxxxxxx Asset Backed
Securities, Inc., the Master Servicer or any of their affiliates will have any
obligation with respect to any certificate or other obligation secured by or
payable from payments on the Certificates.
This certifies that Bear, Xxxxxxx Securities Corp. is the registered
owner of the Percentage Interest evidenced hereby in the beneficial ownership
interest of Certificates of the same Class as this Certificate in a trust (the
"Trust Fund") generally consisting of conventional first lien, fixed rate
mortgage loans secured by one- to four- family residences (collectively, the
"Mortgage Loans") sold by Bear Xxxxxxx Asset Backed Securities, Inc. ("BSABS").
The Mortgage Loans were
A-5-3
sold by EMC Mortgage Corporation ("EMC") to BSABS. Xxxxx Fargo Bank Minnesota,
National Association will act as master servicer of the Mortgage Loans (the
"Master Servicer," which term includes any successors thereto under the
Agreement referred to below). The Trust Fund was created pursuant to the Pooling
and Servicing Agreement dated as of the Cut-off Date specified above (the
"Agreement"), among BSABS, as depositor (the "Depositor"), EMC Mortgage
Corporation as seller and company, Xxxxx Fargo Bank Minnesota, National
Association, as Master Servicer and securities administrator (the "Securities
Administrator") and JPMorgan Chase Bank, as trustee (the "Trustee"), a summary
of certain of the pertinent provisions of which is set forth hereafter. To the
extent not defined herein, capitalized terms used herein shall have the meaning
ascribed to them in the Agreement. This Certificate is issued under and is
subject to the terms, provisions and conditions of the Agreement, to which
Agreement the Holder of this Certificate by virtue of its acceptance hereof
assents and by which such Holder is bound.
Distributions on this Certificate will be made by the Trustee by
check mailed to the address of the Person entitled thereto as such name and
address shall appear on the Certificate Register or, if such Person so requests
by notifying the Trustee in writing as specified in the Agreement.
Notwithstanding the above, the final distribution on this Certificate will be
made after due notice by the Trustee of the pendency of such distribution and
only upon presentation and surrender of this Certificate at the office or agency
appointed by the Trustee for that purpose and designated in such notice.
No transfer of this Certificate shall be made unless the transfer is
made pursuant to an effective registration statement under the Securities Act of
1933, as amended (the "1933 Act"), and an effective registration or
qualification under applicable state securities laws, or is made in a
transaction that does not require such registration or qualification. In the
event that such a transfer of this Certificate is to be made without
registration or qualification, the Trustee shall require receipt of (i) if such
transfer is purportedly being made in reliance upon Rule 144A under the 1933
Act, written certifications from the Holder of the Certificate desiring to
effect the transfer, and from such Holder's prospective transferee,
substantially in the forms attached to the Agreement as Exhibit E and either F
or G, as applicable, and (ii) in all other cases, an Opinion of Counsel
satisfactory to it that such transfer may be made without such registration or
qualification (which Opinion of Counsel shall not be an expense of the Trust
Fund or of the Depositor, the Trustee, the Securities Administrator or the
Master Servicer in their respective capacities as such), together with copies of
the written certification(s) of the Holder of the Certificate desiring to effect
the transfer and/or such Holder's prospective transferee upon which such Opinion
of Counsel is based. Neither the Depositor nor the Trustee is obligated to
register or qualify the Class of Certificates specified on the face hereof under
the 1933 Act or any other securities law or to take any action not otherwise
required under the Agreement to permit the transfer of such Certificates without
registration or qualification. Any Holder desiring to effect a transfer of this
Certificate shall be required to indemnify the Trustee, the Securities
Administrator, the Depositor, the Seller and the Master Servicer against any
liability that may result if the transfer is not so exempt or is not made in
accordance with such federal and state laws.
No transfer of this Class C Certificate will be made unless the
Trustee shall have received the opinion of counsel set forth in section 7.02 of
the Pooling Agreement or (ii) a representation letter, in the form as described
by the Agreement, stating that the transferee is not an
A-5-4
employee benefit or other plan subject to the prohibited transaction provisions
of ERISA or Section 4975 of the Code (a "Plan"), or any other person (including
an investment manager, a named fiduciary or a trustee of any Plan) acting,
directly or indirectly, on behalf of or purchasing any Certificate with "plan
assets" of any Plan.
This Certificate is one of a duly authorized issue of Certificates
designated as set forth on the face hereof (the "Certificates"). The
Certificates, in the aggregate, evidence the entire beneficial ownership
interest in the Trust Fund formed pursuant to the Agreement.
The Certificateholder, by its acceptance of this Certificate, agrees
that it will look solely to the Trust Fund for payment hereunder and that the
Trustee is not liable to the Certificateholders for any amount payable under
this Certificate or the Agreement or, except as expressly provided in the
Agreement, subject to any liability under the Agreement.
This Certificate does not purport to summarize the Agreement and
reference is made to the Agreement for the interests, rights and limitations of
rights, benefits, obligations and duties evidenced hereby, and the rights,
duties and immunities of the Trustee.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Depositor and the rights of the Certificateholders under the Agreement from time
to time by the parties thereto with the consent of the Holders of the Class or
Classes of Certificates affected thereby evidencing over 50% of the Voting
Rights of such Class or Classes. Any such consent by the Holder of this
Certificate shall be conclusive and binding on such Holder and upon all future
Holders of this Certificate and of any Certificate issued upon the transfer
hereof or in lieu hereof whether or not notation of such consent is made upon
this Certificate. The Agreement also permits the amendment thereof, in certain
limited circumstances, without the consent of the Holders of any of the
Certificates.
As provided in the Agreement and subject to certain limitations
therein set forth, the transfer of this Certificate is registrable with the
Trustee upon surrender of this Certificate for registration of transfer at the
offices or agencies maintained by the Trustee for such purposes, duly endorsed
by, or accompanied by a written instrument of transfer in form satisfactory to
the Trustee duly executed by the Holder hereof or such Holder's attorney duly
authorized in writing, and thereupon one or more new Certificates in authorized
denominations representing a like aggregate Percentage Interest will be issued
to the designated transferee.
The Certificates are issuable only as registered Certificates
without coupons in the Classes and denominations specified in the Agreement. As
provided in the Agreement and subject to certain limitations therein set forth,
this Certificate is exchangeable for one or more new Certificates evidencing the
same Class and in the same aggregate Percentage Interest, as requested by the
Holder surrendering the same.
No service charge will be made to the Certificateholders for any
such registration of transfer, but the Trustee may require payment of a sum
sufficient to cover any tax or other governmental charge payable in connection
therewith. The Depositor, the Master Servicer, the Trustee and any agent of any
of them may treat the Person in whose name this Certificate is
A-5-5
registered as the owner hereof for all purposes, and none of the Depositor, the
Master Servicer, the Trustee or any such agent shall be affected by notice to
the contrary.
The obligations created by the Agreement and the Trust Fund created
thereby (other than the obligations to make payments to Certificateholders with
respect to the termination of the Agreement) shall terminate upon the earlier of
(i) the later of (A) the maturity or other liquidation (or Advance with respect
thereto) of the last Mortgage Loan remaining in the Trust Fund and disposition
of all property acquired upon foreclosure or deed in lieu of foreclosure of any
Mortgage Loan and (B) 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
earlier of (i) the first Distribution Date on which the aggregate Stated
Principal Balance of the Mortgage Loans is less than or equal to 20% of the
aggregate Stated Principal Balance of the Mortgage Loans at the Cut-off Date and
(ii) the Distribution Date in September 2013. The exercise of such right will
effect the early retirement of the Certificates. In no event, however, will the
Trust Fund created by the Agreement continue beyond the expiration of 21 years
after the death of certain persons identified in the Agreement.
Unless this Certificate has been countersigned by an authorized
signatory of the Trustee by manual signature, this Certificate shall not be
entitled to any benefit under the Agreement, or be valid for any purpose.
A-5-6
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be
duly executed.
Dated: September 30, 2003 JPMORGAN CHASE BANK,
not in its individual capacity but solely as
Trustee
By:
----------------------------------------
Authorized Signatory
CERTIFICATE OF AUTHENTICATION
This is one of the Class C Certificates referred to in the
within-mentioned Agreement.
JPMORGAN CHASE BANK
Authorized signatory of JPMorgan Chase Bank,
not in its individual capacity but solely
as Trustee
By:
----------------------------------------
Authorized Signatory
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto __________________________________ (Please print or typewrite
name and address including postal zip code of assignee) a Percentage Interest
evidenced by the within Asset-Backed Certificate and hereby authorizes the
transfer of registration of such interest to assignee on the Certificate
Register of the Trust Fund.
I (We) further direct the Certificate Registrar to issue a new
Certificate of a like denomination and Class, to the above named assignee and
deliver such Certificate to the following address:
Dated:
-----------------------------------------------------
Signature by or on behalf of assignor
----------------------------------
Signature Guaranteed
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of
distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to _________________________________ for the account
of _________________________ account number _____________, or, if mailed by
check, to ______________________________. Applicable statements should be mailed
to _____________________________________________.
This information is provided by __________________, the assignee
named above, or ________________________, as its agent.
EXHIBIT A-6
CLASS P CERTIFICATE
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A
"REGULAR INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT," AS THOSE
TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL
REVENUE CODE OF 1986 (THE "CODE").
THE CERTIFICATE PRINCIPAL BALANCE OF THIS CERTIFICATE WILL BE
DECREASED BY THE PRINCIPAL PAYMENTS HEREON. ACCORDINGLY, FOLLOWING THE INITIAL
ISSUANCE OF THE CERTIFICATES, THE CERTIFICATE PRINCIPAL BALANCE OF THIS
CERTIFICATE WILL BE DIFFERENT FROM THE DENOMINATION SHOWN BELOW. ANYONE
ACQUIRING THIS CERTIFICATE MAY ASCERTAIN ITS CERTIFICATE PRINCIPAL BALANCE BY
INQUIRY OF THE TRUSTEE NAMED HEREIN.
THIS CERTIFICATE HAS NOT BEEN AND WILL NOT BE REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR UNDER ANY STATE
SECURITIES LAWS. THE HOLDER HEREOF, BY PURCHASING THIS CERTIFICATE, AGREES THAT
THIS CERTIFICATE MAY BE REOFFERED, RESOLD, PLEDGED OR OTHERWISE TRANSFERRED ONLY
IN COMPLIANCE WITH THE SECURITIES ACT AND OTHER APPLICABLE LAWS AND ONLY (1)
PURSUANT TO RULE 144A UNDER THE SECURITIES ACT ("RULE 144A") TO A PERSON THAT
THE HOLDER REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER WITHIN THE
MEANING OF RULE 144A (A "QIB"), PURCHASING FOR ITS OWN ACCOUNT OR A QIB
PURCHASING FOR THE ACCOUNT OF A QIB, WHOM THE HOLDER HAS INFORMED, IN EACH CASE,
THAT THE REOFFER, RESALE, PLEDGE OR OTHER TRANSFER IS BEING MADE IN RELIANCE ON
RULE 144A, (2) PURSUANT TO AN EXEMPTION FROM REGISTRATION PROVIDED BY RULE 144
UNDER THE SECURITIES ACT (IF AVAILABLE) OR (3) IN CERTIFICATED FORM TO AN
"INSTITUTIONAL ACCREDITED INVESTOR" WITHIN THE MEANING THEREOF IN RULE
501(a)(1), (2), (3) or (7) OF REGULATION D UNDER THE ACT OR ANY ENTITY IN WHICH
ALL OF THE EQUITY OWNERS COME WITHIN SUCH PARAGRAPHS PURCHASING NOT FOR
DISTRIBUTION IN VIOLATION OF THE SECURITIES ACT, SUBJECT TO (A) THE RECEIPT BY
THE TRUSTEE OF A LETTER SUBSTANTIALLY IN THE FORM PROVIDED IN THE AGREEMENT AND
(B) THE RECEIPT BY THE TRUSTEE OF SUCH OTHER EVIDENCE ACCEPTABLE TO THE TRUSTEE
THAT SUCH REOFFER, RESALE, PLEDGE OR TRANSFER IS IN COMPLIANCE WITH THE
SECURITIES ACT AND OTHER APPLICABLE LAWS OR IN EACH CASE IN ACCORDANCE WITH ALL
APPLICABLE SECURITIES LAWS OF THE UNITED STATES AND ANY OTHER APPLICABLE
JURISDICTION.
NO TRANSFER OF THIS CERTIFICATE MAY BE MADE TO ANY PERSON, UNLESS
THE TRANSFEREE PROVIDES EITHER A CERTIFICATION
A-6-1
PURSUANT TO SECTION 7.02(b) OF THE AGREEMENT OR AN OPINION OF COUNSEL
SATISFACTORY TO THE TRUSTEE THAT THE PURCHASE OF THIS CERTIFICATE WILL NOT
CONSTITUTE OR RESULT IN A NON-EXEMPT PROHIBITED TRANSACTION UNDER SECTION 406 OF
THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED ("ERISA"), OR
SECTION 4975 OF THE CODE AND WILL NOT SUBJECT THE MASTER SERVICER, THE TRUSTEE
OR THE SECURITIES ADMINISTRATOR TO ANY OBLIGATION OR LIABILITY IN ADDITION TO
THOSE UNDERTAKEN IN THE AGREEMENT.
Certificate No.1 Percentage Interest: 100%
Class P
Date of Pooling and Servicing Agreement and Aggregate Initial Certificate Principal Balance
Cut-off Date: of this Certificate as of the Cut-off Date:
September 1, 2003 $100.00
First Distribution Date: Initial Certificate Principal Balance of this
October 27, 2003 Certificate as of the Cut-off Date:
$100.00
Master Servicer:
Xxxxx Fargo Bank Minnesota, National
Association CUSIP: 07384Y ML7
Assumed Final Distribution Date:
October 25, 2033
ASSET-BACKED CERTIFICATE
SERIES 2003-AC5
evidencing a fractional undivided interest in the distributions allocable
to the Class P Certificates with respect to a Trust Fund consisting
primarily of a pool of conventional one- to four-family fixed interest
rate mortgage loans sold by BEAR XXXXXXX ASSET BACKED SECURITIES, INC.
This Certificate is payable solely from the assets of the Trust
Fund, and does not represent an obligation of or interest in Bear Xxxxxxx Asset
Backed Securities, Inc., the Master Servicer, the Trustee or the Securities
Administrator referred to below or any of their affiliates or any other person.
Neither this Certificate nor the underlying Mortgage Loans are guaranteed or
insured by any governmental entity or by Bear Xxxxxxx Asset Backed Securities,
Inc., the Master Servicer, the Trustee or the Securities Administrator or any of
their affiliates or any other person. None of Bear Xxxxxxx Asset Backed
Securities, Inc., the Master Servicer or any of their affiliates will have any
obligation with respect to any certificate or other obligation secured by or
payable from payments on the Certificates.
This certifies that Bear, Xxxxxxx Securities Corp. is the registered
owner of the Percentage Interest evidenced hereby in the beneficial ownership
interest of Certificates of the same Class as this Certificate in a trust (the
"Trust Fund") generally consisting of conventional first lien, fixed rate
mortgage loans secured by one- to four- family residences (collectively, the
"Mortgage Loans") sold by Bear Xxxxxxx Asset Backed Securities, Inc. ("BSABS").
