EXHIBIT 1
STRUCTURED ASSET MORTGAGE INVESTMENTS INC.,
SELLER
BANK ONE, NATIONAL ASSOCIATION,
TRUSTEE
XXXXX FARGO BANK MINNESOTA, NATIONAL ASSOCIATION,
MASTER SERVICER AND SECURITIES ADMINISTRATOR
and
EMC MORTGAGE CORPORATION
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POOLING AND SERVICING AGREEMENT
Dated as of December 1, 2002
--------------------------------------------
Structured Asset Mortgage Investments Inc.
Bear Xxxxxxx ARM Trust 2002-11, Mortgage Pass-Through Certificates
Series 2002-11
TABLE OF CONTENTS
Page
ARTICLE I
Definitions
ARTICLE II
Conveyance of Mortgage Loans;
Original Issuance of Certificates
Section 2.01 Conveyance of Mortgage Loans to Trustee............................................................................ 45
Section 2.02 Acceptance of Mortgage Loans by Trustee............................................................................ 47
Section 2.03 Assignment of Interest in the Mortgage Loan Purchase Agreement..................................................... 49
Section 2.04 Substitution of Mortgage Loans..................................................................................... 50
Section 2.05 Issuance of Certificates........................................................................................... 51
Section 2.06 Representations and Warranties Concerning the Seller............................................................... 52
Section 2.07 Conveyance of the Subsequent Mortgage Loans........................................................................ 53
ARTICLE III
Administration and Servicing of Mortgage Loans
Section 3.01 Master Servicer.................................................................................................... 55
Section 3.02 REMIC-Related Covenants............................................................................................ 56
Section 3.03 Monitoring of Servicers............................................................................................ 56
Section 3.04 Fidelity Bond...................................................................................................... 57
Section 3.05 Power to Act; Procedures........................................................................................... 57
Section 3.06 Due-on-Sale Clauses; Assumption Agreements......................................................................... 58
Section 3.07 Release of Mortgage Files.......................................................................................... 58
Section 3.08 Documents, Records and Funds in Possession of Master Servicer To Be Held for Trustee............................... 59
Section 3.09 Standard Hazard Insurance and Flood Insurance Policies............................................................. 60
Section 3.10 Presentment of Claims and Collection of Proceeds................................................................... 60
Section 3.11 Maintenance of the Primary Mortgage Insurance Policies............................................................. 61
Section 3.12 Trustee to Retain Possession of Certain Insurance Policies and Documents........................................... 61
Section 3.13 Realization Upon Defaulted Mortgage Loans.......................................................................... 62
Section 3.14 Compensation for the Master Servicer............................................................................... 62
Section 3.15 REO Property....................................................................................................... 62
Section 3.16 Annual Officer's Certificate as to Compliance...................................................................... 63
Section 3.17 Annual Independent Accountant's Servicing Report................................................................... 63
Section 3.18 Reports Filed with Securities and Exchange Commission.............................................................. 64
Section 3.19 EMC................................................................................................................ 65
Section 3.20 UCC................................................................................................................ 65
Section 3.21 Optional Purchase of Defaulted Mortgage Loans...................................................................... 65
ARTICLE IV
Accounts
Section 4.01 Protected Accounts................................................................................................. 67
Section 4.02 Master Servicer Collection Account................................................................................. 68
Section 4.03 Permitted Withdrawals and Transfers from the Master Servicer Collection Account.................................... 69
Section 4.04 Distribution Account............................................................................................... 70
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Section 4.05 Permitted Withdrawals and Transfers from the Distribution Account.................................................. 70
ARTICLE V
Certificates
Section 5.01 Certificates....................................................................................................... 76
Section 5.02 Registration of Transfer and Exchange of Certificates.............................................................. 83
Section 5.03 Mutilated, Destroyed, Lost or Stolen Certificates.................................................................. 87
Section 5.04 Persons Deemed Owners.............................................................................................. 87
Section 5.05 Transfer Restrictions on Residual Certificates..................................................................... 87
Section 5.06 Restrictions on Transferability of Certificates.................................................................... 88
Section 5.07 ERISA Restrictions................................................................................................. 89
Section 5.08 Rule 144A Information.............................................................................................. 90
ARTICLE VI
Payments to Certificateholders
Section 6.01 Distributions on the Certificates.................................................................................. 91
Section 6.02 Allocation of Losses............................................................................................... 97
Section 6.03 Payments........................................................................................................... 100
Section 6.04 Statements to Certificateholders................................................................................... 100
Section 6.05 Monthly Advances................................................................................................... 103
Section 6.06 Compensating Interest Payments..................................................................................... 103
ARTICLE VII
The Master Servicer
Section 7.01 Liabilities of the Master Servicer................................................................................. 104
Section 7.02 Merger or Consolidation of the Master Servicer..................................................................... 104
Section 7.03 Indemnification of the Trustee, the Master Servicer and the Securities Administrator............................... 104
Section 7.04 Limitations on Liability of the Master Servicer and Others......................................................... 105
Section 7.05 Master Servicer Not to Resign...................................................................................... 106
Section 7.06 Successor Master Servicer.......................................................................................... 106
Section 7.07 Sale and Assignment of Master Servicing............................................................................ 106
ARTICLE VIII
Default
Section 8.01 Events of Default.................................................................................................. 108
Section 8.02 Trustee to Act; Appointment of Successor........................................................................... 109
Section 8.03 Notification to Certificateholders................................................................................. 110
Section 8.04 Waiver of Defaults................................................................................................. 110
Section 8.05 List of Certificateholders......................................................................................... 111
ARTICLE IX
Concerning the Trustee and the Securities Administrator
Section 9.01 Duties of Trustee.................................................................................................. 112
Section 9.02 Certain Matters Affecting the Trustee and the Securities Administrator............................................. 114
Section 9.03 Trustee and Securities Administrator Not Liable for Certificates or Mortgage Loans................................. 116
Section 9.04 Trustee and Securities Administrator May Own Certificates.......................................................... 116
Section 9.05 Trustee's and Securities Administrator's Fees and Expenses......................................................... 116
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Section 9.06 Eligibility Requirements for Trustee and Securities Administrator.................................................. 117
Section 9.07 Insurance.......................................................................................................... 117
Section 9.08 Resignation and Removal of the Trustee and Securities Administrator................................................ 117
Section 9.09 Successor Trustee and Successor Securities Administrator........................................................... 118
Section 9.10 Merger or Consolidation of Trustee or Securities Administrator..................................................... 119
Section 9.11 Appointment of Co-Trustee or Separate Trustee...................................................................... 119
Section 9.12 Federal Information Returns and Reports to Certificateholders; REMIC Administration................................ 120
ARTICLE X
Termination
Xxxxxxx 00.00 Xxxxxxxxxxx Xxxx Xxxxxxxxxx by the Seller or its Designee or Liquidation of the Mortgage Loans.................... 123
Section 10.02 Additional Termination Requirements............................................................................... 125
ARTICLE XI
Miscellaneous Provisions
Section 11.01 Intent of Parties................................................................................................. 127
Section 11.02 Amendment......................................................................................................... 127
Section 11.03 Recordation of Agreement.......................................................................................... 128
Section 11.04 Limitation on Rights of Certificateholders........................................................................ 128
Section 11.05 Acts of Certificateholders........................................................................................ 129
Section 11.06 Governing Law..................................................................................................... 130
Section 11.07 Notices........................................................................................................... 130
Section 11.08 Severability of Provisions........................................................................................ 130
Section 11.09 Successors and Assigns............................................................................................ 131
Section 11.10 Article and Section Headings...................................................................................... 131
Section 11.11 Counterparts...................................................................................................... 131
Section 11.12 Notice to Rating Agencies......................................................................................... 131
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EXHIBITS
Exhibit A-1 - Form of Class [__-A-__] Certificates and [__-M-__]
Certificates
Exhibit A-2 - Form of Class B Certificates
Exhibit A-3 - Form of Class R Certificates
Exhibit B - Mortgage Loan Schedule
Exhibit C - [Reserved]
Exhibit D - Request for Release of Documents
Exhibit E - Form of Affidavit pursuant to Section 860E(e)(4)
Exhibit F-1 - Form of Investment Letter
Exhibit F-2 - Form of Rule 144A and Related Matters Certificate
Exhibit G - Form of Custodial Agreement
Exhibit H-1 to H-6 - Servicing Agreements
Exhibit I - Assignment Agreements
Exhibit J - Mortgage Loan Purchase Agreement
Exhibit K - Subsequent Transfer Instrument
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POOLING AND SERVICING AGREEMENT
Pooling and Servicing Agreement dated as of December 1, 2002, among
Structured Asset Mortgage Investments Inc., a Delaware corporation, as seller
(the "Seller"), Bank One, National Association, a national banking association,
not in its individual capacity but solely as trustee (the "Trustee"), Xxxxx
Fargo Bank Minnesota, National Association, as master servicer (in such
capacity, the "Master Servicer") and as securities administrator (in such
capacity, the "Securities Administrator"), and EMC Mortgage Corporation ("EMC").
PRELIMINARY STATEMENT
On or prior to the Closing Date, the Seller acquired the Mortgage Loans
from EMC. On the Closing Date, the Seller will sell the Mortgage Loans and
certain other property to the Trust Fund and receive in consideration therefor
Certificates evidencing the entire beneficial ownership interest in the Trust
Fund.
The Trustee on behalf of the Trust shall make an election for the
assets constituting REMIC I to be treated for federal income tax purposes as a
REMIC. On the Startup Day, the REMIC I Regular Interests will be designated
"regular interests" in such REMIC and the Class R-I Certificate will be
designated the "residual interest" in such REMIC.
The Trustee on behalf of the Trust shall make an election for the
assets constituting REMIC II to be treated for federal income tax purposes as a
REMIC. On the Startup Day, the REMIC II Regular Interests will be designated
"regular interests" in such REMIC and the Class R-II Certificate will be
designated the "residual interest" in such REMIC.
The Trustee on behalf of the Trust shall make an election for the
assets constituting REMIC III to be treated for federal income tax purposes as a
REMIC. On the Startup Day, the REMIC III Regular Certificates will be designated
"regular interests" in such REMIC and the Class R-III Certificate will be
designated the "residual interest" in such REMIC.
The Mortgage Loans will have an Outstanding Principal Balance as of the
Cut-off Date, after deducting all Scheduled Principal due on or before the
Cut-off Date, of approximately $994,886,070.92. The initial principal amount of
the Certificates will not exceed such Outstanding Principal Balance.
In consideration of the mutual agreements herein contained, the Seller,
the Master Servicer, the Securities Administrator, EMC and the Trustee agree as
follows:
ARTICLE 1
Definitions
Whenever used in this Agreement, the following words and phrases,
unless otherwise expressly provided or unless the context otherwise requires,
shall have the meanings specified in this Article.
Accepted Master Servicing Practices: With respect to any Mortgage Loan,
as applicable, either (x) those customary mortgage servicing practices of
prudent mortgage servicing institutions that master service mortgage loans of
the same type and quality as such Mortgage Loan in the jurisdiction where the
related Mortgaged Property is located, to the extent applicable to the Trustee
or the Master Servicer (except in its capacity as successor to a Servicer), or
(y) as provided in the applicable Servicing Agreement, to the extent applicable
to any Servicer, but in no event below the standard set forth in clause (x).
Account: The Master Servicer Collection Account and the Protected
Account as the context may require.
Accrued Certificate Interest: For any Certificate for any Distribution
Date, the interest accrued during the related Interest Accrual Period at the
applicable Pass-Through Rate on the Current Principal Amount, less (i) in the
case of a Group I Senior Certificate, such Certificate's share of any Net
Interest Shortfall from the Group I Mortgage Loans and, after the Group I
Cross-Over Date, the interest portion of any Realized Losses on the Group I
Mortgage Loans allocated thereto in accordance with Section 6.02(g), (ii) in the
case of a Group II Senior Certificate, such Certificate's share of any Net
Interest Shortfall from the Group II Mortgage Loans and, after the Group II
Cross-Over Date, the interest portion of any Realized Losses on the Group II
Mortgage Loans allocated thereto in accordance with Section 6.02(g), (iii) in
the case of a Group I Senior Mezzanine Certificate, such Certificate's share of
any Net Interest Shortfall and the interest portion of any Realized Losses on
the Group I Mortgage Loans, (iv) in the case of a Group I Subordinate
Certificate, such Certificate's share of any Net Interest Shortfall from the
Group I Mortgage Loans and the interest portion of any Realized Losses on the
Group I Mortgage Loans allocated thereto in accordance with Section 6.02(g) and
(v) in the case of a Group II Subordinate Certificate, such Certificate's share
of any Net Interest Shortfall from the Group II Mortgage Loans and the interest
portion of any Realized Losses on the Group II Mortgage Loans allocated thereto
in accordance with Section 6.02(g).
Additional Collateral: As defined in the Cendant Servicing Agreements.
Affiliate: As to any Person, any other Person controlling, controlled
by or under common control with such Person. "Control" means the power to direct
the management and policies of a Person, directly or indirectly, whether through
ownership of voting securities, by contract or otherwise. "Controlled" and
"Controlling" have meanings correlative to the foregoing. The Trustee may
conclusively presume that a Person is not an Affiliate of another Person unless
a Responsible Officer of the Trustee has actual knowledge to the contrary.
Agreement: This Pooling and Servicing Agreement and all amendments
hereof and supplements hereto.
Alliance: Alliance Mortgage Company.
Alliance Servicing Agreements: The Servicing Agreement, dated as of
August 1, 2002, and Subservicing Agreement, dated as of August 1, 2002, each
between Alliance Mortgage Company and EMC, each as attached hereto as Exhibit
H-1.
Allocable Share:
With respect to each Class of Group I Senior Mezzanine Certificates and
Group I Subordinate Certificates:
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(a) as to any Distribution Date and amounts distributable pursuant to
clauses (i) and (iv) of the definition of Senior Mezzanine and Subordinate
Optimal Principal Amount for the Group I Mortgage Loans, the fraction, expressed
as a percentage, the numerator of which is the Current Principal Amount of such
Class and the denominator of which is the aggregate Current Principal Amount of
all Classes of the Group I Senior Mezzanine and Group I Subordinate
Certificates; and
(b) as to any Distribution Date and amounts distributable pursuant to
clauses (ii), (iii) and (v) of the definition of Senior Mezzanine and
Subordinate Optimal Principal Amount,
(1) for any Distribution Date on which the Group I
Senior Mezzanine Loss and Delinquency Test has been
satisfied, as to each Class of Group I Senior
Mezzanine and Group I Subordinate Certificates (other
than the Class of Group I Subordinate Certificates
having the lowest numerical designation as to which
the Class Prepayment Distribution Trigger shall not
be applicable) for which (x) the related Class
Prepayment Distribution Trigger has been satisfied on
such Distribution Date, the fraction, expressed as a
percentage, the numerator of which is the Current
Principal Amount of such Class and the denominator of
which is the aggregate Current Principal Amount of
all such Classes of Group I Senior Mezzanine and
Group I Subordinate Certificates for which the
related Class Prepayment Distribution Trigger has
been satisfied and (y) the related Class Prepayment
Distribution Trigger has not been satisfied on such
Distribution Date, 0%; provided that if on a
Distribution Date, the Current Principal Amount of
any Class of Group I Senior Mezzanine or Group I
Subordinate Certificates for which the related Class
Prepayment Distribution Trigger was satisfied on such
Distribution Date is reduced to zero, any amounts
distributed pursuant to this clause (b)(1), to the
extent of such Class's remaining Allocable Share,
shall be distributed to the Group I Senior Mezzanine
Certificates, or if the Current Principal Amount of
the Group I Senior Mezzanine Certificates has been
reduced to zero, the Class of Group I Subordinate
Certificates having the lowest numerical designation
and to the Group I Subordinate Certificates which
satisfy the related Class Prepayment Distribution
Trigger in reduction of their respective Current
Principal Amounts, for to the Group I Senior
Mezzanine Certificates and then to the Group I
Subordinate Certificates in the order of their
numerical Class designations; and
(2) for any Distribution Date on which the Group I
Senior Mezzanine Loss and Delinquency Test has not
been satisfied, as to the Group I Senior Mezzanine
Certificates, 100%, and as to the Group I Subordinate
Certificates, 0%; provided that if on a Distribution
Date, the Current Principal Amount of the Group I
Senior Mezzanine Certificates is reduced to zero, any
remaining amounts distributed pursuant to this clause
(b)(2) shall be distributed to the Classes of Group I
Subordinate Certificates which satisfy the related
Class Prepayment Distribution Trigger and to the
Class of Group I Subordinate Certificates having the
lowest numerical designation in reduction of their
respective Current Principal Amounts in the order of
their numerical Class designations.
With respect to each Class of Group II Subordinate Certificates:
(b) as to any Distribution Date and amounts distributable pursuant to
clauses (i), (iv) and (vi) of the definition of Subordinate Optimal Principal
Amount for the Group II Mortgage Loans, the fraction, expressed as a percentage,
the numerator of which is the Current Principal Amount of such Class and the
denominator of which is the aggregate Current Principal Amount of all Classes of
the Group II Subordinate Certificates; and
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(c) as to any Distribution Date and amounts distributable pursuant to
clauses (ii), (iii) and (v) of the definition of Subordinate Optimal Principal
Amount for the Group II Mortgage Loans, and as to each Class of Group II
Subordinate Certificates (other than the Class of Group II Subordinate
Certificates having the lowest numerical designation as to which the Class
Prepayment Distribution Trigger shall not be applicable) for which (x) the
related Class Prepayment Distribution Trigger has been satisfied on such
Distribution Date, the fraction, expressed as a percentage, the numerator of
which is the Current Principal Amount of such Class and the denominator of which
is the aggregate Current Principal Amount of all such Classes of Group II
Subordinate Certificates and (y) the related Class Prepayment Distribution
Trigger has not been satisfied on such Distribution Date, 0%; provided that if
on a Distribution Date, the Current Principal Amount of any Class of Group II
Subordinate Certificates for which the related Class Prepayment Distribution
Trigger was satisfied on such Distribution Date is reduced to zero, any amounts
distributed pursuant to this clause (b), to the extent of such Class's remaining
Allocable Share, shall be distributed to the remaining Classes of Group II
Subordinate Certificates which satisfy the related Class Prepayment Distribution
Trigger and to the Class of Group II Subordinate Certificates having the lowest
numerical designation in reduction of their respective Current Principal Amounts
in the order of their numerical Class designations.
Applicable Credit Rating: For any long-term deposit or security, a
credit rating of AAA in the case of S&P or Aaa in the case of Xxxxx'x. For any
short-term deposit or security, or a rating of A-l+ in the case of S&P or P-1 in
the case of Xxxxx'x.
Applicable State Law: For purposes of Section 9.12(d), the Applicable
State Law shall be (a) the law of the State of New York and (b) such other state
law whose applicability shall have been brought to the attention of the
Securities Administrator and the Trustee by either (i) an Opinion of Counsel
reasonably acceptable to the Securities Administrator and the Trustee delivered
to it by the Master Servicer or the Seller, or (ii) written notice from the
appropriate taxing authority as to the applicability of such state law.
Appraised Value: For any Mortgaged Property related to a Mortgage Loan,
the amount set forth as the appraised value of such Mortgaged Property in an
appraisal made for the mortgage originator in connection with its origination of
the related Mortgage Loan.
Assignment Agreements: The agreements attached hereto as Exhibit I,
whereby the Servicing Agreements were assigned to the Trustee for the benefit of
the Certificateholders.
Assumed Final Distribution Date: February 25, 2033, or if such day is
not a Business Day, the next succeeding Business Day.
Available Funds: With respect to any Distribution Date, the sum of the
Group I and Group II Available Funds for such Distribution Date.
Average Loss Severity: With respect to any period and each Loan Group,
the fraction obtained by dividing (x) the aggregate amount of Realized Losses
for the related Mortgage Loans for such period by (y) the number of related
Mortgage Loans which had Realized Losses for such period.
Bankruptcy Code: The United States Bankruptcy Code, as amended as
codified in 11 U.S.C. xx.xx. 101-1330.
Bankruptcy Loss: With respect to any Mortgage Loan, any Deficient
Valuation or Debt Service Reduction related to such Mortgage Loan as reported by
the applicable Servicer to the Master Servicer.
Book-Entry Certificates: Initially, all Classes of Certificates other
than the Private Certificates and the Residual Certificates.
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Business Day: Any day other than (i) a Saturday or a Sunday, or (ii) a
day on which the New York Stock Exchange or Federal Reserve is closed or on
which banking institutions in the jurisdiction in which the Trustee, the Master
Servicer, any Servicer or the Securities Administrator are authorized or
obligated by law or executive order to be closed.
Calendar Quarter: January 1 to March 31, April 1 to June 30, July 1 to
September 30, or October 1 to December 31, as applicable.
Cendant: Cendant Mortgage Corporation.
Cendant Servicing Agreements: The Mortgage Loan Flow Purchase, Sale and
Servicing Agreement dated as of April 26, 2001, among EMC (as purchaser),
Cendant and Xxxxxx'x Gate Residential Mortgage Trust (formerly known as Cendant
Residential Mortgage Trust) (as sellers) and, with respect to the Mortgage Loans
secured by Additional Collateral, Additional Collateral Assignment and Servicing
Agreement, dated as of April 26, 2001 between Cendant and EMC (whereby MLCC
retained its rights to service the Additional Collateral in accordance thereto),
and with respect to certain of the Mortgage Loans, the Mortgage Loan Flow
Purchase, Sale & Servicing Agreement, dated as of February 11, 2000, among
E*TRADE Bank, EMC and Xxxxxx'x Gate; the Purchase, Warranties and Servicing
Agreement, dated as of May 1, 1998, between EMC and BSMCC Bear Xxxxxxx Mortgage
Capital Corporation ("BSMCC"), assigned to E*TRADE Global Asset Management, Inc.
(f/k/a Telebank Capital Markets) ("E*TGAM") pursuant to the Purchase,
Assignment, Assumption and Recognition Agreement, dated November 30, 1998, among
the EMC, BSMCC and E*TGAM, and further assigned by E*TGAM to the Assignor
pursuant to the Assignment and Assumption Agreement, dated as of December 5,
2002, between the Assignor and E*TGAM, each as attached hereto as Exhibit H-2.
Certificate: Any mortgage pass-through certificate evidencing a
beneficial ownership interest in the Trust Fund signed and countersigned by the
Trustee in substantially the forms annexed hereto as Exhibits X-0, X-0 and A-3,
with the blanks therein appropriately completed.
Certificate Group: The Group I Senior Certificates and Group II Senior
Certificates, as applicable.
Certificate Owner: Any Person who is the beneficial owner of a
Certificate registered in the name of the Depository or its nominee.
Certificate Register: The register maintained pursuant to Section 5.02.
Certificateholder: A Holder of a Certificate.
Chevy Chase: Chevy Chase Bank F.S.B.
Chevy Chase Servicing Agreement: The Purchase, Warranties and Servicing
Agreement, dated as of July 1, 2002, between EMC Mortgage Corporation (as
purchaser) and Chevy Chase Bank, F.S.B. (as company), attached hereto as Exhibit
H-3.
Class: With respect to the Certificates, X-X-0, X-X-0, X-X-0, X-X-0,
XX-X-0, XX-X-0, R-I, R-II, R-III, I-M-1, X-X-0, X-X-0, X-X-0, X-X-0, X-X-0,
X-X-0, XX-X-0, XX-X-0, XX-X-0, XX-X-0, XX-X-0 and II-B-6.
Class Prepayment Distribution Trigger:
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For any Class of Group I Senior Mezzanine Certificates or Group I
Subordinate Certificates for any Distribution Date, the Class Prepayment
Distribution Trigger is satisfied if the fraction (expressed as a percentage),
the numerator of which is the aggregate Current Principal Amount of such Class
and each Class of Group I Senior Mezzanine Certificates or Group I Subordinate
Certificates, respectively, subordinate thereto, if any, and the denominator of
which is the aggregate Scheduled Principal Balance of all of the Group I
Mortgage Loans, as of the related Due Date, equals or exceeds such percentage
calculated as of the Closing Date.
For any Class of Group II Subordinate Certificates for any Distribution
Date, the Class Prepayment Distribution Trigger is satisfied if the fraction
(expressed as a percentage), the numerator of which is the aggregate Current
Principal Amount of such Class and each Class of Group II Subordinate
Certificates, respectively, subordinate thereto, if any, and the denominator of
which is the aggregate Scheduled Principal Balance of all of the Group II
Mortgage Loans, as of the related Due Date, equals or exceeds such percentage
calculated as of the Closing Date.
Class R Certificates: The Class R-I, Class R-II and Class R-III
Certificates.
Closing Date: December 30, 2002.
Code: The Internal Revenue Code of 1986, as amended.
Compensating Interest Payment: As defined in Section 6.06.
Corporate Trust Office: The office of the Trustee at which at any
particular time its corporate trust business is administered, which office, at
the date of the execution of this Agreement, is located at 1 Bank Xxx Xxxxx,
Xxxx Xxxxx XX0-0000, Xxxxxxx, Xxxxxxxx 00000, Attention: Global Corporate Trust
Services.
Countrywide: Countrywide Home Loans, Inc.
Countrywide Servicing Agreement: The Seller's Warranties and Servicing
Agreements, dated as of September 1, 2002, between EMC Mortgage Corporation (as
purchaser) and Countrywide Home Loans, Inc. (as company), attached hereto as
Exhibit H-4.
Current Principal Amount: With respect to any Certificate as of any
Distribution Date, the initial principal amount of such Certificate, and reduced
by (i) all amounts distributed on previous Distribution Dates on such
Certificate with respect to principal, (ii) the principal portion of all
Realized Losses allocated prior to such Distribution Date to such Certificate,
taking account of the Loss Allocation Limitation, (iii) in the case of a Group I
Senior Mezzanine Certificate, such Certificate's pro rata share, if any, of the
applicable Group I Senior Mezzanine Certificate Writedown Amount for previous
Distribution Dates and (iv) in the case of a Group I or Group II Subordinate
Certificate, such Certificate's pro rata share, if any, of the applicable Group
I or Group II Subordinate Certificate Writedown Amount for previous Distribution
Dates. With respect to any Class of Certificates, the Current Principal Amount
thereof will equal the sum of the Current Principal Amounts of all Certificates
of such Class. Notwithstanding the foregoing, solely for purposes of giving
consents, directions, waivers, approvals, requests and notices, the Class R-I,
Class R-II and Class R-III Certificates after the Distribution Date on which
they each receive the distribution of the last dollar of their respective
original principal amount shall be deemed to have Current Principal Amounts
equal to their respective Current Principal Amounts on the day immediately
preceding such Distribution Date.
Custodial Agreement: An agreement, dated as of the Closing Date among
the Seller, the Master Servicer, the Trustee and the Custodian in substantially
the form of Exhibit G hereto.
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Custodian: Xxxxx Fargo Bank Minnesota, National Association, or any
successor custodian appointed pursuant to the provisions hereof and of the
Custodial Agreement.
Cut-off Date: December 1, 2002.
Cut-off Date Balance: $994,886,070.92.
Debt Service Reduction: Any reduction of the Scheduled Payments which a
Mortgagor is obligated to pay with respect to a Mortgage Loan as a result of any
proceeding under the Bankruptcy Code or any other similar state law or other
proceeding.
Deficient Valuation: With respect to any Mortgage Loan, a valuation of
the Mortgaged Property by a court of competent jurisdiction in an amount less
than the then outstanding indebtedness under the Mortgage Loan, which valuation
results from a proceeding initiated under the Bankruptcy Code or any other
similar state law or other proceeding.
Depository: The Depository Trust Company, the nominee of which is Cede
& Co., or any successor thereto.
Depository Agreement: The meaning specified in Subsection 5.01(a)
hereof.
Depository Participant: A broker, dealer, bank or other financial
institution or other Person for whom from time to time the Depository effects
book-entry transfers and pledges of securities deposited with the Depository.
Designated Depository Institution: A depository institution (commercial
bank, federal savings bank, mutual savings bank or savings and loan association)
or trust company (which may include the Trustee), the deposits of which are
fully insured by the FDIC to the extent provided by law.
Determination Date: With respect to each Mortgage Loan, the
Determination Date as defined in the related Servicing Agreement.
Disqualified Organization: Any of the following: (i) the United States,
any State or political subdivision thereof, any possession of the United States,
or any agency or instrumentality of any of the foregoing (other than an
instrumentality which is a corporation if all of its activities are subject to
tax and, except for the Xxxxxxx Mac or any successor thereto, a majority of its
board of directors is not selected by such governmental unit), (ii) any foreign
government, any international organization, or any agency or instrumentality of
any of the foregoing, (iii) any organization (other than certain farmers'
cooperatives described in Section 521 of the Code) which is exempt from the tax
imposed by Chapter 1 of the Code (including the tax imposed by Section 511 of
the Code on unrelated business taxable income), (iv) rural electric and
telephone cooperatives described in Section 1381(a)(2)(C) of the Code or (v) any
other Person so designated by the Trustee based upon an Opinion of Counsel that
the holding of an ownership interest in a Residual Certificate by such Person
may cause any REMIC contained in the Trust or any Person having an ownership
interest in the Residual Certificate (other than such Person) to incur a
liability for any federal tax imposed under the Code that would not otherwise be
imposed but for the transfer of an ownership interest in a Residual Certificate
to such Person. The terms "United States," "State" and "international
organization" shall have the meanings set forth in Section 7701 of the Code or
successor provisions.
Distribution Account: The trust account or accounts created and
maintained pursuant to Section 4.04, which shall be denominated "Bank One,
National Association, as Trustee f/b/o holders of Structured Asset Mortgage
Investments Inc., Bear Xxxxxxx ARM Trust 2002-11, Mortgage Pass-Through
Certificates, Series 2002-11 - Distribution Account," and which shall be an
Eligible Account.
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Distribution Account Deposit Date: The Business Day prior to each
Distribution Date.
Distribution Date: The 25th day of any month, beginning in the month
immediately following the month of the Closing Date, or, if such 25th day is not
a Business Day, the Business Day immediately following.
Diverted Amount: On any Distribution Date, an amount equal to any
Special Hazard Loss allocated to the Group I Senior Certificates or Group II
Senior Certificates, as applicable, for such date pursuant to Section 6.02(e).
DTC Custodian: Bank One, National Association, or its successors in
interest as custodian for the Depository.
Due Date: With respect to each Mortgage Loan, the date in each month on
which its Scheduled Payment is due if such due date is the first day of a month
and otherwise is deemed to be the first day of the following month or such other
date specified in the related Servicing Agreement.
Due Period: With respect to any Distribution Date and each Mortgage
Loan, the period commencing on the second day of the month preceding the month
in which the Distribution Date occurs and ending at the close of business on the
first day of the month in which the Distribution Date occurs.
Eligible Account: Any of (i) a segregated account maintained with a
federal or state chartered depository institution (A) the short-term obligations
of which are rated A-1 or better by Standard & Poor's and P-1 by Moody's at the
time of any deposit therein or (B) insured by the FDIC (to the limits
established by such Corporation), the uninsured deposits in which account are
otherwise secured such that, as evidenced by an Opinion of Counsel (obtained by
the Person requesting that the account be held pursuant to this clause (ii))
delivered to the Trustee prior to the establishment of such account, the
Certificateholders will have a claim with respect to the funds in such account
and a perfected first priority security interest against any collateral (which
shall be limited to Permitted Investments, each of which shall mature not later
than the Business Day immediately preceding the Distribution Date next following
the date of investment in such collateral or the Distribution Date if such
Permitted Investment is an obligation of the institution that maintains the
Distribution Account) securing such funds that is superior to claims of any
other depositors or general creditors of the depository institution with which
such account is maintained, (ii) a segregated trust account or accounts
maintained with a federal or state chartered depository institution or trust
company with trust powers acting in its fiduciary capacity or (iii) a segregated
account or accounts of a depository institution acceptable to the Rating
Agencies (as evidenced in writing by the Rating Agencies that use of any such
account as the Distribution Account will not have an adverse effect on the
then-current ratings assigned to the Classes of the Certificates then rated by
the Rating Agencies). Eligible Accounts may bear interest.
EMC: EMC Mortgage Corporation.
ERISA: The Employee Retirement Income Security Act of 1974, as amended.
E*TRADE: E*TRADE Bank (f/k/a Telebank).
Event of Default: An event of default described in Section 8.01.
Excess Liquidation Proceeds: To the extent that such amount is not
required by law to be paid to the related Mortgagor, the amount, if any, by
which Liquidation Proceeds with respect to a Liquidated Mortgage Loan exceed the
sum of (i) the Outstanding Principal Balance of such Mortgage Loan and accrued
but unpaid interest at the related Mortgage Interest Rate through the last day
of the month in which the related Liquidation Date occurs, plus (ii) related
Liquidation Expenses.
-8-
Xxxxxx Xxx: Federal National Mortgage Association or any successor
thereto.
FDIC: Federal Deposit Insurance Corporation or any successor thereto.
Final Certification: The certification substantially in the form of
Exhibit Three to the Custodial Agreement.
Fractional Undivided Interest: With respect to any Class of
Certificates, the fractional undivided interest evidenced by any Certificate of
such Class the numerator of which is the Current Principal Amount of such
Certificate and the denominator of which is the Current Principal Amount of such
Class. With respect to the Certificates in the aggregate, the fractional
undivided interest evidenced by (i) a Residual Certificate will be deemed to
equal 0.25% multiplied by the percentage interest of such Residual Certificate
and (ii) a Certificate of any other Class will be deemed to equal 99.25%
multiplied by a fraction, the numerator of which is the Current Principal Amount
of such Certificate and the denominator of which is the aggregate Current
Principal Amount of all the Certificates.
Xxxxxxx Mac: Xxxxxxx Mac, formerly the Federal Home Loan Mortgage
Corporation, or any successor thereto.
Global Certificate: Any Private Certificate registered in the name of
the Depository or its nominee, beneficial interests in which are reflected on
the books of the Depository or on the books of a Person maintaining an account
with such Depository (directly or as an indirect participant in accordance with
the rules of such depository).
GMAC: GMAC Mortgage Corporation
GMAC Servicing Agreements: The Servicing Agreement, dated as of May 1,
2001, as amended by Amendment No. 1, dated as of October 1, 2002, each between
EMC Mortgage Corporation (as owner) and GMAC Mortgage Corporation (as servicer),
the Loan Servicing Agreement, dated as of November 30, 1999 between E*TRADE (as
owner) and GMAC Mortgage Corporation (as servicer), and the Loan Servicing
Agreement dated as of November 1, 2002 between E*TRADE Bank and GMAC Mortgage
Corporation, each attached hereto as Exhibit H-5.
Gross Margin: As to each Mortgage Loan, the fixed percentage set forth
in the related Mortgage Note and indicated on the Mortgage Loan Schedule which
percentage is added to the related Index on each Interest Adjustment Date to
determine (subject to rounding, the minimum and maximum Mortgage Interest Rate
and the Periodic Rate Cap) the Mortgage Interest Rate until the next Interest
Adjustment Date.
Group I Available Funds: With respect to any Distribution Date, the sum
of the Group I-1, Group I-2, Group I-3 and Group I-4 Available Funds for such
Distribution Date.
Group I-1 Available Funds, Group I-2 Available Funds, Group I-3
Available Funds, Group I-4 Available Funds, Group II-1 Available Funds or Group
II-2 Available Funds: With respect to any Distribution Date, an amount equal to
the aggregate of the following amounts with respect to the Mortgage Loans in the
related Loan Group: (a) all previously undistributed payments on account of
principal (including the principal portion of Scheduled Payments, Principal
Prepayments and the principal portion of Net Liquidation Proceeds) and all
previously undistributed payments on account of interest received after the
Cut-off Date and on or prior to the related Determination Date, (b) any Monthly
Advances and Compensating Interest Payments by the Servicers or the Master
Servicer with respect to such Distribution Date, (c) any amounts deposited into
the Distribution Account from the Pre-Funding Account and the Interest Coverage
Account pursuant to Sections 4.06 and 4.07 of this Agreement and (d) any
reimbursed amount in connection with losses on investments of deposits in an
account, except:
-9-
(i) all payments that were due on or before the Cut-off Date;
(ii) all Principal Prepayments and Liquidation Proceeds
received after the applicable Prepayment Period;
(iii) all payments, other than Principal Prepayments, that
represent early receipt of Scheduled Payments due on a date or dates
subsequent to the related Due Date;
(iv) amounts received on particular Mortgage Loans as late
payments of principal or interest and respecting which, and to the
extent that, there are any unreimbursed Monthly Advances;
(v) amounts representing Monthly Advances or Servicing
Advances determined to be Nonrecoverable Advances;
(vi) any investment earnings on amounts on deposit in the
Master Servicer Collection Account and the Distribution Account and
amounts permitted to be withdrawn from the Master Servicer Collection
Account and the Distribution Account pursuant to this Agreement;
(vii) to pay the Servicing Fees or to reimburse any Servicer
or the Master Servicer for such amounts as are due under the applicable
Servicing Agreement and the Agreement and have not been retained by or
paid to such Servicer or the Master Servicer; and
(viii) any expenses or other amounts reimbursable to the
Trustee, the Securities Administrator and the Custodian pursuant to
Section 7.04(c) or Section 9.05.
In addition, on the Closing Date, the Seller will deposit $50 in the
Distribution Account in order to pay the Class R-II Certificates on the first
Distribution Date.
In addition, on each Distribution Date, the Group I-1, Group I-2, Group
I-3, Group I-4, Group II-1 or Group II-2 Available Funds shall be increased or
decreased, as applicable, by any Diverted Amount allocated thereto pursuant to
Section 6.02(e).
Group I Certificates: The Group I Senior Certificates, Group I Senior
Mezzanine Certificates and Group I Subordinate Certificates.
Group I Cross-Over Date: The first Distribution Date on which the
aggregate Current Principal Amount of the Group I Senior Mezzanine and Group I
Subordinate Certificates has been reduced to zero (giving effect to all
distributions on such Distribution Date).
Group I Mortgage Loans: The Group I-1 Mortgage Loans, Group I-2
Mortgage Loans, Group I-3 Mortgage Loans and Group I-4 Mortgage Loans.
Group I-1 Mortgage Loans: The Mortgage Loans identified as such on the
Mortgage Loan Schedule.
Group I-2 Mortgage Loans: The Mortgage Loans identified as such on the
Mortgage Loan Schedule.
Group I-3 Mortgage Loans: The Mortgage Loans identified as such on the
Mortgage Loan Schedule.
Group I-4 Mortgage Loans: The Mortgage Loans identified as such on the
Mortgage Loan Schedule.
-10-
Group I Optional Termination Date: With respect to the Group I Mortgage
Loans, any Distribution Date on or after which the Scheduled Principal Balance
(before giving effect to distributions to be made on such Distribution Date) of
the Group I Mortgage Loans is less than 5% of the sum of (i) of their aggregate
Scheduled Principal Balance as of the Cut-off Date and (ii) the Pre-Funded
Amount.
Group I Original Senior Mezzanine and Subordinate Principal Balance:
The aggregate Current Principal Amount of each Class of Group I Senior Mezzanine
and Subordinate Certificates as of the Closing Date.
Group I Senior Certificates: The Class I-A-1, Class I-A-2, Class I-A-3,
Class I-A-4, Class R-I and Class R-III Certificates.
Group I-1 Senior Certificates: The Class I-A-1 Certificates.
Group I-2 Senior Certificates: The Class I-A-2 Certificates.
Group I-3 Senior Certificates: The Class I-A-3 Certificates.
Group I-4 Senior Certificates: The Class I-A-4, Class R-I and Class
R-III Certificates.
Group I Senior Mezzanine Certificates: The Class I-M-1 Certificates.
Group I Senior Mezzanine Certificate Writedown Amount: As to any
Distribution Date on or after which the aggregate Current Principal Amount of
the Group I Subordinate Certificates has been reduced to zero, the amount by
which (a) the aggregate Current Principal Amount of all the Group I Certificates
(after giving effect to the distribution of principal and the allocation of
applicable Realized Losses in reduction of the Current Principal Amounts of such
Group I Certificates on such Distribution Date) exceeds (b) the aggregate
Scheduled Principal Balance of the Group I Mortgage Loans on the Due Date
related to such Distribution Date.
Group I Senior Mezzanine Loss and Delinquency Test: On any Distribution
Date, the Group I Senior Mezzanine Loss and Delinquency Test is satisfied if, as
of the last day of the month preceding such Distribution Date, (A) the aggregate
Scheduled Principal Balance of the Group I Mortgage Loans delinquent 60 days or
more (including for this purpose any such Mortgage Loans in foreclosure and such
Mortgage Loans with respect to which the related Mortgaged Property has been
acquired by the Trust), averaged over the last six months, as a percentage of
the aggregate Current Principal Amount of the Group I Senior Mezzanine and
Subordinate Certificates does not exceed 100%; and (B) cumulative Realized
Losses on the Group I Mortgage Loans do not exceed (a) 30% of the Group I
Original Senior Mezzanine and Subordinate Principal Balance if such Distribution
Date occurs between and including January 2010 and December 2010, (b) 35% of the
Group I Original Senior Mezzanine and Subordinate Principal Balance if such
Distribution Date occurs between and including January 2011 and December 2011,
(c) 40% of the Original Senior Mezzanine and Subordinate Principal Balance if
such Distribution Date occurs between and including January 2012 and December
2012, (d) 45% of the Original Senior Mezzanine and Subordinate Principal Balance
if such Distribution Date occurs between and including January 2013 and December
2013, and (e) 50% of the Original Senior Mezzanine and Subordinate Principal
Balance if such Distribution Date occurs during or after January 2014.
Group I Senior Mezzanine and Subordinate Optimal Principal Amount: As
to any Distribution Date, an amount equal to the sum, without duplication, of
the following (but in no event greater than the aggregate Current Principal
Amount of the Group I Senior Mezzanine and Subordinate Certificates immediately
prior to such Distribution Date):
-11-
(i) the applicable Group I Senior Mezzanine and Subordinate
Percentage of the principal portion of all Monthly Payments due on each
Outstanding Mortgage Loan on the related Due Date, as specified in the
amortization schedule at the time applicable thereto (after adjustment
for previous Principal Prepayments but before any adjustment to such
amortization schedule by reason of any bankruptcy or similar proceeding
or any moratorium or similar waiver or grace period);
(ii) the applicable Group I Senior Mezzanine and Subordinate
Prepayment Percentage of each Principal Payment in part during the
related Prepayment Period with respect to each Mortgage Loan and the
applicable Group I Senior Mezzanine and Subordinate Prepayment
Percentage of the Scheduled Principal Balance of each Mortgage Loan
that was the subject of a Principal Prepayment in full during the
related Prepayment Period;
(iii) the excess, if any, of (A) all Net Liquidation Proceeds
with respect to the Mortgage Loans allocable to principal received
during the related Prepayment Period over (B) the sum of the amounts
distributable pursuant to clause (iii) of the definition of Senior
Optimal Principal Amount;
(iv) the applicable Group I Senior Mezzanine and Subordinate
Prepayment Percentage of the sum of (a) the Scheduled Principal Balance
of each Mortgage Loan or related REO Property which was purchased with
respect to such Distribution Date and (b) the difference, if any,
between the Scheduled Principal Balance of a Mortgage Loan that has
been replaced with a Substitute Mortgage Loan on such Distribution Date
over the Scheduled Principal Balance of such Substitute Mortgage Loan;
and
(v) on the Distribution Date on which the Current Principal
Amounts of the Certificates have all been reduced to zero, 100% of any
Group I Senior Optimal Principal Amount. After the aggregate Current
Principal Amount of the Group I Subordinate Certificates has been
reduced to zero, the Group I Subordinate Optimal Principal Amount shall
be zero.
Group I Senior Mezzanine and Subordinate Percentage: On any
Distribution Date and each Mortgage Loan Group for the Group I Mortgage Loans,
100% minus the Group I-1, Group I-2, Group I-3 and Group I-4 Senior Percentage,
as applicable.
Group I Senior Mezzanine and Subordinate Prepayment Percentage: The
Group I-1, Group I-2, Group I-3 or Group I-4 Senior Mezzanine and Subordinate
Prepayment Percentage, as applicable.
Group I-1 Senior Mezzanine and Subordinate Prepayment Percentage: With
respect to the Group I-1 Mortgage Loans, on any Distribution Date, 100% minus
the Group I-1 Senior Prepayment Percentage, except that on any Distribution Date
after the Current Principal Amount of the Group I-1 Senior Certificates has been
reduced to zero, the Group I-1 Senior Mezzanine and Subordinate Prepayment
Percentage will equal 100%.
Group I-2 Senior Mezzanine and Subordinate Prepayment Percentage: With
respect to the Group I-2 Mortgage Loans, on any Distribution Date, 100% minus
the Group I-2 Senior Prepayment Percentage, except that on any Distribution Date
after the Current Principal Amount of the Group I-2 Senior Certificates has been
reduced to zero, the Group I-2 Senior Mezzanine and Subordinate Prepayment
Percentage will equal 100%.
Group I-3 Senior Mezzanine and Subordinate Prepayment Percentage: With
respect to the Group I-3 Mortgage Loans, on any Distribution Date, 100% minus
the Group I-3 Senior Prepayment Percentage, except that on any Distribution Date
after the Current Principal Amount of the Group I-3 Senior Certificates has been
reduced to zero, the Group I-3 Senior Mezzanine and Subordinate Prepayment
Percentage will equal 100%.
-12-
Group I-4 Senior Mezzanine and Subordinate Prepayment Percentage: With
respect to the Group I-4 Mortgage Loans, on any Distribution Date, 100% minus
the Group I-4 Senior Prepayment Percentage, except that on any Distribution Date
after the aggregate Current Principal Amount of the Group I-4 Senior
Certificates have each been reduced to zero, the Group I-4 Senior Mezzanine and
Subordinate Prepayment Percentage will equal 100%.
Group I Senior Optimal Principal Amount and Group II Senior Optimal
Principal Amount: With respect to each Distribution Date, an amount equal to the
sum, without duplication, of the following (but in no event greater than the
aggregate Current Principal Amounts of the Group I-1, Group I-2, Group I-3 and
Group I-4 Certificates, or the Group II-1 and Group II-2 Senior Certificates, as
applicable, immediately prior to such Distribution Date):
(i) the applicable Senior Percentage of all scheduled payments
of principal allocated to the Scheduled Principal Balance due on each
Outstanding Mortgage Loan in the related Loan Group on the related Due
Date as specified in the amortization schedule at the time applicable
thereto (after adjustments for previous Principal Prepayments but
before any adjustment to such amortization schedule by reason of any
bankruptcy or similar proceeding or any moratorium or similar waiver or
grace period);
(ii) the applicable Senior Prepayment Percentage of the
Scheduled Principal Balance of each Mortgage Loan in the related Loan
Group which was the subject of a Principal Prepayment in full received
by the Master Servicer during the related Prepayment Period;
(iii) the applicable Senior Prepayment Percentage of all
Principal Prepayments in part received by the Master Servicer during
the related Prepayment Period with respect to each Mortgage Loan in the
related Loan Group;
(iv) the lesser of (a) the applicable Senior Prepayment
Percentage of the sum of (A) all Net Liquidation Proceeds allocable to
principal received in respect of each Mortgage Loan in the related Loan
Group which became a Liquidated Mortgage Loan during the related
Prepayment Period (other than Mortgage Loans described in the
immediately following clause (B)) and (B) the Scheduled Principal
Balance of each such Mortgage Loan in the related Loan Group purchased
by an insurer from the Trustee during the related Prepayment Period
pursuant to the related Primary Mortgage Insurance Policy, if any, or
otherwise; and (b) the applicable Senior Percentage of the sum of (A)
the Scheduled Principal Balance of each Mortgage Loan in the related
Loan Group which became a Liquidated Mortgage Loan during the related
Prepayment Period (other than the Mortgage Loans described in the
immediately following clause (B)) and (B) the Scheduled Principal
Balance of each such Mortgage Loan in the related Loan Group that was
purchased by an insurer from the Trustee during the related Prepayment
Period pursuant to the related Primary Mortgage Insurance Policy, if
any or otherwise;
(v) the applicable Senior Prepayment Percentage of the sum of
(a) the Scheduled Principal Balance of each Mortgage Loan in the
related Loan Group which was repurchased by the Mortgage Loan Seller in
connection with such Distribution Date and (b) the excess, if any, of
the Scheduled Principal Balance of a Mortgage Loan in the related Loan
Group that has been replaced by the Mortgage Loan Seller with a
substitute Mortgage Loan pursuant to the Mortgage Loan Purchase
Agreement in connection with such Distribution Date over the Scheduled
Principal Balance of such substitute Mortgage Loan;
(vi) any Diverted Amount allocated to the Group I or Group II
Senior Optimal Principal Amount, as applicable;
minus
-13-
(vii) any Diverted Amount from the Group I or Group II Senior
Optimal Principal mount for such Distribution Date, as applicable.
Group I-1 Senior Percentage: Initially, 97.00%. On any Distribution
Date, the lesser of (i) 100% and (ii) the percentage (carried to six places
rounded up) obtained by dividing the aggregate Current Principal Amount of the
Group I-1 Senior Certificates immediately preceding such Distribution Date by
the aggregate Scheduled Principal Balance of the Group I-1 Mortgage Loans as of
the beginning of the related Due Period.
Group I-2 Senior Percentage: Initially, 97.00%. On any Distribution
Date, the lesser of (i) 100% and (ii) the percentage (carried to six places
rounded up) obtained by dividing the aggregate Current Principal Amount of the
Group I-2 Senior Certificates immediately preceding such Distribution Date by
the aggregate Scheduled Principal Balance of the Group I-2 Mortgage Loans as of
the beginning of the related Due Period.
Group I-3 Senior Percentage: Initially, 97.00%. On any Distribution
Date, the lesser of (i) 100% and (ii) the percentage (carried to six places
rounded up) obtained by dividing the aggregate Current Principal Amount of the
Group I-3 Senior Certificates immediately preceding such Distribution Date by
the aggregate Scheduled Principal Balance of the Group I-3 Mortgage Loans as of
the beginning of the related Due Period.
Group I-4 Senior Percentage: Initially, 97.00%. On any Distribution
Date, the lesser of (i) 100% and (ii) the percentage (carried to six places
rounded up) obtained by dividing the aggregate Current Principal Amount of the
Group I-4 Senior Certificates immediately preceding such Distribution Date by
the aggregate Scheduled Principal Balance of the Group I-4 Mortgage Loans as of
the beginning of the related Due Period.
Group I-1 Senior Prepayment Percentage: On any Distribution Date
occurring during the periods set forth below, as follows:
Period (dates inclusive) Group I-1 Senior Prepayment Percentage
--------------------------------------------------------------------------------
January 25, 2003 - December 25, 2009 100%
January 25, 2010 - December 25, 2010 Group I-1 Senior Percentage plus 70%
of the Group I Senior Mezzanine and
Subordinate Percentage for the related
Mortgage Loan Group.
January 25, 2011 - December 25, 2011 Group I-1 Senior Percentage plus 60%
of the Group I Senior Mezzanine and
Subordinate Percentage for the related
Mortgage Loan Group.
January 25, 2012 - December 25, 2012 Group I-1 Senior Percentage plus 40%
of the Group I Senior Mezzanine and
Subordinate Percentage for the related
Mortgage Loan Group.
January 25, 2013 - December 25, 2013 Group I-1 Senior Percentage plus 20%
of the Group I Senior Mezzanine and
Subordinate Percentage for the related
Mortgage Loan Group.
January 25, 2014 and thereafter Group I-1 Senior Percentage.
In addition, no reduction of the Group I-1 Senior Prepayment Percentage
shall occur on any Distribution Date unless, as of the last day of the month
preceding such Distribution Date, (A) the aggregate Scheduled Principal Balance
of the Group I Mortgage Loans delinquent 60 days or more (including for this
purpose any such Mortgage Loans in foreclosure and Mortgage Loans with respect
to which the related Mortgaged Property has been acquired by the Trust),
averaged over the last six months, as a percentage of the aggregate Current
Principal Amount of the
-14-
Group I Senior Mezzanine Certificates and Group I Subordinate Certificates does
not exceed 50%; and (B) cumulative Realized Losses on the Group I Mortgage Loans
do not exceed (a) 30% of the Group I Original Senior Mezzanine and Subordinate
Principal Balance if such Distribution Date occurs between and including January
2010 and December 2010, (b) 35% of the Group I Original Senior Mezzanine and
Subordinate Principal Balance if such Distribution Date occurs between and
including January 2011 and December 2011, (c) 40% of the Group I Original Senior
Mezzanine and Subordinate Principal Balance if such Distribution Date occurs
between and including January 2012 and December 2012, (d) 45% of the Group I
Original Senior Mezzanine and Subordinate Principal Balance if such Distribution
Date occurs between and including January 2013 and December 2013, and (e) 50% of
the Group I Original Senior Mezzanine and Subordinate Principal Balance if such
Distribution Date occurs during or after January 2014.
In addition, if the current weighted average Group I Senior Mezzanine
and Subordinate Percentage for the Group I Certificates is equal to or greater
than two times the initial weighted average Group I Senior Mezzanine and
Subordinate Percentage for the Group I Certificates, and (a) the aggregate
Scheduled Principal Balance of the Group I Mortgage Loans delinquent 60 days or
more (including for this purpose any such Mortgage Loans in foreclosure and such
Mortgage Loans with respect to which the related Mortgaged Property has been
acquired by the Trust), averaged over the last six months, as a percentage of
the aggregate Current Principal Amount of the Group I Senior Mezzanine and Group
I Subordinate Certificates does not exceed 50% and (b)(i) prior to the
Distribution Date in January 2006 cumulative Realized Losses on the Group I
Mortgage Loans do not exceed 20% of the Group I Original Senior Mezzanine and
Subordinate Principal Balance and (ii) on or after the Distribution Date in
January 2006 cumulative Realized Losses on the Group I Mortgage Loans do not
exceed 30% of the Group I Original Senior Mezzanine and Subordinate Principal
Balance, then, in each case, the Group I-1 Senior Prepayment Percentage for such
Distribution Date will equal the Group I-1 Senior Percentage; provided, however,
if the current weighted average Group I Senior Mezzanine and Subordinate
Percentage for the Group I Certificates is equal to or greater than two times
the initial weighted average Group I Senior Mezzanine and Subordinate Percentage
for the Group I Certificates prior to January 25, 2006 and the above delinquency
and loss tests are met, then the Group I-1 Senior Prepayment Percentage for such
Distribution Date will equal the Group I-1 Senior Percentage plus 50% of the
related Group I Senior Mezzanine and Subordinate Percentage.
Notwithstanding the foregoing, if on any Distribution Date the Group
I-1 Senior Percentage exceeds the Group I-1 Senior Percentage as of the Cut-Off
Date, the Group I-1 Senior Prepayment Percentage for such Distribution Date will
equal 100%. On the Distribution Date on which the Current Principal Amounts of
the Group I-1 Senior Certificates are reduced to zero, the Group I-1 Senior
Prepayment Percentage shall be the minimum percentage sufficient to effect such
reduction and thereafter shall be zero.
Group I-2 Senior Prepayment Percentage: On any Distribution Date
occurring during the periods set forth below, as follows:
Period (dates inclusive) Group I-2 Senior Prepayment Percentage
--------------------------------------------------------------------------------
January 25, 2003 - December 25, 2009 100%
January 25, 2010 - December 25, 2010 Group I-2 Senior Percentage plus 70%
of the Group I Senior Mezzanine and
Subordinate Percentage for the related
Mortgage Loan Group.
January 25, 2011 - December 25, 2011 Group I-2 Senior Percentage plus 60%
of the Group I Senior Mezzanine and
Subordinate Percentage for the related
Mortgage Loan Group.
-15-
January 25, 2012 - December 25, 2012 Group I-2 Senior Percentage plus 40%
of the Group I Senior Mezzanine and
Subordinate Percentage for the related
Mortgage Loan Group.
January 25, 2013 - December 25, 2013 Group I-2 Senior Percentage plus 20%
of the Group I Senior Mezzanine and
Subordinate Percentage for the related
Mortgage Loan Group.
January 25, 2014 and thereafter Group I-2 Senior Percentage.