The Mortgage Loans were
A-6-3
sold by EMC Mortgage Corporation ("EMC") to BSABS. Xxxxx Fargo Bank Minnesota,
National Association will act as master servicer of the Mortgage Loans (the
"Master Servicer," which term includes any successors thereto under the
Agreement referred to below). The Trust Fund was created pursuant to the Pooling
and Servicing Agreement dated as of the Cut-off Date specified above (the
"Agreement"), among BSABS, as depositor (the "Depositor"), EMC Mortgage
Corporation as seller and company, Xxxxx Fargo Bank Minnesota, National
Association, as Master Servicer and securities administrator (the "Securities
Administrator") and JPMorgan Chase Bank, as trustee (the "Trustee"), a summary
of certain of the pertinent provisions of which is set forth hereafter. To the
extent not defined herein, capitalized terms used herein shall have the meaning
ascribed to them in the Agreement. This Certificate is issued under and is
subject to the terms, provisions and conditions of the Agreement, to which
Agreement the Holder of this Certificate by virtue of its acceptance hereof
assents and by which such Holder is bound.
Distributions on this Certificate will be made by the Trustee by
check mailed to the address of the Person entitled thereto as such name and
address shall appear on the Certificate Register or, if such Person so requests
by notifying the Trustee in writing as specified in the Agreement.
Notwithstanding the above, the final distribution on this Certificate will be
made after due notice by the Trustee of the pendency of such distribution and
only upon presentation and surrender of this Certificate at the office or agency
appointed by the Trustee for that purpose and designated in such notice.
No transfer of this Certificate shall be made unless the transfer is
made pursuant to an effective registration statement under the Securities Act of
1933, as amended (the "1933 Act"), and an effective registration or
qualification under applicable state securities laws, or is made in a
transaction that does not require such registration or qualification. In the
event that such a transfer of this Certificate is to be made without
registration or qualification, the Trustee shall require receipt of (i) if such
transfer is purportedly being made in reliance upon Rule 144A under the 1933
Act, written certifications from the Holder of the Certificate desiring to
effect the transfer, and from such Holder's prospective transferee,
substantially in the forms attached to the Agreement as Exhibit E and either F
or G, as applicable, and (ii) in all other cases, an Opinion of Counsel
satisfactory to it that such transfer may be made without such registration or
qualification (which Opinion of Counsel shall not be an expense of the Trust
Fund or of the Depositor, the Trustee, the Securities Administrator or the
Master Servicer in their respective capacities as such), together with copies of
the written certification(s) of the Holder of the Certificate desiring to effect
the transfer and/or such Holder's prospective transferee upon which such Opinion
of Counsel is based. Neither the Depositor nor the Trustee is obligated to
register or qualify the Class of Certificates specified on the face hereof under
the 1933 Act or any other securities law or to take any action not otherwise
required under the Agreement to permit the transfer of such Certificates without
registration or qualification. Any Holder desiring to effect a transfer of this
Certificate shall be required to indemnify the Trustee, the Securities
Administrator, the Depositor, the Seller and the Master Servicer against any
liability that may result if the transfer is not so exempt or is not made in
accordance with such federal and state laws.
No transfer of this Class P Certificate will be made unless the
Trustee shall have received either (i) the opinion of counsel set forth in
Section 7.02(b) of the Pooling Agreement or (ii) a representation letter, in the
form as described by the Agreement, stating that the transferee is
A-6-4
not an employee benefit or other plan subject to the prohibited transaction
provisions of ERISA or Section 4975 of the Code (a "Plan"), or any other person
(including an investment manager, a named fiduciary or a trustee of any Plan)
acting, directly or indirectly, on behalf of or purchasing any Certificate with
"plan assets" of any Plan.
This Certificate is one of a duly authorized issue of Certificates
designated as set forth on the face hereof (the "Certificates"). The
Certificates, in the aggregate, evidence the entire beneficial ownership
interest in the Trust Fund formed pursuant to the Agreement.
The Certificateholder, by its acceptance of this Certificate, agrees
that it will look solely to the Trust Fund for payment hereunder and that the
Trustee is not liable to the Certificateholders for any amount payable under
this Certificate or the Agreement or, except as expressly provided in the
Agreement, subject to any liability under the Agreement.
This Certificate does not purport to summarize the Agreement and
reference is made to the Agreement for the interests, rights and limitations of
rights, benefits, obligations and duties evidenced hereby, and the rights,
duties and immunities of the Trustee.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Depositor and the rights of the Certificateholders under the Agreement from time
to time by the parties thereto with the consent of the Holders of the Class or
Classes of Certificates affected thereby evidencing over 50% of the Voting
Rights of such Class or Classes. Any such consent by the Holder of this
Certificate shall be conclusive and binding on such Holder and upon all future
Holders of this Certificate and of any Certificate issued upon the transfer
hereof or in lieu hereof whether or not notation of such consent is made upon
this Certificate. The Agreement also permits the amendment thereof, in certain
limited circumstances, without the consent of the Holders of any of the
Certificates.
As provided in the Agreement and subject to certain limitations
therein set forth, the transfer of this Certificate is registrable with the
Trustee upon surrender of this Certificate for registration of transfer at the
offices or agencies maintained by the Trustee for such purposes, duly endorsed
by, or accompanied by a written instrument of transfer in form satisfactory to
the Trustee duly executed by the Holder hereof or such Holder's attorney duly
authorized in writing, and thereupon one or more new Certificates in authorized
denominations representing a like aggregate Percentage Interest will be issued
to the designated transferee.
The Certificates are issuable only as registered Certificates
without coupons in the Classes and denominations specified in the Agreement. As
provided in the Agreement and subject to certain limitations therein set forth,
this Certificate is exchangeable for one or more new Certificates evidencing the
same Class and in the same aggregate Percentage Interest, as requested by the
Holder surrendering the same.
No service charge will be made to the Certificateholders for any
such registration of transfer, but the Trustee may require payment of a sum
sufficient to cover any tax or other governmental charge payable in connection
therewith. The Depositor, the Master Servicer, the Trustee and any agent of any
of them may treat the Person in whose name this Certificate is
A-6-5
registered as the owner hereof for all purposes, and none of the Depositor, the
Master Servicer, the Trustee or any such agent shall be affected by notice to
the contrary.
The obligations created by the Agreement and the Trust Fund created
thereby (other than the obligations to make payments to Certificateholders with
respect to the termination of the Agreement) shall terminate upon the earlier of
(i) the later of (A) the maturity or other liquidation (or Advance with respect
thereto) of the last Mortgage Loan remaining in the Trust Fund and disposition
of all property acquired upon foreclosure or deed in lieu of foreclosure of any
Mortgage Loan and (B) 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
earlier of (i) the first Distribution Date on which the aggregate Stated
Principal Balance of the Mortgage Loans is less than or equal to 20% of the
aggregate Stated Principal Balance of the Mortgage Loans at the Cut-off Date and
(ii) the Distribution Date in September 2013. 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.
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be
duly executed.
Dated: September 30, 2003 JPMORGAN CHASE BANK,
not in its individual capacity but solely as
Trustee
By:
----------------------------------------
Authorized Signatory
CERTIFICATE OF AUTHENTICATION
This is one of the Class P Certificates referred to in the
within-mentioned Agreement.
JPMORGAN CHASE BANK
Authorized signatory of JPMorgan Chase Bank,
not in its individual capacity but solely
as Trustee
By:
----------------------------------------
Authorized Signatory
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto __________________________________ (Please print or typewrite
name and address including postal zip code of assignee) a Percentage Interest
evidenced by the within Asset-Backed Certificate and hereby authorizes the
transfer of registration of such interest to assignee on the Certificate
Register of the Trust Fund.
I (We) further direct the Certificate Registrar to issue a new
Certificate of a like denomination and Class, to the above named assignee and
deliver such Certificate to the following address:
Dated:
-----------------------------------------------------
Signature by or on behalf of assignor
----------------------------------
Signature Guaranteed
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of
distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to _________________________________ for the account
of _________________________ account number _____________, or, if mailed by
check, to ______________________________. Applicable statements should be mailed
to _____________________________________________.
This information is provided by __________________, the assignee
named above, or ________________________, as its agent.
EXHIBIT A-7
FORM OF CLASS R-1 CERTIFICATE
THIS CERTIFICATE MAY NOT BE HELD BY OR TRANSFERRED TO A NON-UNITED
STATES PERSON OR A DISQUALIFIED ORGANIZATION (AS DEFINED BELOW).
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A
"RESIDUAL INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT" AS THOSE
TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL
REVENUE CODE OF 1986 (THE "CODE").
NO TRANSFER OF THIS CERTIFICATE MAY BE MADE TO ANY PERSON, UNLESS
THE TRANSFEREE PROVIDES EITHER A CERTIFICATION PURSUANT TO SECTION 7.02(b) OF
THE AGREEMENT OR AN OPINION OF COUNSEL SATISFACTORY TO THE TRUSTEE THAT THE
PURCHASE OF THIS CERTIFICATE WILL NOT CONSTITUTE OR RESULT IN A NON-EXEMPT
PROHIBITED TRANSACTION UNDER SECTION 406 OF THE EMPLOYEE RETIREMENT INCOME
SECURITY ACT OF 1974, AS AMENDED ("ERISA"), OR SECTION 4975 OF THE CODE AND WILL
NOT SUBJECT THE MASTER SERVICER, THE TRUSTEE OR THE SECURITIES ADMINISTRATOR TO
ANY OBLIGATION OR LIABILITY IN ADDITION TO THOSE UNDERTAKEN IN THE AGREEMENT.
ANY RESALE, TRANSFER OR OTHER DISPOSITION OF THIS CERTIFICATE MAY BE
MADE ONLY IF THE PROPOSED TRANSFEREE PROVIDES A TRANSFER AFFIDAVIT TO THE MASTER
SERVICER AND THE TRUSTEE THAT (1) SUCH TRANSFEREE IS NOT (A) THE UNITED STATES,
ANY STATE OR POLITICAL SUBDIVISION THEREOF, ANY POSSESSION OF THE UNITED STATES,
OR ANY AGENCY OR INSTRUMENTALITY OF ANY OF THE FOREGOING (OTHER THAN AN
INSTRUMENTALITY WHICH IS A CORPORATION IF ALL OF ITS ACTIVITIES ARE SUBJECT TO
TAX AND EXCEPT FOR XXXXXXX MAC, A MAJORITY OF ITS BOARD OF DIRECTORS IS NOT
SELECTED BY SUCH GOVERNMENTAL UNIT), (B) A FOREIGN GOVERNMENT, ANY INTERNATIONAL
ORGANIZATION, OR ANY AGENCY OR INSTRUMENTALITY OF EITHER OF THE FOREGOING, (C)
ANY ORGANIZATION (OTHER THAN CERTAIN FARMERS' COOPERATIVES DESCRIBED IN SECTION
521 OF THE CODE) WHICH IS EXEMPT FROM THE TAX IMPOSED BY CHAPTER 1 OF THE CODE
UNLESS SUCH ORGANIZATION IS SUBJECT TO THE TAX IMPOSED BY SECTION 511 OF THE
CODE (INCLUDING THE TAX IMPOSED BY SECTION 511 OF THE CODE ON UNRELATED BUSINESS
TAXABLE INCOME), (D) RURAL ELECTRIC AND TELEPHONE COOPERATIVES DESCRIBED IN
SECTION 1381(a)(2)(C) OF THE CODE, (E) AN ELECTING LARGE PARTNERSHIP UNDER
SECTION 775(a) OF THE CODE (ANY SUCH PERSON DESCRIBED IN THE
A-7-1
FOREGOING CLAUSES (A), (B), (C), (D) OR (E) BEING HEREIN REFERRED TO AS A
"DISQUALIFIED ORGANIZATION"), OR (F) AN AGENT OF A DISQUALIFIED ORGANIZATION,
(2) NO PURPOSE OF SUCH TRANSFER IS TO IMPEDE THE ASSESSMENT OR COLLECTION OF TAX
AND (3) SUCH TRANSFEREE SATISFIES CERTAIN ADDITIONAL CONDITIONS RELATING TO THE
FINANCIAL CONDITION OF THE PROPOSED TRANSFEREE. NOTWITHSTANDING THE REGISTRATION
IN THE CERTIFICATE REGISTER OR ANY TRANSFER, SALE OR OTHER DISPOSITION OF THIS
CERTIFICATE TO A DISQUALIFIED ORGANIZATION OR AN AGENT OF A DISQUALIFIED
ORGANIZATION, SUCH REGISTRATION SHALL BE DEEMED TO BE OF NO LEGAL FORCE OR
EFFECT WHATSOEVER AND SUCH PERSON SHALL NOT BE DEEMED TO BE A CERTIFICATEHOLDER
FOR ANY PURPOSE HEREUNDER, INCLUDING, BUT NOT LIMITED TO, THE RECEIPT OF
DISTRIBUTIONS ON THIS CERTIFICATE. EACH HOLDER OF THIS CERTIFICATE BY ACCEPTANCE
OF THIS CERTIFICATE SHALL BE DEEMED TO HAVE CONSENTED TO THE PROVISIONS OF THIS
PARAGRAPH.
A-7-2
Certificate No.1
Class R-1 Percentage Interest: 100%
Date of Pooling and Servicing Agreement and
Cut-off Date:
September 1, 2003
First Distribution Date:
October 27, 2003
Master Servicer:
Xxxxx Fargo Bank Minnesota, National
Association CUSIP: 07384Y MN3
Assumed Final Distribution Date:
October 25, 2033
ASSET-BACKED CERTIFICATE
SERIES 2003-AC5
evidencing a fractional undivided interest in the distributions allocable
to the Class R-1 Certificates with respect to a Trust Fund consisting
primarily of a pool of conventional one- to four-family fixed interest
rate mortgage loans sold by BEAR XXXXXXX ASSET BACKED SECURITIES, INC.
This Certificate is payable solely from the assets of the Trust
Fund, and does not represent an obligation of or interest in Bear Xxxxxxx Asset
Backed Securities, Inc., the Master Servicer, the Trustee or the Securities
Administrator referred to below or any of their affiliates or any other person.
Neither this Certificate nor the underlying Mortgage Loans are guaranteed or
insured by any governmental entity or by Bear Xxxxxxx Asset Backed Securities,
Inc., the Master Servicer, the Trustee or the Securities Administrator or any of
their affiliates or any other person. None of Bear Xxxxxxx Asset Backed
Securities, Inc., the Master Servicer or any of their affiliates will have any
obligation with respect to any certificate or other obligation secured by or
payable from payments on the Certificates.
This certifies that Bear, Xxxxxxx Securities Corp. is the registered
owner of the Percentage Interest evidenced hereby in the beneficial ownership
interest of Certificates of the same Class as this Certificate in a trust (the
"Trust Fund") generally consisting of conventional first lien, fixed rate
mortgage loans secured by one- to four- family residences (collectively, the
"Mortgage
A-7-3
Loans") sold by Bear Xxxxxxx Asset Backed Securities, Inc. ("BSABS"). The
Mortgage Loans were sold by EMC Mortgage Corporation ("EMC") to BSABS. Xxxxx
Fargo Bank Minnesota, National Association will act as master servicer of the
Mortgage Loans (the "Master Servicer," which term includes any successors
thereto under the Agreement referred to below). The Trust Fund was created
pursuant to the Pooling and Servicing Agreement dated as of the Cut-off Date
specified above (the "Agreement"), among BSABS, as depositor (the "Depositor"),
EMC Mortgage Corporation as seller and company, Xxxxx Fargo Bank Minnesota,
National Association, as Master Servicer and securities administrator (the
"Securities Administrator") and JPMorgan Chase Bank as trustee (the "Trustee"),
a summary of certain of the pertinent provisions of which is set forth
hereafter. To the extent not defined herein, capitalized terms used herein shall
have the meaning ascribed to them in the Agreement. This Certificate is issued
under and is subject to the terms, provisions and conditions of the Agreement,
to which Agreement the Holder of this Certificate by virtue of its acceptance
hereof assents and by which such Holder is bound.
Each Holder of this Certificate will be deemed to have agreed to be bound
by the restrictions set forth in the Agreement to the effect that (i) each
person holding or acquiring any Ownership Interest in this Certificate must be a
United States Person and a Permitted Transferee, (ii) the transfer of any
Ownership Interest in this Certificate will be conditioned upon the delivery to
the Trustee of, among other things, an affidavit to the effect that it is a
United States Person and Permitted Transferee, (iii) any attempted or purported
transfer of any Ownership Interest in this Certificate in violation of such
restrictions will be absolutely null and void and will vest no rights in the
purported transferee, and (iv) if any person other than a United States Person
and a Permitted Transferee acquires any Ownership Interest in this Certificate
in violation of such restrictions, then the Depositor will have the right, in
its sole discretion and without notice to the Holder of this Certificate, to
sell this Certificate to a purchaser selected by the Depositor, which purchaser
may be the Depositor, or any affiliate of the Depositor, on such terms and
conditions as the Depositor may choose.
The Trustee will distribute on the 25th day of each month, or, if
such 25th day is not a Business Day, the immediately following Business Day
(each, a "Distribution Date"), commencing on the First Distribution Date
specified above, to the Person in whose name this Certificate is registered at
the close of business on the last day (or if such last day is not a Business
Day, the Business Day immediately preceding such last day) of the calendar month
immediately preceding the month in which the Distribution Date occurs, an amount
equal to the product of the Percentage Interest evidenced by this Certificate
and the amounts required to be distributed to the Holders of Certificates of the
same Class as this Certificate. The Assumed Final Distribution Date is the
Distribution Date in the month following the latest scheduled maturity date of
any Mortgage Loan.
Distributions on this Certificate will be made by the Trustee by
check mailed to the address of the Person entitled thereto as such name and
address shall appear on the Certificate Register or, if such Person so requests
by notifying the Trustee in writing as specified in the Agreement.
Notwithstanding the above, the final distribution on this Certificate will be
made after due notice by the Trustee of the pendency of such distribution and
only upon presentation and
A-7-4
surrender of this Certificate at the office or agency appointed by the Trustee
for that purpose and designated in such notice.
No transfer of this Class R-1 Certificate will be made unless the
Trustee shall have received either (i) the opinion of counsel set forth in
section 7.02 of the Pooling Agreement or (ii) a representation letter, in the
form as described by the Agreement, stating that the transferee is not an
employee benefit or other plan subject to the prohibited transaction provisions
of ERISA or Section 4975 of the Code (a "Plan"), or any other person (including
an investment manager, a named fiduciary or a trustee of any Plan) acting,
directly or indirectly, on behalf of or purchasing any Certificate with "plan
assets" of any Plan.
This Certificate is one of a duly authorized issue of Certificates
designated as set forth on the face hereof (the "Certificates"). The
Certificates, in the aggregate, evidence the entire beneficial ownership
interest in the Trust Fund formed pursuant to the Agreement.
The Certificateholder, by its acceptance of this Certificate, agrees
that it will look solely to the Trust Fund for payment hereunder and that the
Trustee is not liable to the Certificateholders for any amount payable under
this Certificate or the Agreement or, except as expressly provided in the
Agreement, subject to any liability under the Agreement.
This Certificate does not purport to summarize the Agreement and
reference is made to the Agreement for the interests, rights and limitations of
rights, benefits, obligations and duties evidenced hereby, and the rights,
duties and immunities of the Trustee.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Depositor and the rights of the Certificateholders under the Agreement from time
to time by the parties thereto with the consent of the Holders of the Class or
Classes of Certificates affected thereby evidencing over 50% of the Voting
Rights of such Class or Classes. Any such consent by the Holder of this
Certificate shall be conclusive and binding on such Holder and upon all future
Holders of this Certificate and of any Certificate issued upon the transfer
hereof or in lieu hereof whether or not notation of such consent is made upon
this Certificate. The Agreement also permits the amendment thereof, in certain
limited circumstances, without the consent of the Holders of any of the
Certificates.
As provided in the Agreement and subject to certain limitations
therein set forth, the transfer of this Certificate is registrable with the
Trustee upon surrender of this Certificate for registration of transfer at the
offices or agencies maintained by the Trustee for such purposes, duly endorsed
by, or accompanied by a written instrument of transfer in form satisfactory to
the Trustee duly executed by the Holder hereof or such Holder's attorney duly
authorized in writing, and thereupon one or more new Certificates in authorized
denominations representing a like aggregate Percentage Interest will be issued
to the designated transferee.
A-7-5
The Certificates are issuable only as registered Certificates
without coupons in the Classes and denominations specified in the Agreement. As
provided in the Agreement and subject to certain limitations therein set forth,
this Certificate is exchangeable for one or more new Certificates evidencing the
same Class and in the same aggregate Percentage Interest, as requested by the
Holder surrendering the same.
No service charge will be made to the Certificateholders for any
such registration of transfer, but the Trustee may require payment of a sum
sufficient to cover any tax or other governmental charge payable in connection
therewith. The Depositor, the Master Servicer, the Trustee and any agent of any
of them may treat the Person in whose name this Certificate is registered as the
owner hereof for all purposes, and none of Depositor, the Master Servicer, the
Trustee or any such agent shall be affected by notice to the contrary.
The obligations created by the Agreement and the Trust Fund created
thereby (other than the obligations to make payments to Certificateholders with
respect to the termination of the Agreement) shall terminate upon the earlier of
(i) the later of (A) the maturity or other liquidation (or Advance with respect
thereto) of the last Mortgage Loan remaining in the Trust Fund and disposition
of all property acquired upon foreclosure or deed in lieu of foreclosure of any
Mortgage Loan and (B) 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
earlier of (i) the first Distribution Date on which the aggregate Stated
Principal Balance of the Mortgage Loans is less than or equal to 20% of the
aggregate Stated Principal Balance of the Mortgage Loans at the Cut-off Date and
(ii) the Distribution Date in September 2013. 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-7-6
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be
duly executed.
Dated: September 30, 2003 JPMORGAN CHASE BANK,
not in its individual capacity but solely as
Trustee
By:
----------------------------------------
Authorized Signatory
CERTIFICATE OF AUTHENTICATION
This is one of the Class R-1 Certificates referred to in the
within-mentioned Agreement.
JPMORGAN CHASE BANK
Authorized signatory of JPMorgan Chase Bank,
not in its individual capacity but solely
as Trustee
By:
---------------------------------------
Authorized Signatory
A-7-7
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto __________________________________ (Please print or typewrite
name and address including postal zip code of assignee) a Percentage Interest
evidenced by the within Asset-Backed Certificate and hereby authorizes the
transfer of registration of such interest to assignee on the Certificate
Register of the Trust Fund.
I (We) further direct the Certificate Registrar to issue a new
Certificate of a like denomination and Class, to the above named assignee and
deliver such Certificate to the following address:
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
Dated:
-----------------------------------------------------
Signature by or on behalf of assignor
----------------------------------
Signature Guaranteed
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of
distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to _________________________________ for the account
of _________________________ account number _____________, or, if mailed by
check, to ______________________________. Applicable statements should be mailed
to _____________________________________________.
This information is provided by __________________, the assignee
named above, or ________________________, as its agent.
A-7-8
FORM OF CLASS R-2 CERTIFICATE
THIS CERTIFICATE MAY NOT BE HELD BY OR TRANSFERRED TO A NON-UNITED
STATES PERSON OR A DISQUALIFIED ORGANIZATION (AS DEFINED BELOW).
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A
"RESIDUAL INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT" AS THOSE
TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL
REVENUE CODE OF 1986 (THE "CODE").
NO TRANSFER OF THIS CERTIFICATE MAY BE MADE TO ANY PERSON, UNLESS
THE TRANSFEREE PROVIDES EITHER A CERTIFICATION PURSUANT TO SECTION 7.02(b) OF
THE AGREEMENT OR AN OPINION OF COUNSEL SATISFACTORY TO THE TRUSTEE THAT THE
PURCHASE OF THIS CERTIFICATE WILL NOT CONSTITUTE OR RESULT IN A NON-EXEMPT
PROHIBITED TRANSACTION UNDER SECTION 406 OF THE EMPLOYEE RETIREMENT INCOME
SECURITY ACT OF 1974, AS AMENDED ("ERISA"), OR SECTION 4975 OF THE CODE AND WILL
NOT SUBJECT THE MASTER SERVICER, THE TRUSTEE OR THE SECURITIES ADMINISTRATOR TO
ANY OBLIGATION OR LIABILITY IN ADDITION TO THOSE UNDERTAKEN IN THE AGREEMENT.
ANY RESALE, TRANSFER OR OTHER DISPOSITION OF THIS CERTIFICATE MAY BE
MADE ONLY IF THE PROPOSED TRANSFEREE PROVIDES A TRANSFER AFFIDAVIT TO THE MASTER
SERVICER AND THE TRUSTEE THAT (1) SUCH TRANSFEREE IS NOT (A) THE UNITED STATES,
ANY STATE OR POLITICAL SUBDIVISION THEREOF, ANY POSSESSION OF THE UNITED STATES,
OR ANY AGENCY OR INSTRUMENTALITY OF ANY OF THE FOREGOING (OTHER THAN AN
INSTRUMENTALITY WHICH IS A CORPORATION IF ALL OF ITS ACTIVITIES ARE SUBJECT TO
TAX AND EXCEPT FOR XXXXXXX MAC, A MAJORITY OF ITS BOARD OF DIRECTORS IS NOT
SELECTED BY SUCH GOVERNMENTAL UNIT), (B) A FOREIGN GOVERNMENT, ANY INTERNATIONAL
ORGANIZATION, OR ANY AGENCY OR INSTRUMENTALITY OF EITHER OF THE FOREGOING, (C)
ANY ORGANIZATION (OTHER THAN CERTAIN FARMERS' COOPERATIVES DESCRIBED IN SECTION
521 OF THE CODE) WHICH IS EXEMPT FROM THE TAX IMPOSED BY CHAPTER 1 OF THE CODE
UNLESS SUCH ORGANIZATION IS SUBJECT TO THE TAX IMPOSED BY SECTION 511 OF THE
CODE (INCLUDING THE TAX IMPOSED BY SECTION 511 OF THE CODE ON UNRELATED BUSINESS
TAXABLE INCOME), (D) RURAL ELECTRIC AND TELEPHONE COOPERATIVES DESCRIBED IN
SECTION 1381(a)(2)(C) OF THE CODE, (E) AN ELECTING LARGE PARTNERSHIP UNDER
SECTION 775(a) OF THE CODE (ANY SUCH PERSON DESCRIBED IN THE FOREGOING CLAUSES
(A), (B), (C), (D) OR (E) BEING HEREIN REFERRED TO AS A "DISQUALIFIED
ORGANIZATION"), OR (F) AN AGENT OF A DISQUALIFIED
A-7-9
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-7-10
Certificate No.1
Class R-2 Percentage Interest: 100%
Date of Pooling and Servicing Agreement and
Cut-off Date:
September 1, 2003
First Distribution Date:
October 27, 2003
Master Servicer:
Xxxxx Fargo Bank Minnesota, National
Association CUSIP: 07384Y MP8
Assumed Final Distribution Date:
October 25, 2033
ASSET-BACKED CERTIFICATE
SERIES 2003-AC5
evidencing a fractional undivided interest in the distributions allocable
to the Class R-2 Certificates with respect to a Trust Fund consisting
primarily of a pool of conventional one- to four-family fixed interest
rate mortgage loans sold by BEAR XXXXXXX ASSET BACKED SECURITIES, INC.
This Certificate is payable solely from the assets of the Trust
Fund, and does not represent an obligation of or interest in Bear Xxxxxxx Asset
Backed Securities, Inc., the Master Servicer, the Trustee or the Securities
Administrator referred to below or any of their affiliates or any other person.
Neither this Certificate nor the underlying Mortgage Loans are guaranteed or
insured by any governmental entity or by Bear Xxxxxxx Asset Backed Securities,
Inc., the Master Servicer, the Trustee or the Securities Administrator or any of
their affiliates or any other person. None of Bear Xxxxxxx Asset Backed
Securities, Inc., the Master Servicer or any of their affiliates will have any
obligation with respect to any certificate or other obligation secured by or
payable from payments on the Certificates.
This certifies that Bear, Xxxxxxx Securities Corp. is the registered
owner of the Percentage Interest evidenced hereby in the beneficial ownership
interest of Certificates of the same Class as this Certificate in a trust (the
"Trust Fund") generally consisting of conventional first lien, fixed rate
mortgage loans secured by one- to four- family residences (collectively, the
"Mortgage
A-7-11
Loans") sold by Bear Xxxxxxx Asset Backed Securities, Inc. ("BSABS"). The
Mortgage Loans were sold by EMC Mortgage Corporation ("EMC") to BSABS. Xxxxx
Fargo Bank Minnesota, National Association will act as master servicer of the
Mortgage Loans (the "Master Servicer," which term includes any successors
thereto under the Agreement referred to below). The Trust Fund was created
pursuant to the Pooling and Servicing Agreement dated as of the Cut-off Date
specified above (the "Agreement"), among BSABS, as depositor (the "Depositor"),
EMC Mortgage Corporation as seller and company, Xxxxx Fargo Bank Minnesota,
National Association, as Master Servicer and securities administrator (the
"Securities Administrator") and JPMorgan Chase Bank as trustee (the "Trustee"),
a summary of certain of the pertinent provisions of which is set forth
hereafter. To the extent not defined herein, capitalized terms used herein shall
have the meaning ascribed to them in the Agreement. This Certificate is issued
under and is subject to the terms, provisions and conditions of the Agreement,
to which Agreement the Holder of this Certificate by virtue of its acceptance
hereof assents and by which such Holder is bound.
Each Holder of this Certificate will be deemed to have agreed to be bound
by the restrictions set forth in the Agreement to the effect that (i) each
person holding or acquiring any Ownership Interest in this Certificate must be a
United States Person and a Permitted Transferee, (ii) the transfer of any
Ownership Interest in this Certificate will be conditioned upon the delivery to
the Trustee of, among other things, an affidavit to the effect that it is a
United States Person and Permitted Transferee, (iii) any attempted or purported
transfer of any Ownership Interest in this Certificate in violation of such
restrictions will be absolutely null and void and will vest no rights in the
purported transferee, and (iv) if any person other than a United States Person
and a Permitted Transferee acquires any Ownership Interest in this Certificate
in violation of such restrictions, then the Depositor will have the right, in
its sole discretion and without notice to the Holder of this Certificate, to
sell this Certificate to a purchaser selected by the Depositor, which purchaser
may be the Depositor, or any affiliate of the Depositor, on such terms and
conditions as the Depositor may choose.