In addition, no reduction of the Group I-2 Senior Prepayment Percentage
shall occur on any Distribution Date unless, as of the last day of the month
preceding such Distribution Date, (A) the aggregate Scheduled Principal Balance
of the Group I Mortgage Loans delinquent 60 days or more (including for this
purpose any such Mortgage Loans in foreclosure and Mortgage Loans with respect
to which the related Mortgaged Property has been acquired by the Trust),
averaged over the last six months, as a percentage of the aggregate Current
Principal Amount of the Group I Senior Mezzanine Certificates and Group I
Subordinate Certificates does not exceed 50%; and (B) cumulative Realized Losses
on the Group I Mortgage Loans do not exceed (a) 30% of the Group I Original
Senior Mezzanine and Subordinate Principal Balance if such Distribution Date
occurs between and including January 2010 and December 2010, (b) 35% of the
Group I Original Senior Mezzanine and Subordinate Principal Balance if such
Distribution Date occurs between and including January 2011 and December 2011,
(c) 40% of the Group I Original Senior Mezzanine and Subordinate Principal
Balance if such Distribution Date occurs between and including January 2012 and
December 2012, (d) 45% of the Group I Original Senior Mezzanine and Subordinate
Principal Balance if such Distribution Date occurs between and including January
2013 and December 2013, and (e) 50% of the Group I Original Senior Mezzanine and
Subordinate Principal Balance if such Distribution Date occurs during or after
January 2014.
In addition, if the current weighted average Group I Senior Mezzanine
and Subordinate Percentage for the Group I Certificates is equal to or greater
than two times the initial weighted average Senior Mezzanine and Subordinate
Percentage for the Group I Certificates, and (a) the aggregate Scheduled
Principal Balance of the Group I Mortgage Loans delinquent 60 days or more
(including for this purpose any such Mortgage Loans in foreclosure and such
Mortgage Loans with respect to which the related Mortgaged Property has been
acquired by the Trust), averaged over the last six months, as a percentage of
the aggregate Current Principal Amount of the Group I Senior Mezzanine and Group
I Subordinate Certificates does not exceed 50% and (b)(i) prior to the
Distribution Date in January 2006 cumulative Realized Losses on the Group I
Mortgage Loans do not exceed 20% of the Group I Original Senior Mezzanine and
Subordinate Principal Balance and (ii) on or after the Distribution Date in
January 2006 cumulative Realized Losses on the Group I Mortgage Loans do not
exceed 30% of the Group I Original Senior Mezzanine and Subordinate Principal
Balance, then, in each case, the Group I-2 Senior Prepayment Percentage for such
Distribution Date will equal the Group I-2 Senior Percentage; provided, however,
if the current weighted average Group I Senior Mezzanine and Subordinate
Percentage for the Group I Certificates is equal to or greater than two times
the initial weighted average Group I Senior Mezzanine and Subordinate Percentage
for the Group I Certificates prior to January 25, 2006 and the above delinquency
and loss tests are met, then the Group I-2 Senior Prepayment Percentage for such
Distribution Date will equal the Group I-2 Senior Percentage plus 50% of the
related Group I Senior Mezzanine and Subordinate Percentage.
Notwithstanding the foregoing, if on any Distribution Date the Group
I-2 Senior Percentage exceeds the Group I-2 Senior Percentage as of the Cut-Off
Date, the Group I-2 Senior Prepayment Percentage for such Distribution Date will
equal 100%. On the Distribution Date on which the Current Principal Amounts of
the Group I-2 Senior Certificates are reduced to zero, the Group I-2 Senior
Prepayment Percentage shall be the minimum percentage sufficient to effect such
reduction and thereafter shall be zero.
-16-
Group I-3 Senior Prepayment Percentage: On any Distribution Date
occurring during the periods set forth below, as follows:
Period (dates inclusive) Group I-3 Senior Prepayment Percentage
--------------------------------------------------------------------------------
January 25, 2003 - December 25, 2009 100%
January 25, 2010 - December 25, 2010 Group I-3 Senior Percentage plus 70%
of the Group I Senior Mezzanine and
Subordinate Percentage for the related
Mortgage Loan Group.
January 25, 2011 - December 25, 2011 Group I-3 Senior Percentage plus 60%
of the Group I Senior Mezzanine and
Subordinate Percentage for the related
Mortgage Loan Group.
January 25, 2012 - December 25, 2012 Group I-3 Senior Percentage plus 40%
of the Group I Senior Mezzanine and
Subordinate Percentage for the related
Mortgage Loan Group.
January 25, 2013 - December 25, 2013 Group I-3 Senior Percentage plus 20%
of the Group I Senior Mezzanine and
Subordinate Percentage for the related
Mortgage Loan Group.
January 25, 2014 and thereafter Group I-3 Senior Percentage.
In addition, no reduction of the Group I-3 Senior Prepayment Percentage
shall occur on any Distribution Date unless, as of the last day of the month
preceding such Distribution Date, (A) the aggregate Scheduled Principal Balance
of the Group I Mortgage Loans delinquent 60 days or more (including for this
purpose any such Mortgage Loans in foreclosure and Mortgage Loans with respect
to which the related Mortgaged Property has been acquired by the Trust),
averaged over the last six months, as a percentage of the aggregate Current
Principal Amount of the Group I Senior Mezzanine Certificates and Group I
Subordinate Certificates does not exceed 50%; and (B) cumulative Realized Losses
on the Group I Mortgage Loans do not exceed (a) 30% of the Group I Original
Senior Mezzanine and Subordinate Principal Balance if such Distribution Date
occurs between and including January 2010 and December 2010, (b) 35% of the
Group I Original Senior Mezzanine and Subordinate Principal Balance if such
Distribution Date occurs between and including January 2011 and December 2011,
(c) 40% of the Group I Original Senior Mezzanine and Subordinate Principal
Balance if such Distribution Date occurs between and including January 2012 and
December 2012, (d) 45% of the Group I Original Senior Mezzanine and Subordinate
Principal Balance if such Distribution Date occurs between and including January
2013 and December 2013, and (e) 50% of the Group I Original Senior Mezzanine and
Subordinate Principal Balance if such Distribution Date occurs during or after
January 2014.
In addition, if the current weighted average Group I Senior Mezzanine
and Subordinate Percentage for the Group I Certificates is equal to or greater
than two times the initial weighted average Group I Senior Mezzanine and
Subordinate Percentage for the Group I Certificates, and (a) the aggregate
Scheduled Principal Balance of the Group I Mortgage Loans delinquent 60 days or
more (including for this purpose any such Mortgage Loans in foreclosure and such
Mortgage Loans with respect to which the related Mortgaged Property has been
acquired by the Trust), averaged over the last six months, as a percentage of
the aggregate Current Principal Amount of the Group I Senior Mezzanine and Group
I Subordinate Certificates does not exceed 50% and (b)(i) prior to the
Distribution Date in January 2006 cumulative Realized Losses on the Group I
Mortgage Loans do not exceed 20% of the Group I Original Senior Mezzanine and
Subordinate Principal Balance and (ii) on or after the Distribution Date in
January 2006 cumulative Realized Losses on the Group I Mortgage Loans do not
exceed 30% of the Group I Original Senior Mezzanine and Subordinate Principal
Balance, then, in each case, the Group I-3 Senior Prepayment Percentage for such
Distribution Date will equal the Group I-3 Senior Percentage; provided, however,
if the current weighted
-17-
average Group I Senior Mezzanine and Subordinate Percentage for the Group I
Certificates is equal to or greater than two times the initial weighted average
Group I Senior Mezzanine and Subordinate Percentage for the Group I Certificates
prior to January 25, 2006 and the above delinquency and loss tests are met, then
the Group I-3 Senior Prepayment Percentage for such Distribution Date will equal
the Group I-3 Senior Percentage plus 50% of the related Group I Senior Mezzanine
and Subordinate Percentage.
Notwithstanding the foregoing, if on any Distribution Date the Group
I-3 Senior Percentage exceeds the Group I-3 Senior Percentage as of the Cut-Off
Date, the Group I-3 Senior Prepayment Percentage for such Distribution Date will
equal 100%. On the Distribution Date on which the Current Principal Amounts of
the Group I-3 Senior Certificates are reduced to zero, the Group I-3 Senior
Prepayment Percentage shall be the minimum percentage sufficient to effect such
reduction and thereafter shall be zero.
Group I-4 Senior Prepayment Percentage: On any Distribution Date
occurring during the periods set forth below, as follows:
Period (dates inclusive) Group I-4 Senior Prepayment Percentage
--------------------------------------------------------------------------------
January 25, 2003 - December 25, 2009 100%
January 25, 2010 - December 25, 2010 Group I-4 Senior Percentage plus 70%
of the Group I Senior Mezzanine and
Subordinate Percentage for the related
Mortgage Loan Group.
January 25, 2011 - December 25, 2011 Group I-4 Senior Percentage plus 60%
of the Group I Senior Mezzanine and
Subordinate Percentage for the related
Mortgage Loan Group.
January 25, 2012 - December 25, 2012 Group I-4 Senior Percentage plus 40%
of the Group I Senior Mezzanine and
Subordinate Percentage for the related
Mortgage Loan Group.
January 25, 2013 - December 25, 2013 Group I-4 Senior Percentage plus 20%
of the Group I Senior Mezzanine and
Subordinate Percentage for the related
Mortgage Loan Group.
January 25, 2014 and thereafter Group I-4 Senior Percentage.
In addition, no reduction of the Group I-4 Senior Prepayment Percentage
shall occur on any Distribution Date unless, as of the last day of the month
preceding such Distribution Date, (A) the aggregate Scheduled Principal Balance
of the Group I Mortgage Loans delinquent 60 days or more (including for this
purpose any such Mortgage Loans in foreclosure and Mortgage Loans with respect
to which the related Mortgaged Property has been acquired by the Trust),
averaged over the last six months, as a percentage of the aggregate Current
Principal Amount of the Group I Senior Mezzanine Certificates and Group I
Subordinate Certificates does not exceed 50%; and (B) cumulative Realized Losses
on the Group I Mortgage Loans do not exceed (a) 30% of the Group I Original
Senior Mezzanine and Subordinate Principal Balance if such Distribution Date
occurs between and including January 2010 and December 2010, (b) 35% of the
Group I Original Senior Mezzanine and Subordinate Principal Balance if such
Distribution Date occurs between and including January 2011 and December 2011,
(c) 40% of the Group I Original Senior Mezzanine and Subordinate Principal
Balance if such Distribution Date occurs between and including January 2012 and
December 2012, (d) 45% of the Group I Original Senior Mezzanine and Subordinate
Principal Balance if such Distribution Date occurs between and including January
2013 and December 2013, and (e) 50% of the Group I Original Senior Mezzanine and
Subordinate Principal Balance if such Distribution Date occurs during or after
January 2014.
-18-
In addition, if the current weighted average Group I Senior Mezzanine
and Subordinate Percentage for the Group I Certificates is equal to or greater
than two times the initial weighted average Group I Senior Mezzanine and
Subordinate Percentage for the Group I Certificates, and (a) the aggregate
Scheduled Principal Balance of the Group I Mortgage Loans delinquent 60 days or
more (including for this purpose any such Mortgage Loans in foreclosure and such
Mortgage Loans with respect to which the related Mortgaged Property has been
acquired by the Trust), averaged over the last six months, as a percentage of
the aggregate Current Principal Amount of the Group I Senior Mezzanine and Group
I Subordinate Certificates does not exceed 50% and (b)(i) prior to the
Distribution Date in January 2006 cumulative Realized Losses on the Group I
Mortgage Loans do not exceed 20% of the Group I Original Senior Mezzanine and
Subordinate Principal Balance and (ii) on or after the Distribution Date in
January 2006 cumulative Realized Losses on the Group I Mortgage Loans do not
exceed 30% of the Group I Original Senior Mezzanine and Subordinate Principal
Balance, then, in each case, the Group I-4 Senior Prepayment Percentage for such
Distribution Date will equal the Group I-4 Senior Percentage; provided, however,
if the current weighted average Group I Senior Mezzanine and Subordinate
Percentage for the Group I Certificates is equal to or greater than two times
the initial weighted average Group I Senior Mezzanine and Subordinate Percentage
for the Group I Certificates prior to January 25, 2006 and the above delinquency
and loss tests are met, then the Group I-4 Senior Prepayment Percentage for such
Distribution Date will equal the Group I-4 Senior Percentage plus 50% of the
related Group I Senior Mezzanine and Subordinate Percentage.
Notwithstanding the foregoing, if on any Distribution Date the Group
I-4 Senior Percentage exceeds the Group I-4 Senior Percentage as of the Cut-Off
Date, the Group I-4 Senior Prepayment Percentage for such Distribution Date will
equal 100%. On the Distribution Date on which the Current Principal Amounts of
the Group I-4 Senior Certificates are reduced to zero, the Group I-4 Senior
Prepayment Percentage shall be the minimum percentage sufficient to effect such
reduction and thereafter shall be zero.
Group I Subordinate Certificate Writedown Amount: As to any
Distribution Date, the amount by which (a) the aggregate Current Principal
Amount of all the Group I Certificates (after giving effect to the distribution
of principal and the allocation of applicable Realized Losses in reduction of
the Current Principal Amounts of such Group I Certificates on such Distribution
Date) exceeds (b) the aggregate Scheduled Principal Balance of the Group I
Mortgage Loans on the Due Date related to such Distribution Date.
Group I Subordinate Certificates: The Class I-B-1, Class I-B-2, Class
I-B-3, Class I-B-4, Class I B-5 and Class I-B-6 Certificates.
Group I Subordinate Optimal Principal Amount: As to any Distribution
Date, an amount equal to the sum, without duplication, of the sum of the
following Group I-1, Group I-2, Group I-3 and Group I-4 Mortgage Loans (but in
no event greater than the aggregate Current Principal Amount of the Group I
Senior Mezzanine and Subordinate Certificates immediately prior to such
Distribution Date):
(i) the applicable Group I Senior Mezzanine and Subordinate
Percentage of the principal portion of all Scheduled Payments due on
each Outstanding Mortgage Loan in the related Loan Group on the related
Due Date as specified in the amortization schedule at the time
applicable thereto (after adjustment for previous Principal Prepayments
but before any adjustment to such amortization schedule by reason of
any bankruptcy or similar proceeding or any moratorium or similar
waiver or grace period);
(ii) the applicable Group I Senior Mezzanine and Subordinate
Prepayment Percentage of the Scheduled Principal Balance of each
Mortgage Loan in the related Loan Group that was the subject of a
Principal Prepayment in full received by the Master Servicer during the
related Prepayment Period;
-19-
(iii) the applicable Group I Senior Mezzanine and Subordinate
Prepayment Percentage of each Principal Prepayment in part received
during the related Prepayment Period with respect to each Mortgage Loan
in the related Loan Group;
(iv) the excess, if any, of (a) all Net Liquidation Proceeds
allocable to principal received during the related Prepayment Period in
respect of each Liquidated Mortgage Loan in the related Loan Group over
(b) the sum of the amounts distributable to the related Senior
Certificateholders pursuant to clause (iv) of the related definition of
Senior Optimal Principal Amount on such Distribution Date;
(v) the applicable Group I Senior Mezzanine and Subordinate
Prepayment Percentage of the sum of (a) the Scheduled Principal Balance
of each Mortgage Loan in the related Loan Group which was purchased
with respect to such Distribution Date and (b) the difference, if any,
between the Scheduled Principal Balance of a Mortgage Loan in the
related Loan Group that has been replaced by the Mortgage Loan Seller
with a Substitute Mortgage Loan pursuant to the Mortgage Loan Purchase
Agreement in connection with such Distribution Date over the Scheduled
Principal Balance of such Substitute Mortgage Loan; and
(vi) on the Distribution Date on which the Current Principal
Amounts of the Group I-1 Senior Certificates, Group I-2 Senior
Certificates, Group I-3 Senior Certificates and Group I-4 Senior
Certificates have all been reduced to zero, 100% of the related Senior
Optimal Principal Amount. After the aggregate Current Principal Amount
of the Group I Senior Mezzanine and Subordinate Certificates has been
reduced to zero, the Group I Senior Mezzanine and Subordinate Optimal
Principal Amount shall be zero.
Group II Available Funds: With respect to any Distribution Date, the
sum of the Group II-1 and Group II-2 Available Funds for such Distribution Date.
Group II Certificates: The Group II Senior Certificates and Group II
Subordinate Certificates.
Group II Cross-Over Date: The first Distribution Date on which the
aggregate Current Principal Amount of the Group II Subordinate Certificates has
been reduced to zero (giving effect to all distributions on such Distribution
Date).
Group II Mortgage Loans: The Group II-1Mortgage Loans and Group II-2
Mortgage Loans.
Group II-1 Mortgage Loans: The Mortgage Loans identified as such on the
Mortgage Loan Schedule.
Group II-2 Mortgage Loans: The Mortgage Loans identified as such on the
Mortgage Loan Schedule.
Group II Optional Termination Date: With respect to the Group II
Mortgage Loans, any Distribution Date on or after which the aggregate Scheduled
Principal Balance (before giving effect to distributions to be made on such
Distribution Date) of the Group II Mortgage Loans is less than 10% of their
aggregate Scheduled Principal Balance as of the Cut-off Date.
Group II Original Subordinate Principal Balance: The aggregate Current
Principal Amount of the Group II Subordinate Certificates as of the Closing
Date.
Group II Senior Certificates: The Class II-A-1 and Class II-A-2
Certificates.
-20-
Group II-1 Senior Certificates: The Class II-A-1 Certificates.
Group II-2 Senior Certificates: The Class II-A-2 Certificates.
Group II-1 Senior Percentage: Initially, 92.00%. On any Distribution
Date, the lesser of (i) 100% and (ii) the percentage (carried to six places
rounded up) obtained by dividing the aggregate Current Principal Amount of the
Group II-1 Senior Certificates immediately preceding such Distribution Date by
the aggregate Scheduled Principal Balance of the Group II-1 Mortgage Loans as of
the beginning of the related Due Period.
Group II-2 Senior Percentage: Initially, 92.00%. On any Distribution
Date, the lesser of (i) 100% and (ii) the percentage (carried to six places
rounded up) obtained by dividing the aggregate Current Principal Amount of the
Group II-2 Senior Certificates immediately preceding such Distribution Date by
the aggregate Scheduled Principal Balance of the Group II-2 Mortgage Loans as of
the beginning of the related Due Period.
Group II-1 Senior Prepayment Percentage: On any Distribution Date
occurring during the periods set forth below, as follows:
Period (dates inclusive) Group II-1 Senior Prepayment Percentage
--------------------------------------------------------------------------------
January 25, 2003 - December 25, 2009 100%
January 25, 2010 - December 25, 2010 Group II-1 Senior Percentage plus 70%
of the Group II-1 Subordinate
Percentage.
January 25, 2011 - December 25, 2011 Group II-1 Senior Percentage plus 60%
of the Group II-1 Subordinate
Percentage.
January 25, 2012 - December 25, 2012 Group II-1 Senior Percentage plus 40%
of the Group II-1 Subordinate
Percentage.
January 25, 2013 - December 25, 2013 Group II-1 Senior Percentage plus 20%
of the Group II-1 Subordinate
Percentage.
January 25, 2014 and thereafter Group II-1 Senior Percentage.
In addition, no reduction of the Group II-1 Senior Prepayment
Percentage shall occur on any Distribution Date unless, as of the last day of
the month preceding such Distribution Date, (A) the aggregate Scheduled
Principal Balance of the Group II Mortgage Loans delinquent 60 days or more
(including for this purpose any such Mortgage Loans in foreclosure and Mortgage
Loans with respect to which the related Mortgaged Property has been acquired by
the Trust), averaged over the last six months, as a percentage of the aggregate
Current Principal Amount of the Group II Subordinate Certificates does not
exceed 50%; and (B) cumulative Realized Losses on the Group II Mortgage Loans do
not exceed (a) 30% of the Group II Original Subordinate Principal Balance if
such Distribution Date occurs between and including January 2010 and December
2010, (b) 35% of the Group II Original Subordinate Principal Balance if such
Distribution Date occurs between and including January 2011 and December 2011,
(c) 40% of the Group II Original Subordinate Principal Balance if such
Distribution Date occurs between and including January 2012 and December 2012,
(d) 45% of the Group II Original Subordinate Principal Balance if such
Distribution Date occurs between and including January 2013 and December 2013,
and (e) 50% of the Group II Original Subordinate Principal Balance if such
Distribution Date occurs during or after January 2014.
In addition, if the current weighted average Group II Subordinate
Percentage for the Group II Certificates is equal to or greater than two times
the initial weighted average Group II Subordinate Percentage for the Group II
Certificates, and (a) the aggregate Scheduled Principal Balance of the Group II
Mortgage Loans delinquent 60 days or more (including for this purpose any such
Mortgage Loans in foreclosure and such Mortgage Loans with respect
-21-
to which the related Mortgaged Property has been acquired by the Trust),
averaged over the last six months, as a percentage of the aggregate Current
Principal Amount of the Group II Subordinate Certificates does not exceed 50%
and (b)(i) prior to the Distribution Date in January 2006 cumulative Realized
Losses on the Group II Mortgage Loans do not exceed 20% of the Group II Original
Subordinate Principal Balance and (ii) on or after the Distribution Date in
January 2006 cumulative Realized Losses on the Group II Mortgage Loans do not
exceed 30% of the Group II Original Subordinate Principal Balance, then, in each
case, the Group II-1 Senior Prepayment Percentage for such Distribution Date
will equal the Group II-1 Senior Percentage; provided, however, if the current
weighted average Group II Subordinate Percentage for the Group II Certificates
is equal to or greater than two times the initial weighted average Group II
Subordinate Percentage for the Group II Certificates prior to January 25, 2006
and the above delinquency and loss tests are met, then the Group II-1 Senior
Prepayment Percentage for such Distribution Date will equal the Group II-1
Senior Percentage plus 50% of the related Group II Subordinate Percentage.
Notwithstanding the foregoing, if on any Distribution Date the Group
II-1 Senior Percentage exceeds the Group II-1 Senior Percentage as of the
Cut-Off Date, the Group II-1 Senior Prepayment Percentage for such Distribution
Date will equal 100%. On the Distribution Date on which the Current Principal
Amounts of the Group II-1 Senior Certificates are reduced to zero, the Group
II-1 Senior Prepayment Percentage shall be the minimum percentage sufficient to
effect such reduction and thereafter shall be zero.
Group II-2 Senior Prepayment Percentage: On any Distribution Date
occurring during the periods set forth below, as follows:
Period (dates inclusive) Group II-2 Senior Prepayment Percentage
--------------------------------------------------------------------------------
January 25, 2003 - December 25, 2009 100%
January 25, 2010 - December 25, 2010 Group II-2 Senior Percentage plus 70%
of the Group II-2 Subordinate
Percentage.
January 25, 2011 - December 25, 2011 Group II-2 Senior Percentage plus 60%
of the Group II-2 Subordinate
Percentage.
January 25, 2012 - December 25, 2012 Group II-2 Senior Percentage plus 40%
of the Group II-2 Subordinate
Percentage.
January 25, 2013 - December 25, 2013 Group II-2 Senior Percentage plus 20%
of the Group II-2 Subordinate
Percentage.
January 25, 2014 and thereafter Group II-2 Senior Percentage.
In addition, no reduction of the Group II-2 Senior Prepayment
Percentage shall occur on any Distribution Date unless, as of the last day of
the month preceding such Distribution Date, (A) the aggregate Scheduled
Principal Balance of the Group II Mortgage Loans delinquent 60 days or more
(including for this purpose any such Mortgage Loans in foreclosure and Mortgage
Loans with respect to which the related Mortgaged Property has been acquired by
the Trust), averaged over the last six months, as a percentage of the aggregate
Current Principal Amount of the Group II Subordinate Certificates does not
exceed 50%; and (B) cumulative Realized Losses on the Group II Mortgage Loans do
not exceed (a) 30% of the Group II Original Subordinate Principal Balance if
such Distribution Date occurs between and including January 2010 and December
2010, (b) 35% of the Group II Original Subordinate Principal Balance if such
Distribution Date occurs between and including January 2011 and December 2011,
(c) 40% of the Group II Original Subordinate Principal Balance if such
Distribution Date occurs between and including January 2012 and December 2012,
(d) 45% of the Group II Original Subordinate Principal Balance if such
Distribution Date occurs between and including January 2013 and December 2013,
and (e) 50% of the Group II Original Subordinate Principal Balance if such
Distribution Date occurs during or after January 2014.
-22-
In addition, if the current weighted average Group II Subordinate
Percentage for the Group II Certificates is equal to or greater than two times
the initial weighted average Group II Subordinate Percentage for the Group II
Certificates, and (a) the aggregate Scheduled Principal Balance of the Group II
Mortgage Loans delinquent 60 days or more (including for this purpose any such
Mortgage Loans in foreclosure and such Mortgage Loans with respect to which the
related Mortgaged Property has been acquired by the Trust), averaged over the
last six months, as a percentage of the aggregate Current Principal Amount of
the Group II Subordinate Certificates does not exceed 50% and (b)(i) prior to
the Distribution Date in January 2006 cumulative Realized Losses on the Group II
Mortgage Loans do not exceed 20% of the Group II Original Subordinate Principal
Balance and (ii) on or after the Distribution Date in January 2006 cumulative
Realized Losses on the Group II Mortgage Loans do not exceed 30% of the Group II
Original Subordinate Principal Balance, then, in each case, the Group II-2
Senior Prepayment Percentage for such Distribution Date will equal the Group
II-2 Senior Percentage; provided, however, if the current weighted average Group
II Subordinate Percentage for the Group II Certificates is equal to or greater
than two times the initial weighted average Group II Subordinate Percentage for
the Group II Certificates prior to January 25, 2006 and the above delinquency
and loss tests are met, then the Group II-2 Senior Prepayment Percentage for
such Distribution Date will equal the Group II-2 Senior Percentage plus 50% of
the related Group II Subordinate Percentage.
Notwithstanding the foregoing, if on any Distribution Date the Group
II-2 Senior Percentage exceeds the Group II-2 Senior Percentage as of the
Cut-Off Date, the Group II-2 Senior Prepayment Percentage for such Distribution
Date will equal 100%. On the Distribution Date on which the Current Principal
Amounts of the Group II-2 Senior Certificates are reduced to zero, the Group
II-2 Senior Prepayment Percentage shall be the minimum percentage sufficient to
effect such reduction and thereafter shall be zero.
Group II Subordinate Certificate Writedown Amount: As to any
Distribution Date, the amount by which (a) the aggregate Current Principal
Amount of all the Group II Certificates (after giving effect to the distribution
of principal and the allocation of applicable Realized Losses in reduction of
the Current Principal Amounts of such Group II Certificates on such Distribution
Date) exceeds (b) the aggregate Scheduled Principal Balance of the Group II
Mortgage Loans on the Due Date related to such Distribution Date.
Group II Subordinate Certificates: The Class II-B-1, Class II-B-2,
Class II-B-3, Class II-B-4, Class II B-5 and Class II-B-6 Certificates.
Group II Subordinate Optimal Principal Amount: As to any Distribution
Date, an amount equal to the sum, without duplication, of the sum of the
following for the Group II-1 and Group II-2 Mortgage Loans (but in no event
greater than the aggregate Current Principal Amount of the related Subordinate
Certificates immediately prior to such Distribution Date):
(i) the applicable Group II Subordinate Percentage of the
principal portion of all Scheduled Payments due on each Outstanding
Mortgage Loan in the related Loan Group on the related Due Date as
specified in the amortization schedule at the time applicable thereto
(after adjustment for previous Principal Prepayments but before any
adjustment to such amortization schedule by reason of any bankruptcy or
similar proceeding or any moratorium or similar waiver or grace
period);
(ii) the applicable Group II Subordinate Prepayment Percentage
of the Scheduled Principal Balance of each Mortgage Loan in the related
Loan Group that was the subject of a Principal Prepayment in full
received by the Master Servicer during the related Prepayment Period;
(iii) the applicable Group II Subordinate Prepayment
Percentage of each Principal Prepayment in part received during the
related Prepayment Period with respect to each Mortgage Loan in the
related Loan Group;
-23-
(iv) the excess, if any, of (a) all Net Liquidation Proceeds
allocable to principal received during the related Prepayment Period in
respect of each Liquidated Mortgage Loan in the related Loan Group over
(b) the sum of the amounts distributable to the related Senior
Certificateholders pursuant to clause (iv) of the related definition of
Senior Optimal Principal Amount on such Distribution Date;
(v) the applicable Group II Subordinate Prepayment Percentage
of the sum of (a) the Scheduled Principal Balance of each Mortgage Loan
in the related Loan Group which was purchased with respect to such
Distribution Date and (b) the difference, if any, between the Scheduled
Principal Balance of a Mortgage Loan in the related Loan Group that has
been replaced by the Mortgage Loan Seller with a Substitute Mortgage
Loan pursuant to the Mortgage Loan Purchase Agreement in connection
with such Distribution Date over the Scheduled Principal Balance of
such Substitute Mortgage Loan; and
(vi) on the Distribution Date on which the Current Principal
Amounts of the Group II-1 Senior Certificates and Group II-2 Senior
Certificates have all been reduced to zero, 100% of the related Senior
Optimal Principal Amount. After the aggregate Current Principal Amount
of the Group I Senior Mezzanine and Subordinate Certificates has been
reduced to zero, the Group I Senior Mezzanine and Subordinate Optimal
Principal Amount shall be zero.
Group II Subordinate Percentage: The Group II-1 Subordinate Percentage
or the Group II-2 Subordinate Percentage, as applicable.
Group II-1 Subordinate Percentage: On any Distribution Date, 100% minus
the Group II-1 Senior Percentage.
Group II-2 Subordinate Percentage: On any Distribution Date, 100% minus
the Group II-2 Senior Percentage.
Group II Subordinate Prepayment Percentage: The Group II-1 Subordinate
Prepayment Percentage or the Group II-2 Subordinate Prepayment Percentage, as
applicable.
Group II-1 Subordinate Prepayment Percentage: With respect to the Group
II-1 Mortgage Loans, on any Distribution Date, 100% minus the Group II-1 Senior
Prepayment Percentage, except that on any Distribution Date after the Current
Principal Amount of the Group II-1 Senior Certificates has been reduced to zero,
the Group II-1 Subordinate Prepayment Percentage will equal 100%.
Group II-2 Subordinate Prepayment Percentage: With respect to the Group
II-2 Mortgage Loans, on any Distribution Date, 100% minus the Group II-2 Senior
Prepayment Percentage, except that on any Distribution Date after the Current
Principal Amount of the Group II-2 Senior Certificates has been reduced to zero,
the Group II-2 Subordinate Prepayment Percentage will equal 100%.
Holder: The Person in whose name a Certificate is registered in the
Certificate Register, except that, subject to Subsections 11.02(b) and 11.05(e),
solely for the purpose of giving any consent pursuant to this Agreement, any
Certificate registered in the name of the Seller, the Master Servicer or the
Trustee or any Affiliate thereof shall be deemed not to be outstanding and the
Fractional Undivided Interest evidenced thereby shall not be taken into account
in determining whether the requisite percentage of Fractional Undivided
Interests necessary to effect any such consent has been obtained.
HomeBanc: HomeBanc Mortgage Corporation.
-24-
Indemnified Persons: The Trustee, the Master Servicer, the Custodian
and the Securities Administrator and their officers, directors, agents and
employees and, with respect to the Trustee, any separate co-trustee and its
officers, directors, agents and employees.
Independent: When used with respect to any specified Person, this term
means that such Person (a) is in fact independent of the Seller or the Master
Servicer and of any Affiliate of the Seller or the Master Servicer, (b) does not
have any direct financial interest or any material indirect financial interest
in the Seller or the Master Servicer or any Affiliate of the Seller or the
Master Servicer and (c) is not connected with the Seller or the Master Servicer
or any Affiliate as an officer, employee, promoter, underwriter, trustee,
partner, director or person performing similar functions.
Index: The index, if any, specified in a Mortgage Note by reference to
which the related Mortgage Interest Rate will be adjusted from time to time.
Individual Certificate: Any Private Certificate registered in the name
of the Holder other than the Depository or its nominee.
Initial Certification: The certification substantially in the form of
Exhibit One to the Custodial Agreement.
Institutional Accredited Investor: Any Person meeting the requirements
of Rule 501(a)(l), (2), (3) or (7) of Regulation D under the Securities Act or
any entity all of the equity holders in which come within such paragraphs.
Insurance Policy: With respect to any Mortgage Loan, any standard
hazard insurance policy, flood insurance policy or title insurance policy.
Insurance Proceeds: Amounts paid by the insurer under any Insurance
Policy covering any Mortgage Loan or Mortgaged Property other than amounts
required to be paid over to the Mortgagor pursuant to law or the related
Mortgage Note or Security Instrument and other than amounts used to repair or
restore the Mortgaged Property or to reimburse insured expenses.
Interest Accrual Period: With respect to each Distribution Date, for
each Class of Certificates, the calendar month preceding the month in which such
Distribution Date occurs.
Interest Adjustment Date: With respect to a Mortgage Loan, the date, if
any, specified in the related Mortgage Note on which the Mortgage Interest Rate
is subject to adjustment.
Interest Shortfall: With respect to any Distribution Date and each
Mortgage Loan that during the related Prepayment Period was the subject of a
Principal Prepayment or constitutes a Relief Act Mortgage Loan, an amount
determined as follows:
(a) Partial principal prepayments received during the relevant
Prepayment Period: The difference between (i) one month's interest at the
applicable Net Rate on the amount of such prepayment and (ii) the amount of
interest for the calendar month of such prepayment (adjusted to the applicable
Net Rate) received at the time of such prepayment;
(b) Principal prepayments in full received during the relevant
Prepayment Period: The difference between (i) one month's interest at the
applicable Net Rate on the Scheduled Principal Balance of such Mortgage Loan
immediately prior to such prepayment and (ii) the amount of interest for the
calendar month of such prepayment (adjusted to the applicable Net Rate) received
at the time of such prepayment; and
-25-
(c) Relief Act Mortgage Loans: As to any Relief Act Mortgage Loan, the
excess of (i) 30 days' interest (or, in the case of a principal prepayment in
full, interest to the date of prepayment) on the Scheduled Principal Balance
thereof (or, in the case of a principal prepayment in part, on the amount so
prepaid) at the related Net Rate over (ii) 30 days' interest (or, in the case of
a principal prepayment in full, interest to the date of prepayment) on such
Scheduled Principal Balance (or, in the case of a Principal Prepayment in part,
on the amount so prepaid) at the Net Rate required to be paid by the Mortgagor
as limited by application of the Relief Act.
Interim Certification: The certification substantially in the form of
Exhibit Two to the Custodial Agreement.
Investment Letter: The letter to be furnished by each Institutional
Accredited Investor which purchases any of the Private Certificates in
connection with such purchase, substantially in the form set forth as Exhibit
F-1 hereto.
Liquidated Mortgage Loan: Any defaulted Mortgage Loan as to which the
related Servicer or the Master Servicer has determined that all amounts it
expects to recover from or on account of such Mortgage Loan have been recovered.
Liquidation Date: With respect to any Liquidated Mortgage Loan, the
date on which the Master Servicer or the related Servicer has certified that
such Mortgage Loan has become a Liquidated Mortgage Loan.
Liquidation Expenses: With respect to a Mortgage Loan in liquidation,
unreimbursed expenses paid or incurred by or for the account of the Master
Servicer or the related Servicers in connection with the liquidation of such
Mortgage Loan and the related Mortgage Property, such expenses including (a)
property protection expenses, (b) property sales expenses, (c) foreclosure and
sale costs, including court costs and reasonable attorneys' fees, and (d)
similar expenses reasonably paid or incurred in connection with liquidation.
Liquidation Proceeds: Cash received in connection with the liquidation
of a defaulted Mortgage Loan, whether through trustee's sale, foreclosure sale,
Insurance Proceeds, condemnation proceeds or otherwise.
Loan Group: Loan Group I-1, Loan Group I-2, Loan Group I-3, Loan Group
I-4, Loan Group II-1 or Loan Group II-2, as applicable.
Loan Group I-1: The group of Mortgage Loans designated as belonging to
Loan Group I-1 on the Mortgage Loan Schedule.
Loan Group I-2: The group of Mortgage Loans designated as belonging to
Loan Group I-2 on the Mortgage Loan Schedule.
Loan Group I-3: The group of Mortgage Loans designated as belonging to
Loan Group I-3 on the Mortgage Loan Schedule.
Loan Group I-4: The group of Mortgage Loans designated as belonging to
Loan Group I-4 on the Mortgage Loan Schedule.
Loan Group II-1: The group of Mortgage Loans designated as belonging to
Loan Group II-1 on the Mortgage Loan Schedule.
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Loan Group II-2: The group of Mortgage Loans designated as belonging to
Loan Group II-2 on the Mortgage Loan Schedule.
Loan-to-Value Ratio: With respect to any Mortgage Loan, the fraction,
expressed as a percentage, the numerator of which is the original principal
balance of the related Mortgage Loan and the denominator of which is the
Original Value of the related Mortgaged Property.
Loss Allocation Limitation: The meaning specified in Section 6.02(c)
hereof.
Lost Notes: The original Mortgage Notes that have been lost, as
indicated on the Mortgage Loan Schedule.
Master Servicer: As of the Closing Date, Xxxxx Fargo Bank Minnesota,
National Association and, thereafter, its respective successors in interest who
meet the qualifications of the Servicing Agreements and this Agreement.
Master Servicer Collection Account: The trust account or accounts
created and maintained pursuant to Section 4.02, which shall be denominated
"Bank One, National Association, as Trustee f/b/o holders of Structured Asset
Mortgage Investments Inc., Bear Xxxxxxx ARM Trust 2002-11, Mortgage Pass-Through
Certificates, Series 2002-11 - Master Servicer Collection Account,"and which
shall be an Eligible Account.
Master Servicing Compensation: The meaning specified in Section
3.14(a).
Maximum Lifetime Mortgage Rate: The maximum level to which a Mortgage
Interest Rate can adjust in accordance with its terms, regardless of changes in
the applicable Index.
MERS: Mortgage Electronic Registration Systems, Inc., a corporation
organized and existing under the laws of the State of Delaware, or any successor
thereto.
MERS(R) System: The system of recording transfers of Mortgages
electronically maintained by MERS.
MIN: The Mortgage Identification Number for Mortgage Loans registered
with MERS on the MERS(R) System.
Minimum Lifetime Mortgage Rate: The minimum level to which a Mortgage
Interest Rate can adjust in accordance with its terms, regardless of changes in
the applicable Index.
MOM Loan: With respect to any Mortgage Loan, MERS acting as the
mortgagee of such Mortgage Loan, solely as nominee for the originator of such
Mortgage Loan and its successors and assigns, at the origination thereof.
Monthly Advance: An advance of principal or interest required to be
made by the applicable Servicer pursuant to the related Servicing Agreement or
the Master Servicer pursuant to Section 6.05.
Moody's: Xxxxx'x Investors Service, Inc. or its successor in interest.
Xxxxxx Xxxxxxx Servicing Agreements: The Purchase, Warranties and
Servicing Agreement, dated as of June 26, 2002, between E*TRADE and Company (the
"PWS Agreement"), and with respect to Mortgage Loans secured by Additional
Collateral, that certain Assignment and Assumption Agreement, dated as of
January 18, 2000, between Xxxxxx Xxxxxxx Mortgage Capital, Inc. ("MSMCI") and
E*TRADE, which assigned to E*TRADE with respect to the mortgage loans specified
therein MSMCI's rights under the Master Mortgage Loan Purchase Agreement, dated
as of January 18, 2000, between MSMCI, E*TRADE and MSCC and MSMCI's rights under
the
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Master Servicing Agreement, dated as of January 1, 2000, between MSMCI and MSCC,
each attached hereto as Exhibit H-6.
Mortgage File: The mortgage documents listed in Section 2.01(b)
pertaining to a particular Mortgage Loan and any additional documents required
to be added to the Mortgage File pursuant to this Agreement.
Mortgage Interest Rate: The annual rate at which interest accrues from
time to time on any Mortgage Loan pursuant to the related Mortgage Note, which
rate is equal to the "Mortgage Interest Rate" set forth with respect thereto on
the Mortgage Loan Schedule.
Mortgage Loan: A mortgage loan transferred and assigned to the Trustee
pursuant to Section 2.01 or Section 2.04 and held as a part of the Trust Fund,
as identified in the Mortgage Loan Schedule, including a mortgage loan the
property securing which has become an REO Property.
Mortgage Loan Purchase Agreement: The Mortgage Loan Purchase Agreement
dated as of December 30, 2002, between EMC, as seller, and Structured Asset
Mortgage Investments Inc., as purchaser, and all amendments thereof and
supplements thereto, attached as Exhibit J.
Mortgage Loan Schedule: The schedule, attached hereto as Exhibit B with
respect to the Mortgage Loans and as amended from time to time to reflect the
repurchase or substitution of Mortgage Loans pursuant to this Agreement.
Mortgage Loan Seller: EMC Mortgage Corporation, as mortgage loan seller
under the Mortgage Loan Purchase Agreement.
Mortgage Note: The originally executed note or other evidence of the
indebtedness of a Mortgagor under the related Mortgage Loan.
Mortgaged Property: Land and improvements securing the indebtedness of
a Mortgagor under the related Mortgage Loan or, in the case of REO Property,
such REO Property.
Mortgagor: The obligor on a Mortgage Note.
MSCC: Xxxxxx Xxxxxxx Credit Corporation.
Net Interest Shortfall: With respect to any Distribution Date, the
Interest Shortfall, if any, for such Distribution Date net of Compensating
Interest Payments made with respect to such Distribution Date.
Net Liquidation Proceeds: As to any Liquidated Mortgage Loan,
Liquidation Proceeds net of (i) Liquidation Expenses which are payable therefrom
by the related Servicer or the Master Servicer in accordance with the related
Servicing Agreement or this Agreement and (ii) unreimbursed advances by the
related Servicer or the Master Servicer and Monthly Advances.
Net Rate: With respect to each Mortgage Loan, the Mortgage Interest
Rate in effect from time to time less the Servicing Fee Rate (expressed as a per
annum rate).
Nonrecoverable Advance: Any advance or Monthly Advance (i) which was
previously made or is proposed to be made by the Master Servicer, the Trustee
(as successor Master Servicer) or applicable Servicer and (ii) which, in the
good faith judgment of the Master Servicer, the Trustee or applicable Servicer,
will not or, in the case of a
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proposed advance or Monthly Advance, would not, be ultimately recoverable by the
Master Servicer, the Trustee (as successor Master Servicer) or applicable
Servicer from Liquidation Proceeds, Insurance Proceeds or future payments on the
Mortgage Loan for which such advance or Monthly Advance was made.
Offered Certificate: Any Senior Certificate or Offered Subordinate
Certificate.
Offered Subordinate Certificates: The Class I-B-l, Class I-B-2, Class
I-B-3, Class II-X-x, Class II-B-2 and Class II-B-3 Certificates.
Officer's Certificate: A certificate signed by the Chairman of the
Board, the Vice Chairman of the Board, the President or a Vice President or
Assistant Vice President or other authorized officer of the Master Servicer or
the Seller, as applicable, and delivered to the Trustee, as required by this
Agreement.
Opinion of Counsel: A written opinion of counsel who is or are
acceptable to the Trustee and who, unless required to be Independent (an
"Opinion of Independent Counsel"), may be internal counsel for EMC, the Master
Servicer or the Seller.
Original Value: The lesser of (i) the Appraised Value or (ii) the sales
price of a Mortgaged Property at the time of origination of a Mortgage Loan,
except in instances where either clauses (i) or (ii) is unavailable, the other
may be used to determine the Original Value, or if both clauses (i) and (ii) are
unavailable, Original Value may be determined from other sources reasonably
acceptable to the Seller.
Outstanding Mortgage Loan: With respect to any Due Date, a Mortgage
Loan which, prior to such Due Date, was not the subject of a Principal
Prepayment in full, did not become a Liquidated Mortgage Loan and was not
purchased or replaced.
Outstanding Principal Balance: As of the time of any determination, the
principal balance of a Mortgage Loan remaining to be paid by the Mortgagor, or,
in the case of an REO Property, the principal balance of the related Mortgage
Loan remaining to be paid by the Mortgagor at the time such property was
acquired by the Trust Fund less any Net Liquidation Proceeds with respect
thereto to the extent applied to principal.
Pass-Through Rate: As to each Class of Certificates and the REMIC I
Regular Interests and REMIC II Regular Interests (other than the Class R-II
Certificates), the rate of interest determined as provided with respect thereto,
in Section 5.01(c). Any monthly calculation of interest at a stated rate shall
be based upon annual interest at such rate divided by twelve.
Periodic Rate Cap: With respect to each Mortgage Loan, the maximum
adjustment that can be made to the Mortgage Interest Rate on each Interest
Adjustment Date in accordance with its terms, regardless of changes in the
applicable Index.
Permitted Investments: Any one or more of the following obligations or
securities held in the name of the Trustee for the benefit of the
Certificateholders:
(i) direct obligations of, and obligations the timely payment
of which are fully guaranteed by the United States of America or any
agency or instrumentality of the United States of America the
obligations of which are backed by the full faith and credit of the
United States of America;
(ii) (a) demand or time deposits, federal funds or bankers'
acceptances issued by any depository institution or trust company
incorporated under the laws of the United States of America or any
state thereof
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(including the Trustee or the Master Servicer or its Affiliates acting
in its commercial banking capacity) and subject to supervision and
examination by federal and/or state banking authorities, provided that
the commercial paper and/or the short-term debt rating and/or the
long-term unsecured debt obligations of such depository institution or
trust company at the time of such investment or contractual commitment
providing for such investment have the Applicable Credit Rating or
better from each Rating Agency and (b) any other demand or time deposit
or certificate of deposit that is fully insured by the Federal Deposit
Insurance Corporation;
(iii) repurchase obligations with respect to (a) any security
described in clause (i) above or (b) any other security issued or
guaranteed by an agency or instrumentality of the United States of
America, the obligations of which are backed by the full faith and
credit of the United States of America, in either case entered into
with a depository institution or trust company (acting as principal)
described in clause (ii)(a) above where the Trustee holds the security
therefor;
(iv) securities bearing interest or sold at a discount issued
by any corporation (including the Trustee or the Master Servicer or its
Affiliates) incorporated under the laws of the United States of America
or any state thereof that have the Applicable Credit Rating or better
from each Rating Agency at the time of such investment or contractual
commitment providing for such investment; provided, however, that
securities issued by any particular corporation will not be Permitted
Investments to the extent that investments therein will cause the then
outstanding principal amount of securities issued by such corporation
and held as part of the Trust to exceed 10% of the aggregate
Outstanding Principal Balances of all the Mortgage Loans and Permitted
Investments held as part of the Trust;
(v) commercial paper (including both non-interest-bearing
discount obligations and interest-bearing obligations payable on demand
or on a specified date not more than one year after the date of
issuance thereof) having the Applicable Credit Rating or better from
each Rating Agency at the time of such investment;
(vi) a Reinvestment Agreement issued by any bank, insurance
company or other corporation or entity;
(vii) any other demand, money market or time deposit,
obligation, security or investment as may be acceptable to each Rating
Agency as evidenced in writing by each Rating Agency to the Trustee;
and
(viii) any money market or common trust fund having the
Applicable Credit Rating or better from each Rating Agency, including
any such fund for which the Trustee or Master Servicer or any affiliate
of the Trustee or Master Servicer acts as a manager or an advisor;
provided, however, that no instrument or security shall be a Permitted
Investment if such instrument or security evidences a right to receive
only interest payments with respect to the obligations underlying such
instrument or if such security provides for payment of both principal
and interest with a yield to maturity in excess of 120% of the yield to
maturity at par or if such instrument or security is purchased at a
price greater than par.
Permitted Transferee: Any Person other than a Disqualified Organization
or an "electing large partnership" (as defined by Section 775 of the Code).
Person: Any individual, corporation, partnership, joint venture,
association, limited liability company, joint-stock company, trust,
unincorporated organization or government or any agency or political subdivision
thereof.
Physical Certificates: The Residual Certificates and the Private
Certificates.
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Pre-Funding Account: The account established and maintained pursuant to
Section 4.06 and which shall be an Eligible Account.
Pre-Funded Amount: The amount deposited by the Trustee in the
Pre-Funding Account on the Closing Date, which amount is $29,820,484.
Pre-Funding Period: The period from the Closing Date until the earliest
of (i) the date on which the amount on deposit in the Pre-Funding Account
(exclusive of investment income) is reduced to zero or (ii) January 31, 2003.
Prepayment Charge: With respect to any Mortgage Loan, the charges or
premiums, if any, due in connection with a full or partial prepayment of such
Mortgage Loan in accordance with the terms thereof.
Prepayment Period: With respect to any Mortgage Loan and any
Distribution Date, the calendar month preceding the month in which such
Distribution Date occurs.
Principal Prepayment: Any payment (whether partial or full) or other
recovery of principal on a Mortgage Loan which is received in advance of its
scheduled Due Date to the extent that it is not accompanied by an amount as to
interest representing scheduled interest due on any date or dates in any month
or months subsequent to the month of prepayment, including Insurance Proceeds
and Repurchase Proceeds, but excluding the principal portion of Net Liquidation
Proceeds.
Private Certificates: Any Class I-B-4, Class I-B-5, Class I-B-6, Class
II-B-4, Class II-B-5 and Class II-B-6 Certificate.
Protected Account: An account established and maintained for the
benefit of Certificateholders by each Servicer with respect to the related
Mortgage Loans and with respect to REO Property pursuant to the respective
Servicing Agreements.
QIB: A Qualified Institutional Buyer as defined in Rule 144A
promulgated under the Securities Act.
Qualified Insurer: Any insurance company duly qualified as such under
the laws of the state or states in which the related Mortgaged Property or
Mortgaged Properties is or are located, duly authorized and licensed in such
state or states to transact the type of insurance business in which it is
engaged and approved as an insurer by the Master Servicer, so long as the claims
paying ability of which is acceptable to the Rating Agencies for pass-through
certificates having the same rating as the Certificates rated by the Rating
Agencies as of the Closing Date.
Rating Agencies: Xxxxx'x and S&P.
Realized Loss: Any (i) Bankruptcy Loss or (ii) as to any Liquidated
Mortgage Loan, (x) the Outstanding Principal Balance of such Liquidated Mortgage
Loan plus accrued and unpaid interest thereon at the Mortgage Interest Rate
through the last day of the month of such liquidation, less (y) the related Net
Liquidation Proceeds with respect to such Mortgage Loan and the related Mortgage
Property.
Record Date: With respect to any Distribution Date, the close of
business on the last Business Day of the month immediately preceding the month
of such Distribution Date.
Reinvestment Agreements: One or more reinvestment agreements,
acceptable to the Rating Agencies, from a bank, insurance company or other
corporation or entity (including the Trustee).
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Relief Act: The Soldiers' and Sailors' Civil Relief Act of 1940, as
amended.
Relief Act Mortgage Loan: Any Mortgage Loan as to which the Scheduled
Payment thereof has been reduced due to the application of the Relief Act.
REMIC: A real estate mortgage investment conduit, as defined in the
Code.
REMIC I: That group of assets contained in the Trust Fund designated as
a REMIC consisting of (i) the Group I Mortgage Loans, (ii) the portion of the
Master Servicer Collection Account relating to the Group I Mortgage Loans, (iii)
any REO Property relating to the Group I Mortgage Loans, (iv) the rights with
respect to any related Servicing Agreement, (v) the rights with respect to any
related Assignment Agreement, (v) such funds or assets as from time to time are
deposited in the Distribution Account and belonging to the Trust Fund (exclusive
of the Pre-Funding Account and the Interest Coverage Account) and (vi) any
proceeds of the foregoing.
REMIC I Interests: The REMIC I Regular Interests and the Class R-I
Certificates.
REMIC I Regular Interests: The REMIC I Regular Interests, with such
terms as described in Section 5.01(c).
REMIC I Subordinated Balance Ratio: The ratio among the Uncertificated
Principal Balances of each of the REMIC I Regular Interests ending with the
designation "A," equal to the ratio among, with respect to each such REMIC I
Regular Interest, the excess of (x) the aggregate Scheduled Principal Balance of
the Mortgage Loans in the related Loan Group over (y) the Current Principal
Amount of the Senior Certificates in the related Group.
REMIC II: That group of assets contained in the Trust Fund designated
as a REMIC consisting of (i) the Group II Mortgage Loans, (ii) the portion of
the Master Servicer Collection Account relating to the Group II Mortgage Loans,
(iii) any REO Property relating to the Group II Mortgage Loans, (iv) the rights
with respect to any related Servicing Agreement, (v) the rights with respect to
any related Assignment Agreement, (v) such funds or assets as from time to time
are deposited in the Distribution Account and belonging to the Trust Fund
(exclusive of the Pre-Funding Account and the Interest Coverage Account) and
(vi) any proceeds of the foregoing.
REMIC II Interests: The REMIC II Regular Interests and the Class R-II
Certificates.
REMIC II Regular Interests: As defined in Section 5.01(c).
REMIC II Subordinated Balance Ratio: The ratio among the Uncertificated
Principal Balances of each of the REMIC II Regular Interests ending with the
designation "A," equal to the ratio among, with respect to each such REMIC II
Regular Interest, the excess of (x) the aggregate Scheduled Principal Balance of
the Group II Mortgage Loans in the related Loan Group over (y) the Current
Principal Amount of the Senior Certificates in the related Group.
REMIC III: That group of assets contained in the Trust Fund designated
as a REMIC consisting of the REMIC I Regular Interests and the REMIC II Regular
Interests.
REMIC III Certificates: The REMIC III Regular Certificates and the
Class R-III Certificates.
REMIC III Regular Certificates: Certificates as defined in Section
5.01(c).
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REMIC Opinion: An Opinion of Independent Counsel, to the effect that
the proposed action described therein would not, under the REMIC Provisions, (i)
cause REMIC I, REMIC II or REMIC III to fail to qualify as a REMIC while any
regular interest in such REMIC is outstanding, (ii) result in a tax on
prohibited transactions with respect to any REMIC or (iii) constitute a taxable
contribution to any REMIC after the Startup Day.
REMIC Provisions: The provisions of the federal income tax law relating
to the REMIC, which appear at Sections 860A through 860G of the Code, and
related provisions and regulations promulgated thereunder, as the foregoing may
be in effect from time to time.
REO Property: A Mortgaged Property acquired in the name of the Trustee,
for the benefit of Certificateholders, by foreclosure or deed-in-lieu of
foreclosure in connection with a defaulted Mortgage Loan.
Repurchase Price: With respect to any Mortgage Loan (or any property
acquired with respect thereto) required to be repurchased by the Mortgage Loan
Seller pursuant to the Mortgage Loan Purchase Agreement or Article II of this
Agreement, an amount equal to the sum of (i) 100% of the Outstanding Principal
Balance of such Mortgage Loan as of the date of repurchase (or if the related
Mortgaged Property was acquired with respect thereto, 100% of the Outstanding
Principal Balance at the date of the acquisition), plus (ii) accrued but unpaid
interest on the Outstanding Principal Balance at the related Mortgage Interest
Rate, through and including the last day of the month of repurchase, and reduced
by (iii) any portion of the Master Servicing Compensation, Monthly Advances and
advances payable to the purchaser of the Mortgage Loan.
Repurchase Proceeds: the Repurchase Price in connection with any
repurchase of a Mortgage Loan by the Mortgage Loan Seller and any cash deposit
in connection with the substitution of a Mortgage Loan.
Request for Release: A request for release in the form attached hereto
as Exhibit D.
Required Insurance Policy: With respect to any Mortgage Loan, any
insurance policy which is required to be maintained from time to time under this
Agreement with respect to such Mortgage Loan.
Residual Certificates: Any of the Class R Certificates.
Responsible Officer: Any officer assigned to the Corporate Trust Office
(or any successor thereto), including any Vice President, Assistant Vice
President, Trust Officer, any Assistant Secretary, any trust officer or any
other officer of the Trustee customarily performing functions similar to those
performed by any of the above designated officers and having direct
responsibility for the administration of this Agreement, and any other officer
of the Trustee to whom a matter arising hereunder may be referred.
Rule 144A Certificate: The certificate to be furnished by each
purchaser of a Private Certificate (which is also a Physical Certificate) which
is a Qualified Institutional Buyer as defined under Rule 144A promulgated under
the Securities Act, substantially in the form set forth as Exhibit F-2 hereto.
S&P: Standard & Poor's, a division of The XxXxxx-Xxxx Companies, Inc.,
and its successors in interest.
Scheduled Payment: With respect to any Mortgage Loan and any month, the
scheduled payment or payments of principal and interest due during such month on
such Mortgage Loan which either is payable by a Mortgagor in such month under
the related Mortgage Note or, in the case of REO Property, would otherwise have
been payable under the related Mortgage Note.
Scheduled Principal: The principal portion of any Scheduled Payment.
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Scheduled Principal Balance: With respect to any Mortgage Loan on any
Distribution Date, (i) the unpaid principal balance of such Mortgage Loan as of
the close of business on the related Due Date (i.e., taking account of the
principal payment to be made on such Due Date and irrespective of any
delinquency in its payment), as specified in the amortization schedule at the
time relating thereto (before any adjustment to such amortization schedule by
reason of any bankruptcy or similar proceeding occurring after the Cut-off Date
(other than a Deficient Valuation) or any moratorium or similar waiver or grace
period) and less (ii) any Principal Prepayments (including the principal portion
of Net Liquidation Proceeds) received during or prior to the related Prepayment
Period; provided that the Scheduled Principal Balance of a Liquidated Mortgage
Loan is zero.
Securities Act: The Securities Act of 1933, as amended.
Securities Administrator: Xxxxx Fargo Bank Minnesota, National
Association, or its successor in interest, or any successor securities
administrator appointed as herein provided.
Securities Legend: "THIS CERTIFICATE HAS NOT BEEN AND WILL NOT BE
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"),
OR UNDER ANY STATE SECURITIES LAWS. THE HOLDER HEREOF, BY PURCHASING THIS
CERTIFICATE, AGREES THAT THIS CERTIFICATE MAY BE REOFFERED, RESOLD, PLEDGED OR
OTHERWISE TRANSFERRED ONLY IN COMPLIANCE WITH THE SECURITIES ACT AND OTHER
APPLICABLE LAWS AND ONLY (1) PURSUANT TO RULE 144A UNDER THE SECURITIES ACT
("RULE 144A") TO A PERSON THAT THE HOLDER REASONABLY BELIEVES IS A QUALIFIED
INSTITUTIONAL BUYER WITHIN THE MEANING OF RULE 144A (A "QIB"), PURCHASING FOR
ITS OWN ACCOUNT OR A QIB PURCHASING FOR THE ACCOUNT OF A QIB, WHOM THE HOLDER
HAS INFORMED, IN EACH CASE, THAT THE REOFFER, RESALE, PLEDGE OR OTHER TRANSFER
IS BEING MADE IN RELIANCE ON RULE 144A, (2) PURSUANT TO AN EXEMPTION FROM
REGISTRATION PROVIDED BY RULE 144 UNDER THE SECURITIES ACT (IF AVAILABLE) OR (3)
IN CERTIFICATED FORM TO AN "INSTITUTIONAL ACCREDITED INVESTOR" WITHIN THE
MEANING THEREOF IN RULE 501(a)(1), (2), (3) or (7) OF REGULATION D UNDER THE ACT
OR ANY ENTITY IN WHICH ALL OF THE EQUITY OWNERS COME WITHIN SUCH PARAGRAPHS
PURCHASING NOT FOR DISTRIBUTION IN VIOLATION OF THE SECURITIES ACT, SUBJECT TO
(A) THE RECEIPT BY THE TRUSTEE OF A LETTER SUBSTANTIALLY IN THE FORM PROVIDED IN
THE AGREEMENT AND (B) THE RECEIPT BY THE TRUSTEE OF SUCH OTHER EVIDENCE
ACCEPTABLE TO THE TRUSTEE THAT SUCH REOFFER, RESALE, PLEDGE OR TRANSFER IS IN
COMPLIANCE WITH THE SECURITIES ACT AND OTHER APPLICABLE LAWS OR IN EACH CASE IN
ACCORDANCE WITH ALL APPLICABLE SECURITIES LAWS OF THE UNITED STATES AND ANY
OTHER APPLICABLE JURISDICTION. THIS CERTIFICATE MAY NOT BE ACQUIRED DIRECTLY OR
INDIRECTLY BY, OR ON BEHALF OF, AN EMPLOYEE BENEFIT PLAN OR OTHER RETIREMENT
ARRANGEMENT WHICH IS SUBJECT TO TITLE I OF THE EMPLOYEE RETIREMENT INCOME
SECURITY ACT OF 1974, AS AMENDED, AND/OR SECTION 4975 OF THE INTERNAL REVENUE
CODE OF 1986, AS AMENDED [in the case of the Class I-B-4, Class I-B-5, Class
I-B-6, Class II-B-4, Class II-B-5 and Class II-B-6 Certificates: ,UNLESS THE
PROPOSED TRANSFER AND/OR HOLDING OF A CERTIFICATE AND THE SERVICING, MANAGEMENT
AND/OR OPERATION OF THE TRUST AND ITS ASSETS: (I) WILL NOT RESULT IN ANY
PROHIBITED TRANSACTION WHICH IS NOT COVERED UNDER AN INDIVIDUAL OR CLASS
PROHIBITED TRANSACTION EXEMPTION, INCLUDING, BUT NOT LIMITED TO, PROHIBITED
TRANSACTION EXEMPTION ("PTE") 84-14, XXX 00-00, XXX 00-0, XXX 95-60 OR PTE 96-23
AND (II) WILL NOT GIVE RISE TO ANY ADDITIONAL FIDUCIARY DUTIES ON THE PART OF
THE SELLER, THE SECURITIES ADMINISTRATOR, THE MASTER SERVICER, ANY SERVICER OR
THE TRUSTEE, WHICH WILL BE DEEMED REPRESENTED BY AN OWNER OF A BOOK-ENTRY
CERTIFICATE OR A GLOBAL CERTIFICATE AND WILL BE EVIDENCED BY A REPRESENTATION OR
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AN OPINION OF COUNSEL TO SUCH EFFECT BY OR ON BEHALF OF AN INSTITUTIONAL
ACCREDITED INVESTOR]."
Security Instrument: A written instrument creating a valid first lien
on a Mortgaged Property securing a Mortgage Note, which may be any applicable
form of mortgage, deed of trust, deed to secure debt or security deed, including
any riders or addenda thereto.
Seller: Structured Asset Mortgage Investments Inc., a Delaware
corporation, or its successors in interest.
Senior Certificates: The Group I-1 Senior Certificates, Group I-2
Senior Certificates, Group I-3 Senior Certificates, Group I-4 Senior
Certificates, Group II-1 Senior Certificates, Group II-2 Senior Certificates.
Senior Optimal Principal Amount: The Group I-1 Senior Optimal Principal
Amount, Group I-2 Senior Optimal Principal Amount, Group I-3, Senior Optimal
Principal Amount, Group I-4 Senior Optimal Principal Amount, Group II-1 Senior
Optimal Principal Amount or Group II-2 Senior Optimal Principal Amount, as
applicable.
Senior Percentage: The Group I-1 Senior Percentage, Group I-2 Senior
Percentage, Group I-3 Senior Percentage, Group I-4 Senior Percentage, Group II-1
Senior Percentage or Group II-2 Senior Percentage, as applicable.
Senior Prepayment Percentage: The Group I-1 Senior Prepayment
Percentage, Group I-2 Senior Prepayment Percentage, Group I-3 Senior Prepayment
Percentage, Group I-4 Senior Prepayment Percentage, Group II-1 Senior Prepayment
Percentage or Group II-2 Senior Prepayment Percentage, as applicable.
Servicer: With respect to each Mortgage Loan, Alliance, Cendant, Chevy
Chase, Countrywide, GMAC, Xxxxxx Xxxxxxx or WFHM.
Servicer Remittance Date: With respect to each Mortgage Loan, the date
set forth in the related Servicing Agreement.
Servicing Agreements: The Cendant Servicing Agreements, Countrywide
Servicing Agreement, GMAC Servicing Agreements, Chevy Chase Servicing Agreement,
Alliance Servicing Agreements, Xxxxxx Xxxxxxx Servicing Agreements and WFHM
Servicing Agreement.
Servicing Fee: As to any Mortgage Loan and Distribution Date, an amount
equal to the product of (i) the Scheduled Principal Balance of such Mortgage
Loan as of the Due Date in the preceding calendar month and (ii) the applicable
Servicing Fee Rate.
Servicing Fee Rate: As to any Mortgage Loan, a per annum rate as set
forth in the Mortgage Loan Schedule.
Startup Day: December 30, 2002.
Subordinate Certificates: The Class I-B-1, Class I-B-2, Class I-B-3,
Class I-B-4, Class I-B-5, Class I-B-6, Class II-B-1, Class II-B-2, Class II-B-3,
Class II-B-4, Class II-B-5 and Class II-B-6 Certificates.
Subsequent Cut-off Date: With respect to those Subsequent Mortgage
Loans sold to the Trust Fund pursuant to a Subsequent Transfer Instrument, the
later of (i) first day of the month in which the related Subsequent Transfer
Date occurs or (ii) the date of origination of such Mortgage Loan.
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Subsequent Mortgage Loans: The Mortgage Loans which will be acquired by
the trust during the Pre-Funding Period with amounts on deposit in the
Pre-Funding Account.
Subsequent Mortgage Loan Purchase Agreement: The agreement between EMC,
as seller, and Structured Asset Mortgage Investments Inc., as purchaser, and all
amendments thereof and supplements thereto, regarding the transfer of the
Subsequent Mortgage Loans by EMC to Structured Asset Mortgage Investments Inc..
Subsequent Transfer Date: With respect to each Subsequent Transfer
Instrument, the date on which the related Subsequent Mortgage Loans are sold to
the Trust Fund.
Subsequent Transfer Instrument: Each Subsequent Transfer Instrument,
dated as of a Subsequent Transfer Date, executed by the Trustee at the written
direction of the Seller substantially in the form attached hereto as Exhibit K,
by which Subsequent Mortgage Loans are transferred to the Trust Fund.
Substitute Mortgage Loan: A mortgage loan tendered to the Trustee
pursuant to the related Servicing Agreement, the Mortgage Loan Purchase
Agreement or Section 2.04 of this Agreement, as applicable, in each case, (i)
which has an Outstanding Principal Balance not greater nor materially less than
the Mortgage Loan for which it is to be substituted; (ii) which has a Mortgage
Interest Rate and Net Rate not less than, and not materially greater than, such
Mortgage Loan; (iii) which has a maturity date not materially earlier or later
than such Mortgage Loan and not later than the latest maturity date of any
Mortgage Loan; (iv) which is of the same property type and occupancy type as
such Mortgage Loan; (v) which has a Loan-to-Value Ratio not greater than the
Loan-to-Value Ratio of such Mortgage Loan; (vi) which is current in payment of
principal and interest as of the date of substitution; (vii) as to which the
payment terms do not vary in any material respect from the payment terms of the
Mortgage Loan for which it is to be substituted and (viii) which has a Gross
Margin, Periodic Rate Cap and Maximum Lifetime Mortgage Rate no less than those
of such Mortgage Loan, has the same Index and interval between Interest
Adjustment Dates as such Mortgage Loan, and a Minimum Lifetime Mortgage Rate no
lower than that of such Mortgage Loan.
Tax Administration and Tax Matters Person: The Securities Administrator
or any successor thereto or assignee thereof shall serve as tax administrator
hereunder and as agent for the Tax Matters Person. The Holder of each Class of
Residual Certificates shall be the Tax Matters Person for the related REMIC, as
more particularly set forth in Section 9.12 hereof.
Trust Fund or Trust: The corpus of the trust created by this Agreement,
consisting of the Mortgage Loans and the other assets described in Section
2.01(a).
Trustee: Bank One, National Association, or its successor in interest,
or any successor trustee appointed as herein provided.
Uncertificated Principal Balance: With respect to any REMIC I Regular
Interest or REMIC II Regular Interest as of any Distribution Date, the initial
principal amount of such Regular Interest, reduced by (i) all amounts
distributed on previous Distribution Dates on such Regular Interest with respect
to principal and (ii) the principal portion of all Realized Losses allocated
prior to such Distribution Date to such Regular Interest, taking account of the
Loss Allocation Limitation.
Underlying Seller: With respect to each Mortgage Loan, Cendant, Chevy
Chase, Countrywide, GMAC, Homebanc and WFHM, as indicated on the Mortgage Loan
Schedule.
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Uninsured Cause: Any cause of damage to a Mortgaged Property or related
REO Property such that the complete restoration of such Mortgaged Property or
related REO Property is not fully reimbursable by the hazard insurance policies
required to be maintained pursuant the related Servicing Agreement, without
regard to whether or not such policy is maintained.
United States Person: A citizen or resident of the United States, a
corporation or partnership (including an entity treated as a corporation or
partnership for federal income tax purposes) created or organized in, or under
the laws of, the United States or any state thereof or the District of Columbia
(except, in the case of a partnership, to the extent provided in regulations),
provided that, for purposes solely of the Class R Certificates, no partnership
or other entity treated as a partnership for United States federal income tax
purposes shall be treated as a United States Person unless all persons that own
an interest in such partnership either directly or through any entity that is
not a corporation for United States federal income tax purposes are United
States Persons, or an estate whose income is subject to United States federal
income tax regardless of its source, or a trust if a court within the United
States is able to exercise primary supervision over the administration of the
trust and one or more such United States Persons have the authority to control
all substantial decisions of the trust. To the extent prescribed in regulations
by the Secretary of the Treasury, which have not yet been issued, a trust which
was in existence on August 20, 1996 (other than a trust treated as owned by the
grantor under subpart E of part I of subchapter J of chapter 1 of the Code), and
which was treated as a United States person on August 20, 1996 may elect to
continue to be treated as a United States person notwithstanding the previous
sentence.
WFHM: Xxxxx Fargo Home Mortgage, Inc.
WFHM Servicing Agreement: The Seller's Warranties and Servicing
Agreement, dated as of November 1, 2002, between EMC (as purchaser) and WFHM (as
company), attached hereto as Exhibit H-7.
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ARTICLE II
Conveyance of Mortgage Loans;
Original Issuance of Certificates
Section 2.01 Conveyance of Mortgage Loans to Trustee. (a) The Seller
concurrently with the execution and delivery of this Agreement, sells, transfers
and assigns to the Trust without recourse all its right, title and interest in
and to (i) the Mortgage Loans identified in the Mortgage Loan Schedule,
including all interest and principal due with respect to the Mortgage Loans
after the Cut-off Date or Subsequent Cut-off Date, as applicable, but excluding
any payments of principal and interest due on or prior to the Cut-off Date or
Subsequent Cut-off Date, as applicable; (ii) such assets as shall from time to
time be credited or are required by the terms of this Agreement to be credited
to the Master Servicer Collection Account, (iii) such assets relating to the
Mortgage Loans as from time to time may be held by the Servicers in Protected
Accounts, the Master Servicer in the Master Servicer Collection Account and the
Trustee in the Distribution Account for the benefit of the Trustee on behalf of
the Certificateholders, (iv) any REO Property, (v) the Required Insurance
Policies and any amounts paid or payable by the insurer under any Insurance
Policy (to the extent the mortgagee has a claim thereto), (vi) the Mortgage Loan
Purchase Agreement to the extent provided in Subsection 2.03(a), (vii) the
rights with respect to the Servicing Agreements as assigned to the Trustee on
behalf of the Certificateholders by the Assignment Agreements and (viii) any
proceeds of the foregoing. Although it is the intent of the parties to this
Agreement that the conveyance of the Seller's right, title and interest in and
to the Mortgage Loans and other assets in the Trust Fund pursuant to this
Agreement shall constitute a purchase and sale and not a loan, in the event that
such conveyance is deemed to be a loan, it is the intent of the parties to this
Agreement that the Seller shall be deemed to have granted to the Trustee a first
priority perfected security interest in all of the Seller's right, title and
interest in, to and under the Mortgage Loans and other assets in the Trust Fund,
and that this Agreement shall constitute a security agreement under applicable
law.
(b) In connection with the above transfer and assignment, the Seller
hereby deposits with the Trustee or the Custodian, as its agent, with respect to
each Mortgage Loan, and as described in the Subsequent Mortgage Loan Purchase
Agreement, with respect to each Subsequent Mortgage Loan, (i) the original
Mortgage Note, endorsed without recourse to the order of the Trustee and showing
an unbroken chain of endorsements from the original payee thereof to the Person
endorsing it to the Trustee, or lost note affidavit with indemnity, (ii) the
original Mortgage and, if the related Mortgage Loan is a MOM Loan, noting the
presence of the MIN and language indicating that such Mortgage Loan is a MOM
Loan, which shall have been recorded (or if the original is not available, a
copy), with evidence of such recording indicated thereon (or if clause (x) in
the proviso below applies, shall be in recordable form), (iii) unless the
Mortgage Loan is a MOM Loan, a certified copy of the assignment (which may be in
the form of a blanket assignment if permitted in the jurisdiction in which the
Mortgaged Property is located) to "Bank One, National Association, as Trustee",
with evidence of recording with respect to each Mortgage Loan in the name of the
Trustee thereon (or if clause (x) in the proviso below applies or for Mortgage
Loans with respect to which the related Mortgaged Property is located in a state
other than Maryland or an Opinion of Counsel has been provided as set forth in
this Section 2.01(b), shall be in recordable form), (iv) all intervening
assignments of the Security Instrument, if applicable and only to the extent
available to the Seller with evidence of recording thereon, (v) the original or
a copy of the policy or certificate of primary mortgage guaranty insurance, to
the extent available, if any, (vi) the original policy of title insurance or
mortgagee's certificate of title insurance or commitment or binder for title
insurance and (vii) originals of all modification agreements, if applicable and
available;
provided, however, that in lieu of the foregoing, the Seller may deliver the
following documents, under the circumstances set forth below: (x) in lieu of the
original Security Instrument, assignments to the Trustee or intervening
assignments thereof which have been delivered, are being delivered or will, upon
receipt of recording information relating to the Security Instrument required to
be included thereon, be delivered to recording offices for recording and have
not been returned to the Seller in time to permit their delivery as specified
above, the Seller
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may deliver a true copy thereof with a certification by the Seller, on the face
of such copy, substantially as follows: "Certified to be a true and correct copy
of the original, which has been transmitted for recording"; (y) in lieu of the
Security Instrument, assignment to the Trustee or intervening assignments
thereof, if the applicable jurisdiction retains the originals of such documents
(as evidenced by a certification from the Seller to such effect) the Seller may
deliver photocopies of such documents containing an original certification by
the judicial or other governmental authority of the jurisdiction where such
documents were recorded; and (z) the Seller shall not be required to deliver
intervening assignments or Mortgage Note endorsements between the related
Underlying Seller and EMC Mortgage Corporation, between EMC Mortgage Corporation
and the Depositor, and between the Depositor and the Trustee; and provided,
further, however, that in the case of Mortgage Loans which have been prepaid in
full after the Cut-off Date and prior to the Closing Date, the Seller, in lieu
of delivering the above documents, may deliver to the Trustee or the Custodian,
as its agent, a certification to such effect and shall deposit all amounts paid
in respect of such Mortgage Loans in the Master Servicer Collection Account on
the Closing Date. The Seller shall deliver such original documents (including
any original documents as to which certified copies had previously been
delivered) to the Trustee or the Custodian, as its agent, promptly after they
are received. The Seller shall cause, at its expense, the assignment of the
Security Instrument to the Trustee to be recorded not later than 180 days after
the Closing Date, unless (a) such recordation is not required by the Rating
Agencies or an Opinion of Counsel has been provided to the Trustee (with a copy
to the Custodian) which states that recordation of such Security Instrument is
not required to protect the interests of the Certificateholders in the related
Mortgage Loans or (b) MERS is identified on the Mortgage or on a properly
recorded assignment of the Mortgage as the mortgagee of record solely as nominee
for Seller and its successor and assigns; provided, however, that each
assignment shall be submitted for recording by the Seller in the manner
described above, at no expense to the Trust or the Trustee or the Custodian, as
its agent, upon the earliest to occur of: (i) reasonable direction by the
Holders of Certificates evidencing Fractional Undivided Interests aggregating
not less than 25% of the Trust, (ii) the occurrence of an Event of Default,
(iii) the occurrence of a bankruptcy, insolvency or foreclosure relating to the
Seller and (iv) the occurrence of a servicing transfer as described in Section
8.02 hereof. Notwithstanding the foregoing, if the Seller fails to pay the cost
of recording the assignments, such expense will be paid by the Trustee and the
Trustee shall be reimbursed for such expenses by the Trust in accordance with
Section 9.05.
(c) The Seller hereby assigns to the Trustee its security interest in
and to any Additional Collateral, its right to receive amounts due or to become
due in respect of any Additional Collateral pursuant to the related Servicing
Agreement.
Section 2.02 Acceptance of Mortgage Loans by Trustee. (a) The Trustee
acknowledges the sale, transfer and assignment of the Trust to it by the Seller
and receipt of, subject to further review and the exceptions which may be noted
pursuant to the procedures described below, and declares that it holds, the
documents (or certified copies thereof) delivered to it pursuant to Section
2.01, and declares that it will continue to hold those documents and any
amendments, replacements or supplements thereto and all other assets of the
Trust Fund delivered to it as Trustee in trust for the use and benefit of all
present and future Holders of the Certificates. On the Closing Date, or the
Subsequent Transfer Date, with respect to the Subsequent Mortgage Loans, the
Custodian, with respect to the Mortgage Loans, shall acknowledge with respect to
each Mortgage Loan by an Initial Certification receipt of the Mortgage File, but
without review of such Mortgage File, except to the extent necessary to confirm
that such Mortgage File contains the related Mortgage Note or lost note
affidavit. No later than 90 days after the Closing Date (or, with respect to any
Substitute Mortgage Loan, within five Business Days after the receipt by the
Trustee or Custodian thereof), the Trustee agrees, for the benefit of the
Certificateholders, to review or cause to be reviewed by the Custodian on its
behalf (under the Custodial Agreement), each Mortgage File delivered to it and
to execute and deliver, or cause to be executed and delivered, to the Seller and
the Trustee an Interim Certification. In conducting such review, the Trustee or
Custodian will ascertain whether all required documents have been executed and
received, and based on the Mortgage Loan Schedule, whether those documents
relate, determined on the basis of the Mortgagor name, original principal
balance and loan number, to the Mortgage Loans it has received, as identified in
the Mortgage Loan Schedule. In performing any such review, the Trustee or the
Custodian, as its agent,
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may conclusively rely on the purported due execution and genuineness of any such
document and on the purported genuineness of any signature thereon. If the
Trustee or the Custodian, as its agent, finds any document constituting part of
the Mortgage File 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, as its agent, shall promptly notify the
Mortgage Loan Seller. In accordance with the Mortgage Loan Purchase Agreement
(or the Subsequent Mortgage Loan Purchase Agreement, with respect to the
Subsequent Mortgage Loans), the Mortgage Loan Seller shall correct or cure any
such defect within ninety (90) days from the date of notice from the Trustee or
the Custodian, as its agent, of the defect and if the Mortgage Loan Seller fails
to correct or cure the defect within such period, and such defect materially and
adversely affects the interests of the Certificateholders in the related
Mortgage Loan, the Trustee or the Custodian, as its agent, shall enforce the
Mortgage Loan Seller's obligation pursuant to the Mortgage Loan Purchase
Agreement (or the Subsequent Mortgage Loan Purchase Agreement, with respect to
the Subsequent Mortgage Loans), within 90 days from the Trustee's or the
Custodian's notification, to purchase such Mortgage Loan at the Repurchase
Price; provided that, if such defect would cause the Mortgage Loan to be other
than a "qualified mortgage" as defined in Section 860G(a)(3) of the Code, any
such cure or repurchase must occur within 90 days from the date such breach was
discovered; provided, however, that if such defect relates solely to the
inability of the Mortgage Loan Seller to deliver the original Security
Instrument or intervening assignments thereof, or a certified copy because the
originals of such documents, or a certified copy have not been returned by the
applicable jurisdiction, the Mortgage Loan Seller shall not be required to
purchase such Mortgage Loan if the Mortgage Loan Seller delivers such original
documents or certified copy promptly upon receipt, but in no event later than
360 days after the Closing Date. The foregoing repurchase obligation shall not
apply in the event that the Mortgage Loan Seller cannot deliver such original or
copy of any document submitted for recording to the appropriate recording office
in the applicable jurisdiction because such document has not been returned by
such office; provided that the Mortgage Loan Seller shall instead deliver a
recording receipt of such recording office or, if such receipt is not available,
a certificate confirming that such documents have been accepted for recording,
and delivery to the Trustee or the Custodian, as its agent, shall be effected by
the Mortgage Loan Seller within thirty days of its receipt of the original
recorded document.
(b) No later than 180 days after the Closing Date, the Trustee or the
Custodian, as its agent, will review, for the benefit of the Certificateholders,
the Mortgage Files delivered to it and will execute and deliver or cause to be
executed and delivered to the Trustee and the Seller a Final Certification. In
conducting such review, the Trustee or the Custodian, as its agent, will
ascertain whether an original of each document required to be recorded has been
returned from the recording office with evidence of recording thereon or a
certified copy has been obtained from the recording office. If the Trustee or
the Custodian, as its agent, finds any document constituting part of the
Mortgage File has not been received, or to be unrelated, determined on the basis
of the Mortgagor name, original principal balance and loan number, to the
Mortgage Loans identified in Exhibit B or to appear defective on its face, the
Trustee or the Custodian, as its agent, shall promptly notify the Mortgage Loan
Seller (provided, however, that with respect to those documents described in
subsection (b)(iv), (b)(v) and (b)(vii) of Section 2.01, the Trustee's
obligations shall extend only to the documents actually delivered pursuant to
such subsections). In accordance with the Mortgage Loan Purchase Agreement, the
Mortgage Loan Seller shall correct or cure any such defect or EMC shall deliver
to the Trustee an Opinion of Counsel to the effect that such defect does not
materially or adversely affect the interests of Certificateholders in such
Mortgage Loan within 90 days from the date of notice from the Trustee of the
defect and if the Mortgage Loan Seller is unable to cure such defect within such
period, and if such defect materially and adversely affects the interests of the
Certificateholders in the related Mortgage Loan, the Trustee shall enforce the
Mortgage Loan Seller's obligation under the Mortgage Loan Purchase Agreement to
purchase such Mortgage Loan at the Repurchase Price, provided, however, that if
such defect relates solely to the inability of the Mortgage Loan Seller to
deliver the original Security Instrument or intervening assignments thereof, or
a certified copy, because the originals of such documents. or a certified copy,
have not been returned by the applicable jurisdiction, the Mortgage Loan Seller
shall not be required to purchase such Mortgage Loan, if the
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Mortgage Loan Seller delivers such original documents or certified copy promptly
upon receipt, but in no event later than 360 days after the Closing Date.
(c) In the event that a Mortgage Loan is purchased by the Mortgage Loan
Seller in accordance with Subsections 2.02(a) or (b) above, the Mortgage Loan
Seller shall remit to the Master Servicer the Repurchase Price for deposit in
the Master Servicer Collection Account and the Mortgage Loan Seller shall
provide to the Trustee written notification detailing the components of the
Repurchase Price. Upon deposit of the Repurchase Price in the Master Servicer
Collection Account, the Seller shall notify the Trustee and the Trustee or the
Custodian, as its agent (upon receipt of a Request for Release in the form of
Exhibit D attached hereto with respect to such Mortgage Loan), shall release to
the Mortgage Loan Seller the related Mortgage File and the Trustee shall execute
and deliver all instruments of transfer or assignment, without recourse,
furnished to it by the Mortgage Loan Seller as are necessary to vest in the
Mortgage Loan Seller title to and rights under the Mortgage Loan. Such purchase
shall be deemed to have occurred on the date on which the Repurchase Price in
available funds is received by the Trustee. The Trustee shall amend the Mortgage
Loan Schedule, which was previously delivered to it by Seller in a form agreed
to between the Seller and the Trustee, to reflect such repurchase and shall
promptly notify the Rating Agencies and the Master Servicer of such amendment.
The obligation of the Mortgage Loan Seller to repurchase any Mortgage Loan as to
which such a defect in a constituent document exists shall be the sole remedy
respecting such defect available to the Certificateholders or to the Trustee on
their behalf.
Section 2.03 Assignment of Interest in the Mortgage Loan Purchase
Agreement. (a) The Seller hereby assigns to the Trustee, on behalf of the
Certificateholders, all of its right, title and interest in the Mortgage Loan
Purchase Agreement (or the Subsequent Mortgage Loan Purchase Agreement, with
respect to the Subsequent Mortgage Loans), including but not limited to Seller's
rights and obligations pursuant to the Servicing Agreements (noting that the
Mortgage Loan Seller has retained the right in the event of breach of the
representations, warranties and covenants, if any, with respect to the related
Mortgage Loans of the related Servicer under the related Servicing Agreement to
enforce the provisions thereof and to seek all or any available remedies). The
obligations of the Mortgage Loan Seller to substitute or repurchase, as
applicable, a Mortgage Loan shall be the Trustee's and the Certificateholders'
sole remedy for any breach thereof. At the request of the Trustee, the Seller
shall take such actions as may be necessary to enforce the above right, title
and interest on behalf of the Trustee and the Certificateholders or shall
execute such further documents as the Trustee may reasonably require in order to
enable the Trustee to carry out such enforcement.
(b) If the Seller, the Securities Administrator or the Trustee
discovers a breach of any of the representations and warranties set forth in the
Mortgage Loan Purchase Agreement (or the Subsequent Mortgage Loan Purchase
Agreement, with respect to the Subsequent Mortgage Loans), which breach
materially and adversely affects the value of the interests of
Certificateholders or the Trustee in the related Mortgage Loan, the party
discovering the breach shall give prompt written notice of the breach to the
other parties. The Mortgage Loan Seller, within 90 days of its discovery or
receipt of notice that such breach has occurred (whichever occurs earlier),
shall cure the breach in all material respects or, subject to the Mortgage Loan
Purchase Agreement (or the Subsequent Mortgage Loan Purchase Agreement, with
respect to the Subsequent Mortgage Loans) or Section 2.04 of this Agreement, as
applicable, shall purchase the Mortgage Loan or any property acquired with
respect thereto from the Trustee; provided, however, that if there is a breach
of any representation set forth in the Mortgage Loan Purchase Agreement or
Section 2.04 of this Agreement, as applicable, and the Mortgage Loan or the
related property acquired with respect thereto has been sold, then the Mortgage
Loan Seller shall pay, in lieu of the Repurchase Price, any excess of the
Repurchase Price over the Net Liquidation Proceeds received upon such sale. (If
the Net Liquidation Proceeds exceed the Repurchase Price, any excess shall be
paid to the Mortgage Loan Seller to the extent not required by law to be paid to
the borrower.) Any such purchase by the Mortgage Loan Seller shall be made by
providing an amount equal to the Repurchase Price to the Master Servicer for
deposit in the Master Servicer Collection Account and written notification
detailing the components of such Repurchase Price. The Seller shall
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notify the Trustee and submit to the Trustee or the Custodian, as its agent, a
Request for Release, and the Trustee shall release, or the Trustee shall cause
the Custodian to release, to the Mortgage Loan Seller the related Mortgage File
and the Trustee shall execute and deliver all instruments of transfer or
assignment furnished to it by the Mortgage Loan Seller, without recourse, as are
necessary to vest in the Mortgage Loan Seller title to and rights under the
Mortgage Loan or any property acquired with respect thereto. Such purchase shall
be deemed to have occurred on the date on which the Repurchase Price in
available funds is received by the Trustee. The Trustee shall amend the Mortgage
Loan Schedule to reflect such repurchase and shall promptly notify the Master
Servicer and the Rating Agencies of such amendment. Enforcement of the
obligation of the Mortgage Loan Seller to purchase (or substitute a Substitute
Mortgage Loan for) any Mortgage Loan or any property acquired with respect
thereto (or pay the Repurchase Price as set forth in the above proviso) as to
which a breach has occurred and is continuing shall constitute the sole remedy
respecting such breach available to the Certificateholders or the Trustee on
their behalf.
Section 2.04 Substitution of Mortgage Loans. Notwithstanding anything
to the contrary in this Agreement, in lieu of purchasing a Mortgage Loan
pursuant to the Mortgage Loan Purchase Agreement (or the Subsequent Mortgage
Loan Purchase Agreement, with respect to the Subsequent Mortgage Loans) or
Sections 2.02 or 2.03 of this Agreement, the Mortgage Loan Seller may, no later
than the date by which such purchase by the Mortgage Loan Seller would otherwise
be required, tender to the Trustee a Substitute Mortgage Loan accompanied by a
certificate of an authorized officer of the Mortgage Loan Seller that such
Substitute Mortgage Loan conforms to the requirements set forth in the
definition of "Substitute Mortgage Loan" in the Mortgage Loan Purchase Agreement
or this Agreement, as applicable; provided, however, that substitution pursuant
to the Mortgage Loan Purchase Agreement (or the Subsequent Mortgage Loan
Purchase Agreement, with respect to the Subsequent Mortgage Loans) or Section
2.04 of this Agreement, as applicable, in lieu of purchase shall not be
permitted after the termination of the two-year period beginning on the Startup
Day; provided, further, that if the breach would cause the Mortgage Loan to be
other than a "qualified mortgage" as defined in Section 860G(a)(3) of the Code,
any such cure or substitution must occur within 90 days from the date the breach
was discovered. The Trustee or the Custodian, as its agent, shall examine the
Mortgage File for any Substitute Mortgage Loan in the manner set forth in
Section 2.02(a) and the Trustee or the Custodian, as its agent, shall notify the
Mortgage Loan Seller, in writing, within five Business Days after receipt,
whether or not the documents relating to the Substitute Mortgage Loan satisfy
the requirements of the fourth sentence of Subsection 2.02(a). Within two
Business Days after such notification, the Mortgage Loan Seller shall provide to
the Trustee for deposit in the Distribution Account the amount, if any, by which
the Outstanding Principal Balance as of the next preceding Due Date of the
Mortgage Loan for which substitution is being made, after giving effect to
Scheduled Principal due on such date, exceeds the Outstanding Principal Balance
as of such date of the Substitute Mortgage Loan, after giving effect to
Scheduled Principal due on such date, which amount shall be treated for the
purposes of this Agreement as if it were the payment by the Mortgage Loan Seller
of the Repurchase Price for the purchase of a Mortgage Loan by the Mortgage Loan
Seller. After such notification to the Mortgage Loan Seller and, if any such
excess exists, upon receipt of such deposit, the Trustee shall accept such
Substitute Mortgage Loan which shall thereafter be deemed to be a Mortgage Loan
hereunder. In the event of such a substitution, accrued interest on the
Substitute Mortgage Loan for the month in which the substitution occurs and any
Principal Prepayments made thereon during such month shall be the property of
the Trust Fund and accrued interest for such month on the Mortgage Loan for
which the substitution is made and any Principal Prepayments made thereon during
such month shall be the property of the Mortgage Loan Seller. The Scheduled
Principal on a Substitute Mortgage Loan due on the Due Date in the month of
substitution shall be the property of the Mortgage Loan Seller and the Scheduled
Principal on the Mortgage Loan for which the substitution is made due on such
Due Date shall be the property of the Trust Fund. Upon acceptance of the
Substitute Mortgage Loan (and delivery to the Trustee or Custodian of a Request
for Release for such Mortgage Loan), the Trustee shall release to the Mortgage
Loan Seller the related Mortgage File related to any Mortgage Loan released
pursuant to the Mortgage Loan Purchase Agreement (or the Subsequent Mortgage
Loan Purchase Agreement, with respect to the Subsequent Mortgage Loans) or
Section 2.04 of this Agreement, as applicable, and shall execute and deliver all
instruments of transfer or assignment, without recourse, in form as provided to
it as are
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necessary to vest in the Mortgage Loan Seller title to and rights under any
Mortgage Loan released pursuant to the Mortgage Loan Purchase Agreement (or the
Subsequent Mortgage Loan Purchase Agreement, with respect to the Subsequent
Mortgage Loans) or Section 2.04 of this Agreement, as applicable. The Mortgage
Loan Seller shall deliver the documents related to the Substitute Mortgage Loan
in accordance with the provisions of the Mortgage Loan Purchase Agreement (or
the Subsequent Mortgage Loan Purchase Agreement, with respect to the Subsequent
Mortgage Loans) or Subsections 2.01(b) and 2.02(b) of this Agreement, as
applicable, with the date of acceptance of the Substitute Mortgage Loan deemed
to be the Closing Date for purposes of the time periods set forth in those
Subsections. The representations and warranties set forth in the Mortgage Loan
Purchase Agreement shall be deemed to have been made by the Mortgage Loan Seller
with respect to each Substitute Mortgage Loan as of the date of acceptance of
such Mortgage Loan by the Trustee. The Master Servicer shall amend the Mortgage
Loan Schedule to reflect such substitution and shall provide a copy of such
amended Mortgage Loan Schedule to the Trustee and the Rating Agencies.
Section 2.05 Issuance of Certificates.
(a) The Trustee acknowledges the assignment to it of the Mortgage Loans
and the other assets comprising the Trust Fund and, concurrently therewith, has
signed, and countersigned and delivered to the Seller, in exchange therefor,
Certificates in such authorized denominations representing such Fractional
Undivided Interests as the Seller has requested. The Trustee agrees that it will
hold the Mortgage Loans and such other assets as may from time to time be
delivered to it segregated on the books of the Trustee in trust for the benefit
of the Certificateholders.
(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 Regular 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
Regular 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.
Section 2.06 Representations and Warranties Concerning the Seller. The
Seller hereby represents and warrants to the Trustee, the Master Servicer and
the Securities Administrator as follows:
(i) the Seller (a) is a corporation duly organized, validly
existing and in good standing under the laws of the State of Delaware
and (b) is qualified and in good standing as a foreign corporation to
do business in each jurisdiction where such qualification is necessary,
except where the failure so to qualify would not reasonably be expected
to have a material adverse effect on the Seller's business as presently
conducted or on the Seller's ability to enter into this Agreement and
to consummate the transactions contemplated hereby;
(ii) the Seller has full corporate power to own its property,
to carry on its business as presently conducted and to enter into and
perform its obligations under this Agreement;
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(iii) the execution and delivery by the Seller of this
Agreement have been duly authorized by all necessary corporate action
on the part of the Seller; and neither the execution and delivery of
this Agreement, nor the consummation of the transactions herein
contemplated, nor compliance with the provisions hereof, will conflict
with or result in a breach of, or constitute a default under, any of
the provisions of any law, governmental rule, regulation, judgment,
decree or order binding on the Seller or its properties or the articles
of incorporation or by-laws of the Seller, except those conflicts,
breaches or defaults which would not reasonably be expected to have a
material adverse effect on the Seller's ability to enter into this
Agreement and to consummate the transactions contemplated hereby;
(iv) the execution, delivery and performance by the Seller of
this Agreement and the consummation of the transactions contemplated
hereby do not require the consent or approval of, the giving of notice
to, the registration with, or the taking of any other action in respect
of, any state, federal or other governmental authority or agency,
except those consents, approvals, notices, registrations or other
actions as have already been obtained, given or made;
(v) this Agreement has been duly executed and delivered by the
Seller and, assuming due authorization, execution and delivery by the
other parties hereto, constitutes a valid and binding obligation of the
Seller enforceable against it in accordance with its terms (subject to
applicable bankruptcy and insolvency laws and other similar laws
affecting the enforcement of the rights of creditors generally);
(vi) there are no actions, suits or proceedings pending or, to
the knowledge of the Seller, threatened against the Seller, before or
by any court, administrative agency, arbitrator or governmental body
(i) with respect to any of the transactions contemplated by this
Agreement or (ii) with respect to any other matter which in the
judgment of the Seller will be determined adversely to the Seller and
will if determined adversely to the Seller materially and adversely
affect the Seller's ability to enter into this Agreement or perform its
obligations under this Agreement; and the Seller is not in default with
respect to any order of any court, administrative agency, arbitrator or
governmental body so as to materially and adversely affect the
transactions contemplated by this Agreement; and
(vii) immediately prior to the transfer and assignment to the
Trustee, each Mortgage Note and each Mortgage were not subject to an
assignment or pledge, and the Seller had good and marketable title to
and was the sole owner thereof and had full right to transfer and sell
such Mortgage Loan to the Trustee free and clear of any encumbrance,
equity, lien, pledge, charge, claim or security interest.
Section 2.07. Conveyance of the Subsequent Mortgage Loans.
(a) Subject to the conditions set forth in paragraph (b) below in
consideration of the Trustee's delivery on the Subsequent Transfer Dates to or
upon the written order of the Seller of all or a portion of the balance of funds
in the Pre-Funding Account, the Seller shall on any Subsequent Transfer Date
sell, transfer, assign, set over and convey without recourse to the Trust Fund
but subject to the other terms and provisions of this Agreement all of the
right, title and interest of the Seller in and to (i) the Subsequent Mortgage
Loans identified on the Mortgage Loan Schedule attached to the related
Subsequent Transfer Instrument delivered by the Seller on such Subsequent
Transfer Date, (ii) all interest accruing thereon on and after the Subsequent
Cut-off Date and all collections in respect of interest and principal due after
the Subsequent Cut-off Date and (iii) all items with respect to such Subsequent
Mortgage Loans to be delivered pursuant to Section 2.01 and the other items in
the related Mortgage Files; provided, however, that the Seller reserves and
retains all right, title and interest in and to principal received and interest
accruing on the Subsequent Mortgage Loans prior to the related Subsequent
Cut-off Date. The transfer to the Trustee for deposit in the mortgage pool by
the Seller of the Subsequent Mortgage Loans identified on the Mortgage Loan
Schedule shall be absolute and is intended by the Seller, the Mortgage Loan
Seller, the Master
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Servicer, the Securities Administrator, the Trustee and the Certificateholders
to constitute and to be treated as a sale of the Subsequent Mortgage Loans by
the Seller to the Trust Fund. The related Mortgage File for each Subsequent
Mortgage Loan shall be delivered to the Trustee at least three (3) Business Days
prior to the related Subsequent Transfer Date.
The purchase price paid by the Trustee from amounts released from the
Pre-Funding Account shall be one-hundred percent (100%) of the aggregate
Scheduled Principal Balance of the Subsequent Mortgage Loans so transferred (as
identified on the Mortgage Loan Schedule provided by the Seller). This Agreement
shall constitute a fixed-price purchase contract in accordance with Section
860G(a)(3)(A)(ii) of the Code.
(b) The Seller shall transfer to the Trustee for deposit in the
mortgage pool the Subsequent Mortgage Loans and the other property and rights
related thereto as described in paragraph (a) above, and the Trustee shall
release funds from the Pre-Funding Account, only upon the satisfaction of each
of the following conditions on or prior to the related Subsequent Transfer Date:
(i) the Seller shall have delivered to the Trustee a duly
executed Subsequent Transfer Instrument, which shall include a Mortgage
Loan Schedule listing the Subsequent Mortgage Loans, and the Mortgage
Loan Seller shall cause to be delivered a computer file containing such
Mortgage Loan Schedule to the Trustee at least three (3) Business Days
prior to the related Subsequent Transfer Date;
(ii) as of each Subsequent Transfer Date, as evidenced by
delivery of the Subsequent Transfer Instrument, substantially in the
form of Exhibit K, the Seller shall not be insolvent nor shall it have
been rendered insolvent by such transfer nor shall it be aware of any
pending insolvency;
(iii) such sale and transfer shall not result in a material
adverse tax consequence to the Trust Fund or the Certificateholders;
(iv) the Pre-Funding Period shall not have terminated;
(v) the Seller shall not have selected the Subsequent Mortgage
Loans in a manner that it believed to be adverse to the interests of
the Certificateholders;
(vi) the Seller shall have delivered to the Trustee a
Subsequent Transfer Instrument confirming the satisfaction of the
conditions precedent specified in this Section 2.08 and, pursuant to
the Subsequent Transfer Instrument, assigned to the Trustee without
recourse for the benefit of the Certificateholders all the right, title
and interest of the Seller, in, to and under the Subsequent Mortgage
Loan Purchase Agreement, to the extent of the Subsequent Mortgage
Loans; and
(vii) the Seller shall have delivered to the Master Servicer
the related Servicing Agreement for each Subsequent Mortgage Loan to
the extent such Servicing Agreement has not been provided pursuant to
this Agreement.
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ARTICLE III
Administration and Servicing of Mortgage Loans
Section 3.01 Master Servicer. The Master Servicer shall supervise,
monitor and oversee the obligation of the Servicers to service and administer
their respective Mortgage Loans in accordance with the terms of the applicable
Servicing Agreement and shall have full power and authority to do any and all
things which it may deem necessary or desirable in connection with such master
servicing and administration. In performing its obligations hereunder, the
Master Servicer shall act in a manner consistent with Accepted Master Servicing
Practices. Furthermore, the Master Servicer shall oversee and consult with each
Servicer as necessary from time-to-time to carry out the Master Servicer's
obligations hereunder, shall receive, review and evaluate all reports,
information and other data provided to the Master Servicer by each Servicer and
shall cause each Servicer to perform and observe the covenants, obligations and
conditions to be performed or observed by such Servicer under the applicable
Servicing Agreement. The Master Servicer shall independently and separately
monitor each Servicer's servicing activities with respect to each related
Mortgage Loan, reconcile the results of such monitoring with such information
provided in the previous sentence on a monthly basis and coordinate corrective
adjustments to the Servicers' and Master Servicer's records, and based on such
reconciled and corrected information, the Master Servicer shall provide such
information to the Securities Administrator as shall be necessary in order for
it to prepare the statements specified in Section 6.04, and prepare any other
information and statements required to be forwarded by the Master Servicer
hereunder. The Master Servicer shall reconcile the results of its Mortgage Loan
monitoring with the actual remittances of the Servicers to the Protected Account
pursuant to the applicable Servicing Agreements.
Notwithstanding anything in this Agreement to the contrary, with
respect to any Mortgage Loan secured by any Additional Collateral, the Master
Servicer shall have no duty of obligation to supervise, monitor or oversee the
activities of Cendant (or any successor thereto) under any Cendant Servicing
Agreements with respect to any Additional Collateral (unless the Master Servicer
shall have assumed the obligations of Cendant (or any successor thereto)as
successor Servicer under any Cendant Servicing Agreement pursuant to Section
3.03 of this Agreement, in which event, as successor Servicer, it will service
and administer the Additional Collateral in accordance with the provisions of
the Cendant Servicing Agreements.
The Trustee shall furnish the Servicers and the Master Servicer with
any powers of attorney and other documents in form as provided to it necessary
or appropriate to enable the Servicers and the Master Servicer to service or
master service and administer the related Mortgage Loans and REO Property.
The Trustee shall provide access to the records and documentation in
possession of the Trustee regarding the related Mortgage Loans and REO Property
and the servicing thereof to the Certificateholders, the FDIC, and the
supervisory agents and examiners of the FDIC, such access being afforded only
upon reasonable prior written request and during normal business hours at the
office of the Trustee; provided, however, that, unless otherwise required by
law, the Trustee shall not be required to provide access to such records and
documentation if the provision thereof would violate the legal right to privacy
of any Mortgagor. The Trustee shall allow representatives of the above entities
to photocopy any of the records and documentation and shall provide equipment
for that purpose at a charge that covers the Trustee's actual costs.
The Trustee shall execute and deliver to the related Servicer and the
Master Servicer any court pleadings, requests for trustee's sale or other
documents necessary or desirable to (i) the foreclosure or trustee's sale with
respect to a Mortgaged Property; (ii) any legal action brought to obtain
judgment against any Mortgagor on the Mortgage Note or Security Instrument;
(iii) obtain a deficiency judgment against the Mortgagor; or (iv) enforce any
other rights or remedies provided by the Mortgage Note or Security Instrument or
otherwise available at law or equity.
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Section 3.02 REMIC-Related Covenants. For as long as each REMIC shall
exist, the Trustee and the Securities Administrator shall act in accordance
herewith to assure continuing treatment of such REMIC as a REMIC, and the
Trustee and the Securities Administrator shall comply with any directions of the
Seller, the related Servicer or the Master Servicer to assure such continuing
treatment. In particular, the Trustee shall not (a) sell or permit the sale of
all or any portion of the Mortgage Loans or of any investment of deposits in an
Account unless such sale is as a result of a repurchase of the Mortgage Loans
pursuant to this Agreement or the Trustee has received a REMIC Opinion 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 3.03 Monitoring of Servicers. (a) The Master Servicer shall be
responsible for reporting to the Trustee and the Seller the compliance by each
Servicer with its duties under the related Servicing Agreement. In the review of
each Servicer's activities, the Master Servicer may rely upon an officer's
certificate of the Servicer with regard to such Servicer's compliance with the
terms of its Servicing Agreement. In the event that the Master Servicer, in its
judgment, determines that a Servicer should be terminated in accordance with its
Servicing Agreement, or that a notice should be sent pursuant to such Servicing
Agreement with respect to the occurrence of an event that, unless cured, would
constitute grounds for such termination, the Master Servicer shall notify the
Seller and the Trustee thereof and the Master Servicer shall issue such notice
or take such other action as it deems appropriate.
(b) The Master Servicer, for the benefit of the Trustee and the
Certificateholders, shall enforce the obligations of each Servicer under the
related Servicing Agreement, and shall, in the event that a Servicer fails to
perform its obligations in accordance with the related Servicing Agreement,
subject to the preceding paragraph, terminate the rights and obligations of such
Servicer thereunder and act as servicer of the related Mortgage Loans or to
cause the Trustee to enter in to a new Servicing Agreement with a successor
Servicer selected by the Master Servicer; provided, however, it is understood
and acknowledged by the parties hereto that there will be a period of transition
(not to exceed 90 days) before the actual servicing functions can be fully
transferred to such successor Servicer. Such enforcement, including, without
limitation, the legal prosecution of claims, termination of Servicing Agreements
and the pursuit of other appropriate remedies, shall be in such form and carried
out to such an extent and at such time as the Master Servicer, in its good faith
business judgment, would require were it the owner of the related Mortgage
Loans. The Master Servicer shall pay the costs of such enforcement at its own
expense, provided that the Master Servicer shall not be required to prosecute or
defend any legal action except to the extent that the Master Servicer shall have
received reasonable indemnity for its costs and expenses in pursuing such
action.
(c) To the extent that the costs and expenses of the Master Servicer
related to any termination of a Servicer, appointment of a successor Servicer or
the transfer and assumption of servicing by the Master Servicer with respect to
any Servicing Agreement (including, without limitation, (i) all legal costs and
expenses and all due diligence costs and expenses associated with an evaluation
of the potential termination of the Servicer as a result of an event of default
by such Servicer and (ii) all costs and expenses associated with the complete
transfer of servicing, including all servicing files and all servicing data and
the completion, correction or manipulation of such servicing data as may be
required by the successor servicer to correct any errors or insufficiencies in
the servicing data or otherwise to enable the successor service to service the
Mortgage Loans in accordance with the related Servicing Agreement) are not fully
and timely reimbursed by the terminated Servicer, the Master Servicer shall be
entitled to reimbursement of such costs and expenses from the Master Servicer
Collection Account.
(d) The Master Servicer shall require each Servicer to comply with the
remittance requirements and other obligations set forth in the related Servicing
Agreement.
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(e) If the Master Servicer acts as Servicer, it will not assume
liability for the representations and warranties of the Servicer, if any, that
it replaces.
Section 3.04 Fidelity Bond. The Master Servicer, at its expense, shall
maintain in effect a blanket fidelity bond and an errors and omissions insurance
policy, affording coverage with respect to all directors, officers, employees
and other Persons acting on such Master Servicer's behalf, and covering errors
and omissions in the performance of the Master Servicer's obligations hereunder.
The errors and omissions insurance policy and the fidelity bond shall be in such
form and amount generally acceptable for entities serving as master servicers or
trustees.
Section 3.05 Power to Act; Procedures. The Master Servicer shall master
service the Mortgage Loans and shall have full power and authority, subject to
the REMIC Provisions and the provisions of Article X hereof, to do any and all
things that it may deem necessary or desirable in connection with the master
servicing and administration of the Mortgage Loans, including but not limited to
the power and authority (i) to execute and deliver, on behalf of the
Certificateholders and the Trustee, customary consents or waivers and other
instruments and documents, (ii) to consent to transfers of any Mortgaged
Property and assumptions of the Mortgage Notes and related Mortgages, (iii) to
collect any Insurance Proceeds and Liquidation Proceeds, and (iv) to effectuate
foreclosure or other conversion of the ownership of the Mortgaged Property
securing any Mortgage Loan, in each case, in accordance with the provisions of
this Agreement and the related Servicing Agreement, as applicable; provided,
however, that the Master Servicer shall not (and, consistent with its
responsibilities under Section 3.03, shall not permit any Servicer to) knowingly
or intentionally take any action, or fail to take (or fail to cause to be taken)
any action reasonably within its control and the scope of duties more
specifically set forth herein, that, under the REMIC Provisions, if taken or not
taken, as the case may be, would cause REMIC I, REMIC II or REMIC III to fail to
qualify as a REMIC or result in the imposition of a tax upon the Trust Fund
(including but not limited to the tax on prohibited transactions as defined in
Section 860F(a)(2) of the Code and the tax on contributions to a REMIC set forth
in Section 860G(d) of the Code) unless the Master Servicer has received an
Opinion of Counsel (but not at the expense of the Master Servicer) to the effect
that the contemplated action 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 or any Servicer to execute and deliver
instruments of satisfaction or cancellation, or of partial or full release or
discharge, and to foreclose upon or otherwise liquidate Mortgaged Property, and
to appeal, prosecute or defend in any court action relating to the Mortgage
Loans or the Mortgaged Property, in accordance with the applicable Servicing
Agreement and this Agreement, and the Trustee shall execute and deliver such
other documents, as the Master Servicer may request, to enable the Master
Servicer to master service and administer the Mortgage Loans and carry out its
duties hereunder, in each case in accordance with Accepted Master Servicing
Practices (and the Trustee shall have no liability for misuse of any such powers
of attorney by the Master Servicer or any Servicer). If the Master Servicer or
the Trustee has been advised that it is likely that the laws of the state in
which action is to be taken prohibit such action if taken in the name of the
Trustee or that the Trustee would be adversely affected under the "doing
business" or tax laws of such state if such action is taken in its name, the
Master Servicer shall join with the Trustee in the appointment of a co-trustee
pursuant to Section 9.11 hereof. In the performance of its duties hereunder, the
Master Servicer shall be an independent contractor and shall not, except in
those instances where it is taking action in the name of the Trustee, be deemed
to be the agent of the Trustee.
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Section 3.06 Due-on-Sale Clauses; Assumption Agreements. To the extent
provided in the applicable Servicing Agreement, to the extent Mortgage Loans
contain enforceable due-on-sale clauses, the Master Servicer shall cause the
Servicers to enforce such clauses in accordance with the applicable Servicing
Agreement. If applicable law prohibits the enforcement of a due-on-sale clause
or such clause is otherwise not enforced in accordance with the applicable
Servicing Agreement, and, as a consequence, a Mortgage Loan is assumed, the
original Mortgagor may be released from liability in accordance with the
applicable Servicing Agreement.
Section 3.07 Release of Mortgage Files. (a) Upon becoming aware of the
payment in full of any Mortgage Loan, or the receipt by any Servicer of a
notification that payment in full has been escrowed in a manner customary for
such purposes for payment to Certificateholders on the next Distribution Date,
the Servicer will, if required under the applicable Servicing Agreement,
promptly furnish to the Custodian, on behalf of the Trustee, two copies of a
certification substantially in the form of Exhibit D hereto signed by a
Servicing Officer or in a mutually agreeable electronic format which will, in
lieu of a signature on its face, originate from a Servicing Officer (which
certification shall include a statement to the effect that all amounts received
in connection with such payment that are required to be deposited in the
Protected Account maintained by the applicable Servicer pursuant to Section 4.01
or by the applicable Servicer pursuant to its Servicing Agreement have been or
will be so deposited) and shall request that the Custodian, on behalf of the
Trustee, deliver to the applicable Servicer the related Mortgage File. Upon
receipt of such certification and request, the Custodian, on behalf of the
Trustee, shall promptly release the related Mortgage File to the applicable
Servicer and the Trustee and Custodian shall have no further responsibility with
regard to such Mortgage File. Upon any such payment in full, each Servicer is
authorized, to give, as agent for the Trustee, as the mortgagee under the
Mortgage that secured the Mortgage Loan, an instrument of satisfaction (or
assignment of mortgage without recourse) regarding the Mortgaged Property
subject to the Mortgage, which instrument of satisfaction or assignment, as the
case may be, shall be delivered to the Person or Persons entitled thereto
against receipt therefor of such payment, it being understood and agreed that no
expenses incurred in connection with such instrument of satisfaction or
assignment, as the case may be, shall be chargeable to the Protected Account.