The Trustee will distribute on the 25th day of each month, or, if
such 25th day is not a Business Day, the immediately following Business Day
(each, a "Distribution Date"), commencing on the First Distribution Date
specified above, to the Person in whose name this Certificate is registered at
the close of business on the last day (or if such last day is not a Business
Day, the Business Day immediately preceding such last day) of the calendar month
immediately preceding the month in which the Distribution Date occurs, an amount
equal to the product of the Percentage Interest evidenced by this Certificate
and the amounts required to be distributed to the Holders of Certificates of the
same Class as this Certificate. The Assumed Final Distribution Date is the
Distribution Date in the month following the latest scheduled maturity date of
any Mortgage Loan.
Distributions on this Certificate will be made by the Trustee by
check mailed to the address of the Person entitled thereto as such name and
address shall appear on the Certificate Register or, if such Person so requests
by notifying the Trustee in writing as specified in the Agreement.
Notwithstanding the above, the final distribution on this Certificate will be
made after due notice by the Trustee of the pendency of such distribution and
only upon presentation and
A-7-12
surrender of this Certificate at the office or agency appointed by the Trustee
for that purpose and designated in such notice.
No transfer of this Class R-2 Certificate will be made unless the
Trustee and the Securities Administrator have received either (i) the opinion of
counsel set forth in section 7.02(b) of the Pooling Agreement or (ii) a
representation letter, in the form as described by the Agreement, stating that
the transferee is not an employee benefit or other plan subject to the
prohibited transaction provisions of ERISA or Section 4975 of the Code (a
"Plan"), or any other person (including an investment manager, a named fiduciary
or a trustee of any Plan) acting, directly or indirectly, on behalf of or
purchasing any Certificate with "plan assets" of any Plan.
This Certificate is one of a duly authorized issue of Certificates
designated as set forth on the face hereof (the "Certificates"). The
Certificates, in the aggregate, evidence the entire beneficial ownership
interest in the Trust Fund formed pursuant to the Agreement.
The Certificateholder, by its acceptance of this Certificate, agrees
that it will look solely to the Trust Fund for payment hereunder and that the
Trustee is not liable to the Certificateholders for any amount payable under
this Certificate or the Agreement or, except as expressly provided in the
Agreement, subject to any liability under the Agreement.
This Certificate does not purport to summarize the Agreement and
reference is made to the Agreement for the interests, rights and limitations of
rights, benefits, obligations and duties evidenced hereby, and the rights,
duties and immunities of the Trustee.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Depositor and the rights of the Certificateholders under the Agreement from time
to time by the parties thereto with the consent of the Holders of the Class or
Classes of Certificates affected thereby evidencing over 50% of the Voting
Rights of such Class or Classes. Any such consent by the Holder of this
Certificate shall be conclusive and binding on such Holder and upon all future
Holders of this Certificate and of any Certificate issued upon the transfer
hereof or in lieu hereof whether or not notation of such consent is made upon
this Certificate. The Agreement also permits the amendment thereof, in certain
limited circumstances, without the consent of the Holders of any of the
Certificates.
As provided in the Agreement and subject to certain limitations
therein set forth, the transfer of this Certificate is registrable with the
Trustee upon surrender of this Certificate for registration of transfer at the
offices or agencies maintained by the Trustee for such purposes, duly endorsed
by, or accompanied by a written instrument of transfer in form satisfactory to
the Trustee duly executed by the Holder hereof or such Holder's attorney duly
authorized in writing, and thereupon one or more new Certificates in authorized
denominations representing a like aggregate Percentage Interest will be issued
to the designated transferee.
A-7-13
The Certificates are issuable only as registered Certificates
without coupons in the Classes and denominations specified in the Agreement. As
provided in the Agreement and subject to certain limitations therein set forth,
this Certificate is exchangeable for one or more new Certificates evidencing the
same Class and in the same aggregate Percentage Interest, as requested by the
Holder surrendering the same.
No service charge will be made to the Certificateholders for any
such registration of transfer, but the Trustee may require payment of a sum
sufficient to cover any tax or other governmental charge payable in connection
therewith. The Depositor, the Master Servicer, the Trustee and any agent of any
of them may treat the Person in whose name this Certificate is registered as the
owner hereof for all purposes, and none of Depositor, the Master Servicer, the
Trustee or any such agent shall be affected by notice to the contrary.
The obligations created by the Agreement and the Trust Fund created
thereby (other than the obligations to make payments to Certificateholders with
respect to the termination of the Agreement) shall terminate upon the earlier of
(i) the later of (A) the maturity or other liquidation (or Advance with respect
thereto) of the last Mortgage Loan remaining in the Trust Fund and disposition
of all property acquired upon foreclosure or deed in lieu of foreclosure of any
Mortgage Loan and (B) 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
earlier of (i) the first Distribution Date on which the aggregate Stated
Principal Balance of the Mortgage Loans is less than or equal to 20% of the
aggregate Stated Principal Balance of the Mortgage Loans at the Cut-off Date and
(ii) the Distribution Date in September 2013. 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-7-14
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be
duly executed.
Dated: September 30, 2003 JPMORGAN CHASE BANK,
not in its individual capacity but solely as
Trustee
By:
----------------------------------------
Authorized Signatory
CERTIFICATE OF AUTHENTICATION
This is one of the Class R-2 Certificates referred to in the
within-mentioned Agreement.
JPMORGAN CHASE BANK
Authorized signatory of JPMorgan Chase Bank,
not in its individual capacity but solely
as Trustee
By:
----------------------------------------
Authorized Signatory
A-7-15
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 Percentage Interest
evidenced by the within Asset-Backed Certificate and hereby authorizes the
transfer of registration of such interest to assignee on the Certificate
Register of the Trust Fund.
I (We) further direct the Certificate Registrar to issue a new
Certificate of a like denomination and Class, to the above named assignee and
deliver such Certificate to the following address:
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
Dated:
-----------------------------------------------------
Signature by or on behalf of assignor
----------------------------------
Signature Guaranteed
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of
distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to _________________________________ for the account
of _________________________ account number _____________, or, if mailed by
check, to ______________________________. Applicable statements should be mailed
to _____________________________________________.
This information is provided by __________________, the assignee
named above, or ________________________, as its agent.
A-7-16
FORM OF CLASS R-3 CERTIFICATE
THIS CERTIFICATE MAY NOT BE HELD BY OR TRANSFERRED TO A NON-UNITED
STATES PERSON OR A DISQUALIFIED ORGANIZATION (AS DEFINED BELOW).
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A
"RESIDUAL INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT" AS THOSE
TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL
REVENUE CODE OF 1986 (THE "CODE").
NO TRANSFER OF THIS CERTIFICATE MAY BE MADE TO ANY PERSON, UNLESS
THE TRANSFEREE PROVIDES EITHER A CERTIFICATION PURSUANT TO SECTION 7.02(b) OF
THE AGREEMENT OR AN OPINION OF COUNSEL SATISFACTORY TO THE TRUSTEE THAT THE
PURCHASE OF THIS CERTIFICATE WILL NOT CONSTITUTE OR RESULT IN A NON-EXEMPT
PROHIBITED TRANSACTION UNDER SECTION 406 OF THE EMPLOYEE RETIREMENT INCOME
SECURITY ACT OF 1974, AS AMENDED ("ERISA"), OR SECTION 4975 OF THE CODE AND WILL
NOT SUBJECT THE MASTER SERVICER, THE TRUSTEE OR THE SECURITIES ADMINISTRATOR TO
ANY OBLIGATION OR LIABILITY IN ADDITION TO THOSE UNDERTAKEN IN THE AGREEMENT.
ANY RESALE, TRANSFER OR OTHER DISPOSITION OF THIS CERTIFICATE MAY BE
MADE ONLY IF THE PROPOSED TRANSFEREE PROVIDES A TRANSFER AFFIDAVIT TO THE MASTER
SERVICER AND THE TRUSTEE THAT (1) SUCH TRANSFEREE IS NOT (A) THE UNITED STATES,
ANY STATE OR POLITICAL SUBDIVISION THEREOF, ANY POSSESSION OF THE UNITED STATES,
OR ANY AGENCY OR INSTRUMENTALITY OF ANY OF THE FOREGOING (OTHER THAN AN
INSTRUMENTALITY WHICH IS A CORPORATION IF ALL OF ITS ACTIVITIES ARE SUBJECT TO
TAX AND EXCEPT FOR XXXXXXX MAC, A MAJORITY OF ITS BOARD OF DIRECTORS IS NOT
SELECTED BY SUCH GOVERNMENTAL UNIT), (B) A FOREIGN GOVERNMENT, ANY INTERNATIONAL
ORGANIZATION, OR ANY AGENCY OR INSTRUMENTALITY OF EITHER OF THE FOREGOING, (C)
ANY ORGANIZATION (OTHER THAN CERTAIN FARMERS' COOPERATIVES DESCRIBED IN SECTION
521 OF THE CODE) WHICH IS EXEMPT FROM THE TAX IMPOSED BY CHAPTER 1 OF THE CODE
UNLESS SUCH ORGANIZATION IS SUBJECT TO THE TAX IMPOSED BY SECTION 511 OF THE
CODE (INCLUDING THE TAX IMPOSED BY SECTION 511 OF THE CODE ON UNRELATED BUSINESS
TAXABLE INCOME), (D) RURAL ELECTRIC AND TELEPHONE COOPERATIVES DESCRIBED IN
SECTION 1381(a)(2)(C) OF THE CODE, (E) AN ELECTING LARGE PARTNERSHIP UNDER
SECTION 775(a) OF THE CODE (ANY SUCH PERSON DESCRIBED IN THE FOREGOING CLAUSES
(A), (B), (C), (D) OR (E) BEING HEREIN REFERRED TO AS A "DISQUALIFIED
ORGANIZATION"), OR (F) AN AGENT OF A DISQUALIFIED
A-7-17
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-7-18
Certificate No.1
Class R-3 Percentage Interest: 100%
Date of Pooling and Servicing Agreement and
Cut-off Date:
September 1, 2003
First Distribution Date:
October 27, 2003
Master Servicer:
Xxxxx Fargo Bank Minnesota, National
Association CUSIP: 07384Y MQ 6
Assumed Final Distribution Date:
October 25, 2033
ASSET-BACKED CERTIFICATE
SERIES 2003-AC5
evidencing a fractional undivided interest in the distributions allocable
to the Class R-3 Certificates with respect to a Trust Fund consisting
primarily of a pool of conventional one- to four-family fixed interest
rate mortgage loans sold by BEAR XXXXXXX ASSET BACKED SECURITIES, INC.
This Certificate is payable solely from the assets of the Trust
Fund, and does not represent an obligation of or interest in Bear Xxxxxxx Asset
Backed Securities, Inc., the Master Servicer, the Trustee or the Securities
Administrator referred to below or any of their affiliates or any other person.
Neither this Certificate nor the underlying Mortgage Loans are guaranteed or
insured by any governmental entity or by Bear Xxxxxxx Asset Backed Securities,
Inc., the Master Servicer, the Trustee or the Securities Administrator or any of
their affiliates or any other person. None of Bear Xxxxxxx Asset Backed
Securities, Inc., the Master Servicer or any of their affiliates will have any
obligation with respect to any certificate or other obligation secured by or
payable from payments on the Certificates.
This certifies that Bear, Xxxxxxx Securities Corp. is the registered
owner of the Percentage Interest evidenced hereby in the beneficial ownership
interest of Certificates of the same Class as this Certificate in a trust (the
"Trust Fund") generally consisting of conventional first lien, fixed rate
mortgage loans secured by one- to four- family residences (collectively, the
"Mortgage
A-7-19
Loans") sold by Bear Xxxxxxx Asset Backed Securities, Inc. ("BSABS"). The
Mortgage Loans were sold by EMC Mortgage Corporation ("EMC") to BSABS. Xxxxx
Fargo Bank Minnesota, National Association will act as master servicer of the
Mortgage Loans (the "Master Servicer," which term includes any successors
thereto under the Agreement referred to below). The Trust Fund was created
pursuant to the Pooling and Servicing Agreement dated as of the Cut-off Date
specified above (the "Agreement"), among BSABS, as depositor (the "Depositor"),
EMC Mortgage Corporation as seller and company, Xxxxx Fargo Bank Minnesota,
National Association, as Master Servicer and securities administrator (the
"Securities Administrator") and JPMorgan Chase Bank as trustee (the "Trustee"),
a summary of certain of the pertinent provisions of which is set forth
hereafter. To the extent not defined herein, capitalized terms used herein shall
have the meaning ascribed to them in the Agreement. This Certificate is issued
under and is subject to the terms, provisions and conditions of the Agreement,
to which Agreement the Holder of this Certificate by virtue of its acceptance
hereof assents and by which such Holder is bound.
Each Holder of this Certificate will be deemed to have agreed to be bound
by the restrictions set forth in the Agreement to the effect that (i) each
person holding or acquiring any Ownership Interest in this Certificate must be a
United States Person and a Permitted Transferee, (ii) the transfer of any
Ownership Interest in this Certificate will be conditioned upon the delivery to
the Trustee of, among other things, an affidavit to the effect that it is a
United States Person and Permitted Transferee, (iii) any attempted or purported
transfer of any Ownership Interest in this Certificate in violation of such
restrictions will be absolutely null and void and will vest no rights in the
purported transferee, and (iv) if any person other than a United States Person
and a Permitted Transferee acquires any Ownership Interest in this Certificate
in violation of such restrictions, then the Depositor will have the right, in
its sole discretion and without notice to the Holder of this Certificate, to
sell this Certificate to a purchaser selected by the Depositor, which purchaser
may be the Depositor, or any affiliate of the Depositor, on such terms and
conditions as the Depositor may choose.
The Trustee will distribute on the 25th day of each month, or, if
such 25th day is not a Business Day, the immediately following Business Day
(each, a "Distribution Date"), commencing on the First Distribution Date
specified above, to the Person in whose name this Certificate is registered at
the close of business on the last day (or if such last day is not a Business
Day, the Business Day immediately preceding such last day) of the calendar month
immediately preceding the month in which the Distribution Date occurs, an amount
equal to the product of the Percentage Interest evidenced by this Certificate
and the amounts required to be distributed to the Holders of Certificates of the
same Class as this Certificate. The Assumed Final Distribution Date is the
Distribution Date in the month following the latest scheduled maturity date of
any Mortgage Loan.
Distributions on this Certificate will be made by the Trustee by
check mailed to the address of the Person entitled thereto as such name and
address shall appear on the Certificate Register or, if such Person so requests
by notifying the Trustee in writing as specified in the Agreement.
Notwithstanding the above, the final distribution on this Certificate will be
made after due notice by the Trustee of the pendency of such distribution and
only upon presentation and
A-7-20
surrender of this Certificate at the office or agency appointed by the Trustee
for that purpose and designated in such notice.