(b) From time to time and as appropriate for the servicing or
foreclosure of any Mortgage Loan and in accordance with the applicable Servicing
Agreement, the Trustee shall execute such documents as shall be prepared and
furnished to the Trustee by a Servicer or the Master Servicer (in form
reasonably acceptable to the Trustee) and as are necessary to the prosecution of
any such proceedings. The Custodian, on behalf of the Trustee, shall, upon the
request of a Servicer or the Master Servicer, and delivery to the Custodian, on
behalf of the Trustee, of two copies of a request for release signed by a
Servicing Officer substantially in the form of Exhibit D (or in a mutually
agreeable electronic format which will, in lieu of a signature on its face,
originate from a Servicing Officer), release the related Mortgage File held in
its possession or control to the Servicer or the Master Servicer, as applicable.
Such trust receipt shall obligate the Servicer or the Master Servicer to return
the Mortgage File to the Custodian on behalf of the Trustee, when the need
therefor by the Servicer or the Master Servicer no longer exists unless the
Mortgage Loan shall be liquidated, in which case, upon receipt of a certificate
of a Servicing Officer similar to that hereinabove specified, the Mortgage File
shall be released by the Custodian, on behalf of the Trustee, to the Servicer or
the Master Servicer.
Section 3.08 Documents, Records and Funds in Possession of Master
Servicer To Be Held for Trustee.
(a) The Master Servicer shall transmit and each Servicer (to the extent
required by the related Servicing Agreement) shall transmit to the Trustee or
Custodian such documents and instruments coming into the possession of the
Master Servicer or such Servicer from time to time as are required by the terms
hereof, or in the case of the Servicers, the applicable Servicing Agreement, to
be delivered to the Trustee or Custodian. Any funds received by the Master
Servicer or by a Servicer in respect of any Mortgage Loan or which otherwise are
collected by the Master Servicer or by a Servicer as Liquidation Proceeds or
Insurance Proceeds in respect of any Mortgage Loan shall be
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held for the benefit of the Trustee and the Certificateholders subject to the
Master Servicer's right to retain or withdraw from the Master Servicer
Collection Account the Master Servicing Compensation and other amounts provided
in this Agreement, and to the right of each Servicer to retain its Servicing Fee
and other amounts as provided in the applicable Servicing Agreement. The Master
Servicer shall, and (to the extent provided in the applicable Servicing
Agreement) shall cause each Servicer to, provide access to information and
documentation regarding the Mortgage Loans to the Trustee, its agents and
accountants at any time upon reasonable request and during normal business
hours, and to Certificateholders that are savings and loan associations, banks
or insurance companies, the Office of Thrift Supervision, the FDIC and the
supervisory agents and examiners of such Office and Corporation or examiners of
any other federal or state banking or insurance regulatory authority if so
required by applicable regulations of the Office of Thrift Supervision or other
regulatory authority, such access to be afforded without charge but only upon
reasonable request in writing and during normal business hours at the offices of
the Master Servicer designated by it. In fulfilling such a request the Master
Servicer shall not be responsible for determining the sufficiency of such
information.
(b) All Mortgage Files and funds collected or held by, or under the
control of, the Master Servicer, in respect of any Mortgage Loans, whether from
the collection of principal and interest payments or from Liquidation Proceeds
or Insurance Proceeds, shall be held by the Master Servicer for and on behalf of
the Trustee and the Certificateholders and shall be and remain the sole and
exclusive property of the Trustee; provided, however, that the Master Servicer
and each Servicer shall be entitled to setoff against, and deduct from, any such
funds any amounts that are properly due and payable to the Master Servicer or
such Servicer under this Agreement or the applicable Servicing Agreement.
Section 3.09 Standard Hazard Insurance and Flood Insurance Policies.
(a) For each Mortgage Loan, the Master Servicer shall enforce any
obligation of the Servicers under the related Servicing Agreements to maintain
or cause to be maintained standard fire and casualty insurance and, where
applicable, flood insurance, all in accordance with the provisions of the
related Servicing Agreements. It is understood and agreed that such insurance
shall be with insurers meeting the eligibility requirements set forth in the
applicable Servicing Agreement and that no earthquake or other additional
insurance is to be required of any Mortgagor or to be maintained on property
acquired in respect of a defaulted loan, other than pursuant to such applicable
laws and regulations as shall at any time be in force and as shall require such
additional insurance.
(b) Pursuant to Section 4.01 and 4.02, any amounts collected by the
Servicers or the Master Servicer, or by any Servicer, under any insurance
policies (other than amounts to be applied to the restoration or repair of the
property subject to the related Mortgage or released to the Mortgagor in
accordance with the applicable Servicing Agreement) shall be deposited into the
Master Servicer Collection Account, subject to withdrawal pursuant to Section
4.02 and 4.03. Any cost incurred by the Master Servicer or any Servicer in
maintaining any such insurance if the Mortgagor defaults in its obligation to do
so shall be added to the amount owing under the Mortgage Loan where the terms of
the Mortgage Loan so permit; provided, however, that the addition of any such
cost shall not be taken into account for purposes of calculating the
distributions to be made to Certificateholders and shall be recoverable by the
Master Servicer or such Servicer pursuant to Section 4.02 and 4.03.
Section 3.10 Presentment of Claims and Collection of Proceeds. The
Master Servicer shall (to the extent provided in the applicable Servicing
Agreement) cause the related Servicer to, prepare and present on behalf of the
Trustee and the Certificateholders all claims under the Insurance Policies and
take such actions (including the negotiation, settlement, compromise or
enforcement of the insured's claim) as shall be necessary to realize recovery
under such policies. Any proceeds disbursed to the Master Servicer (or disbursed
to a Servicer and remitted to the Master Servicer) in respect of such policies,
bonds or contracts shall be promptly deposited in the Master Servicer Collection
Account upon receipt, except that any amounts realized that are to be applied to
the repair or restoration
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of the related Mortgaged Property as a condition precedent to the presentation
of claims on the related Mortgage Loan to the insurer under any applicable
Insurance Policy need not be so deposited (or remitted).
Section 3.11 Maintenance of the Primary Mortgage Insurance Policies.
(a) The Master Servicer shall not take, or permit any Servicer (to the
extent such action is prohibited under the applicable Servicing Agreement) to
take, any action that would result in noncoverage under any applicable Primary
Mortgage Insurance Policy of any loss which, but for the actions of such Master
Servicer or Servicer, would have been covered thereunder. The Master Servicer
shall use its best reasonable efforts to cause each Servicer (to the extent
required under the related Servicing Agreement) to keep in force and effect (to
the extent that the Mortgage Loan requires the Mortgagor to maintain such
insurance), primary mortgage insurance applicable to each Mortgage Loan in
accordance with the provisions of this Agreement and the related Servicing
Agreement, as applicable. The Master Servicer shall not, and shall not permit
any Servicer (to the extent required under the related Servicing Agreement) to,
cancel or refuse to renew any such Primary Mortgage Insurance Policy that is in
effect at the date of the initial issuance of the Mortgage Note and is required
to be kept in force hereunder except in accordance with the provisions of this
Agreement and the related Servicing Agreement, as applicable.
(b) The Master Servicer agrees to present, or to cause each Servicer
(to the extent required under the related Servicing Agreement) to present, on
behalf of the Trustee and the Certificateholders, claims to the insurer under
any Primary Mortgage Insurance Policies and, in this regard, to take such
reasonable action as shall be necessary to permit recovery under any Primary
Mortgage Insurance Policies respecting defaulted Mortgage Loans. Pursuant to
Section 4.01 and 4.02, any amounts collected by the Master Servicer or any
Servicer under any Primary Mortgage Insurance Policies shall be deposited in the
Master Servicer Collection Account, subject to withdrawal pursuant to Section
4.03.
Section 3.12 Trustee to Retain Possession of Certain Insurance Policies
and Documents.
The Trustee (or the Custodian, as directed by the Trustee), shall
retain possession and custody of the originals (to the extent available) of any
Primary Mortgage Insurance Policies, or certificate of insurance if applicable,
and any certificates of renewal as to the foregoing as may be issued from time
to time as contemplated by this Agreement. Until all amounts distributable in
respect of the Certificates have been distributed in full and the Master
Servicer otherwise has fulfilled its obligations under this Agreement, the
Trustee (or its Custodian, if any, as directed by the Trustee) shall also retain
possession and custody of each Mortgage File in accordance with and subject to
the terms and conditions of this Agreement. The Master Servicer shall promptly
deliver or cause to be delivered to the Trustee (or the Custodian, as directed
by the Trustee), upon the execution or receipt thereof the originals of any
Primary Mortgage Insurance Policies, any certificates of renewal, and such other
documents or instruments that constitute portions of the Mortgage File that come
into the possession of the Master Servicer from time to time.
Section 3.13 Realization Upon Defaulted Mortgage Loans. The Master
Servicer shall cause each Servicer (to the extent required under the related
Servicing Agreement) to foreclose upon, repossess or otherwise comparably
convert the ownership of Mortgaged Properties securing such of the Mortgage
Loans as come into and continue in default and as to which no satisfactory
arrangements can be made for collection of delinquent payments, all in
accordance with the applicable Servicing Agreement.
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Section 3.14 Compensation for the Master Servicer.
The Master Servicer will be entitled to all income and gain realized
from any investment of funds in the Distribution Account and the Master Servicer
Collection Account, pursuant to Article IV, for the performance of its
activities hereunder. Servicing compensation in the form of assumption fees, if
any, late payment charges, as collected, if any, or otherwise (but not including
any prepayment premium or penalty) shall be retained by the applicable Servicer
and shall not be deposited in the Protected Account. The Master Servicer shall
be required to pay all expenses incurred by it in connection with its activities
hereunder and shall not be entitled to reimbursement therefor except as provided
in this Agreement.
Section 3.15 REO Property.
(a) In the event the Trust Fund acquires ownership of any REO Property
in respect of any related Mortgage Loan, the deed or certificate of sale shall
be issued to the Trustee, or to its nominee, on behalf of the related
Certificateholders. The Master Servicer shall, to the extent provided in the
applicable Servicing Agreement, cause the applicable Servicer to sell, any REO
Property as expeditiously as possible and in accordance with the provisions of
this Agreement and the related Servicing Agreement, as applicable. Pursuant to
its efforts to sell such REO Property, the Master Servicer shall cause the
applicable Servicer to protect and conserve, such REO Property in the manner and
to the extent required by the applicable Servicing Agreement, in accordance with
the REMIC Provisions and in a manner that does not result in a tax on "net
income from foreclosure property" or cause such REO Property to fail to qualify
as "foreclosure property" within the meaning of Section 860G(a)(8) of the Code.
(b) The Master Servicer shall, to the extent required by the related
Servicing Agreement, cause the applicable Servicer to deposit all funds
collected and received in connection with the operation of any REO Property in
the Protected Account.
(c) The Master Servicer and the applicable Servicer, upon the final
disposition of any REO Property, shall be entitled to reimbursement for any
related unreimbursed Monthly Advances and other unreimbursed advances as well as
any unpaid Servicing Fees from Liquidation Proceeds received in connection with
the final disposition of such REO Property; provided, that any such unreimbursed
Monthly Advances as well as any unpaid Servicing Fees may be reimbursed or paid,
as the case may be, prior to final disposition, out of any net rental income or
other net amounts derived from such REO Property.
(d) To the extent provided in the related Servicing Agreement, the
Liquidation Proceeds from the final disposition of the REO Property, net of any
payment to the Master Servicer and the applicable Servicer as provided above
shall be deposited in the Protected Account on or prior to the Determination
Date in the month following receipt thereof and be remitted by wire transfer in
immediately available funds to the Master Servicer for deposit into the related
Master Servicer Collection Account on the next succeeding Servicer Remittance
Date.
Section 3.16 Annual Officer's Certificate as to Compliance.
(a) The Master Servicer shall deliver to the Trustee and the Rating
Agencies on or before May 31 of each year, commencing on May 31, 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
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Servicing Officer to lead such Servicing Officer to believe that any Servicer
has failed to perform any of its duties, responsibilities and obligations under
its Servicing Agreement in all material respects throughout such year, or, if
there has been a material default in the performance or fulfillment of any such
duties, responsibilities or obligations, specifying each such default known to
such Servicing Officer and the nature and status thereof.
(b) Copies of such statements shall be provided to any
Certificateholder upon request, by the Master Servicer or by the Trustee at the
Master Servicer's expense if the Master Servicer failed to provide such copies
(unless (i) the Master Servicer shall have failed to provide the Trustee with
such statement or (ii) the Trustee shall be unaware of the Master Servicer's
failure to provide such statement).
Section 3.17 Annual Independent Accountant's Servicing Report. If the
Master Servicer has, during the course of any fiscal year, directly serviced any
of the Mortgage Loans, then the Master Servicer at its expense shall cause a
nationally recognized firm of independent certified public accountants to
furnish a statement to the Trustee, the Rating Agencies and the Seller on or
before May 31 of each year, commencing on May 31, 2004 to the effect that, with
respect to the most recently ended fiscal year, such firm has examined certain
records and documents relating to the Master Servicer's performance of its
servicing obligations under this Agreement and pooling and servicing and trust
agreements in material respects similar to this Agreement and to each other and
that, on the basis of such examination conducted substantially in compliance
with the audit program for mortgages serviced for Xxxxxxx Mac or the Uniform
Single Attestation Program for Mortgage Bankers, such firm is of the opinion
that the Master Servicer's activities have been conducted in compliance with
this Agreement, or that such examination has disclosed no material items of
noncompliance except for (i) such exceptions as such firm believes to be
immaterial, (ii) such other exceptions as are set forth in such statement and
(iii) such exceptions that the Uniform Single Attestation Program for Mortgage
Bankers or the Audit Program for Mortgages Serviced by Xxxxxxx Mac requires it
to report. Copies of such statements shall be provided to any Certificateholder
upon request by the Master Servicer, or by the Trustee at the expense of the
Master Servicer if the Master Servicer shall fail to provide such copies. If
such report discloses exceptions that are material, the Master Servicer shall
advise the Trustee whether such exceptions have been or are susceptible of cure,
and will take prompt action to do so.
Section 3.18 Reports Filed with Securities and Exchange Commission. (a)
Within 15 days after each Distribution Date, the Master Servicer shall, in
accordance with industry standards, file with the Commission via the Electronic
Data Gathering and Retrieval System ("XXXXX"), a Form 8-K with a copy of the
statement to the Trustee who shall furnish a copy of the statement to the
Certificateholders for such Distribution Date as an exhibit thereto. If
requested by the Seller, the Master Servicer shall, in accordance with industry
standards, file a Form 15 Suspension Notice with respect to the Trust Fund.
Prior to March 30, 2003 and annually thereafter, the Master Servicer shall,
subject to subsection (c), file a Form 10-K, in substance conforming to industry
standards, with respect to the Trust Fund. Such Form 10-K shall include, to the
extent available, as exhibits (i) each applicable Servicer's annual statement of
compliance described under the related Servicing Agreement, (ii) each applicable
Servicer's accountant's report described under the related Servicing Agreement,
and (iii) the Master Servicer's accountant's report described under Section
3.17, if applicable, in each case to the extent timely delivered, if applicable,
to the Master Servicer. If items (i) and (ii) in the preceding sentence are not
timely delivered, the Master Servicer shall file an amended Form 10-K including
such documents as exhibits reasonably promptly after they are delivered to the
Master Servicer. The Seller hereby grants to the Master Servicer a limited power
of attorney to execute and file each Form 8-K on behalf of the Seller. Such
power of attorney shall continue until either the earlier of (i) receipt by the
Master Servicer from the Seller of written termination of such power of attorney
and (ii) the termination of the Trust Fund. The Seller and the Trustee each
agree to promptly furnish to the Master Servicer, from time to time upon
request, such further information, reports and financial statements within its
control related to this Agreement and the Mortgage Loans as the Master Servicer
reasonably deems appropriate to prepare and file all necessary reports with the
Commission. The Master Servicer will cooperate with the Seller in connection
with any additional filings with respect to the Trust Fund as the Seller deems
necessary under the Securities Exchange
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Act of 1934, as amended (the "Exchange Act"). Copies of all reports filed by the
Master Servicer under the Exchange Act shall be sent to: the Seller c/o Bear,
Xxxxxxx & Co. Inc., Attn: Managing Director-Analysis and Control, Xxx Xxxxxxxxx
Xxxxxx Xxxxx, Xxxxxxxx, Xxx Xxxx 00000-0000.
(b) The Master Servicer shall indemnify and hold harmless the Seller,
the Trustee and their respective officers, directors and Affiliates from and
against any losses, damages, penalties, fines, forfeitures, reasonable and
necessary legal fees and related costs, judgments and other costs and expenses
arising out of or based upon a breach of the Master Servicer's obligations under
this Section 3.18 or the Master Servicer's negligence, bad faith or willful
misconduct in connection therewith. Fees and expenses incurred by the Master
Servicer in connection with this Section 3.18 shall not be reimbursable from the
Trust Fund.
(c) Nothing shall be construed from the foregoing subsection (a) and
(b) to require the Seller or the Master Servicer or any officer, director or
Affiliate thereof to sign any Form 10-K or any certification contained therein.
The failure of the Seller or the Master Servicer to sign the Form 10-K or any
certification contained therein shall not be regarded as a breach by the related
party of this Agreement. Furthermore, the inability of the Master Servicer to
file a Form 10-K as a result of the lack of required signatures on such Form
10-K or any certification contained therein shall not be regarded as a breach by
the Master Servicer of any obligation under this Agreement. However, the Seller,
the Master Servicer and the Trustee agree to negotiate in good faith to comply
with further guidance from the Commission concerning the filing of Form 10-Ks.
(d) In connection with the preparation of any Form 8-Ks and the Form
10-K, the Seller, the Master Servicer, the Mortgage Loan Seller, the Securities
Administrator and the Trustee shall comply with all reasonable requests for
information, and shall promptly report to each other in writing any events which
materially and adversely affect the interests of the Certificateholders for
which such party has actual knowledge and which are not reflected in the
statements to Certificateholders, including, without limitation, the termination
of and transfer of servicing of any Servicers, downgrades of the rating of any
of the Certificates by the Rating Agencies, and any fraud discovered in the
origination of or servicing of the Mortgage Loans. With respect to the
Securities Administrator and the Master Servicer, actual knowledge requires
knowledge of any officer of the Securities Administrator or the Master Servicer
who is responsible for performing the duties of such party hereunder who has
actual knowledge of any such events. Actions taken or actions not taken of which
the Securities Administrator or the Master Servicer should have had knowledge,
or have constructive knowledge, do not constitute actual knowledge herein;
provided, however, that (a) the Master Servicer and the Securities Administrator
shall make reasonable inquiries as to any such events from responsible employees
of the Master Servicer and the Securities Administrator, respectively, and (b)
the Master Servicer shall make reasonable inquiries from each Servicer as to any
such events.
(e) Notwithstanding the provisions of Section 11.02, this Section 3.18
may be amended without the consent of the Certificateholders.
Section 3.19 EMC. On the Closing Date, EMC will receive from the Seller
a payment of $5,000.
Section 3.20 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.
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Section 3.21 Optional Purchase of Defaulted Mortgage Loans.
(a) With respect to any Mortgage Loan which as of the first day of a
Calendar Quarter is delinquent in payment by 90 days or more or is an REO
Property, EMC shall have the right to purchase such Mortgage Loan from the Trust
at a price equal to the Repurchase Price; provided however (i) that such
Mortgage Loan is still 90 days or more delinquent or is an REO Property as of
the date of such purchase and (ii) this purchase option, if not theretofore
exercised, shall terminate on the date prior to the last day of the related
Calendar Quarter. This purchase option, if not exercised, shall not be
thereafter reinstated unless the delinquency is cured and the Mortgage Loan
thereafter again becomes 90 days or more delinquent or becomes an REO Property,
in which case the option shall again become exercisable as of the first day of
the related Calendar Quarter.
(b) If at any time EMC remits to the Master Servicer a payment for
deposit in the Master Servicer Collection Account covering the amount of the
Repurchase Price for such a Mortgage Loan, and EMC provides to the Trustee a
certification signed by a Servicing Officer stating that the amount of such
payment has been deposited in the Master Servicer Collection Account, then the
Trustee shall execute the assignment of such Mortgage Loan at the request of EMC
without recourse to EMC which shall succeed to all the Trustee's right, title
and interest in and to such Mortgage Loan, and all security and documents
relative thereto. Such assignment shall be an assignment outright and not for
security. EMC will thereupon own such Mortgage, and all such security and
documents, free of any further obligation to the Trustee or the
Certificateholders with respect thereto.
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ARTICLE IV
Accounts
Section 4.01 Protected Accounts. (a) The Master Servicer shall enforce
the obligation of each Servicer to establish and maintain a Protected Account in
accordance with the applicable Servicing Agreement, with records to be kept with
respect thereto on a Mortgage Loan by Mortgage Loan basis, into which accounts
shall be deposited within 48 hours (or as of such other time specified in the
related Servicing Agreement) of receipt all collections of principal and
interest on any Mortgage Loan and with respect to any REO Property received by a
Servicer, including Principal Prepayments, Insurance Proceeds, Liquidation
Proceeds, and advances made from the Servicer's own funds (less servicing
compensation as permitted by the applicable Servicing Agreement in the case of
any Servicer) and all other amounts to be deposited in the Protected Account.
The Servicer is hereby authorized to make withdrawals from and deposits to the
related Protected Account for purposes required or permitted by this Agreement.
To the extent provided in the related Servicing Agreement, the Protected Account
shall be held 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 the related Servicing Agreement, amounts
on deposit in a Protected Account may be invested in Permitted Investments in
the name of the Trustee for the benefit of Certificateholders and, except as
provided in the preceding paragraph, not commingled with any other funds, such
Permitted Investments to mature, or to be subject to redemption or withdrawal,
no later than the date on which such funds are required to be withdrawn for
deposit in the Master Servicer Collection Account, and shall be held until
required for such deposit. The income earned from Permitted Investments made
pursuant to this Section 4.01 shall be paid to the related Servicer under the
applicable Servicing Agreement, and the risk of loss of moneys required to be
distributed to the Certificateholders resulting from such investments shall be
borne by and be the risk of the related Servicer. The related Servicer (to the
extent provided in the Servicing Agreement) shall deposit the amount of any such
loss in the Protected Account within two Business Days of receipt of
notification of such loss but not later than the second Business Day prior to
the Distribution Date on which the moneys so invested are required to be
distributed to the Certificateholders.
(c) To the extent provided in the related Servicing Agreement and
subject to this Article IV, on or before each Servicer Remittance Date, the
related Servicer shall withdraw or shall cause to be withdrawn from the
Protected Accounts and shall immediately deposit or cause to be deposited in the
Master Servicer Collection Account amounts representing the following
collections and payments (other than with respect to principal of or interest on
the Mortgage Loans due on or before the Cut-off Date) with respect to each Loan
Group:
(i) Scheduled Payments on the Mortgage Loans received or any
related portion thereof advanced by the Servicers pursuant to the
Servicing Agreements which were due on or before the related Due Date,
net of the amount thereof comprising the Servicing Fees;
(ii) Full Principal Prepayments and any Liquidation Proceeds
received by the Servicers with respect to such Mortgage Loans in the
related Prepayment Period, with interest to the date of prepayment or
liquidation, net of the amount thereof comprising the Servicing Fees;
(iii) Partial Principal Prepayments received by the Servicers
for such Mortgage Loans in the related Prepayment Period; and
(iv) Any amount to be used as an Advance.
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(d) Withdrawals may be made from an Account only to make remittances as
provided in Section 4.01(c), 4.02 and 4.03; to reimburse the Master Servicer or
a Servicer for Monthly Advances which have been recovered by subsequent
collection from the related Mortgagor; to remove amounts deposited in error; to
remove fees, charges or other such amounts deposited on a temporary basis; or to
clear and terminate the account at the termination of this Agreement in
accordance with Section 10.01. As provided in Sections 4.01(c) and 4.02(b)
certain amounts otherwise due to the Servicers may be retained by them and need
not be deposited in the Master Servicer Collection Account.
Section 4.02 Master Servicer Collection Account. (a) The Master
Servicer shall establish and maintain in the name of the Trustee, for the
benefit of the Certificateholders, the Master Servicer Collection Account as a
segregated trust account or accounts. The Master Servicer Collection Account
shall be an Eligible Account. The Master Servicer will deposit in the Master
Servicer Collection Account as identified by the Master Servicer and as received
by the Master Servicer, the following amounts:
(i) Any amounts withdrawn from a Protected Account;
(ii) Any Monthly Advance and any Compensating Interest
Payments;
(iii) Any Insurance Proceeds or Net Liquidation Proceeds
received by or on behalf of the Master Servicer or which were not
deposited in a Protected Account;
(iv) The Repurchase Price with respect to any Mortgage Loans
purchased by the Mortgage Loan Seller 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 3.21, and all proceeds of any Mortgage Loans or property
acquired with respect thereto repurchased by the Seller or its designee
pursuant to Section 10.01;
(v) Any amounts required to be deposited with respect to
losses on investments of deposits in an Account; and
(vi) Any other amounts received by or on behalf of the Master
Servicer and required to be deposited in the Master Servicer Collection
Account pursuant to this Agreement.
(b) All amounts deposited to the Master Servicer Collection Account
shall be held by the Master Servicer in the name of the Trustee in trust for the
benefit of the Certificateholders in accordance with the terms and provisions of
this Agreement. The requirements for crediting the Master Servicer Collection
Account or the Distribution Account shall be exclusive, it being understood and
agreed that, without limiting the generality of the foregoing, payments in the
nature of (i) prepayment or late payment charges or assumption, tax service,
statement account or payoff, substitution, satisfaction, release and other like
fees and charges and (ii) the items enumerated in Subsections 4.05(a)(i), (ii),
(iii), (iv), (vi), (vii), (viii), (ix), (x), (xi) and (xii) need not be credited
by the Master Servicer or the related Servicer to the Distribution Account or
the Master Servicer Collection Account, as applicable. In the event that the
Master Servicer shall deposit or cause to be deposited to the Distribution
Account any amount not required to be credited thereto, the Trustee, upon
receipt of a written request therefor signed by a Servicing Officer of the
Master Servicer, shall promptly transfer such amount to the Master Servicer, any
provision herein to the contrary notwithstanding.
(c) The amount at any time credited to the Master Servicer Collection
Account shall be invested, in the name of the Trustee, or its nominee, for the
benefit of the Certificateholders, in Permitted Investments as directed by
Master Servicer. All Permitted Investments shall mature or be subject to
redemption or withdrawal on or before,
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and shall be held until, the next succeeding Distribution Account Deposit Date.
Any and all investment earnings on amounts on deposit in the Master Servicer
Account from time to time shall be for the account of the Master Servicer. The
Master Servicer from time to time shall be permitted to withdraw or receive
distribution of any and all investment earnings from the Master Servicer
Account. The risk of loss of moneys required to be distributed to the
Certificateholders resulting from such investments shall be borne by and be the
risk of the Master Servicer. The Master Servicer shall deposit the amount of any
such loss in the Master Servicer Collection Account within two Business Days of
receipt of notification of such loss but not later than the second Business Day
prior to the Distribution Date on which the moneys so invested are required to
be distributed to the Certificateholders.
Section 4.03 Permitted Withdrawals and Transfers from the Master
Servicer Collection Account. (a) The Master Servicer will, from time to time on
demand of a Servicer or the Securities Administrator, make or cause to be made
such withdrawals or transfers from the Master Servicer Collection Account as the
Master Servicer has designated for such transfer or withdrawal pursuant to this
Agreement and the related Servicing Agreement. The Master Servicer may clear and
terminate the Master Servicer Collection Account pursuant to Section 10.01 and
remove amounts from time to time deposited in error.
(b) On an ongoing basis, the Master Servicer shall withdraw from the
Master Servicer Collection Account (i) any fees and expenses recoverable by the
Trustee, the Master Servicer or the Securities Administrator or the Custodian
pursuant to Sections 3.03, 7.01, 7.04 and 9.05 and (ii) any amounts payable to
the Master Servicer as set forth in Section 3.14.
(c) In addition, on or before each Distribution Account Deposit Date,
the Master Servicer shall deposit in the Distribution Account (or remit to the
Trustee for deposit therein) any Monthly Advances required to be made by the
Master Servicer with respect to the Mortgage Loans.
(d) No later than 3:00 p.m. New York time on each Distribution Account
Deposit Date, the Master Servicer will transfer all Available Funds on deposit
in the Master Servicer Collection Account with respect to the related
Distribution Date to the Trustee for deposit in the Distribution Account.
Section 4.04 Distribution Account. (a) The Trustee shall establish and
maintain in the name of the Trustee, for the benefit of the Certificateholders,
the Distribution Account as a segregated trust account or accounts.
(b) All amounts deposited to the Distribution Account shall be held by
the Trustee in the name of the Trustee in trust for the benefit of the
Certificateholders in accordance with the terms and provisions of this
Agreement.
(c) The Distribution Account shall constitute a trust account of the
Trust Fund segregated on the books of the Trustee and held by the Trustee in
trust in its Corporate Trust Office, and the Distribution Account and the funds
deposited therein shall not be subject to, and shall be protected from, all
claims, liens, and encumbrances of any creditors or depositors of the Trustee or
the Master Servicer (whether made directly, or indirectly through a liquidator
or receiver of the Trustee or the Master Servicer). The Distribution Account
shall be an Eligible Account. The amount at any time credited to the
Distribution Account shall be (i) fully insured by the FDIC to the maximum
coverage provided thereby or (ii) invested in the name of the Trustee, in such
Permitted Investments selected by the Master Servicer or deposited in demand
deposits with such depository institutions as selected by the Master Servicer,
provided that time deposits of such depository institutions would be a Permitted
Investment. All Permitted Investments shall mature or be subject to redemption
or withdrawal on or before, and shall be held until, the next succeeding
Distribution Date if the obligor for such Permitted Investment is the Trustee
or, if such obligor is any other Person, the Business Day preceding such
Distribution Date. All investment earnings on amounts on deposit in the
Distribution Account from time to time shall be for the account of the Master
Servicer. The Master Servicer
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shall be permitted to withdraw or receive distribution of any and all investment
earnings from the Distribution Account on each Distribution Date. If there is
any loss on a Permitted Investment or demand deposit, the Master Servicer shall
remit the amount of the loss to the Trustee who shall deposit such amount in the
Distribution Account. With respect to the Distribution Account and the funds
deposited therein, the Master Servicer shall take such action as may be
necessary to ensure that the Certificateholders shall be entitled to the
priorities afforded to such a trust account (in addition to a claim against the
estate of the Trustee) as provided by 12 U.S.C. ss. 92a(e), and applicable
regulations pursuant thereto, if applicable, or any applicable comparable state
statute applicable to state chartered banking corporations.
Section 4.05 Permitted Withdrawals and Transfers from the Distribution
Account. (a) The Trustee will, from time to time on demand of the Master
Servicer or the Securities Administrator, make or cause to be made such
withdrawals or transfers from the Distribution Account as the Master Servicer
has designated for such transfer or withdrawal pursuant to this Agreement and
the Servicing Agreements or as the Securities Administrator has instructed
hereunder for the following purposes (limited in the case of amounts due the
Master Servicer to those not withdrawn from the Master Servicer Collection
Account in accordance with the terms of this Agreement):
(i) to reimburse the Master Servicer or any Servicer for any
Monthly Advance of its own funds or any advance of such Servicer's own
funds, the right of the Master Servicer or a Servicer to reimbursement
pursuant to this subclause (i) being limited to amounts received on a
particular Mortgage Loan (including, for this purpose, the Repurchase
Price therefor, Insurance Proceeds and Liquidation Proceeds) which
represent late payments or recoveries of the principal of or interest
on such Mortgage Loan respecting which such Monthly Advance or advance
was made;
(ii) to reimburse the Master Servicer or any Servicer from
Insurance Proceeds or Liquidation Proceeds relating to a particular
Mortgage Loan for amounts expended by the Master Servicer or such
Servicer in good faith in connection with the restoration of the
related Mortgaged Property which was damaged by an Uninsured Cause or
in connection with the liquidation of such Mortgage Loan;
(iii) to reimburse the Master Servicer or any Servicer from
Insurance Proceeds relating to a particular Mortgage Loan for insured
expenses incurred with respect to such Mortgage Loan and to reimburse
the Master Servicer or such Servicer from Liquidation Proceeds from a
particular Mortgage Loan for Liquidation Expenses incurred with respect
to such Mortgage Loan; provided that the Master Servicer shall not be
entitled to reimbursement for Liquidation Expenses with respect to a
Mortgage Loan to the extent that (i) any amounts with respect to such
Mortgage Loan were paid as Excess Liquidation Proceeds pursuant to
clause (xi) of this Subsection 4.03 (a) to the Master Servicer; and
(ii) such Liquidation Expenses were not included in the computation of
such Excess Liquidation Proceeds;
(iv) to pay the Master Servicer or any Servicer, as
appropriate, from Liquidation Proceeds or Insurance Proceeds received
in connection with the liquidation of any Mortgage Loan, the amount
which it or such Servicer would have been entitled to receive under
subclause (ix) of this Subsection 4.03(a) as servicing compensation on
account of each defaulted scheduled payment on such Mortgage Loan if
paid in a timely manner by the related Mortgagor;
(v) to pay the Master Servicer or any Servicer from the
Repurchase Price for any Mortgage Loan, the amount which it or such
Servicer would have been entitled to receive under subclause (ix) of
this Subsection 4.03 (a) as servicing compensation;
(vi) to reimburse the Master Servicer or any Servicer for
advances of funds pursuant to Sections, and the right to reimbursement
pursuant to this subclause being limited to amounts received on the
related
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Mortgage Loan (including, for this purpose, the Repurchase Price
therefor, Insurance Proceeds and Liquidation Proceeds) which represent
late recoveries of the payments for which such advances were made;
(vii) to reimburse the Master Servicer or any Servicer for any
Monthly Advance or advance, after a Realized Loss has been allocated
with respect to the related Mortgage Loan if the Monthly Advance or
advance has not been reimbursed pursuant to clauses (i) and (vi);
(viii) to pay the Master Servicer as set forth in Section
3.14;
(ix) to reimburse the Master Servicer for expenses, costs and
liabilities incurred by and reimbursable to it pursuant to Sections
3.03, 7.04(c) and (d);
(x) to pay to the Master Servicer, as additional servicing
compensation, any Excess Liquidation Proceeds to the extent not
retained by the related Servicer;
(xi) to reimburse or pay any Servicer any such amounts as are
due thereto under the applicable Servicing Agreement and have not been
retained by or paid to the Servicer, to the extent provided in the
related Servicing Agreement;
(xii) to reimburse the Trustee, the Securities Administrator
or the Custodian for expenses, costs and liabilities incurred by or
reimbursable to it pursuant to this Agreement;
(xiii) to remove amounts deposited in error; and
(xiv) to clear and terminate the Distribution Account pursuant
to Section 10.01.
(b) The Master Servicer shall keep and maintain separate accounting, on
a Mortgage Loan by Mortgage Loan basis, for the purpose of accounting for any
reimbursement from the Distribution Account pursuant to subclauses (i) through
(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
4.02(b).
(c) On each Distribution Date, the Trustee shall distribute the Group
Available Funds for each Loan Group to the Holders of the Certificates in
accordance with Section 6.01.
Section 4.06 Pre-Funding Account.
(a) No later than the Closing Date, the Trustee shall establish and
maintain a segregated trust account, which shall be titled "Pre-Funding Account,
Bank One, National Association, as trustee for the registered holders of Bear
Xxxxxxx ARM Trust, Mortgage Pass-Through Certificates, Series 2002-11" (the
"Pre-Funding Account"). The Pre-Funding Account shall be an Eligible Account.
The Trustee shall, promptly upon receipt, deposit in the Pre-Funding Account and
retain therein the Pre-Funded Amount remitted on the Closing Date to the Trustee
by the Seller. Funds deposited in the Pre-Funding Account shall be held in trust
by the Trustee for the Certificateholders for the uses and purposes set forth
herein.
(b) The Trustee will invest funds deposited in the Pre-Funding Account
as directed by the Seller or its designee in writing in Permitted Investments
with a maturity date (i) no later than the Business Day immediately preceding
the date on which such funds are required to be withdrawn from such account
pursuant to this Agreement,
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if a Person other than the Trustee or an Affiliate manages or advises such
investment, (ii) no later than the date on which such funds are required to be
withdrawn from such account pursuant to this Agreement, if the Trustee or an
Affiliate manages or advises such investment or (iii) within one (1) Business
Day of the Trustee's receipt thereof. For federal income tax purposes, the
Seller or its designee shall be the owner of the Pre-Funding Account and shall
report all items of income, deduction, gain or loss arising therefrom. All
income and gain realized from investment of funds deposited in the Pre-Funding
Account shall be transferred to the Interest Coverage Account at the following
times: (i) on the Business Day immediately preceding each Distribution Date, if
a Person other than the Trustee or an Affiliate of the Trustee manages or
advises such investment, or on each Distribution Date, if the Trustee or an
Affiliate of the Trustee manages or advises such investment, (ii) on the
Business Day immediately preceding each Subsequent Transfer Date, if a Person
other than the Trustee or an Affiliate of the Trustee manages or advises such
investment, or on each Subsequent Transfer Date, if the Trustee or an Affiliate
of the Trustee manages or advises such investment or (iii) within one (1)
Business Day of the Trustee's receipt thereof. Such transferred funds shall not
constitute income and gain for purposes of Section 4.07(b) hereof. The Seller or
its designee shall deposit in the Pre-Funding Account the amount of any net loss
incurred in respect of any such Permitted Investment immediately upon
realization of such loss without any right of reimbursement therefor. At no time
will the Pre-Funding Account be an asset of any REMIC created hereunder.
(c) Amounts on deposit in the Pre-Funding Account shall be withdrawn by
the Trustee as follows:
(i) On any Subsequent Transfer Date, the Trustee shall
withdraw from the Pre-Funding Account an amount equal to 100% of the Scheduled
Principal Balances of the Subsequent Mortgage Loans transferred and assigned to
the Trustee for deposit in the mortgage pool on such Subsequent Transfer Date
and pay such amount to or upon the order of the Seller upon satisfaction of the
conditions set forth in Section 2.07 with respect to such transfer and
assignment;
(ii) If the amount on deposit in the Pre-Funding Account
(exclusive of investment income) has not been reduced to zero during the
Pre-Funding Period, on the day immediately following the termination of the
Pre-Funding Period, the Trustee shall deposit into the Distribution Account any
amounts remaining in the Pre-Funding Account (exclusive of investment income)
for distribution in accordance with the terms hereof;
(iii) To withdraw any amount not required to be deposited in
the Pre-Funding Account or deposited therein in error; and
(iv) To clear and terminate the Pre-Funding Account upon the
earlier to occur of (A) the Distribution Date immediately following the end of
the Pre-Funding Period and (B) the termination of this Agreement, with any
amounts remaining on deposit therein being paid to the Certificateholders then
entitled to distributions in respect of principal.
Withdrawals pursuant to clauses (i), (ii) and (iii) shall be treated as
contributions of cash to REMIC I on the date of withdrawal.
Section 4.07 Interest Coverage Account.
(a) No later than the Closing Date, the Trustee shall establish and
maintain a segregated trust account, which shall be titled "Interest Coverage
Account, Bank One, National Association, as trustee for the registered holders
of Bear Xxxxxxx Arm Trust, Mortgage Pass-Through Certificates, Series 2002-11"
(the "Interest Coverage Account"). The Interest Coverage Account shall be an
Eligible Account. The Trustee shall, promptly upon receipt, deposit in the
Interest Coverage Account and retain therein the Interest Coverage Amount
remitted on the Closing
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Date to the Trustee by the Seller. Funds deposited in the Interest Coverage
Account shall be held in trust by the Trustee for the Certificateholders for the
uses and purposes set forth herein.
(b) The Trustee will invest funds deposited in the Interest Coverage
Account as directed by the Seller or its designee in writing in Permitted
Investments with a maturity date (i) no later than the Business Day immediately
preceding the date on which such funds are required to be withdrawn from such
account pursuant to this Agreement, if a Person other than the Trustee or an
Affiliate manages or advises such investment, (ii) no later than the date on
which such funds are required to be withdrawn from such account pursuant to this
Agreement, if the Trustee or an Affiliate manages or advises such investment or
(iii) within one (1) Business Day of the Trustee's receipt thereof. For federal
income tax purposes, the Seller or its designee shall be the owner of the
Interest Coverage Account and shall report all items of income, deduction, gain
or loss arising therefrom. All investment earnings on Permitted Investments in
the Interest Coverage Account from time to time shall be for the account of the
Seller. The Seller shall be permitted to withdraw or receive distribution of any
and all investment earnings from the Interest Coverage Account on each
Distribution Date. The Seller or its designee shall deposit in the Interest
Coverage Account the amount of any net loss incurred in respect of any such
Permitted Investment immediately upon realization of such loss without any right
of reimbursement therefor.
(c) On each Distribution Date during the Pre-Funding Period and on the
Distribution Date immediately following the end of the Pre-Funding Period, the
Trustee shall withdraw from the Interest Coverage Account and deposit in the
Distribution Account an amount equal to 30 days' interest on the excess, if any,
of the Pre-Funded Amount over the aggregate Scheduled Principal Balance of
Subsequent Mortgage Loans that both (i) had a Due Date during the Due Period
relating to such Distribution Date and (ii) had a Subsequent Cut-off Date prior
to the first day of the month in which such Distribution Date occurs, at a per
annum rate equal to the weighted average of the Net Mortgage Rates of those
Subsequent Mortgage Loans. Such withdrawal and deposit shall be treated as a
contribution of cash by the Mortgage Loan Seller to REMIC I on the date thereof.
Immediately following any such withdrawal and deposit, and immediately following
the conveyance of any Subsequent Mortgage Loans to the Trust on any Subsequent
Transfer Date, the Trustee shall withdraw from the Interest Coverage Account and
remit to the Mortgage Loan Seller or its designee an amount equal to the excess,
if any, of the amount remaining in such Interest Coverage Account over the
amount that would be required to be withdrawn therefrom (assuming sufficient
funds therein) pursuant to the preceding sentence on each subsequent
Distribution Date, if any, that will occur during the Pre-Funding Period or that
will be the Distribution Date immediately following the end of the Pre-Funding
Period, if no Subsequent Mortgage Loans were acquired by the Trust Fund after
the end of the Prepayment Period relating to the current Distribution Date.
(d) Upon the earliest of (i) the Distribution Date immediately
following the end of the Pre-Funding Period, (ii) the reduction of the principal
balances of the Certificates to zero or (iii) the termination of this Agreement
in accordance with Section 10.01, any amount remaining on deposit in the
Interest Coverage Account after distributions pursuant to paragraph (c) above
shall be withdrawn by the Trustee and paid to the Seller or its designee.
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ARTICLE V
Certificates
Section 5.01 Certificates. (a) The Depository, the Seller and the
Trustee have entered into a Depository Agreement dated as of the Closing Date
(the "Depository Agreement"). Except for the Residual Certificates, the Private
Certificates and the Individual Certificates and as provided in Subsection
5.01(b), the Certificates shall at all times remain registered in the name of
the Depository or its nominee and at all times: (i) registration of such
Certificates may not be transferred by the Trustee except to a successor to the
Depository; (ii) ownership and transfers of registration of such Certificates on
the books of the Depository shall be governed by applicable rules established by
the Depository; (iii) the Depository may collect its usual and customary fees,
charges and expenses from its Depository Participants; (iv) the Trustee shall
deal with the Depository as representative of such Certificate Owners of the
respective Class of Certificates for purposes of exercising the rights of
Certificateholders under this Agreement, and requests and directions for and
votes of such representative shall not be deemed to be inconsistent if they are
made with respect to different Certificate Owners; and (v) the Trustee may rely
and shall be fully protected in relying upon information furnished by the
Depository with respect to its Depository Participants.
The Residual Certificates and the Private Certificates are initially
Physical Certificates. If at any time the Holders of all of the Certificates of
one or more such Classes request that the Trustee cause such Class to become
Global Certificates, the Trustee and the Seller will take such action as may be
reasonably required to cause the Depository to accept such Class or Classes for
trading if it may legally be so traded.
All transfers by Certificate Owners of such respective Classes of
Book-Entry Certificates and any Global Certificates shall be made in accordance
with the procedures established by the Depository Participant or brokerage firm
representing such Certificate Owners. Each Depository Participant shall only
transfer Book-Entry Certificates of Certificate Owners it represents or of
brokerage firms for which it acts as agent in accordance with the Depository's
normal procedures.
(b) If (i)(A) the Seller advises the Trustee in writing that the
Depository is no longer willing or able to properly discharge its
responsibilities as Depository and (B) the Trustee or the Seller is unable to
locate a qualified successor within 30 days or (ii) the Seller at its option
advises the Trustee in writing that it elects to terminate the book-entry system
through the Depository, the Trustee shall request that the Depository notify all
Certificate Owners of the occurrence of any such event and of the availability
of definitive, fully registered Certificates to Certificate Owners requesting
the same. Upon surrender to the Trustee of the Certificates by the Depository,
accompanied by registration instructions from the Depository for registration,
the Trustee shall issue the definitive Certificates. Neither the Seller nor the
Trustee shall be liable for any delay in delivery of such instructions and may
conclusively rely on, and shall be protected in relying on, such instructions.
(c) (i) REMIC I will be evidenced by (x) the REMIC I Regular Interests
(designated below), which will be uncertificated and non-transferable and are
hereby designated as the "regular interests" in REMIC I and have the principal
balances and accrue interest at the Pass-Through Rates equal to those set forth
in this Section 5.01(c)(i) and (y) the Class R-I Certificates, which is hereby
designated as the single "residual interest" in REMIC I.
The REMIC I Regular Interests and the Class R-I Certificate will have
the following designations, initial balances and pass-through rates:
REMIC I Interest Initial Balance Pass-Through Rate Related Group
1A $ 2,391.62 (2) I-1
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1B $ 29,895.17 (2) I-1
2A $ 3,084.94 (3) I-2
2B $ 38,561.66 (3) I-2
3A $ 236.76 (4) I-3
3B $ 2,959.49 (4) I-3
4A $ 298.15 (5) I-4
4B $ 3,726.80 (5) I-4
ZZZ $ 751,350,050.40 (1) N/A
Class R-I $ 50.00 (5) I-4
(1) The weighted average of the Net Rates of the Group I Mortgage Loans,
weighted on the basis of the respective Scheduled Principal Balance of each such
Mortgage Loan as of the beginning of the Due Period immediately preceding the
related Distribution Date.
(2) The weighted average of the Net Rates of the Group I-1 Mortgage Loans,
weighted on the basis of the respective Scheduled Principal Balance of each such
Mortgage Loan as of the beginning of the Due Period immediately preceding the
related Distribution Date.
(3) The weighted average of the Net Rates of the Group I-2 Mortgage Loans,
weighted on the basis of the respective Scheduled Principal Balance of each such
Mortgage Loan as of the beginning of the Due Period immediately preceding the
related Distribution Date.
(4) The weighted average of the Net Rates of the Group I-3 Mortgage Loans,
weighted on the basis of the respective Scheduled Principal Balance of each such
Mortgage Loan as of the beginning of the Due Period immediately preceding the
related Distribution Date.
(5) The weighted average of the Net Rates of the Group I-4 Mortgage Loans,
weighted on the basis of the respective Scheduled Principal Balance of each such
Mortgage Loan as of the beginning of the Due Period immediately preceding the
related Distribution Date.
Distributions shall be deemed to be made to the REMIC I Regular
Interests first, so as to keep the Uncertificated Principal Balance of each
REMIC I Regular Interest ending with the designation "B" equal to 0.01% of the
aggregate Scheduled Principal Balance of the Mortgage Loans in the related
Group; second, to each REMIC I Regular Interest ending with the designation "A,"
so that the Uncertificated Principal Balance of each such REMIC I Regular
Interest is equal to 0.01% of the excess of (x) the aggregate Scheduled
Principal Balance of the Mortgage Loans in the related Group over (y) the
Current Principal Amount of the Senior Certificate in the related Group (except
that if any such excess is a larger number than in the preceding distribution
period, the least amount of principal shall be distributed to such REMIC I
Regular Interests such that the REMIC I Subordinated Balance Ratio is
maintained); and third, any remaining principal to REMIC I Regular Interest ZZZ.
Realized Losses shall be applied after all distributions have been made on each
Distribution Date first, so as to keep the Uncertificated Principal Balance of
each REMIC I Regular Interest ending with the designation "B" equal to 0.01% of
the aggregate Scheduled Principal Balance of the Mortgage Loans in the related
Group; second, to each REMIC I Regular Interest ending with the designation "A,"
so that the Uncertificated Principal Balance of each such REMIC I Regular
Interest is equal to 0.01% of the excess of (x) the aggregate Scheduled
Principal Balance of the Mortgage Loans in the related Group over (y) the
Current Principal Amount of the Senior Certificates in the related Group (except
that if any such excess is a larger number than in the preceding distribution
period, the least amount of Realized Losses shall be applied to such REMIC I
Regular Interests such that the REMIC I Subordinated Balance Ratio is
maintained); and third, any remaining Realized Losses shall be allocated to
REMIC I Regular Interest ZZZ.
(ii) REMIC II will be evidenced by (x) the REMIC II Regular Interests
(designated below), which will be uncertificated and non-transferable and are
hereby designated as the "regular interests" in REMIC II and have the principal
balances and accrue interest at the Pass-Through Rates equal to those set forth
in this Section 5.01(c)(ii) and (y) the Class R-II Certificate, which is hereby
designated as the single "residual interest" in REMIC II.
The REMIC II Regular Interests and the Class R-II Certificate will have
the following designations, initial balances and pass-through rates:
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REMIC II Interest Initial Balance Pass-Through Rate Related Group
5A $ 274.86 (2) II-1
5B $ 9,161.91 (2) II-1
6A $ 455.51 (3) II-2
6B $ 15,183.57 (3) II-2
ZZZ $243,429,690.15 (1) N/A
Class R-II $ 50.00 (4)
(1) The weighted average of the Net Rates of the Group II Mortgage Loans,
weighted on the basis of the respective Scheduled Principal Balance of each such
Mortgage Loan as of the beginning of the Due Period immediately preceding the
related Distribution Date.
(2) The weighted average of the Net Rates of the Group II-1 Mortgage Loans,
weighted on the basis of the respective Scheduled Principal Balance of each such
Mortgage Loan as of the beginning of the Due Period immediately preceding the
related Distribution Date.
(3) The weighted average of the Net Rates of the Group II-2 Mortgage Loans,
weighted on the basis of the respective Scheduled Principal Balance of each such
Mortgage Loan as of the beginning of the Due Period immediately preceding the
related Distribution Date.
(4) The Class R-II Certificates will not be entitled to distributions of
interest.
Distributions shall be deemed to be made to the REMIC II Regular
Interests first, so as to keep the Uncertificated Principal Balance of each
REMIC II Regular Interest ending with the designation "B" equal to 0.01% of the
aggregate Scheduled Principal Balance of the Mortgage Loans in the related
Group; second, to each REMIC II Regular Interest ending with the designation
"A," so that the Uncertificated Principal Balance of each such REMIC II Regular
Interest is equal to 0.01% of the excess of (x) the aggregate Scheduled
Principal Balance of the Mortgage Loans in the related Group over (y) the
Current Principal Amount of the Senior Certificate in the related Group (except
that if any such excess is a larger number than in the preceding distribution
period, the least amount of principal shall be distributed to such REMIC II
Regular Interests such that the REMIC II Subordinated Balance Ratio is
maintained); and third, any remaining principal to REMIC II Regular Interest
ZZZ. Realized Losses shall be applied after all distributions have been made on
each Distribution Date first, so as to keep the Uncertificated Principal Balance
of each REMIC II Regular Interest ending with the designation "B" equal to 0.01%
of the aggregate Scheduled Principal Balance of the Mortgage Loans in the
related Group; second, to each REMIC II Regular Interest ending with the
designation "A," so that the Uncertificated Principal Balance of each such REMIC
I Regular Interest is equal to 0.01% of the excess of (x) the aggregate
Scheduled Principal Balance of the Mortgage Loans in the related Group over (y)
the Current Principal Amount of the Senior Certificates in the related Group
(except that if any such excess is a larger number than in the preceding
distribution period, the least amount of Realized Losses shall be applied to
such REMIC II Regular Interests such that the REMIC I Subordinated Balance Ratio
is maintained); and third, any remaining Realized Losses shall be allocated to
REMIC II Regular Interest ZZZ.
(iii) The Classes of the Certificates shall have the following
designations, initial principal amounts and Pass-Through Rates:
Designation Initial Principal Pass-Through Rate
----------- ----------------- -----------------
I-A-1 $275,035,500.00 (1)
I-A-2 $354,767,200.00 (2)
I-A-3 $ 27,227,300.00 (3)
I-A-4 $ 34,286,400.00 (4)
II-A-1 $ 88,870,500.00 (5)
II-A-2 $147,280,600.00 (6)
I-M-1 $ 36,444,400.00 (7)
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R-I $ 50.00 (4)
R-II $ 50.00 (9)
R-III $ 50.00 (4)
I-B-1 $ 9,017,200.00 (7)
I-B-2 $ 6,011,500.00 (7)
I-B-3 $ 4,133,000.00 (7)
I-B-4 $ 1,502,800.00 (7)
I-B-5 $ 1,502,800.00 (7)
I-B-6 $ 1,503,055.55 (7)
II-B-1 $ 2,556,300.00 (8)
II-B-2 $ 1,947,500.00 (8)
II-B-3 $ 1,339,000.00 (8)
II-B-4 $ 487,000.00 (8)
II-B-5 $ 243,400.00 (8)
II-B-6 $ 730,515.72 (8)
_____________
(1) The Class I-A-1 Certificates will bear interest at a variable
Pass-Through Rate equal to the weighted average of the Net Rates of the Group
I-1 Mortgage Loans, weighted on the basis of the respective Scheduled Principal
Balances of each such Mortgage Loan as of the beginning of the Due Period
immediately preceding the related Distribution Date; provided that for federal
income tax purposes such Certificates will bear interest at a rate equivalent to
the foregoing, expressed as the weighted average of the Pass-Through Rate on
REMIC I Regular Interest 1A, weighted on the basis of the Uncertificated
Principal balance of such REMIC I Regular Interest immediately preceding the
related Distribution Date. The Pass-Through Rate with respect to the first
Interest Accrual Period is expected to be approximately 5.681% per annum.
(2) The Class I-A-2 Certificates will bear interest at a variable
Pass-Through Rate equal to the weighted average of the Net Rates of the Group
I-2 Mortgage Loans, weighted on the basis of the respective Scheduled Principal
Balances of each such Mortgage Loan as of the beginning of the Due Period
immediately preceding the related Distribution Date; provided that for federal
income tax purposes such Certificates will bear interest at a rate equivalent to
the foregoing, expressed as the weighted average of the Pass-Through Rate on
REMIC I Regular Interest 2A, weighted on the basis of the Uncertificated
Principal balance of such REMIC I Regular Interest immediately preceding the
related Distribution Date. The Pass-Through Rate with respect to the first
Interest Accrual Period is expected to be approximately 5.381% per annum.
(3) The Class I-A-3 Certificates will bear interest at a variable
Pass-Through Rate equal to the weighted average of the Net Rates of the Group
I-3 Mortgage Loans, weighted on the basis of the respective Scheduled Principal
Balances of each such Mortgage Loan as of the beginning of the Due Period
immediately preceding the related Distribution Date; provided that for federal
income tax purposes such Certificates will bear interest at a rate equivalent to
the foregoing, expressed as the weighted average of the Pass-Through Rate on
REMIC I Regular Interest 3A, weighted on the basis of the Uncertificated
Principal balance of such REMIC I Regular Interest immediately preceding the
related Distribution Date. The Pass-Through Rate with respect to the first
Interest Accrual Period is expected to be approximately 5.422% per annum.
(4) The Class I-A-4, Class R-I and Class R-III Certificates will bear
interest at a variable Pass-Through Rate equal to the weighted average of the
Net Rates of the Group I-4 Mortgage Loans, weighted on the basis of the
respective Scheduled Principal Balances of each such Mortgage Loan as of the
beginning of the Due Period immediately preceding the related Distribution Date;
provided that for federal income tax purposes such Certificates will bear
interest at a rate equivalent to the foregoing, expressed as the weighted
average of the Pass-Through Rate on REMIC I Regular Interest 4A, weighted on the
basis of the Uncertificated Principal balance of such REMIC I Regular Interest
immediately preceding the related Distribution Date. The Pass-Through Rate with
respect to the first Interest Accrual Period is expected to be approximately
5.236% per annum.