No transfer of this Class R-3 Certificate will be made unless the
Trustee and the Securities Administrator have received either (i) the opinion of
counsel set forth in section 7.02(b) of the Pooling Agreement or (ii) a
representation letter, in the form as described by the Agreement, stating that
the transferee is not an employee benefit or other plan subject to the
prohibited transaction provisions of ERISA or Section 4975 of the Code (a
"Plan"), or any other person (including an investment manager, a named fiduciary
or a trustee of any Plan) acting, directly or indirectly, on behalf of or
purchasing any Certificate with "plan assets" of any Plan.
This Certificate is one of a duly authorized issue of Certificates
designated as set forth on the face hereof (the "Certificates"). The
Certificates, in the aggregate, evidence the entire beneficial ownership
interest in the Trust Fund formed pursuant to the Agreement.
The Certificateholder, by its acceptance of this Certificate, agrees
that it will look solely to the Trust Fund for payment hereunder and that the
Trustee is not liable to the Certificateholders for any amount payable under
this Certificate or the Agreement or, except as expressly provided in the
Agreement, subject to any liability under the Agreement.
This Certificate does not purport to summarize the Agreement and
reference is made to the Agreement for the interests, rights and limitations of
rights, benefits, obligations and duties evidenced hereby, and the rights,
duties and immunities of the Trustee.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Depositor and the rights of the Certificateholders under the Agreement from time
to time by the parties thereto with the consent of the Holders of the Class or
Classes of Certificates affected thereby evidencing over 50% of the Voting
Rights of such Class or Classes. Any such consent by the Holder of this
Certificate shall be conclusive and binding on such Holder and upon all future
Holders of this Certificate and of any Certificate issued upon the transfer
hereof or in lieu hereof whether or not notation of such consent is made upon
this Certificate. The Agreement also permits the amendment thereof, in certain
limited circumstances, without the consent of the Holders of any of the
Certificates.
As provided in the Agreement and subject to certain limitations
therein set forth, the transfer of this Certificate is registrable with the
Trustee upon surrender of this Certificate for registration of transfer at the
offices or agencies maintained by the Trustee for such purposes, duly endorsed
by, or accompanied by a written instrument of transfer in form satisfactory to
the Trustee duly executed by the Holder hereof or such Holder's attorney duly
authorized in writing, and thereupon one or more new Certificates in authorized
denominations representing a like aggregate Percentage Interest will be issued
to the designated transferee.
A-7-21
The Certificates are issuable only as registered Certificates
without coupons in the Classes and denominations specified in the Agreement. As
provided in the Agreement and subject to certain limitations therein set forth,
this Certificate is exchangeable for one or more new Certificates evidencing the
same Class and in the same aggregate Percentage Interest, as requested by the
Holder surrendering the same.
No service charge will be made to the Certificateholders for any
such registration of transfer, but the Trustee may require payment of a sum
sufficient to cover any tax or other governmental charge payable in connection
therewith. The Depositor, the Master Servicer, the Trustee and any agent of any
of them may treat the Person in whose name this Certificate is registered as the
owner hereof for all purposes, and none of Depositor, the Master Servicer, the
Trustee or any such agent shall be affected by notice to the contrary.
The obligations created by the Agreement and the Trust Fund created
thereby (other than the obligations to make payments to Certificateholders with
respect to the termination of the Agreement) shall terminate upon the earlier of
(i) the later of (A) the maturity or other liquidation (or Advance with respect
thereto) of the last Mortgage Loan remaining in the Trust Fund and disposition
of all property acquired upon foreclosure or deed in lieu of foreclosure of any
Mortgage Loan and (B) 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
earlier of (i) the first Distribution Date on which the aggregate Stated
Principal Balance of the Mortgage Loans is less than or equal to 20% of the
aggregate Stated Principal Balance of the Mortgage Loans at the Cut-off Date and
(ii) the Distribution Date in September 2013. 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-7-22
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be
duly executed.
Dated: September 30, 2003 JPMORGAN CHASE BANK,
not in its individual capacity but solely as
Trustee
By:
----------------------------------------
Authorized Signatory
CERTIFICATE OF AUTHENTICATION
This is one of the Class R-3 Certificates referred to in the
within-mentioned Agreement.
JPMORGAN CHASE BANK
Authorized signatory of JPMorgan Chase Bank,
not in its individual capacity but solely
as Trustee
By:
----------------------------------------
Authorized Signatory
A-7-23
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto __________________________________ (Please print or typewrite
name and address including postal zip code of assignee) a Percentage Interest
evidenced by the within Asset-Backed Certificate and hereby authorizes the
transfer of registration of such interest to assignee on the Certificate
Register of the Trust Fund.
I (We) further direct the Certificate Registrar to issue a new
Certificate of a like denomination and Class, to the above named assignee and
deliver such Certificate to the following address:
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
Dated:
-----------------------------------------------------
Signature by or on behalf of assignor
----------------------------------
Signature Guaranteed
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of
distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to _________________________________ for the account
of _________________________ account number _____________, or, if mailed by
check, to ______________________________. Applicable statements should be mailed
to _____________________________________________.
This information is provided by __________________, the assignee
named above, or ________________________, as its agent.
A-7-24
EXHIBIT B
MORTGAGE LOAN SCHEDULE
The Preliminary and Final Mortgage Loan Schedules shall set forth
the following information with respect to each Mortgage Loan:
(a) the loan number;
(b) the Mortgagor's name;
(c) the street address (including city, state and zip code) of the
Mortgaged Property;
(d) the property type;
(e) the Mortgage Rate;
(f) the Master Servicing Rate;
(g) the Net Rate;
(h) the original term;
(i) the maturity date;
(j) the stated remaining term to maturity;
(k) the original principal balance;
(1) the first payment date;
(m) the principal and interest payment in effect as of the Cut-off
Date;
(n) the unpaid principal balance as of the Cut-off Date;
(o) the Loan-to-Value Ratio at origination;
(p) paid-through date;
(q) the insurer of any Primary Mortgage Insurance Policy;
(r) reserved;
B-1
(s) the Gross Margin, if applicable;
(t) the Maximum Lifetime Mortgage Rate, if applicable;
(u) the Minimum Lifetime Mortgage Rate, if applicable;
(v) the Periodic Rate Cap, if applicable; and
(w) the number of days delinquent, if any.
B-2
EXHIBIT C-1
FORM OF CUSTODIAN INITIAL CERTIFICATION
September 30, 2003
JPMorgan Chase Bank
0 Xxx Xxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
EMC Mortgage Corporation
000 Xxxxxx Xxxxx Xxxxx, Xxxxx 000
Xxxxxx, Xxxxx 00000
Attention: Bear Xxxxxxx Asset Backed Securities, Inc., Series 2003-AC5
Re: Custodial Agreement, dated as of September 30, 2003, by and
among JPMorgan Chase Bank, Xxxxx Fargo Bank Minnesota,
National Association, Bear Xxxxxxx Asset Backed Securities,
Inc. and EMC Mortgage Corporation relating to Bear Xxxxxxx
Asset Backed Securities Trust 2003-AC5, Asset-Backed
Certificates, Series 2003-AC5
Ladies and Gentlemen:
In accordance with Section 2.3 of the above-captioned Custodial
Agreement, and subject to Section 2.02 of the Pooling and Servicing Agreement,
the undersigned, as Custodian, hereby certifies that it has received a Mortgage
File (which contains an original Mortgage Note or lost note affidavit) to the
extent required in Section 2.01 of the Pooling and Servicing Agreement with
respect to each Mortgage Loan listed in the Mortgage Loan Schedule, with any
exceptions listed on Schedule A attached hereto.
Capitalized words and phrases used herein shall have the respective
meanings assigned to them in the above-captioned Custodial Agreement.
XXXXX FARGO BANK MINNESOTA,
NATIONAL ASSOCIATION
By:
----------------------------------
Name:
--------------------------------
Title:
-------------------------------
C-1-1
EXHIBIT C-2
FORM OF CUSTODIAN INTERIM CERTIFICATION
[DATE]
JPMorgan Chase Bank
0 Xxx Xxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
EMC Mortgage Corporation
000 Xxxxxx Xxxxx Xxxxx, Xxxxx 000
Xxxxxx, Xxxxx 00000
Attention: Bear Xxxxxxx Asset Backed Securities, Inc., Series 2003-AC5
Re: Custodial Agreement, dated as of September 30, 2003, by and
among JPMorgan Chase Bank, Xxxxx Fargo Bank Minnesota,
National Association, Bear Xxxxxxx Asset Backed Securities,
Inc. and EMC Mortgage Corporation relating to Bear Xxxxxxx
Asset Backed Securities Trust 2003-AC5, Asset-Backed
Certificates, Series 2003-AC5
Ladies and Gentlemen:
In accordance with Section 2.3 of the above-captioned Custodial
Agreement, the undersigned, as Custodian, hereby certifies that it has received
a Mortgage File to the extent required pursuant to Section 2.01 of the Pooling
and Servicing Agreement with respect to each Mortgage Loan listed in the
Mortgage Loan Schedule, and it has reviewed the Mortgage File and the Mortgage
Loan Schedule and has determined that: all required documents have been executed
and received and that such documents related to the Mortgage Loans identified on
the Mortgage Loan Schedule, with any exceptions listed on Schedule A attached
hereto.
Capitalized words and phrases used herein shall have the respective
meanings assigned to them in the above-captioned Custodial Agreement.
XXXXX FARGO BANK MINNESOTA,
NATIONAL ASSOCIATION
By:
----------------------------------
Name:
--------------------------------
Title:
-------------------------------
C-2-1
EXHIBIT C-3
FORM OF FINAL CERTIFICATION
[DATE]
JPMorgan Chase Bank
0 Xxx Xxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
EMC Mortgage Corporation
000 Xxxxxx Xxxxx Xxxxx, Xxxxx 000
Xxxxxx, Xxxxx 00000
Attention: Bear Xxxxxxx Asset Backed Securities, Inc., Series 2003-AC5
Re: Custodial Agreement, dated as of September 30, 2003, by
and among JPMorgan Chase Bank, Xxxxx Fargo Bank
Minnesota, National Association, Bear Xxxxxxx Asset
Backed Securities, Inc. and EMC Mortgage Corporation
relating to Bear Xxxxxxx Asset Backed Securities Trust
2003-AC5, Asset-Backed Certificates, Series 2003-AC5
Ladies and Gentlemen:
In accordance with Section 2.3 of the above-captioned Custodial
Agreement, the undersigned, as Custodian, hereby certifies that it has received
a Mortgage File with respect to each Mortgage Loan listed in the Mortgage Loan
Schedule containing with respect to each such Mortgage Loan:
(i) the original Mortgage Note, including any riders thereto, endorsed
without recourse to the order of "JPMorgan Chase Bank, as Trustee for
certificateholders of Bear Xxxxxxx Asset Backed Securities, Inc. Asset
Backed Certificates, Series 2003- AC5," and showing to the extent
available to the Seller an unbroken chain of endorsements from the
original payee thereof to the Person endorsing it to the Trustee,
(ii) the original Mortgage and, if the related Mortgage Loan is a
MOM Loan, noting the presence of the MIN and language indicating
that such Mortgage Loan is a MOM Loan, which shall have been
recorded (or if the original is not available, a copy), with
C-3-1
evidence of such recording indicated thereon (or if permitted by
Section 2.2 of the Custodial Agreement, shall be in recordable
form),
(iii) unless the Mortgage Loan is a MOM Loan, the assignment (either
an original or a copy, which may be in the form of a blanket
assignment if permitted in the jurisdiction in which the Mortgaged
Property is located) to the Trustee of the Mortgage with respect to
each Mortgage Loan in the name of "JPMorgan Chase Bank, as Trustee
for certificateholders of Bear Xxxxxxx Asset Backed Securities, Inc.
Asset Backed Certificates, Series 2003-AC5," which shall have been
recorded (or if permitted by Section 2.2 of the Custodial Agreement,
shall be in recordable form);
(iv) an original or a copy of all intervening assignments of the
Mortgage, if any, with evidence of recording thereon,
(v) the original policy of title insurance or mortgagee's
certificate of title insurance or commitment or binder for title
insurance, if available, or a copy thereof, or, in the event that
such original title insurance policy is unavailable, a photocopy
thereof, or in lieu thereof, a current lien search on the related
Mortgaged Property and
(vi) originals or copies of all available assumption, modification
or substitution agreements, if any.
Capitalized words and phrases used herein shall have the respective
meanings assigned to them in the above-captioned Custodial Agreement.
XXXXX FARGO BANK MINNESOTA,
NATIONAL ASSOCIATION
By:
----------------------------------
Name:
--------------------------------
Title:
-------------------------------
C-3-2
EXHIBIT D
FORM OF TRANSFER AFFIDAVIT
Affidavit pursuant to Section
860E(e)(4) of the Internal Revenue
Code of 1986, as amended, and for
other purposes
STATE OF )
)ss:
COUNTY OF )
[NAME OF OFFICER], being first duly sworn, deposes and says:
1. That he/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 makes this affidavit.
2. That (i) the Investor is not a "disqualified organization" as defined
in Section 860E(e)(5) of the Internal Revenue Code of 1986, as amended (the
"Code"), and will not be a disqualified organization as of [Closing Date] [date
of purchase]; (ii) it is not acquiring the Bear Xxxxxxx Asset-Backed Securities,
Inc. Asset-Backed Certificates, Series 2003-AC5, Class R-__ Certificates (the
"Residual Certificates") for the account of a disqualified organization; (iii)
it consents to any amendment of the Pooling and Servicing Agreement that shall
be deemed necessary by Bear Xxxxxxx Asset Backed Securities, Inc. (upon advice
of counsel) to constitute a reasonable arrangement to ensure that the Residual
Certificates will not be owned directly or indirectly by a disqualified
organization; and (iv) it will not transfer such Residual Certificates unless
(a) it has received from the transferee an affidavit in substantially the same
form as this affidavit containing these same four representations and (b) as of
the time of the transfer, it does not have actual knowledge that such affidavit
is false.
3. That the Investor is one of the following: (i) a citizen or resident of
the United States, (ii) a corporation or partnership (including an entity
treated as a corporation or partnership for federal income tax purposes) created
or organized in, or under the laws of, the United States or any state thereof or
the District of Columbia (except, in the case of a partnership, to the extent
provided in regulations), provided that no partnership or other entity treated
as a partnership for United States federal income tax purposes shall be treated
as a United States Person unless all persons that own an interest in such
partnership either directly or through any entity that is not a corporation for
United States federal income tax purposes are United States Persons, (iii) an
estate whose income is subject to United States federal income tax regardless of
its source, or (iv) a trust other than a "foreign trust," as defined in Section
7701 (a)(31) of the Code.
4. That the Investor's taxpayer identification number is
______________________.
D-1
5. That no purpose of the acquisition of the Residual Certificates is to
avoid or impede the assessment or collection of tax.
6. That the Investor understands that, as the holder of the Residual
Certificates, the Investor may incur tax liabilities in excess of any cash flows
generated by such Residual Certificates.
7. That the Investor intends to pay taxes associated with holding the
Residual Certificates as they become due.
IN WITNESS WHEREOF, the Investor has caused this instrument to be executed
on its behalf, pursuant to authority of its Board of Directors, by its [Title of
Officer] this ____ day of _________, 20__.
[NAME OF INVESTOR]
By:
--------------------------------------
[Name of Officer]
[Title of Officer]
[Address of Investor for receipt of
distributions]
Address of Investor for receipt of tax
information:
D-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/she
executed the same as his/her free act and deed and the free act and deed of the
Investor.
Subscribed and sworn before me this ___ day of _________, 20___.
NOTARY PUBLIC
COUNTY OF
STATE OF
My commission expires the ___ day of ___________________, 20___.
D-3
EXHIBIT E
FORM OF TRANSFEROR CERTIFICATE
______________,200___
Bear Xxxxxxx Asset Backed Securities, Inc.
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
JPMorgan Chase Bank
0 Xxx Xxxx Xxxxx, 0xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Bear Xxxxxxx Asset Backed Securities Trust 2003-AC5
Re: Bear Xxxxxxx Asset Backed Securities, Inc.
Asset-Backed Certificates, Series 2003-AC5, Class__
Ladies and Gentlemen:
In connection with the sale by ___________ (the "Seller") to ________ (the
"Purchaser") of $_________ Initial Certificate Principal Balance of Asset-Backed
Certificates, Series 2003-AC5, Class _____ (the "Certificates"), issued pursuant
to the Pooling and Servicing Agreement (the "Pooling and Servicing Agreement"),
dated as of September 1, 2003 among Bear Xxxxxxx Asset- Backed Securities, Inc.,
as depositor (the "Depositor"), EMC Mortgage Corporation, as seller and company,
Xxxxx Fargo Bank Minnesota, National Association, as master servicer and
securities administrator, and JPMorgan Chase Bank, as trustee (the "Trustee").
The Seller hereby certifies, represents and warrants to, a covenants with, the
Depositor and the Trustee that:
Neither the Seller nor anyone acting on its behalf has (a) offered,
pledged, sold, disposed of or otherwise transferred any Certificate, any
interest in any Certificate or any other similar security to any person in any
manner, (b) has solicited any offer to buy or to accept a pledge, disposition or
other transfer of any Certificate, any interest in any Certificate or any other
similar security from any person in any manner, (c) has otherwise approached or
negotiated with respect to any Certificate, any interest in any Certificate or
any other similar security with any person in any manner, (d) has made any
general solicitation by means of general advertising or in any other manner, or
(e) has taken any other action, that (as to any of (a) through (e) above) would
constitute a distribution of the Certificates under the Securities Act of 1933
(the "Act"), that would render the disposition of any Certificate a violation of
Section 5 of the Act or any state securities law, or that would require
registration or qualification pursuant thereto. The Seller will not act in any
manner set forth in the foregoing sentence with respect to any Certificate. The
Seller has not and will not sell or otherwise
E-1
transfer any of the Certificates, except in compliance with the provisions of
the Pooling and Servicing Agreement.
Very truly yours,
---------------------------------
(Seller)
By:
------------------------------
Name:
----------------------------
Title:
---------------------------
E-2
EXHIBIT F
FORM OF INVESTOR REPRESENTATION LETTER (NON-RULE 144A)
___________,200__
Bear Xxxxxxx Asset Backed Securities, Inc.
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
JPMorgan Chase Bank
0 Xxx Xxxx Xxxxx, 0xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Bear Xxxxxxx Asset Backed Securities Trust 2003-AC5
Re: Bear Xxxxxxx Asset-Backed Securities, Inc.
Asset-Backed Certificates, Series 2003-AC5, Class__
Ladies and Gentlemen:
______________ (the "Purchaser") intends to purchase from ______________
(the "Seller") $_________ Initial Certificate Principal Balance of Asset-Backed
Certificates, Series 2003-AC5, Class _____ (the "Certificates"), issued pursuant
to the Pooling and Servicing Agreement (the "Pooling and Servicing Agreement"),
dated as of September 1, 2003 among Bear Xxxxxxx Asset Backed Securities, Inc.,
as depositor (the "Depositor"), EMC Mortgage Corporation, as seller and company,
Xxxxx Fargo Bank Minnesota, National Association, as master servicer and
securities administrator, and JPMorgan Chase Bank, as trustee (the "Trustee").
All terms used herein and not otherwise defined shall have the meanings set
forth in the Pooling and Servicing Agreement. The Purchaser hereby certifies,
represents and warrants to, and covenants with, the Depositor and the Trustee
that:
1. The Purchaser understands that (a) the Certificates have not been
and will not be registered or qualified under the Securities Act of 1933,
as amended (the "Act") or any state securities law, (b) the Depositor is
not required to so register or qualify the Certificates, (c) the
Certificates may be resold only if registered and qualified pursuant to
the provisions of the Act or any state securities law, or if an exemption
from such registration and qualification is available, (d) the Pooling and
Servicing Agreement contains restrictions regarding the transfer of the
Certificates and (e) the Certificates will bear a legend to the foregoing
effect.
F-1
2. The Purchaser is acquiring the Certificates for its own account
for investment only and not with a view to or for sale in connection with
any distribution thereof in any manner that would violate the Act or any
applicable state securities laws.
3. The Purchaser is (a) a substantial, sophisticated institutional
investor having such knowledge and experience in financial and business
matters, and, in particular, in such matters related to securities similar
to the Certificates, such that it is capable of evaluating the merits and
risks of investment in the Certificates, (b) able to bear the economic
risks of such an investment and (c) an "accredited investor" within the
meaning of Rule 501 (a) promulgated pursuant to the Act.
4. The Purchaser has been furnished with, and has had an opportunity
to review (a) [a copy of the Private Placement Memorandum, dated ______,
2003, relating to the Certificates (b)] a copy of the Pooling and
Servicing Agreement and [(b)] [(c)] such other information concerning the
Certificates, the Mortgage Loans and the Depositor as has been requested
by the Purchaser from the Depositor or the Seller and is relevant to the
Purchaser's decision to purchase the Certificates. The Purchaser has had
any questions arising from such review answered by the Depositor or the
Seller to the satisfaction of the Purchaser. [If the Purchaser did not
purchase the Certificates from the Seller in connection with the initial
distribution of the Certificates and was provided with a copy of the
Private Placement Memorandum (the "Memorandum") relating to the original
sale (the "Original Sale") of the Certificates by the Depositor, the
Purchaser acknowledges that such Memorandum was provided to it by the
Seller, that the Memorandum was prepared by the Depositor solely for use
in connection with the Original Sale and the Depositor did not participate
in or facilitate in any way the purchase of the Certificates by the
Purchaser from the Seller, and the Purchaser agrees that it will look
solely to the Seller and not to the Depositor with respect to any damage,
liability, claim or expense arising out of, resulting from or in
connection with (a) error or omission, or alleged error or omission,
contained in the Memorandum, or (b) any information, development or event
arising after the date of the Memorandum.]
5. The Purchaser has not and will not nor has it authorized or will
it authorize any person to (a) offer, pledge, sell, dispose of or
otherwise transfer any Certificate, any interest in any Certificate or any
other similar security to any person in any manner, (b) solicit any offer
to buy or to accept a pledge, disposition of other transfer of any
Certificate, any interest in any Certificate or any other similar security
from any person in any manner, (c) otherwise approach or negotiate with
respect to any Certificate, any interest in any Certificate or any other
similar security with any person in any manner, (d) make any general
solicitation by means of general advertising or in any other manner or (e)
take any other action, that (as to any of (a) through (e) above) would
constitute a distribution of any Certificate under the Act, that would
render the disposition of any Certificate a violation of Section 5 of the
Act
F-2
or any state securities law, or that would require registration or
qualification pursuant thereto. The Purchaser will not sell or otherwise
transfer any of the Certificates, except in compliance with the provisions
of the Pooling and Servicing Agreement.
Very truly yours,
-----------------------------------
(Purchaser)
By:
--------------------------------
Name:
------------------------------
Title:
-----------------------------
F-3
EXHIBIT G
FORM OF RULE 144A INVESTMENT LETTER
[Date]
[SELLER]
Bear Xxxxxxx Asset Backed Securities, Inc.
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
JPMorgan Chase Bank
0 Xxx Xxxx Xxxxx, 0xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Re: Bear Xxxxxxx Asset Backed Securities Trust 2003-AC5, Asset-Backed
Certificates, Series 2003-AC5 (the "Certificates"), including the
Class __Certificates (the "Privately Offered Certificates")
Dear Ladies and Gentlemen:
In connection with our purchase of Privately Offered Certificates, we
confirm that:
(i) we understand that the Privately Offered Certificates are not
being registered under the Securities Act of 1933, as amended
(the "Act") or any applicable state securities or "Blue Sky"
laws, and are being sold to us in a transaction that is exempt
from the registration requirements of such laws;
(ii) any information we desired concerning the Certificates,
including the Privately Offered Certificates, the trust in
which the Certificates represent the entire beneficial
ownership interest (the "Trust") or any other matter we deemed
relevant to our decision to purchase Privately Offered
Certificates has been made available to us;
(iii) we are able to bear the economic risk of investment in
Privately Offered Certificates; we are an institutional
"accredited investor" as defined in Section 501(a) of
Regulation D promulgated under the Act and a sophisticated
institutional investor;
(iv) we are acquiring Privately Offered Certificates for our own
account, not as nominee for any other person, and not with a
present view to any distribution or other disposition of the
Privately Offered Certificates;
(v) we agree the Privately Offered Certificates must be held
indefinitely by us (and may not be sold, pledged, hypothecated
or in any way disposed of) unless subsequently registered
under the Act and any applicable state
securities or "Blue Sky" laws or an exemption from the
registration requirements of the Act and any applicable state
securities or "Blue Sky" laws is available;
(vi) we agree that in the event that at some future time we wish to
dispose of or exchange any of the Privately Offered
Certificates (such disposition or exchange not being currently
foreseen or contemplated), we will not transfer or exchange
any of the Privately Offered Certificates unless:
(A) (1) the sale is to an Eligible Purchaser (as defined
below), (2) if required by the Pooling and Servicing Agreement
(as defined below) a letter to substantially the same effect
as either this letter or, if the Eligible Purchaser is a
Qualified Institutional Buyer as defined under Rule 144A of
the Act, the Rule 144A and Related Matters Certificate in the
form attached to the Pooling and Servicing Agreement (as
defined below) (or such other documentation as may be
acceptable to the Trustee and the Securities Administrator) is
executed promptly by the purchaser and delivered to the
addressees hereof and (3) all offers or solicitations in
connection with the sale, whether directly or through any
agent acting on our behalf, are limited only to Eligible
Purchasers and are not made by means of any form of general
solicitation or general advertising whatsoever; and
(B) if the Privately Offered Certificate is not
registered under the Act (as to which we acknowledge you have
no obligation), the Privately Offered Certificate is sold in a
transaction that does not require registration under the Act
and any applicable state securities or "blue sky" laws and, if
Xxxxx Fargo Bank Minnesota, National Association (the
"Securities Administrator") 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 the
Opinion of Counsel required by the Agreement.
G-2
(ix) We understand that each of the Class ___ Certificates bears,
and will continue to bear, a legend to substantiate the
following effect: "THIS CERTIFICATE HAS NOT BEEN AND WILL NOT
BE REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED
(THE "SECURITIES ACT"), OR UNDER ANY STATE SECURITIES LAWS.
THE HOLDER HEREOF, BY PURCHASING THIS CERTIFICATE, AGREES THAT
THIS CERTIFICATE MAY BE REOFFERED, RESOLD, PLEDGED OR
OTHERWISE TRANSFERRED ONLY IN COMPLIANCE WITH THE SECURITIES
ACT AND OTHER APPLICABLE LAWS AND ONLY (1) PURSUANT TO RULE
144A UNDER THE SECURITIES ACT ("RULE 144A") TO A PERSON THAT
THE HOLDER REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL
BUYER WITHIN THE MEANING OF RULE 144A (A "QIB"), PURCHASING
FOR ITS OWN ACCOUNT OR A QIB PURCHASING FOR THE ACCOUNT OF A
QIB, WHOM THE HOLDER HAS INFORMED, IN EACH CASE, THAT THE
REOFFER, RESALE, PLEDGE OR OTHER TRANSFER IS BEING MADE IN
RELIANCE ON RULE 144A, (2) PURSUANT TO AN EXEMPTION FROM
REGISTRATION PROVIDED BY RULE 144 UNDER THE SECURITIES ACT (IF
AVAILABLE) OR (3) IN CERTIFICATED FORM TO AN "INSTITUTIONAL
ACCREDITED INVESTOR" WITHIN THE MEANING THEREOF IN RULE
501(a)(1), (2), (3) or (7) OF REGULATION D UNDER THE ACT OR
ANY ENTITY IN WHICH ALL OF THE EQUITY OWNERS COME WITHIN SUCH
PARAGRAPHS PURCHASING NOT FOR DISTRIBUTION IN VIOLATION OF THE
SECURITIES ACT, SUBJECT TO (A) THE RECEIPT BY THE TRUSTEE OF A
LETTER SUBSTANTIALLY IN THE FORM PROVIDED IN THE AGREEMENT AND
(B) THE RECEIPT BY THE TRUSTEE OF SUCH OTHER EVIDENCE
ACCEPTABLE TO THE TRUSTEE THAT SUCH REOFFER, RESALE, PLEDGE OR
TRANSFER IS IN COMPLIANCE WITH THE SECURITIES ACT AND OTHER
APPLICABLE LAWS OR IN EACH CASE IN ACCORDANCE WITH ALL
APPLICABLE SECURITIES LAWS OF THE UNITED STATES AND ANY OTHER
APPLICABLE JURISDICTION. THIS CERTIFICATE 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
G-3
OR A QIB PURCHASING FOR THE ACCOUNT OF A QIB, WHOM THE HOLDER
HAS INFORMED, IN EACH CASE, THAT THE REOFFER, RESALE, PLEDGE
OR OTHER TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A, (2)
PURSUANT TO AN EXEMPTION FROM REGISTRATION PROVIDED BY RULE
144 UNDER THE SECURITIES ACT (IF AVAILABLE) OR (3) IN
CERTIFICATED FORM TO AN "INSTITUTIONAL ACCREDITED INVESTOR"
WITHIN THE MEANING THEREOF IN RULE 501(a)(1), (2), (3) or (7)
OF REGULATION D UNDER THE ACT OR ANY ENTITY IN WHICH ALL OF
THE EQUITY OWNERS COME WITHIN SUCH PARAGRAPHS PURCHASING NOT
FOR DISTRIBUTION IN VIOLATION OF THE SECURITIES ACT, SUBJECT
TO (A) THE RECEIPT BY THE TRUSTEE OF A LETTER SUBSTANTIALLY IN
THE FORM PROVIDED IN THE AGREEMENT AND (B) THE RECEIPT BY THE
TRUSTEE OF SUCH OTHER EVIDENCE ACCEPTABLE TO THE TRUSTEE THAT
SUCH REOFFER, RESALE, PLEDGE OR TRANSFER IS IN COMPLIANCE WITH
THE SECURITIES ACT AND OTHER APPLICABLE LAWS OR IN EACH CASE
IN ACCORDANCE WITH ALL APPLICABLE SECURITIES LAWS OF THE
UNITED STATES AND ANY OTHER APPLICABLE JURISDICTION."