(5) The Class II-A-1 Certificates will bear interest at a variable
Pass-Through Rate equal to the weighted average of the Net Rates of the Group II
Mortgage Loans, weighted on the basis of the respective Scheduled Principal
Balances of each such Mortgage
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Loan as of the beginning of the Due Period immediately preceding the related
Distribution Date; provided that, for federal income tax purposes the Class
II-A-1 Certificates will bear interest at a rate equivalent to the foregoing,
expressed as the weighted average of the Pass-Through Rate on REMIC II Regular
Interest 5A, weighted on the basis of the Uncertificated Principal Balance of
such REMIC II Regular Interest immediately preceding the related Distribution
Date. The Pass-Through Rate with respect to the first Interest Accrual Period is
expected to be approximately 5.897% per annum.
(6) The Class II-A-2 Certificates will bear interest at a variable
Pass-Through Rate equal to the weighted average of the Net Rates of the Group II
Mortgage Loans, weighted on the basis of the respective Scheduled Principal
Balances of each such Mortgage Loan as of the beginning of the Due Period
immediately preceding the related Distribution Date; provided that, for federal
income tax purposes the Class II-A-2 Certificates will bear interest at a rate
equivalent to the foregoing, expressed as the weighted average of the
Pass-Through Rate on REMIC II Regular Interest 6A, weighted on the basis of the
Uncertificated Principal Balance of such REMIC II Regular Interest immediately
preceding the related Distribution Date. The Pass-Through Rate with respect to
the first Interest Accrual Period is expected to be approximately 6.577% per
annum.
(7) The Class I-M-1, Class I-B-1, Class I-B-2, Class I-B-3, Class
I-B-4, Class I-B-5 and Class I-B-6 Certificates will bear interest at a variable
Pass-Through Rate equal to the weighted average of the Net Rates of each Group I
Mortgage Loan Group, weighted in proportion to the results of subtracting from
the aggregate principal balance of each Group I Mortgage Loan Group, the Current
Principal Amount of the related class or classes of Senior Certificates;
provided that for federal income tax purposes such Certificates will bear
interest at a rate equivalent to the foregoing, expressed as the weighted
average of the Pass-Through Rates on REMIC I Regular Interests 1A, 2A, 3A and
4A, weighted on the basis of the Uncertificated Principal balance of each such
REMIC I immediately preceding the related Distribution Date. The Pass-Through
Rate with respect to the first Interest Accrual Period is expected to be
approximately 5.495% per annum.
(8) The Class II-B-1, Class II-B-2, Class II-B-3, Class II-B-4, Class
II-B-5 and Class II-B-6 Certificates will bear interest at a variable
Pass-Through Rate equal to the weighted average of the Net Rates of each Group
II Mortgage Loan Group, weighted in proportion to the results of subtracting
from the aggregate principal balance of each Group II Mortgage Loan Group, the
Current Principal Amount of the related class or classes of Senior Certificates;
provided that for federal income tax purposes such Certificates will bear
interest at a rate equivalent to the foregoing, expressed as the weighted
average of the Pass-Through Rates on REMIC II Regular Interests 5A and 6A,
weighted on the basis of the Uncertificated Principal balance of each such REMIC
II Regular Interest immediately preceding the related Distribution Date. The
Pass-Through Rate with respect to the first Interest Accrual Period is expected
to be approximately 6.321% per annum.
(9) The Class R-II Certificates will not be entitled to distributions
of interest.
(d) Solely for purposes of Section 1.860G-1(a)(4)(iii) of the Treasury
regulations, the Distribution Date immediately following the maturity date for
the Mortgage Loan with the latest maturity date in the Trust Fund has been
designated as the "latest possible maturity date" for the REMIC I Regular
Interests and the Certificates.
(e) With respect to each Distribution Date, each Class of Certificates
shall accrue interest during the related Interest Accrual Period. With respect
to each Distribution Date and each such Class of Certificates, interest shall be
calculated, on the basis of a 360-day year comprised of twelve 30-day months,
based upon the respective Pass-Through Rate set forth, or determined as
provided, above and the Current Principal Amount of such Class applicable to
such Distribution Date.
(f) The Certificates shall be substantially in the forms set forth in
Exhibits X-0, X-0 and A-3. On original issuance, the Trustee shall sign,
countersign and shall deliver them at the direction of the Seller. Pending the
preparation of definitive Certificates of any Class, the Trustee may sign and
countersign temporary Certificates that are printed, lithographed or
typewritten, in authorized denominations for Certificates of such Class,
substantially of the tenor of the definitive Certificates in lieu of which they
are issued and with such appropriate insertions, omissions, substitutions and
other variations as the officers or authorized signatories executing such
Certificates may determine, as evidenced by their execution of such
Certificates. If temporary Certificates are issued, the Seller will cause
definitive Certificates to be prepared without unreasonable delay. After the
preparation of definitive Certificates, the temporary Certificates shall be
exchangeable for definitive Certificates upon surrender of the
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temporary Certificates at the office of the Trustee, without charge to the
Holder. Upon surrender for cancellation of any one or more temporary
Certificates, the Trustee shall sign and countersign and deliver in exchange
therefor a like aggregate principal amount, in authorized denominations for such
Class, of definitive Certificates of the same Class. Until so exchanged, such
temporary Certificates shall in all respects be entitled to the same benefits as
definitive Certificates.
(g) Each Class of Book-Entry Certificates will be registered as a
single Certificate of such Class held by a nominee of the Depository or the DTC
Custodian, and beneficial interests will be held by investors through the
book-entry facilities of the Depository in minimum denominations of (i) in the
case of the Senior Certificates (other than the Residual Certificates) and the
Group I Senior Mezzanine Certificates, $1,000 and in each case increments of
$1.00 in excess thereof, and (ii) in the case of the Offered Subordinate
Certificates, $25,000 and increments of $1.00 in excess thereof, except that one
Certificate of each such Class may be issued in a different amount so that the
sum of the denominations of all outstanding Certificates of such Class shall
equal the Current Principal Amount of such Class on the Closing Date. On the
Closing Date, the Trustee shall execute and countersign Physical Certificates
all in an aggregate principal amount that shall equal the Current Principal
Amount of such Class on the Closing Date. The Private Certificates shall be
issued in certificated fully-registered form in minimum dollar denominations of
$25,000 and integral multiples of $1.00 in excess thereof, except that one
Private Certificate of each Class may be issued in a different amount so that
the sum of the denominations of all outstanding Private Certificates of such
Class shall equal the Current Principal Amount of such Class on the Closing
Date. The Residual Certificates shall each be issued in certificated
fully-registered form in the denomination of $50 and $50, respectively. Each
Class of Global Certificates, if any, shall be issued in fully registered form
in minimum dollar denominations of $50,000 and integral multiples of $1.00 in
excess thereof, except that one Certificate of each Class may be in a different
denomination so that the sum of the denominations of all outstanding
Certificates of such Class shall equal the Current Principal Amount of such
Class on the Closing Date. On the Closing Date, the Trustee shall execute and
countersign (i) in the case of each Class of Offered Certificates, the
Certificate in the entire Current Principal Amount of the respective Class and
(ii) in the case of each Class of Private Certificates, Individual Certificates
all in an aggregate principal amount that shall equal the Current Principal
Amount of each such respective Class on the Closing Date. The Certificates
referred to in clause (i) and if at any time there are to be Global
Certificates, the Global Certificates shall be delivered by the Seller to the
Depository or pursuant to the Depository's instructions, shall be delivered by
the Seller on behalf of the Depository to and deposited with the DTC Custodian.
The Trustee shall sign the Certificates by facsimile or manual signature and
countersign them by manual signature on behalf of the Trustee by one or more
authorized signatories, each of whom shall be Responsible Officers of the
Trustee or its agent. A Certificate bearing the manual and facsimile signatures
of individuals who were the authorized signatories of the Trustee or its agent
at the time of issuance shall bind the Trustee, notwithstanding that such
individuals or any of them have ceased to hold such positions prior to the
delivery of such Certificate.
(h) No Certificate shall be entitled to any benefit under this
Agreement, or be valid for any purpose, unless there appears on such Certificate
the manually executed countersignature of the Trustee or its agent, and such
countersignature upon any Certificate shall be conclusive evidence, and the only
evidence, that such Certificate has been duly executed and delivered hereunder.
All Certificates issued on the Closing Date shall be dated the Closing Date. All
Certificates issued thereafter shall be dated the date of their
countersignature.
(i) The Closing Date is hereby designated as the "startup" day of each
REMIC within the meaning of Section 860G(a)(9) of the Code.
(j) For federal income tax purposes, each REMIC shall have a tax year
that is a calendar year and shall report income on an accrual basis.
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(k) The Trustee on behalf of the Trust shall cause each REMIC to timely
elect to be treated as a REMIC under Section 860D of the Code. Any
inconsistencies or ambiguities in this Agreement or in the administration of any
Trust established hereby shall be resolved in a manner that preserves the
validity of such elections.
(l) The following legend shall be placed on the Residual Certificates
and Private Certificates, whether upon original issuance or upon issuance of any
other Certificate of any such Class in exchange therefor or upon transfer
thereof:
THIS CERTIFICATE MAY NOT BE ACQUIRED DIRECTLY OR INDIRECTLY BY, OR ON
BEHALF OF, AN EMPLOYEE BENEFIT PLAN OR OTHER RETIREMENT ARRANGEMENT
WHICH IS SUBJECT TO TITLE I OF THE EMPLOYEE RETIREMENT INCOME SECURITY
ACT OF 1974, AS AMENDED, AND/OR SECTION 4975 OF THE INTERNAL REVENUE
CODE OF 1986, AS AMENDED [in the case of Private Certificates Only],
UNLESS THE PROPOSED TRANSFER AND/OR HOLDING OF A CERTIFICATE AND THE
SERVICING, MANAGEMENT AND/OR OPERATION OF THE TRUST AND ITS ASSETS: (I)
WILL NOT RESULT IN ANY PROHIBITED TRANSACTION WHICH IS NOT COVERED
UNDER AN INDIVIDUAL OR CLASS PROHIBITED TRANSACTION EXEMPTION,
INCLUDING, BUT NOT LIMITED TO, PROHIBITED TRANSACTION EXEMPTION ("PTE")
84-14, XXX 00-00, XXX 00-0, XXX 95-60 OR PTE 96-23 AND (II) WILL NOT
GIVE RISE TO ANY ADDITIONAL FIDUCIARY OBLIGATIONS ON THE PART OF THE
SELLER, THE SECURITIES ADMINISTRATOR, THE MASTER SERVICER, ANY SERVICER
OR THE TRUSTEE, WHICH WILL BE DEEMED REPRESENTED BY AN OWNER OF A
BOOK-ENTRY CERTIFICATE OR A GLOBAL CERTIFICATE AND WILL BE EVIDENCED BY
A REPRESENTATION OR AN OPINION OF COUNSEL TO SUCH EFFECT BY OR ON
BEHALF OF AN INSTITUTIONAL ACCREDITED INVESTOR.
Section 5.02 Registration of Transfer and Exchange of Certificates. (a)
The Trustee shall maintain at its Corporate Trust Office a Certificate Register
in which, subject to such reasonable regulations as it may prescribe, the
Trustee shall provide for the registration of Certificates and of transfers and
exchanges of Certificates as herein provided.
(b) Subject to Subsection 5.01(a) and, in the case of any Global
Certificate or Physical Certificate upon the satisfaction of the conditions set
forth below, upon surrender for registration of transfer of any Certificate at
any office or agency of the Trustee maintained for such purpose, the Trustee
shall sign, countersign and shall deliver, in the name of the designated
transferee or transferees, a new Certificate of a like Class and aggregate
Fractional Undivided Interest, but bearing a different number.
(c) By acceptance of an Individual Certificate, whether upon original
issuance or subsequent transfer, each holder of such a Certificate acknowledges
the restrictions on the transfer of such Certificate set forth in the Securities
Legend and agrees that it will transfer such a Certificate only as provided
herein. In addition to the provisions of Subsection 5.02(h), the following
restrictions shall apply with respect to the transfer and registration of
transfer of an Individual Certificate to a transferee that takes delivery in the
form of an Individual Certificate:
(i) The Trustee shall register the transfer of an Individual
Certificate if the requested transfer is being made to a transferee who
has provided the Trustee with a Rule 144A Certificate or comparable
evidence as to its QIB status.
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(ii) The Trustee shall register the transfer of any Individual
Certificate if (x) the transferor has advised the Trustee in writing
that the Certificate is being transferred to an Institutional
Accredited Investor; and (y) prior to the transfer the transferee
furnishes to the Trustee an Investment Letter (and the Trustee shall be
fully protected in so doing), provided that, if based upon an Opinion
of Counsel to the effect that the delivery of (x) and (y) above are not
sufficient to confirm that the proposed transfer is being made pursuant
to an exemption from, or in a transaction not subject to, the
registration requirements of the Securities Act and other applicable
laws, the Trustee shall as a condition of the registration of any such
transfer require the transferor to furnish such other certifications,
legal opinions or other information prior to registering the transfer
of an Individual Certificate as shall be set forth in such Opinion of
Counsel.
(d) Subject to Subsection 5.02(h), so long as a Global Certificate of
such Class is outstanding and is held by or on behalf of the Depository,
transfers of beneficial interests in such Global Certificate, or transfers by
holders of Individual Certificates of such Class to transferees that take
delivery in the form of beneficial interests in the Global Certificate, may be
made only in accordance with this Subsection 5.02(d) and in accordance with the
rules of the Depository:
(i) In the case of a beneficial interest in the Global
Certificate being transferred to an Institutional Accredited Investor,
such transferee shall be required to take delivery in the form of an
Individual Certificate or Certificates and the Trustee shall register
such transfer only upon compliance with the provisions of Subsection
5.02(c)(ii).
(ii) In the case of a beneficial interest in a Class of Global
Certificates being transferred to a transferee that takes delivery in
the form of an Individual Certificate or Certificates of such Class,
except as set forth in clause (i) above, the Trustee shall register
such transfer only upon compliance with the provisions of Subsection
5.02(c)(i).
(iii) In the case of an Individual Certificate of a Class
being transferred to a transferee that takes delivery in the form of a
beneficial interest in a Global Certificate of such Class, the Trustee
shall register such transfer if the transferee has provided the Trustee
with a Rule 144A Certificate or comparable evidence as to its QIB
status.
(iv) No restrictions shall apply with respect to the transfer
or registration of transfer of a beneficial interest in the Global
Certificate of a Class to a transferee that takes delivery in the form
of a beneficial interest in the Global Certificate of such Class;
provided that each such transferee shall be deemed to have made such
representations and warranties contained in the Rule 144A Certificate
as are sufficient to establish that it is a QIB.
(e) Subject to Subsection 5.02(h), an exchange of a beneficial interest
in a Global Certificate of a Class for an Individual Certificate or Certificates
of such Class, an exchange of an Individual Certificate or Certificates of a
Class for a beneficial interest in the Global Certificate of such Class and an
exchange of an Individual Certificate or Certificates of a Class for another
Individual Certificate or Certificates of such Class (in each case, whether or
not such exchange is made in anticipation of subsequent transfer, and, in the
case of the Global Certificate of such Class, so long as such Certificate is
outstanding and is held by or on behalf of the Depository) may be made only in
accordance with this Subsection 5.02(e) and in accordance with the rules of the
Depository:
(i) A holder of a beneficial interest in a Global Certificate
of a Class may at any time exchange such beneficial interest for an
Individual Certificate or Certificates of such Class.
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(ii) A holder of an Individual Certificate or Certificates of
a Class may exchange such Certificate or Certificates for a beneficial
interest in the Global Certificate of such Class if such holder
furnishes to the Trustee a Rule 144A Certificate or comparable evidence
as to its QIB status.
(iii) A holder of an Individual Certificate of a Class may
exchange such Certificate for an equal aggregate principal amount of
Individual Certificates of such Class in different authorized
denominations without any certification.
(f) (i) Upon acceptance for exchange or transfer of an Individual
Certificate of a Class for a beneficial interest in a Global Certificate of such
Class as provided herein, the Trustee shall cancel such Individual Certificate
and shall (or shall request the Depository to) endorse on the schedule affixed
to the applicable Global Certificate (or on a continuation of such schedule
affixed to the Global Certificate and made a part thereof) or otherwise make in
its books and records an appropriate notation evidencing the date of such
exchange or transfer and an increase in the certificate balance of the Global
Certificate equal to the certificate balance of such Individual Certificate
exchanged or transferred therefor.
(ii) Upon acceptance for exchange or transfer of a beneficial
interest in a Global Certificate of a Class for an Individual
Certificate of such Class as provided herein, the Trustee shall (or
shall request the Depository to) endorse on the schedule affixed to
such Global Certificate (or on a continuation of such schedule affixed
to such Global Certificate and made a part thereof) or otherwise make
in its books and records an appropriate notation evidencing the date of
such exchange or transfer and a decrease in the certificate balance of
such Global Certificate equal to the certificate balance of such
Individual Certificate issued in exchange therefor or upon transfer
thereof.
(g) The Securities Legend shall be placed on any Individual Certificate
issued in exchange for or upon transfer of another Individual Certificate or of
a beneficial interest in a Global Certificate.
(h) Subject to the restrictions on transfer and exchange set forth in
this Section 5.02, the holder of any Individual Certificate may transfer or
exchange the same in whole or in part (in an initial certificate balance equal
to the minimum authorized denomination set forth in Section 5.01(h) above or any
integral multiple of $1.00 in excess thereof) by surrendering such Certificate
at the Corporate Trust Office, or at the office of any transfer agent, together
with an executed instrument of assignment and transfer satisfactory in form and
substance to the Trustee in the case of transfer and a written request for
exchange in the case of exchange. The holder of a beneficial interest in a
Global Certificate may, subject to the rules and procedures of the Depository,
cause the Depository (or its nominee) to notify the Trustee in writing of a
request for transfer or exchange of such beneficial interest for an Individual
Certificate or Certificates. Following a proper request for transfer or
exchange, the Trustee shall, within five Business Days of such request made at
such Corporate Trust Office, sign, countersign and deliver at such Corporate
Trust Office, to the transferee (in the case of transfer) or holder (in the case
of exchange) or send by first class mail at the risk of the transferee (in the
case of transfer) or holder (in the case of exchange) to such address as the
transferee or holder, as applicable, may request, an Individual Certificate or
Certificates, as the case may require, for a like aggregate Fractional Undivided
Interest and in such authorized denomination or denominations as may be
requested. The presentation for transfer or exchange of any Individual
Certificate shall not be valid unless made at the Corporate Trust Office by the
registered holder in person, or by a duly authorized attorney-in-fact.
(i) At the option of the Certificateholders, Certificates may be
exchanged for other Certificates of authorized denominations of a like Class and
aggregate Fractional Undivided Interest, upon surrender of the Certificates to
be exchanged at any such office or agency; provided, however, that no
Certificate may be exchanged for new Certificates unless the original Fractional
Undivided Interest represented by each such new Certificate (i) is at least
equal to the minimum authorized denomination or (ii) is acceptable to the Seller
as indicated to the Trustee
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in writing. Whenever any Certificates are so surrendered for exchange, the
Trustee shall sign and countersign and the Trustee shall deliver the
Certificates which the Certificateholder making the exchange is entitled to
receive.
(j) If the Trustee so requires, every Certificate presented or
surrendered for transfer or exchange shall be duly endorsed by, or be
accompanied by a written instrument of transfer, with a signature guarantee, in
form satisfactory to the Trustee, duly executed by the holder thereof or his or
her attorney duly authorized in writing.
(k) No service charge shall be made for any transfer or exchange of
Certificates, but the Trustee may require payment of a sum sufficient to cover
any tax or governmental charge that may be imposed in connection with any
transfer or exchange of Certificates.
(l) The Trustee shall cancel all Certificates surrendered for transfer
or exchange but shall retain such Certificates in accordance with its standard
retention policy or for such further time as is required by the record retention
requirements of the Securities Exchange Act of 1934, as amended, and thereafter
may destroy such Certificates.
Section 5.03 Mutilated, Destroyed, Lost or Stolen Certificates. (a) If
(i) any mutilated Certificate is surrendered to the Trustee, or the Trustee
receives evidence to its satisfaction of the destruction, loss or theft of any
Certificate, and (ii) there is delivered to the Trustee such security or
indemnity as it may require to save it harmless, and (iii) the Trustee has not
received notice that such Certificate has been acquired by a third Person, the
Trustee shall sign, countersign and deliver, in exchange for or in lieu of any
such mutilated, destroyed, lost or stolen Certificate, a new Certificate of like
tenor and Fractional Undivided Interest but in each case bearing a different
number. The mutilated, destroyed, lost or stolen Certificate shall thereupon be
canceled of record by the Trustee and shall be of no further effect and evidence
no rights.
(b) Upon the issuance of any new Certificate under this Section 5.03,
the Trustee may require the payment of a sum sufficient to cover any tax or
other governmental charge that may be imposed in relation thereto and any other
expenses (including the fees and expenses of the Trustee) connected therewith.
Any duplicate Certificate issued pursuant to this Section 5.03 shall constitute
complete and indefeasible evidence of ownership in the Trust Fund, as if
originally issued, whether or not the lost, stolen or destroyed Certificate
shall be found at any time.
Section 5.04 Persons Deemed Owners. Prior to due presentation of a
Certificate for registration of transfer, the Seller, the Trustee and any agent
of the Seller or the Trustee may treat the Person in whose name any Certificate
is registered as the owner of such Certificate for the purpose of receiving
distributions pursuant to Section 6.01 and for all other purposes whatsoever.
Neither the Seller, the Trustee nor any agent of the Seller or the Trustee shall
be affected by notice to the contrary. No Certificate shall be deemed duly
presented for a transfer effective on any Record Date unless the Certificate to
be transferred is presented no later than the close of business on the third
Business Day preceding such Record Date.
Section 5.05 Transfer Restrictions on Residual Certificates. (a)
Residual Certificates, or interests therein, may not be transferred without the
prior express written consent of the Tax Matters Person and the Seller. As a
prerequisite to such consent, the proposed transferee must provide the Tax
Matters Person, the Seller and the Trustee with an affidavit that the proposed
transferee is a Permitted Transferee (and, unless the Tax Matters Person and the
Seller consent to the transfer to a person who is not a U.S. Person, an
affidavit that it is a U.S. Person) as provided in Subsection 5.05(b).
(b) No transfer, sale or other disposition of a Residual Certificate
(including a beneficial interest therein) may be made unless, prior to the
transfer, sale or other disposition of a Residual Certificate, the proposed
transferee
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(including the initial purchasers thereof) delivers to the Tax Matters Person,
the Trustee and the Seller an affidavit in the form attached hereto as Exhibit E
stating, among other things, that as of the date of such transfer (i) such
transferee is a Permitted Transferee and that (ii) such transferee is not
acquiring such Residual Certificate for the account of any person who is not a
Permitted Transferee. The Tax Matters Person shall not consent to a transfer of
a Residual Certificate if it has actual knowledge that any statement made in the
affidavit issued pursuant to the preceding sentence is not true. Notwithstanding
any transfer, sale or other disposition of a Residual Certificate to any Person
who is not a Permitted Transferee, such transfer, sale or other disposition
shall be deemed to be of no legal force or effect whatsoever and such Person
shall not be deemed to be a Holder of a Residual Certificate for any purpose
hereunder, including, but not limited to, the receipt of distributions thereon.
If any purported transfer shall be in violation of the provisions of this
Subsection 5.05(b), then the prior Holder thereof shall, upon discovery that the
transfer of such Residual Certificate was not in fact permitted by this
Subsection 5.05(b), be restored to all rights as a Holder thereof retroactive to
the date of the purported transfer. None of the Trustee, the Tax Matters Person
or the Seller shall be under any liability to any Person for any registration or
transfer of a Residual Certificate that is not permitted by this Subsection
5.05(b) or for making payments due on such Residual Certificate to the purported
Holder thereof or taking any other action with respect to such purported Holder
under the provisions of this Agreement so long as the written affidavit referred
to above was received with respect to such transfer, and the Tax Matters Person,
the Trustee and the Seller, as applicable, had no knowledge that it was untrue.
The prior Holder shall be entitled to recover from any purported Holder of a
Residual Certificate that was in fact not a permitted transferee under this
Subsection 5.05(b) at the time it became a Holder all payments made on such
Residual Certificate. Each Holder of a Residual Certificate, by acceptance
thereof, shall be deemed for all purposes to have consented to the provisions of
this Subsection 5.05(b) and to any amendment of this Agreement deemed necessary
(whether as a result of new legislation or otherwise) by counsel of the Tax
Matters Person or the Seller to ensure that the Residual Certificates are not
transferred to any Person who is not a Permitted Transferee and that any
transfer of such Residual Certificates will not cause the imposition of a tax
upon the Trust or cause any REMIC to fail to qualify as a REMIC.
(c) Unless the Tax Matters Person shall have consented in writing
(which consent may be withheld in the Tax Matters Person's sole discretion), the
Residual Certificates (including a beneficial interest therein) may not be
purchased by or transferred to any person who is not a United States Person.
(d) By accepting a Residual Certificate, the purchaser thereof agrees
to be a Tax Matters Person, and appoints the Securities Administrator to act as
its agent with respect to all matters concerning the tax obligations of the
Trust.
Section 5.06 Restrictions on Transferability of Certificates. (a) No
offer, sale, transfer or other disposition (including pledge) of any Certificate
shall be made by any Holder thereof unless registered under the Securities Act,
or an exemption from the registration requirements of the Securities Act and any
applicable state securities or "Blue Sky" laws is available and the prospective
transferee (other than the Seller) of such Certificate signs and delivers to the
Trustee an Investment Letter, if the transferee is an Institutional Accredited
Investor, in the form set forth as Exhibit F-l hereto, or a Rule 144A
Certificate, if the transferee is a QIB, in the form set forth as Exhibit F-2
hereto. Notwithstanding the provisions of the immediately preceding sentence, no
restrictions shall apply with respect to the transfer or registration of
transfer of a beneficial interest in any Certificate that is a Global
Certificate of a Class to a transferee that takes delivery in the form of a
beneficial interest in the Global Certificate of such Class provided that each
such transferee shall be deemed to have made such representations and warranties
contained in the Rule 144A Certificate as are sufficient to establish that it is
a QIB. In the case of a proposed transfer of any Certificate to a transferee
other than a QIB, the Trustee may require an Opinion of Counsel that such
transaction is exempt from the registration requirements of the Securities Act.
The cost of such opinion shall not be an expense of the Trustee or the Trust
Fund.
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(b) The Private Certificates shall each bear a Securities Legend.
Section 5.07 ERISA Restrictions. (a) Subject to the provisions of
subsection (b), no Residual Certificates or Private Certificates may be acquired
directly or indirectly by, or on behalf of, an employee benefit plan or other
retirement arrangement which is subject to Title I of ERISA and/or Section 4975
of the Code, unless the proposed transferee provides either (i) the Trustee, the
Master Servicer and the Securities Administrator with an Opinion of Counsel
satisfactory to the Trustee, the Master Servicer and the Securities
Administrator, which opinion will not be at the expense of the Trustee, the
Master Servicer or the Securities Administrator, that the purchase of such
Certificates by or on behalf of such Plan is permissible under applicable law,
will not constitute or result in a nonexempt prohibited transaction under ERISA
or Section 4975 of the Code and will not subject the Trustee, the Master
Servicer or the Securities Administrator to any obligation in addition to those
undertaken in the Agreement or (ii) in the case of the Class B-4, Class B-5 and
Class B-6 Certificates, a representation or certification to the Trustee (upon
which the Trustee is authorized to rely) to the effect that the proposed
transfer and/or holding of such a Certificate and the servicing, management and
operation of the Trust: (I) will not result in a prohibited transaction under
Section 406 of ERISA or Section 4975 of the Code which is not covered under an
individual or class prohibited transaction exemption including but not limited
to Department of Labor Prohibited Transaction Exemption ("PTE") 84-14 (Class
Exemption for Plan Asset Transactions Determined by Independent Qualified
Professional Asset Managers); PTE 91-38 (Class Exemption for Certain
Transactions Involving Bank Collective Investment Funds); PTE 90-1 (Class
Exemption for Certain Transactions Involving Insurance Company Pooled Separate
Accounts), PTE 95-60 (Class Exemption for Certain Transactions Involving
Insurance Company General Accounts), and PTCE 96-23 (Class Exemption for Plan
Asset Transactions Determined by In-House Asset Managers and (II) will not
subject the Seller, the Securities Administrator, the Master Servicer, any
Servicer or the Trustee to any obligation in addition to those undertaken in the
Agreement.
(b) Any Person acquiring an interest in a Global Certificate which is a
Private Certificate, by acquisition of such Certificate, shall be deemed to have
represented to the Trustee that in the case of the Class I-B-4, Class I-B-5,
Class I-B-6, Class II-B-4, Class II-B-5 and Class II-B-6 Certificates, either:
(i) it is not acquiring an interest in such Certificate directly or indirectly
by, or on behalf of, an employee benefit plan or other retirement arrangement
which is subject to Title I of ERISA and/or Section 4975 of the Code, or (ii)
the transfer and/or holding of an interest in such Certificate to that Person
and the subsequent servicing, management and/or operation of the Trust and its
assets: (I) will not result in any prohibited transaction which is not covered
under an individual or class prohibited transaction exemption, including, but
not limited to, XXX 00-00, XXX 00-00, XXX 00-0, XXX 95-60 or PTE 96-23 and (II)
will not subject the Seller, the Securities Administrator, the Master Servicer
or the Trustee to any obligation in addition to those undertaken in the
Agreement.
(c) Neither the Trustee, the Master Servicer nor the Securities
Administrator will be required to monitor, determine or inquire as to compliance
with the transfer restrictions with respect to the Global Certificates. Any
attempted or purported transfer of any Certificate in violation of the
provisions of Subsections (a) or (b) above shall be void ab initio and such
Certificate shall be considered to have been held continuously by the prior
permitted Certificateholder. Any transferor of any Certificate in violation of
such provisions, shall indemnify and hold harmless the Trustee, the Securities
Administrator and the Master Servicer from and against any and all liabilities,
claims, costs or expenses incurred by the Trustee, the Securities Administrator
or the Master Servicer as a result of such attempted or purported transfer. The
Trustee shall have no liability for transfer of any such Global Certificates in
or through book-entry facilities of any Depository or between or among
Depository Participants or Certificate Owners made in violation of the transfer
restrictions set forth herein.
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Section 5.08 Rule 144A Information. For so long as any Certificates are
outstanding and are "restricted securities" within the meaning of Rule 144(a)(3)
of the Securities Act, (1) the Seller will provide or cause to be provided to
any holder of such Certificates and any prospective purchaser thereof designated
by such a holder, upon the request of such holder or prospective purchaser, the
information required to be provided to such holder or prospective purchaser by
Rule 144A(d)(4) under the Securities Act; and (2) the Seller shall update such
information from time to time in order to prevent such information from becoming
false and misleading and will take such other actions as are necessary to ensure
that the safe harbor exemption from the registration requirements of the
Securities Act under Rule 144A is and will be available for resales of such
Certificates conducted in accordance with Rule 144A.
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ARTICLE VI
Payments to Certificateholders
Section 6.01 Distributions on the Certificates. (a) Interest and
principal on the Certificates will be distributed monthly on each Distribution
Date, commencing in December 2002, in an amount equal to the Available Funds for
such Distribution Date. On each Distribution Date, the Available Funds shall be
distributed as follows:
(i) With respect to the Group I Certificates:
(A) on each Distribution Date, the Group I-1 Available Funds
will be distributed to the Class I-A-1 Certificates as
follows:
first, to the Class I-A-1 Certificates, the Accrued
Certificate Interest on such Class for such
Distribution Date. As described below, Accrued
Certificate Interest on the Class I-A-1 Certificates
is subject to reduction in the event of certain Net
Interest Shortfalls allocable thereto;
second, to the Class I-A-1 Certificates, any Accrued
Certificate Interest thereon remaining undistributed
from previous Distribution Dates, to the extent of
remaining Group I-1 Available Funds; and
third, to the Class I-A Certificates, in reduction of
the Current Principal Amount thereof, the Group I-1
Senior Optimal Principal Amount for such Distribution
Date to the extent of remaining Group I-1 Available
Funds, until the Current Principal Amounts of such
Class has been reduced to zero;
(B) on each Distribution Date, the Group I-A-2 Available Funds
will be distributed to the Class I-A-2 Certificates as
follows:
first, to the Class I-A-2 Certificates, the Accrued
Certificate Interest on such Class for such
Distribution Date. As described below, Accrued
Certificate Interest on the Class I-A-2 Certificates
is subject to reduction in the event of certain Net
Interest Shortfalls allocable thereto;
second, to the Class I-A-2 Certificates, any Accrued
Certificate Interest thereon remaining undistributed
from previous Distribution Dates, to the extent of
remaining Group I-2 Available Funds; and
third, to the Class I-A-2 Certificates, in reduction
of the Current Principal Amount thereof, the Group
I-2 Senior Optimal Principal Amount for such
Distribution Date to the extent of remaining Group
I-2 Available Funds, until the Current Principal
Amounts of such Class has been reduced to zero;
(C) on each Distribution Date, the Group I-3 Available Funds
will be distributed to the Class I-A-3 Certificates as
follows:
first, to the Class I-A-3 Certificates, the Accrued
Certificate Interest on such Class for such
Distribution Date. As described below, Accrued
Certificate Interest on the Class I-A-3
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Certificates is subject to reduction in the event of
certain Net Interest Shortfalls allocable thereto;
second, to the Class I-A-3 Certificates, any Accrued
Certificate Interest thereon remaining undistributed
from previous Distribution Dates, to the extent of
remaining Group I-3 Available Funds; and
third, to the Class I-A-3 Certificates, in reduction
of the Current Principal Amount thereof, the Group
I-3 Senior Optimal Principal Amount for such
Distribution Date to the extent of remaining Group
I-3 Available Funds, until the Current Principal
Amount of such Class has been reduced to zero;
(D) on each Distribution Date, the Group I-4 Available Funds
will be distributed to the Group I-4 Senior Certificates as
follows:
first, to the Group I-4 Senior Certificates, pro
rata, the Accrued Certificate Interest on each such
Class for such Distribution Date. As described below,
Accrued Certificate Interest on the Group I-4 Senior
Certificates is subject to reduction in the event of
certain Net Interest Shortfalls allocable thereto;
second, to the Group I-4 Senior Certificates, pro
rata, any Accrued Certificate Interest thereon
remaining undistributed from previous Distribution
Dates, to the extent of remaining Group I-4 Available
Funds; and
third, sequentially, in the following order, to the
Class R-I, Class R-III and Class I-A-4 Certificates,
in reduction of the Current Principal Amounts
thereof, the Group I-4 Senior Optimal Principal
Amount for such Distribution Date to the extent of
remaining Group I-4 Available Funds, until the
Current Principal Amount of such Classes have been
reduced to zero;
(E) Except as provided in (G) and (H) below, on each
Distribution Date prior to the Group I Cross-Over Date, an
amount equal to any remaining Group I-1, Group I-2, Group I-3
and Group I-4 Available Funds after the distributions in (A),
(B), (C) and (D) above will be distributed to the Class I-M-1
Certificates, up to an amount equal to and in the following
order: (a) the Accrued Certificate Interest thereon for such
Distribution Date, (b) any Accrued Certificate Interest
thereon remaining undistributed from previous Distribution
Dates and (c) such Class's Allocable Share for such
Distribution Date, in each case, to the extent of remaining
Group I Available Funds
(F) Except as provided in (G) and (H) below, on each
Distribution Date prior to the Group I Cross-Over Date, an
amount equal to any remaining Group I-1, Group I-2, Group I-3
and Group I-4 Available Funds after the distributions in (A),
(B), (C), (D) and (E) above will be distributed sequentially,
in the following order, to the Class I-B-1, Class I-B-2, Class
I-B-3, Class I-B-4, Class I-B-5 and Class I-B-6 Certificates,
in each case up to an amount equal to and in the following
order: (a) the Accrued Certificate Interest thereon for such
Distribution Date, (b) any Accrued Certificate Interest
thereon remaining undistributed from previous Distribution
Dates and (c) such Class's Allocable Share for such
Distribution Date, in each case, to the extent of remaining
Group I Available Funds.
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(G) On each Distribution Date prior to the Group I Cross-Over
Date, but after the reduction of the Current Principal Amount
of the Group I-1, Group I-2, Group I-3 and Group I-4 Senior
Certificates to zero, the remaining Class or Classes of Group
I Senior Certificates will be entitled to receive in reduction
of their Current Principal Amounts, pro rata based upon their
Current Principal Amounts immediately prior to such
Distribution Date, in addition to any Principal Prepayments
related to such remaining Group I Senior Certificates'
respective Mortgage Loan Group allocated to such Group I
Senior Certificates, 100% of the Principal Prepayments on any
Mortgage Loan in the Mortgage Loan Group relating to the fully
repaid Class of Senior Certificates; provided, however, that
if (A) the weighted average Group I Senior Mezzanine and
Subordinate Percentage for the Group I Loans equals or exceeds
16.00% on such Distribution Date and (B) the aggregate
Scheduled Principal Balance of the Mortgage Loans delinquent
60 days or more (including for this purpose any such Mortgage
Loans in foreclosure and Mortgage Loans with respect to which
the related Mortgaged Property has been acquired by the
Trust), averaged over the last six months, as a percentage of
the aggregate Current Principal Amount of the Group I Senior
Mezzanine and Group I Subordinate Certificates does not exceed
100%, then the additional allocation of Principal Prepayments
to the Group I Senior Certificates in accordance with this
clause (G) will not be made.
(H) If on any Distribution Date on which the aggregate Current
Principal Amount of any Class or Classes of Group I Senior
Certificates would be greater than the aggregate Scheduled
Principal Balance of the Mortgage Loans in its related
Mortgage Loan Group and any Group I Senior Mezzanine and
Subordinate Certificates are still outstanding in each case
after giving effect to distributions to be made on such
Distribution Date, (i) 100% of amounts otherwise allocable to
the Group I Senior Mezzanine and Subordinate Certificates in
respect of principal will be distributed to such Class or
Classes of Group I Senior Certificates in reduction of the
Current Principal Amounts thereof, until the aggregate Current
Principal Amount of such Class or Classes of Group I Senior
Certificates is an amount equal to the aggregate Scheduled
Principal Balance of the Mortgage Loans in its related
Mortgage Loan Group, and (ii) the Accrued Certificate Interest
otherwise allocable to the Group I Senior Mezzanine and
Subordinate Certificates on such Distribution Date will be
reduced, if necessary, and distributed to such Class or
Classes of Senior Certificates in an amount equal to the
Accrued Certificate Interest for such Distribution Date on the
excess of (x) the aggregate Current Principal Amount of such
Class or Classes of Group I Senior Certificates over (y) the
aggregate Scheduled Principal Balance of the Mortgage Loans in
the related Mortgage Loan Group. Any such reduction in the
Accrued Certificate Interest on the Group I Senior Mezzanine
and Subordinate Certificates will be allocated in reverse
order of the Group I Subordinate Certificates numerical
designations, commencing with the Class I-B-6 Certificates and
then to the Group I Senior Mezzanine Certificates.
(I) If, after distributions have been made pursuant to
priorities first and second of clauses (a)(i)(A), (B), (C) or
(D) above on any Distribution Date, the remaining Group I-1,
Group I-2, Group I-3 and Group I-4 Available Funds are less
than the sum of the Group I-1, Group I-2, Group I-3 and Group
I-4 Senior Optimal Principal Amounts such amount shall be
reduced, and such remaining funds will be distributed on the
related Senior Certificates on the basis of such reduced
amount.
(J) On each Distribution Date, any Available Funds remaining
after payment of interest and principal to the Classes of
Certificates entitled thereto, as described above, will be
distributed to the Class R-III Certificates; provided that if
on any Distribution Date there are any Group I-1, Group I-2,
Group I-3 and Group I-4 Available Funds remaining after
payment of interest and principal to a Class or Classes of
Certificates entitled thereto, such amounts will be
distributed to the other Classes of Senior Certificates, pro
rata, based upon their Current Principal Amounts, until all
amounts due
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to all Classes of Senior Certificates have been paid in full,
before any amounts are distributed to the Class R-III
Certificates.
(ii) With respect to the Group II Certificates:
On the first Distribution Date, the amount deposited by the Seller into
the Distribution Account on the Closing Date will be distributed to the Class
R-II Certificates, in reduction of its Current Principal Amount, until its
Current Principal Amount has been reduced to zero.
(A) on each Distribution Date, the Group II-1 Available Funds
will be distributed to the Class II-A-1 Certificates as
follows:
first, to the Class II-A-1 Certificates, the
Accrued Certificate Interest on such Class for such
Distribution Date. As described below, Accrued
Certificate Interest on the Class II-A-1 Certificates
is subject to reduction in the event of certain Net
Interest Shortfalls allocable thereto;
second, to the Class II-A-1 Certificates,
any Accrued Certificate Interest thereon remaining
undistributed from previous Distribution Dates, to
the extent of remaining Group II-1 Available Funds;
and
third, to the Class II-A-1 Certificates, in
reduction of the Current Principal Amount thereof,
the Group II-1 Senior Optimal Principal Amount for
such Distribution Date to the extent of remaining
Group II-1 Available Funds, until the Current
Principal Amount of such Class have been reduced to
zero;
(B) on each Distribution Date, the Group II-2 Available Funds
will be distributed to the Class II-A-2 Certificates as
follows:
first, to the Class II-A-2 Certificates,
the Accrued Certificate Interest on such Class for
such Distribution Date. As described below, Accrued
Certificate Interest on the Class II-A-2 Certificates
is subject to reduction in the event of certain Net
Interest Shortfalls allocable thereto;
second, to the Class II-A-2 Certificates,
any Accrued Certificate Interest thereon remaining
undistributed from previous Distribution Dates, to
the extent of remaining Group II-2 Available Funds;
and
third, to the Class II-A-2 Certificates, in
reduction of the Current Principal Amount thereof,
the Group II-2 Senior Optimal Principal Amount for
such Distribution Date to the extent of remaining
Group II-2 Available Funds, until the Current
Principal Amount of such Class has been reduced to
zero;
(C) Except as provided in paragraphs (D) and (E) below, on
each Distribution Date on or prior to the Group II Cross-Over
Date, an amount equal to the sum of the remaining Group II-1
and Group II-2 Available Funds after the distributions in (A)
and (B) above will be distributed sequentially, in the
following order, to the Class II-B-1, Class II-B-2, Class
II-B-3, Class II-B-4, Class II-B-5 and Class II-B-6
Certificates, in each case up to an amount equal to and in the
following order: (a) the Accrued Certificate Interest thereon
for such Distribution Date, (b) any Accrued Certificate
Interest
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thereon remaining undistributed from previous Distribution
Dates and (c) such Class's Allocable Share for such
Distribution Date, in each case, to the extent of the sum of
the remaining Group II Available Funds.
(D) On each Distribution Date prior to the Group II Cross-Over
Date but after the reduction of the Current Principal Amount
of any of the Group II-1 or Group II-2 Senior Certificates to
zero, the remaining Class or Classes of Group II Senior
Certificates will be entitled to receive in reduction of their
Current Principal Amounts, pro rata based upon their Current
Principal Amounts immediately prior to such Distribution Date,
in addition to any Principal Prepayments related to such
remaining Group II Senior Certificates' respective Mortgage
Loan Group allocated to such Group II Senior Certificates,
100% of the Principal Prepayments on any Mortgage Loan in the
Mortgage Loan Group relating to the fully repaid Class or
Classes of Group II Senior Certificates; provided, however,
that if (A) the weighted average Group II Subordinate
Percentage equals or exceeds 6.00% on such Distribution Date
and (B) the aggregate Scheduled Principal Balance of the
Mortgage Loans delinquent 60 days or more (including for this
purpose any such Mortgage Loans in foreclosure and Mortgage
Loans with respect to which the related Mortgaged Property has
been acquired by the Trust), averaged over the last six
months, as a percentage of the aggregate Current Principal
Amount of the Group II Subordinate Certificates does not
exceed 100%, then the additional allocation of Principal
Prepayments to the Group II Senior Certificates in accordance
with this clause (D) will not be made.
(E) If on any Distribution Date on which the aggregate Current
Principal Amount of any Class or Classes of Group II Senior
Certificates would be greater than the aggregate Scheduled
Principal Balance of the Mortgage Loans in its related
Mortgage Loan Group and any Group II Subordinate Certificates
are still outstanding in each case after giving effect to
distributions to be made on such Distribution Date, (i) 100%
of amounts otherwise allocable to the Group II Subordinate
Certificates in respect of principal will be distributed to
such Class or Classes of Group II Senior Certificates in
reduction of the Current Principal Amounts thereof, until the
aggregate Current Principal Amount of such Class or Classes of
Group II Senior Certificates is an amount equal to the
aggregate Scheduled Principal Balance of the Mortgage Loans in
its related Mortgage Loan Group, and (ii) the Accrued
Certificate Interest otherwise allocable to the Group II
Subordinate Certificates on such Distribution Date will be
reduced, if necessary, and distributed to such Class or
Classes of Group II Senior Certificates in an amount equal to
the Accrued Certificate Interest for such Distribution Date on
the excess of (x) the aggregate Current Principal Amount of
such Class or Classes of Group II Senior Certificates over (y)
the aggregate Scheduled Principal Balance of the Mortgage
Loans in the related Mortgage Loan Group. Any such reduction
in the Accrued Certificate Interest on the Group II
Subordinate Certificates will be allocated in reverse order of
the Group II Subordinate Certificates numerical designations,
commencing with the Class II-B-6 Certificates.
(F) If, after distributions have been made pursuant to
priorities first and second of clauses (a)(ii)(A) or (B) above
on any Distribution Date, the remaining Group II-1 and Group
II-2 Available Funds are less than the sum of the Group II-1
and Group II-2 Senior Optimal Principal Amounts such amount
shall be reduced, and such remaining funds will be distributed
on the related Senior Certificates on the basis of such
reduced amount.
(G) On each Distribution Date, any Group II Available Funds
remaining after payment of interest and principal to the
Classes of Certificates entitled thereto, as described above,
will be distributed to the Class R-III Certificates; provided
that if on any Distribution Date there are any Group II-1 and
Group II-2 Available Funds remaining after payment of interest
and principal to a Class or Classes
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of Certificates entitled thereto, such amounts will be
distributed to the other Classes of Group II Senior
Certificates, pro rata, based upon their Current Principal
Amounts, until all amounts due to all Classes of Group II
Senior Certificates have been paid in full, before any amounts
are distributed to the Class R-III Certificates.
(b) "Pro rata" distributions among Classes of Certificates will be made
in proportion to the then Current Principal Amount of such Classes.
(c) No Accrued Certificate Interest will be payable with respect to any
Class of Certificates after the Distribution Date on which the Current Principal
Amount of such Certificate has been reduced to zero.
(d) If on any Distribution Date the Available Funds for the Senior
Certificates in any Certificate Group is less than the Accrued Certificate
Interest on the related Senior Certificates for such Distribution Date prior to
reduction for Net Interest Shortfall and the interest portion of Realized
Losses, the shortfall will be allocated among the holders of each Class of
Senior Certificates in such Certificate Group in proportion to the respective
amounts of Accrued Certificate Interest that would have been allocated thereto
in the absence of such Net Interest Shortfall and/or Realized Losses for such
Distribution Date. In addition, the amount of any interest shortfalls will
constitute unpaid Accrued Certificate Interest and will be distributable to
holders of the Certificates of the related Classes entitled to such amounts on
subsequent Distribution Dates, to the extent of the applicable Available Funds
after current interest distributions as required herein. Any such amounts so
carried forward will not bear interest. Shortfalls in interest payments will not
be offset by a reduction in the servicing compensation of the Master Servicer or
otherwise, except to the extent of applicable Compensating Interest Payments.
(e) The expenses and fees of the Trust shall be paid by each of the
REMICs, to the extent that such expenses relate to the assets of each of such
respective REMICs, and all other expenses and fees of the Trust shall be paid
pro rata by each of the REMICs.
Section 6.02 Allocation of Losses. (a) On or prior to each
Determination Date, the Master Servicer shall determine the amount of any
Realized Loss in respect of each Mortgage Loan that occurred during the
immediately preceding calendar month, based on information provided by the
related Servicer.
(b) With respect to any Certificates on any Distribution Date, the
principal portion of each Realized Loss on a Group I Mortgage Loan shall be
allocated as follows:
first, to the Class I-B-6 Certificates until the Current
Principal Amount thereof has been reduced to zero;
second, to the Class I-B-5 Certificates until the Current
Principal Amount thereof has been reduced to zero;
third, to the Class I-B-4 Certificates until the Current
Principal Amount thereof has been reduced to zero;
fourth, to the Class I-B-3 Certificates until the Current
Principal Amount thereof has been reduced to zero;
fifth, to the Class I-B-2 Certificates until the Current
Principal Amount thereof has been reduced to zero;
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sixth, to the Class I-B-1 Certificates until the Current
Principal Amount thereof has been reduced to zero;
seventh, to the Class I-M-1 Certificates until the Current
Principal Amount thereof has been reduced to zero;
eighth, if such loss is on a Group I-1, Group I-2, Group I-3
or Group I-4 Mortgage Loan, to the Group I-1, Group I-2, Group I-3 or
Group I-4 Senior Certificates, respectively; and
ninth, to the Group I Senior Certificates, on a pro rata
basis.
(c) With respect to any Certificates on any Distribution Date, the
principal portion of each Realized Loss on a Group II Mortgage Loan shall be
allocated as follows:
first, to the Class II-B-6 Certificates until the Current
Principal Amount thereof has been reduced to zero;
second, to the Class II-B-5 Certificates until the Current
Principal Amount thereof has been reduced to zero;
third, to the Class II-B-4 Certificates until the Current
Principal Amount thereof has been reduced to zero;
fourth, to the Class II-B-3 Certificates until the Current
Principal Amount thereof has been reduced to zero;
fifth, to the Class II-B-2 Certificates until the Current
Principal Amount thereof has been reduced to zero;
sixth, to the Class II-B-1 Certificates until the Current
Principal Amount thereof has been reduced to zero;
seventh, if such loss is on a Group II-1 or Group II-2
Mortgage Loan, to the Group II-1 or Group II-2 Senior Certificates,
respectively; and
eighth, to the Group II Senior Certificates, on a pro rata
basis.
(d) Notwithstanding the foregoing clauses (b) and (c), no such
allocation of any Realized Loss shall be made on a Distribution Date to any
Class of Certificates to the extent that such allocation would result in the
reduction of the aggregate Current Principal Amounts of all the Certificates as
of such Distribution Date, after giving effect to all distributions and prior
allocations of Realized Losses on such date, to an amount less than the
aggregate Scheduled Principal Balance of all of the Mortgage Loans as of the
first day of the month of such Distribution Date.
(e) Notwithstanding the foregoing clauses (b) and (c), any Special
Hazard Loss allocable to the Group I Senior Certificates or Group II Senior
Certificates pursuant to clauses (b) or (c) above after the Group I Cross-Over
Date or Group II Cross-Over Date, respectively, shall be allocated to such
Senior Certificates and the most subordinate Class or Classes of Group II
Subordinate Certificates and Group I Subordinate Certificates, respectively, on
a pro rata basis, based on the Current Principal Amount of such Certificates, in
reduction of the Current Principal Amounts thereof until reduced to zero, with
any such loss
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allocable to such Subordinate Certificates allocated in the order described in
clause (b) or (c) above, as applicable.
(f) Any Realized Losses allocated to a Class of Certificates shall be
allocated among the Certificates of such Class in proportion to their respective
Current Principal Amounts. Any allocation of Realized Losses shall be
accomplished by reducing the Current Principal Amount of the related
Certificates on the related Distribution Date.
(g) Realized Losses shall be allocated on the Distribution Date in the
month following the month in which such loss was incurred and, in the case of
the principal portion thereof, after giving effect to distributions made on such
Distribution Date.
(h) On each Distribution Date, the Securities Administrator shall
determine the Group I and Group II Subordinate Certificate Writedown Amount and
Group I Senior Mezzanine Certificate Writedown Amount. Any such Subordinate
Certificate Writedown Amount or Group I Senior Mezzanine Certificates Writedown
Amount shall effect a corresponding reduction in the Current Principal Amount of
(i) if prior to the Group I Cross-Over Date, the Current Principal Amounts of
the Group I Senior Mezzanine Certificates and Group I Subordinate Certificates,
in the reverse order of their numerical Class designations, (ii) if prior to the
Group II Cross-Over Date, the Current Principal Amounts of the Group II
Subordinate Certificates, in the reverse order of their numerical Class
designations, (iii) from and after the Group I Cross-Over Date, the Group I
Senior Certificates which reduction shall occur on such Distribution Date after
giving effect to distributions made on such Distribution Date and (iv) from and
after the Group II Cross-Over Date, the Group II Senior Certificates which
reduction shall occur on such Distribution Date after giving effect to
distributions made on such Distribution Date.
(i) Any Net Interest Shortfall will be allocated among the Classes of
Certificates in proportion to the respective amounts of Accrued Certificate
Interest that would have been allocated thereto in the absence of such Net
Interest Shortfall for such Distribution Date. The interest portion of any
Realized Losses with respect to the Group I Mortgage Loans or Group II Mortgage
Loans occurring on or prior to the Group I Cross-Over Date or Group II
Cross-Over Date, respectively, will not be allocated among any Certificates, but
will reduce the amount of Group I Available Funds or Group II Available Funds,
respectively, on the related Distribution Date. As a result of the subordination
of the Group I Senior Mezzanine, Group I Subordinate Certificates and Group II
Subordinate Certificates in right of distribution, such Realized Losses on the
Group I Mortgage Loans and Group II Mortgage Loans will be borne by the Group I
Senior Mezzanine Certificates Group I Subordinate Certificates and Group II
Subordinate Certificates, respectively, in inverse order of their numerical
Class designations. Following the Group I Cross- Over Date, the interest portion
of Realized Losses on the Group I Mortgage Loans will be allocated to the Group
I Senior Certificates. Following the Group II Cross-Over Date, the interest
portion of Realized Losses on the Group II Mortgage Loans will be allocated to
the Group II Senior Certificates.
Section 6.03 Payments. (a) On each Distribution Date, other than the
final Distribution Date, the Trustee shall distribute to each Certificateholder
of record on the directly preceding Record Date the Certificateholder's pro rata
share of its Class (based on the aggregate Fractional Undivided Interest
represented by such Holder's Certificates) of all amounts required to be
distributed on such Distribution Date to such Class, based on information
provided to the Securities Administrator by the Master Servicer. The Securities
Administrator shall calculate the amount to be distributed to each Class and,
based on such amounts, the Securities Administrator shall determine the amount
to be distributed to each Certificateholder. All of the Securities
Administrator's calculations of payments shall be based solely on information
provided to the Securities Administrator by the Master Servicer. The Securities
Administrator shall not be required to confirm, verify or recompute any such
information but shall be entitled to rely conclusively on such information.
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(b) Payment of the above amounts to each Certificateholder shall be
made (i) by check mailed to each Certificateholder entitled thereto at the
address appearing in the Certificate Register or (ii) upon receipt by the
Trustee on or before the fifth Business Day preceding the Record Date of written
instructions from a Certificateholder by wire transfer to a United States dollar
account maintained by the payee at any United States depository institution with
appropriate facilities for receiving such a wire transfer; provided, however,
that the final payment in respect of each Class of Certificates will be made
only upon presentation and surrender of such respective Certificates at the
office or agency of the Trustee specified in the notice to Certificateholders of
such final payment.
Section 6.04 Statements to Certificateholders. (a) Concurrently with
each distribution to Certificateholders, the Securities Administrator shall make
available to the parties hereto and each Certificateholder via the Securities
Administrator's internet website as set forth below, the following information,
expressed with respect to clauses (i) through (vii) in the aggregate and as a
Fractional Undivided Interest representing an initial Current Principal Amount
of $1,000, or in the case of the Class R-I, Class R-II and Class R-III
Certificates, an initial Current Principal Amount of $50:
(i) the Current Principal Amount of each Class of Certificates
immediately prior to such Distribution Date;
(ii) the amount of the distribution allocable to principal on
each applicable Class of Certificates;
(iii) the aggregate amount of interest accrued at the related
Pass-Through Rate with respect to each Class during the related
Interest Accrual Period;
(iv) the Net Interest Shortfall and any other adjustments to
interest at the related Pass-Through Rate necessary to account for any
difference between interest accrued and aggregate interest distributed
with respect to each Class of Certificates;
(v) the amount of the distribution allocable to interest on
each Class of Certificates;
(vi) the Pass-Through Rates for each Class of Certificates
with respect to such Distribution Date;
(vii) the Current Principal Amount of each Class of
Certificates after such Distribution Date;
(viii) the amount of any Monthly Advances, Compensating
Interest Payments and outstanding unreimbursed advances by the Master
Servicer or the Servicer included in such distribution separately
stated for each Loan Group;
(ix) the aggregate amount of any Realized Losses (listed
separately for each category of Realized Loss and for each Loan Group)
during the related Prepayment Period and cumulatively since the Cut-off
Date and the amount and source (separately identified) of any
distribution in respect thereof included in such distribution;
(x) with respect to each Mortgage Loan which incurred a
Realized Loss during the related Prepayment Period, (i) the loan
number, (ii) the Scheduled Principal Balance of such Mortgage Loan as
of the Cut-off Date, (ii) the Scheduled Principal Balance of such
Mortgage Loan as of the beginning of the related Due Period, (iii) the
Net Liquidation Proceeds with respect to such Mortgage Loan and (iv)
the amount of the Realized Loss with respect to such Mortgage Loan;
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(xi) with respect to each Loan Group, the amount of Scheduled
Principal and Principal Prepayments, (including but separately
identifying the principal amount of principal prepayments, Insurance
Proceeds, the purchase price in connection with the purchase of
Mortgage Loans, cash deposits in connection with substitutions of
Mortgage Loans and Net Liquidation Proceeds) and the number and
principal balance of Mortgage Loans purchased or substituted for during
the relevant period and cumulatively since the Cut-off Date;
(xii) the number of Mortgage Loans (excluding REO Property) in
each Loan Group remaining in the Trust Fund as of the end of the
related Prepayment Period;
(xiii) information for each Loan Group and in the aggregate
regarding any Mortgage Loan delinquencies as of the end of the related
Prepayment Period, including the aggregate number and aggregate
Outstanding Principal Balance of Mortgage Loans (a) delinquent 30 to 59
days on a contractual basis, (b) delinquent 60 to 89 days on a
contractual basis, and (c) delinquent 90 or more days on a contractual
basis, in each case as of the close of business on the last Business
Day of the immediately preceding month;
(xiv) for each Loan Group, the number of Mortgage Loans in the
foreclosure process as of the end of the related Due Period and the
aggregate Outstanding Principal Balance of such Mortgage Loans;
(xv) for each Loan Group, the number and aggregate Outstanding
Principal Balance of all Mortgage Loans as to which the Mortgaged
Property was REO Property as of the end of the related Due Period;
(xvi) the book value (the sum of (A) the Outstanding Principal
Balance of the Mortgage Loan, (B) accrued interest through the date of
foreclosure and (C) foreclosure expenses) of any REO Property in each
Loan Group; provided that, in the event that such information is not
available to the Securities Administrator on the Distribution Date,
such information shall be furnished promptly after it becomes
available;
(xvii) the amount of Realized Losses allocated to each Class
of Certificates since the prior Distribution Date and in the aggregate
for all prior Distribution Dates; and
(xviii) the Average Loss Severity for the prior calendar month
for each Loan Group;
(xix) the then applicable Group I-1, Group I-2, Group I-3,
Group I-4, Group II-1 and Group II-2 Senior Percentage, Group I-1,
Group I-2, Group I-3, Group I-4, Group II-1 and Group II-2 Senior
Prepayment Percentage, the Group I-1, Group I-2, Group I-3 and Group
I-4 Senior Mezzanine and Subordinate Prepayment Percentage, the Group
II-1 and Group II-2 Subordinate Prepayment Percentage, the Group I-1,
Group I-2, Group I-3 and Group I-4 Senior Mezzanine and Subordinate
Percentage, and the Group II-1 and Group II Subordinate Percentage;
(xx) any Diverted Amount for such Distribution Date; and
(xxi) the amount withdrawn from the Pre-Funding Account and
the Interest Coverage Account and used to make payments to
Certificateholders on that Distribution Date, the amount remaining on
deposit following such Distribution Date, and the amount withdrawn from
the Pre-Funding Account used to buy Subsequent Mortgage Loans prior to
such Distribution Date.
The information set forth above shall be calculated or reported, as the
case may be, by the Securities Administrator, based solely on, and to the extent
of, information provided to the Securities Administrator by the
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Master Servicer. The Securities Administrator may conclusively rely on such
information and shall not be required to confirm, verify or recalculate any such
information.
The Securities Administrator may make available each month, to any
interested party, the monthly statement to Certificateholders via the
Securities Administrator's website initially located at "xxx.xxxxxxx.xxx."
Assistance in using the website can be obtained by calling the Securities
Administrator's customer service desk at (000) 000-0000. Parties that are unable
to use the above distribution option are entitled to have a paper copy mailed to
them via first class mail by calling the customer service desk and indicating
such. The Securities Administrator shall have the right to change the way such
reports are distributed in order to make such distribution more convenient
and/or more accessible to the parties, and the Securities Administrator shall
provide timely and adequate notification to all parties regarding any such
change.
(b) By April 30 of each year beginning in 2004, the Trustee will
furnish such report to each Holder of the Certificates of record at any time
during the prior calendar year as to the aggregate of amounts reported pursuant
to subclauses (a)(ii) and (a)(v) above with respect to the Certificates, plus
information with respect to the amount of servicing compensation and such other
customary information as the Securities Administrator may determine and advises
the Trustee to be necessary and/or to be required by the Internal Revenue
Service or by a federal or state law or rules or regulations to enable such
Holders to prepare their tax returns for such calendar year. Such obligations
shall be deemed to have been satisfied to the extent that substantially
comparable information shall be provided by the Securities Administrator or the
Trustee pursuant to the requirements of the Code.
Section 6.05 Monthly Advances. If the Scheduled Payment on a Mortgage
Loan that was due on a related Due Date and is delinquent other than as a result
of application of the Relief Act and for which the related Servicer was required
to make an advance pursuant to the related Servicing Agreement 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 Monthly Advance was made.
Subject to the foregoing, the Master Servicer shall continue to make such
advances through the date that the related Servicer is required to do so under
its Servicing Agreement. If applicable, on the Distribution Account Deposit
Date, the Master Servicer shall present an Officer's Certificate to the Trustee
(i) stating that the Master Servicer elects not to make a Monthly Advance in a
stated amount and (ii) detailing the reason it deems the advance to be
nonrecoverable.
Section 6.06 Compensating Interest Payments. The Master Servicer shall
deposit in the Master Servicer Collection Account not later than each
Distribution Account Deposit Date an amount equal to the lesser of (i) the sum
of the aggregate amounts required to be paid by the Servicers under the
Servicing Agreements with respect to subclauses (a) and (b) of the definition of
Interest Shortfall with respect to the Mortgage Loans for the related
Distribution Date, and not so paid by the related Servicers and (ii) the Master
Servicing Compensation for such Distribution Date (such amount, the
"Compensating Interest Payment"). The Master Servicer shall not be entitled to
any reimbursement of any Compensating Interest Payment.
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ARTICLE VII
The Master Servicer
Section 7.01 Liabilities of the Master Servicer. The Master Servicer
shall be liable in accordance herewith only to the extent of the obligations
specifically imposed upon and undertaken by it herein.
Section 7.02 Merger or Consolidation of the Master Servicer.
(a) The Master Servicer will keep in full force and effect its
existence, rights and franchises as a corporation under the laws of the state of
its incorporation, and will obtain and preserve its qualification to do business
as a foreign corporation in each jurisdiction in which such qualification is or
shall be necessary to protect the validity and enforceability of this Agreement,
the Certificates or any of the Mortgage Loans and to perform its duties under
this Agreement.
(b) Any Person into which the Master Servicer may be merged or
consolidated, or any corporation resulting from any merger or consolidation to
which the Master Servicer shall be a party, or any Person succeeding to the
business of the Master Servicer, shall be the successor of the Master Servicer
hereunder, without the execution or filing of any paper or further act on the
part of any of the parties hereto, anything herein to the contrary
notwithstanding.
Section 7.03 Indemnification of the Trustee, the Master Servicer and
the Securities Administrator. (a) The Master Servicer agrees to indemnify the
Indemnified Persons for, and to hold them harmless against, any loss, liability
or expense (including reasonable legal fees and disbursements of counsel)
incurred on their part that may be sustained in connection with, arising out of,
or relating to, any claim or legal action (including any pending or threatened
claim or legal action) relating to this Agreement or the Certificates (i)
related to the Master Servicer's failure to perform its duties in compliance
with this Agreement (except as any such loss, liability or expense shall be
otherwise reimbursable pursuant to this Agreement) or (ii) incurred by reason of
the Master Servicer's willful misfeasance, bad faith or gross negligence in the
performance of duties hereunder or by reason of reckless disregard of
obligations and duties hereunder, provided, in each case, that with respect to
any such claim or legal action (or pending or threatened claim or legal action),
the Trustee shall have given the Master Servicer and the Seller written notice
thereof promptly after the Trustee shall have with respect to such claim or
legal action knowledge thereof. This indemnity shall survive the resignation or
removal of the Trustee, Master Servicer or the Securities Administrator and the
termination of this Agreement.
(b) The Seller will indemnify any Indemnified Person for any loss,
liability or expense of any Indemnified Person not otherwise referred to in
Subsection (a) above.
Section 7.04 Limitations on Liability of the Master Servicer and
Others. Subject to the obligation of the Master Servicer to indemnify the
Indemnified Persons pursuant to Section 7.03:
(a) Neither the Master Servicer nor any of the directors, officers,
employees or agents of the Master Servicer shall be under any liability to the
Indemnified Persons, the Seller, the Trust Fund or the Certificateholders for
taking any action or for refraining from taking any action in good faith
pursuant to this Agreement, or for errors in judgment; provided, however, that
this provision shall not protect the Master Servicer or any such Person against
any breach of warranties or representations made herein or any liability which
would otherwise be imposed by reason of such Person's willful misfeasance, bad
faith or gross negligence in the performance of duties or by reason of reckless
disregard of obligations and duties hereunder.
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(b) The Master Servicer and any director, officer, employee or agent of
the Master Servicer may rely in good faith on any document of any kind prima
facie properly executed and submitted by any Person respecting any matters
arising hereunder.
(c) The Master Servicer, the Custodian and any director, officer,
employee or agent of the Master Servicer or the Custodian shall be indemnified
by the Trust and held harmless thereby against any loss, liability or expense
(including reasonable legal fees and disbursements of counsel) incurred on their
part that may be sustained in connection with, arising out of, or related to,
any claim or legal action (including any pending or threatened claim or legal
action) relating to this Agreement, the Certificates or any Servicing Agreement
(except to the extent that the Master Servicer is indemnified by the Servicer
thereunder), other than (i) any such loss, liability or expense related to the
Master Servicer's failure to perform its duties in compliance with this
Agreement (except as any such loss, liability or expense shall be otherwise
reimbursable pursuant to this Agreement), or to the Custodian's failure to
perform its duties under the Custodial Agreement, respectively, or (ii) any such
loss, liability or expense incurred by reason of the Master Servicer's or the
Custodian's willful misfeasance, bad faith or gross negligence in the
performance of duties hereunder or under the Custodial Agreement, as applicable,
or by reason of reckless disregard of obligations and duties hereunder or under
the Custodial Agreement, as applicable.
(d) The Master Servicer shall not be under any obligation to appear in,
prosecute or defend any legal action that is not incidental to its duties under
this Agreement and that in its opinion may involve it in any expense or
liability; provided, however, the Master Servicer may in its discretion, with
the consent of the Trustee (which consent shall not be unreasonably withheld),
undertake any such action which it may deem necessary or desirable with respect
to this Agreement and the rights and duties of the parties hereto and the
interests of the Certificateholders hereunder. In such event, the legal expenses
and costs of such action and any liability resulting therefrom shall be
expenses, costs and liabilities of the Trust Fund, and the Master Servicer shall
be entitled to be reimbursed therefor out of the Master Servicer Collection
Account as provided by Section 4.03. Nothing in this Subsection 7.04(d) shall
affect the Master Servicer's obligation to supervise, or to take such actions as
are necessary to ensure, the servicing and administration of the Mortgage Loans
pursuant to Subsection 3.01(a).
(e) In taking or recommending any course of action pursuant to this
Agreement, unless specifically required to do so pursuant to this Agreement, the
Master Servicer shall not be required to investigate or make recommendations
concerning potential liabilities which the Trust might incur as a result of such
course of action by reason of the condition of the Mortgaged Properties but
shall give notice to the Trustee if it has notice of such potential liabilities.
(f) The Master Servicer shall not be liable for any acts or omissions
of any Servicer, except as otherwise expressly provided herein.
Section 7.05 Master Servicer Not to Resign. Except as provided in
Section 7.07, the Master Servicer shall not resign from the obligations and
duties hereby imposed on it except upon a determination that any such duties
hereunder are no longer permissible under applicable law and such
impermissibility cannot be cured. Any such determination permitting the
resignation of the Master Servicer shall be evidenced by an Opinion of
Independent Counsel to such effect delivered to the Trustee. No such resignation
by the Master Servicer shall become effective until EMC or the Trustee or a
successor to the Master Servicer reasonably satisfactory to the Trustee shall
have assumed the responsibilities and obligations of the Master Servicer in
accordance with Section 8.02 hereof. The Trustee shall notify the Rating
Agencies of the resignation of the Master Servicer.
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Section 7.06 Successor Master Servicer. In connection with the
appointment of any successor Master Servicer or the assumption of the duties of
the Master Servicer, EMC or the Trustee may make such arrangements for the
compensation of such successor master servicer out of payments on the Mortgage
Loans as EMC or the Trustee and such successor master servicer shall agree. If
the successor master servicer does not agree that such market value is a fair
price, such successor master servicer shall obtain two quotations of market
value from third parties actively engaged in the servicing of single-family
mortgage loans.
Section 7.07 Sale and Assignment of Master Servicing. The Master
Servicer may sell and assign its rights and delegate its duties and obligations
in its entirety as Master Servicer under this Agreement and EMC may terminate
the Master Servicer without cause and select a new Master Servicer; provided,
however, that: (i) the purchaser or transferee accepting such assignment and
delegation (a) shall be a Person which shall be qualified to service mortgage
loans for Xxxxxx Xxx or Xxxxxxx Mac; (b) shall have a net worth of not less than
$10,000,000 (unless otherwise approved by each Rating Agency pursuant to clause
(ii) below); (c) shall be reasonably satisfactory to the Trustee (as evidenced
in a writing signed by the Trustee); and (d) shall execute and deliver to the
Trustee an agreement, in form and substance reasonably satisfactory to the
Trustee, which contains an assumption by such Person of the due and punctual
performance and observance of each covenant and condition to be performed or
observed by it as master servicer under this Agreement, any custodial agreement
from and after the effective date of such agreement; (ii) each Rating Agency
shall be given prior written notice of the identity of the proposed successor to
the Master Servicer and each Rating Agency's rating of the Certificates in
effect immediately prior to such assignment, sale and delegation will not be
downgraded, qualified or withdrawn as a result of such assignment, sale and
delegation, as evidenced by a letter to such effect delivered to the Master
Servicer and the Trustee; (iii) the Master Servicer assigning and selling the
master servicing shall deliver to the Trustee an Officer's Certificate and an
Opinion of Independent Counsel, each stating that all conditions precedent to
such action under this Agreement have been completed and such action is
permitted by and complies with the terms of this Agreement; and (iv) in the
event the Master Servicer is terminated without cause by EMC, EMC shall pay the
terminated Master Servicer a termination fee equal to 0.25% of the aggregate
Scheduled Principal Balance of the Mortgage Loans at the time the master
servicing of the Mortgage Loans is transferred to the successor Master Servicer.
No such assignment or delegation shall affect any liability of the Master
Servicer arising prior to the effective date thereof.
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ARTICLE VIII
Default
Section 8.01 Events of Default. "Event of Default," wherever used
herein, means any one of the following events (whatever the reason for such
Event of Default and whether it shall be voluntary or involuntary or be effected
by operation of law or pursuant to any judgment, decree or order of any court or
any order, rule or regulation of any administrative or governmental body) and
only with respect to the defaulting Master Servicer:
(i) The Master Servicer fails to cause to be deposited in the
Distribution Account any amount so required to be deposited pursuant to
this Agreement, and such failure continues unremedied for a period of
three Business Days after the date upon which written notice of such
failure, requiring the same to be remedied, shall have been given to
the Master Servicer; or
(ii) The Master Servicer fails to observe or perform in any
material respect any other material covenants and agreements set forth
in this Agreement to be performed by it, which covenants and agreements
materially affect the rights of Certificateholders, and such failure
continues unremedied for a period of 60 days after the date on which
written notice of such failure, properly requiring the same to be
remedied, shall have been given to the Master Servicer by the Trustee
or to the Master Servicer and the Trustee by the Holders of
Certificates evidencing Fractional Undivided Interests aggregating not
less than 25% of the Trust Fund; or
(iii) There is entered against the Master Servicer a decree or
order by a court or agency or supervisory authority having jurisdiction
in the premises for the appointment of a conservator, receiver or
liquidator in any insolvency, readjustment of debt, marshaling of
assets and liabilities or similar proceedings, or for the winding up or
liquidation of its affairs, and the continuance of any such decree or
order is unstayed and in effect for a period of 60 consecutive days, or
an involuntary case is commenced against the Master Servicer under any
applicable insolvency or reorganization statute and the petition is not
dismissed within 60 days after the commencement of the case; or
(iv) The Master Servicer consents to the appointment of a
conservator or receiver or liquidator in any insolvency, readjustment
of debt, marshaling of assets and liabilities or similar proceedings of
or relating to the Master Servicer or substantially all of its
property; or the Master Servicer admits in writing its inability to pay
its debts generally as they become due, files a petition to take
advantage of any applicable insolvency or reorganization statute, makes
an assignment for the benefit of its creditors, or voluntarily suspends
payment of its obligations; or
(v) The Master Servicer assigns or delegates its duties or
rights under this Agreement in contravention of the provisions
permitting such assignment or delegation under Sections 7.05 or 7.07.
In each and every such case, so long as such Event of Default with respect to
the Master Servicer shall not have been remedied, either the Trustee or the
Holders of Certificates evidencing Fractional Undivided Interests aggregating
not less than 51% of the principal of the Trust Fund, by notice in writing to
the Master Servicer (and to the Trustee if given by such Certificateholders),
with a copy to the Rating Agencies, and with the consent of EMC, may terminate
all of the rights and obligations (but not the liabilities) of the Master
Servicer under this Agreement and in and to the Mortgage Loans and/or the REO
Property serviced by the Master Servicer and the proceeds thereof. Upon the
receipt by the Master Servicer of the written notice, all authority and power of
the Master Servicer under this Agreement, whether with respect to the
Certificates, the Mortgage Loans, REO Property or under any other related
agreements (but only to the extent that such other agreements relate to the
Mortgage Loans or related REO Property) shall, subject to Section 8.02,
automatically and without further action pass to and be vested in the Trustee
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pursuant to this Section 8.01; and, without limitation, the Trustee is hereby
authorized and empowered to execute and deliver, on behalf of the Master
Servicer as attorney-in-fact or otherwise, any and all documents and other
instruments and to do or accomplish all other acts or things necessary or
appropriate to effect the purposes of such notice of termination, whether to
complete the transfer and endorsement or assignment of the Mortgage Loans and
related documents, or otherwise. The Master Servicer agrees to cooperate with
the Trustee in effecting the termination of the Master Servicer's rights and
obligations hereunder, including, without limitation, the transfer to the
Trustee of (i) the property and amounts which are then or should be part of the
Trust or which thereafter become part of the Trust; and (ii) originals or copies
of all documents of the Master Servicer reasonably requested by the Trustee to
enable it to assume the Master Servicer's duties thereunder. In addition to any
other amounts which are then, or, notwithstanding the termination of its
activities under this Agreement, may become payable to the Master Servicer under
this Agreement, the Master Servicer shall be entitled to receive, out of any
amount received on account of a Mortgage Loan or related REO Property, that
portion of such payments which it would have received as reimbursement under
this Agreement if notice of termination had not been given. The termination of
the rights and obligations of the Master Servicer shall not affect any
obligations incurred by the Master Servicer prior to such termination.
Section 8.02 Trustee to Act; Appointment of Successor. (a) Upon the
receipt by the Master Servicer of a notice of termination pursuant to Section
8.01 or an Opinion of Independent Counsel pursuant to Section 7.05 to the effect
that the Master Servicer is legally unable to act or to delegate its duties to a
Person which is legally able to act, the Trustee shall automatically become the
successor in all respects to the Master Servicer in its capacity under this
Agreement and the transactions set forth or provided for herein and shall
thereafter be subject to all the responsibilities, duties, liabilities and
limitations on liabilities relating thereto placed on the Master Servicer by the
terms and provisions hereof; provided, however, that EMC shall have the right to
either (a) immediately assume the duties of the Master Servicer or (b) select a
successor Master Servicer; provided further, however, that the Trustee shall
have no obligation whatsoever with respect to any liability (other than advances
deemed recoverable and not previously made) incurred by the Master Servicer at
or prior to the time of termination. As compensation therefor, but subject to
Section 7.06, the Trustee shall be entitled to all funds relating to the
Mortgage Loans which the Master Servicer would have been entitled to retain if
the Master Servicer had continued to act hereunder, except for those amounts due
the Master Servicer as reimbursement permitted under this Agreement for advances
previously made or expenses previously incurred. Notwithstanding the above, the
Trustee may, if it shall be unwilling so to act, or shall, if it is legally
unable so to act, appoint or petition a court of competent jurisdiction to
appoint, any established housing and home finance institution which is a Xxxxxx
Mae- or Xxxxxxx Mac-approved servicer, and with respect to a successor to the
Master Servicer only, having a net worth of not less than $10,000,000, as the
successor to the Master Servicer hereunder in the assumption of all or any part
of the responsibilities, duties or liabilities of the Master Servicer hereunder;
provided, that the Trustee shall obtain a letter from each Rating Agency that
the ratings, if any, on each of the Certificates will not be lowered as a result
of the selection of the successor to the Master Servicer. Pending appointment of
a successor to the Master Servicer hereunder, the Trustee shall act in such
capacity as hereinabove provided. In connection with such appointment and
assumption, the Trustee may make such arrangements for the compensation of such
successor out of payments on the Mortgage Loans as it and such successor shall
agree; provided, however, that the provisions of Section 7.06 shall apply, no
such compensation shall be in excess of that permitted the Trustee under this
Subsection 8.02(a), and that such successor shall undertake and assume the
obligations of the Trustee to pay compensation to any third Person acting as an
agent or independent contractor in the performance of master servicing
responsibilities hereunder. The Trustee and such successor shall take such
action, consistent with this Agreement, as shall be necessary to effectuate any
such succession.
(b) If the Trustee shall succeed to any duties of the Master Servicer
respecting the Mortgage Loans as provided herein, it shall do so in a separate
capacity and not in its capacity as Trustee and, accordingly, the provisions of
Article IX shall be inapplicable to the Trustee in its duties as the successor
to the Master Servicer in
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the servicing of the Mortgage Loans (although such provisions shall continue to
apply to the Trustee in its capacity as Trustee); the provisions of Article VII,
however, shall apply to it in its capacity as successor master servicer.
Section 8.03 Notification to Certificateholders. Upon any termination
or appointment of a successor to the Master Servicer, the Trustee shall give
prompt written notice thereof to Certificateholders at their respective
addresses appearing in the Certificate Register and to the Rating Agencies.
Section 8.04 Waiver of Defaults. The Trustee shall transmit by mail to
all Certificateholders, within 60 days after the occurrence of any Event of
Default known to the Trustee, unless such Event of Default shall have been
cured, notice of each such Event of Default hereunder known to the Trustee. The
Holders of Certificates evidencing Fractional Undivided Interests aggregating
not less than 51% of the Trust Fund may, on behalf of all Certificateholders,
waive any default by the Master Servicer in the performance of its obligations
hereunder and the consequences thereof, except a default in the making of or the
causing to be made any required distribution on the Certificates. Upon any such
waiver of a past default, such default shall be deemed to cease to exist, and
any Event of Default arising therefrom shall be deemed to have been timely
remedied for every purpose of this Agreement. No such waiver shall extend to any
subsequent or other default or impair any right consequent thereon except to the
extent expressly so waived. The Trustee shall give notice of any such waiver to
the Rating Agencies.
Section 8.05 List of Certificateholders. Upon written request of three
or more Certificateholders of record, for purposes of communicating with other
Certificateholders with respect to their rights under this Agreement, the
Trustee will afford such Certificateholders access during business hours to the
most recent list of Certificateholders held by the Trustee.
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ARTICLE IX
Concerning the Trustee and the Securities Administrator
Section 9.01 Duties of Trustee. (a) The Trustee, prior to the
occurrence of an Event of Default and after the curing or waiver of all Events
of Default which may have occurred, and the Securities Administrator each
undertake to perform such duties and only such duties as are specifically set
forth in this Agreement as duties of the Trustee and the Securities
Administrator, respectively. If an Event of Default has occurred and has not
been cured or waived, the Trustee shall exercise such of the rights and powers
vested in it by this Agreement, and subject to Section 8.02(b) use the same
degree of care and skill in their exercise, as a prudent person would exercise
under the circumstances in the conduct of his own affairs.
(b) Upon receipt of all resolutions, certificates, statements,
opinions, reports, documents, orders or other instruments which are specifically
required to be furnished to the Trustee and the Securities Administrator
pursuant to any provision of this Agreement, the Trustee and the Securities
Administrator, respectively, shall examine them to determine whether they are in
the form required by this Agreement; provided, however, that neither the Trustee
nor the Securities Administrator shall be responsible for the accuracy or
content of any resolution, certificate, statement, opinion, report, document,
order or other instrument furnished 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 6.01 and 10.01 herein based the
report of the Securities Administrator.
(d) No provision of this Agreement shall be construed to relieve the
Trustee or the Securities Administrator from liability for its own negligent
action, its own negligent failure to act or its own willful misconduct;
provided, however, that:
(i) Prior to the occurrence of an Event of Default, and after
the curing or waiver of all such Events of Default which may have
occurred, the duties and obligations of the Trustee and the Securities
Administrator shall be determined solely by the express provisions of
this Agreement, neither the Trustee nor the Securities Administrator
shall be liable except for the performance of their respective duties
and obligations as are specifically set forth in this Agreement, no
implied covenants or obligations shall be read into this Agreement
against the Trustee or the Securities Administrator and, in the absence
of bad faith on the part of the Trustee or the Securities
Administrator, respectively, the Trustee or the Securities
Administrator, respectively, may conclusively rely, as to the truth of
the statements and the correctness of the opinions expressed therein,
upon any certificates or opinions furnished to the Trustee or the
Securities Administrator, respectively, and conforming to the
requirements of this Agreement;
(ii) Neither the Trustee nor the Securities Administrator
shall be liable in its individual capacity for an error of judgment
made in good faith by a Responsible Officer or Responsible Officers of
the Trustee or an officer of the Securities Administrator,
respectively, unless it shall be proved that the Trustee or the
Securities Administrator, respectively, was negligent in ascertaining
the pertinent facts;
(iii) Neither the Trustee nor the Securities Administrator
shall be liable with respect to any action taken, suffered or omitted
to be taken by it in good faith in accordance with the directions of
the Holders of Certificates evidencing Fractional Undivided Interests
aggregating not less than 25% of the Trust Fund, if such action or
non-action relates to the time, method and place of conducting any
proceeding for any remedy
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available to the Trustee or the Securities Administrator, respectively,
or exercising any trust or other power conferred upon the Trustee or
the Securities Administrator, respectively, under this Agreement;
(iv) The Trustee shall not be required to take notice or be
deemed to have notice or knowledge of any default or Event of Default
unless a Responsible Officer of the Trustee's Corporate Trust Office
shall have actual knowledge thereof. In the absence of such notice, the
Trustee may conclusively assume there is no such default or Event of
Default;
(v) The Trustee shall not in any way be liable by reason of
any insufficiency in any Account held by or in the name of Trustee
unless it is determined by a court of competent jurisdiction that the
Trustee's gross negligence or willful misconduct was the primary cause
of such insufficiency (except to the extent that the Trustee is obligor
and has defaulted thereon);
(vi) Anything in this Agreement to the contrary
notwithstanding, in no event shall the Trustee or the Securities
Administrator be liable for special, indirect or consequential loss or
damage of any kind whatsoever (including but not limited to lost
profits), even if the Trustee or the Securities Administrator,
respectively, has been advised of the likelihood of such loss or damage
and regardless of the form of action; and
(vii) None of the Securities Administrator, EMC or the Trustee
shall be responsible for the acts or omissions of the other, it being
understood that this Agreement shall not be construed to render them
partners, joint venturers or agents of one another.
Neither the Trustee nor the Securities Administrator shall be required
to expend or risk its own funds or otherwise incur financial liability in the
performance of any of its duties hereunder, or in the exercise of any of its
rights or powers, if there is reasonable ground for believing that the repayment
of such funds or adequate indemnity against such risk or liability is not
reasonably assured to it, and none of the provisions contained in this Agreement
shall in any event require the Trustee or the Securities Administrator to
perform, or be responsible for the manner of performance of, any of the
obligations of the Master Servicer under the Servicing Agreements, except during
such time, if any, as the Trustee shall be the successor to, and be vested with
the rights, duties, powers and privileges of, the Master Servicer in accordance
with the terms of this Agreement.
(e) All funds received by the Master Servicer and the Trustee and
required to be deposited in the Master Servicer Collection Account or
Distribution Account pursuant to this Agreement will be promptly so deposited by
the Master Servicer and the Trustee.
(f) Except for those actions that the Trustee or the Securities
Administrator is required to take hereunder, neither the Trustee nor the
Securities Administrator shall have any obligation or liability to take any
action or to refrain from taking any action hereunder in the absence of written
direction as provided hereunder.
Section 9.02 Certain Matters Affecting the Trustee and the Securities
Administrator. Except as otherwise provided in Section 9.01:
(i) The Trustee and the Securities Administrator may rely and
shall be protected in acting or refraining from acting in reliance on
any resolution, certificate of a Seller, Master Servicer or Servicer,
certificate of auditors or any other certificate, statement,
instrument, opinion, report, notice, request, consent, order,
appraisal, bond or other paper or document believed by it to be genuine
and to have been signed or presented by the proper party or parties;
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(ii) The Trustee and the Securities Administrator may consult
with counsel and any advice of such counsel or any Opinion of Counsel
shall be full and complete authorization and protection with respect to
any action taken or suffered or omitted by it hereunder in good faith
and in accordance with such advice or Opinion of Counsel:
(iii) Neither the Trustee nor the Securities Administrator
shall be under any obligation to exercise any of the trusts or powers
vested in it by this Agreement, other than its obligation to give
notices pursuant to this Agreement, or to institute, conduct or defend
any litigation hereunder or in relation hereto at the request, order or
direction of any of the Certificateholders pursuant to the provisions
of this Agreement, unless such Certificateholders shall have offered to
the Trustee reasonable security or indemnity against the costs,
expenses and liabilities which may be incurred therein or thereby.
Nothing contained herein shall, however, relieve the Trustee of the
obligation, upon the occurrence of an Event of Default of which a
Responsible Officer of the Trustee's Corporate Trust Office has actual
knowledge (which has not been cured or waived), subject to Section
8.02(b), to exercise such of the rights and powers vested in it by this
Agreement, and to use the same degree of care and skill in their
exercise, as a prudent person would exercise under the circumstances in
the conduct of his own affairs;
(iv) Prior to the occurrence of an Event of Default hereunder
and after the curing or waiver of all Events of Default which may have
occurred, neither the Trustee nor the Securities Administrator shall be
liable in its individual capacity for any action taken, suffered or
omitted by it in good faith and believed by it to be authorized or
within the discretion or rights or powers conferred upon it by this
Agreement;
(v) Neither the Trustee nor the Securities Administrator shall
be bound to make any investigation into the facts or matters stated in
any resolution, certificate, statement, instrument, opinion, report,
notice, request, consent, order, approval, bond or other paper or
document, unless requested in writing to do so by Holders of
Certificates evidencing Fractional Undivided Interests aggregating not
less than 25% of the Trust Fund and provided that the payment within a
reasonable time to the Trustee or the Securities Administrator, as
applicable, of the costs, expenses or liabilities likely to be incurred
by it in the making of such investigation is, in the opinion of the
Trustee or the Securities Administrator, as applicable, reasonably
assured to the Trustee or the Securities Administrator, as applicable,
by the security afforded to it by the terms of this Agreement. The
Trustee or the Securities Administrator may require reasonable
indemnity against such expense or liability as a condition to taking
any such action. The reasonable expense of every such examination shall
be paid by the Certificateholders requesting the investigation;
(vi) The Trustee and the Securities Administrator may execute
any of the trusts or powers hereunder or perform any duties hereunder
either directly or through Affiliates, agents or attorneys; provided,
however, that the Trustee may not appoint any agent to perform its
custodial functions with respect to the Mortgage Files or paying agent
functions under this Agreement without the express written consent of
the Master Servicer, which consent will not be unreasonably withheld.
Neither the Trustee nor the Securities Administrator shall be liable or
responsible for the misconduct or negligence of any of the Trustee's or
the Securities Administrator's agents or attorneys or a custodian or
paying agent appointed hereunder by the Trustee or the Securities
Administrator with due care and, when required, with the consent of the
Master Servicer;
(vii) Should the Trustee or the Securities Administrator deem
the nature of any action required on its part, other than a payment or
transfer under Subsection 4.01(b) or Section 4.02, to be unclear, the
Trustee or the Securities Administrator, respectively, may require
prior to such action that it be provided by the Seller with reasonable
further instructions;
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(viii) The right of the Trustee or the Securities
Administrator to perform any discretionary act enumerated in this
Agreement shall not be construed as a duty, and neither the Trustee nor
the Securities Administrator shall be accountable for other than its
negligence or willful misconduct in the performance of any such act;
(ix) Neither the Trustee nor the Securities Administrator
shall be required to give any bond or surety with respect to the
execution of the trust created hereby or the powers granted hereunder,
except as provided in Subsection 9.07; and
(x) Neither the Trustee nor the Securities Administrator shall
have any duty to conduct any affirmative investigation as to the
occurrence of any condition requiring the repurchase of any Mortgage
Loan by the Mortgage Loan Seller pursuant to this Agreement or the
Mortgage Loan Purchase Agreement, as applicable, or the eligibility of
any Mortgage Loan for purposes of this Agreement.
Section 9.03 Trustee and Securities Administrator Not Liable for
Certificates or Mortgage Loans. The recitals contained herein and in the
Certificates (other than the signature and countersignature of the Trustee on
the Certificates) shall be taken as the statements of the Seller, and neither
the Trustee nor the Securities Administrator shall have any responsibility for
their correctness. Neither the Trustee nor the Securities Administrator makes
any representation as to the validity or sufficiency of the Certificates (other
than the signature and countersignature of the Trustee on the Certificates) or
of any Mortgage Loan except as expressly provided in Sections 2.02 and 2.05
hereof; provided, however, that the foregoing shall not relieve the Trustee of
the obligation to review the Mortgage Files pursuant to Sections 2.02 and 2.04.
The Trustee's signature and countersignature (or countersignature of its agent)
on the Certificates shall be solely in its capacity as Trustee and shall not
constitute the Certificates an obligation of the Trustee in any other capacity.
Neither the Trustee or the Securities Administrator shall be accountable for the
use or application by the Seller of any of the Certificates or of the proceeds
of such Certificates, or for the use or application of any funds paid to the
Seller with respect to the Mortgage Loans. Subject to the provisions of Section
2.05, neither the Trustee nor the Securities Administrator shall not be
responsible for the legality or validity of this Agreement or any document or
instrument relating to this Agreement, the validity of the execution of this
Agreement or of any supplement hereto or instrument of further assurance, or the
validity, priority, perfection or sufficiency of the security for the
Certificates issued hereunder or intended to be issued hereunder. Neither the
Trustee nor the Securities Administrator shall at any time have any
responsibility or liability for or with respect to the legality, validity and
enforceability of any Mortgage or any Mortgage Loan, or the perfection and
priority of any Mortgage or the maintenance of any such perfection and priority,
or for or with respect to the sufficiency of the Trust Fund or its ability to
generate the payments to be distributed to Certificateholders, under this
Agreement. Neither the Trustee nor the Securities Administrator shall have any
responsibility for filing any financing or continuation statement in any public
office at any time or to otherwise perfect or maintain the perfection of any
security interest or lien granted to it hereunder or to record this Agreement
other than any continuation statements filed by the Trustee pursuant to Section
3.20.
Section 9.0.4 Trustee and Securities Administrator May Own
Certificates. The Trustee and the Securities Administrator in its individual
capacity or in any capacity other than as Trustee hereunder may become the owner
or pledgee of any Certificates with the same rights it would have if it were not
Trustee or the Securities Administrator, as applicable, and may otherwise deal
with the parties hereto.
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Section 9.05 Trustee's and Securities Administrator's Fees and
Expenses. The fees of the Trustee and the Securities Administrator shall be paid
in accordance with a side letter agreement. In addition, the Trustee and the
Securities Administrator will be entitled to recover from the Master Servicer
Collection Account pursuant to Section 4.03(b) all reasonable out-of-pocket
expenses, disbursements and advances and the expenses of the Trustee and the
Securities Administrator, respectively, in connection with any Event of Default,
any breach of this Agreement or any claim or legal action (including any pending
or threatened claim or legal action) incurred or made by the Trustee or the
Securities Administrator, respectively, in the administration of the trusts
hereunder (including the reasonable compensation, expenses and disbursements of
its counsel) except any such expense, disbursement or advance as may arise from
its negligence or intentional misconduct or which is the responsibility of the
Certificateholders. If funds in the Master Servicer Collection Account are
insufficient therefor, the Trustee and the Securities Administrator shall
recover such expenses from the Seller. Such compensation and reimbursement
obligation shall not be limited by any provision of law in regard to the
compensation of a trustee of an express trust.
Section 9.06 Eligibility Requirements for Trustee and Securities
Administrator. The Trustee and any successor Trustee and the Securities
Administrator and any successor Securities Administrator shall during the entire
duration of this Agreement be a state bank or trust company or a national
banking association organized and doing business under the laws of such state or
the United States of America, authorized under such laws to exercise corporate
trust powers, having a combined capital and surplus and undivided profits of at
least $40,000,000 or, in the case of a successor Trustee, $50,000,000, subject
to supervision or examination by federal or state authority and, in the case of
the Trustee, rated "BBB" or higher by S&P with respect to their long-term rating
and rated "BBB" or higher by S&P and "Baa2" or higher by Xxxxx'x with respect to
any outstanding long-term unsecured unsubordinated debt, and, in the case of a
successor Trustee or successor Securities Administrator other than pursuant to
Section 9.10, rated in one of the two highest long-term debt categories of, or
otherwise acceptable to, each of the Rating Agencies. If the Trustee publishes
reports of condition at least annually, pursuant to law or to the requirements
of the aforesaid supervising or examining authority, then for the purposes of
this Section 9.06 the combined capital and surplus of such corporation shall be
deemed to be its total equity capital (combined capital and surplus) as set
forth in its most recent report of condition so published. In case at any time
the Trustee or the Securities Administrator shall cease to be eligible in
accordance with the provisions of this Section 9.06, the Trustee or the
Securities Administrator shall resign immediately in the manner and with the
effect specified in Section 9.08.
Section 9.07 Insurance. The Trustee and the Securities Administrator,
at their own expense, shall at all times maintain and keep in full force and
effect: (i) fidelity insurance, (ii) theft of documents insurance and (iii)
forgery insurance (which may be collectively satisfied by a "Financial
Institution Bond" and/or a "Bankers' Blanket Bond"). All such insurance shall be
in amounts, with standard coverage and subject to deductibles, as are customary
for insurance typically maintained by banks or their affiliates which act as
custodians for investor-owned mortgage pools. A certificate of an officer of the
Trustee or the Securities Administrator as to the Trustee's or the Securities
Administrator's, respectively, compliance with this Section 9.07 shall be
furnished to any Certificateholder upon reasonable written request.
Section 9.08 Resignation and Removal of the Trustee and Securities
Administrator. (a) The Trustee and the Securities Administrator may at any time
resign and be discharged from the Trust hereby created by giving written notice
thereof to the Seller and the Master Servicer, with a copy to the Rating
Agencies. Upon receiving such notice of resignation, the Seller shall promptly
appoint a successor Trustee or successor Securities Administrator, as
applicable, by written instrument, in triplicate, one copy of which instrument
shall be delivered to each of the resigning Trustee or Securities Administrator,
as applicable, the successor Trustee or Securities Administrator, as applicable.
If no successor Trustee or Securities Administrator shall have been so appointed
and have accepted appointment within 30 days after the giving of such notice of
resignation, the resigning Trustee or Securities Administrator may petition any
court of competent jurisdiction for the appointment of a successor Trustee or
Securities Administrator.
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(b) If at any time the Trustee or the Securities Administrator shall
cease to be eligible in accordance with the provisions of Section 9.06 and shall
fail to resign after written request therefor by the Seller or if at any time
the Trustee or the Securities Administrator shall become incapable of acting, or
shall be adjudged a bankrupt or insolvent, or a receiver of the Trustee or the
Securities Administrator, as applicable, or of its property shall be appointed,
or any public officer shall take charge or control of the Trustee or the
Securities Administrator, as applicable, or of its property or affairs for the
purpose of rehabilitation, conservation or liquidation, then the Seller shall
promptly remove the Trustee, or shall be entitled to remove the Securities
Administrator, as applicable, and appoint a successor Trustee or Securities
Administrator, as applicable, by written instrument, in triplicate, one copy of
which instrument shall be delivered to each of the Trustee or Securities
Administrator, as applicable, so removed, the successor Trustee or Securities
Administrator, as applicable.
(c) The Holders of Certificates evidencing Fractional Undivided
Interests aggregating not less than 51% of the Trust Fund may at any time remove
the Trustee or the Securities Administrator and appoint a successor Trustee or
Securities Administrator by written instrument or instruments, in quadruplicate,
signed by such Holders or their attorneys-in-fact duly authorized, one complete
set of which instruments shall be delivered to the Seller, the Master Servicer,
the Securities Administrator (if the Trustee is removed), the Trustee (if the
Securities Administrator is removed), and the Trustee or Securities
Administrator so removed and the successor so appointed.
(d) No resignation or removal of the Trustee or the Securities
Administrator and appointment of a successor Trustee or Securities Administrator
pursuant to any of the provisions of this Section 9.08 shall become effective
except upon appointment of and acceptance of such appointment by the successor
Trustee or Securities Administrator as provided in Section 9.09.
Section 9.09 Successor Trustee and Successor Securities Administrator.
(a) Any successor Trustee or Securities Administrator appointed as provided in
Section 9.08 shall execute, acknowledge and deliver to the Seller and to its
predecessor Trustee or Securities Administrator an instrument accepting such
appointment hereunder. The resignation or removal of the predecessor Trustee or
Securities Administrator shall then become effective and such successor Trustee
or Securities Administrator, without any further act, deed or conveyance, shall
become fully vested with all the rights, powers, duties and obligations of its
predecessor hereunder, with like effect as if originally named as Trustee or
Securities Administrator herein. The predecessor Trustee or Securities
Administrator shall after payment of its outstanding fees and expenses promptly
deliver to the successor Trustee or Securities Administrator, as applicable, all
assets and records of the Trust held by it hereunder, and the Seller and the
predecessor Trustee or Securities Administrator, as applicable, shall execute
and deliver such instruments and do such other things as may reasonably be
required for more fully and certainly vesting and confirming in the successor
Trustee or Securities Administrator, as applicable, all such rights, powers,
duties and obligations.
(b) No successor Trustee or Securities Administrator shall accept
appointment as provided in this Section 9.09 unless at the time of such
acceptance such successor Trustee or Securities Administrator shall be eligible
under the provisions of Section 9.06.
(c) Upon acceptance of appointment by a successor Trustee or Securities
Administrator as provided in this Section 9.09, the successor Trustee or
Securities Administrator shall mail notice of the succession of such Trustee or
Securities Administrator hereunder to all Certificateholders at their addresses
as shown in the Certificate Register and to the Rating Agencies. EMC shall pay
the cost of any mailing by the successor Trustee or Securities Administrator.
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Section 9.10 Merger or Consolidation of Trustee or Securities
Administrator. Any state bank or trust company or national banking association
into which the Trustee or the Securities Administrator may be merged or
converted or with which it may be consolidated or any state bank or trust
company or national banking association resulting from any merger, conversion or
consolidation to which the Trustee or the Securities Administrator,
respectively, shall be a party, or any state bank or trust company or national
banking association succeeding to all or substantially all of the corporate
trust business of the Trustee or the Securities Administrator, respectively,
shall be the successor of the Trustee or the Securities Administrator,
respectively, hereunder, provided such state bank or trust company or national
banking association shall be eligible under the provisions of Section 9.06. Such
succession shall be valid without the execution or filing of any paper or any
further act on the part of any of the parties hereto, anything herein to the
contrary notwithstanding.
Section 9.11 Appointment of Co-Trustee or Separate Trustee. (a)
Notwithstanding any other provisions hereof, at any time, for the purpose of
meeting any legal requirements of any jurisdiction in which any part of the
Trust or property constituting the same may at the time be located, the Seller
and the Trustee acting jointly shall have the power and shall execute and
deliver all instruments to appoint one or more Persons approved by the Trustee
and the Seller to act as co-trustee or co-trustees, jointly with the Trustee, or
separate trustee or separate trustees, of all or any part of the Trust, and to
vest in such Person or Persons, in such capacity, such title to the Trust, or
any part thereof, and, subject to the other provisions of this Section 9.11,
such powers, duties, obligations, rights and trusts as the Seller and the
Trustee may consider necessary or desirable.
(b) If the Seller shall not have joined in such appointment within 15
days after the receipt by it of a written request so to do, the Trustee shall
have the power to make such appointment without the Seller.
(c) No co-trustee or separate trustee hereunder shall be required to
meet the terms of eligibility as a successor Trustee under Section 9.06
hereunder and no notice to Certificateholders of the appointment of
co-trustee(s) or separate trustee(s) shall be required under Section 9.08
hereof.
(d) In the case of any appointment of a co-trustee or separate trustee
pursuant to this Section 9.11, all rights, powers, duties and obligations
conferred or imposed upon the Trustee and required to be conferred on such
co-trustee shall be conferred or imposed upon and exercised or performed by the
Trustee and such separate trustee or co-trustee jointly, except to the extent
that under any law of any jurisdiction in which any particular act or acts are
to be performed (whether as Trustee hereunder or as successor to the Master
Servicer hereunder), the Trustee shall be incompetent or unqualified to perform
such act or acts, in which event such rights, powers, duties and obligations
(including the holding of title to the Trust or any portion thereof in any such
jurisdiction) shall be exercised and performed by such separate trustee or
co-trustee at the direction of the Trustee.
(e) Any notice, request or other writing given to the Trustee shall be
deemed to have been given to each of the then separate trustees and co-trustees,
as effectively as if given to each of them. Every instrument appointing any
separate trustee or co-trustee shall refer to this Agreement and the conditions
of this Article IX. Each separate trustee and co-trustee, upon its acceptance of
the trusts conferred, shall be vested with the estates or property specified in
its instrument of appointment, either jointly with the Trustee or separately, as
may be provided therein, subject to all the provisions of this Agreement,
specifically including every provision of this Agreement relating to the conduct
of, affecting the liability of, or affording protection to, the Trustee. Every
such instrument shall be filed with the Trustee.
(f) To the extent not prohibited by law, any separate trustee or
co-trustee may, at any time, request the Trustee, its agent or attorney-in-fact,
with full power and authority, to do any lawful act under or with respect to
this Agreement on its behalf and in its name. If any separate trustee or
co-trustee shall die, become incapable of acting,
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resign or be removed, all of its estates, properties rights, remedies and trusts
shall vest in and be exercised by the Trustee, to the extent permitted by law,
without the appointment of a new or successor Trustee.
(g) No trustee under this Agreement shall be personally liable by
reason of any act or omission of another trustee under this Agreement. The
Seller and the Trustee acting jointly may at any time accept the resignation of
or remove any separate trustee or co-trustee.
Section 9.12 Federal Information Returns and Reports to
Certificateholders; REMIC Administration. (a) For federal income tax purposes,
the taxable year of each of REMIC I, REMIC II and REMIC III shall be a calendar
year and the Securities Administrator shall maintain or cause the maintenance of
the books of each such REMIC on the accrual method of accounting.
(b) The Securities Administrator shall prepare and file or cause to be
filed with the Internal Revenue Service, and the Trustee shall sign, Federal tax
information returns or elections required to be made hereunder with respect to
each of REMIC I, REMIC II and REMIC III, the Trust Fund, if applicable, and the
Certificates containing such information and at the times and in the manner as
may be required by the Code or applicable Treasury regulations, and shall
furnish to each Holder of Certificates at any time during the calendar year for
which such returns or reports are made such statements or information at the
times and in the manner as may be required thereby, including, without
limitation, reports relating to interest, original issue discount and market
discount or premium (using a constant prepayment assumption of 25% CPR). The
Securities Administrator will apply for an Employee Identification Number from
the IRS under Form SS-4 or any other acceptable method for all tax entities. In
connection with the foregoing, the Securities Administrator shall timely prepare
and file, and the Trustee shall sign, IRS Form 8811, which shall provide the
name and address of the person who can be contacted to obtain information
required to be reported to the holders of regular interests in each of REMIC I,
REMIC II and REMIC III (the "REMIC Reporting Agent"). The Trustee shall make
elections to treat each of REMIC I, REMIC II and REMIC III as a REMIC (which
elections shall apply to the taxable period ending December 31, 2002 and each
calendar year thereafter) in such manner as the Code or applicable Treasury
regulations may prescribe, and as described by the Securities Administrator. The
Trustee shall sign all tax information returns filed pursuant to this Section
and any other returns as may be required by the Code. The Holder of the Class
R-I Certificate is hereby designated as the "Tax Matters Person" (within the
meaning of Treas. Reg. Sections 1.860F-4(d)) for REMIC I, the Holder of the
Class R-II Certificate is hereby designated as the "Tax Matters Person" for
REMIC II and the Holder of the Class R-III Certificate is hereby designated as
the "Tax Matters Person" for REMIC III. Any Holder of a Residual Certificate
will by acceptance thereof appoint the Securities Administrator as agent and
attorney-in-fact for the purpose of acting as Tax Matters Person for each of
REMIC I, REMIC II and REMIC III during such time as the Securities Administrator
does not own any such Residual Certificate. In the event that the Code or
applicable Treasury regulations prohibit the Trustee from signing tax or
information returns or other statements, or the Securities Administrator from
acting as agent for the Tax Matters Person, the Trustee and the Securities
Administrator shall take whatever action that in its sole good faith judgment is
necessary for the proper filing of such information returns or for the provision
of a tax matters person, including designation of the Holder of a Residual
Certificate to sign such returns or act as tax matters person. Each Holder of a
Residual Certificate shall be bound by this Section.
(c) The Securities Administrator shall provide upon request and receipt
of reasonable compensation, such information as required in Section
860D(a)(6)(B) of the Code to the Internal Revenue Service, to any Person
purporting to transfer a Residual Certificate to a Person other than a
transferee permitted by Section 5.05(b), and to any regulated investment
company, real estate investment trust, common trust fund, partnership, trust,
estate, organization described in Section 1381 of the Code, or nominee holding
an interest in a pass-through entity described in Section 860E(e)(6) of the
Code, any record holder of which is not a transferee permitted by Section
5.05(b) (or which is deemed by statute to be an entity with a disqualified
member).
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(d) The Securities Administrator shall prepare and file or cause to be
filed, and the Trustee shall sign, any state income tax returns required under
Applicable State Law with respect to each of REMIC I, REMIC II and REMIC III or
the Trust Fund.
(e) Notwithstanding any other provision of this Agreement, the Trustee
and the Securities Administrator shall comply with all federal withholding
requirements respecting payments to Certificateholders of interest or original
issue discount on the Mortgage Loans, that the Trustee or the Securities
Administrator reasonably believes are applicable under the Code. The consent of
Certificateholders shall not be required for such withholding. In the event the
Trustee or the Securities Administrator withholds any amount from interest or
original issue discount payments or advances thereof to any Certificateholder
pursuant to federal withholding requirements, the Trustee or the Securities
Administrator shall, together with its monthly report to such
Certificateholders, indicate such amount withheld.
(f) The Trustee and the Securities Administrator agree to indemnify the
Trust Fund and the Seller for any taxes and costs including, without limitation,
any reasonable attorneys fees imposed on or incurred by the Trust Fund, the
Seller or the Master Servicer, as a result of a breach of the Trustee's
covenants and the Securities Administrator's covenants, respectively, set forth
in this Section 9.12; provided, however, such liability and obligation to
indemnify in this paragraph shall not be joint and several and neither the
Trustee nor the Securities Administrator shall be liable or be obligated to
indemnify the Trust Fund for the failure by the other to perform any duty under
this Agreement or the breach by the other of any covenant in this Agreement.
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ARTICLE X
Termination
Xxxxxxx 00.00 Xxxxxxxxxxx Xxxx Xxxxxxxxxx by the Seller or its Designee
or Liquidation of the Mortgage Loans.
(a) Subject to Section 10.03, the respective obligations and
responsibilities of the Seller, the Trustee, the Master Servicer and the
Securities Administrator created hereby, other than the obligation of the
Trustee to make payments to Certificateholders as hereinafter set forth shall
terminate upon:
(i) the repurchase by or at the direction of the Seller or its
designee of all Group I Mortgage Loans and all related REO
Property or the repurchase by or at the direction of the
Seller or its designee of all Group II Mortgage Loans and all
related REO Property remaining in the Trust at a price equal
to (a) 100% of the Outstanding Principal Balance of each
Mortgage Loan (other than a Mortgage Loan related to REO
Property) as of the date of repurchase, net of the principal
portion of any unreimbursed Monthly Advances made by the
purchaser, together with interest at the applicable Mortgage
Interest Rate accrued but unpaid to, but not including, the
first day of the month of repurchase, plus (b) the appraised
value of any related REO Property, less the good faith
estimate of the Seller of liquidation expenses to be incurred
in connection with its disposal thereof (but not more than the
Outstanding Principal Balance of the related Mortgage Loan,
together with interest at the applicable Mortgage Interest
Rate accrued on that balance but unpaid to, but not including,
the first day of the month of repurchase), such appraisal to
be calculated by an appraiser mutually agreed upon by the
Seller and the Trustee at the expense of the Seller; or
(ii) the later of the making of the final payment or other
liquidation, or any advance with respect thereto, of the last
Group I or Group II Mortgage Loan, as applicable, remaining in
the Trust Fund or the disposition of all property acquired
with respect to any Group I or Group II Mortgage Loan;
provided, however, that in the event that an advance has been
made, but not yet recovered, at the time of such termination,
the Person having made such advance shall be entitled to
receive, notwithstanding such termination, any payments
received subsequent thereto with respect to which such advance
was made; or
(iii) the payment to Certificateholders of all amounts required to
be paid to them pursuant to this Agreement.
(b) In no event, however, shall the Trust created hereby continue
beyond the expiration of 21 years from the death of the last survivor of the
descendants of Xxxxxx X. Xxxxxxx, the late Ambassador of the United States to
the Court of St. James's, living on the date of this Agreement.
(c) (i) The right of the Seller or its designee to repurchase all the
assets of the Trust Fund relating to the Group I Mortgage Loans described in
Subsection 10.01(a)(i) above is conditioned upon the date of such purchase
occurring on or after the Group I Optional Termination Date. The Seller or its
designee may repurchase all the assets of the Trust Fund relating to the Group I
Mortgage Loans if the Seller, based upon an Opinion of Counsel, has determined
that the REMIC status of the REMIC I has been lost or that a substantial risk
exists that such REMIC status will be lost for the then-current taxable year.
(ii) The right of the Seller or its designee to repurchase all the assets of the
Trust Fund relating to the Group II Mortgage Loans described in Subsection
10.01(a)(i) above is conditioned upon the date of such purchase occurring on or
after the Group II Optional Termination Date. The Seller or its designee may
repurchase all the assets of the Trust Fund relating to the Group II Mortgage
Loans if the Seller,
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based upon an Opinion of Counsel, has determined that the REMIC status of the
REMIC II has been lost or that a substantial risk exists that such REMIC status
will be lost for the then-current taxable year. (iii) At any time thereafter, in
the case of a repurchase as described in this Subsection 10.01(c), the Seller
may elect to terminate REMIC I, REMIC II and REMIC III at any time, and upon
such election, the Seller or its designee, shall repurchase all the assets of
the Trust Fund described in Subsection 10.01(a)(i) above.