"Eligible Purchaser" means a corporation, partnership or other entity
which we have reasonable grounds to believe and do believe (i) can make
representations with respect to itself to substantially the same effect as the
representations set forth herein, and (ii) is either a Qualified Institutional
Buyer as defined under Rule 144A of the Act or an institutional "Accredited
Investor" as defined under Rule 501 of the Act.
Terms not otherwise defined herein shall have the meanings assigned to
them in the Pooling and Servicing Agreement, dated as of September 1, 2003,
between Bear Xxxxxxx Asset Backed Securities, Inc., as depositor, EMC Mortgage
Corporation, as seller and company, Xxxxx Fargo Bank Minnesota, National
Association, as master servicer and securities administrator, and JPMorgan Chase
Bank, as Trustee (the "Pooling and Servicing Agreement').
If the Purchaser proposes that its Certificates be registered in the name
of a nominee on its behalf, the Purchaser has identified such nominee below, and
has caused such nominee to complete the Nominee Acknowledgment at the end of
this letter.
Name of Nominee (if any):
---------------------------------
G-4
IN WITNESS WHEREOF, this document has been executed by the undersigned who
is duly authorized to do so on behalf of the undersigned Eligible Purchaser on
the ___ day of ________, 20___.
Very truly yours,
[PURCHASER]
By:
----------------------------------
(Authorized Officer)
[By:
----------------------------------
Attorney-in-fact]
G-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]
G-6
EXHIBIT H
FORM OF REQUEST FOR RELEASE
To: JPMorgan Chase Bank
0 Xxx Xxxx Xxxxx, 0xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
RE: Pooling and Servicing Agreement dated as of September 1, 2003, between
Bear Xxxxxxx Asset Backed Securities Inc., as Depositor, EMC Mortgage
Corporation, as seller and company, Xxxxx Fargo Bank Minnesota, National
Association, as master servicer and securities administrator, and JPMorgan
Chase Bank, as Trustee
In connection with the administration of the Mortgage Loans held by you
pursuant to the above-captioned Pooling and Servicing Agreement, we request the
release, and hereby acknowledge receipt, of the Mortgage File for the Mortgage
Loan described below, for the reason indicated.
Mortgage Loan Number:
Mortgagor Name, Address & Zip Code:
Reason for Requesting Documents (check one):
_____ 1. Mortgage Paid in Full and proceeds have been deposited into the
Custodial Account
_____ 2. Foreclosure
_____ 3. Substitution
_____ 4. Other Liquidation
_____ 5. Nonliquidation Reason:
-----------------------------
_____ 6. California Mortgage Loan paid in full
By:
--------------------------------------
(authorized signer)
Issuer:
---------------------------------
Address:
--------------------------------
Date:
------------------------------------
H-1
EXHIBIT I
DTC Letter of Representations
[provided upon request]
I-1
EXHIBIT J
Schedule of Mortgage Loans with Lost Notes
[provided upon request]
J-1
EXHIBIT K
FORM OF CUSTODIAL AGREEMENT
THIS CUSTODIAL AGREEMENT (as amended and supplemented from time to
time, the "Agreement'), dated as of September 30, 2003, by and among JPMORGAN
CHASE BANK, as trustee (including its successors under the Pooling and Servicing
Agreement defined below, the "Trustee"), BEAR XXXXXXX ASSET BACKED SECURITIES,
INC., as depositor (together with any successor in interest, the "Depositor"),
EMC MORTGAGE CORPORATION, as seller (the "Seller") and company (together with
any successor in interest or successor under the Pooling and Servicing Agreement
referred to below, the "Company") and XXXXX FARGO BANK MINNESOTA, NATIONAL
ASSOCIATION, as master servicer (together with any successor in interest or
successor under the Pooling and Servicing Agreement referred to below, the
"Master Servicer"), securities administrator and custodian (together with any
successor in interest or any successor appointed hereunder, the "Custodian").
WITNESSETH THAT:
WHEREAS, the Depositor, the Seller, the Master Servicer and the
Trustee have entered into a Pooling and Servicing Agreement, dated as of
September 1, 2003, relating to the issuance of Bear Xxxxxxx Asset Backed
Securities Trust 2003-AC5, Asset-Backed Certificates, Series 2003-AC5 (as in
effect on the date of this agreement, the "Original Pooling and Servicing
Agreement," and as amended and supplemented from time to time, the "Pooling and
Servicing Agreement'); and
WHEREAS, the Custodian has agreed to act as agent for the Trustee
for the purposes of receiving and holding certain documents and other
instruments delivered by the Depositor, the Seller or the Master Servicer under
the Pooling and Servicing Agreement and the Servicers under their respective
Servicing Agreements, all upon the terms and conditions and subject to the
limitations hereinafter set forth;
NOW, THEREFORE, in consideration of the premises and the mutual
covenants and agreements hereinafter set forth, the Trustee, the Depositor, the
Seller, the Master Servicer and the Custodian hereby agree as follows:
ARTICLE I.
DEFINITIONS
Capitalized terms used in this Agreement and not defined herein
shall have the meanings assigned in the Original Pooling and Servicing
Agreement, unless otherwise required by the context herein.
K-1
ARTICLE II.
CUSTODY OF MORTGAGE DOCUMENTS
Section 2.1. Custodian to Act as Agent: Acceptance of Mortgage
Files. The custodian, as the duly appointed agent of the Trustee for these
purposes, acknowledges (subject to any exceptions noted in the Initial
Certification referred to in Section 2.3(a) receipt of the Mortgage Files
relating to the Mortgage Loans identified on the schedule attached hereto (the
"Mortgage Files") and declares that it holds and will hold such Mortgage Files
as agent for the Trustee, in trust, for the use and benefit of all present and
future Certificateholders.
Section 2.2. Recordation of Assignments. If any Mortgage File
includes one or more assignments of Mortgage that have not been recorded
pursuant to the provisions of Section 2.01 of the Pooling and Servicing
Agreement and the related Mortgage Loan is not a MOM Loan or the related
Mortgaged Properties are located in jurisdictions specifically excluded by the
Opinion of Counsel delivered to the Trustee pursuant to Section 2.01 of the
Pooling and Servicing Agreement, each such assignment shall be delivered by the
Custodian to the Seller for the purpose of recording it in the appropriate
public office for real property records, and the Seller, at no expense to the
Custodian, shall promptly cause to be recorded in the appropriate public office
for real property records each such assignment of Mortgage and, upon receipt
thereof from such public office, shall return each such assignment of Mortgage
to the Custodian.
Section 2.3. Review of Mortgage Files.
(a) On or prior to the Closing Date, in accordance with Section 2.02
of the Pooling and Servicing Agreement, the Custodian shall deliver to the
Seller and the Trustee an Initial Certification in the form annexed hereto as
Exhibit One evidencing receipt (subject to any exceptions noted therein) of a
Mortgage File for each of the Mortgage Loans listed on the Schedule attached
hereto (the "Mortgage Loan Schedule").
(b) Within 90 days of the Closing Date, the Custodian agrees, for
the benefit of Certificateholders, to review, in accordance with the provisions
of Section 2.02 of the Pooling and Servicing Agreement, each such document, and
shall deliver to the Seller and the Trustee an Interim Certification in the form
annexed hereto as Exhibit Two to the effect that all such documents have been
executed and received and that such documents relate to the Mortgage Loans
identified on the Mortgage Loan Schedule, except for any exceptions listed on
Schedule A attached to such Interim Certification. The Custodian shall be under
no duty or obligation to inspect, review or examine said documents, instruments,
certificates or other papers to determine that the same are genuine,
enforceable, or appropriate for the represented purpose or that they have
actually been recorded or that they are other than what they purport to be on
their face.
(c) Not later than 180 days after the Closing Date, the Custodian
shall review the Mortgage Files as provided in Section 2.02 of the Pooling and
Servicing Agreement and deliver to the Seller and the Trustee a Final
Certification in the form annexed hereto as Exhibit Three evidencing the
completeness of the Mortgage Files.
K-2
(d) In reviewing the Mortgage Files as provided herein and in the
Pooling and Servicing Agreement, the Custodian shall make no representation as
to and shall not be responsible to verify (i) the validity, legality,
enforceability, due authorization, recordability, sufficiency or genuineness of
any of the documents included in any Mortgage File or (ii) the collectibility,
insurability, effectiveness or suitability of any of the documents in any
Mortgage File.
Upon receipt of written request from the Trustee, the Custodian shall as
soon as practicable supply the Trustee with a list of all of the documents
relating to the Mortgage Loans missing from the Mortgage Files.
Section 2.4. Notification of Breaches of Representations and
Warranties. Upon discovery by the Custodian of a breach of any representation or
warranty made by the Depositor as set forth in the Pooling and Servicing
Agreement with respect to a Mortgage Loan relating to a Mortgage File, the
Custodian shall give prompt written notice to the Depositor, the related
Servicer and the Trustee.
Section 2.5. Custodian to Cooperate: Release of Mortgage Files. Upon
receipt of written notice from the Trustee that the Seller has repurchased a
Mortgage Loan pursuant to Article II of the Pooling and Servicing Agreement, and
a request for release (a "Request for Release") confirming that the purchase
price therefore has been deposited in the Master Servicer Collection Account or
the Distribution Account, then the Custodian agrees to promptly release to the
Seller the related Mortgage File.
Upon the Custodian's receipt of a Request for Release substantially
in the form of Exhibit H to the Pooling and Servicing Agreement signed by a
Servicing Officer of the Company or the Servicer, as applicable, stating that it
has received payment in full of a Mortgage Loan or that payment in full will be
escrowed in a manner customary for such purposes, the Custodian agrees promptly
to release to the Company or the Servicer, as applicable, the related Mortgage
File. The Depositor shall deliver to the Custodian and the Custodian agrees to
review in accordance with the provisions of their Agreement the Mortgage Note
and other documents constituting the Mortgage File with respect to any
Replacement Mortgage Loan.
From time to time as is appropriate for the servicing or foreclosure
of any Mortgage Loan, including, for this purpose, collection under any Primary
Insurance Policy or LPMI Policy, the Company or the Servicer, as applicable,
shall deliver to the Custodian a Request for Release signed by a Servicing
Officer requesting that possession of all of the Mortgage File be released to
the Company or the Servicer, as applicable, and certifying as to the reason for
such release and that such release will not invalidate any insurance coverage
provided in respect of the Mortgage Loan under any of the Insurance Policies.
Upon receipt of the foregoing, the Custodian shall deliver the Mortgage File to
the Company or the Servicer, as applicable. The Company or the Servicer, as
applicable, shall cause each Mortgage File or any document therein so released
to be returned to the Custodian when the need therefore by the Company or the
Servicer, as applicable, no longer exists, unless (i) the Mortgage Loan has been
liquidated and the Liquidation Proceeds relating to the
K-3
Mortgage Loan have been deposited in the Master Servicer Collection Account or
the Distribution Account or (ii) the Mortgage File or such document has been
delivered to an attorney, or to a public trustee or other public official as
required by law, for purposes of initiating or pursuing legal action or other
proceedings for the foreclosure of the Mortgaged Property either judicially or
non-judicially, and the Company or the Servicer, as applicable, has delivered to
the Custodian a certificate of a Servicing Officer certifying as to the name and
address of the Person to which such Mortgage File or such document was delivered
and the purpose or purposes of such delivery.
At any time that the Company or the Servicer is required to deliver
to the Custodian a Request for Release, the Company or the Servicer, as
applicable, shall deliver two copies of the Request for Release if delivered in
hard copy or the Company or the Servicer, as applicable, may furnish such
Request for Release electronically to the Custodian, in which event the
Servicing Officer transmitting the same shall be deemed to have signed the
Request for Release. In connection with any Request for Release of a Mortgage
File because of a repurchase of a Mortgage Loan, such Request for Release shall
be accompanied by an assignment of mortgage, without recourse, representation or
warranty from the Trustee to the Seller (unless such Mortgage Loan is a MOM
Loan) and the related Mortgage Note shall be endorsed without recourse,
representation or warranty by the Trustee and be returned to the Seller. In
connection with any Request for Release of a Mortgage File because of the
payment in full of a Mortgage Loan, such Request for Release shall be
accompanied by a certificate of satisfaction or other similar instrument to be
executed by or on behalf of the Trustee and returned to the Company or the
Servicer, as applicable.
Section 2.6. Assumption Agreements. In the event that any assumption
agreement, substitution of liability agreement or sale of servicing agreement is
entered into with respect to any Mortgage Loan subject to this Agreement in
accordance with the terms and provisions of the Pooling and Servicing Agreement,
the Master Servicer, to the extent provided in the Pooling and Servicing
Agreement or National City Servicing Agreement, shall cause the Company or the
Servicer, as applicable, to notify the Custodian that such assumption or
substitution agreement has been completed by forwarding to the Custodian the
original of such assumption or substitution agreement, which shall be added to
the related Mortgage File and, for all purposes, shall be considered a part of
such Mortgage File to the same extent as all other documents and instruments
constituting parts thereof.
ARTICLE III.
CONCERNING THE CUSTODIAN
Section 3.1. Custodian a Bailee and Agent of the Trustee. With
respect to each Mortgage Note, Mortgage and other documents constituting each
Mortgage File which are delivered to the Custodian, the Custodian is exclusively
the bailee and agent of the Trustee and has no instructions to hold any Mortgage
Note or Mortgage for the benefit of any person other than the Trustee and the
Certificateholders and undertakes to perform such duties and only such duties as
are specifically set forth in this Agreement. Except upon compliance with the
provisions of Section 2.5 of this Agreement, no Mortgage Note, Mortgage or
Mortgage File shall be delivered by the
K-4
Custodian to the Company, the Depositor, the Servicer or the Master Servicer or
otherwise released from the possession of the Custodian.
Section 3.2. Reserved.
Section 3.3. Custodian May Own Certificates. The Custodian in its
individual or any other capacity may become the owner or pledgee of Certificates
with the same rights it would have if it were not Custodian.
Section 3.4. Master Servicer to Pay Custodian's Fees and Expenses.
The Master Servicer covenants and agrees to pay to the Custodian from time to
time, and the Custodian shall be entitled to, reasonable compensation for all
services rendered by it in the exercise and performance of any of the powers and
duties hereunder of the Custodian, and the Master Servicer will pay or reimburse
the Custodian upon its request for all reasonable expenses, disbursements and
advances incurred or made by the Custodian in accordance with any of the
provisions of this Agreement (including the reasonable compensation and the
expenses and disbursements of its counsel and of all persons not regularly in
its employ), except any such expense, disbursement or advance as may arise from
its negligence or bad faith or to the extent that such cost or expense is
indemnified by the Depositor pursuant to the Pooling and Servicing Agreement.