(d) The Trustee shall give notice of any termination to the
Certificateholders, with a copy to the Master Servicer, the Securities
Administrator and the Rating Agencies, upon which the Certificateholders shall
surrender their Certificates to the Trustee for payment of the final
distribution and cancellation. Such notice shall be given by letter, mailed not
earlier than the l5th day and not later than the 25th day of the month next
preceding the month of such final distribution, and shall specify (i) the
Distribution Date upon which final payment of the Certificates will be made upon
presentation and surrender of the Certificates at the office of the Trustee
therein designated, (ii) the amount of any such final payment and (iii) that the
Record Date otherwise applicable to such Distribution Date is not applicable,
payments being made only upon presentation and surrender of the Certificates at
the office of the Trustee therein specified.
(e) If the option of the Seller to repurchase or cause the repurchase
of all the assets in the Trust Fund for a related Mortgage Loan Group as
described Subsection 10.01(a)(i) above is exercised, the Seller and/or its
designee shall deliver to the Trustee for deposit in the Distribution Account,
by the Business Day prior to the applicable Distribution Date, an amount equal
to the repurchase price for the Mortgage Loans being purchased by it and all
property acquired with respect to such Mortgage Loans remaining in REMIC I or
REMIC II, as applicable. Upon presentation and surrender of the Certificates by
the Certificateholders, the Trustee shall distribute to the Certificateholders
an amount determined as follows: with respect to each Certificate (other than
the Class R Certificates), the outstanding Current Principal Amount, plus with
respect to each Certificate (other than the Class R Certificates), one month's
interest thereon at the applicable Pass-Through Rate; and with respect to the
Class R Certificates, the percentage interest evidenced thereby multiplied by
the difference, if any, between the above described repurchase price and the
aggregate amount to be distributed to the Holders of the Certificates (other
than the Class R Certificates). If the proceeds with respect to the Group I
Mortgage Loans are not sufficient to pay all of the Group I Certificates in
full, any such deficiency will be allocated first, to the Group I Subordinate
Certificates, in inverse order of their numerical designation, second to the
Group I Senior Mezzanine Certificates, and then to the Group I Senior
Certificates. If the proceeds with respect to the Group II Mortgage Loans are
not sufficient to pay all of the Group II Certificates in full, any such
deficiency will be allocated first, to the Subordinate Certificates, in inverse
order of their numerical designation, and then to the Group II Senior
Certificates. If the proceeds with respect to the Group II Mortgage Loans are
not sufficient to pay all of the Group II Certificates in full, any such
deficiency will be allocated first, to the Group II Subordinate Certificates, in
inverse order of their numerical designation, and then to the Group II Senior
Certificates on a pro rata basis. Upon deposit of the required repurchase price
and following such final Distribution Date, the Trustee shall release promptly
to the Seller and/or its designee the Mortgage Files for the remaining
applicable Mortgage Loans, and the Accounts with respect thereto shall
terminate, subject to the Trustee's obligation to hold any amounts payable to
Certificateholders in trust without interest pending final distributions
pursuant to Subsection 10.01(g). Any other amounts remaining in the Accounts
will belong to the Seller. Upon deposit of the required repurchase price and
following such final Distribution Date, the Trustee shall release promptly to
the Seller and/or its designee, as the case may be, the Mortgage Files for the
remaining Mortgage Loans, and the Accounts with respect thereto shall terminate,
subject to the Trustee's obligation to hold any amounts payable to
Certificateholders in trust without interest pending final distributions
pursuant to Subsection 10.01(g).
(f) In the event that this Agreement is terminated by reason of the
payment or liquidation of all Mortgage Loans or the disposition of all property
acquired with respect to all Mortgage Loans under Subsection 10.01(a)(ii) above,
the Master Servicer shall deliver to the Trustee for deposit in the Distribution
Account all distributable
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amounts remaining in the Master Servicer Collection Account. Upon the
presentation and surrender of the Certificates, the Trustee shall distribute to
the remaining Certificateholders, in accordance with their respective interests,
all distributable amounts remaining in the Distribution Account. Upon deposit by
the Master Servicer of such distributable amounts, and following such final
Distribution Date, the Trustee shall release promptly to the Seller or its
designee the Mortgage Files for the remaining Mortgage Loans, and the Master
Servicer Collection Account and the Distribution Account shall terminate,
subject to the Trustee's obligation to hold any amounts payable to the
Certificateholders in trust without interest pending final distributions
pursuant to this Subsection 10.01(g).
(g) If not all of the Certificateholders shall surrender their
Certificates for cancellation within six months after the time specified in the
above-mentioned written notice, the Trustee shall give a second written notice
to the remaining Certificateholders to surrender their Certificates for
cancellation and receive the final distribution with respect thereto. If within
six months after the second notice, not all the Certificates shall have been
surrendered for cancellation, the Trustee may take appropriate steps, or appoint
any agent to take appropriate steps, to contact the remaining Certificateholders
concerning surrender of their Certificates, and the cost thereof shall be paid
out of the funds and other assets which remain subject to this Agreement.
Section 10.02 Additional Termination Requirements. (a) If the option of
the Seller to repurchase (i) all the Group I Mortgage Loans, (ii) all of the
Group II Mortgage Loans or (iii) all of the Mortgage Loans under Subsection
10.01(a)(i) above is exercised, (i) REMIC I, (ii) REMIC II, or (iii) the Trust
Fund and each of REMIC I, REMIC II and REMIC III shall be terminated in
accordance with the following additional requirements, unless the Trustee has
been furnished with an Opinion of Counsel to the effect that the failure of the
Trust to comply with the requirements of this Section 10.02 will not (i) result
in the imposition of taxes on "prohibited transactions" as defined in Section
860F of the Code on REMIC I, REMIC II or REMIC III or (ii) cause any REMIC to
fail to qualify as a REMIC at any time that any Regular Certificates are
outstanding:
(i) within 90 days prior to the final Distribution Date, at the
written direction of the Seller, the Trustee, as agent for the
respective Tax Matters Persons, shall adopt a plan of complete
liquidation of REMIC I, REMIC II and REMIC III in the case of
a termination under Subsection 10.01(a)(i), or a plan of
complete liquidation of REMIC I in the case of a termination
under Subsection 10.01(c)(i), or a plan of complete
liquidation of REMIC II in the case of a termination under
Subsection 10.01(c)(ii), provided to it by the Seller meeting
the requirements of a "qualified liquidation" under Section
860F of the Code and any regulations thereunder.
(ii) the Seller shall notify the Trustee at the commencement of
such 90-day liquidation period and, at or prior to the time of
making of the final payment on the Certificates, the Trustee
shall sell or otherwise dispose of all of the remaining assets
of the Trust Fund in accordance with the terms hereof; and
(iii) at or after the time of adoption of such a plan of complete
liquidation of any of REMIC I or REMIC II or REMIC I and REMIC
II and REMIC III and at or prior to the final Distribution
Date relating thereto, the Trustee shall sell for cash all of
the assets of the Trust to or at the direction of the Seller,
and REMIC I, REMIC II and REMIC III, as applicable, shall
terminate at such time.
(b) By their acceptance of the Residual Certificates, the Holders
thereof hereby (i) agree to adopt such a plan of complete liquidation of the
related REMIC upon the written request of the Seller, and to take such action in
connection therewith as may be reasonably requested by the Seller and (ii)
appoint the Seller as their
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attorney-in-fact, with full power of substitution, for purposes of adopting such
a plan of complete liquidation. The Trustee shall adopt such plan of liquidation
by filing the appropriate statement on the final tax return of each REMIC, as
applicable. Upon complete liquidation or final distribution of all of the assets
of the Trust Fund, the Trust Fund and each of REMIC I, REMIC II and REMIC III
shall terminate.
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ARTICLE XI
Miscellaneous Provisions
Section 11.01 Intent of Parties. The parties intend that each of REMIC
I, REMIC II and REMIC III shall be treated as a REMIC for federal income tax
purposes and that the provisions of this Agreement should be construed in
furtherance of this intent.
Section 11.02 Amendment. (a) This Agreement may be amended from time to
time by EMC, the Seller, the Master Servicer, the Securities Administrator and
the Trustee, and the Servicing Agreements may be amended from time to time by
EMC, the Master Servicer and the Trustee, without notice to or the consent of
any of the Certificateholders, to cure any ambiguity, to correct or supplement
any provisions herein or therein that may be defective or inconsistent with any
other provisions herein or therein, to comply with any changes in the Code or to
make any other provisions with respect to matters or questions arising under
this Agreement which shall not be inconsistent with the provisions of this
Agreement; provided, however, that such action shall not, as evidenced by an
Opinion of Independent Counsel, addressed to the Trustee, adversely affect in
any material respect the interests of any Certificateholder.
(b) This Agreement may also be amended from time to time by EMC, the
Master Servicer, the Seller, the Securities Administrator and the Trustee, and
the Servicing Agreements may also be amended from time to time by the Master
Servicer and the Trustee, with the consent of the Holders of Certificates
evidencing Fractional Undivided Interests aggregating not less than 51% of the
Trust Fund or of the applicable Class or Classes, if such amendment affects only
such Class or Classes, for the purpose of adding any provisions to or changing
in any manner or eliminating any of the provisions of this Agreement or of
modifying in any manner the rights of the Certificateholders; provided, however,
that no such amendment shall (i) reduce in any manner the amount of, or delay
the timing of, payments received on Mortgage Loans which are required to be
distributed on any Certificate without the consent of the Holder of such
Certificate, (ii) reduce the aforesaid percentage of Certificates the Holders of
which are required to consent to any such amendment, without the consent of the
Holders of all Certificates then outstanding, or (iii) cause REMIC I, REMIC II
or REMIC III to fail to qualify as a REMIC for federal income tax purposes, as
evidenced by an Opinion of Independent Counsel which shall be provided to the
Trustee other than at the Trustee's expense. Notwithstanding any other provision
of this Agreement, for purposes of the giving or withholding of consents
pursuant to Section 11.02(b), Certificates registered in the name of or held for
the benefit of the Seller, the Securities Administrator, the Master Servicer, or
the Trustee or any Affiliate thereof shall be entitled to vote their Fractional
Undivided Interests with respect to matters affecting such Certificates.
(c) Promptly after the execution of any such amendment, the Trustee
shall furnish a copy of such amendment or written notification of the substance
of such amendment to each Certificateholder, with a copy to the Rating Agencies.
(d) In the case of an amendment under Subsection 11.02(b) above, it
shall not be necessary for the Certificateholders to approve the particular form
of such an amendment. Rather, it shall be sufficient if the Certificateholders
approve the substance of the amendment. The manner of obtaining such consents
and of evidencing the authorization of the execution thereof by
Certificateholders shall be subject to such reasonable regulations as the
Trustee may prescribe.
(e) Prior to the execution of any amendment to this Agreement, the
Trustee shall be entitled to receive and rely upon an Opinion of Counsel stating
that the execution of such amendment is authorized or permitted by this
Agreement. The Trustee and the Securities Administrator may, but shall not be
obligated to, enter into any such amendment which affects the Trustee's or the
Securities Administrator's own respective rights, duties or immunities under
this Agreement.
-106-
Section 11.03 Recordation of Agreement. To the extent permitted by
applicable law, this Agreement is subject to recordation in all appropriate
public offices for real property records in all the counties or other comparable
jurisdictions in which any or all of the Mortgaged Properties are situated, and
in any other appropriate public recording office or elsewhere. The Seller shall
effect such recordation, at the expense of the Trust upon the request in writing
of a Certificateholder, but only if such direction is accompanied by an Opinion
of Counsel (provided at the expense of the Certificateholder requesting
recordation) to the effect that such recordation would materially and
beneficially affect the interests of the Certificateholders or is required by
law.
Section 11.04 Limitation on Rights of Certificateholders. (a) The death
or incapacity of any Certificateholder shall not terminate this Agreement or the
Trust, nor entitle such Certificateholder's legal representatives or heirs to
claim an accounting or to take any action or proceeding in any court for a
partition or winding up of the Trust, nor otherwise affect the rights,
obligations and liabilities of the parties hereto or any of them.
(b) Except as expressly provided in this Agreement, no
Certificateholders shall have any right to vote or in any manner otherwise
control the operation and management of the Trust, or the obligations of the
parties hereto, nor shall anything herein set forth, or contained in the terms
of the Certificates, be construed so as to establish the Certificateholders from
time to time as partners or members of an association; nor shall any
Certificateholders be under any liability to any third Person by reason of any
action taken by the parties to this Agreement pursuant to any provision hereof.
(c) No Certificateholder shall have any right by virtue of any
provision of this Agreement to institute any suit, action or proceeding in
equity or at law upon, under or with respect to this Agreement against the
Seller, the Securities Administrator, the Master Servicer or any successor to
any such parties unless (i) such Certificateholder previously shall have given
to the Trustee a written notice of a continuing default, as herein provided,
(ii) the Holders of Certificates evidencing Fractional Undivided Interests
aggregating not less than 51% of the Trust Fund shall have made written request
upon the Trustee to institute such action, suit or proceeding in its own name as
Trustee hereunder and shall have offered to the Trustee such reasonable
indemnity as it may require against the costs and expenses and liabilities to be
incurred therein or thereby, and (iii) the Trustee, for 60 days after its
receipt of such notice, request and offer of indemnity, shall have neglected or
refused to institute any such action, suit or proceeding.
(d) No one or more Certificateholders shall have any right by virtue of
any provision of this Agreement to affect the rights of any other
Certificateholders or to obtain or seek to obtain priority or preference over
any other such Certificateholder, or to enforce any right under this Agreement,
except in the manner herein provided and for the equal, ratable and common
benefit of all Certificateholders. For the protection and enforcement of the
provisions of this Section 11.04, each and every Certificateholder and the
Trustee shall be entitled to such relief as can be given either at law or in
equity.
Section 11.05 Acts of Certificateholders. (a) Any request, demand,
authorization, direction, notice, consent, waiver or other action provided by
this Agreement to be given or taken by Certificateholders may be embodied in and
evidenced by one or more instruments of substantially similar tenor signed by
such Certificateholders in person or by an agent duly appointed in writing.
Except as herein otherwise expressly provided, such action shall become
effective when such instrument or instruments are delivered to the Trustee and,
where it is expressly required, to the Seller. Proof of execution of any such
instrument or of a writing appointing any such agent shall be sufficient for any
purpose of this Agreement and conclusive in favor of the Trustee and the Seller,
if made in the manner provided in this Section 11.05.
-107-
(b) The fact and date of the execution by any Person of any such
instrument or writing may be proved by the affidavit of a witness of such
execution or by a certificate of a notary public or other officer authorized by
law to take acknowledgments of deeds, certifying that the individual signing
such instrument or writing acknowledged to him the execution thereof. Where such
execution is by a signer acting in a capacity other than his or her individual
capacity, such certificate or affidavit shall also constitute sufficient proof
of his or her authority. The fact and date of the execution of any such
instrument or writing, or the authority of the individual executing the same,
may also be proved in any other manner which the Trustee deems sufficient.
(c) The ownership of Certificates (notwithstanding any notation of
ownership or other writing on such Certificates, except an endorsement in
accordance with Section 5.02 made on a Certificate presented in accordance with
Section 5.04) shall be proved by the Certificate Register, and neither the
Trustee, the Securities Administrator, the Seller, the Master Servicer nor any
successor to any such parties shall be affected by any notice to the contrary.
(d) Any request, demand, authorization, direction, notice, consent,
waiver or other action of the holder of any Certificate shall bind every future
holder of the same Certificate and the holder of every Certificate issued upon
the registration of transfer or exchange thereof, if applicable, or in lieu
thereof with respect to anything done, omitted or suffered to be done by the
Trustee, the Securities Administrator, the Seller, the Master Servicer or any
successor to any such party in reliance thereon, whether or not notation of such
action is made upon such Certificates.
(e) In determining whether the Holders of the requisite percentage of
Certificates evidencing Fractional Undivided Interests have given any request,
demand, authorization, direction, notice, consent or waiver hereunder,
Certificates owned by the Trustee, the Securities Administrator, the Seller, the
Master Servicer or any Affiliate thereof shall be disregarded, except as
otherwise provided in Section 11.02(b) and except that, in determining whether
the Trustee shall be protected in relying upon any such request, demand,
authorization, direction, notice, consent or waiver, only Certificates which the
Trustee knows to be so owned shall be so disregarded. Certificates which have
been pledged in good faith to the Trustee, the Securities Administrator, the
Seller, the Master Servicer or any Affiliate thereof may be regarded as
outstanding if the pledgor establishes to the satisfaction of the Trustee the
pledgor's right to act with respect to such Certificates and that the pledgor is
not an Affiliate of the Trustee, the Securities Administrator, the Seller, or
the Master Servicer, as the case may be.
Section 11.06 Governing Law. THIS AGREEMENT AND THE CERTIFICATES SHALL
BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT
REFERENCE TO ITS CONFLICT OF LAWS RULES AND THE OBLIGATIONS, RIGHTS AND REMEDIES
OF THE PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.
Section 11.07 Notices. All demands and notices hereunder shall be in
writing and shall be deemed given when delivered at (including delivery by
facsimile) or mailed by registered mail, return receipt requested, postage
prepaid, or by recognized overnight courier, to (i) in the case of the Seller,
000 Xxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Vice
President-Servicing, telecopier number: (000) 000-0000, or to such other address
as may hereafter be furnished to the other parties hereto in writing; (ii) in
the case of the Trustee, at its Corporate Trust Office, or such other address as
may hereafter be furnished to the other parties hereto in writing; (iii) in the
case of the EMC, 000 Xxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Vice
President-Servicing, telecopier number: (000) 000-0000, or to such other address
as may hereafter be furnished to the other parties hereto in writing; (iv) in
the case of the Master Servicer or Securities Administrator, Xxxxx Fargo Bank
Minnesota, National Association, X.X. Xxx 00, Xxxxxxxx Xxxxxxxx 00000 (or, in
the case of overnight deliveries, 0000 Xxx Xxxxxxxxx Xxxx, Xxxxxxxx, Xxxxxxxx
00000) (Attention: BART 2002-11), facsimile no.: (000) 000-0000, or such other
address as may hereafter be furnished to the other parties hereto in writing; or
(v) in the case of the Rating Agencies, Xxxxx'x Investors Service, Inc., 00
Xxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, and Standard & Poor's, a division
-108-
of The XxXxxx-Xxxx Companies, Inc., 00 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000.
Any notice delivered to the Seller, the Master Servicer, the Securities
Administrator or the Trustee under this Agreement shall be effective only upon
receipt. Any notice required or permitted to be mailed to a Certificateholder,
unless otherwise provided herein, shall be given by first-class mail, postage
prepaid, at the address of such Certificateholder as shown in the Certificate
Register. Any notice so mailed within the time prescribed in this Agreement
shall be conclusively presumed to have been duly given when mailed, whether or
not the Certificateholder receives such notice.
Section 11.08 Severability of Provisions. If any one or more of the
covenants, agreements, provisions or terms of this Agreement shall be for any
reason whatsoever held invalid, then such covenants, agreements, provisions or
terms shall be deemed severed from the remaining covenants, agreements,
provisions or terms of this Agreement and shall in no way affect the validity or
enforceability of the other provisions of this Agreement or of the Certificates
or the rights of the holders thereof.
Section 11.09 Successors and Assigns. The provisions of this Agreement
shall be binding upon and inure to the benefit of the respective successors and
assigns of the parties hereto.
Section 11.10 Article and Section Headings. The article and section
headings herein are for convenience of reference only, and shall not limit or
otherwise affect the meaning hereof.
Section 11.11 Counterparts. This Agreement may be executed in two or
more counterparts each of which when so executed and delivered shall be an
original but all of which together shall constitute one and the same instrument.
Section 11.12 Notice to Rating Agencies. The article and section
headings herein are for convenience of reference only, and shall not limited or
otherwise affect the meaning hereof. The Trustee shall promptly provide notice
to each Rating Agency with respect to each of the following of which it has
actual knowledge:
1. Any material change or amendment to this Agreement or the
Servicing Agreements;
2. The occurrence of any Event of Default that has not been
cured;
3. The resignation or termination of the Master Servicer, the
Trustee or the Securities Administrator;
4. The repurchase or substitution of Mortgage Loans;
5. The final payment to Certificateholders; and
6. Any change in the location of the Master Servicer Collection
Account or the Distribution Account.
-109-
IN WITNESS WHEREOF, the Seller, the Trustee, the Master Servicer and
the Securities Administrator have caused their names to be signed hereto by
their respective officers thereunto duly authorized as of the day and year first
above written.
STRUCTURED ASSET MORTGAGE
INVESTMENTS INC., as Seller
By:/s/ Xxxxx Xxxxxxxxxxx
-----------------------------
Name: Xxxxx Xxxxxxxxxxx
Title: Vice President
BANK ONE, NATIONAL ASSOCIATION,
as Trustee
By: /s/ Xxxxxx Xxxxxx
-----------------------------
Name: Xxxxxx Xxxxxx
Title: Vice President
XXXXX FARGO BANK MINNESOTA,
NATIONAL ASSOCIATION, as Master
Servicer
By: /s/ Xxxxxx Xxxxxxxxxx
-----------------------------
Name: Xxxxxx Xxxxxxxxxx
Title: Assistant Vice President
XXXXX FARGO BANK MINNESOTA,
NATIONAL ASSOCIATION, as
Securities Administrator
By: /s/ Xxxxxx Xxxxxxxxxx
-----------------------------
Name: Xxxxxx Xxxxxxxxxx
Title: Assistant Vice President
EMC MORTGAGE CORPORATION
By: /s/ Xxxxxx Xxxxx
-----------------------------
Name: Xxxxxx Xxxxx
Title: President
Accepted and Agreed as to
Sections 2.01, 2.02, 2.03, 2.04 and 9.09(c)
in its capacity as Mortgage Loan Seller
EMC MORTGAGE CORPORATION
By: /s/ Xxxxxx Xxxxx
-----------------------------
Name: Xxxxxx Xxxxx
Title: President
STATE OF NEW YORK )
) ss.:
COUNTY OF NEW YORK )
On the 30th day of December, 2002 before me, a notary public in and for
said State, personally appeared Xxxxx Xxxxxxxxxxx, known to me to be a Vice
President of Structured Asset Mortgage Investments Inc., the corporation that
executed the within instrument, and also known to me to be the person who
executed it on behalf of said corporation, and acknowledged to me that such
corporation executed the within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official
seal the day and year in this certificate first above written.
-------------------------
Notary Public
[Notarial Seal]
STATE OF NEW YORK )
) ss.:
COUNTY OF NEW YORK )
On the 30th day of December, 2002 before me, a notary public in and for
said State, personally appeared Xxxxxx Xxxxxx, known to me to be an Authorized
Officer of Bank One, National Association, the entity that executed the within
instrument, and also known to me to be the person who executed it on behalf of
said entity, and acknowledged to me that such entity executed the within
instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official
seal the day and year in this certificate first above written.
-------------------------
Notary Public
[Notarial Seal]
STATE OF MARYLAND )
) ss.:
COUNTY OF XXXXXX )
On the 30th day of December, 2002 before me, a notary public in and for
said State, personally appeared Xxxxxx Xxxxxxxxxx, known to me to be an
Assistant Vice President of Xxxxx Fargo Bank Minnesota, National Association,
the entity that executed the within instrument, and also known to me to be the
person who executed it on behalf of said entity, and acknowledged to me that
such entity executed the within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official
seal the day and year in this certificate first above written.
-------------------------
Notary Public
[Notarial Seal]
STATE OF MARYLAND )
) ss.:
COUNTY OF XXXXXX )
On the 30th day of December, 2002 before me, a notary public in and for
said State, personally appeared Xxxxxx Xxxxxxxxxx, known to me to be an
Assistant Vice President of Xxxxx Fargo Bank Minnesota, National Association,
the entity that executed the within instrument, and also known to me to be the
person who executed it on behalf of said entity, and acknowledged to me that
such entity executed the within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official
seal the day and year in this certificate first above written.
-------------------------
Notary Public
[Notarial Seal]
STATE OF TEXAS )
) ss.:
COUNTY OF DALLAS )
On the 30th day of December, 2002 before me, a notary public in and for
said State, personally appeared Xxxxxx Xxxxx, known to me to be President of EMC
Mortgage Corporation, the corporation that executed the within instrument, and
also known to me to be the person who executed it on behalf of said corporation,
and acknowledged to me that such corporation executed the within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official
seal the day and year in this certificate first above written.
-------------------------
Notary Public
[Notarial Seal]
STATE OF TEXAS )
) ss.:
COUNTY OF DALLAS )
On the 30th day of December, 2002 before me, a notary public in and for
said State, personally appeared Xxxxxx Xxxxx, known to me to be President of EMC
Mortgage Corporation, the corporation that executed the within instrument, and
also known to me to be the person who executed it on behalf of said corporation,
and acknowledged to me that such corporation executed the within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official
seal the day and year in this certificate first above written.
-------------------------
Notary Public
[Notarial Seal]
EXHIBIT A-1
FORM OF CLASS [_-A-__][I-M-1] CERTIFICATE
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A
"REGULAR INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT," AS THOSE
TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL
REVENUE CODE OF 1986 (THE "CODE").
THE CURRENT PRINCIPAL AMOUNT OF THIS CERTIFICATE WILL BE DECREASED BY
THE PRINCIPAL PAYMENTS [HEREON][ON THE CLASS I-M-1 CERTIFICATES] AND REALIZED
LOSSES ALLOCABLE [HERETO][THERETO]. ACCORDINGLY, FOLLOWING THE INITIAL ISSUANCE
OF THE CERTIFICATES, THE CURRENT PRINCIPAL AMOUNT OF THIS CERTIFICATE WILL BE
DIFFERENT FROM THE DENOMINATION SHOWN BELOW. ANYONE ACQUIRING THIS CERTIFICATE
MAY ASCERTAIN ITS CURRENT PRINCIPAL AMOUNT BY INQUIRY OF THE TRUSTEE NAMED
HEREIN.
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF
THE DEPOSITORY TRUST COMPANY TO THE TRUSTEE OR ITS AGENT FOR REGISTRATION OF
TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED WILL BE REGISTERED IN
THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY AND ANY PAYMENT WILL BE MADE TO
CEDE & CO., ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY
OR TO ANY PERSON IS WRONGFUL SINCE THE REGISTERED OWNER HEREOF, CEDE & CO., HAS
AN INTEREST HEREIN.
Certificate No.1 [Variable][____%] Pass-Through Rate
Class [__-A-__][I-M-1] Senior
Date of Pooling and Servicing Aggregate Initial Current Principal Amount
Agreement and Cut-off Date: of this Senior Certificate as of the
December 1, 2002 Cut-off Date: $[________________]
First Distribution Date: Initial Current Principal Amount of
January 25, 2002 this Senior Certificate as of the
Cut-off Date: $[________________]
Master Servicer:
Xxxxx Fargo Bank Minnesota,
National Association CUSIP: [________________]
Assumed Final Distribution Date:
January 25, 2033
BEAR XXXXXXX ARM TRUST 2002-11
MORTGAGE PASS-THROUGH CERTIFICATE
SERIES 2002-11
evidencing a fractional undivided interest in the distributions
allocable to the Class [__-A-__][I-M-1] Certificates with respect to a
Trust Fund consisting primarily of a pool of adjustable interest rate
mortgage loans secured by first liens on one-to-four family residential
properties and sold by STRUCTURED ASSET MORTGAGE INVESTMENTS INC.
This Certificate is payable solely from the assets of the Trust Fund,
and does not represent an obligation of or interest in Structured Asset Mortgage
Investments Inc., the Master Servicer or the Trustee referred to below or any of
their affiliates or any other person. Neither this Certificate nor the
underlying Mortgage Loans are guaranteed or insured by any governmental entity
or by Structured Asset Mortgage Investments Inc., the Master Servicer or the
Trustee or any of their affiliates or any other person. None of Structured Asset
Mortgage Investments Inc., the Master Servicer or any of their affiliates will
have any obligation with respect to any certificate or other obligation secured
by or payable from payments on the Certificates.
This certifies that ___________________ is the registered owner of the
Fractional Undivided Interest evidenced hereby in the beneficial ownership
interest of Certificates of the same Class as this Certificate in a trust (the
"Trust Fund") primarily consisting of conventional adjustable rate mortgage
loans secured by first liens on one- to four- family residential properties
(collectively, the "Mortgage Loans") sold by Structured Asset Mortgage
Investments Inc. ("SAMI"). The Mortgage Loans were sold by EMC Mortgage
Corporation ("EMC") to SAMI. Xxxxx Fargo Bank Minnesota, National Association
("Xxxxx Fargo") will act as master servicer of the Mortgage Loans (the "Master
Servicer," which term includes any successors thereto under the Agreement
referred to below). The Trust Fund was created pursuant to the Pooling and
Servicing Agreement dated as of the Cut-off Date specified above (the
"Agreement"), among
A-1-2
SAMI, as seller (the "Seller"), Xxxxx Fargo Bank Minnesota, National Association
as master servicer and securities administrator, EMC Mortgage Corporation and
Bank One, National Association, as trustee (the "Trustee"), a summary of certain
of the pertinent provisions of which is set forth hereafter. To the extent not
defined herein, capitalized terms used herein shall have the meaning ascribed to
them in the Agreement. This Certificate is issued under and is subject to the
terms, provisions and conditions of the Agreement, to which Agreement the Holder
of this Certificate by virtue of its acceptance hereof assents and by which such
Holder is bound.
Interest on this Certificate will accrue during the month prior to the
month in which a Distribution Date (as hereinafter defined) occurs on the
Current Principal Amount hereof at a per annum rate equal to the Pass-Through
Rate set forth above and as further described in the Agreement. The Trustee will
distribute on the 25th day of each month, or, if such 25th day is not a Business
Day, the immediately following Business Day (each, a "Distribution Date"),
commencing on the First Distribution Date specified above, to the Person in
whose name this Certificate is registered at the close of business on the last
Business Day (or if such last day is not a Business Day, the Business Day
immediately preceding such last day) of the calendar month preceding the month
of such Distribution Date, an amount equal to the product of the Fractional
Undivided Interest evidenced by this Certificate and the amount (of interest and
principal, if any) required to be distributed to the Holders of Certificates of
the same Class as this Certificate. The Assumed Final Distribution Date is the
Distribution Date in the month immediately following the month of the latest
scheduled maturity date of any Mortgage Loan and is not likely to be the date on
which the Current Principal Amount of this Class of Certificates will be reduced
to zero.
Distributions on this Certificate will be made by the Trustee by check
mailed to the address of the Person entitled thereto as such name and address
shall appear on the Certificate Register or, if such Person so requests by
notifying the Trustee in writing as specified in the Agreement. Notwithstanding
the above, the final distribution on this Certificate will be made after due
notice by the Trustee of the pendency of such distribution and only upon
presentation and surrender of this Certificate at the office or agency appointed
by the Trustee for that purpose and designated in such notice. The Initial
Current Principal Amount of this Certificate is set forth above. The Current
Principal Amount hereof will be reduced to the extent of distributions allocable
to principal [hereon][on the Class I-M-1 Certificates] and any Realized Losses
allocable [hereto][thereto].
This Certificate is one of a duly authorized issue of Certificates
designated as set forth on the face hereof (the "Certificates"), issued in
fourteen Classes. The Certificates, in the aggregate, evidence the entire
beneficial ownership interest in the Trust Fund formed pursuant to the
Agreement.
The Certificateholder, by its acceptance of this Certificate, agrees
that it will look solely to the Trust Fund for payment hereunder and that the
Trustee is not liable to the Certificateholders for any amount payable under
this Certificate or the Agreement or, except as expressly provided in the
Agreement, subject to any liability under the Agreement.
This Certificate does not purport to summarize the Agreement and
reference is made to the Agreement for the interests, rights and limitations of
rights, benefits, obligations and duties evidenced hereby, and the rights,
duties and immunities of the Trustee.
The Agreement permits, with certain exceptions therein provided; (i)
the amendment thereof and the modification of the rights and obligations of the
Seller, the Master Servicer and the Trustee and the rights of the
Certificateholders under the Agreement from time to time by EMC, the Seller, the
Master Servicer, the Securities Administrator and the Trustee, and (ii) the
amendment of the Servicing Agreements
A-1-3
by the Mater Servicer and the Trustee with the consent of the Holders of
Certificates, evidencing Fractional Undivided Interests aggregating not less
than 51% of the Trust Fund (or in certain cases, Holders of Certificates of
affected Classes evidencing such percentage of the Fractional Undivided
Interests thereof). Any such consent by the Holder of this Certificate shall be
conclusive and binding on such Holder and upon all future Holders of this
Certificate and of any Certificate issued upon the transfer hereof or in lieu
hereof whether or not notation of such consent is made upon this Certificate.
The Agreement also permits the amendment thereof and of the Servicing Agreements
in certain limited circumstances, without the consent of the Holders of any of
the Certificates.
As provided in the Agreement and subject to certain limitations therein
set forth, the transfer of this Certificate is registrable with the Trustee upon
surrender of this Certificate for registration of transfer at the offices or
agencies maintained by the Trustee for such purposes, duly endorsed by, or
accompanied by a written instrument of transfer in form satisfactory to the
Trustee duly executed by the Holder hereof or such Holder's attorney duly
authorized in writing, and thereupon one or more new Certificates in authorized
denominations representing a like aggregate Fractional Undivided Interest will
be issued to the designated transferee.
The Certificates are issuable only as registered Certificates without
coupons in the Classes and denominations specified in the Agreement. As provided
in the Agreement and subject to certain limitations therein set forth, this
Certificate is exchangeable for one or more new Certificates evidencing the same
Class and in the same aggregate Fractional Undivided Interest, as requested by
the Holder surrendering the same.
No service charge will be made to the Certificateholders for any such
registration of transfer, but the Trustee may require payment of a sum
sufficient to cover any tax or other governmental charge payable in connection
therewith. The Seller, the Master Servicer, the Trustee and any agent of any of
them may treat the Person in whose name this Certificate is registered as the
owner hereof for all purposes, and none of the Seller, the Master Servicer, the
Trustee or any such agent shall be affected by notice to the contrary.
The obligations created by the Agreement and the Trust Fund created
thereby (other than the obligations to make payments to Certificateholders with
respect to the termination of the Agreement) shall terminate upon the earlier of
(i) the later of the (A) final payment or other liquidation (or Advance with
respect thereto) of the last Mortgage Loan remaining in the Trust Fund and (B)
disposition of all property acquired upon foreclosure or deed in lieu of
foreclosure of any Mortgage Loan and the remittance of all funds due under the
Agreement, or (ii) the optional repurchase by the party named in the Agreement
of all the Mortgage Loans and other assets of the Trust Fund in accordance with
the terms of the Agreement. Such optional repurchase may be made only on or
after the Distribution Date on which the aggregate unpaid principal balance of
the Mortgage Loans is less than the percentage of the aggregate Outstanding
Principal Balance specified in the Agreement of the Mortgage Loans at the
Cut-off Date. The exercise of such right will effect the early retirement of the
Certificates. In no event, however, will the Trust Fund created by the Agreement
continue beyond the expiration of 21 years after the death of certain persons
identified in the Agreement.
Unless this Certificate has been countersigned by an authorized
signatory of the Trustee by manual signature, this Certificate shall not be
entitled to any benefit under the Agreement, or be valid for any purpose.
A-1-4
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed.
Dated: December 30, 2002 BANK ONE, NATIONAL ASSOCIATION
Not in its individual capacity but
solely as Trustee
By:
-------------------------------------------
Authorized Signatory
CERTIFICATE OF AUTHENTICATION
This is one of the Class [_-A-__] [I-M-1] Certificates referred to in
the within-mentioned Agreement.
BANK ONE, NATIONAL ASSOCIATION
Authorized signatory of Bank One, National
Association, not in its individual capacity
but solely as Trustee
By:
----------------------------------------
Authorized Signatory
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto _______________________ (Please print or typewrite name and
address including postal zip code of assignee) a Fractional Undivided Interest
evidenced by the within Mortgage Pass-Through Certificate and hereby authorizes
the transfer of registration of such interest to assignee on the Certificate
Register of the Trust Fund.
I (We) further direct the Certificate Registrar to issue a new
Certificate of a like denomination and Class, to the above named assignee and
deliver such Certificate to the following address:
Dated:
---------------------------------------------------------------
Signature by or on behalf of assignor
--------------------------------------------
Signature Guaranteed
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to _________________________________ for the account
of _________________________ account number _____________, or, if mailed by
check, to ______________________________. Applicable statements should be mailed
to _______________________________________.
This information is provided by __________________, the assignee named
above, or ________________________, as its agent.
EXHIBIT A-2
FORM OF CLASS [_]-B-[_] CERTIFICATE
THIS CERTIFICATE IS SUBORDINATED IN RIGHT OF PAYMENT TO THE SENIOR
CERTIFICATES [,][AND] [CLASS __-B-1 CERTIFICATES] [,][AND] [CLASS __-B-2
CERTIFICATES] [,][AND] [CLASS __-B-3 CERTIFICATES] [,][AND] [CLASS __-B-4
CERTIFICATES] [AND CLASS __-B-5 CERTIFICATES] AS DESCRIBED IN THE AGREEMENT (AS
DEFINED BELOW).
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A
"REGULAR INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT," AS THOSE
TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL
REVENUE CODE OF 1986 (THE "CODE").
THE CURRENT PRINCIPAL AMOUNT OF THIS CERTIFICATE WILL BE DECREASED BY
THE PRINCIPAL PAYMENTS HEREON AND ANY REALIZED LOSSES ALLOCABLE HERETO.
ACCORDINGLY, FOLLOWING THE INITIAL ISSUANCE OF THE CERTIFICATES, THE CURRENT
PRINCIPAL AMOUNT OF THIS CERTIFICATE WILL BE DIFFERENT FROM THE DENOMINATION
SHOWN BELOW. ANYONE ACQUIRING THIS CERTIFICATE MAY ASCERTAIN ITS CURRENT
PRINCIPAL AMOUNT BY INQUIRY OF THE TRUSTEE NAMED HEREIN.
[THIS CERTIFICATE HAS NOT BEEN AND WILL NOT BE REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR UNDER ANY STATE
SECURITIES LAWS. THE HOLDER HEREOF, BY PURCHASING THIS CERTIFICATE, AGREES THAT
THIS CERTIFICATE MAY BE REOFFERED, RESOLD, PLEDGED OR OTHERWISE TRANSFERRED ONLY
IN COMPLIANCE WITH THE SECURITIES ACT AND OTHER APPLICABLE LAWS AND ONLY (1)
PURSUANT TO RULE 144A UNDER THE SECURITIES ACT ("RULE 144A") TO A PERSON THAT
THE HOLDER REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER WITHIN THE
MEANING OF RULE 144A (A "QIB"), PURCHASING FOR ITS OWN ACCOUNT OR A QIB
PURCHASING FOR THE ACCOUNT OF A QIB, WHOM THE HOLDER HAS INFORMED, IN EACH CASE,
THAT THE REOFFER, RESALE, PLEDGE OR OTHER TRANSFER IS BEING MADE IN RELIANCE ON
RULE 144A, (2) PURSUANT TO AN EXEMPTION FROM REGISTRATION PROVIDED BY RULE 144
UNDER THE SECURITIES ACT (IF AVAILABLE) OR (3) IN CERTIFICATED FORM TO AN
"INSTITUTIONAL ACCREDITED INVESTOR" WITHIN THE MEANING THEREOF IN RULE
501(a)(1), (2), (3) or (7) OF REGULATION D UNDER THE ACT OR ANY ENTITY IN WHICH
ALL OF THE EQUITY OWNERS COME WITHIN SUCH PARAGRAPHS PURCHASING NOT FOR
DISTRIBUTION IN VIOLATION OF THE SECURITIES ACT, SUBJECT TO (A) THE RECEIPT BY
THE TRUSTEE OF A LETTER SUBSTANTIALLY IN THE FORM PROVIDED IN THE AGREEMENT AND
(B) THE RECEIPT BY THE TRUSTEE OF SUCH OTHER EVIDENCE ACCEPTABLE TO THE TRUSTEE
THAT SUCH REOFFER, RESALE, PLEDGE OR TRANSFER IS IN COMPLIANCE WITH THE
SECURITIES ACT AND OTHER APPLICABLE LAWS OR IN EACH CASE IN ACCORDANCE WITH ALL
APPLICABLE SECURITIES LAWS OF THE UNITED STATES AND ANY OTHER APPLICABLE
JURISDICTION.]
[THIS CERTIFICATE MAY NOT BE ACQUIRED DIRECTLY OR INDIRECTLY BY, OR ON
BEHALF OF, AN EMPLOYEE BENEFIT PLAN OR OTHER RETIREMENT
ARRANGEMENT WHICH IS SUBJECT TO TITLE I OF THE EMPLOYEE RETIREMENT
INCOME SECURITY ACT OF 1974, AS AMENDED, AND/OR SECTION 4975 OF THE INTERNAL
REVENUE CODE OF 1986, AS AMENDED, UNLESS THE PROPOSED TRANSFER AND/OR HOLDING OF
A CERTIFICATE AND THE SERVICING, MANAGEMENT AND/OR OPERATION OF THE TRUST AND
ITS ASSETS: (I) WILL NOT RESULT IN ANY PROHIBITED TRANSACTION WHICH IS NOT
COVERED UNDER AN INDIVIDUAL OR CLASS PROHIBITED TRANSACTION EXEMPTION,
INCLUDING, BUT NOT LIMITED TO, PROHIBITED TRANSACTION EXEMPTION ("PTE") 84-14,
XXX 00-00, XXX 00-0, XXX 95-60 OR PTE 96-23 AND (II) WILL NOT GIVE RISE TO ANY
ADDITIONAL FIDUCIARY OBLIGATIONS ON THE PART OF THE SELLER, THE MASTER SERVICER
OR THE TRUSTEE, WHICH WILL BE DEEMED REPRESENTED BY AN OWNER OF A BOOK-ENTRY
CERTIFICATE OR A GLOBAL CERTIFICATE AND WILL BE EVIDENCED BY A REPRESENTATION OR
AN OPINION OF COUNSEL TO SUCH EFFECT BY OR ON BEHALF OF AN INSTITUTIONAL
ACCREDITED INVESTOR.]
[UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE
OF THE DEPOSITORY TRUST COMPANY TO THE ISSUER OR ITS AGENT FOR REGISTRATION OF
TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED WILL BE REGISTERED IN
THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY AND ANY PAYMENT WILL BE MADE TO
CEDE & CO., ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY
OR TO ANY PERSON IS WRONGFUL SINCE THE REGISTERED OWNER HEREOF, CEDE & CO., HAS
AN INTEREST HEREIN.]
A-2-2
Certificate No.1 Variable Pass-Through Rate
Class __-B-[__] Subordinate
Date of Pooling and Servicing Aggregate Initial Current Principal Amount
Agreement and Cut-off Date: of this Subordinate Certificate as of the
December 1, 2002 Cut-off Date: $[________________]
First Distribution Date: Initial Current Principal Amount of this
January 25, 2002 Subordinate Certificate as of the
Cut-off Date: $[________________]
Master Servicer: CUSIP: [________________]
Xxxxx Fargo Bank Minnesota,
National Association
Assumed Final Distribution Date:
January 25, 2033
MORTGAGE PASS-THROUGH CERTIFICATE
SERIES 2002-11
evidencing a fractional undivided interest in the distributions
allocable to the Class __-B-1 Certificates with respect to a Trust Fund
consisting primarily of a pool of adjustable interest rate mortgage
loans secured by first liens on one-to-four family residential
properties sold by STRUCTURED ASSET MORTGAGE INVESTMENTS INC.
This Certificate is payable solely from the assets of the Trust Fund,
and does not represent an obligation of or interest in Structured Asset Mortgage
Investments Inc., the Master Servicer or the Trustee referred to below or any of
their affiliates or any other person. Neither this Certificate nor the
underlying Mortgage Loans are guaranteed or insured by any governmental entity
or by Structured Asset Mortgage Investments Inc., the Master Servicer or the
Trustee or any of their affiliates or any other person. None of Structured Asset
Mortgage Investments Inc., the Master Servicer or any of their affiliates will
have any obligation with respect to any certificate or other obligation secured
by or payable from payments on the Certificates.
This certifies that _________________ is the registered owner of the
Fractional Undivided Interest evidenced hereby in the beneficial ownership
interest of Certificates of the same Class as this Certificate in a trust (the
"Trust Fund") primarily consisting of conventional adjustable rate mortgage
loans secured by first liens on one- to four-family residential properties
(collectively, the "Mortgage Loans") sold by Structured Asset Mortgage
Investments Inc. ("SAMI"). The Mortgage Loans were sold by EMC Mortgage
Corporation ("EMC") to SAMI. Xxxxx Fargo Bank Minnesota, National Association
("Xxxxx Fargo") will act as master servicer of the Mortgage Loans (the "Master
Servicer," which term includes any successors thereto under the Agreement
referred to below). The Trust Fund was created pursuant to the Pooling and
Servicing Agreement dated as of the Cut-off Date specified above (the
"Agreement"), among
A-2-3
SAMI, as seller (the "Seller"), Xxxxx Fargo Bank Minnesota, National Association
as master servicer and securities administrator, EMC Mortgage Corporation and
Bank One, National Association, as trustee (the "Trustee"), a summary of certain
of the pertinent provisions of which is set forth hereafter. To the extent not
defined herein, capitalized terms used herein shall have the meaning ascribed to
them in the Agreement. This Certificate is issued under and is subject to the
terms, provisions and conditions of the Agreement, to which Agreement the Holder
of this Certificate by virtue of its acceptance hereof assents and by which such
Holder is bound.
Interest on this Certificate will accrue during the month prior to the
month in which a Distribution Date (as hereinafter defined) occurs on the
Current Principal Amount hereof at a per annum rate equal to the Pass-Through
Rate set forth above and as further described in the Agreement. The Trustee will
distribute on the 25th day of each month, or, if such 25th day is not a Business
Day, the immediately following Business Day (each, a "Distribution Date"),
commencing on the First Distribution Date specified above, to the Person in
whose name this Certificate is registered at the close of business on the last
Business Day (or if such last day is not a Business Day, the Business Day
immediately preceding such last day) of the calendar month preceding the month
of such Distribution Date, an amount equal to the product of the Fractional
Undivided Interest evidenced by this Certificate and the amount (of interest and
principal, if any) required to be distributed to the Holders of Certificates of
the same Class as this Certificate. The Assumed Final Distribution Date is the
Distribution Date in the month immediately following the month of the latest
scheduled maturity date of any Mortgage Loan and is not likely to be the date on
which the Current Principal Amount of this Class of Certificates will be reduced
to zero.
Distributions on this Certificate will be made by the Trustee by check
mailed to the address of the Person entitled thereto as such name and address
shall appear on the Certificate Register or, if such Person so requests by
notifying the Trustee in writing as specified in the Agreement. Notwithstanding
the above, the final distribution on this Certificate will be made after due
notice by the Trustee of the pendency of such distribution and only upon
presentation and surrender of this Certificate at the office or agency appointed
by the Trustee for that purpose and designated in such notice. The Initial
Current Principal Amount of this Certificate is set forth above. The Current
Principal Amount hereof will be reduced to the extent of distributions allocable
to principal hereon and any Realized Losses allocable hereto.
[No transfer of this Class __-B-[_] certificate will be made unless
such transfer is (i) exempt from the registration requirements of the Securities
act of 1933, as amended, and any applicable state securities laws or is made in
accordance with said Act and laws and (ii) made in accordance with Section 5.02
of the Agreement. In the event that such transfer is to be made the Trustee
shall register such transfer if, (i) made to a transferee who has provided the
Trustee with evidence as to its QIB status; or (ii) (A) the transferor has
advised the Trustee in writing that the Certificate is being transferred to an
Institutional Accredited Investor and (B) prior to such transfer the transferee
furnishes to the Trustee an Investment Letter; provided that if based upon an
Opinion of Counsel to the effect that (A) and (B) above are met sufficient to
confirm that such transfer is being made pursuant to an exemption from, or in a
transaction not subject to, the registration requirements of the Securities Act
and other applicable laws.]
[This Certificate may not be acquired directly or indirectly by, or on
behalf of, an employee benefit plan or other retirement arrangement which is
subject to Title I of the Employee Retirement Income Security Act of 1974, as
amended, and/or Section 4975 of the Internal Revenue Code of 1986, as amended,
unless the proposed transfer and/or holding of a Certificate and the servicing,
management and/or operation of the trust and its assets: (i) will not result in
any prohibited transaction which is not covered under an individual or class
prohibited transaction exemption, including, but not limited to, Prohibited
Transaction Exemption ("PTE") 84-14, XXX 00-00, XXX 00-0, XXX 00-00 or PTE 96-23
and (ii) will not give rise to any
A-2-4
additional fiduciary obligations on the part of the Seller, the Master Servicer
or the Trustee, which will be deemed represented by an owner of a Book-Entry
Certificate or a Global Certificate and will be evidenced by a representation or
an Opinion of Counsel to such effect by or on behalf of an Institutional
Accredited Investor.]
This Certificate is one of a duly authorized issue of Certificates
designated as set forth on the face hereof (the "Certificates"), issued in
twelve Classes. The Certificates, in the aggregate, evidence the entire
beneficial ownership interest in the Trust Fund formed pursuant to the
Agreement.
The Certificateholder, by its acceptance of this Certificate, agrees
that it will look solely to the Trust Fund for payment hereunder and that the
Trustee is not liable to the Certificateholders for any amount payable under
this Certificate or the Agreement or, except as expressly provided in the
Agreement, subject to any liability under the Agreement.
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; (i)
the amendment thereof and the modification of the rights and obligations of the
Seller, the Master Servicer and the Trustee and the rights of the
Certificateholders under the Agreement from time to time by EMC, the Seller, the
Master Servicer, the Securities Administrator and the Trustee, and (ii) the
amendment of the Servicing Agreements by the Mater Servicer and the Trustee with
the consent of the Holders of Certificates, evidencing Fractional Undivided
Interests aggregating not less than 51% of the Trust Fund (or in certain cases,
Holders of Certificates of affected Classes evidencing such percentage of the
Fractional Undivided Interests thereof). Any such consent by the Holder of this
Certificate shall be conclusive and binding on such Holder and upon all future
Holders of this Certificate and of any Certificate issued upon the transfer
hereof or in lieu hereof whether or not notation of such consent is made upon
this Certificate. The Agreement also permits the amendment thereof and of the
Servicing Agreements in certain limited circumstances, without the consent of
the Holders of any of the Certificates.
As provided in the Agreement and subject to certain limitations therein
set forth, the transfer of this Certificate is registrable with the Trustee upon
surrender of this Certificate for registration of transfer at the offices or
agencies maintained by the Trustee for such purposes, duly endorsed by, or
accompanied by a written instrument of transfer in form satisfactory to the
Trustee duly executed by the Holder hereof or such Holder's attorney duly
authorized in writing, and thereupon one or more new Certificates in authorized
denominations representing a like aggregate Fractional Undivided Interest will
be issued to the designated transferee.
The Certificates are issuable only as registered Certificates without
coupons in the Classes and denominations specified in the Agreement. As provided
in the Agreement and subject to certain limitations therein set forth, this
Certificate is exchangeable for one or more new Certificates evidencing the same
Class and in the same aggregate Fractional Undivided Interest, as requested by
the Holder surrendering the same.
A-2-5
No service charge will be made to the Certificateholders for any such
registration of transfer, but the Trustee may require payment of a sum
sufficient to cover any tax or other governmental charge payable in connection
therewith. The Seller, the Master Servicer, the Trustee and any agent of any of
them may treat the Person in whose name this Certificate is registered as the
owner hereof for all purposes, and none of the Seller, the Master Servicer, the
Trustee or any such agent shall be affected by notice to the contrary.
The obligations created by the Agreement and the Trust Fund created
thereby (other than the obligations to make payments to Certificateholders with
respect to the termination of the Agreement) shall terminate upon the earlier of
(i) the later of the (A) final payment or other liquidation (or Advance with
respect thereto) of the last Mortgage Loan remaining in the Trust Fund and (B)
disposition of all property acquired upon foreclosure or deed in lieu of
foreclosure of any Mortgage Loan and the remittance of all funds due under the
Agreement, or (ii) the optional repurchase by the party named in the Agreement
of all the Mortgage Loans and other assets of the Trust Fund in accordance with
the terms of the Agreement. Such optional repurchase may be made only on or
after the Distribution Date on which the aggregate unpaid principal balance of
the Mortgage Loans is less than the percentage of the aggregate Outstanding
Principal Balance specified in the Agreement of the Mortgage Loans at the
Cut-off Date. The exercise of such right will effect the early retirement of the
Certificates. In no event, however, will the Trust Fund created by the Agreement
continue beyond the expiration of 21 years after the death of certain persons
identified in the Agreement.
Unless this Certificate has been countersigned by an authorized
signatory of the Trustee by manual signature, this Certificate shall not be
entitled to any benefit under the Agreement, or be valid for any purpose.
A-2-6
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed.
Dated: December 30, 2002 BANK ONE, NATIONAL ASSOCIATION
Not in its individual capacity but
solely as Trustee
By:
------------------------------------------
Authorized Signatory
CERTIFICATE OF AUTHENTICATION
This is one of the Class __-B-[_] Certificates referred to in the
within-mentioned Agreement.
BANK ONE, NATIONAL ASSOCIATION
Authorized signatory of Bank One, National
Association, not in its individual
capacity but solely as Trustee
By:
------------------------------------------
Authorized Signatory
A-2-7
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 Fractional Undivided
Interest evidenced by the within Mortgage Pass-Through Certificate and hereby
authorizes the transfer of registration of such interest to assignee on the
Certificate Register of the Trust Fund.
I (We) further direct the Certificate Registrar to issue a new
Certificate of a like denomination and Class, to the above named assignee and
deliver such Certificate to the following address:
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Dated:
---------------------------------------------------------
Signature by or on behalf of assignor
-------------------------------------
Signature Guaranteed
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to _________________________________ for the account
of _________________________ account number _____________, or, if mailed by
check, to ______________________________. Applicable statements should be mailed
to _______________________________________.
This information is provided by __________________, the assignee named
above, or ________________________, as its agent.
X-0-0
XXXXXXX X-0
FORM OF CLASS R-[_] CERTIFICATE
THIS CERTIFICATE MAY NOT BE HELD BY OR TRANSFERRED TO A NON-UNITED
STATES PERSON, A PUBLICLY TRADED PARTNERSHIP OR A DISQUALIFIED ORGANIZATION (AS
DEFINED BELOW).
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A
"RESIDUAL INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT" AS THOSE
TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL
REVENUE CODE OF 1986 (THE "CODE").
THIS CERTIFICATE MAY NOT BE ACQUIRED DIRECTLY OR INDIRECTLY BY, OR ON
BEHALF OF, AN EMPLOYEE BENEFIT PLAN OR OTHER RETIREMENT ARRANGEMENT WHICH IS
SUBJECT TO TITLE I OF THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS
AMENDED, AND/OR SECTION 4975 OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED,
UNLESS THE PROPOSED TRANSFER AND/OR HOLDING OF A CERTIFICATE AND THE SERVICING,
MANAGEMENT AND/OR OPERATION OF THE TRUST AND ITS ASSETS: (1) WILL NOT RESULT IN
OR CONSTITUTE A NONEXEMPT PROHIBITED TRANSACTION AND IS PERMISSIBLE UNDER
APPLICABLE LAW AND (2) WILL NOT GIVE RISE TO ANY ADDITIONAL FIDUCIARY
OBLIGATIONS ON THE PART OF THE SELLER, THE MASTER SERVICER OR THE TRUSTEE, WHICH
MUST BE EVIDENCED BY AN OPINION OF COUNSEL TO SUCH EFFECT BY OR ON BEHALF OF AN
INSTITUTIONAL ACCREDITED INVESTOR.
ANY RESALE, TRANSFER OR OTHER DISPOSITION OF THIS CERTIFICATE MAY BE
MADE ONLY IF THE PROPOSED TRANSFEREE PROVIDES A TRANSFER AFFIDAVIT TO THE MASTER
SERVICER AND THE TRUSTEE THAT (1) SUCH TRANSFEREE IS NOT (A) THE UNITED STATES,
ANY STATE OR POLITICAL SUBDIVISION THEREOF, ANY FOREIGN GOVERNMENT, ANY
INTERNATIONAL ORGANIZATION, OR ANY AGENCY OR INSTRUMENTALITY OF ANY OF THE
FOREGOING, (B) ANY ORGANIZATION (OTHER THAN A COOPERATIVE DESCRIBED IN SECTION
521 OF THE CODE) WHICH IS EXEMPT FROM THE TAX IMPOSED BY CHAPTER 1 OF THE CODE
UNLESS SUCH ORGANIZATION IS SUBJECT TO THE TAX IMPOSED BY SECTION 511 OF THE
CODE, (C) ANY ORGANIZATION DESCRIBED IN SECTION 1381(a)(2)(C) OF THE CODE, (ANY
SUCH PERSON DESCRIBED IN THE FOREGOING CLAUSES (A), (B) OR (C) BEING HEREIN
REFERRED TO AS A "DISQUALIFIED ORGANIZATION") OR (D) AN AGENT OF A DISQUALIFIED
ORGANIZATION, (2) NO PURPOSE OF SUCH TRANSFER IS TO IMPEDE THE ASSESSMENT OR
COLLECTION OF TAX AND (3) SUCH TRANSFEREE SATISFIES CERTAIN ADDITIONAL
CONDITIONS RELATING TO THE FINANCIAL CONDITION OF THE PROPOSED TRANSFEREE.
NOTWITHSTANDING THE REGISTRATION IN THE CERTIFICATE REGISTER OR ANY TRANSFER,
SALE OR OTHER DISPOSITION OF THIS CERTIFICATE TO A DISQUALIFIED ORGANIZATION OR
AN AGENT OF A DISQUALIFIED ORGANIZATION, SUCH REGISTRATION SHALL BE DEEMED TO BE
OF NO LEGAL FORCE OR EFFECT WHATSOEVER AND SUCH PERSON SHALL NOT BE DEEMED TO BE
A CERTIFICATEHOLDER FOR ANY PURPOSE HEREUNDER, INCLUDING, BUT NOT LIMITED
TO, THE RECEIPT OF DISTRIBUTIONS ON THIS CERTIFICATE. EACH HOLDER OF THIS
CERTIFICATE BY ACCEPTANCE OF THIS CERTIFICATE SHALL BE DEEMED TO HAVE CONSENTED
TO THE PROVISIONS OF THIS PARAGRAPH.
A-3-2
Certificate No.1 Variable Pass-Through Rate
Class R-[_] Senior
Aggregate Initial Current Principal
Date of Pooling and Servicing Agreement Amount of this Certificate as
and Cut-off Date: December 1, 2002 of the Cut-off Date: $[50.00]
First Distribution Date: Initial Current Principal Amount
January 25, 2002 of this Certificate as
of the Cut-off Date: $[50.00]
Master Servicer:
Xxxxx Fargo Bank Minnesota,
National Association CUSIP: [________________]
Assumed Final Distribution Date:
January 25, 2033
BEAR XXXXXXX ARM TRUST 2002-11
MORTGAGE PASS-THROUGH CERTIFICATE
SERIES 2002-11
evidencing a fractional undivided interest in the distributions
allocable to the Class R-I Certificates with respect to a Trust Fund
consisting primarily of a pool of adjustable interest rate mortgage
loans secured by first liens on one-to-four family residential
properties sold by STRUCTURED ASSET MORTGAGE INVESTMENTS INC.
This Certificate is payable solely from the assets of the Trust Fund,
and does not represent an obligation of or interest in Structured Asset Mortgage
Investments Inc., the Master Servicer or the Trustee referred to below or any of
their affiliates or any other person. Neither this Certificate nor the
underlying Mortgage Loans are guaranteed or insured by any governmental entity
or by Structured Asset Mortgage Investments Inc., the Master Servicer or the
Trustee or any of their affiliates or any other person. None of Structured Asset
Mortgage Investments Inc., the Master Servicer or any of their affiliates will
have any obligation with respect to any certificate or other obligation secured
by or payable from payments on the Certificates.
This certifies that ______________________________ is the registered
owner of the Fractional Undivided Interest evidenced hereby in the beneficial
ownership interest of Certificates of the same Class as this Certificate in a
trust (the "Trust Fund") primarily consisting of conventional adjustable rate
mortgages loans secured by first liens on one- to four-family residential
properties (collectively, the "Mortgage Loans") sold by Structured Asset
Mortgage Investments Inc. ("SAMI"). The Mortgage Loans were sold by EMC Mortgage
Corporation ("EMC") to SAMI. Xxxxx Fargo Bank Minnesota, National Association
("Xxxxx Fargo") will act as master servicer of the Mortgage Loans (the "Master
Servicer," which
A-3-3
term includes any successors thereto under the Agreement referred to below). The
Trust Fund was created pursuant to the Pooling and Servicing Agreement dated as
of the Cut-off Date specified above (the "Agreement'), among SAMI, as seller
(the "Seller"), Xxxxx Fargo Bank Minnesota, National Association as master
servicer and securities administrator, EMC Mortgage Corporation and Bank One,
National Association, as trustee (the "Trustee"), a summary of certain of the
pertinent provisions of which is set forth hereafter. To the extent not defined
herein, capitalized terms used herein shall have the meaning ascribed to them in
the Agreement. This Certificate is issued under and is subject to the terms,
provisions and conditions of the Agreement, to which Agreement the Holder of
this Certificate by virtue of its acceptance hereof assents and by which such
Holder is bound.
Interest on this Certificate will accrue during the month prior to the
month in which a Distribution Date (as hereinafter defined) occurs on the
Current Principal Amount hereof at a per annum rate equal to the Pass-Through
Rate set forth above. The Trustee will distribute on the 25th day of each month,
or, if such 25th day is not a Business Day, the immediately following Business
Day (each, a "Distribution Date"), commencing on the First Distribution Date
specified above, to the Person in whose name this Certificate is registered at
the close of business on the last Business Day (or if such last day is not a
Business Day, the Business Day immediately preceding such last day) of the
calendar month preceding the month of such Distribution Date, an amount equal to
the product of the Fractional Undivided Interest evidenced by this Certificate
and the amount (of interest and principal, if any) required to be distributed to
the Holders of Certificates of the same Class as this Certificate. The Assumed
Final Distribution Date is the Distribution Date in the month immediately
following the month of the latest scheduled maturity date of any Mortgage Loan
and is not likely to be the date on which the Current Principal Amount of this
Class of Certificates will be reduced to zero.
Distributions on this Certificate will be made by the Trustee by check
mailed to the address of the Person entitled thereto as such name and address
shall appear on the Certificate Register. Notwithstanding the above, the final
distribution on this Certificate will be made after due notice by the Trustee of
the pendency of such distribution and only upon presentation and surrender of
this Certificate at the office or agency appointed by the Trustee for that
purpose and designated in such notice. The Initial Current Principal Amount of
this Certificate is set forth above. The Current Principal Amount hereof will be
reduced to the extent of distributions allocable to principal hereon and any
Realized Losses allocable hereto.
Each Holder of this Certificate will be deemed to have agreed to be
bound by the restrictions set forth in the Agreement to the effect that (i) each
person holding or acquiring any Ownership Interest in this Certificate must be a
United States Person and a Permitted Transferee, (ii) the transfer of any
Ownership Interest in this Certificate will be conditioned upon the delivery to
the Trustee of, among other things, an affidavit to the effect that it is a
United States Person and Permitted Transferee, (iii) any attempted or purported
transfer of any Ownership Interest in this Certificate in violation of such
restrictions will be absolutely null and void and will vest no rights in the
purported transferee, and (iv) if any person other than a United States Person
and a Permitted Transferee acquires any Ownership Interest in this Certificate
in violation of such restrictions, then the Seller will have the right, in its
sole discretion and without notice to the Holder of this Certificate, to sell
this Certificate to a purchaser selected by the Company, which purchaser may be
the Seller, or any affiliate of the Seller, on such terms and conditions as the
Seller may choose.
A-3-4
This certificate may not be acquired directly or indirectly by, or on
behalf of, an employee benefit plan or other retirement arrangement which is
subject to title I of the employee retirement income security act of 1974, as
amended, and/or section 4975 of the internal revenue code of 1986, as amended,
unless the proposed transfer and/or holding of a certificate and the servicing,
management and/or operation of the trust and its assets: (1) will not result in
or constitute a nonexempt prohibited transaction and is permissible under
applicable law and (2) will not give rise to any additional fiduciary
obligations on the part of the seller, the master servicer or the trustee, which
must be evidenced by an opinion of counsel to such effect by or on behalf of an
institutional accredited investor.
This Certificate is one of a duly authorized issue of Certificates
designated as set forth on the face hereof (the "Certificates"), issued in
fourteen Classes. The Certificates, in the aggregate, evidence the entire
beneficial ownership interest in the Trust Fund formed pursuant to the
Agreement.
The Certificateholder, by its acceptance of this Certificate, agrees
that it will look solely to the Trust Fund for payment hereunder and that the
Trustee is not liable to the Certificateholders for any amount payable under
this Certificate or the Agreement or, except as expressly provided in the
Agreement, subject to any liability under the Agreement.
This Certificate does not purport to summarize the Agreement and
reference is made to the Agreement for the interests, rights and limitations of
rights, benefits, obligations and duties evidenced hereby, and the rights,
duties and immunities of the Trustee.
The Agreement permits, with certain exceptions therein provided; (i)
the amendment thereof and the modification of the rights and obligations of the
Seller, the Master Servicer and the Trustee and the rights of the
Certificateholders under the Agreement from time to time by EMC, the Seller, the
Master Servicer, the Securities Administrator and the Trustee, and (ii) the
amendment of the Servicing Agreements by the Mater Servicer and the Trustee with
the consent of the Holders of Certificates, evidencing Fractional Undivided
Interests aggregating not less than 51% of the Trust Fund (or in certain cases,
Holders of Certificates of affected Classes evidencing such percentage of the
Fractional Undivided Interests thereof). Any such consent by the Holder of this
Certificate shall be conclusive and binding on such Holder and upon all future
Holders of this Certificate and of any Certificate issued upon the transfer
hereof or in lieu hereof whether or not notation of such consent is made upon
this Certificate. The Agreement also permits the amendment thereof and of the
Servicing Agreements in certain limited circumstances, without the consent of
the Holders of any of the Certificates.
As provided in the Agreement and subject to certain limitations therein
set forth, the transfer of this Certificate is registrable with the Trustee upon
surrender of this Certificate for registration of transfer at the offices or
agencies maintained by the Trustee for such purposes, duly endorsed by, or
accompanied by a written instrument of transfer in form satisfactory to the
Trustee duly executed by the Holder hereof or such Holder's attorney duly
authorized in writing, and thereupon one or more new Certificates in authorized
denominations representing a like aggregate Fractional Undivided Interest will
be issued to the designated transferee.
The Certificates are issuable only as registered Certificates without
coupons in the Classes and denominations specified in the Agreement. As provided
in the Agreement and subject to certain limitations therein set forth, this
Certificate is exchangeable for one or more new Certificates evidencing the
A-3-5
same Class and in the same aggregate Fractional Undivided Interest, as requested
by the Holder surrendering the same.
No service charge will be made to the Certificateholders for any such
registration of transfer, but the Trustee may require payment of a sum
sufficient to cover any tax or other governmental charge payable in connection
therewith. The Seller, the Master Servicer, the Trustee and any agent of any of
them may treat the Person in whose name this Certificate is registered as the
owner hereof for all purposes, and none of the Seller, the Master Servicer, the
Trustee or any such agent shall be affected by notice to the contrary.
The obligations created by the Agreement and the Trust Fund created
thereby (other than the obligations to make payments to Certificateholders with
respect to the termination of the Agreement) shall terminate upon the earlier of
(i) the later of the (A) final payment or other liquidation (or Advance with
respect thereto) of the last Mortgage Loan remaining in the Trust Fund and (B)
disposition of all property acquired upon foreclosure or deed in lieu of
foreclosure of any Mortgage Loan and the remittance of all funds due under the
Agreement, or (ii) the optional repurchase by the party named in the Agreement
of all the Mortgage Loans and other assets of the Trust Fund in accordance with
the terms of the Agreement. Such optional repurchase may be made only on or
after the Distribution Date on which the aggregate unpaid principal balance of
the Mortgage Loans is less than the percentage of the aggregate Outstanding
Principal Balance specified in the Agreement of the Mortgage Loans at the
Cut-off Date. The exercise of such right will effect the early retirement of the
Certificates. In no event, however, will the Trust Fund created by the Agreement
continue beyond the expiration of 21 years after the death of certain persons
identified in the Agreement.
Unless this Certificate has been countersigned by an authorized
signatory of the Trustee by manual signature, this Certificate shall not be
entitled to any benefit under the Agreement, or be valid for any purpose.
A-3-6
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed.
Dated: December 30, 2002 BANK ONE, NATIONAL ASSOCIATION
Not in its individual capacity
but solely as Trustee
By:
----------------------------------------
Authorized Signatory
CERTIFICATE OF AUTHENTICATION
This is one of the Class R-[__] Certificates referred to in the
within-mentioned Agreement.
BANK ONE, NATIONAL ASSOCIATION
Authorized signatory of Bank One,
National Association, not in its
individual capacity but solely as Trustee
By:
-------------------------------------
Authorized Signatory
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 Fractional Undivided
Interest evidenced by the within Mortgage Pass-Through Certificate and hereby
authorizes the transfer of registration of such interest to assignee on the
Certificate Register of the Trust Fund.
I (We) further direct the Certificate Registrar to issue a new
Certificate of a like denomination and Class, to the above named assignee and
deliver such Certificate to the following address:
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Dated:
-----------------------------------------------------------
Signature by or on behalf of assignor
-------------------------------------
Signature Guaranteed
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to _________________________________ for the account
of _________________________ account number _____________, or, if mailed by
check, to ______________________________. Applicable statements should be mailed
to ___________________________________________.
This information is provided by __________________, the assignee named
above, or ________________________, as its agent.
EXHIBIT B
MORTGAGE LOAN SCHEDULE
[PROVIDED UPON REQUEST]
B-1
EXHIBIT C
[RESERVED]
C-1
EXHIBIT D
REQUEST FOR RELEASE OF DOCUMENTS
To: Bank One, National Association
000 Xxxx 00xx Xx., 0xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
RE: Pooling and Servicing Agreement dated as of
December 1, 2002, among SAMI,
Xxxxx Fargo Bank Minnesota,
National Association, as master servicer
and securities administrator,
EMC Mortgage Corporation and
Bank One, National Association
as Trustee
In connection with the administration of the Mortgage Loans held by you
pursuant to the above-captioned Pooling and Servicing Agreement, we request the
release, and hereby acknowledge receipt, of the Mortgage File for the Mortgage
Loan described below, for the reason indicated.
Mortgage Loan Number:
Mortgagor Name, Address & Zip Code:
Reason for Requesting Documents (check one):
_____ 1. Mortgage Paid in Full and proceeds have been deposited into the
Custodial Account
_____ 2. Foreclosure
_____ 3. Substitution
_____ 4. Other Liquidation
_____ 5. Nonliquidation Reason:
--------------------------------
_____ 6. California Mortgage Loan paid in full
By:
-----------------------------------
(authorized signer)
Issuer:
--------------------------------
Address:
------------------------------
Date:
----------------------------------
D-1
EXHIBIT E
FORM OF AFFIDAVIT PURSUANT TO SECTION 860E(E)(4)
Affidavit pursuant to Section 860E(e)(4) of
the Internal Revenue Code of 1986, as
amended, and for other purposes
STATE OF )
) ss:
COUNTY OF )
[NAME OF OFFICER], being first duly sworn, deposes and says:
1. That he is [Title of Officer] of [Name of Investor] (the
"Investor"), a [savings institution] [corporation] duly organized and existing
under the laws of [the State of ] [the United States], on behalf of
which he makes this affidavit.
2. That (i) the Investor is not a "disqualified organization" as
defined in Section 860E(e)(5) of the Internal Revenue Code of 1986, as amended
(the "Code"), and will not be a disqualified organization as of [Closing Date]
[date of purchase]; (ii) it is not acquiring the Structured Asset Mortgage
Investments Inc., Bear Xxxxxxx ARM Trust, Mortgage Pass-Through Certificates,
Series 2002-11, Class R Certificates (the "Residual Certificates") for the
account of a disqualified organization; (iii) it consents to any amendment of
the Pooling and Servicing Agreement that shall be deemed necessary by Structured
Asset Mortgage Investments Inc. (upon advice of counsel) to constitute a
reasonable arrangement to ensure that the Residual Certificates will not be
owned directly or indirectly by a disqualified organization; and (iv) it will
not transfer such Residual Certificates unless (a) it has received from the
transferee an affidavit in substantially the same form as this affidavit
containing these same four representations and (b) as of the time of the
transfer, it does not have actual knowledge that such affidavit is false.
3. That the Investor is one of the following: (i) a citizen or resident
of the United States, (ii) a corporation or partnership (including an entity
treated as a corporation or partnership for federal income tax purposes) created
or organized in, or under the laws of, the United States or any state thereof or
the District of Columbia (except, in the case of a partnership, to the extent
provided in regulations), provided that no partnership or other entity treated
as a partnership for United States federal income tax purposes shall be treated
as a United States Person unless all persons that own an interest in such
partnership either directly or through any entity that is not a corporation for
United States federal income tax purposes are United States Persons, (iii) an
estate whose income is subject to United States federal income tax regardless of
its source, or (iv) a trust other than a "foreign trust," as defined in Section
7701 (a)(31) of the Code.
4. That the Investor's taxpayer identification number is -------------
---------------.
5. That no purpose of the acquisition of the Residual Certificates is
to avoid or impede the assessment or collection of tax.
6. That the Investor understands that, as the holder of the Residual
Certificates, the Investor may incur tax liabilities in excess of any cash flows
generated by such Residual Certificates.
E-1
7. That the Investor intends to pay taxes associated with holding the
Residual Certificates as they become due.
IN WITNESS WHEREOF, the Investor has caused this instrument to be
executed on its behalf, pursuant to authority of its Board of Directors, by its
[Title of Officer] this ____ day of _________, 20__.
[NAME OF INVESTOR]
By:
-----------------------------------
[Name of Officer]
[Title of Officer]
[Address of Investor for receipt
of distributions]
Address of Investor for receipt
of tax information:
E-2
Personally appeared before me the above-named [Name of Officer], known
or proved to me to be the same person who executed the foregoing instrument and
to be the [Title of Officer] of the Investor, and acknowledged to me that he
executed the same as his free act and deed and the free act and deed of the
Investor.
Subscribed and sworn before me this ___ day of _________, 20___.
NOTARY PUBLIC
COUNTY OF
STATE OF
My commission expires the ___ day of ___________________, 20___.
E-3
EXHIBIT F-1
FORM OF INVESTMENT LETTER
[Date]
[SELLER]
Bank One, National Association
000 Xxxx 00xx Xx., 0xx Xxxxx
Xxx Xxxx ,Xxx Xxxx 00000
Structured Asset Mortgage Investments Inc.
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Re: Structured Asset Mortgage Investments Inc., Bear Xxxxxxx ARM
Trust, Series 2002-11 Mortgage Pass-Through Certificates (the
"Certificates"), including the [Class __-B-4, Class __-B-5, Class
__-B-6] Certificates (the "Privately Offered Certificates")
--------------------------------------------------------------
Dear Ladies and Gentlemen:
In connection with our purchase of Privately Offered Certificates, we
confirm that:
(i) we understand that the Privately Offered Certificates are not being
registered under the Securities Act of 1933, as amended (the "Act")
or any applicable state securities or "Blue Sky" laws, and are being
sold to us in a transaction that is exempt from the registration
requirements of such laws;
(ii) any information we desired concerning the Certificates, including
the Privately Offered Certificates, the trust in which the
Certificates represent the entire beneficial ownership interest (the
"Trust") or any other matter we deemed relevant to our decision to
purchase Privately Offered Certificates has been made available to
us;
(iii) we are able to bear the economic risk of investment in Privately
Offered Certificates; we are an institutional "accredited investor"
as defined in Section 501(a) of Regulation D promulgated under the
Act and a sophisticated institutional investor;
(iv) we are acquiring Privately Offered Certificates for our own account,
not as nominee for any other person, and not with a present view to
any distribution or other disposition of the Privately Offered
Certificates;
(v) we agree the Privately Offered Certificates must be held
indefinitely by us (and may not be sold, pledged, hypothecated or in
any way disposed of) unless subsequently registered under the Act
and any applicable state securities or "Blue Sky" laws or an
exemption from the registration requirements of the Act and any
applicable state securities or "Blue Sky" laws is available;
F-1-1
(vi) we agree that in the event that at some future time we wish to
dispose of or exchange any of the Privately Offered Certificates
(such disposition or exchange not being currently foreseen or
contemplated), we will not transfer or exchange any of the Privately
Offered Certificates unless:
(A) (1) the sale is to an Eligible Purchaser (as defined
below), (2) if required by the Pooling and Servicing Agreement (as
defined below) a letter to substantially the same effect as either
this letter or, if the Eligible Purchaser is a Qualified
Institutional Buyer as defined under Rule 144A of the Act, the Rule
144A and Related Matters Certificate in the form attached to the
Pooling and Servicing Agreement (as defined below) (or such other
documentation as may be acceptable to the Trustee) is executed
promptly by the purchaser and delivered to the addressees hereof and
(3) all offers or solicitations in connection with the sale, whether
directly or through any agent acting on our behalf, are limited only
to Eligible Purchasers and are not made by means of any form of
general solicitation or general advertising whatsoever; and
(B) if the Privately Offered Certificate is not registered
under the Act (as to which we acknowledge you have no obligation),
the Privately Offered Certificate is sold in a transaction that does
not require registration under the Act and any applicable state
securities or "blue sky" laws and, if Bank One, National Association
(the "Trustee") so requests, a satisfactory Opinion of Counsel is
furnished to such effect, which Opinion of Counsel shall be an
expense of the transferor or the transferee;
(vii) we agree to be bound by all of the terms (including those relating
to restrictions on transfer) of the Pooling and Servicing, pursuant
to which the Trust was formed; we have reviewed carefully and
understand the terms of the Pooling and Servicing Agreement;
(viii) we either: (i) are not acquiring the Privately Offered Certificate
directly or indirectly by, or on behalf of, an employee benefit plan
or other retirement arrangement which is subject to Title I of the
Employee Retirement Income Security Act of 1974, as amended, and/or
section 4975 of the Internal Revenue Code of 1986, as amended, or
(ii) are providing a representation or an opinion of counsel to the
effect that the proposed transfer and/or holding of a Privately
Offered Certificate and the servicing, management and/or operation
of the Trust and its assets: (I) will not result in any prohibited
transaction which is not covered under an individual or class
prohibited transaction exemption, including, but not limited to,
Prohibited Transaction Exemption ("PTE") 84-14, XXX 00-00, XXX 00-0,
XXX 00-00 or PTE 96-23 and (II) will not give rise to any additional
fiduciary duties on the part of the Seller, the Securities
Administrator, the Master Servicer or the Trustee in addition to
those undertaken in the Pooling and Servicing Agreement.
(ix) We understand that each of the Class __-B-4, Class __-B-5 and Class
__-B-6 Certificates bears, and will continue to bear, a legend to
substantiate the following effect: "THIS CERTIFICATE HAS NOT BEEN
AND WILL NOT BE
F-1-2
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
"SECURITIES ACT"), OR UNDER ANY STATE SECURITIES LAWS. THE HOLDER
HEREOF, BY PURCHASING THIS CERTIFICATE, AGREES THAT THIS CERTIFICATE
MAY BE REOFFERED, RESOLD, PLEDGED OR OTHERWISE TRANSFERRED ONLY IN
COMPLIANCE WITH THE SECURITIES ACT AND OTHER APPLICABLE LAWS AND
ONLY (1) PURSUANT TO RULE 144A UNDER THE SECURITIES ACT ("RULE
144A") TO A PERSON THAT THE HOLDER REASONABLY BELIEVES IS A
QUALIFIED INSTITUTIONAL BUYER WITHIN THE MEANING OF RULE 144A (A
"QIB"), PURCHASING FOR ITS OWN ACCOUNT OR A QIB PURCHASING FOR THE
ACCOUNT OF A QIB, WHOM THE HOLDER HAS INFORMED, IN EACH CASE, THAT
THE REOFFER, RESALE, PLEDGE OR OTHER TRANSFER IS BEING MADE IN
RELIANCE ON RULE 144A, (2) PURSUANT TO AN EXEMPTION FROM
REGISTRATION PROVIDED BY RULE 144 UNDER THE SECURITIES ACT (IF
AVAILABLE) OR (3) IN CERTIFICATED FORM TO AN "INSTITUTIONAL
ACCREDITED INVESTOR" WITHIN THE MEANING THEREOF IN RULE 501(a)(1),
(2), (3) or (7) OF REGULATION D UNDER THE ACT OR ANY ENTITY IN WHICH
ALL OF THE EQUITY OWNERS COME WITHIN SUCH PARAGRAPHS PURCHASING NOT
FOR DISTRIBUTION IN VIOLATION OF THE SECURITIES ACT, SUBJECT TO (A)
THE RECEIPT BY THE TRUSTEE OF A LETTER SUBSTANTIALLY IN THE FORM
PROVIDED IN THE AGREEMENT AND (B) THE RECEIPT BY THE TRUSTEE OF SUCH
OTHER EVIDENCE ACCEPTABLE TO THE TRUSTEE THAT SUCH REOFFER, RESALE,
PLEDGE OR TRANSFER IS IN COMPLIANCE WITH THE SECURITIES ACT AND
OTHER APPLICABLE LAWS OR IN EACH CASE IN ACCORDANCE WITH ALL
APPLICABLE SECURITIES LAWS OF THE UNITED STATES AND ANY OTHER
APPLICABLE JURISDICTION. THIS CERTIFICATE MAY NOT BE ACQUIRED
DIRECTLY OR INDIRECTLY BY, OR ON BEHALF OF, AN EMPLOYEE BENEFIT PLAN
OR OTHER RETIREMENT ARRANGEMENT WHICH IS SUBJECT TO TITLE I OF THE
EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED, AND/OR
SECTION 4975 OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED,
UNLESS THE PROPOSED TRANSFER AND/OR HOLDING OF A CERTIFICATE AND THE
SERVICING, MANAGEMENT AND/OR OPERATION OF THE TRUST AND ITS ASSETS:
(1) WILL NOT RESULT IN ANY PROHIBITED TRANSACTION WHICH IS NOT
COVERED UNDER AN INDIVIDUAL OR CLASS PROHIBITED TRANSACTION
EXEMPTION, INCLUDING, BUT NOT LIMITED TO, PROHIBITED TRANSACTION
EXEMPTION ("PTE") 84-14, XXX 00-00, XXX 00-0, XXX 95-60 OR PTE 96-23
AND (II) WILL NOT GIVE RISE TO ANY ADDITIONAL FIDUCIARY DUTIES ON
THE PART OF THE SELLER, THE MASTER SERVICER, THE TRUSTEE OR THE
SECURITIES ADMINISTRATOR, WHICH WILL BE DEEMED REPRESENTED BY AN
OWNER OF A BOOK-ENTRY CERTIFICATE OR A GLOBAL CERTIFICATE AND WILL
BE EVIDENCED BY A REPRESENTATION OR AN OPINION OF COUNSEL TO SUCH
EFFECT BY OR ON BEHALF OF A HOLDER OF A PRIVATE CERTIFICATE."
F-1-3
"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 December 1, 2002, among
Structured Asset Mortgage Investments Inc., Xxxxx Fargo Bank Minnesota, National
Association as master servicer and securities administrator, EMC Mortgage
Corporation and Bank One, National Association, as Trustee (the "Pooling and
Servicing Agreement').
If the Purchaser proposes that its Certificates be registered in the
name of a nominee on its behalf, the Purchaser has identified such nominee
below, and has caused such nominee to complete the Nominee Acknowledgment at the
end of this letter.
Name of Nominee (if any):
---------------------------
F-1-4
IN WITNESS WHEREOF, this document has been executed by the undersigned
who is duly authorized to do so on behalf of the undersigned Eligible Purchaser
on the ___ day of ________, 20___.
Very truly yours,
[PURCHASER]
By:
------------------------------
(Authorized Officer)
[By:
------------------------------
Attorney-in-fact]
F-1-5
Nominee Acknowledgment
The undersigned hereby acknowledges and agrees that as to the
Certificates being registered in its name, the sole beneficial owner thereof is
and shall be the Purchaser identified above, for whom the undersigned is acting
as nominee.
[NAME OF NOMINEE]
By:
----------------------------
(Authorized Officer)
[By:
----------------------------
Attorney-in-fact]
F-1-6
EXHIBIT F-2
FORM OF RULE 144A AND RELATED MATTERS CERTIFICATE
[SELLER] [Date]
Bank One, National Association
000 Xxxx 00xx Xx., 0xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Structured Asset Mortgage Investments Inc.
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Re: Structured Asset Mortgage Investments Inc., Bear Xxxxxxx ARM
Trust, Series 2002-11 Mortgage Pass-Through Certificates, Class
__-B-4, Class __-B-5 and Class __-B-6 Certificates (the "Privately
Offered Certificates")
Dear Ladies and Gentlemen:
In connection with our purchase of Privately Offered Certificates, the
undersigned certifies to each of the parties to whom this letter is addressed
that it is a qualified institutional buyer (as defined in Rule 144A under the
Securities Act of 1933, as amended (the "Act")) as follows:
1. It owned and/or invested on a discretionary basis eligible securities
(excluding affiliate's securities, bank deposit notes and CD's, loan
participations, repurchase agreements, securities owned but subject to a
repurchase agreement and swaps), as described below:
Date: ______________, 20__ (must be on or after the close of its most
recent fiscal year)
Amount: $ _____________________; and
2. The dollar amount set forth above is:
a. greater than $100 million and the undersigned is one of the following
entities:
(x) |_| an insurance company as defined in Section 2(13) of the
Act(1); or
------------------
1 A purchase by an insurance company for one or more of its separate
accounts, as defined by Section 2(a)(37) of the Investment Company Act of
1940, which are neither registered nor required to be registered
thereunder, shall be deemed to be a purchase for the account of such
insurance company.
F-2-1
(y) |_| an investment company registered under the Investment
Company Act or any business development company as
defined in Section 2(a)(48) of the Investment Company
Act of 1940; or
(z) |_| a Small Business Investment Company licensed by the U.S.
Small Business Administration under Section 301(c) or
(d) of the Small Business Investment Act of 1958; or
(aa) |_| a plan (i) established and maintained by a state, its
political subdivisions, or any agency or instrumentality
of a state or its political subdivisions, the laws of
which permit the purchase of securities of this type,
for the benefit of its employees and (ii) the governing
investment guidelines of which permit the purchase of
securities of this type; or
(bb) |_| a business development company as defined in Section
202(a)(22) of the Investment Advisers Act of 1940; or
(cc) |_| a corporation (other than a U.S. bank, savings and loan
association or equivalent foreign institution),
partnership, Massachusetts or similar business trust, or
an organization described in Section 501(c)(3) of the
Internal Revenue Code; or
(dd) |_| a U.S. bank, savings and loan association or equivalent
foreign institution, which has an audited net worth of
at least $25 million as demonstrated in its latest
annual financial statements; or
(ee) |_| an investment adviser registered under the Investment
Advisers Act; or
b. |_| greater than $10 million, and the undersigned is a
broker-dealer registered with the SEC; or
c. |_| less than $10 million, and the undersigned is a broker-dealer
registered with the SEC and will only purchase Rule 144A
securities in transactions in which it acts as a riskless
principal (as defined in Rule 144A); or
d. |_| less than $100 million, and the undersigned is an investment
company registered under the Investment Company Act of 1940,
which, together with one or more registered investment
companies having the same or an affiliated investment adviser,
owns at least $100 million of eligible securities; or
e. |_| less than $100 million, and the undersigned is an entity, all
the equity owners of which are qualified institutional buyers.
The undersigned further certifies that it is purchasing a Privately
Offered Certificate for its own account or for the account of others that
independently qualify as "Qualified Institutional Buyers" as defined in Rule
144A. It is aware that the sale of the Privately Offered Certificates is being
made in reliance on its continued compliance with Rule 144A. It is aware that
the transferor may rely on the exemption from the
F-2-2
provisions of Section 5 of the Act provided by Rule 144A. The undersigned
understands that the Privately Offered Certificates may be resold, pledged or
transferred only to (i) a person reasonably believed to be a Qualified
Institutional Buyer that purchases for its own account or for the account of a
Qualified Institutional Buyer to whom notice is given that the resale, pledge or
transfer is being made in reliance in Rule 144A, or (ii) an institutional
"accredited investor," as such term is defined under Rule 501 of the Act in a
transaction that otherwise does not constitute a public offering.
The undersigned agrees that if at some future time it wishes to dispose
of or exchange any of the Privately Offered Certificates, it will not transfer
or exchange any of the Privately Offered Certificates to a Qualified
Institutional Buyer without first obtaining a Rule 144A and Related Matters
Certificate in the form hereof from the transferee and delivering such
certificate to the addressees hereof. Prior to making any transfer of Privately
Offered Certificates, if the proposed Transferee is an institutional "accredited
investor," the transferor shall obtain from the transferee and deliver to the
addressees hereof an Investment Letter in the form attached to the Pooling and
Servicing Agreement, dated as of December 1, 2002, among Structured Asset
Mortgage Investments Inc., Xxxxx Fargo Bank Minnesota, National Association, EMC
Mortgage Corporation and Bank One, National Association, as Trustee, pursuant to
Certificates were issued.
The undersigned certifies that it either: (i) is not acquiring the
Privately Offered Certificate directly or indirectly by, or on behalf of, an
employee benefit plan or other retirement arrangement which is subject to Title
I of the Employee Retirement Income Security Act of 1974, as amended, and/or
section 4975 of the Internal Revenue Code of 1986, as amended, or (ii) is
providing a representation or an opinion of counsel to the effect that the
proposed transfer and/or holding of a Privately Offered Certificate and the
servicing, management and/or operation of the Trust and its assets: (I) will not
result in any prohibited transaction which is not covered under a prohibited
transaction exemption, including, but not limited to, Prohibited Transaction
Exemption ("PTE") 84-14, XXX 00-00, XXX 00-0, XXX 00-00 or PTE 96-23 and (II)
will not give rise to any additional fiduciary duties on the part of the Seller,
the Securities Administrator, the Master Servicer or the Trustee in addition to
those undertaken in 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.
F-2-3
Name of Nominee (if any):
IN WITNESS WHEREOF, this document has been executed by the undersigned who is
duly authorized to do so on behalf of the undersigned Eligible Purchaser on the
____ day of ___________, 20___.
Very truly yours,
[PURCHASER]
By:
--------------------------------
(Authorized Officer)
[By:
-------------------------------
Attorney-in-fact]
F-2-4
Nominee Acknowledgment
The undersigned hereby acknowledges and agrees that as to the
Certificates being registered in its name, the sole beneficial owner thereof is
and shall be the Purchaser identified above, for whom the undersigned is acting
as nominee.
[NAME OF NOMINEE]
By:
-----------------------------------
(Authorized Officer)
[By:
-----------------------------------
Attorney-in-fact]
F-2-5
EXHIBIT G
FORM OF CUSTODIAL AGREEMENT
THIS CUSTODIAL AGREEMENT (as amended and supplemented from time to
time, the "Agreement'), dated as of December 30, 2002, by and among BANK ONE,
NATIONAL ASSOCIATION, as trustee (including its successors under the Pooling and
Servicing Agreement defined below, the "Trustee"), STRUCTURED ASSET MORTGAGE
INVESTMENTS INC., as company (together with any successor in interest, the
"Company"), XXXXX FARGO BANK MINNESOTA, NATIONAL ASSOCIATION, as master servicer
and securities administrator (together with any successor in interest or
successor under the Pooling and Servicing Agreement referred to below, the
"Master Servicer") and XXXXX FARGO BANK MINNESOTA, NATIONAL ASSOCIATION, as
custodian (together with any successor in interest or any successor appointed
hereunder, the "Custodian").
WITNESSETH THAT:
WHEREAS, the Company, the Master Servicer and the Trustee have entered
into a Pooling and Servicing Agreement, dated as of December 1, 2002, relating
to the issuance of Bear Xxxxxxx ARM Trust 2002-11, Mortgage Pass-Through
Certificates, Series 2002-10 (as in effect on the date of this agreement, the
"Original Pooling and Servicing Agreement," and as amended and supplemented from
time to time, the "Pooling and Servicing Agreement'); and
WHEREAS, the Custodian has agreed to act as agent for the Trustee for
the purposes of receiving and holding certain documents and other instruments
delivered by the Company or the Master Servicer under the Pooling and Servicing
Agreement and the Servicers under their respective Servicing Agreements, all
upon the terms and conditions and subject to the limitations hereinafter set
forth;
NOW, THEREFORE, in consideration of the premises and the mutual
covenants and agreements hereinafter set forth, the Trustee, the Company, the
Master Servicer and the Custodian hereby agree as follows:
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.
II
CUSTODY OF MORTGAGE DOCUMENTS
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.
2.2. Recordation of Assignments. If any Mortgage File includes one or
more assignments of Mortgage to the Trustee in a state which is specifically
excluded from the Opinion of Counsel delivered by the Seller to the Trustee
(with a copy to the Custodian) pursuant to the provisions of Section 2.01 of the
Pooling and Servicing Agreement, each such assignment shall be delivered by the
Custodian to the Company for the purpose of recording it in the appropriate
public office for real property records, and the Company, at no expense to the
Custodian, shall promptly cause to be recorded in the appropriate public office
for real property records each such assignment of Mortgage and, upon receipt
thereof from such public office, shall return each such assignment of Mortgage
to the Custodian.
2.3. Review of Mortgage Files.
(a) On or prior to the Closing Date, in accordance with Section 2.02 of
the Pooling and Servicing Agreement, the Custodian shall deliver to the Trustee
an Initial Certification in the form annexed hereto as Exhibit One evidencing
receipt (subject to any exceptions noted therein) of a Mortgage File for each of
the Mortgage Loans listed on the Schedule attached hereto (the "Mortgage Loan
Schedule").
(b) Within 90 days of the Closing Date, the Custodian agrees, for the
benefit of Certificateholders, to review, in accordance with the provisions of
Section 2.02 of the Pooling and Servicing Agreement, each such document, and
shall deliver to the Seller and the Trustee an Interim Certification in the form
annexed hereto as Exhibit Two to the effect that all such documents have been
executed and received and that such documents relate to the Mortgage Loans
identified on the Mortgage Loan Schedule, except for any exceptions listed on
Schedule A attached to such Interim Certification. The Custodian shall be under
no duty or obligation to inspect, review or examine said documents, instruments,
certificates or other papers to determine that the same are genuine,
enforceable, or appropriate for the represented purpose or that they have
actually been recorded or that they are other than what they purport to be on
their face.
(c) Not later than 180 days after the Closing Date, the Custodian shall
review the Mortgage Files as provided in Section 2.02 of the Pooling and
Servicing Agreement and deliver to the Seller and the Trustee a Final
Certification in the form annexed hereto as Exhibit Three evidencing the
completeness of the Mortgage Files.
(d) In reviewing the Mortgage Files as provided herein and in the
Pooling and Servicing Agreement, the Custodian shall make no representation as
to and shall not be responsible to verify (i) the validity, legality,
enforceability, due authorization, recordability, sufficiency or genuineness of
any of the documents included in any Mortgage File or (ii) the collectibility,
insurability, effectiveness or suitability of any of the documents in any
Mortgage File.
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.
G-2
2.4. Notification of Breaches of Representations and Warranties. Upon
discovery by the Custodian of a breach of any representation or warranty made by
the Company as set forth in the Pooling and Servicing Agreement with respect to
a Mortgage Loan relating to a Mortgage File, the Custodian shall give prompt
written notice to the Company, the related Servicer and the Trustee.
2.5. Custodian to Cooperate: Release of Mortgage Files. Upon receipt of
written notice from the Trustee that the Mortgage Loan Seller has repurchased a
Mortgage Loan pursuant to Article II of the Pooling and Servicing Agreement, and
that the purchase price therefore has been deposited in the Master Servicer
Collection Account or the Distribution Account, then the Custodian agrees to
promptly release to the Mortgage Loan Seller the related Mortgage File.
Upon the Custodian's receipt of a request for release (a "Request
for Release") substantially in the form of Exhibit D to the Pooling and
Servicing Agreement signed by a Servicing Officer of the related Servicer
stating that it has received payment in full of a Mortgage Loan or that payment
in full will be escrowed in a manner customary for such purposes, the Custodian
agrees promptly to release to the related Servicer the related Mortgage File.
The Company shall deliver to the Custodian and the Custodian agrees to accept
the Mortgage Note and other documents constituting the Mortgage File with
respect to any Substitute Mortgage Loan.
From time to time as is appropriate for the servicing or foreclosure
of any Mortgage Loan, including, for this purpose, collection under any Primary
Insurance Policy, the related Servicer shall deliver to the Custodian a Request
for Release signed by a Servicing Officer requesting that possession of all of
the Mortgage File be released to the related Servicer and certifying as to the
reason for such release and that such release will not invalidate any insurance
coverage provided in respect of the Mortgage Loan under any of the Insurance
Policies. Upon receipt of the foregoing, the Custodian shall deliver the
Mortgage File to the related Servicer. The related Servicer shall cause each
Mortgage File or any document therein so released to be returned to the
Custodian when the need therefore by the related Servicer no longer exists,
unless (i) the Mortgage Loan has been liquidated and the Liquidation Proceeds
relating to the Mortgage Loan have been deposited in the Master Servicer
Collection Account or the Distribution Account or (ii) the Mortgage File or such
document has been delivered to an attorney, or to a public trustee or other
public official as required by law, for purposes of initiating or pursuing legal
action or other proceedings for the foreclosure of the Mortgaged Property either
judicially or non-judicially, and the related Servicer has delivered to the
Custodian a certificate of a Servicing Officer certifying as to the name and
address of the Person to which such Mortgage File or such document was delivered
and the purpose or purposes of such delivery.
At any time that a Servicer is required to deliver to the Custodian
a Request for Release, the Servicer shall deliver two copies of the Request for
Release if delivered in hard copy or the Servicer may furnish such Request for
Release electronically to the Custodian, in which event the Servicing Officer
transmitting the same shall be deemed to have signed the Request for Release. In
connection with any Request for Release of a Mortgage File because of a
repurchase of a Mortgage Loan, such Request for Release shall be accompanied by
an assignment of mortgage, without recourse, from the Trustee to the Mortgage
Loan Seller and the related Mortgage Note shall be endorsed without recourse by
the Trustee and be returned to the Mortgage Loan Seller. In connection with any
Request for Release of a Mortgage File because of the payment in full of a
Mortgage Loan, such Request for Release shall be accompanied by a certificate of
satisfaction or other similar instrument to be executed by or on behalf of the
Trustee and returned to the related Servicer.
G-3
2.6. Assumption Agreements. In the event that any assumption agreement,
substitution of liability agreement or sale of servicing agreement is entered
into with respect to any Mortgage Loan subject to this Agreement in accordance
with the terms and provisions of the Pooling and Servicing Agreement, the Master
Servicer, to the extent provided in the related Servicing Agreement, shall cause
the related Servicer to notify the Custodian that such assumption or
substitution agreement has been completed by forwarding to the Custodian the
original of such assumption or substitution agreement, which shall be added to
the related Mortgage File and, for all purposes, shall be considered a part of
such Mortgage File to the same extent as all other documents and instruments
constituting parts thereof.
III
CONCERNING THE CUSTODIAN
3.1. Custodian as Bailee and Agent of the Trustee. With respect to each
Mortgage Note, Mortgage and other documents constituting each Mortgage File
which are delivered to the Custodian, the Custodian is exclusively the bailee
and agent of the Trustee and has no instructions to hold any Mortgage Note or
Mortgage for the benefit of any person other than the Trustee and the
Certificateholders and undertakes to perform such duties and only such duties as
are specifically set forth in this Agreement. Except upon compliance with the
provisions of Section 2.5 of this Agreement, no Mortgage Note, Mortgage or
Mortgage File shall be delivered by the Custodian to the Company, the Servicers
or the Master Servicer or otherwise released from the possession of the
Custodian.
3.2. Reserved.
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.
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 Company pursuant to the Pooling and Servicing Agreement.
3.5. Custodian May Resign Trustee May Remove Custodian. The Custodian
may resign from the obligations and duties hereby imposed upon it as such
obligations and duties relate to its acting as Custodian of the Mortgage Loans.
Upon receiving such notice of resignation, the Trustee shall either take custody
of the Mortgage Files itself and give prompt notice thereof to the Company, the
Master Servicer and the Custodian, or promptly appoint a successor Custodian by
written instrument, in duplicate, one copy of which instrument shall be
delivered to the resigning Custodian and one copy to the successor Custodian. If
the Trustee shall not have taken custody of the Mortgage Files and no successor
Custodian shall have been so appointed and have accepted appointment within 30
days after the giving of such notice of resignation, the resigning Custodian may
petition any court of competent jurisdiction for the appointment of a successor
Custodian.
G-4
The Trustee may remove the Custodian at any time with the consent of
the Master Servicer. In such event, the Trustee shall appoint, or petition a
court of competent jurisdiction to appoint, a successor Custodian hereunder. Any
successor Custodian shall be a depository institution subject to supervision or
examination by federal or state authority, shall be able to satisfy the other
requirements contained in Section 3.7 and shall be unaffiliated with the
Servicer or the Company.
Any resignation or removal of the Custodian and appointment of a
successor Custodian pursuant to any of the provisions of this Section 3.5 shall
become effective upon acceptance of appointment by the successor Custodian. The
Trustee shall give prompt notice to the Company and the Master Servicer of the
appointment of any successor Custodian. No successor Custodian shall be
appointed by the Trustee without the prior approval of the Company and the
Master Servicer.
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.
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.
IV
MISCELLANEOUS PROVISIONS
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.
4.2. Amendments. No modification or amendment of or supplement to this
Agreement shall be valid or effective unless the same is in writing and signed
by all parties hereto, and neither the Company, the Master Servicer nor the
Trustee shall enter into any amendment hereof except as permitted by the Pooling
and Servicing Agreement. The Trustee shall give prompt notice to the Custodian
of any amendment or supplement to the Pooling and Servicing Agreement and
furnish the Custodian with written copies thereof.
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.
G-5
4.4. Recordation of Agreement. To the extent permitted by applicable
law, this Agreement is subject to recordation in all appropriate public offices
for real property records in all the counties or other comparable jurisdictions
in which any or all of the properties subject to the Mortgages are situated, and
in any other appropriate public recording office or elsewhere, such recordation
to be effected by the Company and at the Trust's expense, but only upon
direction accompanied by an Opinion of Counsel reasonably satisfactory to the
Company to the effect that the failure to effect such recordation is likely to
materially and adversely affect the interests of the Certificateholders.
For the purpose of facilitating the recordation of this Agreement as
herein provided and for other purposes, this Agreement may be executed
simultaneously in any number of counterparts, each of which counterparts shall
be deemed to be an original, and such counterparts shall constitute but one and
the same instrument.
4.5. Severability of Provisions. If any one or more of the covenants,
agreements, provisions or terms of this Agreement shall be for any reason
whatsoever held invalid, then such covenants, agreements, provisions or terms
shall be deemed severable from the remaining covenants, agreements, provisions
or terms of this Agreement and shall in no way affect the validity or
enforceability of the other provisions of this Agreement or of the Certificates
or the rights of the holders thereof.
G-6
IN WITNESS WHEREOF, this Agreement is executed as of the date first
above written.
Address: BANK ONE, NATIONAL
ASSOCIATION, as Trustee
000 Xxxx 00xx Xx., 0xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
By:
--------------------------------
Attention: Name:
Telecopy: Title:
Confirmation:
Address: STRUCTURED ASSET MORTGAGE
INVESTMENTS INC.
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000 By:
--------------------------------
Name:
Title:
Address: XXXXX FARGO BANK MINNESOTA,
NATIONAL ASSOCIATION, as
Master Servicer
0000 Xxx Xxxxxxxxx
Xxxxxxxx, Xxxxxxxx 00000
By:
--------------------------------
Name:
Title:
Address: XXXXX FARGO BANK MINNESOTA,
NATIONAL ASSOCIATION, as Custodian
0000 Xxx Xxxxxxxxx
Xxxxxxxx, Xxxxxxxx 00000 By:
--------------------------------
Name:
Title:
STATE OF NEW YORK )
) ss:
COUNTY OF NEW YORK )
On the 30th day of December 2002 before me, a notary public in and for
said State, personally appeared _______________, known to me to be a
_________________of Bank One, National Association, a national banking
association that executed the within instrument, and also known to me to be the
person who executed it on behalf of said corporation and acknowledged to me that
such corporation executed the within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official
seal the day and year in this certificate first above written.
--------------------------------
Notary Public
[SEAL]
STATE OF MARYLAND )
) ss:
COUNTY OF XXXXXX )
On the 30th day of December 2002 before me, a notary public in and for
said State, personally appeared _________________, known to me to be an
Assistant Vice President of Xxxxx Fargo Bank Minnesota, National Association, a
national banking association that executed the within instrument, and also known
to me to be the person who executed it on behalf of said national banking
association, and acknowledged to me that such national banking association
executed the within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official
seal the day and year in this certificate first above written.
--------------------------------
Notary Public
[SEAL]
STATE OF NEW YORK )
) ss:
COUNTY OF NEW YORK )
On the 30th day of December 2002 before me, a notary public in and for
said State, personally appeared _________________, known to me to be a Vice
President of Structured Asset Mortgage Investments Inc., one of the corporations
that executed the within instrument, and also known to me to be the person who
executed it on behalf of said corporation, and acknowledged to me that such
corporation executed the within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official
seal the day and year in this certificate first above written.
--------------------------------
Notary Public
[Notarial Seal]
STATE OF MARYLAND )
) ss:
COUNTY OF XXXXXX )
On the 30th day of December 2002 before me, a notary public in and for
said State, personally appeared _________________, known to me to be an
Assistant Vice President of Xxxxx Fargo Bank Minnesota, National Association,
one of the corporations that executed the within instrument, and also known to
me to be the person who executed it on behalf of said corporation, and
acknowledged to me that such corporation executed the within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official
seal the day and year in this certificate first above written.
--------------------------------
Notary Public
[Notarial Seal]
EXHIBIT ONE
FORM OF CUSTODIAN INITIAL CERTIFICATION
December __, 2002
Bank One, National Association Structured Asset Mortgage Investments Inc.
000 Xxxx 00xx Xx., 0xx Xxxxx 000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000 Xxx Xxxx, Xxx Xxxx 00000
Attention: Structured Asset Mortgage Investments Inc., Series 2002-10
Re: Custodial Agreement, dated as of December 1, 2002, by and
among Bank One, National Association, Structured Asset
Mortgage Investments Inc. and Xxxxx Fargo Bank Minnesota,
National Association relating to Bear Xxxxxxx ARM Trust,
Mortgage Pass-Through Certificates, Series 2002-11
Ladies and Gentlemen:
In accordance with Section 2.3 of the above-captioned Custodial
Agreement, and subject to Section 2.02 of the Pooling and Servicing Agreement,
the undersigned, as Custodian, hereby certifies that it has received a Mortgage
File (which contains an original Mortgage Note or lost note affidavit) to the
extent required in Section 2.01 of the Pooling and Servicing Agreement with
respect to each Mortgage Loan listed in the Mortgage Loan Schedule, with any
exceptions listed on Schedule A attached hereto.
Capitalized words and phrases used herein shall have the respective
meanings assigned to them in the above-captioned Custodial Agreement.
XXXXX FARGO BANK MINNESOTA,
NATIONAL ASSOCIATION
By:
-----------------------------
Name:
Title:
EXHIBIT TWO
FORM OF CUSTODIAN INTERIM CERTIFICATION
December __, 2002
Bank One, National Association Structured Asset Mortgage Investments Inc.
000 Xxxx 00xx Xx., 0xx Xxxxx 000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000 Xxx Xxxx, Xxx Xxxx 00000
Attention: Structured Asset Mortgage Investments Inc., Series 2002-11
Re: Custodial Agreement, dated as of December __, 20__, by and
among Bank One, National Association, Structured Asset
Mortgage Investments Inc. and Xxxxx Fargo Bank Minnesota,
National Association relating to Bear Xxxxxxx ARM Trust,
Mortgage Pass-Through Certificates, Series 2002-11
Ladies and Gentlemen:
In accordance with Section 2.3 of the above-captioned Custodial
Agreement, the undersigned, as Custodian, hereby certifies that it has received
a Mortgage File to the extent required pursuant to Section 2.01 of the Pooling
and Servicing Agreement with respect to each Mortgage Loan listed in the
Mortgage Loan Schedule, and it has reviewed the Mortgage File and the Mortgage
Loan Schedule and has determined that: all required documents have been executed
and received and that such documents related to the Mortgage Loans identified on
the Mortgage Loan Schedule, with any exceptions listed on Schedule A attached
hereto.
Capitalized words and phrases used herein shall have the respective
meanings assigned to them in the above-captioned Custodial Agreement.
XXXXX FARGO BANK MINNESOTA,
NATIONAL ASSOCIATION
By:
----------------------------------
Name:
--------------------------------
Title:
-------------------------------
EXHIBIT THREE
FORM OF CUSTODIAN FINAL CERTIFICATION
December __, 20__
Bank One, National Association Structured Asset Mortgage Investments Inc.
000 Xxxx 00xx Xx., 0xx Xxxxx 000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000 Xxx Xxxx, Xxx Xxxx 00000
Attention: Structured Asset Mortgage Investments Inc., Series 2002-11
Re: Custodial Agreement, dated as of December __, 20__, by and
among Bank One, National Association, Structured Asset
Mortgage Investments Inc. and Xxxxx Fargo Bank Minnesota,
National Association relating to Bear Xxxxxxx ARM Trust,
Mortgage Pass-Through Certificates, Series 2002-11
Ladies and Gentlemen:
In accordance with Section 2.3 of the above-captioned Custodial
Agreement, the undersigned, as Custodian, hereby certifies that it has received
a Mortgage File with respect to each Mortgage Loan listed in the Mortgage Loan
Schedule containing with respect to each such Mortgage Loan:
(i) The original Mortgage Note, endorsed without recourse to the order
of the Trustee and showing an unbroken chain of endorsements from the originator
thereof to the Person endorsing it to the Trustee or an original lost note
affidavit from the related Seller stating that the original Mortgage Note was
lost, misplaced or destroyed, together with a copy of the related Mortgage Note;
(ii) The original Mortgage with evidence of recording indicated thereon
or a copy of the Mortgage certified by the public recording office in which such
mortgage has been recorded;
(iii) An original Assignment of the Mortgage to the Trustee with
evidence of recording indicated thereon or a copy of such assignment certified
by the public recording office in which such assignment has been recorded;
(iv) With respect to each Mortgage Loan, to the extent available, the
original recorded assignment or assignments of the Mortgage showing an unbroken
chain of title from the originator thereof to the Person assigning it to the
Trustee or a copy of such assignment or assignments of the Mortgage certified by
the public recording office in which such assignment or assignments have been
recorded; and
(v) The original of each modification, assumption, extension or
guaranty agreement, if any, relating to such Mortgage Loan or a copy of each
modification, assumption, extension or guaranty agreement certified by the
public recording office in which such document has been recorded.
Capitalized words and phrases used herein shall have the respective
meanings assigned to them in the above-captioned Custodial Agreement.
XXXXX FARGO BANK MINNESOTA,
NATIONAL ASSOCIATION
By:
----------------------------------
Name:
--------------------------------
Title:
-------------------------------
EXHIBIT H-1
SERVICING AGREEMENTS
ALLIANCE MORTGAGE COMPANY
[provided upon request]
X-0-0
XXXXXXX X-0
SERVICING AGREEMENTS
CENDANT AND XXXXXX'X GATE RESIDENTIAL MORTGAGE TRUST
[provided upon request]
X-0-0
XXXXXXX X-0
SERVICING AGREEMENTS
CHEVY CHASE BANK, F.S.B.
[provided upon request]
X-0-0
XXXXXXX X-0
SERVICING AGREEMENT
COUNTRYWIDE HOME LOANS, INC.
[provided upon request]
X-0-0
XXXXXXX X-0
SERVICING AGREEMENTS
GMAC MORTGAGE CORPORATION
[provided upon request]
X-0-0
XXXXXXX X-0
SERVICING AGREEMENTS
XXXXXX XXXXXXX MORTGAGE CAPITAL, INC
[provided upon request]
X-0-0
XXXXXXX X-0
SERVICING AGREEMENTS
XXXXX FARGO HOME MORTGAGE, INC.
[provided upon request]
H-7-1
EXHIBIT I
ASSIGNMENT AGREEMENTS
[provided upon request]
I-1
EXHIBIT J
MORTGAGE LOAN PURCHASE AGREEMENT
[provided upon request]
J-1