Section 3.5. Custodian May Resign; Trustee May Remove Custodian. The
Custodian may resign from the obligations and duties hereby imposed upon it as
such obligations and duties relate to its acting as Custodian of the Mortgage
Loans. Upon receiving such notice of resignation, the Trustee shall either take
custody of the Mortgage Files itself and give prompt notice thereof to the
Depositor, the Master Servicer and the Custodian, or promptly appoint a
successor Custodian by written instrument, in duplicate, one copy of which
instrument shall be delivered to the resigning Custodian and one copy to the
successor Custodian. If the Trustee shall not have taken custody of the Mortgage
Files and no successor Custodian shall have been so appointed and have accepted
appointment within 30 days after the giving of such notice of resignation, the
resigning Custodian may petition any court of competent jurisdiction for the
appointment of a successor Custodian.
The Trustee may remove the Custodian at any time upon 60 days prior
written notice to Custodian. In such event, the Trustee shall appoint, or
petition a court of competent jurisdiction to appoint, a successor Custodian
hereunder. Any successor Custodian shall be a depository institution subject to
supervision or examination by federal or state authority shall be able to
satisfy the other requirements contained in Section 3.7 and shall be
unaffiliated with the Servicers, the Company and the Depositor.
Any resignation or removal of the Custodian and appointment of a
successor Custodian pursuant to any of the provisions of this Section 3.5 shall
become effective upon acceptance of appointment by the successor Custodian. The
Trustee shall give prompt notice to the Depositor and the Master Servicer of the
appointment of any successor Custodian. No successor Custodian shall be
appointed by the Trustee without the prior approval of the Depositor and the
Master Servicer.
K-5
Section 3.6. Merger or Consolidation of Custodian. Any Person into
which the Custodian may be merged or converted or with which it may be
consolidated, or any Person resulting from any merger, conversion or
consolidation to which the Custodian shall be a party, or any Person succeeding
to the business of the Custodian, shall be the successor of the Custodian
hereunder, without the execution or filing of any paper or any further act on
the part of any of the parties hereto, anything herein to the contrary
notwithstanding.
Section 3.7. Representations of the Custodian. The Custodian hereby
represents that it is a depository institution subject to supervision or
examination by a federal or state authority, has a combined capital and surplus
of at least $15,000,000 and is qualified to do business in the jurisdictions in
which it will hold any Mortgage File.
ARTICLE IV.
MISCELLANEOUS PROVISIONS
Section 4.1. Notices. All notices, requests, consents and demands
and other communications required under this Agreement or pursuant to any other
instrument or document delivered hereunder shall be in writing and, unless
otherwise specifically provided, may be delivered personally, by telegram or
telex, or by registered or certified mail, postage prepaid, return receipt
requested, at the addresses specified on the signature page hereof (unless
changed by the particular party whose address is stated herein by similar notice
in writing), in which case the notice will be deemed delivered when received.
Section 4.2. Amendments. No modification or amendment of or
supplement to this Agreement shall be valid or effective unless the same is in
writing and signed by all parties hereto. The Trustee shall give prompt notice
to the Custodian of any amendment or supplement to the Pooling and Servicing
Agreement and furnish the Custodian with written copies thereof.
Section 4.3. GOVERNING LAW. THIS AGREEMENT SHALL BE DEEMED A
CONTRACT MADE UNDER THE LAWS OF THE STATE OF NEW YORK AND SHALL BE CONSTRUED AND
ENFORCED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF NEW YORK.
Section 4.4. Recordation of Agreement. To the extent permitted by
applicable law, this Agreement is subject to recordation in all appropriate
public offices for real property records in all the counties or other comparable
jurisdictions in which any or all of the properties subject to the Mortgages are
situated, and in any other appropriate public recording office or elsewhere,
such recordation to be effected by the Depositor and at the Trust's expense on
direction by the Trustee, but only upon direction accompanied by an Opinion of
Counsel reasonably satisfactory to the Depositor to the effect that the failure
to effect such recordation is likely to materially and adversely affect the
interests of the Certificateholders.
K-6
For the purpose of facilitating the recordation of this Agreement as
herein provided and for other purposes, this Agreement may be executed
simultaneously in any number of counterparts, each of which counterparts shall
be deemed to be an original, and such counterparts shall constitute but one and
the same instrument.
Section 4.5. Severability of Provisions. If any one or more of the
covenants, agreements, provisions or terms of this Agreement shall be for any
reason whatsoever held invalid, then such covenants, agreements, provisions or
terms shall be deemed severable from the remaining covenants, agreements,
provisions or terms of this Agreement and shall in no way affect the validity or
enforceability of the other provisions of this Agreement or of the Certificates
or the rights of the holders thereof.
K-7
IN WITNESS WHEREOF, this Agreement is executed as of the date first
above written.
Address: JPMORGAN CHASE BANK, as Trustee
0 Xxx Xxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000 By:
--------------------------------
Name:
Attention: Title:
Telecopy:
Confirmation:
Address: BEAR XXXXXXX ASSET BACKED
SECURITIES, INC.
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
By:
--------------------------------
Name:
Title:
Address: EMC MORTGAGE CORPORATION
000 Xxxxxx Xxxxx Xxxxx, Xxxxx 000
Xxxxxx, Xxxxx 00000 By:
--------------------------------
Name:
Title:
Address: XXXXX FARGO BANK MINNESOTA,
NATIONAL ASSOCIATION, as Custodian
0000 Xxx Xxxxxxxxx Xxxx
Xxxxxxxx, Xxxxxxxx 00000 By:
--------------------------------
Name:
Title:
STATE OF NEW YORK )
) ss:
COUNTY OF NEW YORK )
On the ______ day of September 2003 before me, a notary public in
and for said State, personally appeared _______________, known to me to be a
_________________of JPMorgan Chase Bank, a New York State banking 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
[SEAL]
X-0
XXXXX XX XXX XXXX )
) ss:
COUNTY OF NEW YORK )
On the ______ day of September 2003 before me, a notary public in
and for said State, personally appeared ________________, known to me to be a
_____________ of Bear Xxxxxxx Asset Backed Securities, Inc., that executed the
within instrument, and also known to me to be the person who executed it on
behalf of said corporation, and acknowledged to me that such corporation
executed the within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my
official seal the day and year in this certificate first above written.
-------------------------------
Notary Public
[SEAL]
X-00
XXXXX XX XXXXX )
) ss:
COUNTY OF DALLAS )
On the ______ day of September 2003 before me, a notary public in
and for said State, personally appeared ________________, known to me to be a
__________________ of EMC Mortgage Corporation, one of the corporations that
executed the within instrument, and also known to me to be the person who
executed it on behalf of said corporation, and acknowledged to me that such
corporation executed the within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my
official seal the day and year in this certificate first above written.
-------------------------------
Notary Public
[Notarial Seal]
X-00
XXXXX XX XXXXXXXX )
) ss:
COUNTY OF XXXXXX )
On the ______ day of September 2003 before me, a notary public in
and for said State, personally appeared ____________, known to me to be a of
Xxxxx Fargo Bank Minnesota, National Association, one of the national
associations that executed the within instrument, and also known to me to be the
person who executed it on behalf of said national association, and acknowledged
to me that such national association executed the within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my
official seal the day and year in this certificate first above written.
-------------------------------
Notary Public
[Notarial Seal]
K-12
EXHIBIT ONE TO CUSTODIAL AGREEMENT
FORM OF CUSTODIAN INITIAL CERTIFICATION
September 30, 2003
JPMorgan Chase Bank
0 Xxx Xxxx Xxxxx, 0xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
EMC Mortgage Corporation
000 Xxxxxx Xxxxx Xxxxx, Xxxxx 000
Xxxxxx, Xxxxx 00000
Attention: Bear Xxxxxxx Asset Backed Securities, Inc., Series 2003-AC5
Re: Custodial Agreement, dated as of September 30, 2003, by and
among JPMorgan Chase Bank, Xxxxx Fargo Bank Minnesota,
National Association, Bear Xxxxxxx Asset Backed Securities,
Inc. and EMC Mortgage Corporation relating to Bear Xxxxxxx
Asset Backed Securities Trust 2003-AC5, Asset-Backed
Certificates, Series 2003-AC5
Ladies and Gentlemen:
In accordance with Section 2.3 of the above-captioned Custodial
Agreement, and subject to Section 2.02 of the Pooling and Servicing Agreement,
the undersigned, as Custodian, hereby certifies that it has received a Mortgage
File (which contains an original Mortgage Note or lost note affidavit) to the
extent required in Section 2.01 of the Pooling and Servicing Agreement with
respect to each Mortgage Loan listed in the Mortgage Loan Schedule, with any
exceptions listed on Schedule A attached hereto.
Capitalized words and phrases used herein shall have the respective
meanings assigned to them in the above-captioned Custodial Agreement.
XXXXX FARGO BANK MINNESOTA,
NATIONAL ASSOCIATION
By:
-----------------------------
Name:
---------------------------
Title:
--------------------------
K-13
EXHIBIT TWO TO CUSTODIAL AGREEMENT
FORM OF CUSTODIAN INTERIM CERTIFICATION
____________, 2002
JPMorgan Chase Bank
0 Xxx Xxxx Xxxxx, 0xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
EMC Mortgage Corporation
000 Xxxxxx Xxxxx Xxxxx, Xxxxx 000
Xxxxxx, Xxxxx 00000
Attention: Bear Xxxxxxx Asset Backed Securities, Inc., Series 2003-AC5
Re: Custodial Agreement, dated as of September 30, 2003, by and
among JPMorgan Chase Bank, Xxxxx Fargo Bank Minnesota,
National Association, Bear Xxxxxxx Asset Backed Securities,
Inc. and EMC Mortgage Corporation relating to Bear Xxxxxxx
Asset Backed Securities Trust 2003-AC5, Asset-Backed
Certificates, Series 2003-AC5
Ladies and Gentlemen:
In accordance with Section 2.3 of the above-captioned Custodial
Agreement, the undersigned, as Custodian, hereby certifies that it has received
a Mortgage File to the extent required pursuant to Section 2.01 of the Pooling
and Servicing Agreement with respect to each Mortgage Loan listed in the
Mortgage Loan Schedule, and it has reviewed the Mortgage File and the Mortgage
Loan Schedule and has determined that: all required documents have been executed
and received and that such documents related to the Mortgage Loans identified on
the Mortgage Loan Schedule, with any exceptions listed on Schedule A attached
hereto.
Capitalized words and phrases used herein shall have the respective
meanings assigned to them in the above-captioned Custodial Agreement.
XXXXX FARGO BANK MINNESOTA,
NATIONAL ASSOCIATION
By:
-----------------------------
Name:
---------------------------
Title:
--------------------------
K-14
EXHIBIT THREE TO CUSTODIAL AGREEMENT
FORM OF CUSTODIAN FINAL CERTIFICATION
____________, 2002
JPMorgan Chase Bank
0 Xxx Xxxx Xxxxx, 0xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
EMC Mortgage Corporation
000 Xxxxxx Xxxxx Xxxxx, Xxxxx 000
Xxxxxx, Xxxxx 00000
Attention: Bear Xxxxxxx Asset Backed Securities, Inc., Series 2003-AC5
Re: Custodial Agreement, dated as of September 30, 2003, by and
among JPMorgan Chase Bank, Xxxxx Fargo Bank Minnesota,
National Association, Bear Xxxxxxx Asset Backed Securities,
Inc. and EMC Mortgage Corporation relating to Bear Xxxxxxx
Asset Backed Securities Trust 2003-AC5, Asset-Backed
Certificates, Series 2003-AC5
Ladies and Gentlemen:
In accordance with Section 2.3 of the above-captioned Custodial
Agreement, the undersigned, as Custodian, hereby certifies that it has received
a Mortgage File with respect to each Mortgage Loan listed in the Mortgage Loan
Schedule containing with respect to each such Mortgage Loan:
(i) the original Mortgage Note, including any riders thereto,
endorsed without recourse to the order of "Bank One, National
Association, as Trustee for certificateholders of Bear Xxxxxxx Asset
Backed Securities, Inc. Asset Backed Certificates, Series 2003-
AC5," and showing to the extent available to the Seller an unbroken
chain of endorsements from the original payee thereof to the Person
endorsing it to the Trustee,
(ii) the original Mortgage and, if the related Mortgage Loan is a
MOM Loan, noting the presence of the MIN and language indicating
that such Mortgage Loan is a MOM Loan, which shall have been
recorded (or if the original is not available, a copy), with
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evidence of such recording indicated thereon (or if permitted by
Section 2.3 of the Custodial Agreement, shall be in recordable
form),
(iii) unless the Mortgage Loan is a MOM Loan, the assignment (either
an original or a copy, which may be in the form of a blanket
assignment if permitted in the jurisdiction in which the Mortgaged
Property is located) to the Trustee of the Mortgage with respect to
each Mortgage Loan in the name of "Bank One, National Association,
as Trustee for certificateholders of Bear Xxxxxxx Asset Backed
Securities, Inc. Asset Backed Certificates, Series 2003-AC5," which
shall have been recorded (or if permitted by Section 2.3 of the
Custodial Agreement, shall be in recordable form);
(iv) an original or a copy of all intervening assignments of the
Mortgage, if any, with evidence of recording thereon,
(v) the original policy of title insurance or mortgagee's
certificate of title insurance or commitment or binder for title
insurance, if available, or a copy thereof, or, in the event that
such original title insurance policy is unavailable, a photocopy
thereof, or in lieu thereof, a current lien search on the related
Mortgaged Property and
(vi) originals or copies of all available assumption, modification
or substitution agreements, if any.
Capitalized words and phrases used herein shall have the respective
meanings assigned to them in the above-captioned Custodial Agreement.
XXXXX FARGO BANK MINNESOTA,
NATIONAL ASSOCIATION
By:
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Name:
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Title:
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EXHIBIT L
FORM OF COMPANY CERTIFICATION
This certificate is being delivered pursuant to Section 3.13(b) of the
Pooling and Servicing Agreement, dated as of September 1, 2003 (the
"Agreement"), among Bear Xxxxxxx Asset Backed Securities, Inc., as depositor,
EMC Mortgage Corporation (the "Company"), as seller and servicer, Xxxxx Fargo
Bank Minnesota, National Association, as master servicer and securities
administrator, and JPMorgan Chase Bank, as trustee. Capitalized terms used
herein and not otherwise defined have the meanings set forth in the Agreement.
I certify that:
(i) I am a ____________________ of the Company.
(ii) Based on my knowledge, the information in the annual statement of
compliance furnished in March 20__ pursuant to Section 3.13(b) of
the Agreement and the annual independent certified public
accountants' servicing report delivered pursuant to Section 3.14
thereof (collectively, the "Reports"), and all servicing reports,
officer's certificates and other information relating to the EMC
Mortgage Loans submitted to the Master Servicer taken as a whole,
does not contain any untrue statement of a material fact or omit to
state a material fact necessary to make the statements made, in
light of the circumstances under which such statements were made,
not misleading as of the date of this certification.
(iii) The servicing information required to be provided to the Master
Servicer by the Company under the Agreement has been provided to the
Master Servicer.
(iv) I am responsible for reviewing the servicing activities performed by
the Company pursuant to this Agreement, and except as disclosed in
the Reports, the Company has, as of the date of this certification,
fulfilled its obligations under the Agreement.
(v) I have disclosed to the Master Servicer all significant deficiencies
relating to the Company's compliance with the minimum servicing
standards in accordance with a review conducted in compliance with
the Uniform Single Attestation Program for Mortgage Bankers or
similar standard as set forth in the Agreement.
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Dated: March __, 20__
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